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The year in review

by ShelMarkblog In Uncategorized

25 December 2016

It seems each year passes by more and more quickly. Looking back over 2016 in terms of the property market and what’s been happening on the home front, it was a year of ups and downs.

Here’s a rundown of the year that was:

  • We introduced our Refer a Friend offer in January, which is our way of thanking all those who refer our services to others. The incentive rewards anyone who refers us to a friend, family member or colleague and the referral results in a sale. The reward is $500 on settlement! Initially intended as a limited offer, we decided to continue the offer on an indefinite basis.
  • Australia’s cash rate was 2.0% at the start of 2016. It was reduced to 1.75% in May and hit the historically low 1.50% in August where it remains at the close of 2016.
  • Perth entered into a buyers market earlier in the year where it remains at the close of the year. Indeed buyers remain spoilt for choice in the current market.
  • We talked about the increasing popularity of auctions in Perth and explained how we work with multi award-winning independent Perth auctioneer, Tom Esze to achieve astonishing results in many cases (our best auction result this year sold for $150,000 above reserve)!
  • We shed light on the massive Garden City Shopping Centre upgrade, expected to commence next year.
  • Property experts welcomed Treasurer Scott Morrison’s ‘safe’ budget in the lead up to the Federal Election, with negative gearing and capital gains tax left unchanged. The State Government’s budget was also welcomed, particularly the decision to leave property taxes unchanged in the 2016/17 financial year.
  • New tax laws were introduced on July 1 for properties sold above $2 million.
  • WA negative gearing survey results were released, with the results indicating that property investment provides an opportunity across the board as a means for people to secure their future.
  • The City of Melville featured in the news for all the right reasons in July (with a focus on the Garden City upgrade and how it will benefit the local area).
  • Applecross and Como featured in Perth’s eight highest growth suburbs list for the year from May 2015 to May 2016.
  • The City of Melville secured $23.6 million in funding for local infrastructure for the 2016/17 financial year.
  • We celebrated our 10th anniversary of serving the community with our own boutique brand of real estate sales and service in August.
  • Perth experienced a welcome spike in leasing activity in August.
  • Consumer confidence rose in WA for the first time in 3 quarters.
  • National CPI figures for the September quarter showed real promise for Aussie homebuyer and renters.
  • A new Code of Conduct for real estate agents came into effect in October, with a focus on transparency.
  • The inaugural #SnapPerth movement was successfully launched in November.
  • Trump won the US election in November.
  • The City of Melville was in the news again when it topped the state in the national Garage Sale Trail.
  • Discussions began to heat up in December on the chance that we could see rates start to rise in 2017.

Merry Christmas & Happy New Year!

 We would like to take this opportunity to wish you and your loved ones a safe and very Merry Christmas and a happy, healthy and prosperous New Year. We look forward to continuing to be of service in 2017 and helping you achieve your property goals, whatever they may be.

 With a number of new listings coming onto the market in January and February we will be very busy over the festive season getting ready for the campaigns and a very busy start to the New Year.

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Love it or list it?

by ShelMarkblog In Uncategorized

18 December 2016

All homeowners are faced with the agonising decision at some point between staying put and showing their existing home some love, or listing it and moving on. Arguably at no time is that question raised more within Australian households than around the turn of a new year. This is a time for making new plans and goals – a fresh start for a brand new year. So how do you determine the best way to move forward? The answer is, it depends on your motives. The decision can be made even more difficult when two people in a relationship want different things.

Let’s see what the experts suggest.

The ‘showing your home some love’ option

If you love where you live but dream of living in a more modern home and/or need some extra space to accommodate a growing family, ask yourselves the following questions:

  • Would your existing home design accommodate an extension without the need to reconfigure the entire floor plan?
  • Do you perhaps have room under the existing roof to work with? If the answer is “yes” then you could potentially save yourself a fortune, as redesigning an entire house comes with a substantial price tag.
  • Would your local council, neighbours and the nature of your block support the kind of additions you wish to make to your home?
  • Do you love your home and location so much that cost isn’t an issue? If the answer is “yes” then it’s a no-brainer decision – stay and give it the extra love it deserves – even if it means taking your time while you save for the next stage.
  • Are you just looking to refresh a tired décor? If so, then this could be relatively easy and cost effective to achieve.

