Regional differences are emerging in the Australian housing market, with some regions reporting price rises and others seeing values decline.
Sydney and Canberra are seeing real estate values continue to climb, but those in Perth and Brisbane falling, according to the latest house market index.
In addition, the figures show that cheaper properties are selling better than the luxury end of the market, with interest rates and natural disasters such as the floods in January taking their toll.
According to Tim Lawless, RP Data’s research director, expensive suburbs have helped drag the overall market down.
Indeed, over the year to end April, properties in the most expensive suburbs fell 5.4 per cent. This compares to declines of 0.9 per cent and 0.5 per cent in the middle priced suburbs and cheapest suburbs respectively.
"The luxury end of the housing market is also showing its volatility. During the growth phase of the cycle the most expensive homes realised the highest capital gains," he said.
"Yet as the market cools premium home values seem to be losing steam the fastest."
Saturday, 11 June 2011
Spanish property market ‘looks bright’
Despite a number of indices suggesting that prices are falling and oversupply is having a negative impact on the sector, one firm has offered a positive outlook for the Spanish property market.
"In Spain things are looking very bright," Dr Dennis Coote, founder of The Hampshire & Home Counties Property Networking Club, said.
"Prices are not going up very fast, but there’s a very lively atmosphere. I don’t see any evidence of people being hard up here, honestly. It’s very much [a vibrant market]," he explained.
His comments follow the publication of new research by the Royal Institution of Chartered Surveyors into distressed property listings.
According to its Global Distressed Property Monitor, Spain has seen one of the largest increases in foreclosed property anywhere in the world, with the firm only expecting the number to increase.
Indeed, in the coming three months, Ireland, Spain, Hungary and Italy expect the highest numbers of distressed properties to come to market, while Russia, China, South Africa and Poland expect the lowest.
"In Spain things are looking very bright," Dr Dennis Coote, founder of The Hampshire & Home Counties Property Networking Club, said.
"Prices are not going up very fast, but there’s a very lively atmosphere. I don’t see any evidence of people being hard up here, honestly. It’s very much [a vibrant market]," he explained.
His comments follow the publication of new research by the Royal Institution of Chartered Surveyors into distressed property listings.
According to its Global Distressed Property Monitor, Spain has seen one of the largest increases in foreclosed property anywhere in the world, with the firm only expecting the number to increase.
Indeed, in the coming three months, Ireland, Spain, Hungary and Italy expect the highest numbers of distressed properties to come to market, while Russia, China, South Africa and Poland expect the lowest.
Monday, 2 May 2011
Spanish property set to be popular this summer
Property analysts have forecast that the Balearic island of Mallorca will be this year’s hottest Spanish destination.
As confidence in European property markets continue on the road to recovery, a growing number of investors are expected to increase their exposure to the market.
The Balearics’ property market remains strong, with a 145 per cent increase in property sales in 2010 compared to 2009 recorded by the Public Works Ministry.
Ignacio Osle, sales and marketing director of Taylor Wimpey de Espana, claimed that it is easy to see why the Mediterranean island is proving popular with buyers.
"Over the last 12 months we have seen both visitor numbers and enquires for property on Mallorca rise steadily," Mr Osle said.
"Buyers from the UK and Europe are not only looking at the traditional property hotspots on the mainland but further afield to Spain’s stunning islands such as Mallorca."
It follows a recent study by Aviva which found that more Brits that ever before are considering emigrating.
Some 46 per cent of those questioned by the insurance firm claim that they are considering a permanent move abroad – with Spain one of the most popular countries for relocation.
As confidence in European property markets continue on the road to recovery, a growing number of investors are expected to increase their exposure to the market.
The Balearics’ property market remains strong, with a 145 per cent increase in property sales in 2010 compared to 2009 recorded by the Public Works Ministry.
Ignacio Osle, sales and marketing director of Taylor Wimpey de Espana, claimed that it is easy to see why the Mediterranean island is proving popular with buyers.
