Australian Lifestyle Property

Dwelling values across all of Australia’s capital city housing markets, except Perth and Darwin, fell over October, interrupting a four month run of recovery.

The RP Data-Rismark Home Value index results for October recorded the first month-on-month decline since May 2012, with the eight capital city aggregate index falling by -1.0 per cent over the month. The fall was broad-based, with falls being experienced across each of the capital cities apart from Perth and Darwin.

Both Sydney and Brisbane markets recorded a -0.9 per cent fall in values over the month, while Melbourne values experienced a larger -1.1 per cent fall. Of the mainland capitals, the largest monthly decline was recorded in Adelaide where dwelling values dipped -2.4 per cent in October.

Highlights over the quarter

• Best performing capital city: Darwin +1.5 per cent
• Weakest performing capital city: Hobart, -5.7 per cent
• Highest rental yields: Darwin houses with gross rental yield of 5.9 per cent and Darwin Units at 6.0 per cent
• Lowest rental yields: Melbourne houses with gross rental yields of 3.6 per cent and Melbourne units at 4.5 per cent
• Most expensive city: Sydney with a median dwelling price of $530,000
• Most affordable city: Hobart with a median dwelling price of $300,375

Complete results in attached media release.

Michelle (Mitch) Koper
National Media & Communications Manager

*RP Data-Rismark October Hedonic Daily Home Value Index Results
Released: Thursday, November 1, 2012
Further information contact: rpdata.com – Mitch Koper – 0417 771 778 or for Rismark Ben Skilbeck – 0403 138 172

According to The Age, Australia is the fastest growing economy among all developed nations who are a part of the Organisation for Economic Co-operation and Development. The recent release of Australia’s first-quarter growth numbers for 2012 shows that the country is doing well financially, with 4.3 percent annual growth, but the numbers don’t tell the whole story. These numbers, which appeared as a surprise to some analysts, are due in part to an increase in mining investment and an surge in consumer spending.¹ Many Australian’s are skeptical about whether the growth is sustainable for a number of reasons, including the carbon price which will soon be levied on many large businesses.

In addition to the increase in mining, consumers increased their spending in the areas of food, education, clothing, transportation, restaurants and health care. Citizens had the cash to spend thanks to many jobs offering pay increases or keeping wages stable. On top of all the spending, families are still able to put away about nine percent of their income for savings.² The news of the surging economy caused the Australian dollar to go up while interest rates dropped. Australian cash loan and other emergency borrowing went down.

There are three major factors that have a strong connection to the economy, and can affect it positively or negatively. They are all inextricably linked and some people expect them to negatively impact Australia in the coming months.

Carbon Price

Effective July 1, 2012, a levy will be imposed on companies who are responsible for putting carbon dioxide into the atmosphere. Opponents of the tax state that now is not a good time to introduce such a law. With the upcoming elections, however, it is uncertain whether or not the tax will stay in place for long. The Liberal party candidate, Tony Abbott, has promised to repeal the levy if he is elected as a way to keep the economy strong. Consumers will also feel the effects of this tax as energy prices are expected to rise. According to Perth Now, Synergy, an energy retailer, will raise prices 9.1 percent which translates to an extra $3.30 a week being added to each household’s energy bill.³

Continued Slow Down in China

Part of the reason why Australia was able to escape a recession in recent years is because of its large mining industry and the vast amount of coal that is sent to China. But now the Chinese economy, which has experienced tremendous growth in recent years, is slowing down due to high levels of inflation. Business Live reports that despite the fact that less coal is being exported, miners are still investing heavily with a strong belief that the demand will again pick up.⁴

Rise of the Australian Dollar

In some ways, the rising currency is doing more harm than good for the country in respect to its exports market. As the price of Australian goods go up there is less demand for them in other countries, especially those that are experiencing limited or no economic growth. When the demand for goods cools off, Australians will start to see unemployment numbers rise. In order to make the country more stable, and ward off the possibility of a recession in the future, new jobs will need to be created in the banking and manufacturing sectors says Fariborz Moshirian of the University of New South Wales.⁵

The new carbon levy, China’s impact on the Australian economy and the currency are all factors that will contribute to whether or not the country enjoys another successful quarter. There’s little the country can do about the slowing Chinese economy, but they can control the factors at home.

