February Wrap Up 2019

Greetings from Scoutable and welcome to our February Wrap Up.

Across Sydney, Melbourne and Brisbane, auction numbers are climbing as the market gets back into swing after the festive break. The data below shows a drop in clearance rates of 10% in Sydney, 21% in Melbourne and 8% in Brisbane, for the February year on year comparison.

February saw 1,766 properties scheduled for auction across Sydney, with an average clearance rate of 58%. Melbourne saw 2,227 properties scheduled, with an average clearance rate of 51%. Brisbane saw 353 properties scheduled for auction with an average clearance rate of 40%. In comparison, February last year had an average clearance rate of 68% (3,141 properties), 72% (3,675 properties) & 48% (1,050 properties) respectively.

Yesterday, I attended the Australian Property Institute’s Property Market Outlook for 2019 seminar. Besa Deda, Chief Economist of St George, provided her overview for the residential market and general economic outlook.

Besa discussed the four main issues effecting the global economy, which included economic and political concerns in the USA, USA/China trade tension, Brexit and Italy falling into a recession. 

Nevertheless, world growth looks good. 

In regards to the Australian Economy, Besa mentioned the economic growth forecast has been cut by the Reserve Bank. Whilst the cash rate is on hold for now, there are scenarios for both a cash rate rise and a cash rate cut towards the end of 2019. Overall consumer spending and the property market are down but business spending is good. She believes there will be a cash rate cut in December 2019.

The housing downturn has been led by Sydney and Melbourne. Sydney is down 12% since the peak 18 months ago, Melbourne is down 8% since the peak 14 months ago. Besa points out that on average there has been a 70% rise in property prices over the last five years, thus a 12% drop is not so bad. She mentioned the downturn is unique as it has not been driven by increased interest rates but more so by Government policy, foreign demand decrease, the Royal Commission, lending conditions and in some areas an oversupply of new build apartments.

Should the Labor party win the upcoming election, there will be a few changes for the property market which will include a change to negative gearing. Labour proposes that negative gearing will only apply to new build properties. All existing investment properties will be grandfathered from this ruling.

Overall, NSW has a good report card from Besa. NSW is the fasting growing state in Australia, supported by infrastructure, spending and population growth.

As always, our advice is that property is a long-term hold. There will always be movement in the market. The key is to not over extend yourself, buy in ‘blue chip’ locations (close to transport, retail facilities, CBD, schools, universities, hospitals) and do your research.

If you would like to discuss the current conditions of the market further, or are thinking of buying or investing in Australian property, get in touch to learn about Scoutable's services and how we can assist with your property search.

Until next month,

Kellie Landrey | Principal Buyers Agent

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IN THE NEWS

THE BANKING ROYAL COMMISSION AT A GLANCE

https://mobile.abc.net.au/news/2019-02-04/banking-royal-commission-report-at-a-glance/10777188?pfmredir=sm

PARENTS STILL UNHAPPY WITH REVISED SCHOOL CATCHMENT

https://www.smh.com.au/national/nsw/a-line-between-us-parents-reject-new-inner-sydney-high-boundaries-20190222-p50znl.html

ROSE BAY HOME SELLS FOR $23.5M AFTER PASSING IN AT AUCTION

https://www.domain.com.au/news/rose-bay-trophy-home-of-stephen-burcher-sold-for-about-23-5m-almost-24m-804101/

PROPERTY OF THE MONTH

16/1 DARLEY STREET DARLINGHURST

February’s property of the month is a great little investment apartment. 16/1 Darley Street Darlinghurst is located 1.9km from Sydney's CBD. Nestled in the back of the block, the apartment is 37sqm internally, comprising open plan kitchen / living / dining, bedroom, bathroom and access to a disused fire escape providing a small alfresco stoop to enjoy your morning coffee.

The price guide is $490,000 with a rental guide of $490 per week. Should these figures be achieved, the resulting gross yield would be 5.2%. The outgoings equate to $4,280 per annum, which covers strata fees, council rates and water rates, resulting in a net yield (before management fees and insurance) of 4.3%.

The complex was built in the 1930s, with 20 apartments in the block. Positioned in a tree lined cul-de-sac, it's within walking distance to restaurant and retail facilities of Darlinghurst, Surry Hills, Paddington and Potts Point and well as St Vincent's Hospital, National Art School, Kings Cross Station and the CBD.

Properties like this provide a great opportunity to enter the Sydney market due to their enviable location and high rental demand ensures they are hardly ever vacant.

It's important to note than some banks require a minimum internal space of 40-50sqm as part of their lending criteria so it's worth shopping around for the right loan if you're looking into purchasing a small property.

If you'd like to know more about this property or any others, please get in touch.

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January Wrap Up 2019

Greetings from Scoutable and welcome to our first newsletter of the year.

We hope you had a great holiday season and wish you the very best for 2019.

The property market (unofficially) kicked off after Australia Day, with the first round of auctions scheduled for 8th February. We have been out inspecting properties over the last few weeks and have noticed an increase in the number of buyers out looking. A few sales agents have commented that they have had more buyers inspect a listing in one Saturday than they did for a whole campaign at the end of last year. How this increased demand transacts on the auction floor will be revealed in the clearance rates over the coming months.
 
Like the beginning of last year, there are a variety of forecasts concerning the property market for 2019. Opinions are divided as to whether the market is stabilising or will undergo further correction. I think it is important to have a look at what factors affect the housing market, some of which are listed below (of course there are other factors which can affect a specific market i.e. infrastructure, zoning changes etc).
 

  • Interest rates - Adjusting interest rates is one of the most effective ways that the Reserve Bank of Australia (RBA) can drive or restrain the country’s economic growth. Lower interest rates encourage more people to borrow as buying property becomes more attractive. Moreover, repayments on existing mortgages and debts are easier to make, allowing the consumer to spend more on day to day living which in turn boosts the economy.

  • Economic growth - When an economy is strong, unemployment rates drop, wages increase and individuals are thus able to spend and/or save more. This raises confidence and people become more inclined to invest in the property market.

  • Mortgage availability -. In other words – how easy it is to gain credit from lenders. Credit conditions are determined by various global, financial, regulatory and commercial factors and generally speaking, when credit policies are good, banks and other lenders are more willing to lend, thus making it easier for consumers to borrow the funds required to purchase a property.

