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One year adds $98,000 to house

 The extraordinary growth in house prices in Australia's capital cities over the past year has resulted in the value of an average home in Melbourne rising by nearly $98,000.

In Sydney, the price increase for an average home peaked even higher, above $104,000.

House price figures for eight capital cities released by the Australian Bureau of Statistics yesterday show year-on-year growth from June 2009 of 24.3 per cent in Melbourne and 21.4 per cent in Sydney.

A 24.3 per cent rise above the median Melbourne house price of $403,000 for June 2009 equates to an annual increase of $97,929. Similarly, a 21.4 per cent rise above Sydney's median 2009 June price of $490,000 equates to $104,860.

The figures provide welcome news for first home buyers, indicating the growth in property prices has peaked and is now declining.

Melbourne prices grew by 3.6 per cent over the June quarter compared with growth in the March quarter of 6.7 per cent.

Economists suggest property prices are likely to flatten, rather than decline significantly, and then remain stable.

''It's still pretty incredible growth, given we have had six cash rate increases,'' Nomura Australia economist Stephen Roberts said. ''That tends to rule out any relief from lower interest rates, too, for some time. The last thing this housing market needs is any stimulus from lower rates.''

 

Economist Saul Eslake from Melbourne's Grattan Institute said the ABS figures confirmed data released last Friday that showed property prices declining in June. ''It's consistent with all the other evidence of lower clearance rates and lower volumes,'' he said. ''A lot of the heat that was in the market when interest rates were lower and when there was more government support in the form of grants has now dissipated.''

Overall, Australia's house price growth slowed less than expected in the June quarter. Economists were predicting growth of 2 per cent but capital city house prices rose 3.1 per cent, following a revised 4.2 per cent rise in the March quarter, according to the ABS.

Economists suggest demand may continue to keep prices stable, with 200,000 new homes needed to house Australia's growing population.

This comes despite dwelling approvals posting a surprise 3.3 per cent fall in June and the volume of new home sales also declining.

Brisbane recorded the slowest property growth rate with an 8.5 per cent increase. Canberra prices rose 19.6 per cent, Darwin 14.6 per cent, Adelaide 11.6 per cent and Hobart 10.8 per cent, the ABS data shows.

The combination of growth in house prices, a strong labour market, the push for wage increases and other inflationary factors was likely to add to the case for the Reserve Bank lifting interest rates towards the end of the year, Mr Roberts said.

House prices were also affecting other parts of the economy. Households forced to pay off large mortgages were ''scrimping and saving'', which was affecting other sectors such as retail sales, he said.

Story by Simon Johanson www.domain.com.au

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Liveable House Design

Homes will be where the easy access is, says new building code to promote mobility.

A minimalist step-free shower; a corridor wide enough for a sofa; and a front entry you don't have to wrestle the pram up.

These features are part of a voluntary building code to be released today by the Parliamentary Secretary for Disabilities, Bill Shorten. The code would improve a home's value and also make life easier for Australians with mobility issues, advocates said.

An ageing population of baby boomers who dislike stairs and young parents wanting better safety for toddlers are key targets for the Liveable Housing Design, the consumer-facing brand of the code developed with the property industry.

The national convener of the advocacy group Australian Network for Universal Housing Design, Amelia Starr, said the fashionable step-free shower was already standard in homemaker magazines, while wider corridors were useful to anyone moving furniture.

US research showed 90 per cent of newly built homes would at some point have someone with a mobility issue residing there. Too many Australian homes were unable to adapt to a family's evolving needs, let alone wheelchair use, Ms Starr said.

''We hope people will say I want that brand in my home because then it can be sold off to the widest range of people possible,'' she said.

The Property Council of Australia chief executive, Peter Verwer, said: ''It makes good sense to design homes so they evolve with their users. It works as well for mums to be as it does for senior Australians.''

The new standards grew from several meetings between Mr Shorten and Therese Rein with industry groups including the Master Builders, Australian Institute of Architects, the Property Council and the Herald journalist Cynthia Banham. The last meeting was held two days before Kevin Rudd stepped down as prime minister.

The code will be launched today by Mr Shorten at a Penrith housing development that already adopts its features.

The Master Builders chief executive, Wilhelm Harnisch, said: ''Improving the safety of kitchens and other areas means people can stay longer in the home instead of going to an aged care facility.''

