Only a few weeks remain until the royal commission hands down its final report. Here are a few things to look out for when the final report is published on 1 February:

Only a few weeks remain until the royal commission hands down its final report. Its recommendations could be deadly in the hands of overzealous politicians approaching a federal election.

Many industry professionals will be hoping that cooler heads prevail when Commissioner Hayne’s final verdict is unveiled next month. It has been a challenging 12 months for the Australian financial services industry, with many casualties and a deeper sense of uncertainty about what the future will look like.

Unfortunately, the royal commission final report will be published in an election year; a notorious time for poor decision-making and short-sightedness by those who run the country. Once the two major political parties grow tired of punting the negative gearing debate around, they will no doubt pick up Hayne’s final report like a political football and continue their embarrassing mudslinging match until the last vote has been counted.

This is the real threat to the Australian mortgage industry; Hayne’s recommendations, on their own, pose little risk to the stability of the lending landscape and the viability of thriving, popular markets like the mortgage broking channel. But in the hands of politicians who will stoop to great depths to win a federal election, the recommendations from the royal commission could be catastrophic.

Here are a few things to look out for when the final report is published on 1 February:

Customer living expenses

The latest research from Digital Finance Analytics (DFA), which involves a survey of 52,000 households, has reported that approximately 40 per cent of home loan applications were rejected in December 2018, up from 8 per cent in December 2017. It’s fair to say that lenders have tightened up considerably.

One area that the royal commission focused on during 2018 was customer living expenses, specifically the use of the Household Expenditure Measure (HEM).

Clarity on mortgage broker duties

In his interim report, Commissioner Hayne noted that it is not clear what would be the content of a “customer first” duty for mortgage brokers.

“In particular, it is not clear how this form of duty is intended to differ from the duty to act in the best interests of the client that the Corporations Act imposes on financial advisers. Nor is it clear, if the two forms of duty are to be given different content, why the duty a mortgage broker owes to a borrower should differ from the duty a financial adviser owes a retail client,” he said.

Hayne made these remarks after considering the evidence given to the royal commission in the form of a letter from former CBA chief executive Ian Narev to Stephen Sedgwick. The letter outlined that broker loans were associated with higher leverage, are more likely to be interest-only, have higher LVRs and higher interest costs than those originated by the bank directly.

“There is no reason to doubt the accuracy of these findings,” Mr Hayne said. “They were the findings that ASIC recorded in its Review of Mortgage Broker Remuneration published in March 2017.”

The big questions

In the 10th chapter of Hayne’s interim report, he posted 15 questions about consumer lending, which he will presumably clarify via recommendations made in the final report next month. These questions should be front of mind for anyone working in consumer lending.

As you will see, there is a clear focus on the role of the intermediary, the role of the lender and the responsible lending guidelines outlined in the NCCP Act:

  • What duties does an intermediary owe to a borrower?
  • What duties should an intermediary owe to a borrower?
  • How can entities’ systems be improved to detect and prevent breaches of responsible lending obligations by intermediaries?
  • Are “introducer” programs compatible with responsible lending obligations?
  • Do broker contracts, as they stood at the time of the hearings, meet the statutory requirement imposed by Section 912A of the Corporations Act 2001 (Cth) to have arrangements in place to manage conflicts of interests? Do broker contracts, as now made, meet those requirements?
  • What should be disclosed to borrowers about an intermediary’s obligations to the lender and to the borrower?
  • What should be disclosed to borrowers about an intermediary’s remuneration?
  • What steps, consistent with responsible lending obligations, should a lender take to verify a borrower’s expenses?
  • Do the processes used by lenders, at the time of the hearings, to verify borrowers’ expenses meet the requirements of the NCCP Act? Do the processes now used meet those requirements?
  • Should the HEM continue to be used as a benchmark for borrowers’ living expenses?
  • Is the offer of a credit limit increase, where the customer has consented to receive such marketing, consistent with the NCCP Act obligation not to provide credit that is not unsuitable for the customer, having regard to their requirements and objectives? Is the offer of a credit limit increase based only on information held by the bank about a customer a breach of the NCCP Act obligation to take reasonable steps to verify the consumer’s financial situation?
  • When an employee or intermediary is terminated for fraud or other misconduct, should a licensee inform their clients of the reason for termination?
  • When an employee or intermediary is terminated for fraud or other misconduct, should a licensee review all the files or clients of that employee or intermediary for an incidence of misconduct?
  • Are certain types of add-on insurance, by their nature, poor value propositions for customers?