"Over the last 12 months we have seen both visitor numbers and enquires for property on Mallorca rise steadily," Mr Osle said.
"Buyers from the UK and Europe are not only looking at the traditional property hotspots on the mainland but further afield to Spain’s stunning islands such as Mallorca."
It follows a recent study by Aviva which found that more Brits that ever before are considering emigrating.
Some 46 per cent of those questioned by the insurance firm claim that they are considering a permanent move abroad – with Spain one of the most popular countries for relocation.
Thursday, 28 April 2011
Investing in a Holiday Home – What to Expect
When you invest in a holiday property, you risk letting your emotions get the better of you at the expense of your finances. Fortunately, a little wise advice can help your holiday home provide you some income as well as great holidays and hopefully selling your house will never become a necessity.
Some owners love having a holiday home at their disposal and are satisfied if they can make $10,000 and pay the land taxes. Others pull in up to $60,000 a year for a handsome return on their investment, but must remain heavily involved, looking after the home between tenants, providing keys, and so forth. What is most important to you—return or lifestyle?
Rates for short term rentals are certainly superior to long term. A one bedroom in Sydney with an unfurnished return of $400 a week will likely earn $800 weekly as a short term, furnished rental property, minus about 20 percent for the management fee.
However, how often will you be able to pull in top rents? In a metropolitan area you may well get 90 percent occupancy, but in a regional area you may achieve only 20 to 40 percent. Management fees also vary wildly, from 16 percent plus a $90 cleaning fee each rental in Victor Harbor, to up to 50 percent on the Gold Coast.
It’s also important to consider actual cash flow versus high rents. Rental properties may stay empty for weeks at a time, but you’ll still need to pay the mortgage, while maintenance and management costs cut into your gross income and choke your cash flow.
Holiday letting can often be more lucrative than permanent rentals. For instance, a five-bedroom house can bring in as much as $75,000 a year in Lorne, Victoria. This equals a 6.9 percent gross yield, based on the current price of similar homes in Lorne. This is substantially more than the 5.5 percent yield for permanent rentals, according to the July 2009 listing in Australian Property Monitors.
Keep in mind that banks view holiday rental properties as higher risk, so investors may have to contribute a higher deposit. Another crucial aspect is the income tax break. Depreciation benefits and regular tax deductions may be associated with furnishing holiday rentals, depending on strategy. The Tax Office states that deductible property expenses are valid only in relation to the period that tenants actually occupy the property, or it is truly free for commercial rental. Travel costs are likewise deductible for true maintenance, but not personal trips.
Due to capital growth and the phenomena of sea change, owners of holiday homes in certain seaside locations have profited enormously in the past ten years. An idyllic location with a small local population and enough appeal to attract holiday-makers every year may be the key. Holiday homes that previously barely broke even in rental fees have risen in value by hundreds of thousands of dollars in the past ten years.
Even with current, higher purchase prices, there is still growing room in the right locations. Seaside locations will always have the potential for long term capital growth, and some continue to experience healthy price increases even in the current economy. Still, investors must be able to cover costs when seasons are slow. A property in an established city or town inhabitants will provide more reliable ordinary returns than in a remote beach village. In addition, amenities and infrastructure are needed for eventual capital growth.
Even well-known locations currently offer great bargains, such as the Gold Coast. True beachfront properties in older structures are available there for around $300,000, a real steal.
Still, remember that holiday homes are an investment in lifestyle with the goal of long term gain. Body corporate fees and renovation costs can be quite high, and you will need to own the property about ten years to get about 10 percent a year in capital gains. However, that’s better than for general housing, and some properties reap even more.
Independent one or two bedroom properties appeal to more buyers and provide the option of permanent occupancy. However, beware of council zonings. Some complexes do not permit more than three month occupancy, making eventual permanent letting or occupation impossible.
To summarize, you need to be a good marketer and manager of your property in order to reap big gains from a holiday home. If you simply want a place for a weekend getaway in a prime locale, just be ready to shoulder many costs yourself. Either way, with realistic expectations, you can make the best of your holiday home.
