Canberra (16%), Hobart (11%), Melbourne (10%), Brisbane (7%), Adelaide (7%) and Perth (3%) over the next three years due to increased demand and limited supply.

Housing affordability is slated to improve over the next three years as unit prices fall due to a glut of apartments in Australia’s major cities, according to a new report.

Unit prices are expected to drop by 7% in Brisbane, 5% in Melbourne and 4% in Sydney, providing an opening for more first time buyers to enter the market, states QBE’s Housing Outlook 2017-20 report.

QBE Lenders’ Mortgage Insurance CEO Phil White said that the apartment sector will have a growing influence on the nation’s property market over the coming decades. Units now account for 46% of all residential construction across the country. Investor demand for units is also expected to weaken largely due to tighter lending standards, the report says.

“With so many Australians priced out of the housing market, the Australian Dream of owning property is increasingly turning to high and medium density apartments,” he said. “Units contribute to a greater share of the market as changing lifestyles and affordability dictate property choices.

“Encouragingly, that dream should become a reality for more Australians, with improving affordability overall.”

According to the report, house prices will rise in Canberra (16%), Hobart (11%), Melbourne (10%), Brisbane (7%), Adelaide (7%) and Perth (3%) over the next three years due to increased demand and limited supply. Sydney experienced 12% growth in house prices in the 2016-17 financial year, and is expected to flatten to -0.2% by 2020.

But overall, the report forecasts that Sydney, Melbourne, Adelaide, Perth and Darwin will become more affordable in the next three years, while Hobart and Canberra are expected to become less affordable. Affordability forecasts are based on mortgage repayments on 75% of the median house price as a proportion of average household disposable income.

“Recent low affordability in Sydney and Melbourne should stop purchasers from taking larger mortgages and bidding up prices even more,” he said.

With more lending restrictions impacting investors, it could be good news for owner occupiers as they should face less competition from investors, he added.

According to the report, first home buyer loans declined by less than 1% in 2016/17. However, overall signs of strengthening demand for first home buyers are emerging with 13% more loans approved to first home buyers to the three months to July 2017 compared to the prior year.

Looking further ahead, White said around 6.5 million people will need to be housed over the next 15 years.

“The forecast population growth raises questions about whether our property market will have us on track to meet short, medium and long-term population challenges,” he said. “Careful planning for housing stock and infrastructure is imperative.”

The report forecasts Sydney, Melbourne, Adelaide, Perth and Darwin to become more affordable in the next three years. Hobart and Canberra are expected to become less affordable to June 2020.

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CAPITAL GAINS TAX ON DEFERRED PROPERTY SETTLEMENTS OVER 12 MONTHS

img 20170812 150921

img 20170812 150921

A recent ruling on Capital Gains Tax on Deferred Settlement over 12 months by the ATO TD 94/89 has clarified a position in relation to capital gains tax – when a contract for sale has a deferred settlement period, this could be 12 months or over several years time.

Even though a capital gain must be recorded in the income year where contracts were exchanged, the tax return does not need to record this until after settlement has taken place. Generally by the time you lodge your tax return the typical CGT event has settled and the proceeds of the sale have been paid. However, if the settlement is beyond the typical 1-3 months, and over 12 months in advance, you may find you have not settled on the property by the time you normally would need to lodge your return and declare the CGT event.

In situations where there is an extended deferred settlement, this could cause you to lodge your return late, to ensure settlement actually occurs. However, the ATO will allow you to lodge your return without the CGT Event declared, provided you lodge an amendment once settlement takes place.

MORE TECHNICAL EXPLANATION PROVIDED-

When a property is disposed of under a contract, CGT event A1 occurs. The time of the event is when the contract is entered into (ITAA 1997 s 104-10(3)). Accordingly, s 104-10 goes on to say that a capital gain will occur when the capital proceeds on the disposal of the asset are more than the asset’s cost base.

It is clear from the reading of s 104-10 that the capital gain from the sale of a property must be included in that income year’s tax return. However, many circumstances may exist where the capital proceeds received by the taxpayer occur at a time later than the exchange of a contract for sale.

This period, known as the settlement period, has no standard length and therefore may be deferred until a later point in time, not necessarily in the following tax year. A recent Private Binding Ruling has conveyed the ATO’s position when these types of arrangements occur.

