The combination of low interest rates, foreign buyers, upgrader enthusiasm and investor momentum saw 2013 emerge from its property holding pattern and the market become reinvigorated.
RP Data analyst Cameron Kusher said he believes momentum in property will continue into the new year, propelled by investors and upgraders.
He also believes values will climb further, though not as sharply in 2014. Another of his predictions is that gross rental yields in Sydney and Melbourne will continue the decline they commenced in latter 2013, leading investors to look at alternative growth zones. These are good tidings for the Far South Coast of NSW. The last few months of the year had seen keen interest in the area, with properties that were priced right being snapped up, some as soon as they came on the market.
However, Mr. Kusher issued a warning about other economic wild cards, like the unemployment rate, stating “If it reaches 6.25% it will be the nation’s highest unemployment rate since September 2002. If people start to become nervous about their job security it is likely to result in a lower level of demand for housing.”
Rates are at their lowest levels since the 1960s and inflation is currently at 2.2%. Keep in mind that the Australian interest rates don’t operate in a bubble – they respond to what’s happening in the global economy. The recent fall of the Australian dollar of 2.5 cents against the U.S. dollar as a result of the U.S. winding back its stimulus is a reminder that inflation could increase if the dollar keeps falling and the cost of imports increase. If inflation increases we could see a rise in interest rates. The all important question now is whether the RBA will increase or decrease rates, or leave them as is in the new year.
With keen interest from both local buyers and those from interstate in Merimbula, Bega, Tura Beach, Eden and Cooma and the current low interest rates together with confidence in the real estate market, vendors should not delay listing their properties for sale. Now is a prime time to sell.
There’s no doubt that yield is the golden word for investors. Other things may come into play, such as lifestyle or infrastructure potential, such as the Bega Hospital and Eden Wharf developments, but the income return on the property is usually the major concern for the purchaser. The Sydney market has been hot for investment properties to the extent that Investors are crowding each other out, resulting in a slight drop in yields. That gives regional towns on the South Coast and Monaro such as Bega, Merimbula, Tura Beach, Eden and Cooma the inside track for investors looking for positive returns.
Yield is generally calculated annually as a percentage. It is based on the asset price or market value of a property. The gross yield is the income (i.e. rent) derived from the investment before expenses are taken out. The net yield is the income less expenses. These expenses could include stamp duty, legal fees, pest and building inspections, repairs and maintenance, property management fees, insurance, rates, strata management fees.
The yield is stated as a percentage and is worked out as –
Gross yield = annual rental income / property value x 100
Net yield = annual rental income – annual expenses / property value x 100
The return or total return includes capital gains. It is quoted as a percentage and is retrospective, based on the gain or loss of the investment during a particular period.
Increasing housing demand drives property prices up and this can affect the yield of an investment. The more prices go up, the lower the percentage between rents (income) to property value. According to Australian Property Monitor’s figures for the September quarter, this is exactly what is happening in Sydney right now. With the current low interest rates many investors are considering purchasing property for negative gearing. Purchasers should ask the right questions of Real Estate Agents to ensure they know the likely net yield on a property before they purchase.
Politicians make all sorts of promises in the lead up to an election, trying to convince you that they’re the best choice. We all know how often those promises fall flat! Real Estate Agents can promise you the world as well. But with a ramped-up spring selling season underway, you don’t want to make the mistake of listing with an ineffective Agent and “miss the boat”.
So let’s push the promises aside and look at some facts:
1. We won’t charge you a Marketing Fee
2. Our online marketing strategy will give your home a higher profile than other sellers
3. Your property will be on more websites than any other local agent.
4. We use Youtube and Facebook to attract more buyers
5. Qualified Buyers are emailed when you trust us to sell your home
1. We get Home Sellers more money in their pocket and we can prove it
2. Our Sales Consultants train EVERY week in negotiation, relationship-building and client care
3. Our Sales Consultants have a hotline to industry mentors which gives us the negotiation edge
4. If a Buyer asks “What will they take?” we answer “The advertised price”.
1. We won’t lie to you, “buy” your listing or ask you to accept an offer from a “tyrekicker”
2. We use hard evidence to justify the suggested selling price
3. If we don’t live up to our promises, you don’t have to pay us
Profile & Experience
1. Fisk & Nagle First Choice has been operating for 40 years
2. With five offices across the Far South Coast and Cooma, we have better exposure and bigger reach than any other agent in south-east NSW.