Article written and supplied by Anna K. on behalf of Sell My Castle
Anna K. is a journalist from Brisbane, Australia. She writes for several blogs about finance topics such as real estate, insurance and several others which attract attention of many readers.
Some owners love having a holiday home at their disposal and are satisfied if they can make $10,000 and pay the land taxes. Others pull in up to $60,000 a year for a handsome return on their investment, but must remain heavily involved, looking after the home between tenants, providing keys, and so forth. What is most important to you—return or lifestyle?
Rates for short term rentals are certainly superior to long term. A one bedroom in Sydney with an unfurnished return of $400 a week will likely earn $800 weekly as a short term, furnished rental property, minus about 20 percent for the management fee.
However, how often will you be able to pull in top rents? In a metropolitan area you may well get 90 percent occupancy, but in a regional area you may achieve only 20 to 40 percent. Management fees also vary wildly, from 16 percent plus a $90 cleaning fee each rental in Victor Harbor, to up to 50 percent on the Gold Coast.
It’s also important to consider actual cash flow versus high rents. Rental properties may stay empty for weeks at a time, but you’ll still need to pay the mortgage, while maintenance and management costs cut into your gross income and choke your cash flow.
Holiday letting can often be more lucrative than permanent rentals. For instance, a five-bedroom house can bring in as much as $75,000 a year in Lorne, Victoria. This equals a 6.9 percent gross yield, based on the current price of similar homes in Lorne. This is substantially more than the 5.5 percent yield for permanent rentals, according to the July 2009 listing in Australian Property Monitors.
Keep in mind that banks view holiday rental properties as higher risk, so investors may have to contribute a higher deposit. Another crucial aspect is the income tax break. Depreciation benefits and regular tax deductions may be associated with furnishing holiday rentals, depending on strategy. The Tax Office states that deductible property expenses are valid only in relation to the period that tenants actually occupy the property, or it is truly free for commercial rental. Travel costs are likewise deductible for true maintenance, but not personal trips.
Due to capital growth and the phenomena of sea change, owners of holiday homes in certain seaside locations have profited enormously in the past ten years. An idyllic location with a small local population and enough appeal to attract holiday-makers every year may be the key. Holiday homes that previously barely broke even in rental fees have risen in value by hundreds of thousands of dollars in the past ten years.
Even with current, higher purchase prices, there is still growing room in the right locations. Seaside locations will always have the potential for long term capital growth, and some continue to experience healthy price increases even in the current economy. Still, investors must be able to cover costs when seasons are slow. A property in an established city or town inhabitants will provide more reliable ordinary returns than in a remote beach village. In addition, amenities and infrastructure are needed for eventual capital growth.
Even well-known locations currently offer great bargains, such as the Gold Coast. True beachfront properties in older structures are available there for around $300,000, a real steal.
Still, remember that holiday homes are an investment in lifestyle with the goal of long term gain. Body corporate fees and renovation costs can be quite high, and you will need to own the property about ten years to get about 10 percent a year in capital gains. However, that’s better than for general housing, and some properties reap even more.
Independent one or two bedroom properties appeal to more buyers and provide the option of permanent occupancy. However, beware of council zonings. Some complexes do not permit more than three month occupancy, making eventual permanent letting or occupation impossible.
To summarize, you need to be a good marketer and manager of your property in order to reap big gains from a holiday home. If you simply want a place for a weekend getaway in a prime locale, just be ready to shoulder many costs yourself. Either way, with realistic expectations, you can make the best of your holiday home.
Article written and supplied by Anna K. on behalf of Sell My Castle
Anna K. is a journalist from Brisbane, Australia. She writes for several blogs about finance topics such as real estate, insurance and several others which attract attention of many readers.
Thursday, 21 April 2011
French property demand remains high
Demand for property in France appears to be strong, with the number of overseas enquiries for homes in the country rising.
Comments from French estate agent Leggett Immobilier suggest that the country has put the recent global economic troubles behind it and is now an attractive market for investors to by in.
