NEWSLETTER – NOVEMBER/DECEMBER 2015
ADELAIDE SOUTH PROPERTY IS HERE
From the 1st November this company has been trading in the name of ADELAIDE SOUTH PROPERTY. The Lin Andrews Real Estate Morphett Vale franchise ended as we could no longer see any advantage for this company or its clients to continue in that association. We have therefore decided to go in a new direction which is of greater benefit to our landlords, tenants and vendors. Nevertheless the parent company of Danster Pty Ltd with ABN 80 113 334 797 is unchanged whilst the superficial trading veneer has undergone a makeover.
In our last Newsletter we said this is the next phase in our evolution however we emphasised the same staff members are still here and the way we do business remains the same but now we are sporting a renewed agenda.
The ultimate goal of real estate companies may vary in the detail but most see the measure of their success in the number of sales they have listed and the number of properties they have under management. Whilst I can fully understand this perspective it tends to reduce the business into a machine processing real estate transactions like sausages spat out along a conveyor belt. However having made that observation I still wish for the conveyor belts to be full for all my companions in the real estate industry but I see this company as having a far different objective.
We still need our conveyor belts to be full of real estate transaction sausages but full so that we can pursue our objective of giving meaningful advice to people on all aspects of not just real estate but of every manner of financial transaction that can affect their lives.
We see our customers as people who understand that ownership of real estate is a mile-stone goal in life; that bricks and mortar and sods of land can be a store of wealth and an investment for the future that give financial security into retirement and provide for their families. But why come to us rather than any other real estate agent?
Real Estate should be more than just a necessary evil like a trip to the Dentist
We want you to come to us to sell your investment property, or any other property, for that matter – but if we ask nothing more than how much you want to sell it for and when, then we are not doing you a service.
As a company who is supremely interested in where you will be financially in 10 or 20 years time or at retirement we should be asking a lot more, provided, of course, that we are invited.
How many times have I made wrong decisions in the past and they seem to haunt me. Even now I drive past houses I once owned that I sold during periods of doubt and I shed a quiet tear.
Lost opportunities and rash decisions that can’t be revisited. If I had had the right advice at that time I could count my wealth in squillions by now, or at least in numbers that are relatively respectable.
This is the motivator behind out motto;
YOUR INVESTMENT OUR PRIORITY
This will not affect the way we conduct ourselves in the day to day operations of this company in handling the sale or management of your property but we will endeavour to give sound advice and guidance to all those who are open to it by using all the expertise we can muster including mortgage brokers, insurance brokers, quantity surveyors, builders, valuers, accountants, financial planners and others.
Our priority becomes your financial well being through the things you invest in.
The difference we want to deliver to the market place is as agents who will give sound advice that speaks to where you are and where you need to be to achieve financial freedom.
Most agents say things like, “Nobody does it better”, “Your place for all things real estate”, “We know about real estate”, “We are ready to discuss your property needs”, “We deliver results”, “Your local real estate experts”, “Smarter, bolder, faster”, “We are not like the rest”, “Superior Marketing Solutions” …
The list goes on and on. It makes you think if some of these real estate agents were selling slogans instead of houses they would be rich enough to retire tomorrow.
But we want to go beyond propaganda
By examining your current financial situation we are able to tell you how much you will have when you retire; what you will need to retire comfortably in the life style you want and whether you are going to fall short. We will not only be able to tell you what you will need to do to make up any shortfall but we will also be able to put into place strategies that will get you to the financial freedom that you have worked for your whole life.
By this and a lot more we will show you that YOUR INVESTMENT IS OUR PRIORITY.
Early last month the Reserve Bank voted to leave interest rates the same at 2.0%. But virtually at the same time the big 4 banks; Commonwealth, Westpac, ANZ and National Bank increased their rates!
So what is the point of the Government trying to control the economy when we have these banks setting their own rules? I would not be alone in thinking that the banks are ‘off their leash’!
That sounds like a contradiction in terms; big profits should mean high share prices but recent changes in regulations require them to keep more capital in reserve as a buffer which should make them more resilient in the event of another financial crisis. Keeping all these funds in reserve combined with new requirements to have tougher lending criteria means it is less profitable for them to write loans.
Faced with the prospect of lower future profits the banks are looking to recover these costs from their share holders and their customers. So for the customers it means higher interest rates.
Various experts predict that the capital rules on banks are only going to get tougher which will put more pressure on them to lift interest rates and fees even further. This trend will likely continue unless their competition, the smaller banks and credit unions, can come up with cheaper products to steal away their customers and so put pressure on the Big 4 in the other direction to keep their prices down.
Only time will tell how this works out for the consumer.
Aussie banks survived the Global Financial Crisis very well and have a reputation for being among the most profitable in the world so it is hard for the average person to feel too much sympathy for them.
Over the last few years the Reserve Bank has repeatedly reduced the cash rate in order to stimulate the economy and the Government of the day has meekly implored the banks to pass on the full savings to their customers. This has so often been followed by the banks doing the exact opposite. Few of us would not be infuriated by this.
One way or another, the government needs to keep the banks on a tighter leash and it is up to the consumer public to vote with their feet to seek out the smaller operators in the finance industry. There are a lot of institutions to choose from that still have big financial backing behind them and a long history of service in this state.
