Be careful with Real Estate Agents tricks

Real estate agents are notorious for talking up their properties in order make a sale. But now one has broken ranks by publishing the true meaning of their jargon.

Here are some of the lines used by real estate agents, and their translations:


Estate agent speak "The property has excellent transport links"
Translation "There's a motorway and or busy railway line right next to it"
Estate agent speak "In need of modernisation"
Translation "This property hasn't been updated since the 1970s and needs a complete refit"
Estate agent speak "An ideal purchase as your first three-bedroom home"
Translation "You can barely fit a bed into the third bedroom"
Estate agent speak "Set within a purpose-built residential development"
Translation "This property is in the middle of a large housing estate"
Estate agent speak "A cosy property in a rural location"
Translation "This property is small and the nearest shop is 20 minutes' drive away"
Estate agent speak "Easy-to-maintain living space"
Translation "It's really incredibly small"
Estate agent speak "Conveniently located"
Translation "Next door to a busy main road and above a take away"
Estate agent speak "Unexpectedly re-available"
Translation "The previous buyer pulled out at the last minute due to major problems or the surveyor revealed that the property was vastly overpriced"
Estate agent speak "Reduced"
Translation "Desperate"
Estate agent speak "Within easy reach of local schools"
Translation "Kids will congregate outside your house at lunchtime and drop litter all over your driveway."
Estate agent speak "Ideal for the first-time buyer or as a buy-to-let investment"
Translation "The property's small and in a terrible area"
Estate agent speak "Tremendous scope for improvement. A real blank canvas"
Translation "Derelict"
Estate agent speak "In need of some updating and offered with no onward chain"
Translation "An old lady has recently died in the house and it hasn't been decorated since she originally moved in 50 years ago"
Estate agent speak "A garden flat"
Translation "A dark and most probably damp basement flat"
Estate agent speak "Bordering the sought-after area of North Clapham"
Translation "The property is actually in Stockwell"
Estate agent speak "The property has many character features"
Translation "The ceilings are extremely low"
Estate agent speak "Low maintenance rear garden"
Translation "The garden is concrete"
Estate agent speak "Situated in a stamp duty exempt area"
Translation "Situated in a deprived part of town"
Estate agent speak "New price!"
Translation "This property was massively overpriced in the first place"
Estate agent speak " Character…."
Translation "Dilapidated"

courtesy : watoday.domain.com.au

Opportunities abound in the property market, but don't expect another boom,David Potts

Property investors have rarely had it so good, even if it's at the expense of first home buyers. Rents are high, interest rates low and prices are creeping up again.
House values rose 1.7 per cent nationally in the March quarter, and soared 3.6 per cent in Melbourne, where prices had been moribund, while rents on units jumped 2.2 per cent, according to Australian Property Monitors. That makes the well-worn real estate agent spiel about property values doubling every 10 years sound plausible.
To achieve that, it would take an average 7 per cent rise a year. With record-low rates, growing population and strong Asian interest in Australian property, such annual rises shouldn't be too challenging.
As principal-home owners instinctively know, capital gains are tax free. Less appreciated, and something that drives economists spare, is that not having to pay rent is an implied income that isn't taxed.

