Rate Rises, Growth, Tax reform
Emma Cunningham of Platinum Finance has provided a run down on some pertinent issues currently relating to the property market.
Emma’s team at Platinum Finance provides long term financial strategies to investors with an ongoing focus on wealth creation.
Rate Rises, Property Growth and Henry Tax Reform
what a week!!….still more to come….Tuesday is budget night….
Below I have given you a break down of what it all means…
If you don’t read any of it. Just book a pre 30 June Investment appointment with me. Why? I want make your daily efforts work for you (and if we do it pre 30 June we might be able to get some money back into your pocket from this year’s tax return).
These are the most common problems, frustrations or causes for loss of sleep - I solve for clients:
1. Cash flow strapped - home lopping you from being able to get ahead and invest or your investments are straining your cash flow
2. Not enough super to retire - if you have a combined balance of $100,000 you need to book an appointment, if you are young and not interested I will show you how “super” this tax system is to accelerate our investment portfolio
3. Paying too much tax - want to reduce it without effecting cash flow or lifestyle - most of the investors I work with are not paying tax
4. Scared investing will hampen your lifestyle now
The RBA’s decision yesterday is the 6th increase in the last 8 months based on a strengthening economy locally and globally. The cash rate has moved from 4.25% to 4.5% this moves it closer to the target average rate. NAB, CBA and Westpac have already based on the full increase.
Economists are still tipping for more rate rises this year with the two contributing factors being growth in the Property sector and Resource sector. Both have had air play this week - Bureau of Statistics released the property growth statistics and the Mining Sector is at the focal point of the proposed tax changes from the Henry Tax Reform.
Property statistics released this week from the Bureau of Statistics show a rise of almost 5 per cent for the quarter, and 20 per cent for the year. It is the largest annual increase since the series began in the March quarter of 2002.
Melbourne led gains with quarterly prices rising 6.7 per cent and annual prices up 27.7 per cent.
The strongest growth came from established houses with relatively high prices.
Over the quarter the other capitals also experienced positive contributions: Sydney up 5.3 per cent, Perth 3.5 per cent, Brisbane 2 per cent, Adelaide 2.7 per cent, Canberra 5.4 per cent, Hobart 4.2 per cent and Darwin 3.6 per cent.
Annually, house prices rose in Melbourne 27.7 per cent, Sydney 21 per cent, Canberra 20.6 per cent, Darwin 17.5 per cent, Perth 15 per cent, Hobart 14.1 per cent, Brisbane 12.1 per cent and Adelaide 10.8 per cent.
But not everyone is convinced the figures give a true picture of the broader housing market. Senior economist with BIS Shrapnel, Jason Anderson, shared his caution on Monday despite the positive market indicators.
“I think we’ve got a view though that rates will head up and need to go higher, but it’s really not until they get above say 8 per cent, towards 8.5 per cent historically, that we’ve seen a really rapid and sharp slowdown in the property markets,”
George Tharenou economist for UBS says the reason for such big increases is plain.
“I think there’s clearly a structural under-supply of housing. We expect the supply of housing to improve over the next year but it’s just not enough to meet the sharply increasing population.”
Major tax changes proposed from Henry Tax Reform
- Lifing the superannuation contribution from 9% to 12% by 2020
- More Government payments for low-income workers into their superannuation
- Compulsory super payments for those over 70 and concessions on contributions for those over 50
- A reduction in company tax from 30% to 28% by 2015
- Small business to benefit from company tax cut from 2012
- Other write off concessions for small business
- Miners to be hit with a 40% tax on above normal profits
- An infrastructure fund to be paid to the states each year to start at $700 million in 2012
We work with clients to create simple plans, that are robust and enable them to invest with confidence in a rising or stagnate property market. If you have been wondering how others invest. Make an appointment and find out:
1. Get the tax you pay working for you to fund a property portfolio for the future
2. Work out how much income you will need to stop working
3. Find out how you can do it without hampering your lifestyle now - our clients still drink wine, have great holidays,
invest, save tax and sleep easy
Contact Emma on 1300 792 561 or email emma@platinumfinancing.com.au
Sustainability Checklist
Nothing the government does surprises me anymore, but recently hearing about a new legislation that has recently been passed through parliament actually managed to! As of 1 January 2010, all sellers of houses, townhouses and units will need to complete a compulsory checklist that is designed to inform buyers about the sustainability features of a property and increase community awareness of the value of these features.
Four key areas of each dwelling are covered, including energy, water, access and safety. More specifically, owners are asked to identify features such as solar power, air conditioning, rainwater tanks, garden irrigation, and smoke alarms on the document.
The declaration does not form part of the contract of sale, however if the declaration is not completed or made available to buyers, there are substantial fines for both sellers and agents. Sellers can complete the declaration themselves, which is a simple two page document, or they can source a sustainability consultant to look after it for them.