  • Supply - Put simply, when there is an oversupply of stock, prices tend to drop. When there is an undersupply, prices will rise. Rules and planning regulations vary greatly between federal, state and local government which can have great effect on supply levels.

 
Looking back, the slow-down in 2018 was influenced by the unavailability of funding, credit conditions and media hype.  In 2017, APRA imposed a cap on the volume of investment / interest only loans a bank can offer. Further, the government increased the foreign stamp duty surcharge from 4% to 8%. The result of this surcharge and limited availability of funding was a reduction in the number of foreign and local investors buying property in Australia. Foreign investors who had already exchanged on an off-the-plan purchase struggled to complete their purchase. The media hyped this up to say the market was crashing! Local sellers rushed to the market to sell before the market ‘crashed’, oversupplying some areas. Local buyers were sitting on their hands waiting to see if the market would drop further.
 
Looking forward, the economy is performing well, interest rates remain low, there seems to be more availability of funding, we are seeing an increase in stock levels, matched with an increase in buyer interest. From the small number of properties to transact in January, agents have commented that they have achieved better results in January compared to November / December 2018. Properties that are ticking all the boxes are continuing to sell well, properties perceived to be a little flawed are sitting on the market a little longer.
 
As always, our advice is that property is a long-term hold. There will always be movement in the market. The key is to not over extend yourself, buy in ‘blue chip’ locations (close to transport, retail facilities, CBD, schools, universities, hospitals) and do your research.

If you would like to discuss the current conditions of the market further, or are thinking of buying or investing in Australian property, get in touch to learn about Scoutable's services and how we can assist with your property search.
 
Till next month,
Kellie Landrey | Principal Buyers Agent

IN THE NEWS

SYDNEY BUYERS GETTING MORE BANG FOR BUCK
https://www.domain.com.au/news/sydney-buyers-get-more-bang-for-their-buck-as-house-prices-decline-domain-data-shows/amp/

PARENTS ANGRY ABOUT NEW INNER CITY SCHOOL'S CATCHMENT
https://www.smh.com.au/national/nsw/kick-in-the-guts-parents-angry-about-new-school-s-catchment-20181216-p50ml4.html

TOORAK HOME SET TO TRADE AT $16M
https://www.domain.com.au/news/toorak-home-set-to-trade-for-about-16-million/

PROPERTY OF THE MONTH

2 CLIFFBROOK PARADE CLOVELLY

Clovelly is located 8km south-east of Sydney CBD. Arden Street and Clovelly Road provide retail facilities for the local area. Clovelly is surrounded by the suburbs of Bronte in the north, Randwick in the west and Coogee in the south. Gordon’s Bay is a secluded oasis, hidden north of Coogee Beach and south of Clovelly Beach. It can only be accessed via the Coastal Walkway and parking is available at either Coogee or Clovelly Beach. On a sunny day you will find people basking in the sun, swimming, snorkelling and diving in the tranquil waters.
 
Location Location Location is the best way to describe 2 Cliffbrook Parade Clovelly. The property’s expansive views over Gordon’s Bay is the biggest selling point of this original home. The second selling point is the property’s land area of 500sqm. The house is presented in original rentable condition, accommodating six bedrooms over three levels, serviced by three and a half bathrooms, various living spaces, parking for two cars and good size backyard. The property provides water views from each level and extensive scope to renovate to take advantage of the views.
 
The price guide is $6,500,000 - $7,500,000.
 
If you would like to know more about this property or any others, please get in touch.

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November Wrap Up 2018

Greetings from Scoutable and welcome to our November Wrap Up.

Across Sydney, Melbourne and Brisbane, auction numbers continue to climb as the spring market heads for Christmas when the market traditionally stops. However, the data below shows a drop in clearance rates of 12% in Sydney, 24% in Melbourne and 9% in Brisbane, for the November year on year comparison.

November saw 3,538 properties scheduled for auction across Sydney, with an average clearance rate of 48%. Melbourne saw 3,915 properties scheduled, with an average clearance rate of 46%. Brisbane saw 672 properties scheduled for auction with an average clearance rate of 36%. In comparison, November last year had an average clearance rate of 60% (5,438 properties), 70% (5,528 properties) & 44% (672 properties) respectively.

When buying property in Australia, it is important to know what type of title it has. Below I’ve listed some of the more common types of property titles in Australia which entail different kinds of ownership structures and ongoing costs. They include:

Torrens Title - Also known as “freehold”, this is the most common type of title when buying land in Australia. When you purchase Torrens titled land, you are buying both the land and any dwelling/s that may be on it. Most residential and commercial properties in Australia fall under the Torrens title. The property belongs to the ‘title owner’ however, if the owner has mortgage on the property, the financial institution will keep the title certificate until the title owner has paid the mortgage off.

Limited Torrens Title - Some Torrens title properties have unclear boundaries since they have not been adequately surveyed. You can convert Limited title properties into standard Torrens title properties by surveying the land / boundaries. There are usually additional costs involved.

The Old System Property Title - When Australia was first settled, there was no formal system for registering the ownership of land. As the colonies developed, they created registers, and eventually, a formal centralised system for registering ownership which has over time moved to the Torrens title system. Properties that are not registered in this system are known as Old System title properties.

Strata Title or Group Title - These types of properties are usually apartments or townhouses. A Strata title property owner only owns the space within the lot walls. This includes paint and fixtures but not the wall itself. It can apply to both residential and commercial properties, either standing singularly or grouped under the one roof. Any common areas such as the lift, garden, swimming pool, stairwells, entrance halls, and other community facilities, are co-owned and shared by every lot owner in the building. A strata corporation is set up to handle maintenance of common areas and insurance of the buildings. You will pay annual (and sometimes special “one-off”) strata fees for the maintenance of the building/s and common areas.

Company Title - This type of property title was commonly used before strata title was invented. A Company title means that you buy shares in the company that owns and runs the land and building. The purchaser’s shares give them the right to occupy their apartment, enjoy the common areas of the property and have voting rights on company matters.
There is little known about this kind of title amongst the general public and the subsequent selling of a property will require the sale of the shares which may be difficult. It may also require the shareholders to approve new buyers and may have rules not allowing leasing. Further, some banks might limit the LVR (loan to value ratio) or not lend at all.