 

KPMG chief economist Brendan Rynne attributed recent price falls to lending controls imposed by the Australian Prudential Regulation Authority (APRA), as well as state taxation measures, which he said has a “significant effect” on the housing market.

Mr Rynne added: “There has been a falling-away in foreign interest, notably from China, and lending to domestic buyers has got stricter, while housing supply has increased.

“This is why prices have declined – but we believe that process will reach its peak over the next few months and then go into reverse later this year.”

However, despite forecasting a price recovery in 2021 across Sydney and Melbourne, KPMG noted that its forecast was predicated on current credit conditions and warned that a further tightening off the back of the financial services royal commission could prolong housing market weakness.

“To the extent, this availability of credit becomes tighter beyond what we have assumed in our analysis, then our house price forecasts are likely to be optimistic,” the KPMG report noted.

“It is important to highlight that an overreaction to the Hayne royal commission by the domestic banking sector that results in a tightening of credit more than what would be considered necessary to achieve ‘normal’ prudential lending standards could have a seriously negative effect on dwelling prices in Australia.”

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5 tips to help you buy in a slow housing market | LJ Gilland Real Estate

The year is expected to be uneventful for Australia’s property market as conditions remain the same — the fall in home prices, particularly in cities which saw tremendous growth before the downturn, is anticipated to continue while lending rules are predicted to remain strict.

Many believe that the continuous decline in home prices has turned the property scene into a buyer’s market, meaning that it would be easier to get the best deals. It is, however, not the case for everybody. Even in a slow market, there are risks that should be identified and avoided.

Real Estate Buyers Agents Association (REBAA) president Rich Harvey said it is common for buyers to mistakenly infer that they have better odds of acquiring bargains in a less buoyant market. He said that a slow market can have just as many pitfalls as a hot market, exposing inexperienced buyers to the risk of overpaying for property.

“Just because a property gets passed in at auction, doesn’t mean there aren’t two or more people interested who are sitting back, waiting to make their offer post-auction,” Harvey said, adding that any home buyer in this scenario may find themselves going against multiple parties blindly and paying too much for a property.

However, one huge advantage of a slow market is that it gives buyers time. This means that they do not necessarily feel the pressure to rush into a decision. With proper diligence and careful research, buyers have higher chances of getting the best property they can afford. Here are five tips on how you can successfully navigate the slow market and achieve the best deal possible.

Have your financing approved early on

The tight lending market presents a huge challenge for many home buyers — it is not as easy to borrow money from lenders today as it was during the property boom. If you want to get a head start, you have to act early by determining your borrowing power prior to going on a property hunt.

This will prevent any problems caused by finance delays, which can cost you hundreds, if not thousands, of dollars. Be sure to check when your pre-approval expires so that you can properly plot your schedule.

Do your research on your target suburb or area

A responsible buyer must not make hasty decisions. Remember, even if you feel like the market is on your side, it is important for you to still do your job and know what you are doing.

You have to carefully study the market conditions of the suburb where you are planning to buy. Does it have everything you need from accessibility, infrastructure, and lifestyle standpoints? Do you think the suburb has the best prospects in terms of value growth?

With regards to the selection of the property itself, you have to take note of your own needs. Does it have enough rooms for your family? Does the house have features that you believe will be useful to you?

For many market watchers, one vital thing to look for in a house is a car space or a garage. This feature is proven to boost a property’s resale value.

If you are a first-home buyer, you have to remember that it is okay for you not to get your dream home immediately. Start small and be realistic with your goals — take on a property that meets your standards, and more importantly, that you can afford.

Think with a long-term perspective

Buying in a slow market needs a long-term perspective. If you are planning to sell your property in a year or two for profit, then it is best to reconsider your strategy. Housing markets take time to make a significant turnaround after a downturn. In a slow market, it is ideal for you to occupy the property first, make some improvements, and wait for the conditions to strengthen considerably before selling.

This also applies to assess your needs for the next five to 10 years. Ensure that the property will remain suitable for you to avoid selling in the short-term.

Command the negotiating table

In a buyer’s market, you have the power to wield the best weapon against overpaying. One tip to ensure that you get the best deal is to look for a property that has been on the market for a long time. Sellers are usually open to give discounts if their property is not gaining much attention.

However, it is also important to note that being complacent will take you nowhere. Despite having a range of choices in a slow market, you still have to be firm in your decisions. Remember, you may face real estate agents who are professionally trained to negotiate prices.

When negotiating, you also have to be reasonable — bid too high and you risk overpaying, offer too low and you might not be taken seriously. It is all about playing the cards right.

