Why home owners haven’t fallen off the mortgage cliff...yet!

Keeping abreast of the current market and its fundamentals is something essential for me to do my job well.

I love it when something comes across my desk that I know will be of interest to ALL of my clients…in all sectors and price points! Like this interesting read… posted by Jim Malo courtesy of Domain.com on why homeowners with a mortgage haven’t YET fallen off the mortgage cliff.

In summary, it read — recent analysis highlights the worsening crisis in housing affordability in Australia.

Economists had feared that borrowers shifting from low fixed-rate mortgages of around 2% to higher rates near 6% would face significant financial strain, potentially leading to forced property sales. According to the Real Estate Institute of Australia, housing affordability has declined by 15% over the past five years, with a smaller 13.4% decline over the last decade.

Dr. Diaswati Mardiasmo, PRD’s chief economist, emphasized the alarming acceleration of unaffordability, stating, “It’s definitely accelerating in terms of unaffordability.” She pointed out that the COVID-19 pandemic has been a major driver, saying, “In the past five years that’s COVID. It’s a supernova event that pushed unaffordability.”

Jim Malo also noted that without the Reserve Bank of Australia’s interest rate hikes, house prices could have risen even further, potentially reaching a median price of $1.4 million. Economists agree that the low interest rates during the COVID boom allowed buyers to take on more debt, inflating property prices, and that the lack of housing supply, exacerbated by high interest rates, continues to worsen the situation. “We need more supply,” said REIA president Leanne Pilkington, underscoring the importance of addressing the fundamental issues in the market.

Interesting times!!

Buying Property in NSW series

‘GOOD TO KNOW SERIES’ | PART 4: ‘WHAT DOES OLD SYSTEM TITLE’ MEAN?

In the first years of the NSW colony, there was no system for recording land transactions. In some cases, brief particulars of a sale were written on the back of a land grant, in many cases, ownership changed without any evidence at all.

This changed in 1802 when all parties were invited to record their land dealings, forming the first book of the ‘Old Register’.

These records were occasionally updated. It is almost impossible to relate these records to any parcel of land that exists today.

On 18 January 1817, a proclamation providing for the registration of deeds related to land with the Office of the Judge Advocate, also part of the Old Register.

The introduction of the Torrens Title System in NSW with the commencement of the Real Property Act 1863 marked the end of Old System land titles and the beginning of the system we use today.

The biggest difference between ‘Old System Title’ and ‘Torrens Title’ is that with Torrens Title, a registered interest is absolute. With Old System titles, ownership needs to be established through a chain of titles. A chain relies on various Deeds, each document being used to verify the others.

Buying Property in NSW Series

‘Good to know series’ | Part 3: What does ‘Limited Title’ mean?

Thousands of properties in NSW, are designated by the Land Registry Services (LRS) office as having ‘Limited Title’. But all it means is that the boundaries of the property have not yet been surveyed. Which can be remedied if necessary.

‘Limited Title’ can be removed by a registered surveyor registering an accurate survey of the land with the LRS. A plan of delimitation requires the surveyor to re-establish the original deed boundaries and to compare those boundaries with existing occupations (including buildings constructed) on the land.

This can be more expensive than a standard surveyor’s plan of the land, and there are some LRS registration costs.

Before purchasing a ‘Limited Title’ property, it is advised to have a survey done to confirm there are no boundary encroachments. It is also a good idea to take out title insurance, which is a low-cost way of protecting yourself if it turns out that the boundaries as understood at the time of purchase are significantly different. (Discuss options with your legal representative)

If you want to develop/subdivide ‘Limited Title’ land, you may be required to register a plan of delimitation with LRS.

It may also be difficult to gain approval for a home loan for a property with a ‘Limited Title’, some banks and lenders in Australia will be reluctant to lend on ‘Limited Title’ properties without the property being surveyed. While ‘Limited Title’ has little impact on a property in 2022, some banks are still cautious about lending as there could potentially be a misdescription on the boundaries or easements. For this reason, some lenders will refuse to lend on ‘Limited Title’ property.

If you are considering purchasing a property with a ‘Limited Title’, it’s best to have the limitation removed by working with your legal advisor.

Buying Property in NSW series

'GOOD TO KNOW' SERIES | PART 2: What does Strata Title mean?

When buying a property that is part of a Strata title, you not only own the unit, apartment, duplex or townhouse (called the lot), but you are sharing the ownership of what's called 'common property' which includes areas like foyers, lifts, fences, gardens, swimming pools, car parks etc.

These areas are the shared responsibility of all property owners of the building. Strata title properties come in many forms, residential units or apartments and townhouses are the most common—but they also exist in commercial property, serviced apartments, retirement villages and some retail. 