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Property's other strong appeal is that it isn't superannuation, though it's attractive to DIY funds. Both sides of politics refuse to rule out more changes to super, making a geared property the only decent tax break neither would dare touch.
Not even the government's wide-ranging, and largely ignored, Henry review on taxation would go there. Even so, a way around the $25,000-a-year limit on salary sacrificing into super is borrowing to buy an investment property through a DIY fund - though the loan must be specially structured.
But forget a boom.
The Reserve Bank laid it on the line when a senior official, Luci Ellis, argued, in no uncertain terms, that ''trend housing price growth will be slower in future than in the previous 30 years''. Ouch. Left unsaid was trend growth has been about 10 per cent a year. But she did say there are more likely to be ''mildly'' deflationary years as well.
So choosing the right place is more critical than it was for baby boomers, who rode the debt escalator as prices took the express lift.
Values will rise an average 5 per cent in the eastern capitals at most this year, property experts say.
The single biggest influence on property is always population growth. No problem there. But the credit isn't available, or rather isn't being demanded, to fuel another price boom. On the contrary, owner-occupiers are more interested in paying down the mortgage. And Gen Ys are resisting the idea of having a huge mortgage in the first place.
Although the burden of mortgage repayments as a proportion of income has eased with record-low interest rates, it's still punishing because of high home prices, the jobs outlook or talk of a tough budget.
''First home buyers have gone missing,'' says buyer's agent and property expert Kevin Lee, principal of Smart Property Adviser and a mortgage broker with Smartline. For once, investors are more likely to be elbowing out each other, rather than first home buyers, at property inspections.
''This is a rare treat for property investors,'' says Joe Sirianni, executive director of mortgage broker Smartline.
Investors are armed with annual tax-deductible interest and expenses, while first home buyers must make do with a one-off government grant and stamp duty concessions. Investors have been given another leg-up by state governments in NSW and Queensland, which have removed the home grant and stamp duty concessions from established units or houses bought by first-time buyers.
As a result, loans for investors so far this year have jumped the most since the global financial crisis, though are still running at a relatively low level by past standards, but fallen for first home buyers, according to the Australian Bureau of Statistics.
The subdued housing construction that Australia has been experiencing since the global financial crisis is a mixed blessing.
There are fewer opportunities for developing new properties with their better tax break in the 2.5 per cent building allowance, but then it keeps supply tight, which is good for rents and vacancies.
Treasury expects a pick-up in housing construction will buffer the forecast winding down in mining investment later this year. There's something of a love-hate relationship between investors, who will continue to have the upper hand for a while, and their tenants - who are likely to be the first home buyers who they've outbid.
If you can't beat them, why not join them?
First-time buyers should consider investing before they settle down.
One of the best ways of building wealth is by staying at home longer and buying an investment property that you can move into later, or use the equity built up from it as a deposit for somewhere to live.
On average, the gross rent from a unit (except in Melbourne and Hobart) is more than the two-year fixed mortgage rate of 4.99 per cent. At first blush, that would make it almost impossible to be negatively geared since income would be greater than interest.
Alas, there are always maintenance and repair expenses, council charges, management agent fees and some periods without a tenant to be reckoned with.
The best rental yields are in Darwin, where units are averaging 6.3 per cent. But every city has its exceptions. Yields in Sydney's Ultimo, for example, are closer to 9 per cent before expenses.
Melbourne has the lowest thanks to a glut of apartments, beginning with Docklands, where prices are reportedly being discounted 25 per cent. There's also a vacancy rate of about 10 per cent.
Worse, there's a backlog of new apartment blocks that will be completed over the next year, adding to supply and depressing prices and rents. This could even spill to middle-ring suburbs.
Perhaps head due south for capital gains: Hobart is proving the best performer, having the advantage of coming off a low base.
The first decision for a property investor has to be the city in which to buy.
Unfortunately, looking down the street usually isn't a good idea, even though a property there is handy to keep an eye on and you might not need a managing agent.
Looking further afield offers far more opportunities and reduces the risk of having all your eggs in one location.
After all, one area, say in Queensland, will have a different property cycle to one in Victoria. You don't want everything going up or down together, do you?
So don't rule out buying interstate.
An immediate benefit is you'll avoid a potential land-tax liability, especially if you intend to have a portfolio of properties.
In a boom town such as Darwin, you might even get the best of both worlds: higher rents and price gains.
Even the Gold Coast, a serial underperformer for property investors in recent years, might be coming into its own now it has direct flights to Asia, where there are potential investors.
''I'd still be hesitant about an established apartment, but there are new developments in walking distance from [Gold Coast beaches] which cost $6000 a square metre compared with $11,000 to $12,000 in Sydney,'' says Jason Anderson, chief economist at property economist MacroPlan Dimasi.
One ready-made way of investing interstate is buying a Defence Housing
Authority (DHA) home. Properties are listed at dha.gov.au.
These are let to defence personnel and can be anywhere from Sydney's upper north shore to the back of beyond. Usually they are houses, but occasionally, new townhouses and apartments are offered.
They're sold under a leaseback, with the rent virtually government-guaranteed, payable whether or not there's a tenant and reviewed annually.
The DHA does all the letting and property management for a fee of 16.5 per cent of the rent for houses or between 12 per cent and 14 per cent for apartments and townhouses.
A lease is for nine or 12 years, after which you can sell or lease privately. But when it's up, you're on your own.
Location is always paramount when making property investment decisions.
Whatever you can afford must suit the demographics of the neighbourhood, which will also decide whether to buy a new or established property. New buildings come with extra tax concessions and are likely to be easier to let with fewer maintenance issues.
By the same token, you will be paying a developer's margin when you buy. On the other hand, an established property lends itself to capital value-adding renovations and will have a scarcity value. But don't go over the top with renovations, which are notoriously difficult to budget for.
Often a lick of paint, new carpet, stove and light fittings are all that's needed.
''Most important are the kitchen and bathroom,'' Lee says.
Units are doing better than houses, the result of baby boomers downsizing and younger buyers preferring to live closer to the city to save on transport costs. Even so, determining the better investment between units and houses will boil down to the area.
In a young demographic close to the city, proximity to transport, amenities, cafes and jobs will be paramount. For a house, you want a family demographic and it should be close to parks and schools.
Either way, you want somewhere with a growing population.