What do you really know about home insurance?

Most homeowners will probably buy one policy and then renew it for as long as they own their home. Insurance plans get renewed every year and are generally forgotten about, barring any accidents or damages.

If you feel you have the perfect home insurance, great! But it may be likely that you are missing out on a better policy from another insurer. Staying knowledgeable of home insurance trends can help you do a good home insurance comparison when it comes time to renew your coverage. Here are some tips to help you find a better plan to fit your home ownership needs.

Defining Needs

Where you live is a big factor in determining the needs of your insurance coverage. If you live in an area that is prone to excessive wind, rain and electrical storms, your risk levels are probably higher than other homes in less severe weather areas. For all-around home insurance coverage, a homeowner should look into protection against:
• fire damage
• floods
• loss or damage to the contents of your home
• liability claims

Three Ways to Lower Insurance Costs

1. Insurers will give discounts to people with excellent credit scores. They use the logic that people with good credit are more responsible and file fewer claims.

2. Living in a better neighbourhood with less crime can lead to lower rates.

3. Maintaining and repairing your home reflects positively on your insurance risk. Replacing an old roof or painting your home’s exterior may qualify you for lower rates.

More than Just a Standard Policy

Make sure that you account for all possible risk. A standard policy is a good start, but you may need to add some additional coverage for losses that go beyond the limits of the basic homeowners policy. Buying coverage that pays the replacement cost rather than the actual (depreciated value) cost can make a big difference when it comes time to replace items due to water damages or fire.

Without Replacement Value Coverage, a claim for a ten year old carpet that was soaked when a pipe burst and left two inches of standing water, might only get you $200, when it will cost you closer to $1000 to replace.

Home insurance does not cover damage caused by severe floods. If water enters your home because of a torrential rainstorm or a nearby river overflows its banks, a flood insurance policy will help cover the damages. If you live in an area that is known to flood, it is very important to have this type of additional coverage.

When disaster does strike and you are no longer able to live in your home, you need to find alternative shelter. Loss of use coverage will reimburse you for the cost of paying for a hotel room or other reasonable housing alternative for a specified period of time.

Extra Coverage Can Add Up

All of that extra coverage can be costly. Depending upon your personal circumstances, you may be able to cut back on or eliminate some of your home coverage. You have to pay extra if you want to insure particularly expensive items like jewelry or a coin collection. To avoid the extra charge, you might be better off putting your diamond jewelry in a bank safety deposit box or getting a safe to store your collection of coins. Do not pay extra for coverage of items that you could easily afford to replace if they are lost, stolen or damaged.

A home insurance comparison should be done annually to make sure you are getting the best policy for your money. You should also periodically assess your coverage needs. Do not waste money on unnecessary extra coverage. Rather, protect the investment you have in your home with common sense. When disaster strikes, you will be glad you have the coverage.

John Symond has come out in agreement with Governor of the RBA, Glenn Stevens’, position on the state of the Australian housing market in his Anika Foundation speech at Macquarie Bank on 24 July.

Symond, the Chairman and Founder of Australia’s largest Mortgage Broker Aussie says:

“Repayments are now at their lowest in years on the back low interest rates, income growth and lower house prices and loans sizes.”

“I particularly endorse the RBA’s optimism and agree that arrears have remained low or have even seen some decline in the last year, while house prices are now somewhere around their 2004 levels. The likelihood of the so-called ‘bubble’ bursting seems low, in my opinion.

“Now really is an opportune time for first home buyers to consider getting in to the market, especially with the chance of further rate drops in the coming months. Both variable and fixed rates look appealing, and with an increase of houses on the market combined with positive economic indicators, it provides a great environment to invest in your own place rather than pay someone else’ s rent if you can afford it,” Symond concludes.