Do not hesitate to seek professional help

Finding the right home is not easy, but help is always out there for those who might feel stuck between choices. You can seek the assistance of local buyer’s agents who have the necessary knowledge of the area or the market you are looking into. They will be able to guide you with regards to the area’s historical performance as well as the macroeconomic conditions shaping the current market trend. While professional help might add another item to your expenses, it can help you protect your budget and get you the best deal possible in a slow market.

Curious on how much you can borrow for a home loan?

L J Gilland Real Estate was formed in 1996 and has grown through word of mouth since then. The company is an independently owned family business based in Brisbane. Whilst the company functions in all sections of the market, L J Gilland has developed a speciality in the prestige investment market. L J Gilland Real Estate have been member agents of the Real Estate Institute of Queensland since 1996 and are holders of all appropriate Real Estate Licenses. On all matter relating to Property Management advice, it’s our dedication, experience and professionalism that counts We are Client focused in our business and we are more than happy to do the utmost for our Clients. Since 1996 our Agency has demonstrated a genuine enjoyment of working with people, developing long-term relationships and delivering on the promise of great service. Our Property Management Team offers investors with in-depth advise, well-researched rental valuations, and highly professional rental management services. AT A GLANCE: WE OFFER:- • Property Management – BRISBANE WIDE • Sales of properties with tenants in place • Body Corporate Management • Competitive Commission Rates • LET FEE FOR REFERRALS, We are a business built on 20 years of Referrals. • NO Lease Renewal & Comparable Market Analysis’ Fees/Charges. No hidden fees. • PHOTOS TAKEN ON ENTRY, tenants are shown about safety switches and water mains etc. • We meet all tenants on site. • Hands-on approach to all Property Investment Management Matters. Our goal is simple: to provide the greatest possible net operating income, while continually enhancing the value of the asset. We believe in using proven and new strategies and continually looking for new ways to provide cost savings for the property and the owner. Our vision: To provide a flexible and all-encompassing management service for our customers’ properties and assets. Our values: Exceptional customer service. Transparency, punctuality and reliability. Because we are a family business we have a more personal approach than most other agents, we continue to support your Investment Property Strategies aiming to maximize your rental returns and limit high turnover of tenants which could affect wear and tear on the property i.e. for example we take extraordinary amount of photographs of your property for use in addition to each entry and exit of tenant, not relying on generic RTA condition reports to back up in any potential claim mounted by any future tenant. LJ吉尔兰房地产有限公司 要求在这里免费租赁评估! “您的本地物业管理和销售专家”

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L J Gilland Real Estate was formed in 1996 and has grown through word of mouth since then. The company is an independently owned family business based in Brisbane. Whilst the company functions in all sections of the market, L J Gilland has developed a speciality in the prestige investment market. L J Gilland Real Estate have been member agents of the Real Estate Institute of Queensland since 1996 and are holders of all appropriate Real Estate Licenses. On all matter relating to Property Management advice, it’s our dedication, experience and professionalism that counts We are Client focused in our business and we are more than happy to do the utmost for our Clients. Since 1996 our Agency has demonstrated a genuine enjoyment of working with people, developing long-term relationships and delivering on the promise of great service. Our Property Management Team offers investors with in-depth advise, well-researched rental valuations, and highly professional rental management services. AT A GLANCE: WE OFFER:- • Property Management – BRISBANE WIDE • Sales of properties with tenants in place • Body Corporate Management • Competitive Commission Rates • LET FEE FOR REFERRALS, We are a business built on 20 years of Referrals. • NO Lease Renewal & Comparable Market Analysis’ Fees/Charges. No hidden fees. • PHOTOS TAKEN ON ENTRY, tenants are shown about safety switches and water mains etc. • We meet all tenants on site. • Hands-on approach to all Property Investment Management Matters. Our goal is simple: to provide the greatest possible net operating income, while continually enhancing the value of the asset. We believe in using proven and new strategies and continually looking for new ways to provide cost savings for the property and the owner. Our vision: To provide a flexible and all-encompassing management service for our customers’ properties and assets. Our values: Exceptional customer service. Transparency, punctuality and reliability. Because we are a family business we have a more personal approach than most other agents, we continue to support your Investment Property Strategies aiming to maximize your rental returns and limit high turnover of tenants which could affect wear and tear on the property i.e. for example we take extraordinary amount of photographs of your property for use in addition to each entry and exit of tenant, not relying on generic RTA condition reports to back up in any potential claim mounted by any future tenant. LJ吉尔兰房地产有限公司 要求在这里免费租赁评估! “您的本地物业管理和销售专家”