courtesy_watoday.com -14.05.2013

April data shows slight drop in home values - watoday

In line with Reserve Bank comments last week that there'll be occasions when property prices drop slightly despite the general upward trend of the market, an analyst on Wednesday released figures showing exactly that.
The RP Data-Rismark April Hedonic Home Value Index said that dwelling (houses and apartments combined) values dropped 0.4 per cent in Sydney; 0.5 per cent in Melbourne and 0.7 per cent in Brisbane. The fall across the eight capital cities combined over the month was 0.5 per cent.

RP Data's director of research, Tim Lawless, described the April results as a mere "stumble" on the road to recovery rather than any trend of values dropping.

“When viewed in line with other metrics such as auction clearance rates, private treaty indicators and some improvement in housing finance demand, it is likely that the negative April result will be a blip along the path to recovery.
“We weren't expecting that the high rate of growth evidenced over the first three months of the year would be sustained into April. A more measured pace of growth is a much more realistic outcome for the Australian housing market, especially considering that the first quarter is typically the strongest for value growth.”
The report said for the three months to April, dwelling values had increased 1.1 per cent in Sydney; 1.8 per cent in Melbourne and dropped 0.9 per cent in Brisbane.
The head of the Reserve Bank's financial stability department, Luci Ellis, told the Citibank Property Conference last Wednesday that house price growth would be "slower in future than in the previous 30 years" and suggested there could be occasions when prices drop slightly.
"If housing price growth is now cycling around a lower average, there will be more periods when prices are falling [a little] in absolute terms," Dr Ellis had said.
The RP Data figures showed that the best performing capital city for the three months to the end of April was Darwin with 5 per cent growth and Hobart was the worst performer with a drop of 1.6 per cent.
Darwin houses also had the highest gross rental yields with 6 per cent for houses and 6.1 per cent for units.
The lowest rental yields were in Melbourne, with houses 3.6 per cent and units 4.4 per cent.
RP Data confirms Sydney as the most expensive city for property with a median dwelling price of $565,000. Most affordable is Hobart with a median dwelling price of $311,500.

Many first-time buyers priced out of market across Australia

HOUSING affordability remains a problem across Australia, with many first-home buyers still priced out of the market despite recent interest rate cuts.

JP Morgan's latest snapshot of the local housing market ranks Australia in second place behind Hong Kong for having the world's highest house prices.
The report's co-author Martin North said mortgage repayments remained high because the average loan was getting bigger and the major banks had not passed on the Reserve Bank of Australia's interest rate cuts in full.
As a result, potential home buyers in major capital cities were being put off from plunging into the property market.
"In some of the major markets, such as NSW and Western Australia, over half the people who want to buy can't because they can't afford to,'' he said.
While first-home buyers were put off by high house prices, existing property owners looking to buy wanted to downsize to smaller properties.

The report's fellow co-author Scott Manning said these vendors would not sell at a lower price.
"We've got a generational shift which will take 20 or 30 years to play out,'' he said.
"These people have ridden the wave up but someone's got to buy off them.''
Mr Manning said it was likely the major banks would maintain their current trend of not passing on the RBA's rate cuts in full for another two years.