You can change or renovate your strata home (interior only) if the changes are cosmetic, for any building or structural works you will need the approval of the strata manager/committee.

There are fees involved which can vary greatly, depending on the type and quality of the individual property being considered.

A strata report can be very helpful in determining the viability of purchasing a strata titled property.

The need for building insurance is usually covered in the strata fees (always check your contract for confirmation), you will however need to organise your own personal contents insurance.

Buying Property in NSW

'GOOD TO KNOW' SERIES | PART 1: What does Torrens Title mean?

Torrens title is a land title system which means you are the sole owner of the property/land (and the home on it). You have the freedom to change, improve and renovate—all with-in your local council regulations and guidelines.

The Torrens Title System was first introduced in 1858, named after its inventor, Sir Robert Richard Torrens. Torrens title simply means the purchaser owns the land and building. Which can also be known as “freehold”. Most properties in Australia are Torrens title.

There are usually no ongoing monthly or quarterly fees associated with a Torrens title.

Engaging a Buyer’s Agent

So what does a Buyer’s Agent do?

Essentially a Buyer’s Agent will help you locate and secure the best available property for your needs and budget at the best price—in the shortest amount of time possible. Potentially saving you thousands of dollars and many hours of your precious time!

It is said that ‘moving’ is in the top three most stressful things you can experience (after the loss of a loved one or divorce). The whole real estate landscape can be extremely overwhelming.

A good Buyer’s Agent is there to eliminate the overwhelm by taking the reins and guiding you through the whole process.

Firstly, we listen—your Buyer’s Agent must have acute listening skills! We take a concise brief, research, match you to the best property, negotiate and secure!

A Buyer’s Agent is for you if you are:

  • Families looking to upsize or downsize

  • An investor looking for great returns

  • Time poor professional’s

  • Interstate or overseas buyer’s

  • Investors looking to purchase property within your Superannuation Fund

  • First home buyers looking to enter the market

  • Buying “OFF MARKET” properties not available to the general public

Check before engaging a LOCAL Buyer’s Agent:

  • Do they have established networks and track record to access opportunities OFF the market?

  • Do they have born and bred local knowledge, offering historical and relevant information on all the BEST suburbs? An extensive history provides a deep understanding of the nuances of each suburb.

  • Do they have industry knowledge in buying all types of property at all different price points?

  • Do they have access to local industry leaders in conveyancing, lending and property inspectors?

  • Are they totally unbiased and operating independently from a selling agency? 

  • Do they have the knowledge to know when to buy and when to walk away?

Whether your budget is $700,000 ‘or’ $5.7 million—your Buyer’s Agent should have a service to suit and to help you buy your next home! I know I do, and I am ready to help you!

If you have any questions, fill out the form to the right. I look forward to helping you.

Talk soon, Dean : )

Is July 2022 a good time to buy Property?

Over the last few months I have have been asked the same question almost daily…“Dean, I’m concerned about moving forward with a purchase, is now the time, or should I wait?”

Followed by… “when is the best time to buy property?”

So, it prompted me to provide some answers.

Firstly, I must say—I am currently seeing the best buying opportunities I have seen for the past 2 years. I am seeing more and more opportunity while others delay and over-think the market.

Remember whenever there is fear and hesitation in the market from the majority, that is the best time to buy!

Current market tips:

  1. There are no crystal balls with predicting the property market, but my long term strategy of… buying well located blue chip property, in the best streets, of the best suburbs with the most potential within your budget— will lead to strong future growth and will be worth more in the years to come.

  2. Don’t listen to too much main stream media and the 6pm news! Get your property information from an experienced property buying professional with LOCAL experience and with YOUR best interests at heart.

  3. Property is a long term game! Making decisions based on other’s opinions and current media hype may not be the best way forward for you.

  4. Have a strategy. Most of my clients who have made fantastic financial gains using my strategies and experience with their buying decisions have done so going against the crowd—while listening to my recommendations from an “on the ground” position!

  5. Most of all, you have to be comfortable in your decisions.

  6. Have a great lender/bank behind you.

  7. And finally, have a cash “buffer” for any unforeseen events.

There will always be a reason not to buy now, but don’t be one of those people who say…“What if i only bought that house ‘x’ years ago, I would be so far in front now!!!!”

If you need some property assistance or advice, don’t hesitate to reach out!

The Home Guarantee Scheme 2022—what you need to know about it.

Great news for first home buyers and single parents…there are thousands more guarantees available as of July 2022!


A Quick Snapshot

  • First Home Guarantee (formerly the First Home Loan Deposit Scheme): 35,000 places p.a. for first home buyers. 5% minimum deposit and pay no Lenders Mortgage Insurance (LMI). 