L J Gilland Real Estate was formed in 1996 and has grown through word of mouth since then. The company is an independently owned family business based in Brisbane. Whilst the company functions in all sections of the market, L J Gilland has developed a speciality in the prestige investment market. L J Gilland Real Estate have been member agents of the Real Estate Institute of Queensland since 1996 and are holders of all appropriate Real Estate Licenses. On all matter relating to Property Management advice, it’s our dedication, experience and professionalism that counts We are Client focused in our business and we are more than happy to do the utmost for our Clients. Since 1996 our Agency has demonstrated a genuine enjoyment of working with people, developing long-term relationships and delivering on the promise of great service. Our Property Management Team offers investors with in-depth advise, well-researched rental valuations, and highly professional rental management services. AT A GLANCE: WE OFFER:- • Property Management – BRISBANE WIDE • Sales of properties with tenants in place • Body Corporate Management • Competitive Commission Rates • LET FEE FOR REFERRALS, We are a business built on 20 years of Referrals. • NO Lease Renewal & Comparable Market Analysis’ Fees/Charges. No hidden fees. • PHOTOS TAKEN ON ENTRY, tenants are shown about safety switches and water mains etc. • We meet all tenants on site. • Hands-on approach to all Property Investment Management Matters. Our goal is simple: to provide the greatest possible net operating income, while continually enhancing the value of the asset. We believe in using proven and new strategies and continually looking for new ways to provide cost savings for the property and the owner. Our vision: To provide a flexible and all-encompassing management service for our customers’ properties and assets. Our values: Exceptional customer service. Transparency, punctuality and reliability. Because we are a family business we have a more personal approach than most other agents, we continue to support your Investment Property Strategies aiming to maximize your rental returns and limit high turnover of tenants which could affect wear and tear on the property i.e. for example we take extraordinary amount of photographs of your property for use in addition to each entry and exit of tenant, not relying on generic RTA condition reports to back up in any potential claim mounted by any future tenant. LJ吉尔兰房地产有限公司 要求在这里免费租赁评估! “您的本地物业管理和销售专家”

 

L J Gilland Real Estate was formed in 1996 and has grown through word of mouth since then. The company is an independently owned family business based in Brisbane. Whilst the company functions in all sections of the market, L J Gilland has developed a speciality in the prestige investment market. L J Gilland Real Estate have been member agents of the Real Estate Institute of Queensland since 1996 and are holders of all appropriate Real Estate Licenses. On all matter relating to Property Management advice, it’s our dedication, experience and professionalism that counts We are Client focused in our business and we are more than happy to do the utmost for our Clients. Since 1996 our Agency has demonstrated a genuine enjoyment of working with people, developing long-term relationships and delivering on the promise of great service. Our Property Management Team offers investors with in-depth advise, well-researched rental valuations, and highly professional rental management services. AT A GLANCE: WE OFFER:- • Property Management – BRISBANE WIDE • Sales of properties with tenants in place • Body Corporate Management • Competitive Commission Rates • LET FEE FOR REFERRALS, We are a business built on 20 years of Referrals. • NO Lease Renewal & Comparable Market Analysis’ Fees/Charges. No hidden fees. • PHOTOS TAKEN ON ENTRY, tenants are shown about safety switches and water mains etc. • We meet all tenants on site. • Hands-on approach to all Property Investment Management Matters. Our goal is simple: to provide the greatest possible net operating income, while continually enhancing the value of the asset. We believe in using proven and new strategies and continually looking for new ways to provide cost savings for the property and the owner. Our vision: To provide a flexible and all-encompassing management service for our customers’ properties and assets. Our values: Exceptional customer service. Transparency, punctuality and reliability. Because we are a family business we have a more personal approach than most other agents, we continue to support your Investment Property Strategies aiming to maximize your rental returns and limit high turnover of tenants which could affect wear and tear on the property i.e. for example we take extraordinary amount of photographs of your property for use in addition to each entry and exit of tenant, not relying on generic RTA condition reports to back up in any potential claim mounted by any future tenant. LJ吉尔兰房地产有限公司 要求在这里免费租赁评估! “您的本地物业管理和销售专家”