Story by Kirsty Needham www.smh.com.au

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Why Move When You Can Improve? Time to Renovate Is Now

Don't let the slow real estate market keep you from having the home of your dreams. You don't have to move, you just need to improve. And this is the perfect time to do so.
Never before have all the stars been so perfectly aligned to facilitate the remodelling needed to give you your perfect palace. Materials costs have been lowered to increase sales, building contractors have reduced their fees to attract more clients, and interest rates are the lowest they have ever been. If you've ever wanted to tackle a home improvement task, this is the time to do so.
Here are five good places to start:
1. Kitchen Remodel

-- If your kitchen is tired and run down, this is a great time to remodel it. Cabinet manufacturers are pricing more competitively, granite prices have fallen, and contractors are itching to work. The contractors that were busy building homes during the housing boom are now fighting each other to get the kitchen remodelling jobs, and the homeowner is the one who wins. Since it is the kitchen that is said to sell the home, the improvements you make now will benefit you greatly when the market turns around and you put your home on the market.

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2. Bathroom Remodel -- No longer just a place to shower and shave, bathrooms have been elevated to spa status. If your bathroom doesn't measure up, this is a fantastic time to bring it up to date. Popular improvements this year include heated flooring, natural materials such as stone and wood, multiple shower heads with massaging jets, higher counters with vessel sinks, and soft colours with mood lighting for that ultimate spa experience.

3. Bedroom Addition -- There is always great value in adding another bedroom to your home. Whether you create an ultimate master retreat, a welcoming guest room, or a home office, the extra room will always increase your profits when you go to sell. The long line of craftsmen needed to implement a room addition are all willing to bargain now to get your job. From the architect to the contractor, to the carpet salesman, they are all offering the best deals in years.

4. Decks -- Outdoor entertaining is a huge trend with homeowners, and adding a deck is a great way to welcome your friends to the great outdoors. From a simple square deck to a multi-level masterpiece featuring an outdoor kitchen, materials and labour costs have come down to make this an ideal time to take on that outdoor living project.

Story by Barbara Green - http://www.housingwatch.com
Barbara Green is The Design Diva and owner of Sensibly Chic Interior Design. She creates one of a kind interiors that reflect your taste, lifestyle and budget.

Should vendors be present at open homes?

Open Home Inspection Times for This Week

A friend is thinking of selling her house. It's an upmarket place in a swish spot. Would it be appropriate, she asked me, for her to be there during the open homes, keeping the agent company? Maybe serving wine and cheese to tempt would-be home buyers (it's a nice home, and her buyers are likely to enjoy that kind of thing), and to answer any questions about the property.

It's generally something not done in Australia but it's not uncommon on TV lifestyle shows to see the vendors, having spruced up their place, springing forward to open the door for house hunters, and then guiding them around the property while the agent lurks in the background.

Being on site during open houses could go either way. One of the things that makes buyers fall in love with homes is that they can imagine themselves living there, and they might find that hard to do with the owner on hand. Many also like the freedom to open and shut drawers, check if the toilet flushes properly and jump up and down on the floorboards, to see if everything is in working order.

You would have to be thick-skinned when showing your own house because buyers don't generally hold back in letting their thoughts be known about the state of a property, the choice of paint colours or even the furniture. Sometimes it's just the house hunter talking through what they might change to make it their own, but for sellers who've worked hard on getting the place to be just as they want it, that might not sound so nice. Then again you're selling and it won't be yours soon anyway, so you'd just have to grin and bear it, really.

On the plus side, you would get to hear first hand what it is that buyers don't like about your place, and you might have the opportunity to make a few changes before future open homes.

As a would-be buyer I think I'd be 50-50 about whether I wanted an owner present while I was snooping through their place. Not that I'm rifling through their drawers (honestly) but it's hard to meaningfully "inspect" something under pressure. It would be great to be able to ask the seller about the ins and outs of the house – however, I would not want them looking over my shoulder every step of the way. I'd be comfortable if they were there, but perhaps confined to the front room or the kitchen, on hand if I had any queries.

Real estate agents might not be so keen to have the owner hanging about either, or would want to set some ground rules about price quoting and impromptu negotiations.