So far in 2011, the firm reports that it has seen an almost 100 per cent increase in new buyer enquiries compared to last year’s figures.
The stability offered in France is proving attractive to international property investors and reports suggest that the increasing demand is also being driven by mortgage rates, which are at their lowest levels since the Second World War.
"Enquiry levels from both shows are substantially up from both 2009 and 2010," managing director Trevor Leggett said.
"This is particularly the case for property on the Cote D’Azur where our representatives have already closed a significant number of sales this year."
Meanwhile, according to the latest figures from foreign exchange company Moneycorp, Germany, France, Italy and Ireland all proved popular destinations last month.
Comments from French estate agent Leggett Immobilier suggest that the country has put the recent global economic troubles behind it and is now an attractive market for investors to by in.
So far in 2011, the firm reports that it has seen an almost 100 per cent increase in new buyer enquiries compared to last year’s figures.
The stability offered in France is proving attractive to international property investors and reports suggest that the increasing demand is also being driven by mortgage rates, which are at their lowest levels since the Second World War.
"Enquiry levels from both shows are substantially up from both 2009 and 2010," managing director Trevor Leggett said.
"This is particularly the case for property on the Cote D’Azur where our representatives have already closed a significant number of sales this year."
Meanwhile, according to the latest figures from foreign exchange company Moneycorp, Germany, France, Italy and Ireland all proved popular destinations last month.
Spain proving popular with investors
Despite concerns surrounding the economy, interest in property in Spain from British buyers has not been dampened.
The country’s property market appears to have weathered the latest worries surrounding the state of its finances, with Rightmove reporting that interest from Brits remained high during March.
Indeed, the province of Valencia in Spain was the website’s top climber in terms of searches over the course of the month, with a massive rise of 166.78 per cent compared to the previous month.
Conversely, Australia appears to be heading in the opposite direction with five separate regions in Rightmove’s top ten fallers.
Shameem Golamy, head of overseas sales at the firm, noted that Spain was not the only destination that has been downgraded on the international financial markets to see an increase in interest.
"This could be from savvy investors looking to cash in on the economic uncertainty in those territories, or simply those looking to research property prices before flying away to enjoy the holiday season," he added.
The country’s property market appears to have weathered the latest worries surrounding the state of its finances, with Rightmove reporting that interest from Brits remained high during March.
Indeed, the province of Valencia in Spain was the website’s top climber in terms of searches over the course of the month, with a massive rise of 166.78 per cent compared to the previous month.
Conversely, Australia appears to be heading in the opposite direction with five separate regions in Rightmove’s top ten fallers.
Shameem Golamy, head of overseas sales at the firm, noted that Spain was not the only destination that has been downgraded on the international financial markets to see an increase in interest.
"This could be from savvy investors looking to cash in on the economic uncertainty in those territories, or simply those looking to research property prices before flying away to enjoy the holiday season," he added.
Wednesday, 20 April 2011
Dubai property market is ‘stabilising’
Demand for property in the UAE could be set to rise following a recent report from a leading real estate firm in the region.
Research relating to the first three months of 2011 by Asteco has revealed that, for the first time in two years, the Dubai property market has stabilised.
According to the firm, apartment rentals averaged a decline of just two per cent over the three-month period.
However, despite the slowdown in average rents there were regional differences, with drops of as large as five and seven per cent in some areas.
Elaine Jones, chief executive officer of Asteco Property Management, noted that movements within the market were being driven by a desire by buyers to attain good quality, value for money stock.
"The rental market stabilised in certain areas, with a downward trend in others, albeit at a lower rate. This is attributed to the pressure of new stock on the already oversupplied market, especially for apartments and offices," she said.
It follows a recent report by CB Richard Ellis which revealed that Dubai is now considered one of the top shopping destinations in the world.
Research relating to the first three months of 2011 by Asteco has revealed that, for the first time in two years, the Dubai property market has stabilised.
According to the firm, apartment rentals averaged a decline of just two per cent over the three-month period.
