Tag Archives: buying

How to help your children up the property ladder

How to help your children up the property ladderFor anyone trying to buy a home in today’s market, recent conditions aren’t particularly accommodating. According to the Housing Industry Association’s Affordability Report, the affordability index dropped by 6.4 per cent over the December quarter. This has pushed the rating to 75.6 (a score of 100 represents a balanced market). A mix of incredible price growth and a supply shortage has helped see to this.

In these circumstances, young first home buyers could find it tough to break into several city’s markets, and are often being priced out of their own region. If your kids are struggling to get a foot on the property ladder, there are a few ways you can lend a hand.

Let’s take a look at how you can do this:

Putting a deposit

CoreLogic’s monthly indices show that the average value of houses across Australia’s five biggest cities was $757,330 by the end of January. In Sydney, Australia’s densest city, this figure was a whopping $993,770. Clearly, buying real estate in Australia is more costly an affair than its ever been, making it a journey just to save for the initial down payment.

If you want to invest into the future of your children, why not give them a one-off cash gift that will go toward a deposit. Not only are you speeding up the saving process for them but keeping them motivated and with their eyes on the prize.

Put your home as collateral

For those picking up a home loan for the first time, lending conditions aren’t usually in their favour from the get-go. With no property of their own to put as collateral should things go south, they present a greater risk toward lenders.

If your child is in this situation, it can help immensely to put yourself forward as a guarantor. This means that you’ll put your own home down as collateral for the mortgage, which can help lower the minimum deposit that they have to commit by quite a bit. It could help them to buy a homeand get a foothold in the market much quicker, as well as keep them motivated.

The great thing is that it won’t cost you a cent, but can fast-track your child’s property journey significantly. However, there are obviously big risks to this. Just make sure they have the income and financial stability to make those repayments or you could, in the worst-case scenario, lose your home. Speak with a financial adviser to see if such an approach is right for you and your young adult.

Why is investing in a holiday home a smart move?

Why is investing in a holiday home a smart move?As most real estate experts will tell you, building your property portfolio is a smart way to invest your money because land, like gold, retains its value. This means that you are safely investing your funds, as the likelihood of a return – or even profit – on your investment is high given that property and land are always in demand.

For those of you who are looking to expand your property portfolio further by buying real estate in Australia, it might be time to consider purchasing a holiday home. There are both financial and health benefits to be enjoyed by doing so.

Financial perks of a holiday home

In many ways, investing in a holiday home is the gift that keeps on giving because even when you are not using it, you can rent out the property to other holidaymaking families. This is where location, location, location comes in - consult with an agent to find a holiday home that is near the beach, parks, gardens or tourist attractions of a city to ensure you’re getting as much rent money as possible on a weekly basis. Sea views are a great calling card for renters.

Simply take your house off the rental market when you and your family want a vacation, so you can all enjoy the nearby amenities, too!

Health benefits of a holiday home

Interestingly, a study sponsored by Nuffield Health found that taking annual leave, or having regular holidays, can dramatically improve our overall health and wellbeing. In addition to being positive by releasing endorphins and dopamine, the chemicals that make us happy, going on holiday can reduce our blood pressure by 6 per cent on average, according to the study’s findings. What’s more, our sleep quality can also improve by up to 17 per cent.

More space for home owner-occupiers in the market

More space for home owner-occupiers in the marketStruggling to buy a home in Australia? It can be frustrating, especially when you have to compete with investors snatching up houses for sale on every corner.

Housing values in the country have been on the up, driven mainly by prices of real estate in Sydney and Melbourne. This is partially thanks to the 2 per cent cash rate that has pushed interest rates on home loans to record lows.

To combat the risk of a market crash, the Australia Prudential Regulation Authority (APRA) has put countermeasures in place, including a ten per cent limit on investment credit yearly growth. While not technically enforced, this suggested target aims to restrict lending to investors to help cool rising prices.

So the big question is, is this solution working?

A look at the numbers will seem to suggest – yes.