courtesy : Daily Telegraph 11-04-2013

Land plan to cut house prices

Peter Kerr, The West Australian Updated April 9, 2013, 2:40 am

New Housing Minister Bill Marmion wants to drive down house prices by flooding the market with land to improve affordability for those struggling to get a foothold in property.
In a renewal of his controversial comments in 2010, Mr Marmion told The West Australian that releasing more land was one of the key ways to ensure cheaper houses.
His intervention into the debate about the cost of homes in WA comes less than a week after figures revealed Perth’s median house price surged to a record $510,000 in the March quarter and rents continued to soar.
“Opposition Leader Mark McGowan laughed at me in Parliament (in 2010) when I said you have got to try and flood the market with more land … to drop the cost,” Mr Marmion said.
“But that is the only solution — to have land ready to go (to build on).”
Mr Marmion found a strong ally yesterday in the developers’ lobby group, the Urban Development Institute of Australia.
It warned that Perth had less than two months supply of land that was ready to build on.
UDIA chief executive Debra Goostrey said the turnaround in the housing market in the past few months had caught the industry by surprise.
She called on the WA Government to reduce red tape and up-front costs for developers to avert a looming squeeze.
“When you unpeel the emotive language on flooding and say you need adequate and orderly land supply, I couldn’t agree with him (Mr Marmion) more,” Ms Goostrey said.
“It is fundamental to affordable housing.”
But the Real Estate Institute of WA, which has in the past been worried about big land releases triggering negative equity — houses worth less than their purchase price — said Mr Marmion’s comments were misplaced, especially given low interest rates.
“Housing affordability has actually improved to its best level in a decade,” REIWA executive manager of policy and research Stewart Darby said.
“In Perth, the supply would be miniscule in the context of the total housing stock and would make no difference to the overall composition of the median house price until dwellings are built on that land and then sold.
“And all that would do is devalue existing properties in those neighbourhoods.”
Mr Marmion pointed to State-owned LandCorp’s land releases in Broome last decade as proof the policy could help moderate prices, which he said was crucial — along with other measures such as shared equity schemes — to help tackle WA’s big social housing waiting list.
“If you have a supply of land for people to buy and put a house on you can try and keep the prices down,” he said.
“We have got an absolute problem in terms of affordability at the lower end.
“It is a major problem for me as the Minister for Housing running a social housing stock.

Australia's property market crash prediction

 US real estate analyst Jordan Wirsz, who believes Australia is heading towards a property bloodbath as the global economic downturn spreads to China and eventually here.
Mr Wirsz advises Fortune 500 CEOs and fund managers on investing in real estate.
He predicts that a flood of properties will begin to hit the market in Australia from next year as investors scramble to bail out, leading to a property crash of magnitude the country has not seen before.
“Right now is not a time to be buying real estate in Australia," Mr Wirsz said.
"The market has slowed substantially but residential prices are likely to fall up to 60 per cent, possibly even more, within five years."

PERTH has the tightest rental market of any capital city in the country as tenants pay more than the asking price to secure a property.

The outlook is even grimmer for land investments, which Mr Wirsz said are more speculative and will plummet by as much as 80 and 90 per cent in value.
Commercial property will also take a hit in line with the residential sector shedding at least 50 per cent of its value.
Mr Wirsz pointed to artificially low interest rates, high loan-to-value lending practices, overinflated property prices, unrealistic vendor expectations and Australia's large number of second mortgages.
“I’m bearish about world real estate but I couldn’t be more bearish about the Australian market," he said.
"There have been corrections but they don’t hold up to the scale of what is coming.
"The paradigm is that nobody ever believes house prices can go down but those who have bought at the top of the market are going to be sorely disappointed."
He predicts property prices will be on a slippery slope next year when interest rates begin to rise, commodity prices peak and China's demand for Australian exports slows.
A sluggish recovery will begin in 2016.
“If you are homeowner, be cautious, get rid of your debt, consider selling if you don’t plan to be in your house for more than seven years and downsize or become a tenant," he said.
The only winners will be real estate agents cashing in on bank-owned properties, he added.
Adding to the glum outlook, properties in capital city would be hardest hit “because Australian cities are some of the most overvalued in the world and more speculative than regional areas", Mr Wirsz said.
Mr Wirsz joins other international naysayers including visiting US economist Harry Dent who recently said Australian house prices were 50 per cent overvalued.
With few exceptions, local experts disagree with their predictions.
HSBC’s chief economist Paul Bloxham said for property values to crash there would need to be sharp rises in interest rates, unemployment and housing stocks.
That combination is not on the cards, he said.
"I am not of the view that there is a looming housing bubble in Australia as it seems many doom and gloomsters are," Mr Bloxham said.
"Surely if the market was going to collapse it would have happened in 2009 after the Lehman's collapse when we had the biggest aversion to housing assets that you’ve seen.
"All we saw was a 3 per cent fall in house prices and then they rose."
Mr Bloxham believes an undersupply of housing, more rate cuts, low dwelling price to income ratios and strong overseas demand for Australian assets will act as buffer from global instability
"Some commentators aren’t doing the calculations correctly, they typically look at detached houses in the capital cities, they don’t incorporate apartments and regional areas, and they overstate the level of house prices to income."
Sydney real estate agent Charlie Bailey of Ray White Inner West believes there will not be a burst because there is no bubble.
"People have been predicting house prices to fall every year and every year we have an increase in prices," Mr Bailey said.
"In Sydney, we have 20,000 people a week looking for accommodation and not enough supply.
"I can't see the city's housing infrastructure changing any time soon so a prediction of a 60 per cent fall in property prices is a big call."