What happened around the Melbourne and Victorian Real Estate Market during last week?

A clearance rate of 76 per cent was recorded this weekend compared to 72 per cent last weekend and 73 per cent this weekend last year. There were 826 auctions reported to the REIV today, with 631 selling and 195 being passed in, 93 of those on a vendor bid. This weekend marks the first major auction weekend of the year – with a further 1,470 auctions scheduled for next week. By the end of February, more than 3,000 homes are expected to have been auctioned, which is about 500 more than February last year. The clearance rate for the year to date is 71 per cent, compared to 70 per cent in 2014.

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Supportive information sources: REIV and REBAA in association with Master Advocates – Real Estate Services – published February 2015

Master Advocates – Real Estate Services loves nothing more than to be able to add value and benefits to our services for our clients.

To Celebrate Chinese New Year, we are embracing a new advancement in resources. Core Logic RP Data has been a powerful resource which enables Master Advocates to provide our clients from both domestic and international markets with vital supportive data and analytics that are current and informative relating to real estate comparable sales and leasing results, market trends. Ultimately assisting our Advocates to estimate and make more accurate and informed decisions relating to property which we research, inspect and strategically assess to negotiate buying, selling or leasing transactions on behalf of our clients with their best interests in mind. We can also use this information to estimate the potential for key locations that may provide the best options for strong capital growth and/or rental yields.

Now Core Logic RP Data have produced a facility which will provide Chinese Language Property Reports. This will allow some of our foreign buyers and clients access to the information in a format that they can appreciate and understand at a greater level by providing property and suburb information, ultimately allowing them to make decisions in conjunction with results from our due diligence processes, opinios and advice with more confidence.

The latest Core Logic RP Data Chinese Language Reports offer:

CMA (current market appraisal)-styled information delivering valuable insights into individual properties and their location

Professional translations into Simplified Chinese – the official written language of China and Singapore

Easy to use workflow within the RP Data Professional database

PDF formats that can be easily emailed to clients

Contact Master Advocates to obtain a sample report

In the Chinese calendar, 2015 is the Year of the Goat. Goats are recognised as being compassionate, helpful, sincere and determined.

Make sure your 2015 is prosperous by adding another channel to your portfolio and investment network of service providers by enlisting Master Advocates – Real Estate Services and the addition of the Chinese Language Reports.

In further property news, Residential property prices could spike by 15% if the Reserve Bank of Australia is forced to cut rates to below 1.25 per cent in response to falling oil prices impacting the US economy, a prominent economist has warned.

Matthew Peter, Queensland Investment Corporation’s chief economist says the plunge in world oil prices has the potential to push the US economy into deflation this year, which would prompt the Federal Reserve to defer a tightening cycle to 2016. \”The RBA would have to offset that and cut rates quickly – to 1.25 per cent for a quarter before raising it to 1.5 per cent – but cannot hold them there for very long due to the extreme impact it would have on the housing market,” Peter told The Sydney Morning Herald in a detailed assessment of the impact of the decline in oil prices on the economy.

“It would give a 15 per cent lift to housing prices.”

Supportive information sources: The Real Estate Conversation in association with REIA, REIV and Core Logic RP Data – published February 2015

The real estate industry has urged the Government to retain negative gearing in May, when Treasurer Joe Hockey will announce his second budget. In its pre-budget submission, the Real Estate Institute of Australia has defended the measure, saying it helps renters and investors alike.

“The evidence is clear that both negative gearing and the capital gains tax discount (CGT) feed the supply-side pipeline at a time of a chronic under-supply of houses in Australia,\” said REIA CEO Amanda Lynch. “Any alteration to the current arrangements would likely result in a need for a greater investment by the Government in social housing and could potentially increase rents – as recognised by the Henry Tax Review in 2010, which stated that the current provisions placed downward pressure on rents.\”

The REIA\’s submission has eight recommendations. Along with the retention of negative gearing, these include abolishing conveyance stamp duties and replacing them with an efficient source of revenue
for states and territories; not increasing capital gains tax on property investments; establishing a scheme to encourage young Australians to access their superannuation as a first home deposit; a uniformed approach to the provision of assistance to first home buyers for both new and established homes; continued funding for the Industry Skills Fund; better utilization of private investment to improve the supply of housing for social housing tenants transitioning to private rental; and a mechanism to ensure the availability of reliable data on housing demand and supply to assist in formulating effective policies.

Supportive information source: The Real Estate Conversation in association with REIA – published February 2015

The Commonwealth Bank of Australia was the first of the big four banks to pass on the Reserve Bank of Australia\’s rate cut. CBA is now offering its lowest-ever fixed mortgage rates by passing on the RBA\’s rate cut in full.

CBA said its standard variable rate mortgage will be cut by 0.25 per cent to 5.65 per cent, and its five-year fixed rate mortgage will be reduced by 0.30 per cent to 4.69 per cent, while its three year fixed rate mortgage reduced by 0.25 per cent to 4.69 per cent. The new [variable] rate of 5.65 per cent is the lowest since April 2009. The new standard variable rate will take place effect from February 20.

Westpac has also announced it will reduce its floating interest rate, by 0.28 per cent to 5.7 per cent per annum, exceeding the RBA cut. Westpac\’s new rate will effective from February 20. Westpac said the reduction will save homeowners $52 a month, or $624 a year, in repayments on an average $300,000 mortgage.

Bank of Queensland cut its variable home loan rate by 25 basis points immediately after the RBA announcement. ME Bank and ING Direct also moved on Tuesday.

This morning, Treasurer Joe Hockey told ABC Radio the banks should immediately pass on the interest rate cut. \”The flow-through to the Australian economy is significant, and importantly it must be immediate,\” he said. \”I say again to the Australian banks pass it on in full now, not just to home owners, but importantly small business and credit cards as well.\”

Supportive information source: The Real Estate Conversation in association with REIA – published February 2015

Melbourne housing market remains solid in latest quarter; rate cut to underpin growth

The Reserve Bank today reduced the cash rate by 25 basis points to 2.25 per cent, the lowest level since the 1950’s. Interest rates had been on hold for the past 17 months which provided a solid platform for the property market across Melbourne and Victoria.

The national rate of inflation is currently at 1.7 per cent – well below the RBA inflation target of 2-3 per cent – which indicates an accommodative environment for continued low interest rates.

Melbourne\’s housing market remained solid in the final quarter of last year, with the city\’s median house price of $669,000 up five per cent on the September quarter. Prices increased in inner, middle and outer suburbs.

Supportive information source: REIV Monthly Research Bulletin – published February 2015


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■BUYER’S ADVOCACY

For Buyer’s Advocacy Services in Melbourne – Master Advocates have the answers you need:

Whether you’re an investor or someone looking for that family home – buying property needs careful consideration.

At Master Advocates, we are your buyer advocacy experts and we are happy to answer any of your questions.

Are buyer’s advocacy fees tax-deductible?

A buyer’s agent’s fee is treated as a capital expense, which means it is deductible to you at the point of selling your property. Master Advocates specialise in issues about buyer’s advocacy and we are not qualified accountants, so we recommend that you speak to your own accounting expert to better understand you own individual financial situation.

Is buying at auction the best way to buy a property?

Generally speaking – no. Auctions inspire a lot of competition that is aimed at pushing the price up. Efficient negotiation through other sale methods is usually better for the incoming buyer and with Master Advocates looking after that for you, you know you are getting the best possible price.