Owner occupation on the rise

According to the Housing Industry Association (HIA), home loans for owner-occupier housing increased in August by 2.5 per cent. HIA Economist Diwa Hopkins also notes that “lending to investors seeking to construct housing fell away sharply during the month”. This means that more financing is being shifted away from investors and put toward owner-occupiers.

Furthermore the Australian Bureau of Statistics show that the dwelling commitment values for this type of property increased by 6.1 per cent (seasonally-adjusted estimate) from July to August. Meanwhile, it decreased by 0.4 per cent for investment housing.

As the APRA continues to crack down on banks exceeding the 10 per cent ‘speed limit’, you can expect to see the real estate market be less and less heated in the months to come. If you’re looking to buy a home you can settle in, it’s important to be ready to snatch up a property for sale that suits your needs.

Why should you should consider renting?

Why should you should consider renting?When it comes to living in Australian property, purchasing with home loans seems to be the default choice. For many, there’s a general impression that renting property is some kind of short-term bridge between leaving your family and buying your first home.

But if you’ve had your eye on real estate news for the last few years, you’ll notice that purchasing real estate in Australia is getting increasingly difficult, particularly in certain capital cities.

While there are many great perks and benefits from owning property, there are also key advantages to renting that make it an appealing option.

Affordability

Affordability is a big factor for anyone. In this field, the case for renting seems to have the upper hand.

The Housing Industry Association reported in June that the National Affordability Index dropped by 2.9 per cent. Sydney and Melbourne saw the greatest decreases, at 6.9 and 9.1 per cent respectively. This demonstrates that housing prices are rising faster than people’s earnings.

While people with low interest home loans can still find ways to adapt and purchase property, it outlines just how comparatively affordable renting could be.

The deal with yields

The best way to observe this comparison is not just to examine rental rates, but to take a look at yields. Sure, rates can give you a snapshot into how much it’ll cost you per week, but this alone will not give you a holistic view.

Yield figures on the other hand, will show you how renting stacks up to buying property in the current market, which is the real contest here. This can be defined as the percentage of rental income to the home’s purchase price.

For instance, CoreLogic RP Data research notes that the median rental price for a Sydney house was $610 in July. This figure might seem high and have you consider buying instead.

However, figures reveal that Sydney’s rental yield was down 0.2 per cent over the quarter, and decreased by 0.6 per cent over the year to July. This shows that rental income were in fact lower than they should have been when considering property prices.

This is true for many of the other capital cities as well, and is a sign that renting could the far more affordable option in relativity to housing prices.

Stable rates

Another good reason to look at houses for rent is the fact that rates have been mostly stagnating. Australia’s combined capital cities experienced a 0.7 per cent decline in rates over the September quarter, with every single one recording negative change.

Melbourne has lead the charge in rental growth over the year, showing a 2.1 per cent rate increase in the year to September but clearly, this figure is hardly something to worry over.

With stable rates that are lower than property prices would have them, anyone who may struggle with mortgage repayments should consider renting instead.

The high and low of Australian house prices

Image result for ups and downs of house pricesFinding an affordable first house is always near the top of the list of priorities for a house hunter. A safe and good infrastructure, enough green space for the kids and pets and even good water pressure are all important, but affordability is truly key. Something too expensive could put you in a poor position when you sign up to a home loan, or leave you saving money for the next decade to have enough for a deposit.

But where do you find these affordable properties? CoreLogic RP Data has released a report in its weekly Property Pulse that highlights the most affordable suburbs within 10 kilometres of Australian capital cities, right across the country. To give an idea of the breadth of the current market, we looked at the highest and lowest of these affordable suburbs.

Most expensive: Turrella, Sydney

As expected, Sydney has the most expensive property in the country – and by quite some margin. Even the most affordable suburb within 10km of the CBD might be a little far-fetched for the tight budget, with the median house price in Turrella coming in at $839,676.

