Gower Buchanan

Each month with sponsorship from NZHL I survey residential real estate agents around the country to get their insights into what is happening at the housing coalface. My latest survey shows the following main things. -Most readings are very similar to a month ago. -More agents see fewer of both investors and first home buyers than say they are seeing more. -Prices are widely seen by agents as declining throughout the country. The results overall show a decidedly weak market with virtually no FOMO. https://lnkd.in/gtUsWWap

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Each month with sponsorship from NZHL I survey real estate agents around the country. I ask them how activity levels are changing, what the views of first home buyers and investors are, and the factors which are affecting sentiment of those two large groups. The key results from this month’s survey which yielded 283 responses include the following. ·      There has been a notable rise in the proportion of agents saying that there are more investors in the market looking to make a purchase. Motivating factors include falling interest rates and rising expectations of increasing prices. ·      Demand from first home buyers also remains strong but because the number of vendors is also rising price pressure is still relatively muted. ·      FOMO has risen to 19% of agents observing it and this matches the 19% of agents saying they are seeing FOOP – fear of over-paying by buyers.  https://lnkd.in/ghStADci

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As Valuers, the most common questions we hear are, "Where is the best place to buy?" and "What is the property market like at the moment?" CBRE's latest Residential Valuer Insights Report Q4, 2024 features responses from CBRE Valuers over the past four quarters, providing a robust and detailed view of market trends over time and a comprehensive look at the market landscape in Australia. Whether you're in the property industry, a buyer, seller, or just curious about the property market, this report is your go-to resource for information on the Australian Residential Property Market. Key highlights include: - Active buyers - Change in supply and demand in the last 3 months - Expected value moment in the next 12 months - Supply and Demand Forecast Stay ahead of the curve and stay informed with CBRE's Residential Valuer Insights Report, Q4, 2024! Click the link below to view the report. https://lnkd.in/gUJiS_yf Kat Hale FAPI CPV FRICS, Sameer Chopra, Izzy O'Hara #RealEstate #PropertyMarket #Valuations #MarketInsights #CBRE #RealEstateTrends #PropertyInvestment #Residentialvaluations #VASCBRE

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I am generally in favour of less government intervention in the property market and economy as the past 20 years of various governments have resulted in the current property shortage and affordability issues. This suggestion to give first home buyers a competitive advantage through lower APRA mandated interest rates, seems quite well considered compared to previous incentives/taxes etc. Any thoughts? As always please be respectful, inclusive and polite to others. This is for the purpose of encouraging discussion and I am not advocating a particular position. https://lnkd.in/gjgDhmV5

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Federal Budget Report 2024/2025 The Australian Federal Government's 2024-25 Budget looks to balance cost of living relief without stoking inflation. It marks a significant milestone, achieving back-to-back surpluses for the first time in almost two decades. This year’s budget allocates $11.3 billion for housing, including $9.3 billion for social housing and homelessness, $1 billion for crisis and transitional accommodation, and an additional 10 per cent increase in Commonwealth Rent Assistance. These measures will help boost the supply of homes over the medium term. While the plan is multifaceted, focusing on several key areas to achieve its goals and supported by a $90.6 million construction workforce package, we are still lacking a more immediate solution to increase the supply of new homes. Overall, the markets remains largely unchanged. What remains to be seen is whether the government has effectively aligned its fiscal policy with monetary policy to prevent fuelling inflation and potentially prompting further rate hikes by the RBA - meaning that the rates remains the same; steady through 2024 with a potential cut at the start of 2025. To delve deeper into the impact of the 2024-25 Federal Budget on the real estate market, download the full report: https://lnkd.in/eJPhxD3N #ljhooker #federalbudget #realestateaustralia