Stratum Title - Stratum title pre-dates modern strata title and is a bit of a cross between strata and company title. Under stratum title, the property is subdivided into lots. Each lot owner is the registered owner of their lot but instead of co-owning common property as in a strata title, you own shares in a service company which owns and manages the common property of the building/s as you would see in a company title.

Community Title - Similar to strata title, community title usually refers to an entire subdivision or neighbourhood. By setting up a community title rather than a strata title, the entire community can pay to look after common grounds such as gardens, security, tennis courts, pools and any other services in the neighbourhood that can all be shared by the occupants.  

Leasehold Title - Leasehold title properties are usually in rural areas that are owned by the government but are leased out to an owner for a period of time. This types of property could be a cattle farm, a wheat property, or a church. The government has the power to decide ownership of the land. There is no freehold estate land in the Australian Capital Territory (ACT) but there is a leasehold system. This means that ownership of a property is in actual fact a right to use the land for a specified term. Usually, it’s initially released on a of 99 year lease, the balance of which can be sold and exchanged. Crown Land / Perpetual Leasehold title in other states are also common, particularly in NSW where some luxury apartments on converted wharfs are maritime leasehold.  

If you're thinking of buying or investing in Australian property, get in touch to learn about Scoutable's services and how we can assist with your property search. 


Until next month,

Kellie Landrey | Principal Buyers Agent

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IN THE NEWS

DOMAIN PREDICTS MARKET TO STABILISE
https://www.9news.com.au/2018/11/28/16/59/domain-property-price-forecast-predicts-stabilisation-of-housing-market-before-modest-growth-period

STATE LIBRARY RELEASES COLLECTION OF PROPERTY PORN
https://www.smh.com.au/national/nsw/property-porn-gives-glimpse-into-the-aussie-dream-of-home-ownership-20181121-p50hfl.html

CITY OF SYDNEY PROPOSES CHANGES TO LATE NIGHT TRADING PLANNING CONTROLS
https://www.cityofsydney.nsw.gov.au/council/your-say/sydneys-late-night-trading-draft-planning-controls

PROPERTY OF THE MONTH

233 & 233A EDINBURGH ROAD CASTLECRAG

Castlecrag is a suburb on Sydney's lower north shore. It's located on a peninsular bound by Middle Harbour to the north, south and east. The suburb was named by Walter Burley Griffin and Marion Mahony Griffin, after a towering crag of rock overlooking Middle Harbour. The Griffins had much to do with the planning of the suburb, paying sympathy and respect to the natural environment and character of the site. This is still  clearly evident through all the local flora and fauna.

Located on the banks of Sugarloaf Creek on the northern side of the peninsular is this special home, on the market for the first time in 80 years. Positioned on one of two lots of land for sale, totalling an unbelievable 6,600sqm, it is one of only three homes ever positioned on this waterfront enclave. The other two are currently council owned.

The house itself, was built in 1912 and is heritage listed. It maintains all the period charms of it's time - ornate ceilings, double hung windows, cornicing, picture rails and the like although there's no doubt that it is requiring some work. It also offers a tidal pool leased by the Maritime Services Board. Rumour has it that the dwelling was an illegal gambling den in the 1920s - understandable given its unique location. The property is only accessible by boat or a hilly 8-minute bush walk to get you to Edinburgh Road (we timed the walk). What's incredible is that this secluded harbour side retreat is only 10km from the CBD. 

It was such a treat to inspect this unique piece of Sydney real estate.

The price guide is $6,000,000.

If you’d like to know more about this property or any others, please get in touch.

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October Wrap Up 2018

Greetings from Scoutable and welcome to our October Wrap Up.

Across Sydney, Melbourne and Brisbane, there has been a significant drop in the number of properties scheduled for auction however, the spring market is seeing those numbers rise. The below data shows a drop in clearance rates of 11% in Sydney, 21% in Melbourne and 3% in Brisbane, for the October year on year comparison.

October saw 2,706 properties scheduled for auction across Sydney, with an average clearance rate of 52%. Melbourne saw 4,612 properties scheduled, with an average clearance rate of 51%. Brisbane saw 501 properties scheduled for auction with an average clearance rate of 39%. In comparison, October last year had an average clearance rate of 63% (4,570 properties), 72% (5,974 properties), & 42% (1,390 properties) respectively.

In September’s wrap up, we discussed understanding research data that reflects capital cities as a whole and how it is important to remember that each region within the city will perform differently. A recent article by David Ross, outlined the best and worst performing suburbs. The average September clearance rate for Sydney was 55%. Interestingly, Bondi recorded a clearance rate of 80.60%, while Kellyville only recorded 23.10%. This result demonstrates whilst the property market has slowed, properties in key locations with supply constraints are clearly outperforming the averages. Please see Australian’s best and worst performing suburbs over the September quarter below. 

AUSTRALIA’S BEST PERFORMING SUBURBS

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AUSTRALIA’S WORST PERFORMING SUBURBS 

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Please also find full article in the link below.

If you're thinking of buying or investing in Australian property, get in touch to learn about Scoutable's services and how we can assist with your property search. 


Until next month,

Kellie Landrey | Principal Buyers Agent

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IN THE NEWS

AUSTRALIA'S BEST & WORST SELLING SUBURBS
https://www.news.com.au/finance/real-estate/selling/the-worst-suburbs-in-australia-to-auction-your-home/news-story/e16203f525d5e88904d65b2a7dfc2385

HOW WOULD LABOUR'S NEGATIVE GEARING STACK UP NOW?
https://moneymag.com.au/labor-negative-gearing/

NINETEENTH CENTURY POTTS POINT HOTEL FOR SALE
https://www.domain.com.au/news/cover-story-october-27-deluxe-772334/

PROPERTY OF THE MONTH

6/8 HEREWARD STREET MAROUBRA

Maroubra is a beachside suburb located 10 kIlometres from the Sydney CBD. Its name originates from an Aboriginal word meaning 'like thunder', which is a reference to the surf conditions and the sound of the waves.

