Latest Property News from Ted Hanson

Friday 12 August 2011 The Power of Auction Marketing A few weeks back Southern Estates held 3 on-site auctions, with 2 selling under the hammer at above reserve prices. The 3rd property in Cordeaux Heights was passed in, as the interested parties could not purchase under auction conditions. Last week we negotiated and exchanged the sale on that property - also above market expectations. The auction marketing allowed us to identify the right buyers and achieve a great result for our clients. Coming into spring, now could be the right time to achieve the best result for your property. Contact us on 4229 5344 to discuss how our auction campaigns can realise your property's full potential. 1. Finance steadies Housing finance remained unchanged in June following positive results in the previous two months, according to data released this week by the Australian Bureau of Statistics. In seasonally adjusted terms, the number of commitments for owner occupied housing finance was flat (0.0 per cent). This follows a rise of 4.4 per cent in May and of 4.8 per cent in April. In trend terms, commitments for owner-occupied housing finance rose 1.0 per cent. The number of commitments (trend) for the purchase of new dwellings rose 1.9 per cent, the number of commitments for the purchase of established dwellings rose 0.9 per cent and the number of commitments for the construction of dwellings rose 0.9 per cent. In seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions fell 1.4 per cent. Peter Jones, Chief Economist Master Builders Australia, said that the figures show the market has found a floor after eight months of interest rate stability. "Despite some improvement seen in recent housing finance numbers the pace of recovery is likely to be slow, particularly given the strong headwinds still facing the industry", Mr Jones said. "Longer term, the weak underlying level of housing finance signals that the residential building industry will be unable to meet a serious undersupply of housing that has arisen, risking higher rents and house prices as more people chase less stock." He added that Master Builders will continue to push for the need to address inefficient developer charges, land release regulations and the approvals process as part of reforms to remove impediments affecting the supply of housing. 2. What puts buyers off your home? How much do you suppose a pile of crunchy dead bugs on a windowsill will affect the selling price of a $500,000 home? How about a life-size skeleton hanging in the closet, or an open coffin in the basement with a dummy vampire inside? Or an overly-ripe kitty litter box under the kitchen table? The National Association of Exclusive Buyer Agents (NAEBA), an industry body in the United States, conducted an online survey of their members to rate the things they found most annoying when showing a home to prospective buyers. The results of the survey are revealing, surprising, and sometimes downright weird. Here are the top twelve things the agents reported as most off-putting when showing a home: Broken door locks preventing access to the house.Pet deposits in the back yard or dirty cat boxes.Missing light bulbs.Sellers that ask you to remove shoes and then have wet carpet or dirty floors.Having loose stairs or missing banisters.Low hanging dining room light fixtures in a vacant home.Closet doors that fall off or are not adjusted properly.Going into a vacant home and hearing animals in the walls.Dangerous children's toys left out.Dead cars in the driveway or yard.Political signs.Dead birds or animals in or around the home. Silliness aside, there is an important lesson here for home sellers to have a good look around your house to make sure that things you tend to overlook may not be a distraction or distasteful to prospective buyers. Imagine you are a stranger, or take a friend or relative for a walk through - they will often notice things you don't (such as cobwebs, pet smells, or an overgrown garden). 3. Building expected to recover Residential building is set for a roller-coaster ride over the next few years, according to a report released this week by industry analyst and economic forecaster, BIS Shrapnel. The Building in Australia 2011 Report shows that the impact of residential building is forecast to be minimal in 2011/12 after being negative in 2010/11. BIS Shrapnel's Managing Director, Robert Mellor, said that the value of new dwelling starts is forecast to remain relatively flat - up one per cent - in 2011/12. "Despite weakening net overseas migration inflows, which have fallen from a record 300,000 persons in 2008/09, to an estimated 165,000 in 2010/11, construction nationally still remains below the level of underlying demand, although in some states the market is closer to balance", Mr Mellor said. The report shows that the flat level of construction will set the scene for an improvement in residential dwelling activity in 2012/13. After the lull in 2010/11, economic growth is forecast to strengthen through 2011/12, underpinned by strong rises in resource investment, which will in turn result in higher net overseas migration in response to increasing labour requirements. Moreover, dwelling activity is now well below underlying demand nationally, with this shortfall focussed in Queensland, Western Australia, and New South Wales. BIS Shrapnel forecasts two interest rate rises in 