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RBA

At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.

In Australia, the economy is continuing its transition following the mining investment boom. Some slowing in the year-ended growth rate is likely, before it picks up again. Further increases in exports of resources are expected as completed projects come on line. The outlook for business investment remains subdued, although measures of business sentiment remain above average.

Inflation remains quite low. The continuing subdued growth in labour costs means that inflation is expected to remain low for some time, before returning to more normal levels.

Low interest rates have been supporting domestic demand and the lower exchange rate since 2013 has been helping the traded sector. Financial institutions are in a position to lend for worthwhile purposes. These factors are assisting the economy to make the necessary adjustments, though an appreciating exchange rate could complicate this.

Conditions in the housing market have strengthened overall, although they vary considerably around the country. In some markets, prices are rising briskly, while in others they are declining. Housing credit has picked up a little, although turnover of established dwellings is lower than it was a year ago. Supervisory measures have strengthened lending standards and some lenders are taking a more cautious attitude to lending in certain segments. Considerable supply of apartments is scheduled to come on stream over the next couple of years, particularly in the eastern capital cities. Growth in rents is the slowest for some decades.

Story Source: www.rba.gov.au

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PPG_Blog_Nov_ image 3_market update_

The 2016 spring property market is delivering everything home sellers desire: solid price growth, high clearance rates and strong buyer demand.

September quarter median house figures published by the REIV also indicate a positive and growing market. Melbourne’s median house price increased 3.25% since June to settle at $740,000. The inner and middle suburbs were the main growth drivers in the September quarter with house prices in these areas up 4.2% and 3.5% respectively.

Outer suburbs were not without positive results, however. Langwarrin, for example, recorded the city’s largest price growth with the median house price increasing 20% over the September quarter to $561,000. Many outer suburbs like Langwarrin remain attractive to home buyers and investors because of their value and space. Better affordability in Melbourne’s outer neighborhoods is also an appealing factor for many first home buyers just breaking into the market.

Meanwhile, apartment prices across the city also increased in the September quarter with the overall median up 2.1% to $545,500. These figures are stronger than expected by many market experts, including the REIV.

The auction clearance rate across Melbourne is up around 80% with numerous properties still attracting multiple groups of bidders all competing for the purchase. Whilst demand remains high there are still fewer houses and apartments on the market than in previous years.

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Young Investors

PPG_Blog_Oct_image 2_young investors

For several years now, there has been a significant focus on how difficult it is for young people to break into the property market.

Compared to 30 years ago, there’s now twice as many Australians renting, and for many Generation Y’s now in their 20’s and 30’s, buying their own home is still an unattainable dream.

Not helping the cause is figures released by McCrindle that suggest four decades ago, an average home in a capital city was 5 times the average annual earnings, and in 2013, it was as much as 10 times the average annual earnings.

Whilst this is certainly the case for some, it doesn’t necessarily mean the younger generations can’t become property investors. Investing in bricks and mortar can be an excellent stepping stone to eventually owing your dream home.

For the many professionals who work in or close to the CBD, high property prices can be a barrier to living in that vicinity and hence enjoying the ease and efficiency of short travel times. So what we are seeing is a number of young professionals investing where they can afford and renting where they want to live.

Depending on your financial position, a 5% deposit is often all that’s required to purchase an investment property. In some situations, such as when parents act as a guarantor, you can borrow up to 105% of the cost of the property, which includes purchasing costs such as stamp duty and solicitor fees.

The idea of ‘rent money is dead money’ only applies if you aren’t putting your savings towards something else, which will appreciate. The benefits of investing whilst renting are tangible in the short term – renting where you want to live, and substantial in the long term – getting into the market and building your investment portfolio.

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PPG_Blog_oct_image 3_depreciation schedule health check

The tax benefits from depreciation on an investment property can be extremely valuable, but are often overlooked by some landlords.

The issue is that some investors either aren’t aware of the benefits associated with depreciation, or they don’t have an up-to-date depreciation schedule.

The Australian Taxation Office (ATO) allows property owners to claim the wear and tear, depreciation, of their investment as a deduction. In order to claim these deductions, investors should engage a specialist Quantity Surveyor to complete a Tax Depreciation Schedule. The costs associated with a depreciation schedule, which can be between $500-$700 per report, are also tax deductible.

