The ABS National Accounts show the huge disparity, but age and household size don’t explain the gap. The average age of a renter is 41 and those paying off a mortgage are 44. The ABS says the average rental home has 1.8 adult occupants while home owners have just 2.1 adults living under the same roof.

A recent Credit Suisse report says Australians are now amongst the world’s wealthiest, with real assets per adult second only to Norway.

The ABS data also shows the growth in the business of renting an investment property. In 1960 just 2.5% of GDP was earned by renting out a dwelling, but by 2010 this had risen to 8%. Last year $99 billion of rent was paid on just under 2 million Australian homes.

So it’s no surprise we’re seeing more and more fact-searching before buyers submit an offer. Online resources have expanded remarkably over recent years and one site’s now released “Guesstimates”, providing an instant “value” of any house in Australia. Even they call it a “guess” and it follows a model similar to an American tool called a Zestimate. We first wrote about them almost 5 years ago and they’ve since caused plenty of confusion in the Land of the Free (data). Guesstimates do use some science to come up with a price range. But it’s pretty rough – in both directions. One home we sold recently (so it’s not yet recorded in official data) sold for 20% or $100,000 less than the website tells us it’s worth. Must be a lousy agent! Inner-city buyers won’t get much from the tool because apartments don’t seem to appear in their data and nor do houses on community title.

And a tip for apartment buyers relying on online sales data: watch out for lot numbers versus apartment numbers. They’re often different and the official stats report lot numbers only. Announcing the Guesstimate launch their product manager said “To meaningfully price a property for sale, more in-depth information and local knowledge is required – this is where real estate agents and professionals, as local experts, have skill sets that are invaluable.”

So consider this: would a good agent spend their Saturday afternoons standing out the front of a home that’s 20% over the market? Home buyers do need to do their homework and be comfortable with their offered price. But as a wise person once told us, “Don’t let someone else buy the home for a price you were prepared to pay”.

Share that one with your friends.

We wrote recently about that mythical place called Buyer’s School and the trend for many home buyers to consistently ask similar questions. Surely they’re all attending some briefing session before hitting the open homes! And the latest must-ask question is focused on body corp fees.

Now we’d be the first to acknowledge that these do vary a lot between buildings, but we’re now being asked for the fees before a buyer will even inspect an apartment. Before they want to know about any other features. And it seems to us the focus has drifted to the wrong concerns.

The first comment is this: no-one makes a profit in a body corp. The fees are set with a budget so if they’re higher it’s costing more to run the building. Lifts, onsite management and insurances are big ticket items. So if you’re happy with stairs or waiting a little longer for your lift, you will save money. One CBD tower has 5 lifts for nearly 500 apartments while a South Brisbane mid-rise has 2 lifts for just 40 lots. Of course one is cheaper. Some bodies corp do put a lot away for rainy days; others run tight. You get what you pay for.

Buyers are naturally drawn to low fees but they need to ask if it’s not just a clue that the building is being run on a shoestring. Is the sinking fund forecast being followed? Will they cop a special levy of thousands, payable immediately, for all sorts of unbudgeted expenses? We’re not defending misuse of your funds and we agree that some bodies corp don’t keep a close enough eye on things. But if you’ve ever volunteered your time for a committee you’ll know it’s a thankless job and many owners don’t even bother to vote at the AGM, let along give their input into budgeting. So cut them some slack – or better still, get involved!

Right now we’re witnessing buyers who are spending half a million dollars or more, weighing their choice heavily based on annual fees. If the fees seem $1000/year too much why not offer $5000 less when you buy it and that’ll cover the next few years. And you’ll have time to join the committee and get the place in shape!

Please give us your comments? Why are body corp fees so important to buyers?

pic courtesy themorningbulletin.com.au

The announcement is fresh so the details are still sketchy. But here’s the latest news for home buyers from the Queensland State Treasurer and today’s budget:

If you’re buying a home after July 31st you will now pay more stamp duty. For the median Brisbane house of $430,000 it will be $6,575 extra (for a new total of $12,875 going out of your pocket into the government coffers.) Concessions will remain for first home buyers spending less than $500,000, not that there’s many of them left any more. The duty on an investment purchase remains unchanged.