  • Family Home Guarantee: 5,000 places p.a. for single parents with dependents. 2% minimum deposit and no LMI.

  • Regional Home Guarantee {NEW}: 10,000 places p.a. for Australian citizens and permanent residents to buy or build a new home in regional areas. 5% minimum deposit and no LMI. Must not have owned a home in the last 5 years. 

All three components of the scheme will be open to singles earning up to $125,000 p.a. and couples with a combined household income of $200,000 p.a.

These changes come into effect from 1 July 2022.

Are my Buyers’ Agent fees tax deductible?

It depends on whether you are buying a home to live in or buying an investment property.

BUYING AN INVESTMENT PROPERTY
Great news, if you have employed a Buyer’s Agent like myself to help you with purchasing an investment property, while not immediately tax-deductible against income tax, my fees may form part of a cost base for capital gains purposes in the future.

This means my fees may reduce any capital gains tax (CGT) you will have to pay when it comes to selling your investment.

BUYING A PROPERTY TO LIVE IN
Unfortunately, my fees will not be deductible for a property you are buying to live in, because the property you will live in will not be generating an income for you.

The Australian Tax Office (ATO) views only expenses incurred relating to you earning any assessable income can be deducted.

Always seek independent advice on ATO related matters.

Prepare your home for sale with these top 10 tips to ensure you get the maximum value for your home.

1. VENDOR advocate AND SALES ADVICE

Are you deliberating on whether to sell or not? Trying to decide the right timing, the right agent, preparing your property for sale, selecting the right form of sale, handling contracts and documentation can be a little overwhelming.

I will bring a wealth of experience to your journey—making the selling process stress free. I was a top-performing sales agent for many years and have worked with and alongside many of the preferred local agents—giving me insight to their track records and the way they do business. This insight can be a game-changer.

BOOK A 1:1 CONSULTATION BEFORE DECIDING TO SELL!

I’m here to help with this overwhelming process.

2. TAKE THE HOME OUT OF YOUR HOUSE

Clear the home as much as possible to create the feeling of space. Removal of unused furniture and personal belongings can make a huge impact, allowing potential buyers to see themselves in the home.

3. ADD MASSIVE VALUE WITH SMALL COSMETIC CHANGES

A fresh lick of paint in neutral colours is the most cost-effective change you can make. It will lift and freshen with a minimum toll on time and budget. Floor coverings need to be clean and clear, replace worn carpets or use quality rugs to add warmth.

4. CREATE MORE STORAGE

One of the biggest issues that potential buyers bring up is—lack of storage. Create as much storage as possible...shelving, cupboards, store things—converting spare space into usable storage is paramount.

5. TARGET MARKETING

Professional photography and descriptive texts are paramount to unveil what can't be seen from the street. Ensure your marketing is targeted appropriately to negate the need to spend thousands of dollars unnecessarily on incorrect marketing and advertising.

6. IMPRESSIVE OPEN HOMES

It's your first opportunity to impress. Take the time to clean up, clear things out and let the light in. Light a candle or two, open the windows, make the beds, hang fresh towels and make sure the yard is free from droppings from your furry family members.

7. CORRECT PRICING

Make sure your agent gets it right! The right price will ensure success. Too high and you miss the valuable initial peak selling period. Too low will create too big a gap to bridge once the negotiations get underway.

8. PRESENTATION AND STYLING

Getting the advice of a professional to maximise the design impact of your home can mean the difference of thousands of dollars of profit. Whether it’s rearranging your own furniture or hiring pieces—the result of your profit can be extraordinary. See my Presenting and styling video for more on this.

9. CONCEAL THE CRITTERS

While your furry family members are loved and adored by you, potential buyers may not feel the same. It’s best to take them for a walk while any inspections are taking place.

10. LET THERE BE LIGHT

Clean all windows and window furnishings. Make sure the lights work—replace globes and clean or replace light fittings. A light-filled home gives a feeling of openness and joy. It is emotionally uplifting and can have a positive impact on the mood of the inspection.


Property Advice from well meaning sources

Advice comes in many forms…

A well meaning friend or family member (usually limited to their personal experiences)
A friendly Real Estate Agent
Social media
The 6 o’clock news
Newspapers and magazines

But unless the information given to you is unbiased, transparent, honest, with no agenda, independent and informed—coming from a trained professional who is only interested in YOUR needs…be very careful.

Our advice is completely unbiased and tailored to your individual needs and requirements.

As buyers agent’s, we provide you with a strategic plan that will include purchasing options that are available, but not widely known. Which when used, can save you hundreds of hours and thousands of dollars.