IN THE PRIVATE BINDING RULING, THE FOLLOWING ARE THE RELEVANT FACTS AND CIRCUMSTANCES:

  • • The taxpayer signed a contract to sell land they owned with other parties.
  • • Proceeds for the land sold would be made over a period of several years.
  • • The land title will not transfer until the final settlement payment is made.
  • • The taxpayer intends to amend their original tax return once the final settlement is made after those several years.

In the Ruling, the ATO found it acceptable that the taxpayer would initially prepare and lodge the tax return without the capital gain included. In the subsequent year, where the final settlement and land title transfer would take place, the taxpayer could go back and amend that original lodgment.

This is allowed by TD 94/89 where the ATO discusses a situation where land is disposed of in one income year but settles in a later year.

In the Ruling, it states that a taxpayer is not required to include a capital gain on their tax return until such time as a change of ownership occurs.

The ATO has stated in TD 94/89 that the discretion would ordinarily be exercised to remit interest in full where the request for amendment is made within a reasonable time frame after the date of settlement. In most cases, the ATO would consider a period of one month after settlement to be a reasonable period.

20170222125824-957769

Posted in LJ Gilland Real Estate Pty Ltd

HTW #October #Housing #Brisbane #Australia – LJ Gilland Real Estate by @GillandDebello #property https://www.slideshare.net/GillandDebello/htw-october-housing-brisbane-australia-lj-gilland-real-estate

HTW #October #Housing #Brisbane #Australia – LJ Gilland Real Estate by @GillandDebello #property https://www.slideshare.net/GillandDebello/htw-october-housing-brisbane-australia-lj-gilland-real-estate

http://www.ljgrealestate.com.au

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Keeping it in the family

Australia’s housing affordability crisis isn’t going away, and with more first home buyers relying on their parents to fill the income gap, innovative solutions are needed now more than ever. La Trobe Financial’s Cory Bannister explains how the non-bank lender is making the Australian dream still possible

 

Owning a home is a cultural rite of passage in Australia, but this financial achievement has become increasingly out of reach for most young adults.

 

Keeping it in the Family

State of the Market Report – September 2017 | Domain – Product http://mvnt.us/m522222

Total Returns From Housing are Starting to Ease

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Posted in Australia, Brisbane, ECONOMIC OUTLOOK, ECONOMY FINANCE BUSINESS LJGREALESTATE RENTALS PROPERTY SALES PROPERTY INVESTOR PROPERTY MANAGEMENT, family, LJ Gilland Real Estate Pty Ltd, ljgrealestate, Maintenance Renovating tips Construction Home Staging Property Sales Property Management Property Investor Builders Developers Rentals Sales Tenance | Tagged , ,

State of the Market Report – September 2017 | Domain – Product http://mvnt.us/m522222

 

The latest data on dwelling approvals and housing finance are firmer than anticipated, while house price growth in Sydney and Melbourne remains relatively strong. Taken together, this suggests that the moderation in the housing market and residential construction will be gradual. Uncertainty about the timing and extent of the expected downturn in home-building continues to pose a risk to our GDP forecast

State of the Market Report – September 2017 | Domain – Product http://mvnt.us/m522222

10B KARAWATHA STREET SPRINGWOOD. PROPERTY FOR RENT. THERE IS AN OPEN HOME TOMORROW SATURDAY FROM 11:00-11:30AM ANY ISSUES CALL CARLOS ON 0413 560 808 THANKS LJ GILLAND REAL ESTATE

Posted in Australia, Brisbane, ECONOMY FINANCE BUSINESS LJGREALESTATE RENTALS PROPERTY SALES PROPERTY INVESTOR PROPERTY MANAGEMENT, Empowerment, family, finance, Foreign Investment, GDP, LJ Gilland Real Estate Pty Ltd, ljgrealestate, maintenance & roofing, Maintenance Renovating tips Construction Home Staging Property Sales Property Management Property Investor Builders Developers Rentals Sales Tenance | Tagged , , , , , ,

9 Ways to Fall Back to Sleep When You Wake Up in the Night

Source: 9 Ways to Fall Back to Sleep When You Wake Up in the Night

Posted in LJ Gilland Real Estate Pty Ltd

Total Returns From Housing are Starting to Ease

CoreLogic’s Accumulation Index looks at the total returns from the housing asset class factoring in the change in the value of the dwelling and the gross rental return from the property.