On our best estimates the number of real estate transactions in Brisbane were lower in 2010 than they had been for more than a decade. This year has so far been the slowest in many agents’ memories, well down on 2010, maybe by as much as a further 30%. So how does increasing the tax on each of these make any sense at all? It’s hard to keep an open mind when the mindlessness of it is breathtaking.

Why the change? Well the government seems to be struggling with balancing the books and had to fund some “headline” good news stories. Here’s the explanation from the budget papers: “The government has introduced a temporary $10,000 Queensland Building Boost grant towards the construction or purchase of a new home for six months commencing 1 August 2011. The Community Ambulance Cover levy is to be abolished from 1 July 2011. These changes are to be funded by the removal of the principal place of residence transfer duty concession.”

I must be missing something here. If the Treasurer thinks the new home market operates in isolation of the established housing market he’s badly misguided. Smacking home buyers around the teeth with an extra $6000 or $7000 of tax will further slow the whole real estate market – established and new. So they won’t be handing out too many of those $10,000 cheques for new homes……

Ahhh – I think I understand!

Please share your thoughts on these changes. And to calculate your new tax go to the stamp duty calculator.

## Thursday 16th June update: Some news today from the State Opposition in their budget reply speech:
“Today we also announced our commitment to reintroducing stamp duty concessions on family homes, a saving that was ditched by Labor in the 2011-12 Budget. We understand that this 125 per cent increase will cost Queenslanders dearly, which is why we oppose it. Our policy will save Queenslanders around $7,000 on the average home.”

The Real Estate Institute of Queensland has just completed a fairly comprehensive study of consumer behaviour in our industry and our team has spent long hours digesting it to ensure we’re marketing our clients’ properties to the best of our ability!

So where do buyers come from and what attracts them to an area?  Aside from investors, buyers are more influenced to an area these days because they are able to achieve the lifestyle they desire over the potential for future growth. Interestingly they also tend to purchase within their local area.   They’re inspecting a greater number of properties in their search for the property they finally purchase.

Not surprisingly today’s buyers are time poor and real estate websites are overwhelmingly the preferred method of searching for a property. We know buyers are more likely to contact your agent and view your property if your advertising campaign contains the information and detail they expect to see. We also now know that in 30% of cases buyers report having paid more than they had originally budgeted.

So a great agent can make a big difference to your sale’s bottom line!

It’s equally important for landlords to have some insight on the impact their property manager has on tenant experience. A little over half of tenants are satisfied with the real estate agent or property manager they are dealing with. The main reason is the level of communication. Those that aren’t satisfied give a lack of professionalism as the main reason. Interestingly landlords tell a very similar story.

So chances are if you, the landlord, are confident in the professionalism and level of communication of your property manager, then so is your tenant.

Geo-fencing is not new technology. Using GPS systems you create a virtual boundary fence in a real world geographic area, and are sent an alert when a device crosses the ‘fence’. It’s used to track Kenyan elephants – when they pass a certain checkpoint the park rangers get an SMS. Stolen cars can be remotely turned off using these systems and Americans use it to keep an eye on their kids (sounds perfect for teenage daughters!) And it may soon be on a real estate portal near you.

Imagine you’ve registered all your criteria for your desired home (bedroom numbers, price etc) and walking through your preferred neighbourhood one morning you get an SMS to tell you you’re about to pass a new listing that matches. The next open home time is included or you can reply to have the agent to call and organise your inspection. Finding Brisbane real estate on your phone is no longer new, but this is an electronic tap on the shoulder – you no longer need to do the searching. A basic GPS matched system, it’s not a complicated process and we understand several US portals are close to implementation.

Recent innovations in property marketing have been all about increased availability of info – better real estate mapping,  virtual reality video overlays and broader search criteria. All are designed to help a buyer or tenant cut through the clutter and see only the listings they want. Geo-fencing is immediate, local and specific to your personal needs so we’d expect it to be a real hit.

Meantime local portal behemoth realestate.com.au launched its new ‘face’ this month and the industry collectively stifled a yawn. There are some good ‘about-time’ improvements, such as finally allowing buyers to search from the first page, rather than 2-clicking. For the most part though it’s only a tweak on the old version.

Good to see the addition of dynamic mapping (Google’s big innovation that they’ve now matched) which means you’ll be offered results outside your search area. We’re guessing this will see increased interest in some suburbs where a neighbouring address has a dearer price point. Suddenly suburb boundaries won’t be as relevant and it’s likely more and more buyers will use mapping as their search tool of choice.

