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| Testimonial in this tough market | | Posted on: 02/07/2009 | | | Thanks again for your help!
Griffin Realty helped us sell our property for a fantastic price in tough market times. We had Chris Griffin as our agent, and he was very friendly and helpful throughout the whole process. Thanks guys!
Kristy |
| | | Testimonial | | Posted on: 12/12/2008 | | | The following is an excerpt from an email received by one of our very good clients. We extend our congratulations to Paul and wish him continued success regarding his investing.
"Hi Kelly,
Well, I have some very good news. Thanks to my own savings, but also
to the rent monies Griffin Realty and its precedessor GDM have given
me over the last 2 years and 1 month, I have fully paid off the
mortgage on the flat.
I'd like to thank you, Tala, and Griffin Realty in general for being a
fine realtor these last two years. It's a great thing for me to fully
own my flat and discharge the mortgage, and I was able to do that with
your company's very good help."
Well done mate.
If you would like to benefit from our companies services or would like to review your existing position, give us a call and we would be more than happy to help.
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| | | A timely reminder for your wary buyers | | Posted on: 03/10/2008 | | | This week’s Property Pulse looks at property as a medium to long term investment based on what would have happened had someone purchased the median priced property during 2005 and what position they’d be in today.
With so much attention being directed at the current soft conditions of the residential property sector, many investors seem to be forgetting that property investment is generally a medium to long term proposition. It is very rare to find an investor who buys and sells a property within 12 months, particularly within established residential areas such as our capital cities. Firstly, there is no discount on the capital gain and secondly the buying and selling costs tend to erode the short term gain.
Most property investors will be holding for at least three years – so it is important to analyse the performance of the market over this time frame. Over the last three years almost 20% of suburbs across Australia have witnessed property values increase by more than 50% between July 05 and July 08.
Between July 2005 and July 2008, all mainland capital cities have seen median house values increase. This value growth has ranged from just over $20,000 in Sydney ($6,813 annually) to more than $155,000 in Perth ($51,988 annually).
A similar phenomenon has occurred for units with Sydney’s median unit values recording the smallest amount of growth ($6,233 annually) and Perth unit values increasing by more than $190,000 or $63,596 annually.
These results highlight the diverse nature of the Australian property market with large variations in performance between cities. Increases in property values translate directly into equity for the owners property. This is real growth and can be used to re-invest in a wide range of asset classes. On average, across Australia, house owners have gained more than $85,000 in equity over the last three years and unit owners have gained more than $67,000 in equity, a very impressive result. It is also important to remember that whilst 2007 was a strong year, over the three year period only Adelaide and Perth witnessed a true boom in values.
Also impressive has been the increase in weekly rents over this period. Over the three year period, Darwin houses have seen rents climb by $267/week, Adelaide houses have seen the smallest rental increase of all mainland capital cities although, rents have still risen by $69/week. Across Australia, renters have seen house rents increase by $100/week over the last three years, unsurprisingly, the greatest increases have been seen during the last 12 months.
These strong rental increases directly result in yield improvement. If a property owner purchased a median priced property during Jul-05, the best rental return they would have achieved at that time was 5.6% for a house in Darwin and 6.3% for a unit in the same city. Meanwhile, the lowest yields at that time were found in Perth for houses (3.5%) and Perth for units (4.2%). Moving forward three years, if the purchaser still owned that property and was achieving current median rents (which is very achievable), the best house yields are now found in Darwin (10.3%) as are the best unit yields (10.1%).
Meanwhile, even the worst performing market in terms of projected rental yield is achieving a return of 5.0% for houses (Sydney) and 5.9% for units (Sydney and Melbourne). In fact, if properties were purchased in many of these areas three years ago on an interest only loan many would be close to being positively geared at the moment.
These results highlight that medium to long term property investment is a very solid investment class, with value growth fuelling equity increases, allowing owners to upgrade, renovate or re-invest. Once value growth slows, rental rates will generally begin to improve which in turn significantly improves yields and increases potential property returns from investment property.
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| | | Don't Despair - You can do it! | | Posted on: 26/09/2008 | | | From dream to reality
Author: Susan Wellings
Date: September 20, 2008
Publication: Sydney Morning Herald (subscribe)
There are ways to buy your first home but be prepared to make sacrifices.
You're young, just starting out and you don't have much money but you're still determined to buy your first home. And why not?
Despite high interest rates, a glum economic forecast and housing affordability slumping to the lowest level in more than 23 years, there's no need to despair.
Think outside the square, say the experts. Look at ways you can maximise your savings and minimise your expense and keep your fingers crossed for healthy interest-rate cuts.
"It's about setting realistic expectations within a sensible amount of money you can borrow without stretching yourself too much," says Housing Industry Association economist Harley Dale.
