Staff Reporter

Consumer sentiment remains flat despite a 50 basis point cut from the Reserve Bank, according to new data.

The Westpac Melbourne Institute Index of Consumer Sentiment increased by 0.8 per cent in May from 94.5 in April. 

Westpac’s Chief Economist, Bill Evans, said the results were surprisingly low and fell well below expectations.

“This is a disappointing result,” he said. “It follows a surprise 0.5 per cent cut in the official cash rate by the Reserve Bank and extensive media coverage that the unemployment rate had fallen from 5.2 per cent to 4.9 per cent,” he said.

“However, other factors appear to have offset these positives. Firstly there might have been a degree of disappointment amongst households that the standard variable mortgage rate was reduced by an average of 0.37 per cent.

The results show that sentiment is two per cent lower now than when the cash rate was 100 basis points higher last October, when it was 4.75 per cent.

Mr Evans said the lower than expected sentiment could give the Reserve Bank reason to cut the cash rate again in the coming months.

“It is our current view that the Bank will wait until July before it cuts again but developments overseas along with today’s evidence that the recent cut has had little impact on Confidence could easily see the Bank bring that decision forward to the next Board meeting in June.”

Breaking News

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Property portal VivaReal celebrates three years of its operations in Brazil with the launch of the mobile version of its website. The new feature makes the search of over 400 thousand available properties, easier than ever.

The portal receives visitors from all over Brazil and it has just achieved the impressive mark of 1.7 million visits per month.

The system uses GPS enabled functionality to identify the user’s whereabouts and delivers the closest properties available according to the user’s location. Site visitors are able to view information about the property of choice and peruse with ease, from their smart phones. The can also use filters to defined by price range, city, district, number of rooms and parking spaces, to further narrow their search. Once selected, the user can then share his/her find with friends on Facebook, Twitter, Google+ or by e-mail.

“Mobile connections are growing at an alarming rate in Brazil and this is only the beginning of our future mobile offerings. We strongly believe in the future of mobile,” affirms Brian Requarth, CEO and co-founder of VivaReal.

Our growth in Brazil continues as we complete three years of operation in the country. During the first quarter we have visitors coming from over 174 countries. Brazil is growing as an international destination and investors are bullish on the growing middle class”, Requarth comments.

With the recent investments from Monashees and Kaszek funds, VivaReal is expanding with a growing presence nationally.

The new platform can be accessed from any smartphone by typing www.vivareal.com.br in the browser.

Property Portal Watch

Technorati Tags: launches, mobile, Site, Version, VivaReal

After months of spruiking increased funding costs as the reason behind increasing interest rates, ANZ changed their tune last Friday, instead blaming high retail deposit prices for its decision to pass on just .37% of the .50% official interest cash rate cut by the Reserve Bank (RBA). Interestingly, the ANZ did pass on the full .50% cut to the interest rate it pays its customers on deposits and although the bank denied the action was profiteering, consumers are sceptical.

Meanwhile, commentators have interpreted the most recent RBA statement as indicating Australians can expect up to three further rate cuts of around 25 basis points each this year. But according to some, new liquidity rules forcing lenders to hold more retail deposits will mean lenders will face higher funding costs for the next two years.

As well as battling negative feedback, the banks are struggling with a significant slowdown in consumer borrowing. CBA is the latest lender to announce staff cuts, with 100 jobs due to be cut as the bank closes its Melbourne mortgage processing unit.

While it is disappointing that Australian lenders failed to pass on the full benefit of the RBA’s recent stimulatory action, cuts of an average of .36% teamed with the expectation of more cuts to come is likely to boost confidence in the property market. Although the market is already showing signs of increased buyer activity, vendors should not make the mistake of thinking the activity will necessarily result in increased prices, but instead understand the environment is likely to presents greater opportunities to secure a buyer at current market value.

Property News

Technorati Tags: Blame, Deposits, Market, report, state, Weekly

Four Australian-based charities have received funding grants totalling $ 34,180 as part of the latest round of funding grants from The Harcourts Foundation.

In Queensland, a grant of $ 15,000 was provided to the Australian Leukodystrophy Support Group, whose aim is to provide assistance and information to those affected by Leukodystrophy and to support research into the disease.

$ 11,180 was granted to the Cancer Council Tasmania while a further $ 4,000 was provided to Alzheimer’s Australia in New South Wales.

Another $ 4,000 grant was provided to the Little Heroes Foundation in South Australia which offers support to children living with cancer and other serious illnesses, and their families.

The money granted will provide these charitable organisations with the funds to carry out important research and development projects, purchase vital equipment for those in need, and run significant community projects and services.

Mike Green, Managing Director of Harcourts International, is thrilled that The Harcourts Foundation is able to provide much needed support to local community groups and charitable organisations.