Each year, landlords can claim between 10% and 40% of a variety of depreciable items, and sometimes more. In many cases, 2.5% of the building cost of the investment home is also claimable on an annual basis. New homes in particular, can provide significant and cumulative depreciation claims over several years.

So if you don’t currently have a depreciation schedule for your investment property or you think your existing schedule might be out of date, seek advice from a professional. Claims can sometimes be back dated by up to two years.

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PPG_Blog_Oct_image 1_new standards for apartment developments

With Melbourne’s population predicted to increase from 4.6 million today to 8 million by 2051, pressure is mounting on the world’s most liveable city to accommodate increased demand for housing.

According to the Victoria State Government, “Apartments provide our growing population with affordable and diverse housing options, and the high number of apartment buildings being constructed, indicates that they are a popular alternative to conventional detached houses in terms of cost and lifestyle.”

However, the state government says Victoria has little design guidance in place when it comes to development of apartment blocks, especially when compared to other Australian states and jurisdictions.

To address this gap, the state government release the Better Apartments – A Discussion Paper to start a statewide consultation with the community, local government and industry about internal apartment amenity and potential future design standards.

Nearly 1700 survey responses and about 150 submissions were received on the discussion paper. Community survey participants ranked the key issues affecting apartment amenity by most to least important – identifying daylight, space, natural ventilation and noise as the top issues.

A summary of the outcomes of the public consultation was released at the end of 2015 and this has now led to the latest publication – a draft of the government’s proposed apartment standards – Better Apartments – Draft Design Standards. There was further public consultation from August to September this year and the final Design Standards will be introduced in Victoria in December this year.

According to the state government, The Better Apartments draft design standards will address a popular concern that many apartment developments are just “dog boxes”. They will ensure:

  1. New apartments are well-designed
  2. The needs of a range of households (including the elderly, people with disabilities, and families with children) are met
  3. There is greater transparency and consultancy for both the community and development industry
  4. The effects of climate change are mitigated and environmental impacts are minimised
  5. Melbourne’s identity, productivity, liveability and attractiveness as a place to live, work, visit and invest in is maintained and enhanced.

The proposed introduction of these standards comes as new data from the Victorian Building Authority shows that building permits in the 2015-2016 financial year exceeded $31 billion for the first time.

Apartment building approvals in Victoria rose by 23.7% and house building approvals were up by 12.5%.

To find out more about the new apartment design standards, please visit the Victorian state government website.

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RBA Leaves Rates on Hold

RBA

At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.

In Australia, the economy is growing at a moderate rate. The large decline in mining investment is being offset by growth in other areas, including residential construction, public demand and exports. Household consumption has been growing at a reasonable pace, but appears to have slowed a little recently. Measures of household and business sentiment remain above average.

Inflation remains quite low. The September quarter inflation data were broadly as expected, with underlying inflation continuing to run at around 1½ per cent.

Low interest rates have been supporting domestic demand and the lower exchange rate since 2013 has been helping the traded sector. Financial institutions are in a position to lend for worthwhile purposes. These factors are assisting the economy to make the necessary adjustments, though an appreciating exchange rate could complicate this.

In the housing market, supervisory measures have strengthened lending standards and some lenders are taking a more cautious attitude to lending in certain segments. Turnover in the housing market and growth in lending for housing have slowed over the past year. The rate of increase in housing prices is also lower than it was a year ago, although prices in some markets have been rising briskly over the past few months. Considerable supply of apartments is scheduled to come on stream over the next couple of years, particularly in the eastern capital cities.

Growth in rents is the slowest for some decades.

Story source:www.rba.gov.au

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PPG_Blog_Sept_image 1_why your property isn't selling

Whilst Melbourne’s property market is hot right now, every now and again a single property doesn’t seem to sell. If this is your house, don’t despair. Try asking yourself these three simple questions and you’re likely to find the answer:

1. Is the price right?

The number one determining factor for selling a property is the price tag. If the asking price is too high your property will almost certainly spend more time on the market. While the current market is experiencing high clearance rates, not all properties are selling over the reserve. Personal attachment can sometimes over-inflate the dollar value you place on the house or unit. Ensure you research and compare other similar properties in the nearby area to gauge a realistic figure.