In 2006, Maroubra Beach was the second Australian beach to be named a National Surfing Reserve (the first being Bells Beach in Victoria).

Hereward Street takes its name from an event that took place in the late 1800s. A fully rigged iron ship known as the Hereward, weighing 1,513 tonnes, was caught by strong winds and shipwrecked at the northern end of the beach while en route to Newcastle. In 2013, a brass alloy canon was salvaged from the wreck and can be seen at Maroubra Seals Club, overlooking the site of the wreckage.

6/8 Hereward Street is a top floor, 50sqm apartment in a small art deco block of eight. The floor plan provides open plan kitchen / living / dining, two bedrooms, bathroom and a shared laundry and entertaining garden. The apartment is north facing providing great light and is well presented in refurbished condition whilst maintaining its period charm.

Located one block from the beach and walking distance to the shops and CBD bus stop, 6/8 Hereward Street provides a great opportunity for first home buyers and / or investors alike. Maroubra provides above average potential for capital growth while maintaining strong rental yields due to the suburb's proximity to the beach, CBD, RPA Hospital and UNSW.

The price guide is $800,000.

The rental guide is $600 per week, reflecting a gross yield of 3.9% at a purchase price of $800,000.

If you’d like to know more about this property or any others, please get in touch.
 

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September Wrap Up 2018

Greetings from Scoutable and welcome to our September Wrap Up. I hope you had a lovely weekend.

September saw 3,432 properties scheduled for auction across Sydney, with an average clearance rate of 55%. Melbourne saw 3,922 properties scheduled, with an average clearance rate of 58%. Brisbane saw 628 properties scheduled for auction with an average clearance rate of 44%. In comparison, September last year had an average clearance rate of 68% (4,869 properties), 77% (5,137 properties), & 40% (1,481 properties) respectively.

The above data is showing a drop in clearance rates of 13% in Sydney and 19% in Melbourne, while Brisbane is up 4%, for the September year on year comparison. Across the three cities, there has been a significant drop in the number of properties scheduled for auction however, the numbers are up from last month (excluding the long weekend) as expected in the spring market.

When I was going through various news articles to share with you in this wrap up, I found a lot of doom and gloom on the property market. I think the media can get carried away and it seems I’m not the only one – see an article below that references a recent alarmist 60 Minutes segment. So, I thought why don’t we look at what a respected industry research company had to say about the property market over the next few years.

BIS Oxford Economics each year releases a forecast report called Residential Property Prospects. Let's take a look at the report for 2018-2021.

We all know, the market has hit it's peak as house price growth has slowed across most of Australia. It would be impossible to maintain the double-digit growth rates that the market has seen over the last few years.

Let’s start with the important news in this report. BIS state that the housing market will not crash, with the support of low interest rates, a “relatively stable, albeit subdued, economic environment” and strong population growth.

So why the slow down? BIS suggest the current lull is a result of tighter lending criteria, especially with respect to interest only loans. This limited ability to obtain interest only loans, is effecting the borrowing capacity for investors and the appeal for some investors on utilising negative gearing (only the interest component of the loan payments is deductible debt). The withdrawal of investors is having a similar effect on the market as would an increase in interest rates – it is slowing down the market. This is good news for first home buyers.
 
Further drivers to the slow down include; affordability constraints, weak wage growth, an increased supply of apartments and large levels of construction, which may lead to an oversupply of apartments in the inner cities of Brisbane, Perth, Canberra and to a lesser extent Melbourne.

Over the next 12 months, taking inflation into account, modest price declines were forecast in most capital cities. The three years to follow will bring a turn around and show price growth, though the results fragmented. Please see graph below.

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Looking beyond 2021, there’s potential for higher growth should overseas migration inflows be sustained over the coming years - which is likely. Supply falls back to below underlying demands and the economy strengthens. The recent construction boom and oversupply of new dwellings will be absorbed by population growth although BIS states that any growth in rental will be minimal.

It is important to remember that research like the above is taking into consideration the capital cities as a whole. Each region within the city will perform differently. Some areas will outperform whilst others underperform. When investing, consideration must be given to what is driving demand for property in that area. How close is the suburb to public transport? work hubs? retail facilities? any public infrastructure scheduled? how available is land for redevelopment?

As always, property investing is not meant to be a short-term hold. We believe there are some great buying opportunities out there with an outlook to the future.

If you're thinking of buying or investing in Australian property, get in touch to learn about Scoutable services and how we can assist with your property search. 


Until next month,

Kellie Landrey | Principal Buyers Agent

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IN THE NEWS

SOME OF AUSTRALIA'S  BEST INTERIORS
https://www.dezeen.com/2018/09/29/eight-australian-homes-best-interior-design/?utm_medium=email&utm_campaign=Daily%20Dezeen%20Digest&utm_content=Daily%20Dezeen%20Digest+CID_0b62691a9868d4fbc1a2b6ca06ff4346&utm_source=Dezeen%20Mail&utm_term=Dezeen%20roundups%20Aussie%20homes

AUSTRALIA'S MOST EXPENSIVE HOUSE, SOLD!
https://www.afr.com/real-estate/residential/nsw/point-piper-estate-fairwater-sells-in-record-deal-making-it-australias-most-expensive-house-20180927-h15xin

ALARMIST HEADLINES SERVE NO PURPOSE
https://www.therealestateconversation.com.au/blog/victor-kumar/alarmist-headlines-serve-no-purpose/victor-kumar-right-property-group/60-minutes

PROPERTY OF THE MONTH

2 HENNINGS LANE NEWTOWN

Newtown is a suburb of Sydney’s inner west, located on Gadigal land of the Eora Nation, approximately four kilometres from the CBD. It was established as a residential and farming area in the early 19th Century and took its name, arguably, from one of two sources. A grocery store that opened in 1832 with signage that read “New Town Stores”, and “Newtown House” which was built around the same time. The name New Town was adopted and the space was eventually removed to form the name Newtown.
 
Continuing with our love of inner-west warehouses, we introduce you to 2 Hennings Lane. It was originally the Newtown Bakery and for the last three decades has been operating as an upholsterer’s and antiques workshop.
 