For further information:
Fiona Hamann
Snr Manager, Public Relations
(02)8297 0560
Fiona.hamann@aussie.com.au
OR
Tim Allerton
City PR
02 9267 4511
tallerton@citypublicrelations.com.au

Mike Green, Managing Director of Harcourts International, predicts that the real estate sector is poised for significant growth, creating strong demand for staff within the industry.

“Given the current conditions within the property market, the real estate industry is set to experience significant growth over the coming months and years, making now the perfect time to being a career in real estate,” Mr Green said.

In order to facilitate this growth, Harcourts launched their latest opportunity and information program, A New View in Real Estate earlier this month.

The program, created by the group’s training facility, The Harcourts Academy, has been designed as an information session for aspiring real estate professionals and doubles as a recruitment event for the group.

The event runs for approximately three hours and aims to provide comprehensive information about the real estate profession and the benefits of working in the industry.

Participants view inspiring audio visual presentations and interviews with real people in the field, and leave with an accurate understanding of what is required to succeed in sales or property management.

“Here at Harcourts we have an aggressive growth strategy both within Australia and overseas, and we are always in need of enthusiastic people with a passion for real estate to join our group,” Mr Green said.

The launch of the New View in Real Estate program comes just days after the Council of Australian Governments (COAG) announced that new national licensing requirements for real estate agents have been delayed until 2013 – well behind the original July 2012 deadline.

Head of the Harcourts Academy, Irene Green expressed that, “While these delays are disappointing, it is important that industry standards are raised not lowered, and we are hopeful that this delay will provide the opportunity for a proper review of all requirements, including continuing education.

“Taking sufficient time to create the best possible national licensing system is crucial for Australia’s real estate sector, and will ensure greater professionalism and higher industry standards once implemented,” Mrs Green stated.

Thursday, 26th April 2012

For Further Information:
Hillary Bell, Media Relations Officer, on 07 3868 7209
Irene Green, Head of Academy, on 07 3839 3100

Asset rich but cash poor senior Australians are increasingly taking up reverse mortgages to help fund retirement activities, according to leading mortgage broker, Loan Market.

Loan Market Sydney-based principal finance broker and reverse mortgage consultant Bob Staley said more than 40,000 Australians currently hold reverse mortgages, which are also known as Seniors Finance Equity Release loans.

Mr Staley said a recent survey by accounting firm Deloitte found the take up of reverse mortgages had grown 22 per cent over the past two years.

“It is becoming more popular in the post global financial crisis environment,” Mr Staley said.

Reverse mortgages are available to people aged 63 and over and are designed specifically to allow seniors to use the equity in their home or investment property to release cash for their own use.

“This is a lifetime loan with no repayments required until the property is sold,” Mr Staley said.

“Unlike the traditional mortgage, there are no criteria to obtain a reverse mortgage such as income criteria. It can be used for any purpose such as an overseas holiday, to buy a car, to invest, home improvements, health reasons or repayment of a current mortgage.”

Mr Staley said the maximum amount available to borrow under a reverse mortgage was $425,000. The interest rate is slightly higher than the standard variable interest rate.

“There are a range of lenders who offer reverse mortgages, and each lender will make various percentages of equity available depending on your age and the age of your partner,” he said.

In an interview with Sydney small business radio station Eagle Waves, Mr Staley said reverse mortgages were “a niche market which is there for the people it suits”.

Mr Staley, a member of Senior Australians Equity Release Association of Lenders (SEQUAL), said reverse mortgages did not suit all circumstances and anyone considering a reverse mortgage should seek independent financial and legal advice.

“We encourage people considering a reverse mortgage to visit the ASIC website www.fido.gov.au which has a reverse mortgage calculator accessed via the ‘Over 55’s’ link,” he said.

“We also recommend you look for reverse mortgages that have a no negative equity guarantee, so you or your estate are not left having to find extra money if the debt exceeds the value of your home.

An iconic Australian property brand celebrates its 110th birthday this month, with the progeny of the company’s founder still at the helm.