The CoreLogic Accumulation Index shows that nationally, the total returns from the housing asset class over the 12 months to August 2017 were 13.2%.  Because the return is calculated from value change as well as the gross rental yield, you tend to find that houses have a superior value growth performance while units offer superior rental returns.  Over the past year, total returns for houses nationally have been recorded at 13.5% compared to a 12.0% return for units.  Over the 10 years to August 2017, the annual total returns for housing nationally have been recorded at 8.8%, split between 8.9% for houses and 8.5% for units.

Annual total returns from the housing asset class,
National

2017-09-18--annualtotalreturnsnationl

Total housing returns have generally been superior in capital cities to regional markets however, in the 2008 and 2010-11 downturns, returns slumped by a greater magnitude in the capital cities.  Over the past decade, combined capital city annual total returns have been recorded at 9.3% with returns of 9.5% for houses and 9.0% for units.  Over the 12 months to August 2017, total returns have been recorded at 14.0% for houses and 12.3% for units.  Like the national chart, the recent data for the combined capital cities shows that total returns have started to slow.

Annual total returns from the housing asset class,
combined capital cities

2017-09-18--annualtotalreturnscapitlcities

Regional markets are also beginning to see total returns slow however, the returns over recent years have generally not been as strong as those across the combined capital cities.  Over the past 12 months, total returns have been recorded at 11.7% for houses and 10.2% for units.  Over the past decade, annual total returns for housing outside of the capital cities have been recorded at 7.0%, 7.2% for houses and 5.6% for units.

Annual total returns from the housing asset class,
combined regional markets

2017-09-18--annualtotalreturnsregionalmarkets

Hobart has recorded the strongest annual growth of all capital cities over the past year and it also has some of the highest rental yields which has meant it has had the strongest total returns.  Total returns for houses over the past year have been above 10% in each of Sydney, Melbourne, Adelaide, Hobart and Canberra.  For units, double-digit total returns have been achieved over the past year in each of Sydney, Melbourne and Hobart.  Units in Darwin were the only capital city property type to achieve negative returns over the past year.

Annual total returns from the housing asset class,
individual capital cities, to Aug-17

2017-09-18--annualtotalreturns

With capital growth now appearing to have peaked and rental yields at record lows it is reasonable to expect a further moderating of total returns over the coming months.  The other important thing to consider when looking at total returns is the calculation of the rental income.  Although rents are increasing in many areas, the assumption in a gross rental yield calculation is that the property is occupied for 52 weeks of the year.  In some parts of the country this is increasingly difficult to achieve and it can eat into the investment returns.

The total returns data, particularly for the past decade, shows why housing investment has been so popular and hit record highs.  Returns have been fairly consistent and less volatile than equities however, the ongoing strength and the evidence of a recent slowdown should give investors pause for thought.  With mortgage rates starting to increase for investors, record-high levels of new housing supply and value growth slowing, housing investors shouldn’t assume that the types of returns seen over recent years will continue to be replicated going forward.

10B KARAWATHA STREET SPRINGWOOD. PROPERTY FOR RENT. THERE IS AN OPEN HOME SATURDAY THANKS LJ GILLAND REAL ESTATE

 

 

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SPRINGWOOD AIR-CONDITIONED 3 BEDROOM HOME WITH STUDY NOOK.

10B Karawatha Street, Springwood

 

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This Modern 3 Bedroom Low-set Home Features: •3 Carpeted Bedrooms With Ceiling Fans & Built- Ins.

  • Air- Conditioned Master Bedroom has En-suite & Built In.
  • Air-Conditioned Tiled Open Plan Lounge/ Dinning/ & Kitchen Area.
  • Kitchen has Stainless Steel Appliances including dishwasher & Electric Cook Top.
  • Study Nook.
  • Master Bathroom.
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Other Features:

  • Security Screens.
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  • Fully Fenced & Landscaped.

 

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(Amount Undisclosed) Sold on 27 Jul 2017

Duplex Semi-detached

10 Karawatha St Springwood QLD 4127

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https://youtu.be/Non6LIIs4rY

The latest data on dwelling approvals and housing finance are firmer than anticipated, while house price growth in Sydney and Melbourne remains relatively strong. Taken together, this suggests that the moderation in the housing market and residential construction will be gradual. Uncertainty about the timing and extent of the expected downturn in home-building continues to pose a risk to our GDP forecast

SPRINGWOOD PROPERTY INVESTMENT OPPORTUNITIES – Each house/dwelling is separately titled, as houses on any estateSPRINGWOOD PROPERTY INVESTMENT OPPORTUNITIES – Each house/dwelling is separately titled, as houses on any estate

The Australian Bureau of Statistics (ABS) released their biennial survey of household income and wealth earlier this week.  The release has a huge amount of valuable data but at least initially I thought it was pertinent to look at the dwelling tenure data.  The information is provided from 1994-95 up until the latest release (2015-16).