The warehouse comprises 292sqm of land providing 405sqm of internal floor space and 65sqm of outdoor space. Skylights and a wall of east facing windows flood the interiors, exposing raw textures of brick, steel, concrete and timber.
 
Spread over two floors, the ground level offers very basic kitchen and bathroom facilities which adjoin a large area currently configured to home separate workshops.
 
Take either of the two extra wide staircases to the upper level (a room 19 metres long requires two!) to reveal another vast expanse of space (140sqm) and a slightly smaller second room which you would imagine to be the main bedroom - even though it’s the size of an average two bedroom apartment.  Original barn doors open to timber decking which overlooks the internal courtyard that houses large trees that reach for the sky, giving it a mystical “Great Expectations” kind of ambience.

Please see the video link below as the photos do not do it nearly enough justice.

https://www.youtube.com/watch?v=UKXdaAkVZO8

While it’s not currently set up as a home, it has been approved for home conversion with existing commercial rights meaning it has potential to be an incredible home, commercial space or both. 
 
The price guide is $3,300,000.
 
If you’d like to know more about this property or any others, please get in touch.

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August Wrap Up 2018

Greetings from Scoutable and welcome to our August Wrap Up. Who's excited about spring?!

August saw 2,204 properties scheduled for auction across Sydney, with an average clearance rate of 57%. Melbourne saw 3,104 properties scheduled, with an average clearance rate of 58%. Brisbane saw 411 properties scheduled for auction with an average clearance rate of 45%. In comparison, August last year had an average clearance rate of 70% (3,419 properties), 75% (4,212 properties), & 44% (1,059 properties) respectively.

The above data is showing a drop in clearance rates of 13% in Sydney and 17% in Melbourne, while Brisbane is up 1%, for the August year on year comparison. Across the three cities, there has been a significant drop in the number of properties scheduled for auction. However, stock levels are up from last month and it will be interesting to see if clearance rates follow suit as we head into the spring market.

Australian house prices have remained relatively flat this year and we have not seen the massive crash as predicted by some. It would seem the double-digit growth of previous years is firmly off the table. However, senior ANZ economists, Daniel Gradwell and Joanne Masters, are predicting property prices to rise in 2019.

ANZ has forecast a total growth of 1.8% for Australian property for 2018, rising to 3.6% for 2019. “We think most of the slowdown has already occurred”. “We retain our view that prices will not materially decline". “Over the near term, auction results in Sydney and Melbourne suggest that the majority of the price growth adjustment is behind us.” Having initially predicted two RBA rate rises for 2018, the economists have pushed back their prediction to mid 2019 and suggest that this, combined with a strong labour market and rising incomes, will drive price growth.

Please see graph below: -

Screen Shot 2019-01-29 at 4.12.06 pm.png

The graph is predicting Melbourne to outperform Sydney, with Brisbane not far behind. Hobart looks strong and it's great to see expectations for both Perth and Darwin back in positive territory for 2019.

Whilst it would seem the RBA might not be making any movement with the official cash rate till next year, yesterday Westpac announced that they are increasing their interest rates by 0.19% effective September 19. It remains to be seen if the other major banks will follow suit. Even with households building a buffer in savings, movements in interest rates result in higher household debt which can have a negative impact on the property market. It will be interesting to note the effects of interest rate movements by the banks on the ANZ predictions over the coming months.

If you're thinking of buying or investing in Australian property, get in touch to learn about Scoutable services and how we can assist with your property search. 


Till next month,

Kellie Landrey | Principal Buyers Agent

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IN THE NEWS

 WESTPAC MAKES $4.2BILLION PROFIT IN 6 MONTHS THEN HIKES INTEREST RATES
https://www.news.com.au/finance/economy/interest-rates/westpac-st-george-hike-interest-rates/news-story/63a14d126317e24f4d45e5dbb777e6b6

THE NORTH SHORE'S MOST EXPENSIVE HOUSE
https://www.domain.com.au/news/exwoolworths-boss-bill-wavish-lists-kurraba-point-trophy-home-for-35-million-20180828-h14lz3-760606/

NEW VISION FOR SYDNEY TECH INDUSTRY
https://www.nsw.gov.au/your-government/the-premier/media-releases-from-the-premier/new-vision-for-sydney-tech-industry/

PROPERTY OF THE MONTH

316 EDGECLIFF ROAD WOOLLAHRA

Woollahra is an Aboriginal word meaning campmeeting ground or a sitting down place. It's one of Sydney's more affluent suburbs with many heritage-listed sites, boutique shops, cafes, restaurants, and along with neighbouring Paddington, has the highest concentration of art galleries in Sydney.

Set on a generous 340sqm of elevated land, and commanding northerly district views, 316 Edgecliff Road is conveniently located 750m from Bondi Junction Railway Station, 4km from the CBD and a short walk to local retail facilities. 

A four bedroom, three bathroom, freestanding home bursting with Victorian grandeur and charm, paired with the luxury of modern conveniences. All that should be cherished, has been, with well thought out additions. The layout comprises, ground floor formal living / dining, fourth king size bedroom, eat-in kitchen and powder room. The first floor provides accommodation for three more king size bedrooms, including the master bedroom with double walk in wardrobes and ensuite, and family bathroom. The property provides a front and rear garden, heated swimming pool and parking for two cars.  

The price guide is $5,000,000. 
 
If you'd like to know more about this property or any others, please get in touch.

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May Wrap Up 2018

Greetings from Scoutable and welcome to our May Wrap Up.

May saw 3,018 properties scheduled for auction across Sydney, with an average clearance rate of 62.5%. Melbourne saw 4,387 properties scheduled, also with an average clearance rate of 62.5%. Brisbane saw 590 properties scheduled for auction with an average clearance rate of 43.5%. In comparison, May last year saw an average clearance rate of 74.3% (4,379 properties), 76.8% (4,922 properties), & 47.3% (1,195 properties) respectively.

The above data is showing a drop in clearance rates of 11.8% in Sydney, 14.3% in Melbourne and 3.8% in Brisbane for the May year on year comparison. Across the three cities, there has been an overall drop in the number of properties scheduled for auction.

While there is an obvious slowdown in the overall market, housing affordability is still a talking point.
 