2011/12, saying that with the rate of economic growth accelerating, this should still be able to support a rise in residential demand in those states where pent-up demand pressures are emerging. As a result, the value of new residential building commenced is forecast to rise by 10 per cent over 2012/13. "The gains are expected to be roughly felt equally across new houses and multi unit dwellings, with the upturn concentrated in Queensland, Western Australia and New South Wales", Mellor said. "These states will experience a rapidly rising dwelling deficiency, while affordability has also improved after solid income growth and weak price rises in recent years. In the other states, recent high levels of residential construction have meant that underlying demand and supply is more balanced and there is little upside." The residential building upturn will be short-lived, however, and the subsequent downturn in residential construction will result in a substantial underlying deficiency of dwellings emerging across most states. Meanwhile, prices in most states are also expected to have declined in real terms and affordability will have improved. Mellor predicts that through this period, non-residential building is expected to ease, freeing up additional capacity for residential construction into the subsequent cycle and allowing new dwelling construction to reach a higher level from 2016. "The challenge will be for an adequate level of new land supply to be available to meet this potential upturn in demand", he concluded. 4. Improve your Location Whether your house has water views or is next door to an electricity substation, make sure potential buyers are aware of the best features of your neighbourhood. Fill your agent in on all the local amenities and how they have affected the quality of your life. Prospective buyers who will be inspecting your house want to imagine themselves living there - and the more they see of the whole picture (schools, restaurants, transport, hospitals) the easier that is. 5. Raising the standards Possible loopholes in the national energy rating scheme could prove costly to homeowners, according to consumer advocacy group Choice. Choice warned this week that while energy efficiency can save households thousands in bills, instances of cost cutting by some builders and developers and poorly trained assessors are compromising the effectiveness of standards. Industry concerns about the existence of collusion between sellers and assessors and the questionable use of energy rating software have also been drawn into the spotlight. Choice spokesperson Ingrid Just said that currently, a new home's energy rating is assessed at the design phase rather than upon completion of the work. "We have seen evidence of dramatic discrepancies between promised versus real energy efficiencies once a home is built," she said. Ms Just cited the instance of a home in north-western Sydney that allegedly required more than $100,000 worth of additional work to meet minimum energy and building compliance standards, despite already being certified for occupation. "The home owner was shocked to discover that the energy star rating they were given on paper was far less than the reality," she said. At a time of rising energy bills, consumer confidence in energy ratings is crucial, especially ahead of the planned national roll-out of energy ratings for existing homes in 2012, according to Choice. A recent government study into house prices in the ACT showed that an energy rating improvement of one star will increase a home's market value by 3 per cent. "The whole point of energy ratings is to give credible information to consumers about the energy use of houses, so they can factor that into their decisions," Ms Just said. "If homes aren't built to specifications or energy assessments aren't accurate, then buyers could soon find themselves paying the cost in higher bills and lower market value," she warned. Prior to home energy ratings rolling out nationally Choice is asking for:* A survey of the number of newly built homes meeting minimum energy efficiency standards* Stronger regulation of post-design energy compliance for new homes* Assessors to be qualified and always chosen by the buyer rather than the building's builder, developer or seller* Greater information provided to consumers about home energy efficiency ratings and the most energy efficient ways to use their homes 6. Out of the frying pan, into the fire There is an adage that you can't avoid death and taxes, as both are sure catch up with you. The latter certainly caught up with one UK man attempting to jump his way through an assumed loophole to avoid paying taxes for renovations on an investment property. In the UK, building a house from scratch removes the 20 per cent VAT (Value-Added Tax, similar to our GST) otherwise incurred when refurbishing or renovating, the UK Daily Mail reports. To avoid the fee, the property investor demolished the house to start the construction fresh, disregarding the fact that the nearly 200-year-old house was registered as part of a conservation area, and that any demolition would require special consents. He has subsequently been fined nearly AU$128K for the illegal demolition and a further $78K in costs from the council. The size of the fine is said to reflect the judge's determination that the man should not benefit from the sizable savings he'd hoped to attain.