Take advantage of the Federal Government's Home Super Saver scheme, the First Home Owner Grant ($7000) and any other inducements available. "Then do your research, look around and adopt a savings culture to gather as much of a deposit as you can," he says.
And don't discount some of the more ingenious ways of saving on that precious first purchase.
With friends or family
Can't quite afford your dream home? Then think about buying it with friends (see case study, above right) or with family.
"I've seen more of this in the past three years than in the last 18," says Andrew Bowring, a planner with Maven Financial. "If you want to pay the median price of $450,000 to $500,000 that means you have to save up to $100,000 for a 20 per cent deposit. That's pretty difficult these days for a young person."
Most friends would buy together through a "tenants in common" contract, where they can divvy the mortgage and the benefits to match. Some parents might build a duplex, with the children living upstairs. This allows them to stay at home longer to save; other parents lend their children money to buy.
Personal assistant Alysha McIntosh's parents are buying a house on the lower North Shore, which she will "rent to buy". "I'll be paying them rent until my rent has bought the house from them," says McIntosh, 21. "Otherwise I'd just be paying a huge rent somewhere else, which is dead money. This is a great opportunity."
Many parents are pulling money out of their super after age 60 to help their children, too. Bowring often recommends they do this via a loan, which means that, if a young couple splits, there is some protection for the asset.
Aussie Home Loans also has a product, Aussie Family Advantage, which can eliminate the risk of parents losing their own homes if they act as guarantors for their child's mortgage.
In a cheaper area
Forget Vaucluse, Cremorne or Glebe. Look instead for a house in Emerton, Busby or Bullaburra. Liam O'Hara, senior economist with Australian Property Monitors, says these are the cheapest places to buy in Sydney.
The median price in Emerton in the west is $198,000, down 1 per cent from last year, in Busby in the south-west it's $235,000, down 8.9 per cent, and in Bullaburra in the Blue Mountains it's $279,000, down 20.3 per cent. "Median prices are falling across the board," he says.
Others say Campbelltown is a good place to buy. "It offers an unparalleled opportunity to enter the market at an affordable price," says Laing+Simmons general manager Leanne Pilkington.
The City Futures Research Centre at the University of NSW found Campbelltown one of four suburbs showing high ratios of mortgage repayment to household income.
If you're not keen on the outer Sydney suburbs, there may be opportunity further afield. For the price of a tired 20-year-old apartment in Melbourne or Sydney, you could buy, for example, a brand new four-bedroom home with two bathrooms and a two-car garage in a new master-planned community in Albury-Wodonga.
"There isn't the pressure-cooker on the regional residential rental market like there is in the cities but prices are very attractive with high rental yields, demand from a growing population and low entry prices," says John Thomson, sales manager of the 1040-block White Box Rise.
Apartment or townhouse
Apartments or townhouses can be up to 50 per cent cheaper than houses in a similar location and can mean less maintenance, more security and more convenience. "Many people start with an apartment and move on to a house later," says Walker Corp's Don Carvahlo. "Others like them so much they don't ever move into a house."
An apartment in an area such as Rhodes will usually be at least a third cheaper than a house, he says. "And it can be all about lifestyle, too."
Buy a dump and renovate
An increasing number of people are considering buying older, rundown properties and either working on them themselves or paying for professional help. The advantage is they can often move in and make do - until they've saved up enough for a renovation.
"We're getting more people asking us to come and look at houses to give them an estimate of how much it would cost to renovate or extend before they decide whether or not to buy," says Greg Neehan, the building supervisor at Trevan Constructions.
A new bathroom will start at about $10,000, he says, a kitchen at $10,000 or $20,000 with installation, and an extension on top of a small, single-storey house about $100,000.
"We are getting a lot of inquiries at the moment," Neehan says. "A lot of people are willing to make sacrifices in the short term to have a better house later."
Change your mindset
Most first-home buyers aren't going to be able to afford their dream home straight off. It might be better to view it differently from the start, says Mark Armstrong, director of Property Planning Australia and the author of Property For Life (Wiley Publishers).
Buying a property to rent out then sell is a way of acquiring capital but, unfortunately, that won't qualify for the first home-owner's grant.
"If people open up to the idea instead that this is an investment, instead of the home they'll want to live in for the rest of their lives, then all of a sudden a lot of opportunities open up," he says.
"It's about changing your focus and seeing it instead as a good investment, so you'll be buying in an area that grows more than, or at least the same as, the area you ultimately want to live in."
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| | | RBA Leaves Rates On Hold | | Posted on: 07/08/2008 | | | STATEMENT BY GLENN STEVENS, GOVERNOR
MONETARY POLICY
At its meeting today, the Board decided to leave the cash rate unchanged at 7.25 per cent.
Inflation in Australia has been high over the past year in an environment of limited spare capacity and earlier strong growth in demand. This was evident again in the most recent CPI data. In these circumstances, the Board has been seeking to restrain demand in order to reduce inflation over time.