However, if you have the funds, then this is the area to buy in. Sydenham, St Peters, Tempe and Waterloo rounded out the list of the top five suburbs for houses, so these could be worth your time as well. For reference, the next most expensive house price on the list was Preston in Melbourne, at $675,973.

Cheapest: Clarendon Vale, Hobart

At the other end of the scale, the most affordable suburb within 10km of any capital city of Australia is Clarendon Vale, where the median price for a house is $156,078. That is just under a fifth of the median price for Turrella.

According to the Bankwest First Home Buyer report released in December last year, it would take the average buyer 4.1 years to save a 20 per cent deposit on a home, based on a median price of $469,000. Applying the same differences to the cities mentioned above, that means an average of 7.3 years to save for a Turrella deposit, and 1.4 years for one in Clarendon Vale.

Deciding where to buy depends entirely on your financial situation. Doing the maths and working out what you can afford is a vital part of this process. Check the prices in your area, and speak with a professional about how much you need to comfortably set up a home loan.

What to think about when buying off the plan

What to think about when buying off the planAfter a few year experience in the property market game, many people start to think about different ways to maximise their profit. There is nothing more appealing than snapping up a house or unit for less than its value and making a great rental return, then waiting for the best time to take advantage of compound growth. In some cases, you can actually buy a property before the building has even been constructed. This is known as buying off the plan.

If you want to go down this path, there are a number of things to think about.

Legal tips

Buying in this way is much different than normal property purchases because you are entering into a contract without being able to view and inspect a physical building. The date for completing the contract is generally not until the building is finished, so you should get legal advice before agreeing to any conditions.

There are a few things you should ask. First, investigate whether there are any serious penalties for withdrawing from the contract. Financial and personal circumstances can change quickly, but you don’t want to be caught out.

Ask questions

Particularly in a big strata development, properties can end up looking the same – but when you want to get as much profit from your investment as possible, you should also ask about customising the property. This can include choosing everything from appliances, wall colours and floor tiles; to finishes in the kitchen and bathroom. You might even want to check on its progress during construction.

You might also enquire about your rights in construction phase. For example, you need to know if you’re able to on-sell during building, or what rights you have the if building is finished earlier than expected but your finances aren’t in order. This is especially the case if construction is delayed or if you’ve paid the deposit but the building doesn’t go ahead at all.

Property investment can be a very lucrative, but it’s very important to be prepared before you commit.

How to soundproof a home

How-to-soundproof-a-homeWhile they will differ between states and countries, most residential areas all have one thing in common: noise restrictions. Whether it’s power tools in the garage or your son or daughter’s party getting out of hand, there will usually come a time when your household breaches noise restrictions. It’s important to know when these are: For example, in New South Wales you cannot have music heard from a habitable room in a neighbours’ home between midnight and 8am.

Sometimes, these things just happen. But you can take steps to cut down noise from inside your own home – and conversely, also to cut down on noise from other homes nearby if you wish.

Set the scene appropriately

If you are buying or building a new home, consider what can be done to arrange the premises in a way that distances it from noise and neighbours. The location of your fences, windows, doors and yard spaces will all play an impact in how the noise travels to and from your home.

Even trees and plants can act as a natural muffler! Work with your surroundings and you’ll come out with a much more soundproofed space.

Change rooms

This is the same principle again, but this time on the inside. Having rooms causing noise or ones that you want to stay quiet as far away from the undesirable situation as possible is a great start. Consider reinforcing doors and windows for these rooms. You can effectively create a small sanctuary (or rumpus room) within the comfort of your own home.

There are options such as insulation and glazing on windows and walls, but these can be a lengthy and expensive renovation if you don’t have the funds. Adapt to your surrounds to create a wonderful space, whether for noise or calm.

- See more at: http://www.firstnational.com.au/media/australian-real-estate-blog/2015/February/How-to-soundproof-a-home#sthash.E0iKc24E.dpuf

Three burning questions on upsizing

Three-burning-questions-on-upsizingAt one point or another in your life, there will always come a time to upsize your home. Perhaps you’ve decided to expand your family beyond the initial plans, take on a parent in old age or simply want more room to relax. Whatever the reason, you might face a few issues when upsizing - here’s how to deal with some of them.

