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Are you fed up with the low interest rate that banks offer you, the drop in the share market and want to invest into somewhere else? Then consider the real estate sector. This is one of the booming sectors at present times, and when it comes to real estate investment, there is no better place than Australia.
Though global economic meltdown has affected all parts of the world, the Australian real estate market has continued to grow. It has been acclaimed by thousands of investors that among the best countries of Australasia region, Australia comes out on the supreme position. Around 41% of the real-estate investors choose Australia as their top investment choice.
So, what are you waiting for? If you are really eager to invest on a highly booming segment then look at the Australian real estate sector.
Wait! How familiar are you with the ins and outs of real estate investment? Without the right knowledge of the market, the industry, and other factors of real estate investment, there are risks in property. If you don’t possess a comprehensive knowledge, don’t worry, Mark Forytarz is here to help you in every aspect of real estate investment.
Along with an extensive industry experience, Mark Forytarz has thorough knowledge of this sector. His expertise in the real estate market in Australia is proven with a long list of happy past. You can even follow Mark Forytarz thoughts on the real estate market online.
With targeted advice and guidance from Mark Forytarz, you can move on towards investing on this sector with confidence. So, without any second thought, call Mark Forytarz and to discuss your real estate investment needs.
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With the ACCC proposing tough penalties for real estate agents and vendors who under quote to get potential buyers to auctions, it has come to light that the REIV have voted against forcing vendors to reveal reserve pricing before auctions.
Here’s an extract from an article in the Herald Sun (http://www.news.com.au/heraldsun/story/0,21985,25703450-5013926,00.html)
A secret committee ballot within the Real Estate Institute of Victoria voted nine to three against a motion that would have forced vendors to publish the prices they were willing to sell at.
The motion proposed that the REIV ask the State Government to introduce legislation requiring vendors to publish their reserve price before auction.
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With affordability at its lowest level on record, first-home buyers have to think outside the square.
The home-ownership dream rarely used to feature a sibling in your bathtub and a parent on your certificate of title. These days though, first-home buyers are prepared to be flexible.
Housing affordability fell to record lows in the March quarter this year according to the latest Housing Industry Association-Commonwealth Bank report. Mortgage payments accounting for 30.7 per cent of total first-home buyer income these days!
Generations X and Y are also settling down later meaning for many home ownership is a solo battle.
It’s not surprising then that increasing numbers of first-home buyers are teaming up with siblings, parents or friends in a bid to break into the property market.
“There’s been a noticeable trend towards family members buying property together, as property prices are still very high, particularly for first-home buyers,” says Aussie Home Loans boss John Symond.
The number of family members taking out mortgages together has jumped from about 1% of all loans originated by ‘Aussie’ to 5 per cent over the past two years! Mortgage Choice has reported a similar trend. A survey carried out by the company last year revealed more than 6 per cent of people who bought property within the past two years had done so with family or friends. And of those who intended to buy property within the next two years, over 8 per cent intended to do so with family or friends!
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INVESTORS own around two million homes in Australia and every year thousands claim deductions they’re not entitled to and fall foul of the Australian Taxation Office.
The result can be a kind warning or a significant fine and large interest bill.
The tax office says investors’ should be responsible in getting their tax returns right and they can’t blame their accountant or plead ignorance if they get it wrong.
One of the most common mistakes investors make is claiming items that should be depreciated over several years.
According to the ATO, initial repairs to fix damage, defects or deterioration that existed when a property was bought are capital expenses that should be claimed as capital-works deductions over either 25 or 40 years.
Capital improvements such as re-modelling a bathroom or adding a pergola should also be claimed as capital-works deductions.
Other mistakes include:
Interest
Taxpayers sometimes use loans for investing and private purposes — for example, to buy or renovate a rental property or to buy a motor boat.
The interest expense on the private portion of the loan (the boat) is not deductible!
Legal expenses
Conveyancing expenses incurred when buying and selling a property are not deductible. These form part of the cost for capital-gains tax purposes.
Travel expenses
If you take a holiday and visit your investment property while you’re there, you cannot claim a deduction for the full trip.
The tax office says you may claim only those expenses directly related to the property inspection and a proportion of accommodation expenses.
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What will happen if rates go up? In today’s low-interest-rate environment one of the common questions property investors ask is, “What happens if we buy now and interest rates skyrocket, like back in the 1980’s?”
An understandable concern and today’s historically low interest rates can’t be sustained forever because at some point the economy will begin recovering, inflation will grow and rates will rise!
That’s the economy’s cyclical nature for you.
When rates do rise it’s doubtful they’ll hit the dizzying heights of the late 1980s. The major lenders certainly don’t think so; they’re setting their 10year fixed rates about 7per cent.
With vast resources and access to the world’s top economic minds, it’s highly unlikely that major lenders will make the wrong call about the future direction of interest rates.