Then there's the question of whether having an owner on hand would add to the value of the property, or potentially detract from it. And sometimes that might come down to mood and manner because let's face it, not all of us are people-people, if you know what I mean.

Carolyn Boyd is a property journalist and keen follower of Australia’s housing market.

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Friendly neighbours can increase property prices

Buyers are prepared to pay more for a Melrose Place-type environment.

When good neighbours become good friends, it can not only make apartment buildings much more enjoyable places to live but also boost the price of the property.

One of the key things professional strata record searchers look at in apartment blocks or complexes when they're examining buildings on behalf of potential purchasers is how friendly, harmonious and happy the residents are.

"That's definitely something that's included in our strata reports," says the director of I&D Strata Searching, Matt Trachtenberg-Ray.

"What a lot of people fail to understand when they move into strata buildings is that they are moving into a community and the harmony of a building is just as important as how much they have to spend on fixing the concrete."

For as well as such harmony making a building a far more pleasant place to live, with neighbours chatting in lifts rather than enduring stony silences and greeting each other on common property, it also means it's much more likely that disputes will be settled quickly and amicably rather than through expensive legal action.

"It's the tone of a building that's important," says the president of the Institute of Strata Title Management, David Ferguson. "A good building that's supportive of the social fabric can be like having an extended family and, in turn, not to have a friendly building can be disastrous.

"It's incumbent on people, and especially office-bearers, to make people welcome and run the building in a positive way. Where a building is known for a good living environment, there's more demand for apartments and inevitably the competition will force prices up."

That might mean buildings that host book clubs, wine-tasting evenings, playgroups, social occasions, sporting ventures and even - such as in the case of the city's Highgate building - group holidays in far-flung destinations, such as Yemen.

At the vast Jacksons Landing in Pyrmont, for example, there are Friday drinks, BYO dinners, quarterly meals in local restaurants, tennis, a singing group, dog-owner get-togethers, newsletters and an annual Christmas charity fund-raiser concert.

"A lot of people now know each other as a result of them and it really enhances the building," says Regina Knowles, who organises many of the events. "It creates a very friendly atmosphere, which people love."

Smaller buildings can be just as welcoming. In JoAnn Holloway's 12-unit complex in Bexley, there's an affable ambience. In-house dinner parties for residents are a regular occurrence and everyone pitches in if there's a problem.

"It makes it a very happy place to live," Holloway says. "Occupants are always happy to help each other with chores, like moving furniture, gardening and even rescuing washing from the clothes line if it rains.

One elderly resident often passes on home-made biscuits and enjoys having a chat, while one time, when I was sick, a neighbour immediately offered to help and dropped off a meal. It's wonderful."

It all comes down to attitude, says the vice-president of the apartment owners' peak group, the Owners Corporation Network, Brian Wood. If people say hello when they pass each other and engage rather than ignoring each other, it oils the wheels of a building.

"A good atmosphere in a building is completely fundamental," he says. "If you have a good relationship with other owners, then you'll get disputes or problems being resolved sensibly and practicably rather than escalating stupidly."

Indeed, friendliness is the very reason that Robert Dodds recently decided to buy into the Motto building in Erskineville. He was happy to buy a one-bedroom apartment for $510,000 - $20,000 over the reserve - because he has friends already in the building who say it's a very sociable place to live.

"During inspections I got the feeling that it's a bit like Melrose Place," says Dodds, in reference to the American TV show about the comings and goings of people in an apartment building.

"I liked this apartment's big balcony, which will be great for entertaining, but the residents seem to be young professionals who are all pretty outgoing and friendly. It looks like a great place to buy into."

Midday at the oceana

On a sunny weekend, there can be any number of residents socialising over a glass or two down by the barbecue, cabana and pool at Elizabeth Bay's 65-unit apartment building Oceana.

"It's just a very friendly building, with great amenities, which we all share with goodwill during warmer days," says Ross Appleton, who's lived there for nearly four years.

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"We're a diverse group of demographics and age groups but we do interact well and socialise with each other."

There are many formal, organised activities but, every Christmas, everyone gets together over drink and food. And after each AGM - instead of, as in some buildings, trying to tear each other's throats out over disputes - everyone socialises, with wine, beer and nibbles laid on.

In addition, if there are any major issues happening, such as the proposal to extend the nearby Elizabeth Bay marina, nearly every resident is happy to sign a petition. "If there are any disputes in the building, the sociable, friendly atmosphere enables us to work out a way around it," Appleton says.