3. Our offices hold the most prominent position in Bega, Cooma, Merimbula, Tura Beach and Eden
4. Our signage and window displays are bigger, brighter and more noticeable than other agents
Who will you elect to sell your home?
In May Representatives of the Real Estate Institute of NSW, President Christian Payne and CEO Tim McKibbin met with New South Wales Treasurer Mike Baird to discuss how the New South Wales Government can help stimulate the property market in NSW.
Amongst a range of issues discussed the Real Estate Institute of NSW put forward the argument that reducing stamp duty will stimulate real estate purchases and result in increased revenue to the NSW Government. On their website the REINSW states –
“REINSW believes that the best way to bolster the NSW economy is for the State Government to act now and cut the rate of transfer stamp duty in order to stimulate transactional activity in the property market and as a result potentially boost state revenue by hundreds of millions of dollars.“
They cite the outcome for Governments that have introduced stamp duty cuts. For example:
This is strong evidence that decreasing property transfer duty rates does indeed boost revenue. The REINSW also suggested at the meeting that the NSW Government should reinstate the first homebuyers’ incentives for purchasing existing properties. They felt that limiting the grant to cover purchase of new properties only had been a failure, causing a detrimental impact on the NSW property market. Their position is that the Government should take steps to improve housing affordability, which will consequently improve the New South Wales economy.
Purchasers and Property Investors keep an eye on Eden. With the announcement that the Port of Eden will receive a major upgrade to expand its capacity as the only safe deep water port between Sydney and Melbourne the community can expect a major boost to the economy. The Merimbula News reported this week that the Member for Eden-Monaro Dr Mike Kelly visited the port and said the upgrade would expand the port’s capacity to handle large cruise ships, more bulk freight and more supply vessels for the Bass Strait oilfields. He said that the upgrade would be a massive boost to the local economy and the wider region, with cruise ship arrivals expected to increase ten-fold to 50 every year. The expansion will go ahead thanks to a $10 million federal grant that forms a major part of the investment.
Dr Kelly said “The Port of Eden is a fantastic asset for us, the best deep water port in Australia, and we will finally be taking advantage of its potential.” Dr Kelly said the project would generate 45 new jobs in its construction phase and 151 ongoing jobs upon completion.
As part of the $24.5 million project, a fixed panel wave attenuator will control the waves to protect a 150 metre-wide navigation channel into the port, and a 500-metre pedestrian boardwalk will connect the port with the tourist and community precincts of Snug Cove and Cattle Bay. 2000 passengers are expected to land in Eden every week and more small boats are expected to arrive at the port as recreational sailors will get safe moorings in Eden.
House prices are currently very competitive in Eden and with a development boost of this size potential purchasers and property investors should seriously consider the town of Eden for their next purchase. Call Fisk & Nagle First Choice Real Estate on 1800 For Sale to arrange an inspection of suitable properties in Eden.
If you are thinking of purchasing property or selling property in Merimbula, Eden or Tura Beach on The Sapphire Coast you will welcome a plan hatched during a visit to China that could see the Sapphire Coast become the wedding capital of NSW, boosting overseas tourism to the area.
The plan, that could see 100 Chinese couples visiting the local area to get married, is under consideration by Chinese officials after a visit to China by a Bega Valley Shire Council delegation which included representatives from local chambers of commerce reported the Merimbula Weekly News this week. A photographer in the delegation, Robert Hayson who is from Bega,came across a bride in China who had no one to take her photo. Mr Hayson said that after he had taken photos for the bride it occurred to him that there might be an opportunity to encourage bridal tourism to the Sapphire Coast with its spectacular scenery that is ideal as a backdrop for wedding photos.