Wonderful service and excellent outcomes across the board – 25 Feb 2018 Linda and Carlos have been a pleasure to work with during the 10 years they managed our investment property, including the eventual sale. Engaging and personable, Linda and Carlos are always professional and consistently provide excellent, attentive service. I love the way they keep everyone informed in a timely manner and always seek the best outcomes for all parties involved. It’s been a wonderful association and I couldn’t be more enthusiastic about recommending their services. https://www.ratemyagent.com.au/real-estate-agent/linda-debello/reviews/3-planigale-cres-north-lakes-aajz43 Very helpful – 25 Feb 2018 Carlos was very helpful along the way. Thank you! https://www.ratemyagent.com.au/real-estate-agent/linda-debello/reviews/3-planigale-cres-north-lakes-aajz5u Removing the Hassle from Sales & Rentals Brisbane Wide https://www.ratemyagent.com.au/real-estate-agent/linda-debello/reviews/32-musgrave-st-north-lakes-aail7o https://www.ratemyagent.com.au/real-estate-agent/linda-debello/reviews/19-eaton-cl-north-lakes-aaj14y https://www.ratemyagent.com.au/real-estate-agent/lj-gilland-real-estate/reviews/16-st-clair-court-redland-bay-aag45d https://www.ratemyagent.com.au/real-estate-agent/lj-gilland-real-estate/reviews/6-greenmeadow-road-mansfield-aafms7 https://www.ratemyagent.com.au/real-estate-agent/lj-gilland-real-estate/reviews/11-reynolds-cl-redbank-plains-aafwtr https://www.ratemyagent.com.au/real-estate-agent/lj-gilland-real-estate/reviews/11-reynolds-cl-redbank-plains-aafu86 http://www.facebook.com/ljgrealestate & Find Us on Google+

The year is expected to be uneventful for Australia’s property market as conditions remain the same — the fall in home prices, particularly in cities which saw tremendous growth before the downturn, is anticipated to continue while lending rules are predicted to remain strict.

Many believe that the continuous decline in home prices has turned the property scene into a buyer’s market, meaning that it would be easier to get the best deals. It is, however, not the case for everybody. Even in a slow market, there are risks that should be identified and avoided.

Real Estate Buyers Agents Association (REBAA) president Rich Harvey said it is common for buyers to mistakenly infer that they have better odds of acquiring bargains in a less buoyant market. He said that a slow market can have just as many pitfalls as a hot market, exposing inexperienced buyers to the risk of overpaying for the property.

“Just because a property gets passed in at auction, doesn’t mean there aren’t two or more people interested who are sitting back, waiting to make their offer post-auction,” Harvey said, adding that any home buyer in this scenario may find themselves going against multiple parties blindly and paying too much for a property.

However, one huge advantage of a slow market is that it gives buyers time. This means that they do not necessarily feel the pressure to rush into a decision. With proper diligence and careful research, buyers have higher chances of getting the best property they can afford. Here are five tips on how you can successfully navigate the slow market and achieve the best deal possible.

Have your financing approved early on

The tight lending market presents a huge challenge for many home buyers — it is not as easy to borrow money from lenders today as it was during the property boom. If you want to get a head start, you have to act early by determining your borrowing power prior to going on a property hunt.

This will prevent any problems caused by finance delays, which can cost you hundreds, if not thousands, of dollars. Be sure to check when your pre-approval expires so that you can properly plot your schedule.

Do your research on your target suburb or area

A responsible buyer must not make hasty decisions. Remember, even if you feel like the market is on your side, it is important for you to still do your job and know what you are doing.

You have to carefully study the market conditions of the suburb where you are planning to buy. Does it have everything you need from accessibility, infrastructure, and lifestyle standpoints? Do you think the suburb has the best prospects in terms of value growth?

With regards to the selection of the property itself, you have to take note of your own needs. Does it have enough rooms for your family? Does the house have features that you believe will be useful to you?

For many market watchers, one vital thing to look for in a house is a car space or a garage. This feature is proven to boost a property’s resale value.

If you are a first-home buyer, you have to remember that it is okay for you not to get your dream home immediately. Start small and be realistic with your goals — take on a property that meets your standards, and more importantly, that you can afford.

Think with a long-term perspective

Buying in a slow market needs a long-term perspective. If you are planning to sell your property in a year or two for profit, then it is best to reconsider your strategy. Housing markets take time to make a significant turnaround after a downturn. In a slow market, it is ideal for you to occupy the property first, make some improvements, and wait for the conditions to strengthen considerably before selling.

This also applies to assess your needs for the next five to 10 years. Ensure that the property will remain suitable for you to avoid selling in the short-term.

Command the negotiating table

In a buyer’s market, you have the power to wield the best weapon against overpaying. One tip to ensure that you get the best deal is to look for a property that has been on the market for a long time. Sellers are usually open to give discounts if their property is not gaining much attention.

However, it is also important to note that being complacent will take you nowhere. Despite having a range of choices in a slow market, you still have to be firm in your decisions. Remember, you may face real estate agents who are professionally trained to negotiate prices.

