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What is negative gearing?

A property is negatively geared when the costs of owning it (include interest on the loan, bank charges, maintenance, repairs and depreciation) exceed the income it produces. The property investors hope that their income losses will be more than offset by their capital gains when they eventually refinance or sell their property.

In Australia capital gain is not taxed unless you sell your property, and then it is concessionally taxed; again evoking the argument that it favours wealthy landlords. The truth is that negative gearing is more favourable for taxpayers who earn high incomes.

The benefits of negative gearing is greater the more you earn and the higher your tax rate.

House Prices Hit Record High | First Home Buyer Loose Out

After spending more time at home than ever, more of us are keen to move into a bigger place, borrowing at ultra-low interest rates and spending up big at auction. But there’s a grim flipside: the old chestnut of housing affordability and the prospect that many young people in Australia’s largest cities might never afford their own home. Even with low interest rates, the hurdle is the deposit gap, and that hurdle keeps getting higher.

Sydney’s median house price is now an extraordinary $1.41 million, after spiralling 24 per cent from a year ago, according to the latest Domain House Price Report for the June quarter. Melbourne and Canberra joined the million-dollar club (up 16.2 per cent and a whopping 29.2 per cent, respectively). Spare a thought, too, for Hobart locals, where prices leapt 28.4 per cent in 12 months, with double-digit rises also recorded in Darwin, Brisbane, Adelaide and Perth. Experts are startled and nervous.

ANZ senior economist Felicity Emmett went ahead of the pack in March when she forecast overall capital city housing price growth of 17 per cent this year, warning it would lock some aspiring first-home buyers out. But she was still surprised to see the latest sharp gains.

Although the data is for the period until June 30, when Sydney’s latest lockdown had just begun, the figures are stark reading against a backdrop of new stay-at-home measures that have put many out of work in Australia’s largest city – a reminder of the extended restrictions in Melbourne last year and snap lockdowns in other capitals in between stretches of economic recovery and optimism.

Support payments were on offer, and workers returned to their jobs as the health situation improved, but they bear the scars of income forgone.

Depending on the family situation, first-time buyers could look to apartments instead of houses, where the pace of growth has been more subdued, although four cities are at or close to record unit prices. A widespread shift to working from home allowed some city workers to move to cheaper outer suburbs and commute two or three days a week, pushing up prices in some outer-ring neighbourhoods. A similar move from cities into affordable regional towns has sent regional house prices through the roof, with a dozen regional areas rising more than 30 per cent in a year.

Source: https://www.domain.com.au/news/australian-house-prices-grim-picture-for-housing-affordability-as-pandemic-prices-skyrocket-1075871/

6 Easy Steps to Increase Your Property’s Value

We want to show you 6 easy steps to increase your property’s value without having to spend a lot of money. If you’ve been thinking about selling your house at some point in the near future, you’ll want to start getting ready as soon as possible. 

With interest rates near zero, the economy pumped up with massive amounts of stimulus and the virus all but eradicated from our shores, bullishness has returned to the housing market as prices have started to rise. 

Even in a bullish market, there is a lot you can do to add even more value to your property before it goes on the market.

Step 1 – External Wall Repair and Painting

Properties that appear dilapidated, old, or ugly just won’t make the cut.

There’s nothing like a fresh coat of paint to make your home look fresh, modern and more universally appealing.

Step 2 – Upgrade Doors and Windows

New doors or windows make your home more energy efficient and can lead to more affordable household running costs.

 

Step 3 – Landscraping and Yard Lighting

Investing in new soil, rocks, shrubs, ground cover, trees, and mulch can help transform your yard; making it appear fresh and inviting. 

Night lighting can create a modern, chic look for your garden.

Step 4 – Kitchen Upgrades

You don’t need to completely renovate the kitchen, but adding new handles and appliances are easy to increase the liveability of the kitchen.

 

 

Step 5 – Internal Lighting Fixtures

If you have old-fashioned hanging lights, it’s probably time for an upgrade.

Down-lights look good in most environments and using energy efficient.

Step 6 – Organising

If you’re going to hold inspections whilst still living in the property, be sure to organise all clutter.

Remove all personal belongings, such as family photos and get storage boxes for anything that doesn’t fit neatly into cupboards. Neatness is everything!

We’re here to guide you through selling or buying your property. Contact one of our Real Estate Agents  at Whitestone Agency for more advice.

Where to buy n Sydney

Where to buy in Sydney

It’s hard to know where to start when looking for property in Sydney. Knowing where to buy in Sydney comes down to understanding what’s most important in the property you purchase. Location? Community amenities? Access to transport connections? Lifestyle opportunities?

Each suburb offers a range of alternative options and opportunities. The challenge is finding the one that suits your needs and requirements best.

There are plenty of places you can research these elements. Real estate websites and local councils for example. But nothing beats getting an on-the-ground feel for the suburb. Meeting the local community, seeing how it comes alive over the weekend or during the week. That depends on what you’re in the market for of course!