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🏡 Exploring Investment Potential: Evaluating the Pros and Cons of Building Granny Flats With Australia's rental crisis persisting, many are considering the viability of granny flats as a solution. These additional dwelling units, typically located in the backyard of existing properties, have gained attention as a means to increase housing stock and address affordability challenges. While laws governing granny flats vary across states, they remain a topic of interest for property investors nationwide. Lately, I've received inquiries from clients weighing the option of constructing granny flats on their investment properties. The allure of generating additional rental income to offset expenses and navigate changing interest rates has sparked curiosity. As investors seek to maximize cash flow and rental returns, alternative strategies such as dual key properties have also emerged as popular options. 𝐁𝐮𝐢𝐥𝐝𝐢𝐧𝐠 𝐚 𝐠𝐫𝐚𝐧𝐧𝐲 𝐟𝐥𝐚𝐭 𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐬 𝐚𝐧 𝐨𝐩𝐩𝐨𝐫𝐭𝐮𝐧𝐢𝐭𝐲 𝐭𝐨 𝐞𝐧𝐡𝐚𝐧𝐜𝐞 𝐩𝐫𝐨𝐩𝐞𝐫𝐭𝐲 𝐯𝐚𝐥𝐮𝐞, 𝐚𝐤𝐢𝐧 𝐭𝐨 𝐚𝐝𝐝𝐢𝐧𝐠 𝐚𝐧 𝐞𝐱𝐭𝐫𝐚 𝐛𝐞𝐝𝐫𝐨𝐨𝐦 𝐨𝐫 𝐫𝐞𝐧𝐨𝐯𝐚𝐭𝐢𝐧𝐠 𝐭𝐡𝐞 𝐤𝐢𝐭𝐜𝐡𝐞𝐧. However, compared to other investment avenues like dual-key properties or subdivisions, the return on investment from granny flats may be more modest. Despite potential cost savings, such as avoiding extensive renovations or land subdivision, the overall impact on property value may vary. In summary, the decision to build a granny flat comes with its own set of pros and cons. On the positive side, it offers the potential to increase rental income and property value while providing additional living space. However, investors should carefully consider factors such as construction costs, regulatory requirements, and the potential impact on property resale value. Ultimately, whether granny flats align with your investment goals depends on your individual circumstances and strategy in the real estate market. Engage by liking, commenting, and sharing with your network! Keep an eye out for more valuable insights in my upcoming posts. Until then, happy investing! 🏡 ✨ #PropertyInvestment #GrannyFlats #RealEstateInsights

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🚨How to make money in property auctions 🚨 Thursday 21st November 7pm. FREE WEBINAR. Learn how to navigate auctions correctly and how they have become one of the best ways to maximise profit in a market where a lot of strategies are suffering. My knowledge on auctions is second to none and I have purchased from auctions for the last decade. • I can help you find properties and secure them for the right price. • Teach you how to read a legal pack correctly. • I explain what type of financing is needed for auctions. • How to use the correct power team. • How to find the end values and refurb costs. • There’s so much more included. What do you have to lose? This one webinar could completely change your life. Click the link below to secure your space for FREE. https://lnkd.in/eK-Gk9fi

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Interesting article on vacancy rates for commercial offices spaces in the CBDs in 2024. I keep reading and hearing from agents that office space below A grade quality is hard to sell or lease. The question becomes what is the highest and best use - refurbish to A grade office, convert to residential usage, a mix of residential/office usage? Any thoughts? As always please be respectful, inclusive and polite to others. This is for the purpose of encouraging discussion and I am not advocating a particular position. https://lnkd.in/gWieHVGP

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The new reality is that it's more expensive to rent, even a unit, than it is to buy, in most suburbs in Australia. Whilst it may cost more to own than rent, owning is the way to create long term growth. It's easier to get $100,000 of capital growth than it is to save $100,000. If you are thinking about buying then get in touch to make this happen sooner. In this rising property market your delays are costing you. Your delay will mean a higher purchase price when you do decide to buy. Let me help you. #buyersagent