As a result of increases in the cash rate last year and early this year, additional rises in market interest rates and tougher credit standards, there has been a substantial tightening in financial conditions since the middle of 2007. Some further tightening has occurred over the past couple of months. Conditions in international financial markets remain difficult, with heightened concerns over credit persisting.
The evidence is that the tightening in financial conditions, in conjunction with other factors including rising fuel costs, and lower asset values, has restrained demand. Indicators of household spending have continued to record subdued outcomes over recent months, and credit expansion to both households and businesses has slowed significantly. Surveys suggest a softening in business activity, and there have also been some early signs of an easing in labour market conditions.
The rise in Australia’s terms of trade that is currently occurring is working in the opposite direction, adding substantially to national income and ability to spend. At the same time, high prices of oil and a range of other commodities have added to global inflationary risks. They are also dampening growth in a number of countries.
Given the opposing forces at work, considerable uncertainty has surrounded the outlook for demand and inflation. On balance, however, it is looking more likely that demand will remain subdued, and economic growth will be fairly slow, over the period ahead. Inflation is likely to remain relatively high in the short term, with the CPI affected by high global oil prices. Looking further ahead, inflation in both CPI and underlying terms is likely to decline over time, given the outlook for demand, provided wages growth remains moderate. The Bank’s forecast remains that inflation will fall below 3 per cent during 2010.
Weighing up the available domestic and international information, the Board judged that the cash rate should remain unchanged this month. Nonetheless, with demand slowing, the Board’s view is that scope to move towards a less restrictive stance of monetary policy in the period ahead is increasing.
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| | | Not Surprising | | Posted on: 21/07/2008 | | | Mr Chris Griffin of Griffin Realty has described the latest Media Report from REIWA as "Not Surprising". "The property market has always been cyclic, and what we are seeing now is just part of the normal economic cycle of life. Prices have risen dramatically in a short period of time, and people have made money in spite of themselves, meaning that it didn't matter what you bought, you made money from it. NOw the fundamentals of property investing hold true, and you need to speak with specialists like Griffin Realty to make sure that you are investing in the right product."
Call us today so we can HELP YOU HELP YOURSELF! |
| | Perth houses prices drop $30,000 in 6 months
Rental vacancy rates return to normal | | Posted on: 21/07/2008 | | 11 July 2008
Data released today by the Real Estate Institute of Western Australia show that the Perth median
house price has dropped a further $14,000 since March, while the rental vacancy rate has returned
to normal for the first time in several years.
REIWA’s preliminary results for the June quarter show a 3 per cent fall in median price, pulling the
metropolitan median down from $460,000 in March to around $446,000.
This follows the median price having peaked at the end of last year at $475,000.
REIWA President Rob Druitt said the post-boom market was still correcting but had now been hit by
the weaker consumer confidence in the overall economy, interest rate uncertainty and petrol
prices.
“Perth has experienced an overall slump of almost $30,000 in the median price since the beginning
of this year, and the June quarter shows that this slump is found right across the metropolitan area
and also that the regions have gone backwards a little too,” Mr Druitt said.
REIWA data for June show that Mandurah dropped by 7 per cent, Greater Bunbury by 7 per cent,
Geraldton-Greenough by 9 per cent and Kalgoorlie by around 5 per cent.
Mr Druitt said the large number of properties for sale punctured the myth of a housing shortage.
“In WA we have a situation of oversupply – not a problem with undersupply, and this is due to the
strength of building activity between 2001 and 2007,” he said.
There were 17,200 properties on the market in June (down 2 per cent on March), including 2,450
blocks of land.
Mr Druitt said the once tight vacancy rate for tenants had now returned to normal, with REIWA
recording a comfortable 3 per cent vacancy rate, illustrating many new properties had flooded into
the rental system as investor/owners now found it a difficult time to sell.
“For the first time in several years tenants should now find it much easier to find a suitable home.
There is much more stock available and much more competition amongst owners to secure good
tenants.
“However, rents did increase a little in the June quarter, lifting by $10 per week for houses to a
median of $350 per week, while units rose by $10 per week to a median of $320 per week,” Mr
Druitt said.
“Given the large number of properties now being passed over into the rental system, it is
reasonable to expect that rental price growth will ease in the latter part of the year.
“Landlords need to be mindful of the changing conditions and not to price themselves out of the
market,” Mr Druitt said.
The oversupply of housing is not restricted to the Perth market with both Mandurah and Bunbury
recording high stocks of listings along with healthy vacancy rates which have contributed to no
movement in rents in these regions during June.
Contact:
REIWA President Rob Druitt
w) 9446 5222 m) 0417 922 194
REIWA Media Brian Greig
w) 9380 8274 m) 0417 946 917 |
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