2. Is your property shining?

If attendance numbers are reasonable at open for inspections but you are yet to receive an offer, presentation could be a problem. Decluttering and keeping personal items to a minimum are ‘no brainers’ but there are also several low cost improvements you can make that will strengthen your property’s wow factor and make it shine.

Such enhancements could include a fresh coat of paint, carpet cleaning or replacement and a working bee in the garden to really get the exterior neat and tidy. Engaging the services of a property stylist can also be an extremely worthwhile investment if your existing interior décor is a little tired.

3. Are you listening to the experts?

Real estate agents are obliged to provide unbiased and honest feedback about why your property is not selling. Try to keep your own personal opinions out of the picture and listen to the experts. It can often be a minor, simple change to your price, presentation or selling strategy that makes all the difference.

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PPG_Blog_sept_image 2_warehouse conversions

Melbourne’s inner city has a rich industrial past. This makes it a playground for developers and home buyers keen to remodel some of the most beautiful historical factories and warehouses into modern residences.

A warehouse conversion can create the funkiest of abodes for singles, couples and growing families. If you are thinking of tackling a warehouse conversion for yourself there are some big considerations to ponder before calling in the builders.

A remodelling on this scale is not a project you want to take without some serious professional advice. Even if you are a veteran in other types of renovations, it certainly pays to ask an expert in this case. There are many Melbourne architects who specialise in warehouse conversions. A quick search online will provide contact details and a display of images showcasing their incredible work.

Key elements an architect will understand and advise you on include: structural issues, insulation (both thermal and acoustic), ventilation, sustainability and energy efficiency, how best to divide the space, capitalising on the existing characteristics of the building, waste management and design of an outdoor or rooftop area if applicable. Creativity is essential which is where an architectural team can really shine.

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Smoke Alarms Save Lives

PPG_Blog_Sept_image 4_smoke alarms save lives

When a house fire starts, it’s working smoke alarms that provide the critical early warning needed to save lives and minimise property damage. So as we now have daylight saving, it’s an ideal time to check all smoke alarms and ensure they are in perfect working order.

· Test each smoke alarm using the test button.

· Replace the smoke alarm immediately if it doesn’t respond properly when tested.

· Make sure everyone in your home understands the sound of the smoke alarm and knows how to respond.

· Replace all smoke alarms when they are 10 years old.

· Mains powered smoke alarms must be fitted by a licensed electrical contractor.

· For smoke alarms with any other type of battery, replace batteries at least once a year. If the alarm chirps, replace only the battery.

If you don’t feel confident checking your own smoke alarms try utilising a professional service. There are experts across all Melbourne suburbs who can visit your property annually and if you are a landlord, at each tenancy change (as required by law) to inspect all alarms. Firstly they check to ensure your property has the correct number of alarms according to the building code and that they are located correctly and that they haven’t expired. Secondly, they clean and install new batteries, test with artificial smoke and when alarms are expired, faulty or damaged replace them with new Australian Standard approved alarms. And finally they issue a report and a compliance certificate to be kept on file.

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RBA

At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.

The global economy is continuing to grow, at a lower than average pace. Labour market conditions in the advanced economies have improved over the past year, but growth in global industrial production and trade remains subdued.

Low interest rates have been supporting domestic demand and the lower exchange rate since 2013 has been helping the traded sector. Financial institutions are in a position to lend for worthwhile purposes. These factors are all assisting the economy to make the necessary economic adjustments, though an appreciating exchange rate could complicate this.

Supervisory measures have strengthened lending standards in the housing market. Separately, a number of lenders are also taking a more cautious attitude to lending in certain segments. Growth in lending for housing has slowed over the past year. Turnover in the housing market has declined. The rate of increase in housing prices is lower than it was a year ago, although some markets have strengthened recently. Considerable supply of apartments is scheduled to come on stream over the next couple of years, particularly in the eastern capital cities. Growth in rents is the slowest for some decades.

Story source: www.rba.gov.au

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