Grab a coffee at a local café, dine in a restaurant, go for a walk around the park. Even drive through the streets to view the properties. Investigate local schools, how the commute to work or a car ride to grandma’s would feel. All of this forms a picture of how your life will play out when you live in the area.

In the end, Sydney offers so many different lifestyle experiences. We’ve pulled together some of our favourite Sydney suburbs for investors looking to expand a portfolio. And with us, you’ll have a trusted team manage your investment. These are also great areas for owner-occupiers to settle down in these suburbs.

Marsden Park

Marsden Park - where to buy in Sydney

Marsden Park is close to excellent transport links. They will take you west to the Blue Mountains, east to Sydney city, or connect you to most of greater Sydney’s main arterials.

Quakers Hill

Quakers Hill - where to buy in Sydney

It’s touted as the best of both worlds. Quakers Hill offers a range of convenient amenities, and is located in the leafy Hills district, away from city pressures and busyness.

Riverstone

Riverstone - where to buy in Sydney

Residents rated the top reasons to live here. They are public transport links, the peace and quiet and the resale or rental value. Also, the parks and recreation options and good internet access.

Rouse Hill

Rouse Hill - where to buy in Sydney

At its heart is Rouse Hill Town Centre, a busy Town Square. It provides residents with a wonderful family-friendly community feel and multitude of amenities, including shopping and medical.

Schofields

Schofields - where to buy in Sydney

Schofields residents rated their suburb highly for the neighbourly spirit and a safe and sound area. They also like the clean and green spaces, public transport links and the quality of the local schools.

The Ponds

The Ponds - where to buy in Sydney

The Ponds offers new and purpose-built educational, medical and shopping facilities. As well, recreation amenities like playgrounds and parks. Investing here provides opportunity for our clients.

To discuss where to buy in Sydney, selling or investing, contact us today. We’re available 7 days a week and would love to find out how we can support your next real estate move!

NSW Government offers support for Landlords

The NSW Government has provided guidelines to help both landlords and tenants during COVID-19.

To help answer some of your questions we have collated the following FAQ’s .

 

How is the NSW Government supporting landlords?

Under the NSW government’s $440 million package, residential landlords will be eligible for a land tax waiver or rebate of up to 25 per cent if they pass the saving on to tenants in financial distress as a result of COVID-19.

 
Eligible landlords will be able to apply for a land tax concession of up to 25 per cent of their 2020 (calendar year) land tax liability on relevant properties. A further land tax deferral for any outstanding amounts for a three-month period will also be offered to landlords who claim the land tax concession.


To be eligible for the land tax waiver or rebate, the landlord’s residential tenants must be struggling to make rental payments and have suffered a loss of income equal to or greater than 25 per cent due to COVID-19.   

Please note the above proposed changes have not been legislated.

What does a moratorium on evictions mean?

The NSW State Government implemented the following changes to evictions during COVID-19:

  • An immediate interim 60 day stop on landlords issuing termination notices or applying for NSW Civil and Administrative Tribunal eviction orders due to rental arrears where tenants are financially disadvantaged by COVID-19
  • The landlord is firstly required to negotiate a rent reduction with the tenant in good faith and can only seek to give a termination notice or apply for an eviction after the interim 60-day stop
  • Fair Trading can assist landlords and tenants to reach an agreement if needed
  • The NSW State Government will be extending the notice period for certain lease termination reasons to 90 days
  • At any time during the 60 day stop and the longer six-month restrictions, Landlords can still apply to the Civil and Administrative Tribunal at any time to take possession of a property if they are suffering undue hardship. 

What happens once the interim 60 day stop ends?

Once the interim 60 day stop ends a tenant(s) who is still unable to meet their rental obligations due to COVID-19 can only have their tenancy terminated on the basis of rental arrears if the landlord has attempted to negotiate reduced rent in good faith but the tenant has failed to do so.

What should I do if my tenant cannot pay rent? 

Residential landlords are required to negotiate rental payments in good faith in circumstances where a household has lost at least 25% of its income because of Coronavirus.  


It should be noted that tenants are also obliged under the mandatory code to enter into negotiations to formulate a rent relief agreement with their landlord or managing agent, prior to seeking a forced end to their tenancy.

What can I consider in a rent relief agreement?

A landlord and tenant may agree to include the following amendments in a temporary rent agreement:

  • Whether the rent will be waived or reduced
  • Rent amount payable
  • Date for agreement to be reviewed
  • Any repayment plan agreed

What information does my tenant need to provide to show that they are impacted by COVID-19? 

The tenant can provide the following documents to show they are impacted by COVID-19:

  • Proof of job termination / stand down, or loss or work hours
  • Proof of Government income support
  • Proof of prior income

I can’t afford to provide a rental reduction, what can I do?