We support the State Government’s desire to raise awareness of sustainability features. It is true that homes with sustainability features have lower energy and water costs and generate fewer greenhouse gas emissions. The government is hoping to encourage the community to make informed choices about protecting the environment against climate change.
Admittedly, however, it is less than ideal that the legislation was passed so quickly and will come into effect more or less immediately. There has not been a great deal of information made available to real estate agents or home owners, which is a shame, because sellers face inconvenient delays on the marketing of their property if the form is not completed accordingly.
We encourage any home owners thinking about selling their home to contact us for more information on the declaration, as well as their obligations as sellers. We can’t control decisions made by the government, but we can help our sellers avoid a fine!
Procrastination 101
During the past week I have tackled a wicked enemy of mine – one that creeps up when I least expect it to take me by surprise. It’s called procrastination, and it tends to find me when I really need to get important things done.
Interestingly, it’s always the most rewarding tasks that I tend to procrastinate over. The things that will provide the most joy and satisfaction find me procrastinating madly. For example, our little girl, Milla, has her birthday party just around the corner, and her greatest wish is a Dora the Explorer cake. Do you think I was jumping with enthusiasm to make it for her? No! But that doesn’t mean I cannot wait to see the excitement on her little face when she blows out her birthday candles. 
Similarly, this week we were working on our REIQ Excellence Awards submission and, while we know how important it is to ourselves and our team to be acknowledged for our successes over the past year, I just couldn’t bring myself to go through those awards criteria.
I know many people who procrastinate when they know it’s time to list their home for sale and start the next phase of their lives. Is it really because they don’t know where to start, that they are afraid moving will be expensive, that their house won’t sell, or they won’t find somewhere else to live? Or are they actually afraid of letting go, and moving forward?
Procrastination is a funny thing and I am definitely not the only one affected by this beast. Perhaps we as humans are a little afraid of achieving, of taking that next step. Maybe we cannot acknowledge our own growth or we may feel like we are letting go of something important in our past. I know Milla is only turning two, but that’s one year closer to her becoming an adult, and one year of her childhood that is lost. And by us submitting those application forms, we are acknowledging that we are no longer Jason and Ann-Maree – two individuals trying to make it in the big world of real estate, but actually leaders of a committed and talented team who are well on our way to being the most recognizable real estate brand in Brisbane!!!
But maybe we have got the wrong idea and need to look at it from another perspective. We need to be grateful for the past and welcome the future too, because that’s our journey in life. There is never a moment like the present, and sometimes it just takes a little courage to take that next step.
I will submit those submissions to the REIQ and be proud of how far we have come, I will ice that Dora cake if it kills me, and hopefully all those would-be sellers who are waiting for a sign that the time is right will realise that the current market has never been more ideal!
Interest Rates…Interesting?
I have noticed that whenever there is a change in interest rates, it’s all anyone can talk about. Its in the media, on TV, talk-back shows, and morning radio. You can also tell by the sheer volume of news stories and conversation around the proverbial office photocopier whether rates have increased or decreased – there is somehow always more to discuss when interest rates increase!
I know I work in the real estate industry and therefore its almost obligatory that I have something to say about it, but you know what? I am going to pass this time around. Interest rates increase, they decrease, life goes on, people move and buy and sell homes. The world doesn’t stop turning. The simple fact is, interest rates are still the lowest they have been in years, and most people won’t use a small interest rate increase as an excuse to put their plans to invest or buy a new home on hold.
So, if I am not going to discuss interest rates, what is the topic of my blog going to be this week? In the world of All Brisbane Realty, and the Bond family, its been another hectic week and not without its mishaps. I somehow contracted a stomach bug and was forced to work from home for the first part of the week. And I can tell you that two-year-olds don’t always appreciate when Mummy is not feeling well and can’t play games that involve a lot of running around.
In addition to the stress associated with a sore stomach and a hyper little girl sneaking mouthfuls of designer jelly beans in the pantry, Jason got thrown in the pool over the weekend with his mobile in his pocket. Handy! The Bond family learned that iphones don’t tolerate getting wet very well. In fact, they refuse to work at all. So, he promptly took my phone and I was left with no form of communication, except email and facebook, for a few days. At home. With a sore stomach.
But, as they say, every cloud has a silver lining, and in every stressful situation, something can be learned. In addition to our learnings about iphones, I was reminded, again, what a brilliant team we have at All Brisbane Realty. Scary to say this, but it appears we are not even needed there at all to ensure things run smoothly. Our team handled all enquiries professionally and quickly, worked exceptionally well with buyers and sellers, ensured all admin was completed accordingly, and property management was running like a dream as usual.
So, while the rest of Australia and the industry continue to sweat about interest rates, I am thanking my lucky stars for our talented, passionate and dedicated team… and also that Jason now has a new phone so I have mine back, thank you very much!