The idea is that the Bega Valley would host 100 brides and their families in either May or October which are considered the most auspicious months to be married in China. Michael Guo, CEO of the Australia International Trade Association, Australia China Sister City Summit & Australia China Business Summit was enthusiastic about the concept and many discussions were held in China. After some discussion it was suggested that October 2014 would be the first possible date.
This can only be good news for home owners in Merimbula, Eden and Tura Beach looking to sell, as they will benefit from the boost to the economy brought about by increased overseas tourism to the Sapphire Coast. Potential property buyers will look more intently at purchasing investment properties on the Sapphire coast as they see the opportunity for accommodation for bridal parties and the general flow on effect created by this type of tourism.
Fisk & Nagle are leading Real Estate Agents in the region and will assist those wishing to sell their houses or apartments and those looking to purchase in Merimbula, Eden, Tura Beach or Bega. With offices in all these towns and a range of listings on their books, they are the go to Real Estate Agents on the Sapphire coast. Call 1800 For Sale or 1800 367 7253 to inspect your potential new property on the Far South Coast of NSW.
Nick recently moved to the Fisk & Nagle Tura Beach Real Estate office and is relishing meeting the friendly people of this lovely coastal area, just five minutes’ drive from Merimbula, NSW. As he talks to prospective vendors in Tura Beach he is enjoying the friendly reception and he believes that a great place to buy a real estate property is Tura Beach right now. Why? Because house prices have remained steady, facilities such as the new shopping centre with Woolworths, Harvey Norman, a discount Chemist, Newsagent and Nick’s Bar & Grill as well as the Tura Beach Country Club with a top class golf course and lawn bowls, not to mention the sensational views.
Nick first began at Fisk & Nagle First Choice Real Estate in 2010 as a Home Finder and selling real estate in Merimbula. He really appreciates the people in the area, as he says “ When I door knock and meet people to enquire if they would like to list their property for sale in Tura Beach, their welcome is a big improvement on the reception I used to receive as a Sheriff in the ACT!”. Before he moved here in 2010 Nick worked for 10 years as a Sheriff in Canberra, having been born and bred in Queanbeyan. He is family oriented with a young family , a girl aged 7 and a boy aged 12. He loves his rugby league, being a keen supporter of the Canterbury Bulldogs and enjoys fishing.
Nick loves the friendly community and the fact that most people know each other. He has noticed a movement in the population at Tura Beach, it appears that a lot of the retired people who originally purchased properties at Tura Beach are now moving into retirement villages and younger families are now purchasing houses in Tura Beach. Call Nick at the only Real Estate Agency in Tura Beach, Fisk & Nagle on 1800 For Sale or 1800 367 7253.
17 year old Molly Campbell of Pambula Beach on the Far South Coast was announced the winner of the Lions “Youth of the Year” as well as the winner of the “Lions Public Speaking Competition” held in Canberra on Saturday April 27th at the Lions Convention. Molly’s winning speech was about the Australian agricultural industry and the monopoly large companies hold over the industry, as reported by Denise Dion of the Merimbula News Weekly.
Molly attends one of the local secondary schools in the area, Lumen Christi College situated at Pambula Beach. Last year the winner of the Public Speaking Competition was also a local resident, Nathan Barnden of Bega. This is a great achievement for the area, illustrating the level of education children receive in the region is at a competitive standard nationally. Those considering purchasing property in Merimbula, Tura Beach, Eden or Bega who have a young family will be delighted at Molly’s and Nathan’s achievements.
Other secondary schools on the Far South Coast are Bega High School situated in Bega, Sapphire Coast Anglican College also in Bega and Eden Marine High School in Eden. Primary education is well catered for with both Lumen Christi College and Sapphire Coast Anglican College also offering primary education; other private primary schools are Mumbulla School for Rudolf Steiner Education, St. Patricks Primary School and Thomas More Christian Montessori School . The towns of Eden, Merimbula, Tathra , Pambula and Bega all have Government primary schools.