According to Peter Koulizos – Chairman of Property Investment Professionals of Australia(PIPA), many commentators are using just two indicators to measure housing affordability – income and house prices.  "This is a good measure to indicate how expensive housing is, but if you want to analyse affordability, you must also consider mortgage repayments."
 
In the table below, PIPA looks at the annual averages on loan size, interest rates, loan repayments and wages. Their research suggests that mortgages are more affordable today than they were in 1990.

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SOURCES: ABS, tradingeconomics.comloansense.com.au, NAB

In 1990, it would require 48.1% of the average annual wage to pay off the average home loan of $66,300 due to the high variable interest rate of 17%.
 
While the average home loan size has grown substantially to $389,000 in 2018, the standard variable rate is just 5.1% (or less) resulting in repayments of 40.9% of the average annual wage.

While house prices are still rising in some blue chip areas it seems to be the initial deposit that is disabling buyers rather than the ability to service a loan and we’re seeing people using innovative strategies such as rentvesting or buying within syndicates.

If you're thinking of buying or investing in Australian property, get in touch to learn about Scoutable services and how we can assist with your property search.


Till next month,
Kellie Landrey | Principal Buyers Agent

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IN THE NEWS

A BUYERS MARKET IS UPON US
https://www.news.com.au/finance/real-estate/sydney-nsw/sydney-property-market-transitions-to-a-buyers-market/news-story/55c28c0db6561a75ab3039c59d7380ab

FOREIGN INVESTMENT BOOM LOOKS TO BE OVER
http://theconversation.com/australias-foreign-real-estate-investment-boom-looks-to-be-over-here-are-five-things-we-learned-97460

$30MILLION INFRASTRUCTURE BOOST FOR SYDNEY'S EAST
http://www.sydneymedia.com.au/30-million-infrastructure-boost-for-east-sydney/#hp_f_listMedia_1_%2430+million+infrastructure+boost+for+east+Sydney

PROPERTY OF THE MONTH

1/301 ST GEORGES ROAD FITZROY NORTH

Once the Fitzroy Fire Station circa 1912, now 301 St Georges Road. Due to it’s mixed zoning, this Fitzroy North landmark had been cleverly converted into apartments and offices all whilst maintaining it's glorious façade.

“Warehouse 1” is a three-level light filled home offering versatility and style, providing three well separated bedrooms plus two extra spaces ideal for the home office.

Original fire truck doors lead into the garage which provides ladder access to the mezzanine office space.

Unfortunately, while there is a ladder to climb up, there is no pole to slide down. Ground floor also has another entrance providing access to the second office, third bedroom and the rest of the home.

The first floor comprises the second bedroom, bathroom, balcony and an expansive open plan living space with exposed beam work providing clear zones for kitchen, living and dining.

The top floor offers a master retreat with huge entertaining terrace and panoramic views to the city.

With a guide of $1,850,000 - $2,000,000 we look forward to seeing what this one sells for.
 

If you'd like to know more about this property or any others, please get in touch.

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April Wrap Up 2018

Greetings from Scoutable and welcome to our April Wrap Up.

I hope you are well and enjoyed your weekend. With Easter behind us and the school holidays over, the market is back in swing with many new properties both on and off market.

April saw 2,905 properties up for auction across Sydney, with an average clearance rate of 64%, Melbourne saw 3,825 properties, with an average clearance rate of 65%, and Brisbane saw 409 properties with an average clearance rate of 48%.

In comparison, April last year saw an average clearance rate of 75% (3,122 properties), 78% (3,644 properties), & 47% (474 properties) respectively.

The above data is showing a drop in clearance rates of 11% in Sydney & 13% in Melbourne for the April year on year comparison. Brisbane is showing a 1% increase.

Across the three cities, there has been an overall drop in the number of properties scheduled for auction although the number of auctions scheduled is slightly skewed due to the fall of Easter in mid April 2017.

Overall we're still finding the Australian property market patchy, however, properties in blue chip locations are still holding their value.

As an investor, it is important to understand the costs of owning a property. An investment property has much the same initial costs as a property you purchase to live in (as reported in Scoutable's February Wrap Up), but there are a few ongoing costs you need to have on your radar.

Ongoing costs include: -

Insurance
Better to be safe than sorry. You never know what's going to happen, so it’s advisable to have building and landlord insurance. No one wants red wine stained carpet or tenants who won’t pay rent.

Land tax
Generally this is paid annually and is levied on the owner of the land.

Income tax
If your property is positively geared, i.e. the total rental income is greater than the cost of owning and managing your property, the difference will be added to your taxable income.

Council rates & strata fees
Council rates vary between councils and the type of property you own so it's important to keep it in mind when purchasing a property and to do your research.

If you own a property within a complex, you will incur strata or company levies. Generally, this is to cover the building maintenance and up keep of common property such as gardens, lifts, pools etc.
Occasionally, special levies may need to be raised for unforeseen building repairs or upgrades so it doesn't hurt to have a few grand put away in case this happens.

Water Usage
The landlord always has to pay for water and/or sewerage services. You are also responsible for paying the water usage unless the property is individually metered in which case, the tenant can be charged.

Rental management
If you have someone managing your property, then you will need to consider the fees they charge for this service.

Maintenance
Being an owner means you will need to put money towards maintaining the property and ensuring it remains in good condition.

It's important to note that most of these costs can be claimed as a tax deduction and we recommend speaking with a tax professional regarding this.

If you're thinking of buying or investing in Australian property, get in touch to learn about Scoutable services and how we can assist with your property search.


Till next month,
Kellie Landrey | Principal Buyers Agent

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IN THE NEWS

WHY MORE PEOPLE ARE SELLING OFF MARKET
https://www.therealestateconversation.com.au/blog/nathan-jones/why-are-more-people-choosing-sell-market/private-sale/discreet-real-estate-sale

AT US$188 MILLION, IT'S A BARGAIN
https://www.realestate.com.au/news/americas-most-expensive-home-gets-us62-million-discount/?pid=article-page%7Csource:news:article-page-bottom

NSW GOVERNMENT CHANGES TO HOUSING CODE
https://www.domain.com.au/advice/thousands-of-owners-on-narrow-blocks-set-to-benefit-under-nsw-government-changes-to-housing-code-20180410-h0ykdz/?utm_campaign=featured-masthead&utm_source=smh&utm_medium=link

PROPERTY OF THE MONTH

311-313 BELMONT STREET ALEXANDRIA

Some of our chosen properties focus on a savvy investment opportunity, others on architectural delights. This one comes from the busy bodies within who love to ogle over how the others live. It's the kind of place that gets you talking to strangers at the inspection. It's not the walls, but the art on the walls. Not the state of the kitchen but the vintage oven it encompasses. The parachutes and umbrellas, the hanging gardens and suspended windows. The birdcages. The paint. The multiple Persian rugs. 