Seek expert advice – not just on the design options but also on the cost you’ll be up for and the current marketplace value of your home. This will give you a clear indication of whether or not it would be worth putting your hard-earned funds into your existing home or whether you would be better off financially to sell and find a home that ticks off your wish list as is.

One of the added benefits of staying in the home you love is the money you will save in moving costs (including the costs to buy and sell).

 The ‘list it and go’ option

 You’ve done the research and discovered that the costs to improve your home will be far greater than the benefits you will get out of it. In this case, listing, selling and moving on would be the best decision.

The benefits of selling over renovating can be significant. For starters selling usually takes less time and far less stress than renovating (two factors that people commonly fail to consider). Moving to a new home in which the hard work’s been done and there’s no money to spend to bring it to the standard you are looking for can be the best feeling. All that’s left for you is to move in and reap the rewards of someone else’s efforts.

Furthermore, if you’ve fallen out of love with your existing home and its location, it won’t matter how much money you throw at it – it will never live up to your expectations. If this is how you feel towards your home, then clearly it’s time to move on. Maybe you’ve learned of changes happening within your local community in the near future and you feel those changes won’t be in line with the way you and your family want to live. This is another cue that it’s time to move on.

Perhaps the kids have grown up and left the nest and you no longer want the responsibility of maintaining a large 4-bedroom, 2 bathroom home with a pool. Selling and downsizing the home and the To-do list can be an absolute joy as it could give you the freedom to do all those things you’ve always longed to do but never had the time or the money to do – like taking holidays.

What if you and your partner have opposing views?

One of you loves where you live and the other would rather sell and move on. This can be quite a predicament and cause its own level of stress and anxiety.

The best thing to do in this situation is not to do anything for the time being. Simply start by compiling a list of Pros and Cons for staying and another for selling and moving on. Try to be as objective as possible, especially when adding things to the Pros column of the option you are not in favour of right now. Many couples are surprised to find that their opinion changes when they do this simple exercise as they see it all spelled out clearly in black and white.

Contact us for an obligation free market appraisal of your home. This is a great place to start with your decision making process. Why? Because it will not only tell you what you could expect to sell your home for, but also how much equity you own in it. This information is vitally important if you are looking to renovate and wish to borrow against your home to do so.


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5 tips to make the most of low interest rates

by ShelMarkblog In Uncategorized

10 December 2016

For the last two years, most of the talk around interest rates has been that they will continue to fall. Given that we have seen rates fall to historic lows, many people have a tendency to become somewhat complacent.

Andrew Mirams, a leading finance strategist with over 27 years’ experience in the finance sector who has been recognised by the mortgage industry with a number of awards, shares his top 5 tips to take advantage of low interest rates.

1. Conduct a review of your current home loan deal

With competition so high among lenders it is important not to become complacent and simply make the assumption that you are getting the same great deal as everyone else. Andrew writes that only recently he was speaking with a client who owns a substantial property portfolio and thought that the rate he was on of 4.8% was as good as it gets. “When I told him he was probably about half a percent out of the market and the resulting impact on his portfolio of approximately $3 million dollars meant that he was missing savings of around $15,000 a year, he realised that he needed to review his facilities and consider a change,” says Andrew.

Naturally the savings will be lower for smaller mortgages. But even a saving of $100 a month can make a huge difference to your overall budget. “The banks are actively competing for your business and now is a great time to recast your financial structures – be it for accessing investment funds or reducing your monthly exposure,” says Andrew.