Many lenders are offering to reduce or waive mortgage payments and landlords should seek to negotiate with their lender to try to obtain an agreement to waive or reduce these. 


If this is possible, landlords should have a greater capacity to agree to a reduced rent or charges for a period of time.


The immediate 60-day stop on evictions will also allow time for the tenants to access Government income support and may allow tenants to resume paying existing rent.

Does landlord insurance cover rental loss?

Landlords should check their insurance policy to see whether they are covered for rental default.  Policies have different limits and requirements.

 

Many insurers are adopting new procedures to deal with the impacts of COVID-19 and may require evidence that the landlord has attempted to negotiate with the tenant. 

What happens if my tenant refuses to negotiate? 

Both the landlord and tenant should attempt in good faith to negotiate a rent reduction.

If an agreement cannot be reached, NSW Fair Trading provide a dispute resolution process for tenants and landlords to use. 

Can I terminate a tenancy agreement during COVID-19?

A landlord can terminate a tenancy agreement as usual and for the following reasons:

  • Non-payment of rent or charges not due to tenant being impacted by COVID-19
  • Landlord is suffering hardship
  • Tenant has caused serious damage to the property or injury to the landlord or their agent or neighbour
  • Tenant is using premises for illegal purposes
  • Tenant has threatened, abused, intimidated or harassed the landlord/landlord’s agent/other person
  • Landlord is looking to sell the premises
  • Tenant has not complied with a rectification order.

Can a tenant and landlord still end a tenancy if they agree?

Yes, a tenant and a landlord can agree to end a tenancy and decide when and how this is to happen.

What happens if I have already filed an eviction?

The new measures come into effect immediately and landlords will have to wait 60 days for their applications to be processed.

When the 60-day moratorium has come to an end, landlords will be able to recover their properties if they are in financial hardship, while tenants will not get a black mark against their names.


The information included in this article was taken from Fair Trading NSW

Significant Changes to the Residential Tenancy Laws

The NSW Office of Fair Trading has announced major changes to the Residential Tenancies Acts, come into effect on 23th of March 2020. These changes will affect Real Estate Agents, landlords and tenants.

Some of the reforms include:

  • Rent increases must be limited to once per year during a periodic agreement when the fixed term has passed.
  • Landlords must obtain tenants’ prior written consent to publish photographs or video recordings of premises, including property interiors for advertising purposes which may show tenants’ possessions.
  • Tenants may make minor alterations, fixtures, additions and renovations with the landlord’s consent, but the landlord cannot unreasonably withhold consent if the alteration, fixture or addition is one from a prescribed list in the 2019 Regulation.
  • Repairs and replacements of hardwired smoke alarms must be carried out by an authorised electrician
  • Non-payment of water usage or utility charges may now result in tenancy termination (in addition to non-payment of rent)
  • Tenants have the right to break their lease if it is signed after 23 March 2020. Tenants will pay a break fee of:
    • 4 weeks rent if less than 25% of the fixed term has expired
    • 3 weeks rent if 25% or more but less than 50% of the fixed term has expired
    • 2 weeks rent if 50% or more but less than 75% of the fixed term has expired
    • 1 week’s rent if 75% or more of the fixed term has expired

To read more, click on the link below.

https://www.fairtrading.nsw.gov.au/about-fair-trading/legislation-and-publications/changes-to-legislation/new-residential-tenancy-laws#break

Why is my property taking so long to find a tenant?

In this current rental market it does take longer to find a suitable tenants and for some properties is may take more effort and different approaches. This is because tenants have more choices now. Rental price is extremely important for this market and need to be adjusted accordingly as it can change fast. If your property is not looked after by the right Property Manager there is more financial loss to you.

As a Property Manager it hurts to see you without any rental income. At Whitestone, we always work hard to secure good tenants for our clients and within a short timeframe.

This is how we manage to minimise your weekly rental loss:

– We assess the market thoroughly and provide update frequently so you can make an informed decision promptly

– We do more than just open homes. We upsell your property.

– We follow up on all prospective tenants, including ones in our database

– We interact and ask for tenants’ feedbacks

– We do private inspections everyday, including Sundays

If your properties are not well look after, it is a simple process to change Agent.

Give us a call and we will take care of the rest for you.

Confidence back in the market for 2020

Sydney’s property price has lifted slightly recently and it is consistent with the increase in auction clearance rates. Investors’ confidence level increased due to lower interest rates, tax cuts and a subtle easing in credit policy. “Based on recent indicators, it looks like price growth over the next 12 months could be above 5 per cent, maybe even around 10 per cent.” Domain economist Trent Wiltshire said.

Having said that, the volume of stock advertised for sale remains low. Is it a good time to sell now or wait? If you want the right answer, we can direct you to our Sales Partner. Contact us for more information.

The rental market is still fragile and with the number of vacant properties on the market it gives tenants more options.