It was no surprise that the Reserve Bank of Australia (RBA) didn’t increase interest rates on Tuesday, but property investors should factor in rising rates in their budgets for the next year or two.
By MICHAEL YARDNEY
In its statement the RBA indicated comfort with current interest rate levels. Governor Glenn Stevens said the RBA’s official rate was “appropriate for the time being”.
This suggests to me that the next cash rate move will likely be up, even if it may be some time before this happens.
And even if the RBA doesn’t increase the official cash rate for a while, now that the election result is clear local banks may increase their retail Read more →
As the pundits debate just how much, or little, the new minority Gillard Government will be able to achieve, the housing development industry has some blunt advice.
ELIZABETH ALLEN
Get down to work and deal with the pressing issues affecting housing supply in Australia, say some of the housing industry’s main players.
“Affordability”, “bottlenecks”, “infrastructure” and “population policy” are some of the words on their impatient lips.
The Federal Government has to act quickly or else watch the housing situation become “dire”, warns the Housing Industry Association (HIA). Read more →
Spring is traditionally a time people start thinking about selling property. The days are getting warmer, hours of sunlight are increasing and after hibernating in winter, our gardens can be manicured to look magnificent.
BY PETER KOULIZOS
Over the next couple of months, I will be providing tips for vendors who are considering selling their property at this time of year.
The first consideration is, “Should I sell my property myself or should I use a real estate agent?” Read more →
The latest regional population figures from the Australian Bureau of Statistics (ABS) reveal an increasing trend toward inner-city living, as Gen Y leads the surge of people choosing to move closer to our major CBDs. So what does this mean for property investors?
By MICHAEL YARDNEY
As they leave the sanctuary of their parents’ homes and realise true independence, most Gen Ys are opting to live closer to employment opportunities, established infrastructure and lifestyle amenities, including public transport, shopping, restaurants and entertainment facilities. Read more →
Over the past few days I’ve been pondering just how much the recent election outcome and the property market have in common.
By ELIZABETH ALLEN
To approach both the election result and current property prices with equanimity it helps to believe in the old adage “every cloud has a silver lining”.
It’s been hard while watching Australia wallow in its post-election hiatus and seeing the Independents’ egos – with a couple of exceptions – expand daily. Read more →
We all know the old real estate adage ‘location, location, location’ and the careful consideration needed to ensure capital growth. However equally important is the position of a property within that location – an unwise choice can have significant consequences if you need to sell in a soft market.
By CATHERINE CASHMORE
Homebuyers are often tempted to inspect properties on main roads, especially during periods where the market is rising and there’s reduced stock. It’s not hard to be tempted when priced out of a desired suburb and ‘lo and behold’ a seemingly attractive and affordable option arises. Read more →
Underquoting is continuing to be an issue for many buyers. This is where a selling agent quotes a property price of, say, “offers over $600,000” but the actual value and realistic selling price is more likely to be $710,000. So what is the solution?
By RICH HARVEY
My team has seen countless examples of underquoting over the past seven months. It’s partly a reflection of the undersupplied market, but sometimes it’s a reflection of poor agent practice.
The catch phrase for this outdated tactic is “quote them low and watch them go!” Like bees to a honey pot the buyers swarm around the perception of a bargain, only to be disappointed again. Read more →
Historically houses have enjoyed more capital growth than units but things are changing – maybe permanently.
By MICHAEL YARDNEY
The latest RP Data-Rismark’s Home Value Index shows that units outperformed houses with higher capital growth over the past 12 months. And with shrinking household sizes, affordability issues and a rapidly growing population all impacting on Australia’s housing markets, the result is probably not surprising.
The report suggests the reason houses have traditionally shown stronger long-term growth includes our cultural preference for big homes and backyards, a decrease in developable land and generally better designs available with housing stock. Read more →
Dreaming about retirement? Short of winning the lottery, a common approach is to use an investment property to benefit you in retirement. Let’s look at a few issues that can help you decide whether this will work for you.
By DAMIAN SMITH
Share the load
If your investment property is generating a good rental income then you may be better off hanging onto it as opposed to selling now. But you may need to weigh up the effect of owning an asset like an investment property on your eligibility for a pension – make sure you talk to your accountant about this. One option that some retirees explore is to sell a portion of the property to your children as you may be able to release some of the equity in order to generate income elsewhere. It may also reduce your capital gains tax (CGT) exposure in the long run and enable you to diversify any other investments.
Increase your super
Another way that could possibly lessen the impact of CGT is by depositing some of the proceeds of the sale of your investment property to top up your super. Make sure you’re aware of the limits that apply to deposits by age, as there are some potentially big tax consequences here. Check out the Australian Taxation Office (ATO) website, and ask your accountant for more information.
Sell the property
If your investment property isn’t producing a high enough income, or if you’re concerned of its impact on your eligibility for the pension, you can always consider selling the property. You can then either use the proceeds to purchase other income-producing retirement investments. However, be aware that you could incur CGT upon selling the investment property. Again, there are CGT calculation tools at the ATO website.
Damian Smith is CEO at financial comparison website RateCity (www.ratecity.com.au). He’s one of Australia’s most experienced internet and technology executives, with leadership roles in Australia, the US, Japan and the UK for over 13 years. Damian holds a Masters Degree in Public Policy from Harvard University.
If Australia emerges from its election limbo with Independents holding the balance of power, as expected, Federal Government policy is likely to take on a distinctly rural flavour.
By ELIZABETH ALLEN
The rural and regional focus of three key Independents combines with Australia’s inevitable population growth to create a very different scenario for our federal policy makers.
And it’s one that could have implications for the property market – as CommSec chief economist Craig James noted this week.
“We do need more migrants and where these people end up settling may be a matter for the Independents,” James said. Read more →