“I’m incredibly proud of The Harcourts Foundation and am so thankful that as an organisation we are able to help so many communities in need. Our local communities have supported us so well over the years and I’m thrilled that we are now in a position to give back to them,” Mr Green said.

Established in August 2008, The Harcourts Foundation aims to provide financial support that helps, grows and enriches local communities, and has received close to $ 1.5 million in donations from Harcourts staff, offices and clients around Australia and New Zealand in its first three and a half years of operation.

To date, all funds have been raised by dedicated Harcourts team members and clients in the form of fundraising events, auctions, workplace giving, individual donations or ‘off the top’ giving (a percentage calculated from each sales commission).

“The next round of grant applications has already begun, with the closing date being the 30^th of June 2012.

“I encourage all Australian charities to jump online at www.harcourtsfoundation.org and download the grant application form. We look forward to funding as many applicants as possible,” Mr Green said.

Be sure to look out for grant application deadlines:

• 1 April – 30 June 2012
• 1 July – 30 September 2012
• 1 October – 31 December 2012

Harcourts Newsroom » Australia

Technorati Tags: 000, charity, Foundation, grants., Harcourts

Homesales.com.au has launched ‘Investment Property Search’, a new free service specifically aimed at property investors.

Investment Property Search (IPS) allows users to search properties for sale on homesales.com.au based on their investment strategy. It prioritizes financial search parameters over location which is the prime search field for owner occupiers.

Launched this week, IPS allows users to search based on parameters such as positive or negative cash flow; rental yields and historical capital growth (based on postcode). Other property search options include suburb population trends and home ownership rates. To ensure complete transparency, IPS does not search auction or POA listings.

“Finding an investment property is all about numbers. homesales.com.au’s new IPS functionality helps consumers find potential investment properties quickly by prioritising key search parameters,” Ajay Bhatia, Director of homesales.com.au and CIO of carsales.con Ltd commented.

“The new search leverages homesales.com.au’s native and partner datasets to deliver transparent and targeted results. IPS is not about replacing existing investment advisory services but rather complimenting them,” Mr Bhatia stated.

IPS is unique to homesales.com.au, the real estate arm of carsales.com Ltd (ASX: CRZ). No investment property specific search functionality exists on other mainstream real estate sites in Australia.

“Property investment is about making informed rather than emotional decisions. Therefore it was important to build a unique service for this part of the property marketplace,” homesales.com.au General Manager Rhett Dallwitz commented.

“IPS has been designed with input from consumers and the industry alike. It is the first of a number of market-specific launches homesales.com.au is planning moving into the next financial year,” Mr Dallwitz said.

Business 2

Technorati Tags: homesales.com.au, investment, launches, property, search

Staff Reporter

Real estate agents have been put on notice by Fair Work, with the workplace regulator announcing it will audit 125 agencies in Queensland as a follow up to its campaign last year which found the majority of principals had failed to lodge written staff agreements with the Queensland Property Industry Registry (QPIR).

Fair Work inspectors are planning to audit the businesses – a mix of those that failed to lodge agreements last year and others that will be randomly selected – over the next three months to check that they have lodged the agreements.

Last year, the Fair Work Ombudsman audited 156 real estate agents throughout Queensland and found that 81 (52 per cent) had failed to lodge agreements.

The Fair Work Ombudsman will also work with key industry stakeholders to contact more than 2,000 real estate industry employers throughout Queensland to make them aware of their obligations under workplace laws.

The follow-up campaign will focus on real estate agents, business and hotel brokers, strata and community title management businesses, stock and station agents, buyers’ agencies and real estate valuation agents.

Fair Work inspectors will audit employers throughout Brisbane, the Sunshine Coast and Gold Coast and in regional areas including Ipswich, Loganholme, Cairns, Mount Isa, Townsville, Mackay, Rockhampton, Hervey Bay, Gladstone, Gympie, Toowoomba, Gatton, Stanthorpe, Charters Towers, Kilcoy, Maryborough, Roma and Longreach.

Fair Work said it is a requirement under the Real Estate Industry Award 2010 for employers to lodge a written agreement with the QPIR for all staff classified as property/strata management or property sales employees.

The agreements must state how the employees will be paid – commission-only, part-commission or as per the rates listed in the Modern Award.

Fair Work Ombudsman Nicholas Wilson said employers who fail to lodge agreements are at greater risk of underpaying their employees.

“We are conducting this follow-up campaign because we have identified that many of the underpayment complaints we receive from real estate industry workers in Queensland are against employers who have not lodged pay agreements with the QPIR,” Mr Wilson said.

“By ensuring employers are complying with the requirement to lodge agreements, we aim to prevent underpayments and pay disputes before they occur.”