However, despite the slowdown in average rents there were regional differences, with drops of as large as five and seven per cent in some areas.
Elaine Jones, chief executive officer of Asteco Property Management, noted that movements within the market were being driven by a desire by buyers to attain good quality, value for money stock.
"The rental market stabilised in certain areas, with a downward trend in others, albeit at a lower rate. This is attributed to the pressure of new stock on the already oversupplied market, especially for apartments and offices," she said.
It follows a recent report by CB Richard Ellis which revealed that Dubai is now considered one of the top shopping destinations in the world.
Monday, 18 April 2011
‘Plan ahead’ when investing in Spain
Individuals looking to purchase property in Spain have been told to plan ahead in order to minimise risk.
This is according to Paul Collins, editor of BuyAssociation, who noted that many of the problems that crop up when buying a home abroad can be avoided with a bit of forward planning.
He explained that issues include changes to the country’s political situation, as well as legislative changes, such as stamp duty, which can add to the overall cost.
"Most of these things are signalled in advance, so with good research and careful research a lot of these things can at least be prepared for and mitigated in advance," he said.
New figures from the Bank of Spain show that real estate investment in the country climbed 2.9 per cent over the course of 2010, the Press Association reported.
The bank found that the last quarter of the year saw the highest annual improvement in foreign investment, with many industry experts attributing the increase in sales to low prices and promotions by the country’s banks.
This is according to Paul Collins, editor of BuyAssociation, who noted that many of the problems that crop up when buying a home abroad can be avoided with a bit of forward planning.
He explained that issues include changes to the country’s political situation, as well as legislative changes, such as stamp duty, which can add to the overall cost.
"Most of these things are signalled in advance, so with good research and careful research a lot of these things can at least be prepared for and mitigated in advance," he said.
New figures from the Bank of Spain show that real estate investment in the country climbed 2.9 per cent over the course of 2010, the Press Association reported.
The bank found that the last quarter of the year saw the highest annual improvement in foreign investment, with many industry experts attributing the increase in sales to low prices and promotions by the country’s banks.
Housing approvals rise in Spain y-o-y
The number of approvals for new homes in Spain increased by seven per cent in January compared to the previous year, the latest statistics have revealed.
According to figures released by the Spanish government, there has been an increase in the number of housing developments year-on-year.
However, the level of planning approvals in Spain fell by 15 per cent to 6,784 compared to December – an indication that the market is still not in the full throes of recovery.
Mark Stucklin, of Spanish Property Insight, is more upbeat about the long-term chances for the Spanish property market, forecasting that building activity will increase this year.
"In my opinion, 2011 will mark the bottom of the cycle for planning approvals, though I should stress that is just a hunch. If it is not this year it will be next year, so it’s not as if I’m taking a wild guess," he said.
It follows comments from European finance minister that Spain is not expected to follow in the footsteps of Portugal and seek financial aid.
According to figures released by the Spanish government, there has been an increase in the number of housing developments year-on-year.
However, the level of planning approvals in Spain fell by 15 per cent to 6,784 compared to December – an indication that the market is still not in the full throes of recovery.
Mark Stucklin, of Spanish Property Insight, is more upbeat about the long-term chances for the Spanish property market, forecasting that building activity will increase this year.
"In my opinion, 2011 will mark the bottom of the cycle for planning approvals, though I should stress that is just a hunch. If it is not this year it will be next year, so it’s not as if I’m taking a wild guess," he said.
It follows comments from European finance minister that Spain is not expected to follow in the footsteps of Portugal and seek financial aid.
Friday, 15 April 2011
Queensland Coastal Plan eroding investor confidence, says Property Council
The Property Council of Australia (PCA) has expressed great concern following today’s release of the new Queensland Coastal Plan by Minister for Environment and Resource Management Kate Jones.
Ms Jones has moved to protect more coastal areas from development with a new, consistent approach to coastal planning aimed at stopping more coastline and communities becoming vulnerable to erosion and inundation, associated with climate change and severe weather events.