But for argument’s sake that they do and rates climb back to the heady levels of 20 years ago.
If interest rates go up that far it’s a sign that business and consumer confidence is high. When rates go up so does inflation. And when inflation rises, so do property values. Yes, your holding costs will be higher because of higher interest rates but as an investor you will benefit on three fronts.
High rental returns
First-home buyers won’t be prowling because property is less affordable in a high-interest-rate environment. This will keep them in the rental market, put pressure on the available rental accommodation and drive up asking rents. The higher the interest rates the higher the investment yield!
Negative gearing benefits
If your expenditure on the property exceeds your rental income, you’ll be able to soften the impact and increase your cash flow by claiming the difference as a tax deduction.
Substantial sale proceeds
If you can’t afford to hold the property you can sell it. Whilst not an ideal scenario, your property will have grown substantially in value during the time of high inflation so you’ll be better off than when you purchased it and that is the aim of investing!
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MELBOURNE’s auction market had its highest clearance rate over the weekend since the end of the property boom in December 2007.
Of the 452 properties up for auction, 83 per cent sold and 77 properties were passed in!
However, the number of properties for auction was 126 fewer than at the same time last year!
The CEO of Real Estate Institute of Victoria attributed the high clearance rate to the extension of the first-home buyer’s grant announced in last week’s federal Budget, combined with low interest rates and an increase in investor numbers.
“It’s off a low base. There were not a lot of auctions,” Mr Raimondo said.
The part of the market performing really well is priced at or below the medium of about $410,000.
“In the last 12 months that’s stayed very stable.”
Mr Raimondo expects the strong clearance rate to continue.
“The next two weeks we expect to see just under 1300 auctions, which is a very high number of auctions at this time of the year.
“I expect the clearance rate to remain high until the September 30 when the full first-home owner’s boost will be phased out.”
Flat and apartment clearances were also strong: 90 per cent of 136 properties at auction sold.
The latest residential land report from the Housing Industry Association revealed Melbourne’s median land price grew 0.7 per cent in the December quarter to a record $152,000.
The HIA-RP Data residential land report showed the price of land in Melbourne was up 4.8 per cent over the year.
The median land price in regional Victoria fell 2.8 per cent in the December quarter to $97,250, the lowest price since mid-2007.
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Home buyers are flocking back to variable rate mortgages which now account for 91% of the residential lending market, their highest proportion in four months.
Mortgage broker Mortgage Choice reported in April basic variable mortgages accounted for 48.15 per cent of all home loans approved - up nearly one per cent from March, while standard variable mortgages comprised 42.77 per cent of the market, down 1.47 per cent from March.
Basic variable loans generally have fewer loan features than a standard variable loan.
Fixed rate loans accounted for four per cent of all approvals up a percentage point from a month earlier.
Basic variable loans have been the most popular loan type though for four months after overtaking standard variable for the first time in January 2009!
Rates charged on variable home loans move in line with interest rates as set by the Reserve Bank of Australia (which has successively cut its overnight cash rate since September last year to a 49-year low.
And despite interest rates being at their lowest in decades, the sensitive global and domestic economic climate is having a strong influence over loan product preferences.
Consumer conservatism with rates and fees continues to win out against loan flexibility and extra features.
Line of credit loans in April, popular with property investors, posted a fall, five per cent down from the previous month.
Commitments for owner-occupied housing rose 4.9 per cent in March, seasonally adjusted, to 59,793, Australian Bureau of Statistics data showed this month.
Total housing finance by value rose 6.7 per cent in March, seasonally adjusted, to $20.688 billion, based on the latest data available.
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Property investors should start planning ahead to take advantage of the next upturn in the property cycle, that’s according to quantity surveying firm Asset Economics.
Property booms never last but neither do property busts.”
To take advantage of the next boom, investors need to ensure they’re buying for long-term capital growth but take in account the ripple effect.
As our next property cycle comes around, it‘ll be the most desirable sought-after areas that start growing first, and these are generally the most affluent areas too.
From there, capital growth starts to ripple outwards!!
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551 Punt Road SOUTH YARRA
Renovated from the ground up with an open mind and an open chequebook, this stunning home has been re-stumped and rewired with new double glazing. It features a stunning gourmet kitchen opening on to a large family room at the rear overlooking a picturesque back garden and entertaining area, accommodation includes three huge double bedrooms plus study (master with ensuite) formal sitting room, all with 12 ft plus ornate Victorian ceilings!
There’s 4 open fire places perfect to fall asleep in front of with the impending winter, stunning new timber floors with brass inlay and ducted heating!
There’s off street parking for a number of cars including a car port, as well as a double storey
cottage / studio.
This beautiful home is an exquisite example of a timeless triple brick “Victorian” superbly decorated with feature gold leaf!