Breaking News

Technorati Tags: agents, blitz, Fair, followup, targets, work

Stacey Moseley

Idle auction rates picked up this weekend, with the four major cities recording increases.

Auction figures released by Australian Property Monitors (APM) found that there has been an increase in clearance rates across the four major cities of Sydney, Melbourne, Adelaide and Brisbane when compared to the same time last year.

According to the Real Estate Institute of NSW, Sydney recorded a clearance rate of 64 per cent over the weekend, up almost four per cent from this time last year.

“This week saw 281 properties reported sold and 156 pass in for a clearance rate of 64 per cent,” REINSW CEO Tim McKibbin said.

“The overall clearance rate for the year to date has been 57 per cent.

“The suburbs showing the strongest clearance rates have tended to be on the south side of the harbour, with most areas between Leichhardt and Bondi having an average clearance rate of 60 per cent of higher.”

According to the Real Estate Institute of Victoria (REIV) the state’s weekend auction clearance rate was 63 per cent, compared to 61 per cent last weekend, and 52 per cent on this weekend last year.

“The same weekend last year marked a turning point in the auction market, with the clearance rate falling to the mid- to low 50s throughout winter and into the spring,”  REIV CEO Enzo Raimondo said.

“At this point, that outcome looks unlikely to be repeated this year, which is positive news for vendors.

There were 591 auctions reported to the REIV this weekend, with 370 selling and 221 being passed in, 135 of those on a vendors bid.

“Next week the REIV estimates 600 auctions will be conducted followed by 680 the following week,” he said.

Brisbane jumped by almost 35 per cent from last year, to record an auction clearance rate of 50 per cent, while Adelaide’s stagnant auction results recorded a modest increase, sitting at 36 per cent.

The most expensive property sold over the weekend across the four major cities, according to the APM was a four bedroom house in Canterbury, Victoria, which went under the hammer for $ 4.1 million.

However, the REIV reports the most expensive property sold across the weekend was a four bedroom home in Kew which went for $ 4.4 million.

A three bedroom house located in Brighton in Victoria, took the title of the weekend’s most affordable property, selling for $ 126,000.

Breaking News

Technorati Tags: across, auction, cities, clearance, Major, rates

Jessica Darnbrough

More than a week after the other majors announced their rate cuts, ANZ has finally moved on rates.

Earlier today at the major’s monthly rate review meeting, ANZ announced it would cut 37 basis points from its standard variable rate.

Effective from 18 May, ANZ will boast a new variable rate of 7.05 per cent – slightly more expensive than NAB at 6.99 per cent and CBA at 7.01 per cent.

ANZ chief executive Australia Philip Chronican said the RBA’s decision to reduce the cash rate had impacted domestic funding sources giving the bank scope to reduce lending rates.

“We continue to work hard to ensure we are competitive despite sustained funding pressure driven by the high rates we are paying to our 2.9 million deposit customers relative to the Reserve Bank’s cash rate and the ongoing volatility in wholesale money markets,” Mr Chronican said.

Breaking News

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The Australian Tax Office (ATO) recently released taxation statistics for the 2009/10 financial year.  The data had a lot of good information, some of which was touched on in last week’s blog however, this week we will be specifically looking at rental income and deductions associated with property investment.

Over the 2009/10 financial year there were 1,751,679 individuals that received rental income (owned investment property).  The number had increased by 3.5% from the previous financial year.  Of these 1,751,679 individuals, 1,110,922 individuals or 63% made a loss on their rental income; the remaining 37% of individuals turned a profit on their rental properties.

Of those 63% of investors that had made a loss on their rental income, the typical loss was $ 9,132 over the year or $ 176/week.  The most concerning sign is that individuals that earn less than $ 6,000 a year are carrying a loss of $ 207/week with only those on an annual salary of more than $ 180,000 carrying a greater loss each week ($ 399).  It is difficult to determine what this actually means however, you could assume that a portion of those on incomes of less than $ 6,000 p.a. are self funded retirees.  Of course a portion of these people are likely to not be self funded retirees either.  If the current housing market conditions persist and these people are essentially making no annual income having a negatively geared property is of limited benefit and they may in fact be looking to sell these homes in an already soft market.  Even for those that are self funded retirees, if they have no personal income there is no benefit to them having a negatively geared property asset.

Somewhat worrying is the fact that 825,284 investors making a loss on their rental income are earning $ 80,000 a year or less.  These owners are typically making a loss of $ 8,111/year ($ 156/week).  For most of those in the lower income brackets the need to negatively gear a property to offset their tax is typically lower than those on a higher income.  This leads me to believe that many have got into investment housing initially for the taxation benefits but obviously with a view to experiencing capital gains and the subsequent positive cash flow benefits in the future.  The statistics also show that 285,638 persons (26%) making a loss on their rental property are earning more than $ 80,000 a year.  These individuals recording a tax loss on their rental property are typically losing $ 12,082 a year or $ 232/week.