Oceana chairman Paul Johnson says it was a deliberate strategy to create a cordial feeling throughout the building. "We wanted to help people communicate more and it's often much easier to raise issues when you're talking over a beer," Johnson says. "It works very well."

Ice-breaker at horizon

Having a concierge in an apartment building often provides a pivotal point for residents to get to know each other, says lawyer Richard Gration. At his building, Darlinghurst's Horizon, people will often stand and chat to the concierge and others will join in, helping to create a friendly atmosphere for everyone.

"The concierge is a significant factor in pulling people together," Gration says. "It's almost an ice-breaker that gives people the ability to make contact with one another.

"We also have regular organised social functions for residents, especially designed to facilitate neighbours meeting each other. They are always very well attended, with around 80 to 100 people."

One resident paid caterers out of his own pocket for cocktail food while, for Horizon's 10th birthday, a penthouse owner opened up his $15 million apartment for a function, which was attended by about 150 residents. There are also discussions happening about a tennis day on the complex's court.

"A friendly atmosphere also means that the number of neighbour disputes tends to be a lot lower than that you'd expect from a building with 260 apartments," Gration says. "People feel they can talk to one another like adults rather than rushing off to the courts or to the CTTT."

Playgroup the key at Pacific Place

Enterprising apartment residents at one north shore complex have set up a playgroup to enable parents and toddlers to get together in a novel experiment to ensure a friendly atmosphere.

"This is great," says mum Linda Prankerd, watching her daughter Alexandra, 1, play with her little friends from neighbouring apartments at Chatswood's Pacific Place.

"I've lived in quite a few complexes but people here have worked really hard to make this one extremely friendly."

The chairman of the 221-unit Epica building in the complex, Gerry Chia, organises an annual social that has now expanded beyond his building to include all four of the strata's on the site. There's also been a tai chi group at the complex, a card club, quilting club and all manner of social activities.

In an effort to increase the range — and allow the playgroup to meet even in wet weather — all the residents are now chipping in to pay for a community centre to be built at the complex.

"I think many people expect apartment buildings to be soulless places and that they'll be lonely in high-rise," Chia says. "But that's certainly not the case here. Of course, not everyone wants to be social but we're ensuring it's friendly for everyone."

Story by Susan Wellings –www.domain.com.au

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The Next RBA Move will be Downwards

When yours truly was on Seven's Sunrise back in May it was acknowledged by both David Koch and myself that the Reserve Bank of Australia (RBA) would be unlikely to lift rates that day, with the knowledge that things were looking worse in Europe and there were already signs of a slowdown on housing here. We were wrong.

The RBA lifted rates that day by yet another quarter point to 4.5 per cent. At the time it was largely expected by economists.

However, I believe it was a serious mistake to lift cash rates; similar to the mistake made in 2008 when the RBA thought lifting rates was a prudent idea in the first half of that year.

 

Now, sure, the RBA board members do not have a crystal ball and can only go on present information at hand. So it was not to know of the events on Wall Street and in Europe later in the week (the so-called "flash crash").

However, Europe had been simmering for some time before May and as each week had gone by in March, and then in April, the situation was becoming worse and worse.

Yet the RBA moved rates higher in May largely on the belief the housing market was still surging ahead. This belief was due to, among other factors, auction clearance rates.

But, as I have stated before, there has been an increasing number of passed-in auctions failing to make it into the official results and clearance rates.

The problem with this is that the RBA has been relying on auction clearance rates to get an indicator of the market. Naturally, to think that it may have lifted interest rates in May partly based on incorrect data is a disturbing thought.

Now, not much more than a month later, the banks are starting to cut their fixed rates. And banks only tend to do that when they are sure cash rates have peaked.

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Even the real estate spruikers have been stating the housing market is slowing. You know the market is seriously slowing when they do that.

The positive news in all this is that the probability of further interest rate rises this year has all but been eliminated. And I believe the next move is actually going to be down.

That is because the RBA was lifting rates to stop a potential housing bubble. Now that risk has gone and, indeed, the risk has increased for house price falls, the RBA can accommodate a cut and will likely make a cut if Europe drags us down and/or house prices retreat.