When negotiating, you also have to be reasonable — bid too high and you risk overpaying, offer too low and you might not be taken seriously. It is all about playing the cards right.

Do not hesitate to seek professional help

Finding the right home is not easy, but help is always out there for those who might feel stuck between choices. You can seek the assistance of local buyer’s agents who have the necessary knowledge of the area or the market you are looking into. They will be able to guide you with regards to the area’s historical performance as well as the macroeconomic conditions shaping the current market trend. While professional help might add another item to your expenses, it can help you protect your budget and get you the best deal possible in a slow market.

Curious on how much you can borrow for a home loan?  Talk to us as we can refer to you best practice finance professionals whom have helped our Valued Clients over more than 22 years…..

 

Australia is about to get its second strike this year as it maintains its position as the world’s weakest-performing housing market for the second year in a row, according to a rating agency’s projection.

A recent report by Fitch Ratings predicts that house prices in Australia will fall by another 5% this year, making it the worst amongst the 24 countries monitored by the credit rating agency.

The national housing market ended 2018 with a 6.7% house price decline, driven by the muted demand from investors. Sydney and Melbourne, Australia’s largest housing markets, have already recorded peak-to-trough declines of 11% and 7.2%, respectively, as of last month.

“We expect price declines to continue at a similar pace in 2019 in Sydney and Melbourne, where larger falls have occurred,” the report said.

Another cause of concern is Australia’s household debt-to-GDP ratio, which has already hit 121%. This, according to Fitch, represents a material risk to the economy.

However, banks are attempting to mitigate the hazards by tightening their lending rules. As first-homebuyers struggle to get their funding, housing credit growth is predicted to tighten further to 3.5%, from 5.1% in October.

The tough lending environment will also result in a slight increase in mortgage arrears of over 90 days.

“Properties in possession will take longer to sell as home prices fall, so loans will remain delinquent for longer. Early-stage mortgage arrears — 30 to 90 days in arrears — will be broadly stable in 2019,” the report said.

 

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Property managers don’t drive the fancy cars, but they should be praised just as much as their sales agent counterparts.

Tenants and landlords everywhere grumble about their property managers, assuming they aren’t doing their job properly or are simply doing nothing at all.

It makes sense that the source of most complaints that real estate agencies will receive comes from tenants. Landlords are paying them to collect rent, which at times is not an easy task and it’s unfortunate if they get bad reviews simply for doing their job.

But those that don’t work in real estate will not realise the importance of a Property Manager, how hard they work and the responsibility that they are taking on for those with investment properties.

Property Managers are the ones that work in real estate without necessarily driving the fancy cars, but they should be praised just as much as their sales agent counterparts.

They are underappreciated, underpaid and invaluable to real estate agencies and while sales agents seem to steal most of the limelight in the industry, we need to remember what they do and realise it isn’t always straightforward before we start complaining.

They play various roles 

It’s tougher than people think but there are a variety of skills that Property Managers need to be successful.

They are mediators, helping to resolve conflict between tenants and landlords who, in my experience, are both demanding sets of people. This problem is exacerbated with everyone wanting everything instantly, whether it be the money for rent or something fixed. It puts a lot of strain on relationships.

Property Managers are also problem solvers, appeasing concerns and working towards solutions for everything from rent increases to maintenance.

They conduct inspections and condition reports making sure everything is accounted for across properties and advise landlords on who the perfect tenant will be from countless applications received.

There are even times where Property Managers end up in tribunals or courts attempting to resolve a dispute on behalf of a landlord.

They manage more than you think 

Property Managers are in control of what is one of people’s most expensive and valuable assets aside from their own home.

One Property Manager can have over 200 properties entrusted to them. Even if these are valued at $500,000 each, they are responsible for $100 million in assets. They have a lot of wealth in their care yet compared to other financial fund managers who also ensure that assets are protected, Property Managers get paid little.

They have a lot on their plate

It’s a job that involves being on-call every day of the week, so even when Property Managers aren’t in the office, they are still technically ‘at work’.

Property Managers are the ones who get a call at midnight with a tenant complaining about a broken pipe, with inspections for new rentals often held in the evenings or on weekends. They don’t always get remunerated for the possible round the clock work that can be involved in the job.

The house or commercial property that you lease isn’t the only property they are managing as they are dealing with countless other calls and emails of people wanting the exact same thing.

People should cut their Property Manager some slack and think twice before complaining, as there’s always a lot more to the job than meets the eye.