Families considering purchasing property in Merimbula, Bega, Eden or Tura Beach have a choice of educational facilities as well as sporting activities, sporting facilities and other extra curricula activities in the region such as ballet, dance, gymnastics and drama classes.
The Bega Valley Shire has had much discussion about the proposition of extending the runway at the airport at Merimbula. Currently 1600 metres, discussion has centred around adding another 200m to the runway. At a council meeting five months ago it was resolved to go ahead with repairs to the runway required by CASA but not to extend. The extra cost for an extension appeared to be the main reason the council rejected the proposal.
At a recent council meeting it was mentioned again, apparently the contractors currently undertaking repairs to the existing runway had offered an extension of 200m at a discounted price. The ensuing debate in council was intriguing, as it centred around the need for an extension to the runway, would it make a difference to the size of planes and amount of traffic the shire could expect?
Property owners and people considering purchasing property in Merimbula, Eden, Bega, and Tura Beach will be watching this debate with keen interest. Ensuring the airport is capable of accommodating larger planes and an increase in the amount of aircraft visiting the area is of utmost importance to the continual growth of the area. Growth in tourism will in turn affect the value of holiday rental properties and even property values in general.
The councillors voted 4 for and 5 against the motion to extend the runway after considering the facts and arguments presented. One of the councillors reported that Qantas had said “The length of the runway is not a limitation for the Q400 and the aircraft can easily manage it. “ She also mentioned that the airport has a Code C classification and can take 72 seat aircraft. The Bombadier Dash 8 Q400 specifications on the Airlines Inform website states that the aircraft can carry 76-84 economy seat passengers and take off field length is 1300 with a landing field length of 1290. One visitor to the site stated in October 2012 “I was impressed with the performance of this aircraft on short field take off.”
Property owners, property buyers and vendors will be hoping the council has got it right and that larger aircraft will begin to use Merimbula airport, bringing more visitors to the area. Perhaps Qantas will bring in the Dash 8 Q400 several times a day from Melbourne, Sydney and Canberra – now wouldn’t that be excellent for growth?
It is not long until tax time and you may be wondering what claims you can make on your investment property. Here are some ideas to ponder.
The ATO website reports that “Certain types of construction costs – including extensions, alterations and structural improvements – can be claimed as capital works deductions. However, the purchase cost of the land on which a rental property is constructed cannot be claimed. Instead, the land forms part of the cost base for capital gains tax purposes.
Deductions can be claimed for the decline in value of some types of depreciating assets in residential rental properties – for example, curtains, blinds, dishwashers, refrigerators, stoves, television sets and hot water systems. However, construction costs are not depreciating assets.”
If you have a holiday rental property it is possible to rent it out but use it for yourself, family and friends for some of the time and still make taxation claims. The ATO allows you to claim some expenses incurred in running your holiday home or unit against your accessible income. Accessible income is derived from commercial renting whereas a minimal rent received from friends and family is considered reimbursement for out-of-pocket expenses. Expenses incurred whilst renting to friends and family cannot be claimed as the ATO considers it personal use at these times.
For your property to be considered an investment property, you need to prove you are actually trying to rent it commercially. You can show this by engaging a holiday rental agent, such as Getaway for Merimbula and Eden holiday rental properties. Listing on a holiday rental site such as Getaway will also help show you are serious about rentals, as well as helping you gain tenants. http://www.getawaymerimbula.com.au/holiday/Merimbula
The general rule with any tax deduction is that it must be relevant to an income-producing activity. Common deductions made on rental investment properties are: advertising for tenants, body corporate and strata fees, gardening, maintenance, cleaning, insurance and land tax. With thanks to Bina Brown of the SMH.
For full and professional advice on your investment property taxation claims see your Accountant. For advice on purchasing an investment property call Fisk & Nagle on 1800 For Sale.