The RBA will never admit it, but it made a mistake in May. And that's why I believe the probabilities have risen that the next move will be down.

Louis Christopher is the managing director of SQM Research and the head of property at Adviser Edge.

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Investors fill the first home buyers’ gap

When June-quarter property prices are released in the next two months, it's likely we'll see house price growth down markedly from the rates we saw in March and December.

The figures probably won't show falling prices but growth will be a lot closer to zero than it has been for more than a year.

That in itself would be an unusual result. The fall in housing finance figures compiled by the ABS has been steep and would normally suggest falling prices, not just a fall in the rate of growth.

Overall, the number of housing loans for owner occupation, excluding those for refinancing, is down more than 30 per cent year on year for NSW.

One reason the downward effect on house prices hasn't been as pronounced as we've seen historically is that it was accompanied by a rise in the proportion of housing purchases not involving mortgages.

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Or another way to think about it, the lack of a significant fall is partly due to a fall in the proportion of first home buyers, who recently have had a much greater propensity to use mortgages for their purchases.

The other reason is the increased level of investor activity, reported separately to the owner-occupied numbers that are usually considered to have the biggest link to prices.

Nationally, the value of loans taken out by investors is up nearly 30 per cent year on year, according to the ABS, and brokers and financing groups are reporting strong upswings in investor activity as the competition from first home buyers and upgraders continues to dissipate.

This has helped cushion the effect of the withdrawal of first home buyers and upgraders from the market as interest rate concerns dominate.

Matthew Bell is the economist for the Fairfax-owned Australian Property Monitors.

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Interest Rates are they coming down or going up?

The current housing market is awaiting the savvy buyer. With the consecutive rises by the reserve bank, European PIGS Economy treat, Revolving door Labour Prime Minister and now threat of a coming election.

If you have cash – that is no bank finance required - you are KING. The last three real estate contracts written, in Everton Park and McDowall, have been cash unconditional. The savvy buyers have purchased at well discounted prices. Motivated sellers have taken the offers and moved on.

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Tighten bank conditions, over jealous building inspections, have made these contracts very attractive. Remember when you negotiate on a property there are three levels of negotiations: price, time and conditions. Which one is more important to you, in the current market make your offer as attractive as possible.

I don’t believe that these conditions will be sustainable due to the housing shortage, so if you are cashed up make the move now. This particular mille second in time is a buyers market.

Moving your pets

Your pets will always be aware that something new is happening. As with humans, your pets enjoy comfortable and familiar surroundings. Moving away from routines will increase the stress levels.

Quotify has an excellent site detailing some of the measures you should consider when moving with your pets. Among the main concerns are:

> Keeping pet routines regular.

> Ensuring animals are registered and have all their identification tags available – especially during the moving period in case they get lost.

> Have your pet checked by the vet before you move.

> Ensure your pet meets local laws and regulations if you have moved interstate – some states have curfews (and in some cases outright bans) for different animals.

> Make sure your pet is accustomed to its familiar surrounding such as bowls and toys, etc, soon after they have arrived at your new address.

If you’re travelling by car, ensure you have the correct size animal carrier for your pet.

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> It’s a good idea not to feed pets substantial meals during the trip, but rather have snacks and plenty of water.

  • Incorporate breaks and exercise time for pets into the trip.
  • Take a litter box for cats and scoop and plastic bags for dogs.

> Dogs should be acclimatised to their new surroundings as soon as possible – take them for a walk to familiarise themselves.

> With cats, in particular, it is a good idea to leave one room where they feel completely at home and are not upset by the sight of packing boxes and furniture out of place.

> At a cat’s new location, it is likely to feel out of place for a while and may be happy being kept inside until it’s ready to venture forth.

  • A good solution is to leave the cat in cage outside to check its new surroundings – with you not far away of course.
  • Making sure your cat is allowed to look outside through windows is a good way of letting them acclimatise.

> Animals such as guinea pigs, mice, birds or reptiles, should be kept in their cages, covered and cool.

  • Ensure they have access to water as soon as you arrive at your location.

> You could consider rubbing a towel around your cat’s or dog’s body at your old address and rubbing this around prominent surfaces at your new address to ensure your pet gets a feeling of ‘home’ at its new location.

> Some companies might move pets – always ensure you have up to date vaccination and vet records.

Story by Alice M –realestate.com.au