Externally, this Alexandria warehouse appears as just that - a warehouse on a quiet suburban street.

A ten metre frontage, single roller door and a couple of small barred windows are all that deceives you from the wonderland that is 311-313 Belmont Street. Step in side and you're transported to what feels like a museum or antique store.

Set on 276sqm of land, it features front and rear roller door access, double lock up garage, kitchen, powder room, wet areas (bathroom and laundry), and a giant expanse of space with which the current owner has created a truly unique home, making clear definitions of living zones through out.

Perhaps it's greatest feature is the possibility of what could be next, and with the opportunity to purchase the semi next door (309 Belmont Street), the options are endless.

The warehouse comes with a price guide of $2.1m and the semi is looking to fetch $1.25m.

If you'd like to know more about this property or any others, please get in touch.

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March Wrap Up 2018

Greetings from Scoutable and welcome to our March Wrap Up.
 
I hope you enjoyed the long weekend relaxing with family and friends.
 
The Easter long weekend brought a reduced number of properties up for auction last week. There were 362 properties listed for auction in Sydney, 148 in Melbourne and 57 in Brisbane, recording clearance rate of 78%, 70%, and 42% respectively.  In comparison, the weekend prior saw 1,359 properties listed in Sydney, 2,078 in Melbourne and 194 in Brisbane, recording a clearance rate of 66%, 67%, & 49% respectively.

The low clearance rates are impacting certain areas more than others. The inner city of Sydney and Melbourne are outperforming the greater capital cities.  We are seeing some good competition for certain properties, some of which are selling significantly over the quoted price guide. Having said that, many believe it's a much fairer market with buyers and sellers able to engage in healthy negotiation.

In a recent domain article, property analyst and head of SQM Research Louis Christopher explains the recent market downturn as a result of a regulatory "double-whammy" - APRA's crack down on interest-only loans and the federal government clamp on tax deductions and depreciations on investor property related expenses and items.

Damien Cooley of Cooley Auctions has also suggested a lack of investor presence since the regulatory changes and that investors are looking to park their money elsewhere as there's not much short term gain on a two bedroom unit. While this might be the case, we always maintain that the property market is cyclic and we should be focusing on long term holds.
 
The Reserve Bank of Australia, today at it's April meeting, decided to keep the official cash rate on hold at 1.5% for the twentieth consecutive month. Experts believe that it will not rise until some time next year.

Are you looking to buy or invest? Let us help. We love property and would love to find the perfect one for you.

 
Till next month,
Kellie Landrey | Principal Buyers Agent

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IN THE NEWS

RECORD AUCTION NUMBERS BUT LOWER CLEARANCE RATES
https://www.therealestateconversation.com.au/2018/03/26/record-auction-numbers-weigh-clearance-rates/1522022283

BRISBANE COUPLE $43K PER MONTH WINDFALL
http:// https://www.realestate.com.au/news/easter-windfall-brisbane-couple-sells-home-for-30pc-more-than-they-paid-just-over-a-year-ago/

PRESTIGE PROPERTY PRICE GROWTH
https://www.domain.com.au/news/sydney-and-melbourne-among-top-15-cities-for-prestige-property-price-growth-knight-frank-report-20180307-h0x4vo/

PROPERTY OF THE MONTH

18 LISMORE STREET EASTLAKES

The March property of the month can be found in the little known Sydney eastern suburb of Eastlakes. This quiet neighborhood nestled between Rosebery and Kingsford has been on out radar for a while now with the CBD, Sydney Airport, UNSW, Price of Wales Hospital and Maroubra Beach all under 10 kilometres away.

The area is going through gentrification as many of the suburb's traditional Californian bungalows are owned by the Baby Boomer generation who are now downsizing. The area's revival is also linked to the improvement of retail facilities (Eastlakes Shopping Centre under major renovations) and CBD transport links. Eastlakes is catching the eye of young families wishing for more land without comprising access to the conveniences of city living.

18 Lismore Street, is a perfect example of the type of stock available in Eastlakes. Sitting on a 450sqm level block of land this Californian Bungalow just sold for the first time in 48 years for $1,776,000.

The property maintains all it's original charm featuring lead light windows, high ornate ceilings and picture rails.  Providing three bedrooms, two bathrooms and parking for at least two cars, it has been kept in great condition and could be comfortably lived in with scope to improve in due course. The abundance of land could allow for a granny flat, swimming pool or substantial veggie garden.

If you'd like to know more about this property or any others, please get in touch.

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February Wrap Up 2018

Greetings from Scoutable and welcome to our February Wrap Up.
 
The market is now in full swing and we're seeing plenty of good stock around. Last week, 3,313 auctions were held across the capital cities. A clearance rate of 66.8% was recorded which is higher than the previous weeks rate of 66.1% (of 1,992 auctions).

For anyone thinking of buying, it's important to remember the various acquisition costs associated with purchasing a property as it's not just the price written on the contract.

Lenders Mortgage Insurance (LMI)

Most lenders will require you to pay LMI if your deposit is less than 20% of the purchase price and it is calculated based on your LVR (loan to value ratio). Basically, the larger your deposit, the less insurance you pay. Of course, if you have 20% or more, this is of no concern unless you are a foreign buyer as the requirements are stricter.

Loan fees

When you take out a home loan,  you will generally have to pay a fee to set up that loan. The fee varies between lenders but they are usually quite competitive. In some circumstances they can even waive this fee so make sure you ask!

Legal and conveyancing fees

I would highly recommended using a solicitor or conveyancer to review and prepare all the documents for the contract of sale. Sure, there are some key points you can look over yourself if any of it makes sense to you, but it's imperative to have the documents reviewed professionally before proceeding with a property. The fees can vary based on the ownership structure and the amount of properties you have reviewed.