The Ray White Group, Australia’s largest residential property for sale network with almost 1,000 offices spanning several nations, started out in the rural Queensland town of Crows Nest.

The company’s namesake once sold pigs, insurance and rural real estate in a railway siding that has been restored as a museum telling the Ray White story.

Today the Ray White Group is headed by Ray’s grandsons Brian and Paul White as joint chairmen.

The fourth generation continues to influence the brand: Sam White is the group’s deputy chairman, Ben and Dan White are directors, and Matt White is the general manager of operations in Victoria and Tasmania.

The group expanded throughout Queensland initially and today has a strong presence in each state as well as New Zealand and Indonesia. Offices have opened in recent years in India, Lebanon, Hong Kong and Malaysia.

The Ray White network lists 8,000 properties on average per month and sells over $24billion in property annually.

The network continues to grow, expanding into commercial, industrial, rural, livestock, marine, strata, investments, project marketing and home finance.

As the sun set on the 2012 financial year, the team at Aussie smashed all records to achieve its biggest settlement day since it began keeping computerised records.

It increased settlements by a staggering 42.8 per cent on June 30 last year and grew by 10.27 per cent on the previous biggest settlement day back in March 2010.

“To be honest I think it’s our best result ever, but we can only claim it as far back as our current computerised records, without digging through paper-based archives,” says executive director James Symond.

“The team has worked hard to achieve this result which is a culmination of a number of factors,” he continues. “The public seems to be responding to our “Smart to Ask” campaign, and we have had a successful broker recruitment campaign as well, but more tellingly, it may indicate growing confidence in the market after the most recent consecutive monthly rate cuts by most lenders.”

For further information:

Fiona Hamann
Snr Manager, Public Relations
Fiona.hamann@aussie.com.au

Going Green: Eco-Friendly Homes Constructing
With the threat of global warming and resource depletion approaching, people are looking for ingenious ways to conserve energy and reduce their carbon footprint. Building eco-friendly houses are one of the known trends for going green. Here are the many reasons why you should go green.

1. These houses save you money in the long run.
Building an eco-friendly home may be a bit expensive than the traditional house but the advantage of having one is that it will save you money in the long run. Green homes need less energy to operate and this reduces your energy bills dramatically.

2. Green homes are healthier than conventional ones.
An environment-friendly home is proven to be much healthier and it promotes well-being for its residents. In addition, most eco-friendly homes are visually stimulating than the boring traditional homes.

3. It’s environmentally friendly.
This is basically the main reason why people build a green home. From building the house to actually living in it, everything is environmentally friendly. Builders make sure that the lumber, paint and other raw materials used are environmentally safe.

Building Your Very Own Eco-friendly Dream Home
Building your very own green home will take a lot of your time, money and your patience. Here are some important factors you need to consider before you start pursuing your dream to live green.

1. Planning and Design

The building design is one of the crucial steps in building your home. This step requires proper planning to prevent any complications in the future. Having an architect who specializes in eco-friendly construction to assists you with the design would save you the trouble of designing on your own.

Everything in the house should be environmentally-safe. Building a green home requires application of various “eco-friendly” building principles. Here are some points you need to consider:

• Low-cost building materials should be used in building your home.
• Every building will create a certain amount of waste in the time of production. The house should produce less waste and pollution than conventional buildings.
• Using environment-safe materials such as non-toxic paint and low VOC (volatile organic chemicals) materials in construction to promote health and well-being.
• Using energy efficient methods like solar power, water-saving technology and energy-saving air conditioning systems.
Those are just some of the key points you need to check when you are building an environment-friendly home. Seek help from experts in green technology to have a better understanding on what you need for your house to be “eco-friendly”.

2. Standards

Like any infrastructure, every home has to meet the building standards, codes and environmental compliances depending on the country or state you live in. Do research on the building standards and guidelines of your countries to know if your house meets the requirements. Having an expert who will do extensive research on the carbon output of the building from construction to the time it will be used is also an essential.