State Environment Minister Kate Jones said the plan took the long-term view that was needed.
"Councils will be able to better plan for the impacts of climate change and extreme weather events, not just over the next few decades but over the next 100 years," she said.
But Queensland Executive Director of the Property Council of Australia Kathy Mac Dermott said the Plan introduces major uncertainty and raises a raft of question just days before the Premier’s Building Revival Forum on 12 April 2011.
State Environment Minister Kate Jones said the plan took the long-term view that was needed.
"Councils will be able to better plan for the impacts of climate change and extreme weather events, not just over the next few decades but over the next 100 years," she said.
But Queensland Executive Director of the Property Council of Australia Kathy Mac Dermott said the Plan introduces major uncertainty and raises a raft of question just days before the Premier’s Building Revival Forum on 12 April 2011.
“The coastal plan raises serious issues around property values, future land use and development rights - along with existing and future state and local government infrastructure.
“Until there is certainty around these issues, the plan further erodes investor confidence and diminishes Queensland’s competitiveness.
According to PCA the Queensland government has prepared coastal hazard area maps showing areas projected to be at risk up to the year 2100. These maps factor in climate change impacts, including sea-level rise of 80 centimetres and a 10 per cent increase in the maximum potential intensity of cyclones.
“We understand that approximately 100,000 properties in Queensland are located within the areas identified as ‘high hazard’, with an additional 60.000 properties located in ‘medium hazard’ areas,” said Ms Mac Dermott.
The 160.000 properties at risk equate to 10 per cent of all Queensland properties.
“The Queensland government has sent a strong message that settlement in high hazard zones should be ‘avoided’,” she said.
According to PCA, councils will have up to five years to draw up ‘adaptation plans’ for (development in) at-risk areas, and the Queensland Government is working with the Local Government Association Queensland on guidelines.
“We do not expect any immediate prohibition of development in existing urban areas within identified hazard zones.
“However, additional costs for development projects are to be expected as yet unknown mitigation measures will have to be negotiated with Councils, with project timelines also affected.
“This is yet another State Planning Policy (SPP) that undermines the South East Queensland Regional Plan, and which could also lead to up to 5 years of uncertainty in Government mapped hazard zones.
“As part of its 2011 Advocacy Agenda, the Property Council has called for a moratorium on SPPs for the next three years.”
The Property Council is currently undertaking a detailed review of the Queensland Coastal Plan and its implications for the property industry in Queensland.
“Until there is certainty around these issues, the plan further erodes investor confidence and diminishes Queensland’s competitiveness.
According to PCA the Queensland government has prepared coastal hazard area maps showing areas projected to be at risk up to the year 2100. These maps factor in climate change impacts, including sea-level rise of 80 centimetres and a 10 per cent increase in the maximum potential intensity of cyclones.
“We understand that approximately 100,000 properties in Queensland are located within the areas identified as ‘high hazard’, with an additional 60.000 properties located in ‘medium hazard’ areas,” said Ms Mac Dermott.
The 160.000 properties at risk equate to 10 per cent of all Queensland properties.
“The Queensland government has sent a strong message that settlement in high hazard zones should be ‘avoided’,” she said.
According to PCA, councils will have up to five years to draw up ‘adaptation plans’ for (development in) at-risk areas, and the Queensland Government is working with the Local Government Association Queensland on guidelines.
“We do not expect any immediate prohibition of development in existing urban areas within identified hazard zones.
“However, additional costs for development projects are to be expected as yet unknown mitigation measures will have to be negotiated with Councils, with project timelines also affected.
“This is yet another State Planning Policy (SPP) that undermines the South East Queensland Regional Plan, and which could also lead to up to 5 years of uncertainty in Government mapped hazard zones.
“As part of its 2011 Advocacy Agenda, the Property Council has called for a moratorium on SPPs for the next three years.”
The Property Council is currently undertaking a detailed review of the Queensland Coastal Plan and its implications for the property industry in Queensland.
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