The decline in house prices and what it means for tenants:-

Australian median house prices have declined over the past year and are expected to only drop further, but with capital gain and equity in houses declining, it’s renters who are left to make up the difference.

With rent prices increasing, drastic measures are being taken to secure a suitable home, such as rental bidding. Many Australians believe rental bidding will only become illegal with recent rental reforms, when in fact, explicit rental bidding is already banned under Australian Consumer Law.

Whilst unethical and illegal, rental bidding still takes place as it’s hard to monitor from the outside, but there are ways you can legally offer more rent in order to secure that house you love.

Rental bidding is illegal under Australian consumer law 

New reforms slated for 2020 are set to ‘crackdown’ on rental bidding but unbeknownst to most, rental bidding is already illegal, falling under Australian Consumer Law. The current law states that a person must not engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

So why do people still engage in it? Rental properties experience high demand, particularly in February, which is the busiest period of the year. It’s not only beneficial for the tenant in assisting them to secure a high-demand rental, but it’s also a way to get the ‘best’ result for the landlord amidst a competitive rental market.

Overall, the practice is difficult to police since it is hard to prove if an agency is explicitly misleading applicants with deceptive conduct and relaying messages back and forth.

If a tenant believes they are experiencing rental bidding, they can go to the Australian Consumer Affairs with their case to ensure the agency is arraigned.

A tenant needs to ensure they have evidence by recording communication and confirming correspondence in writing in order to be able to distinguish between rental bidding and simply offering more money.

Tenants can offer more money but agencies cannot ask for more 

Offering more money for a property is different from rental bidding. Tenants can legally offer more for a rental property and landlords are allowed to accept an additional sum on top of the original weekly rent.

Property managers are allowed to inform the landlord of an offer, but they can not go back to the prospective tenant to ask for a higher amount.

A 2016 Consumer Affairs Victoria report estimated that one in five tenants offer to pay more than the advertised rent, but offering more money is not the only way to secure a property.

Prospective tenants from overseas have been known to offer up to 12 months rent in advance in order to secure a particular property, which offers stability and peace of mind for both the tenant and the vendor.

Agencies can ask for applicants to submit their best offer 

There are ways that an agency can navigate through offers from the applicants in order to please both the tenants and the landlord.

A property may be popular and have a number of offers that are equally appealing. In this instance, a property manager can give applicants an idea of what the vendor will accept and present applicants with the opportunity to make their best offer.

But this needs to be done right from the beginning in order to make it fair to all prospective tenants at the same time, while still complying with the current regulations.

For this to be done within rental laws, the property manager cannot suggest it to landlords but rather advise them that they will advertise the property at a specific price and will inform the prospects to put their best offer forward.

In no circumstance should a property manager treat a rental property like an auction, encouraging prospective tenants to keep putting up their offer in order to secure the tenancy.

Rental bidding can be instigated by tenants, property managers or landlords however it is the responsibility of the property manager to ensure that all procedures are followed, laws are not breached and all parties involved get the best outcome.

Posted in LJ Gilland Real Estate Pty Ltd

Media tends to measure markets by movements in

Media tends to measure markets by movements in median prices. But other measures of the health of major markets are worthy of attention, including sales volumes, vacancy rates and movements in rentals.

Rental data is often a forward-looking marker of things to come with prices. Sydney had a couple of years of major rental growth, but little in the way of price growth, before embarking on its price boom from 2013 to 2017. Hobart recorded very low vacancies and the nation’s biggest rental growth before starting the mini-boom on prices that’s still occurring.

So we should keep a close eye on what’s happening with vacancies and rents in the major cities.

The Domain Rental Report for the December 2018 Quarter shows that rents are stronger than sale prices in terms of growth in the past year. Six of the eight capital cities delivered growth in their rentals in 2018, both for houses and for apartments. Recent rental data from SQM Research has similar numbers.

There is, as always, a strong correlation between vacancy rates and rental growth.

The cities with the tightest rental markets, Hobart (0.4% vacancy, according to SQM) and Canberra (0.9%), are the ones with the highest annual growth in their rentals.

Other cities with low vacancies, Adelaide (1.2%) and Melbourne (1.9%), have also recorded solid growth in their rentals.

Two cities where vacancy rates have been high in the recent past but have improved recently – Brisbane (3.0%) and Perth (3.4%) – are also both delivering moderate growth in their rents.

The only cities where rents have fallen in the past year are those where vacancies are trending higher – Sydney (current vacancy rate 3.2%, up from 2.1% a year ago) and Darwin (4.0%, up from 2.8% a year ago).