We all need to search them out and this highlights the growing trend of using brokers to do the looking for you. Although they get paid commissions from the banks to place business their way good brokers can be amazingly candid and honest in telling you exactly what they think.
This company and our clients have had great experience in dealing with Wendy Perry from Smartline and you could do well by getting an opinion from her.
It should also be noted that we do not receive any financial, or other, benefit from referring anyone to Wendy but if we need to get a tricky loan application through for an approval of a sale then Wendy would be our first port of call.
Feel free to ring Wendy or us here at anytime.
LAND CAN TAKE A LONG TIME TO SELL BUT NOT IF YOU DO IT RIGHT
When the government releases land for new residential developments there is inevitably a rush to snap up a block. Prices can often be controlled by the government to prevent scalping or the pricing of first home buyers out of the market by investors and very soon a new estate is all sold.
But things seem to change when you see individual blocks for sale in established suburbs. These would appear to be aspirational locations for many; places where they grew up and which are usually closer to the inner city where Adelaide people seem to be drawn like moths to a flame.
It sounds good but it doesn’t seem to happen as fast as in the outer suburbs where most land releases tend to happen and it’s not all because of the price difference. Sure, single blocks can be sold at whatever price the market can bare so they are bound to take a bit longer than in the big land releases where there is some government control, but that’s not the full story.
There seems to be a real failure in the marketing of many agents. When a real estate agent has to do an appraisal for a house or land they have numerous resources to work with including all sorts of websites and data bases, not to mention simply scrolling through www.realestate.com.au which is the most popular real estate website.
It soon becomes apparent that certain properties are so difficult to assess due to the lack of information supplied that you tend to pass them by. It can be so hard to even work out what is included with some sales. You can look at the photos but they can be so selective; how could anyone make a decision based on them. Not even a floor plan is available in many cases.
It is even worse for the sale of land. Most blocks for sale will only have a site plan and the most vague or glamorised description. If it is within 1km of the ocean you may get a photo of a seagull on the beach or for you may be supplied with photos of the best local attraction within a kilometre or two.
But what people really want to know is; let’s see the land now; is there a slope; what is the street like; what are the neighbours like; are they nice people; what does it feel like to be there?
We recently had for sale 2 blocks of land at Russell Street Magill. It was a development of a block of land that had an old 1950’s fibro or asbestos 2 bedroom home with nothing to attract anyone. When the tenants have left the house will be demolished, land is to be subdivided and sold separately.
Question: So what would you do to sell a subdivision here?
Answer:… Just answer the questions mentioned above with simple clear aerial photos taken with a drone.
For just $220 we got some awesome shots above the property that made it very clear what the area had to offer. One photo direct above and from the front of the house; one down the north end of the street; one down the south end and one from behind looking toward the city.
Buyers were able to clearly make a judgement of the area and even precisely select which block they wanted based upon the photos. Someone asked if there were any significant trees that might inhibit development so we only had to refer to the photos online which spoke for themselves. Of course they drove past later but no one needed to even enter the property which is still leased to tenants.
Bottom line is that within 12 hours of posting the 2 blocks for sale on www.realestate.com.au it was all over but the shouting! Only the contracts, Form1’s and other paperwork had to be completed before we slapped an ‘UNDER CONTRACT’ sticker over the signboard.
Some signboards almost rust out before a property is sold but not these.
To see more have a look at the link below:
RESERVE BANK HOLDS INTEREST RATES STEADY FOR THE 7th MONTH
On 1st December the Reserve bank, amid the usual speculation, held the cash rate at 2.0%, once again, for the 7th consecutive month making this the longest period of low interest rates for home borrowers in history.
The Governor of the Reserve Bank, Glenn Stevens, said “Key commodity prices are much lower than a year ago, reflecting increased supply, including from Australia, as well as weaker demand. Australia’s terms of trade are falling.” http://www.rba.gov.au/media-releases/2015
He also said, “In Australia, the available information suggests that moderate expansion in the economy continues in the face of a large decline in capital spending in the mining sector.” That all suggested Australia is doing better than some may think. There is reason for some optimism.
Two other key points worth noting were, “The Federal Reserve is expected to start increasing its policy rate over the period ahead … “ and “Members also observed that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand.” So it looks like they are having a bob each way.
It was, however, good to hear them note there was, “… stronger growth in employment and a steady rate of unemployment.”
And following on from the disgust of many commentators it was recognised, “Growth in lending to investors in the housing market has eased. Supervisory measures are helping to contain risks that may arise from the housing market.” But the board thought the banking environment was better for business and commercial.
Again the economy will play out until the board meets next month.
CHANGES IN STAMP DUTY
Various changes to Stamp Duty were brought into state law on 26 November. They have the potential to be real game changers and a boost for business according to John Stankevicius of Jonas & Associates Accountants. Unfortunately they don’t include Stamp Duty of home purchases but it’s a start.
He says, “The abolition of stamp duties on commercial properties will allow business owners to transfer their commercial properties to their superannuation funds or risk free trusts without the threat of stamp duty. Investors have begun to look at opportunities to buy commercial properties to take advantage of the announcement.”
John and Jonas & Associates have had a long experience with Self Managed Superannuation Funds and we recommend that you consider these options for yourself.
We do not necessarily endorse everything that is said by people and companies we make
reference to in this newsletter but in all situations before making any decisions
based on what you read above we recommend that you do
your own investigations first to determine
if any course of action is
right for you.