The tenure data is premised upon who is currently residing in the property, this is important to understand because when we look at the proportion of residents who own without a mortgage, for example, this doesn’t necessarily represent the total number of dwellings owned outright.  The reason being that some of those properties that are occupied by renters may be owned outright by the person who is renting that property out.

2017-09-18--propertieswithnomortgage

As at the 2015-16 release 30.4% of households were lived in by someone that owned that property outright.  This figure was lower than the 31.4% in 2013-14 and as the above chart shows it has been steadily trending lower over recent years.  In fact, at the peak throughout the timeframe shown, 42.8% of households had no mortgage in 1995-96.  This is an interesting statistic when you consider than many people suggest that lower mortgage rates result in improved housing affordability.  In June 1996 the standard variable mortgage rate was recorded at 9.75% compared to a mortgage rate of 5.4% in June 2016.  The ongoing decline in mortgage rates has pushed dwelling values higher and although it has made servicing mortgage debt easier it has not led to a greater proportion of the population living mortgage free.

2017-08-19--householdswithamortgage

With fewer households owning their home outright, there has been an increase in the proportion of households that live in a home that they own and still carry mortgage debt.  In 2015-16, 37.1% of households had mortgage debt which has increased from 35.8% in 2013-14.  At its low point over the period highlighted on the chart, 28.1% of households had mortgage debt in 1995-96.  Since 2003-04, there has consistently been a higher proportion of households with mortgage debt than those without.

2017-08-19--householdsthatarerentals

As the rates of outright home ownership have fallen there has been a rise in the proportion of households which are rented.  Whereas outright home ownership has continued to fall and ownership with a mortgage has risen, it is interesting to note how the proportion of rental households has actually declined since the last survey.  The latest data shows that in 2015-16, 30.3% of households nationally were rented compared to 31.0% in 2013-14.  Back in 1994-95 only 25.7% of households were rented.

2017-09-18--householdsrentedfromstatehousingauthorities

As the prominence of renting has increased over time, the responsibility to provide rental accommodation has increasingly fallen on private citizens rather than the public sector.  At its peak in 1995-96, 6.0% of households were rental properties which were rented from state housing authorities, by 2015-16 this figure had fallen to just 3.5%.  This is an important consideration for governments when considering potential changes to investment policies such as negative gearing.  Governments are clearly not as involved in providing housing as they have been in the past, if private citizens or companies are going to be responsible for providing that housing it is likely they will require some incentives other than just the rental income, especially considering how low rental yields are across Australian cities.

The charts presented to highlight how home ownership is continuing to decline which is leading to a greater proportion of the population either being in mortgage debt or renting.  As the population ages, this can create challenges especially if an increasing number of Australians are retiring but still carry mortgage debt.  It also highlights that simply building more homes is not necessarily a solution to increasing homeownership rates.  As we’ve seen over recent years during a housing construction boom first home buyer levels have been at near record lows and housing investment levels have hit all-time highs.  Arresting the decline in home ownership in Australia will be no easy feat, however, the data indicates that simply building more housing won’t necessarily solve the problem particularly if it isn’t at a price point which is reachable for lower and middle-income earners.

We would expect that over the coming years, the rate of home ownership will continue to fall especially given we have seen dwelling values continue to climb since June 2016.

SPRINGWOOD PROPERTY INVESTMENT OPPORTUNITIES – Each house/dwelling is separately titled, as houses on any estateSPRINGWOOD PROPERTY INVESTMENT OPPORTUNITIES – Each house/dwelling is separately titled, as houses on any estate

Logan City Council has declared Springwood as its first Economic Development Zone

Posted in Australia, Brisbane, ECONOMY FINANCE BUSINESS LJGREALESTATE RENTALS PROPERTY SALES PROPERTY INVESTOR PROPERTY MANAGEMENT, family, finance, Foreign Investment, LJ Gilland Real Estate Pty Ltd, ljgrealestate, maintenance & roofing, Maintenance Renovating tips Construction Home Staging Property Sales Property Management Property Investor Builders Developers Rentals Sales Tenance | Tagged , ,