3. Sustainability

Energy efficient technologies in your home always need to be checked and maintained to make sure that they are in tip-top shape. Any poorly maintained equipment is most likely become a nuisance due to high energy consumption and emit more pollution. Regular maintenance of your house’s technology can ensure its sustainability and eco-friendly state.

Affordable Eco-Friendly Homes
If you are on a tight-budget, there are different ways to acquire a home that is eco-friendly and affordable at the same time. There are companies who offer affordable eco-friendly homes. They offer buildings with sufficient “green” quality to pass the ratings of eco-friendly house standards and environmental compliances.

• Retrofitting your old building

If you can’t afford buying a new home, you can always retrofit your old one to make it eco-friendly. There are some basic ways to make your home transform into an “eco-friendly” building.

• Energy

You can reduce your energy spending by installing “green” windows and allow the sun to lighten up the room. You can also look for alternative source of electricity with solar panels and wind mills that store energy in batteries and is then supplied to your outlets.

• Water

You can save a lot of water by installing rain catchers and other water-saving technologies like low-flow shower heads and faucets that are available in the market. You can also reuse your water for flushing toilets and watering the plants.

• Comfort

Insulating your house can set you free from the dependence of heaters and air conditioners. Also, dark colors in your house absorb too much heat. Painting your roof with white can reflect unwanted heat during summer time.

About the Author:
Elston Marcelo is a Marketing Consultant for Debtconsolidation.com.au, a debt
consolidation and agreement company that provides assistance and advice for bad
credit loans and bankruptcy issues for people and their finances.

Follow him at twitter @SamariaKurt

The latest statistical figures from RP Data, a CoreLogic-owned provider of risk management services and investment property information and analytics in Australia and New Zealand, revealed that there is a significant increase in the number of Aussie homeowners who find themselves in negative equity. This means that their properties, as of the time of study, were worth less than their value at the time of purchase.

To illustrate, RP Data’s figures by the end of September 2011 showed that an estimated 4.9% of Australian homes were in negative equity. However, by the end of December 2011, RP Data recorded a whopping 6.4%, revealing that 1.5% more Australian homes suffered a decline in value from their original worth in just about three months.

There was also a decrease in the number of homes with current value that’s more than double their original price (from 43% in September to 42% in December), as well as in the rate of appreciation or value increase of capital city homes (compared with the average of 25% in the last five years towards December 2011). The latter, in fact, is one of the factors that caused the rise in the number of homeowners in negative equity.

This scenario is being interpreted by some as a manifestation of the recession in Australian homeowners’ economy, especially that some of them, in fact, have even incurred home loans higher than the present worth of their properties. It could be considered that this is a reflection of the slump in housing markets since the latter part of 2010, when real estate values fell by about 5.5%.

While this, at first glance, could seem worrisome for property investors, homeowners and other stakeholders in the realm of real estate and property investment, there is actually no need to worry, as the Australian government has already set new laws to protect homeowners from the state of negative equity.

New No-Negative Equity Laws
In order to prevent people from borrowing more than their home’s worth, the Australian government set new laws to ban negative equity debts and compel financial institutions to provide better and more detailed disclosure of their interest rates and other loan information to borrowers. This move was to clean up the country’s $3 billion equity release industry, which has been bugged with dirt from scams and inappropriate lending practices.

The provisions on greater information disclosure are focused on providers of accommodation bond and reverse mortgage loans, requiring them to thoroughly and sufficiently explain to borrowers not just their interest rates, but also the implications of such compounding rates on their financial welfare. They will also be obliged to provide total debt estimates involved in the home equity release product, so the borrower would have an idea on payables to expect.

By enforcing such new laws, homeowners are prohibited from availing of loans more than their property’s worth, thus preventing them from falling into deeper debt. This will also help people make better use of their resources and become more responsible in managing their liabilities and investment properties.

About the Author: Elston Marcelo is a marketing consultant for PureChecks.com, a leading company in the industry of checks. They offer a wide variety of designer checks available for your different needs.