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There's currently quite a bit of discussion in the housing market concerning the 3% serviceability buffer and whether to change it or scrap it entirely. Just a few thoughts on this, that focus solely on the demand side: (1) The buffer is one mechanism to guard against cycles that push borrowers out in terms of affordability. If rates turn swiftly borrowers should be able to stay paying off their mortgage. Changes in the buffer should be considered and implemented with caution. (2) Another mechanism is the deposit; this is both a shared investment and incentive for borrowers to continue to pay down their mortgage. Remember, lowering the deposit generally works when asset values continue to rise. (3) Stamp duty is a disincentive for all buyers and more so for First Home Buyers, its another barrier to entry. Concessions exist across states but the debate whether this tax should be discarded is worthy.   (4) Reliance on refinancing from higher cost loans to lower cost ones generally assumes asset prices (home values) are rising, and credit markets are functioning as per normal. Prices would generally rise in a normal market and history suggests Australian house prices to continue to rise unless a GFC type event shocks the market. (5) Lenders Mortgage Insurance is a policy that benefits the lender and is paid by the borrower. Not having this in place increases risks for the lender (and these are passed onto borrowers through higher costs) and including it places a further financial strain on the borrower. (6) Bank of Mom and Dad – not everyone has this luxury. And if they do, it poses additional risks to retirees and their families with capital locked away for long periods not yielding sufficient (if any) returns. Changes in any, all or some of these mechanisms will either reduce or increase the demand side in the housing market. This will (as we know from economics) have an impact on asset prices (house prices), caution should be exercised. Supply side factors need just as much focus, push and energy to balance an imbalanced market when it comes to First Home Buyers. Changes to the 3% serviceability buffer is not a silver bullet but one of many mechanisms, Senator Andrew Bragg. https://lnkd.in/gpYPrNbB #housing #mortgages #homeloans #serviceabilitybuffer

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Following Labour’s win in the election, whether you are a prospective buyer, renter or landlord, everyone is eager to understand the implications for the housing market. Under the leadership of a Labour government, an ambitious housing agenda promises strong changes designed to address affordability, increase supply, and protect renters. Labour’s most significant pledge is to build at least 1.5 million new homes over the next five years. This initiative represents the largest boost to affordable housing in a generation. The plan includes creating new towns with high-quality homes, green spaces and reliable transport links, ensuring these communities are both liveable and sustainable. A key aspect of Labour’s strategy is the introduction of a ‘planning passport’ which will fast-track the approval and construction of high density housing in urban areas, optimising the use of already developed land. Accelerated construction could lead to a variety of homes becoming available for prospective buyers and landlords looking to develop their portfolio. For first-time buyers, their plan includes offering buyers first selection on homes in new developments through a government-backed mortgage guarantee scheme. This initiative is designed to support younger people in getting onto the housing ladder, addressing the affordability crisis for many aspiring homeowners. Renters will see significant protection under Labour’s new policies. The party has pledged to ban no-fault evictions, providing greater security and stability for tenants. Additionally, Labour plans to reform or end the leasehold system, addressing a longstanding issue affecting many homeowners. As these policies unfold, the housing market is ready for a period of dynamic change and opportunity. Source: Mortgage Intelligence (July 2024) #labour #housingmarket #newgovernment #propertynews #propertymarket

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Interesting article discussing the difference in Capital Gains between units and detached houses. Housing is a complicated topic with so many factors and issues affecting supply, demand and price/rents. As the article points out Sydney is landlocked between National Parks/waterways to the north/east/west/south which limits urban sprawl and future supply of land releases. Added to this is the risk with many high density unit complexes now identifying significant defects and the high cost to repair these which further reduce Capital Gains for units in general. Any thoughts? As always please be respectful, inclusive and polite to others. This is for the purpose of encouraging discussion and I am not advocating a particular position. https://lnkd.in/g4bjKUeH

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From the article: "They’re $1m-plus homes you can’t live in – with everything from rotting ceilings and floors to interiors strewn with crumbling bricks – but in many parts of Sydney they’re the few houses available to buy. Agents have reported a “severe” shortage of ready-to-move-into houses across the Greater Sydney area as uncertainty over rate rises discourages would-be sellers of turnkey homes from listing. These shortages have been particularly severe in Sydney’s well-connected inner- and middle-ring suburbs, where housing demand has historically been higher." Any agents/conveyancers noticing falling sales volumes recently? I imagine the cold and wet weather is not helping with marketing..... Any thoughts? As always please be respectful, inclusive and polite to others. This is for the purpose of encouraging discussion and I am not advocating a particular position. https://lnkd.in/gBNH4A7J

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The supply/demand balance is the key driver of price movements across Australia’s cities and regions today. The areas doing well have tight supply and demand and vice versa in the softer markets.