Do I buy a new home or renovate my current one?

The age-old question, and one that never really has a clear answer – because it depends on your tastes and needs. If you’re living in an inner-city block, it is probably common sense to look at buying a new home, as renovations could be costly and require not just state planning approvals, but consent from landlords and neighbours who could be affected. However, if you’ve got more of a lifestyle block and want to add a new bedroom or sleepout, renovation could be more your style.

What will the cheapest option be?

There is a lot to consider here, and an agent or broker may be able to give some quality advice. Moving fees and house prices will vary no matter where you are, so best practice is usually to seek out many different quotes for refinancing, moving and building. Then you can work out your cheapest move.

Do I start from scratch with my furniture?

When you’re creating a new space, be it renovating a lounge or buying a fresh house, there’s always the temptation to remove all old possessions and start again. But wait! Take inventory of what you have – could that set of chairs just need a varnish, and the couch a simple reupholster before it looks ultra-modern? You can save yourself a lot of money by touching up current furniture, and they make great pieces to show off when your friends come to marvel at your new home.

3 signs it’s time to buy your first property

3-signs-it-s-time-to-buy-your-first-propertyTaking the plunge and buying your first property seems like a big step – and it’s one that shouldn’t be taken lightly. However, there are some indications that now might be the time to make those all-important steps onto the property ladder and realise your property ownership dreams.

Here are some of the major indicators to look for if you’re still on the fence as to whether you should go in search of property for the first time.

1. You’ve built a substantial deposit

Generally speaking, the bigger the deposit you have, the more attractive you will be to mortgage lenders. This said, it is possible to get into a home without spending decades putting together a large amount of savings.

If you have at least 10 per cent of your dream property’s value saved then it’s a good idea to think about approaching a broker or lender.

2. Your rental outgoings are increasing

The cost of renting property is increasing in some parts of the country, which could make buying a more attractive prospect for some people. Take a look at costs in your local area and see if the figures add up for your individual circumstances.

If there’s a chance you could pay less meeting repayments on your own mortgage than renting out someone else’s home,then it’s time to look seriously at doing just that.

3. You’re looking for a long-term investment

There’s a reason so many people choose to invest in property – it gives them a fairly safe long-term investment option. It’s not usually the best choice if you’re looking for a quick buck, but it can give decent returns in the long run.

Doing your homework is one of the most effective ways of making sure you’re coming to the right decision, so put in plenty of research and you shouldn’t be disappointed.

What should I consider when buying my first home?

How-to-choose-your-ideal-propertyIt’s a big decision to buy your first property and chances are there are all sorts of features you’d like to find in your home.

Locating that ideal property should involve a bit of your heart and a lot more of your head, otherwise you could end up buying somewhere that’s far from a perfect fit.

Compiling a list of what’s important to you in a property is a great way of narrowing down your options and ensuring you purchase somewhere most suited to your needs.

Location, location, location

One of the most important aspects to think about is the location of your property, which will largely depend on your individual circumstances.

If, for example, you have children then you’ll need to make sure there are plenty of quality schools nearby. Young professionals, on the other hand, will want to be close to their place of work.

An area might seem ideal at face value, but spend some time researching it more in-depth to ensure it’s the right choice for you.

Property prices

Another important factor is the price of property – how much can you afford to spend on your first home?

Some parts of the country – or the city – are more affordable than others, so it’s worth knowing where you are able to buy before getting your heart set on a certain home.

Safety and security

It’s essential that you feel at ease when you move into your first home, which is why you should invest some time in getting to grips with the local crime statistics.

Speaking to people who already live in the area is another good way to research the area – they’re likely to be the best source of information!

Renovation potential

Some people like the idea of making their first property into a renovation project, while others simply want to move in and start living in it straight away.

Decide which category you fall into and factor this into your property hunting process.