The news is much more positive for those investors that are achieving a profit from their rental property.  The typical owner with a net rental income of more than or equal to $ 0 is making $ 160/week from their property as opposed to the -$ 176/week loss many others are making.

The results highlight that most property investors are negatively geared.  Of course some will be quite happy to be negatively geared with the cost offsetting tax elsewhere while others, particularly those nearing retirement or at retirement, will be hoping the property starts to turn a profit in the near future.  Given the current economic and housing market conditions, it seems as if these investors will be reliant on a pick-up in rental growth to propel them to positive gearing rather than capital gains.  This is the reason why investors that are interested in purchasing in the current market must be careful and should focus on buying for long term capital gains while maximizing their rental return or even positive gearing rather than short-term capital gains.

RP Data Research Blog

Technorati Tags: choice, gearing, nation, Negative

April – that fluffy month with Easter holidays – traditionally signals the end of the fabulous Summer selling season. It’s the month that can bring a sharp dose of brutal realities. It’s the month where there seems to be less ‘impulse’ buying – just servicing of the hardcore needs of our communities!

Did we hit our magic baseline $ 2billion in April sales? – that figure that we see as our platform. Yes we did – but help came from some surprising quarters. New Zealand keeps outperforming expectations. The results from our Indonesian network took our breath away.

Indonesia has had it tough for the last ten years. Interest rates up to 19 per cent; their joy when rates dropped to their current 8.5 per cent. Their market is now incredibly active. Prices increasing by up to 100 per cent in twelve months. A friendly reminder to all Australians of the reality and certainty of cycles. If Australian mortgage rates were as high as Indonesia’s currently are there would be black despair! Yet they are booming. It reminds one of the expression ‘when things are tough people expect them to get tougher again, when things are on the improve people expect that improvement to go on forever’. Both expectations are invariably wrong.

On the rural front, the debate on coal seam gas is creating unwanted nervousness from the traditional supporters of rural property. This additional uncertainty is on top of the water debate and the question of whether Australia should take a greater interest in its long term food security. Recent sales, where the intention of new owners is to provide food security exclusively for foreign markets will, in our view, add to the issues. Thus the pending Ray White sale of iconic Victoria River district properties in the Northern Territory will be followed with great interest.

Loan Market figures were up 16 per cent on last year but reflected seasonal trends. But people are out checking their financial capacity to purchase.

Commercial businesses have seen upward momentum as well. For the first four months of 2012, compared with the same period in 2011, trading is up 14.9 per cent. Positive signs as we are about to head into the stronger transactional period post-Easter through to December.

On the property management front, the need and opportunity to increase property management standards will be the central focus at the forthcoming Wealth Conference on 3-4 June at the Gold Coast.

What’s new at Ray White?
Next month we celebrate another milestone – 110 years since Ray White opened his tiny railway siding shed – ready to do anything to service his community of just one hundred people.

Not much use having a milestone if, at that point, the Group is not in the best “shape” it has ever been. Others will need to be the judge. We remain obsessed with the need for constant improvement.

We have had a number of new office openings (contrasting to the number rebranding to us in recent years). It’s a positive sign. In fact it’s a good time to open a business – vendors seek agents possessing energy and new ideas in selling campaigns.

We have seen new office start-ups in recent weeks across Australia and New Zealand including Coogee, Woollahra, Cessnock, Narraweena, Lakemba, Hawthorn, Point Cook, Taylors Lakes, Melbourne CBD, Frankston, Hawthorn, Central Launceston, Burnie, Hobart and Andrew Acton at Townsville Central.

We continue to see great existing businesses choosing to have a change at the top of their game to Ray White. Clint Wallis at Townsville and our new offices at Strathpine, Montville, Redcliffe and Nerang in Queensland are examples. So too Wentworth Point, Quirindi and Merrylands in New South Wales and Geelong West, Highton, Pakenham and Taylors Lakes in Victoria. In New Zealand, 3 key offices comprising the Dianne Quinn Group rebranded in the Northland district.

Service, above and beyond, is such a critical factor in business. We saw a great example of this in the property management team at Ray White Tokoroa in the central North Island of New Zealand who have been awarded the quarterly property management award for Outstanding Service exemplary to Ray White by volunteering to learn sign language. The portfolio has a high number of deaf clients who without their sign language can only express their intentions by writing everything down.

The increasing confidence of our members to the future shape of this industry, where a real estate office will more closely reflect a community-centre with a deeper range of information and activity has been showcased. Wilston in Brisbane being the most recent.

Property News

Technorati Tags: April, happened, markets