Embracing Technology - A Case Study
As featured in Sold! The Magazine For Real Estate Professionals
By KERRY MCDULING, March 25,2009
Technology has enabled businesses to operate 24/7 and consumers to obtain support and make purchases from anywhere in the world, around the clock. At the same time, community has never been more important, and personal contact holds far greater value over a general computerised response. The trick is finding the perfect balance, and using the right mix of ‘high tech’ and ‘high touch’.
Jason and Ann-Maree Bond are the owners and directors of a boutique Brisbane inner-city real estate agency, All Brisbane Realty, a small but dynamic agency that is making waves in the industry. Jason, Ann-Maree and their team are one of the very first real estate agencies nationally to use a number of technologies within their business, to keep in touch with their contact database and also to ensure maximum visibility for their business and their listings.
“There is no question that technologies such as Facebook and YouTube are a big part of Generation X and Generation Y ‘s daily lives, so if we want to speak to our clients in these age categories, we have to speak the same language and use the same channels they do,” Jason said.
Fans of Facebook
Many people use Facebook as a business networking tool, rather than simply a way of sharing photos. As community is becoming increasingly important in this high tech age, it is a well known fact that people would rather do business with people they consider friends, than with strangers. Hence the rise of Facebook’s popularity.
With this in mind, Jason and Ann-Maree have created a Facebook page for All Brisbane Realty, with a link from their website. Facebook users can elect to become a fan on the page and, in turn, invite their Facebook friends.
“We update this page with new listings, and fans of this page are notified on their home page the next time they log in to Facebook,” Jason explained.
Jason and Ann-Maree feel strongly about creating discussion about the market among their contacts, so regularly Jason will ask a question or make a comment via the online Facebook forum on the page, and a discussion will result.
He said that this creates a sense of community and also keeps the page dynamic and interesting, therefore encouraging fans to invite others to join and, also, to keep them visiting the page on a regular basis to see what’s new. Jason also said that having the Facebook page assisted them greatly with their Google rankings.
e-marketing is no myth
E-marketing is another important part of All Brisbane Realty’s business. Their contacts receive a weekly newsletter via email that includes recently sold and recently listed property, referral marketing programmes, as well as property management updates and what’s new within the business.
Buyers who have indicated that they would like to receive news about new listings on the market automatically receive email notification as soon as the property is listed, with details about the property and the asking price.
“We are also very excited about our e-mag that we are launching in a few weeks’ time for our client database, to be be sent in addition to the weekly newsletter,” Jason added.
Film stars
One of All Brisbane Realty’s point of difference is that they film each new listing in the form of a mini feature film, starring Jason as host and narrator. More appealing than the typical virtual tour used by many real estate agencies today, the DVDs are given to buyers in addition to a printed brochure.
“Not only do they present very well, in a DVD case with an image on front, and are interesting to watch, but they are actually more cost effective to produce than a typical printed brochure,” Jason said.
The DVDs also play a role in another popular medium that All Brisbane Realty use to communicate with their target market. You Tube is a video sharing website, a technology that allows users to upload, view and share video clips. YouTube was created in February 2005 by three former PayPal employees, and shortly thereafter, in November 2006, YouTube was bought by Google Inc. for $1.65 billion.
While anyone has access to view the videos, only registered users can upload their own content. According to YouTube, hundreds of millions of people watch videos on YouTube everyday – more than any other TV network combined.
“We have a You Tube account and upload the listing DVDs on here for the world to see. This technology also tells us how many views a DVD has had, great feedback for the seller,” Jason said.
Visitors to the office can immediately see the team’s commitment to using technology in their day-to-day business. Three 46 inch LCD plasma screens adorn the external walls of the office, displaying listings, rentals and other information.
Where did they come from?
All Brisbane Realty can trace its beginnings back to 2003 when Jason entered the real estate industry. He quickly rose through the ranks, progressing from sales cadet to salesperson, and then from leading salesperson to sales manager.
“Of course, that was at a time when I was still learning the ropes and working for someone else,” Jason said.“I had a vision for my own real estate company that would focus not only on high quality service for our clients, but on a superior level of service than was then available. I could see it focusing on strong brand awareness and brand integrity, and providing innovative and modern approaches to selling and managing real estate with high class service and results to match.”
Ann-Maree explained, “Jason and I believed we had a great complement of skills and experience to offer – Jason’s highly regarded sales reputation and my background in marketing and project management seemed like the perfect combination to provide the market with a high quality service offering.”
This view, together with their innovative approach to using new technology, has ensured the office is a stand-out performer on the local real estate scene and done much to ensure their agency has become one of the fastest growing real estate agencies in Brisbane.
Check them out…
www.allbrisbanerealty.com.au
www.facebook.com/home.php?#/pages/Brisbane-Australia/All-Brisbane-Realty/113054470572