Sydney house rents have declined annually for the first time in 12 years. Sydney is no longer the nation’s most expensive capital city to rent a house.

Canberra house rents have continued to rise on the back of low vacancies and the national capital is now the most expensive city for house rentals (according to Domain – the SQM Research figures differ on this point).

Brisbane house rents increased annually for the first time in almost three years, helped by improvement in the vacancy rate. This is one of numerous markers suggesting that Brisbane real estate will be stronger in 2019.

Hobart house rents continue to increase, but the rate of growth has slowed. There’s a similar trend with prices and this, combined with a gradual decline in sales activity recently, suggests the mini-boom in the Tasmanian capital has passed its peak. 

Perth house rents have increased annually for the first time in five years. “Coupled with improving yields, the city will become a more attractive option for investors,” says Domain. I tend to agree and note that there are other indicators of improvement in the Perth market, including increased sales activity and elevated prices in the million-dollar suburbs.

In the apartment markets, Sydney unit rents have declined for two consecutive quarters for the first time on record, with rents hitting an almost two-year low, Domain says.

Brisbane unit rents recorded the strongest annual increase in almost three years. I note that Moody’s Analytics is forecasting Brisbane will be a national leader on apartment price growth in the next year or two.

Canberra unit rents experienced the strongest annual growth the city has seen in almost two years, yet another marker of stronger performance in this market, which is underpinned by one of the nation’s best economies and lowest jobless rate.

Overall the rental data, alongside other figures, points to stronger markets this year in Canberra, Brisbane, Perth and Adelaide – and confirms the decline in Sydney, while pointing a gradual wind-down in Hobart’s buoyant market.

Source Terry Ryder

#research #yield #rents #property-manager #ljgrealestate
http://ljgrealestate.com.au/rental/3-15-lancewood-street-algester-qld-4115/

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The strongest capital city sub-regions were confined to Hobart, Canberra, Brisbane and Adelaide where housing prices are generally – Jan. 2019 Market Update

Housing market conditions ended the 2018 calendar year on a weak note, with the rate of decline consistently worsening over the year. National dwelling values were down 2.3% over the December quarter; the largest quarter on quarter decline since the December quarter of 2008

Index Results as at December 31 

According to the CoreLogic December home value index results, the downturn in Australian housing conditions accelerated through 2018, driven by consistently larger quarter-on-quarter declines in Sydney and Melbourne together with a reprisal in Perth’s rate of decline and slowing conditions across the remaining capital cities and most regional markets. The year finished with national dwelling values down 4.8%, ranging from an 8.9% fall in Sydney values through to a 9.9% rise in values across regional Tasmania.

Most regions of Australia recorded a weaker housing market performance in 2018 relative to 2017. Four of the eight capital cities recorded a decline in dwelling values over the calendar year led by Sydney (-8.9%) and Melbourne (-7.0%), while values were also lower across Perth (-4.7%) and Darwin (-1.5%). The remaining capital cities recorded a rise in values, although conditions weren’t as strong as 2017 with every capital city recording a weakening in the pace of growth or an acceleration in the rate of decline over the year.

Rolling Annual Change in Index Values 

According to CoreLogic head of research Tim Lawless, the broad weakening in housing market conditions in 2018 highlights that this slowdown goes well beyond the correction in Sydney and Melbourne.

He said, “Although Australia’s two largest cities are the primary drivers for the weaker national reading, most regions around the country have reacted to tighter credit conditions by recording weaker housing market results relative to 2017.

“The two exceptions were regional Tasmania, where the pace of capital gains was higher relative to 2017 resulting in a nation leading 9.9% gain in values over the 2018 calendar year, and Darwin, where the annual rate of decline improved from -8.9% in 2017 to -1.5% in 2018.”

The December CoreLogic housing market results take national dwelling values down by a cumulative 5.2% since peaking in October 2017. Values across the combined capitals are down a larger 6.7% since peaking, while regional dwelling values have been more resilient to falls, down by 1.5%.

Annual Change in Dwelling Values 

Although Sydney and Melbourne recorded the weakest conditions, the peak to current declines are much less severe relative to Perth and Darwin where values have been falling since mid-2014. Sydney values are now 11.1% lower relative to the July 2017 peak and Melbourne values are down 7.2% since peaking in November 2017. The downturn has been running much longer in Perth and Darwin, resulting in cumulative falls of 15.6% and 24.5% respectively.

At the end of 2018, Sydney values were back to where they were in August 2016, while Melbourne values are back to February 2017 levels. Perth values are back to levels last seen in March 2009 and Darwin dwelling values are at October 2007 levels.

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