Stamp Duty costs

Arghhh stamp duty! You've just got to pay it. There are various online calculators to give you an estimate on how much you must allow for this. The percentage you pay depends on the amount you spend and works on a sliding scale. Fortunately for some first home buyers, some states offer exemptions or concessions depending on the purchase price. There are also different rules for off-the-plan purchases and foreign investors.

Inspections: Building and Pest

When purchasing a house, it's advisable to have a building and pest inspection carried out. In the case of buying an apartment, you would purchase a strata/company report which your solicitor or conveyancer will review. While it may seem like an unnecessary cost, it's definitely worth it and will be far cheaper than dealing with a pest problem or say concrete cancer further down the track. Building and pest inspections can cost around $500-$600 and strata reports generally cost no more than $300.

Transfer fees and mortgage registration

Mortgage registration allows the mortgage to be viewed through a simple title search and prevents the mortgage holder from selling their home and not paying back the lender. When you take out a mortgage, the registration process will cost approximately $140 dollars in New South Wales as will the title transfer registration. This fee is to transfer the ownership status of a property and to register that information. Both these fees vary from state to state. Your solicitor or conveyancer will be able to advise on the exact amount.

If the deposit is what you're lacking but you do qualify for a loan, paying LMI is still a good option and can be incorporated into your  periodic loan repayments.


If you're looking to buy a home or invest, let us help. We love property and would love to find the perfect one for you.
 
Till next month,
Kellie Landrey | Principal Buyers Agent

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IN THE NEWS

FALLING HOUSES PRICES MAY NOT LAST
https://www.businessinsider.com.au/australia-house-prices-fall-february-2018-2

$40MILLION APARTMENT SELLS IN ONE BARANGAROO 
https://www.domain.com.au/news/bob-blann-spends-40m-on-wholefloor-apartment-in-sydney-crown-casino-development-20180224-h0wgy9/

SOLAR ENERGY NOW AN OPTION FOR RENTERS AND APARTMENT DWELLERS
https://www.smh.com.au/money/investing/invest-in-a-garden-and-stop-your-bills-growing-20180222-p4z1bm.html

PROPERTY OF THE MONTH

10/2 MCDONALD STREET POTTS POINT

Recently sold at auction for $655,000 this studio apartment is a great first home or investor buy. While it's only 39sqm, it's clever layout and 1930's charm give it a sense of space with potential to add value.

Positioned in the "Paris end" of Potts Point, it's located on a wide tree lined street, within walking distance to restaurant and retail facilities of Potts Point and Darlinghurst, St Vincent's Hospital,  harbour parks, Kings Cross Station and the CBD.

Properties like this provide a great opportunity to enter the Sydney market due to their enviable location and the high rental demand ensures they are hardly ever vacant.

It's important to note than some banks require a minimum internal space of 40-50sqm as part of their lending criteria so it's worth shopping around for the right loan if you're looking into purchasing a small property.

If you'd like to know more about this property or any others, please get in touch.

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January Wrap Up 2018

Greetings from Scoutable and welcome to our first newsletter of the year.

We hope you had a great holiday season and wish you the very best for 2018.

The property market (unofficially) kicked off this week. With school back and most people having returned to work, the year is now in full swing. During the holiday period, we've been busy inspecting and stock levels are looking good! We are seeing some great opportunities and looking forward to securing some good deals. 

There are a variety of forecasts concerning the property market for 2018. Some are anticipating a correction in the market following a double digit per annum growth over the last four years. However, a Business Insider article from 24 January argued that once you adjust the recent price data to factor in the usual seasonal declines that occur over summer, it looks like prices are already stabilising (please find link below). 
 
As always, our advice is that property is a long-term hold. There will always be movement in the market. The key is to not over extend yourself, buy in ‘blue chip’ locations (close to transport, retail facilities, CBD, schools, universities, hospitals) and do your research (what infrastructure have been earmarked for the area? schools? public development? zoning changes? etc.). 
 
If you would like to discuss the current conditions of the market further, please get in touch. 
 
Till next month,
Kellie Landrey | Principal Buyers Agentr

IN THE NEWS

THE IVY TO BE REPLACED BY 55 FLOOR HOTEL
https://www.dailytelegraph.com.au/news/nsw/justin-hemmes-confirms-he-will-replace-merivales-ivy-with-an-international-hotel/news-story/1c60970d7f1d3bf82fd4eb36da3fc78f

CONSTRUCTION OF GREEN SQUARE AQUATIC CENTRE KICKS OFF
https://architectureau.com/articles/construction-of-green-square-aquatic-centre-kicks-off/

AUSTRALIA'S HOUSE PRICE CORRECTION MAY ALREADY BE OVER
https://www.businessinsider.com.au/australia-house-price-declines-stabilise-anz-2018-1

PROPERTY OF THE MONTH

3 BAKERS LANE FOREST LODGE

CUTE! CUTE! CUTE! That pretty much sums up this Forest Lodge semi. Set down the end of a quiet lane, this property offers 126sqm of land close to the city with a price guide of $1,000,000.

The existing layout has been stylishly updated to maximise light and space and is easily inhabitable provided you're happy to live a minimalist lifestyle.

Currently, two small bedrooms occupy the front of the house with little to no storage, and should you be happy eating dinner off your lap, the rear of the house offers a delightful airy oasis. A DA approval for renovation means there's a solution in place to rectify some of the spacial issues should you wish to do so.

While we're aware that it's not the palatial home that many of us dream of, nor would it necessarily be suited everyone, we think it's a great opportunity to secure a decent piece of land with scope to future improve, whilst enjoying it's many little charms in the meantime.

The property would make an ideal investment as it's located approximately 3 kilometres from the CBD and is within walking distance to Sydney University, UTS, RPA Hospital and the retail and restaurant hubs of Glebe, Newtown and Broadway. This will ensure a wide pool of potential tenants for the property. At a purchase price of $1,000,000 and an estimated rental of $750pw, the returns would yield approx. 3.9%pa.

If you'd like to know more about this property or any others, please get in touch.

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