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Some reasonable points made in this article, keep in mind what the dominant purchasers are in your suburb for your property type and be careful if you create a floorplan or style that is unique in your area. It might suggest you are a genius ahead of the demand curve or just not aware of the current demand of buyers. Any thoughts? As always please be respectful, inclusive and polite to others. This is for the purpose of encouraging discussion and I am not advocating a particular position. https://lnkd.in/dN5U2WKE

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I have just received an enquiry for 2 flats in a high-rise block close to Primrose Hill which are let as an HMO. Financing ex-local authority flats (previously council-owned properties) can be somewhat difficult due to specific considerations, the first is the construction of the block which is concrete, this will automatically exclude many lenders, as many of 1960s-style blocks are built from concrete. Not all lenders consider lending on blocks which are 20 stories high, they reconsider the resale to be difficult should they have to take possession. Most lenders also insist that the block be mostly privately owned, when the flats are in a prime location then often the residents have been unable to afford the Right to Buy, even with the discount offered the property was still expensive, this was the case with this block with the majority still owned by the local authority. There has also been a raft of new fire safety regulations since Grenfell which affects high-rise blocks and lenders will expect the work to have been completed on these blocks before completion of the loan. In this instance, I had the added challenge of the property being a House in Multiple Occupation. Bizarrely I love enquires like this, I can help the client, lower the cost of the finance they currently have but also help the client raise additional funds for a new property investment. The client is grateful for the help and I enjoyed the challenge.

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For the week ending 1st September 2024, Brisbane recorded an auction clearance rate of 58.6% from 158 auctions. ✍🏻 This marks a continuation of the downward trend, following last week's rate of 60.6% from 137 auctions. The ongoing decline in clearance rates suggests perhaps a general cooling in buyer activity and possibly a more cautious approach in the market as we transition into spring [we’re watching supply levels closely]. The Brisbane property market has experienced significant variability in auction clearance rates over recent months, with figures fluctuating between a high of 79% and the current low of 58.6%. These shifts reflect broader market dynamics, including economic factors, seasonal adjustments, and changing buyer sentiment. As we move further into spring, it will be crucial to monitor whether this trend continues or if we see a rebound in activity. Despite the recent softening, demand from owner-occupiers and investors remains a key driver in the market, underscoring the ongoing appeal of Brisbane real estate even in times of fluctuation. 🎯 Key Observations: 1. Ongoing Decline: Auction clearance rates have been steadily decreasing, indicating potential buyer caution or market adjustment. 2. Market Fluctuations: The rates have ranged from a peak of 79% to the current 58.6%, highlighting the volatility in buyer confidence and market conditions. 3. Seasonal Impact: The transition into spring may bring about changes in market dynamics, with potential for either continued softening or a resurgence in activity. 4. Resilient Demand: Despite the dip in clearance rates, strong underlying demand from both owner-occupiers and investors continues to support the market's long-term stability. #templetonproperty

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The May CoreLogic House Price Index results are in and it’s another (minor) drop for values – with Auckland’s weakness showing through more clearly. The overall net effects on the housing market of tax cuts, LVR loosening, DTI introduction, and removal of first home grants could be pretty neutral in the coming months. But high mortgage rates and plenty of buyer choice (elevated stock of available listings) could easily keep a lid on property values for a while yet. Indeed, there could be as many 50,000 or so investors out there who are currently sitting on capital gains (but possibly enduring cashflow losses) and who will also escape a possible tax liability earlier than they expected when the Brightline Test shortens on 1st July. Clearly, not all of those investors will suddenly sell. But it is another solid reason to think that listings levels could stay fairly high for a while yet. https://lnkd.in/gzBdBgxP

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