What do you think of the ‘new’ realestate.com.au? We’d love to hear your comments.

Last Friday night we met with a couple who wanted to buy their first home. It’s 7pm at the home’s kitchen bench, another offer’s been received, the auction’s the next day, so no time to waste. And out we come with the 5 documents over 22 pages. Nervous do you think? Do they understand fully the details and implications? Is it a fair environment to put anyone in?

Surely consumer protection is firstly about informing people? How can they be fairly informed by 22 pages of reading on a Friday night? And this isn’t including the 2 page Sustainability Declaration the seller’s provided or the building and pest inspections they still need done. Or the title/council/body corp/main roads/EPA/flooding etc searches their solicitor will ask them to check.

One option being canvassed is the idea of a disclosure document, prepared and paid for by a seller before they put their property on the market. Kind of like a “roadworthy” you need before you can sell your car. It could include all the usual info and even a building and pest report, and be available to each and every buyer when they first enquire. If you don’t understand something, you can ask your lawyer/valuer/townplanner/banker/Uncle Jack before you decide to buy…

Then we can have simple contracts that everyone can follow.

What do you think of this idea? Got another solution to the masses of contract paperwork?We’d love to hear your comments.

If life is like a box of chocolates, Brisbane’s inner city is the variety pack! Property investors can choose from modern studio apartments for $140,000 or six-pack style apartments from the 1970’s for $350,000. Modern high-rise apartments range from $350,000 to $7 million. Or for those who crave their own piece of dirt, houses are generally priced from $500,000 upwards.

As a property investor do you see yourself as a small business person? You should. Your annual rental income will likely be $25,000 or more, so it’s worth having a good hard look at the rental marketplace and working out what product offering you’re going to make.

Some people dream of owning a riverfront penthouse, but for rental returns they’re lousy. There are not many tenants wanting to spend $2000 per week. Median priced homes are the safest territory as this is where the majority of people live. Around the CBD and surrounding suburbs the going rate is $430-$520/week for a 2-bedroom apartment. Have a look at www.WhatRentMyHome.com.au for median rents in all inner city suburbs.

Tenants don’t have the long term focus of a buyer, so while future improvements like new bridges, tunnels or new shops are all a key part of your capital gain plans, they’re not going to earn more rent for you today. A suburb like Woolloongabba might not earn top rent today, but what if that new subway goes ahead with a station in the suburb linking it directly to the CBD’s Riverside Centre?

We see investing in property as a balancing act, capital gains being the main aim and rental returns important to your holding costs.

So why choose the inner city over a modern house in the ‘burbs? Like many purchasing decisions your location choice is probably more about your own needs than the final property you buy. Is it a set-and-forget investment where you have minimal involvement? Or do you want to add value to the property by spending your weekends labouring at plastering walls or back-breaking paint work? (Okay so I’m giving away some bias here!). Your decision will vary too if you’ll want to make the place your own home one day.

What the inner city clearly offers investors is Brisbane’s largest rental market. We survey tenants regularly and a home’s proximity to their workplace always ranks highly in their decision making.

The CBD is our largest workplace by a country mile, with St Lucia’s University campus also a massive pool of potential tenants. We don’t believe rental returns will make you rich but, for peace of mind, keeping your cash input to a minimum, and simply having the largest choice of potential occupants, it’s hard to beat the inner city.

You can log in to your bank 24/7 and see what’s happening so why not your real estate agent? Bees Nees can now offer our landlords a heap of property info online, including current lease and rent details (are they paid up to date?!) along with copies of past monthly statements. Our software updates the web pages each night so the info is fresh and relevant.

If you’re a Bees Nees landlord just read the bottom of your monthly statement for the web address and your personal and secure log-in. Or call us for the details. If you’re not a Bees Nees landlord, maybe it’s time for a change!

A new function from domain.com.au is making life easier for home buyers too. Called “Inspection Planner” it’s a neat tool that allows you to plan your Saturday inspections, helping you set a schedule, avoid overlapping times and even giving you directions and a map to follow from one open home to the next.

It’s great to see some strong innovation from the big property portals in recent months and this one seems such a simple but helpful tool. See the quick video intro.