2. Gear repayments as if interest rates were higher

Andrew says it is very wise to gear your repayments at an assumed higher interest rate if at all possible. Why? Well for starters, interest rates aren’t going to stay this low forever. So if you can afford to make higher repayments, it can help to either create a buffer or reduce your home loan liability while increasing the equity in your home.

Andrew suggests gearing your payment at a rate that is 1.5 to 2.5% higher than they are right now.

He gives the following example.

If you currently have a $400,000 home loan at 4.75%, you would be paying about $2,100 a month or $480 a week.

If you make payments at a higher rate of say 6%, these repayments would be around $2,400 a month or $550 a week.

The impact of paying this additional amount of $70 per week is significant – a saving of $94,000 and 7.1 years on a $400,000 loan (based on a term of 30 years).

3. Create an offset account

In simple terms, an offset account sits ‘beside’ your mortgage. Any savings you hold within your offset account becomes a credit against your home loan, which in turn acts to reduce the amount of interest you pay.

Say you have $10,000 in an offset account and a mortgage of $410,000. At 4.75% over 30 years and paying interest only, you will save in excess of $30,000 in interest and cut more than a year off the loan term – just by having money in your offset account.

“The bottom line is, if you don’t have an offset account, you need to get one!” says Andrew.

4. Avoid bad debt

For many of us Christmas is the hardest time of the year to avoid accruing bad debt (money spent on things that don’t generate future wealth), especially credit card debt. But it is so important to try as hard as possible to spend within your means and avoid credit card debt and other high interest credit that will come back to bite you in the new year wen all the bills start rolling in. If willpower is not your strong point, consider getting rid of all credit cards altogether.

“With a little bit of discipline now you’ll be able to buy those things in the future by getting ahead on your home loan,” says Andrew.

5. Consider fixing your rate

Andrew’s final tip is to start thinking about and researching fixed rate options. While interest rates are at an all time low right now, there are still some great opportunities available to lock in your rate for a 3 or 5-year period at well under 5%.

If you’re not comfortable locking in your entire mortgage, most lenders have an option to split your rate, allowing you to lock in a portion of your mortgage at the fixed rate while the remaining portion remains variable.

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Have interest rates gone as low as they’ll go?

by ShelMarkblog In Uncategorized

03 December 2016

For the first time in two years investors have started placing bets, albeit cautiously, that the next move in official interest rates will be up rather than down. If this happens, it will no doubt come as a bit of a shock to most homeowners as we’ve all become accustomed to rates either falling or on hold for the past five years.

It seems experts have done a backflip on their previous predictions that the Reserve Bank Board would likely make the call to slash another 0.25 basis points off the cash rate, creating a new historic low. Now it looks as though this isn’t going to happen. But don’t worry, the RBA is not expected to announce an increase this calendar year.

Another sign that the interest cycle is about to turn is what’s been happening in the fixed rate home loan market. Westpac and a number of smaller banks have begun to lift borrowing costs for customer taking out new loans in the last few months.

Some are going so far as to call this latest turn of events, the “Trump effect” (finance-speak for the belief that US President elect, Donald Trump will unleash higher inflation on the world economy) something many are saying has been “severely lacking”. This prospect has caused investors to sell US Treasury bonds in droves, a trend that started months ago but accelerated after Trump’s election win. When bond prices fall due to a sell-off, the result is a rise in yields, which has been the case all over the world, including here in Australia. The domino effect continues with the banks raising fixed rate mortgage pricing in an effort to protect themselves against future rate rises.

Another clue that we’ve seen the end of rate cuts is the fact that the Reserve Bank’s index for our top export commodities has increased 30% this year, due mainly to a surge in the price of iron ore and coal.

While official rates are not expected to rise in the near future, it is looking less and less likely that we will see any more falls.

Given that an increase of just 0.25% would add $50 a month to a mortgage of $300,000, it is best to factor in future rate rises into your budget rather than fall into the trap of complacency and push spending to the limit while rates are still at an all time low. Something to ponder as you get into the annual Christmas buying frenzy.

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