Author Archives: Terry Hansen

year

What will 2021 have in store for Outer Western Sydney property?

It’s certainly been a year unlike any other.

This time last year nobody would have been able to predict the rollercoaster ride that was 2020, but even as we all came to grips with what it’s like to live through a global pandemic, things haven’t turned out too bad for the Sydney property market.

The real estate market has been extremely resilient and while we saw things slow down as the country entered into lockdowns, things have already started to pick up again.

Of course, just as we couldn’t predict 2020, it’s impossible to know for certain what will happen in 2021 (or we would all be filthy rich), but in the short to medium term the market looks set to continue on its recovery.

We may see some people being more conservative with their purchases as they wait to see how future events unfold, but there are a lot of other people who are eager to take advantage of some of the market’s current drawcards.

For one, the cost of money is negligible, with some lenders offering home loan rates of less than 2 per cent.

In addition to low rates, both the state and federal governments are offering a number of incentives to entice buyers, particularly first-home buyers and those purchasing new homes, such as the First Home Loan Deposit Scheme and HomeBuilder.

These schemes have been designed to help provide a much-needed boost to the building industry, which is one of the country’s biggest employer’s.

Things are looking good for 2021

These drawcards, coupled with the fact that the property market has held up so well in 2020, is likely to keep property prices competitive and it is looking very likely that we will see a rising market next year.

While the property market probably can’t afford substantial gains, it’s looking like there will be a lift in house prices, possibly by about 5 per cent or so.

Is now the time to buy and/or sell?

If you are thinking of buying or selling your property then there are a lot of reasons why you would be better off doing so sooner rather than later.

For those thinking of selling and upgrading their property, you would likely be better off doing so before the market takes off again.

While it might sound like a good idea to hold out and wait for prices to go up a further 5 per cent, you need to keep in mind that prices will also be up on any property you purchase too.

Most costs involved with your sale and purchase are scaled to the amounts in your transaction, so if you wait for prices to go up then you would not only be looking at an extra 5 per cent on a more expensive home but you could be looking at paying higher stamp duty and you’ll possibly be up for lenders mortgage insurance too, if you can’t make up the required 20 per cent deposit to avoid it.

So by waiting to upgrade you could actually end up spending thousands more.

For those simply looking to enter the market, the sooner you buy the better off you are likely to be in the long run.

In the Outer Western Sydney market in particular there is a lot happening, with major infrastructure works such as the new airport and metro line keeping buyer interest strong.

Everybody should of course do their own due diligence and assess their own personal circumstances before purchasing a property, but there’s a lot of good reasons to get into the market right now if you are in a strong position to do so.

metro

Time’s running out to have a say on Western Sydney Airport Metro Project

The community is currently invited to provide feedback on the Sydney Metro – Western Sydney Airport’s Environmental Impact Statement (EIS), which is on exhibition until Wednesday 2 December.

The EIS provides a detailed picture of what the 23km rail line that will connect St Marys to the new Western Sydney Airport will look like.

Six stations have been proposed along the line, including two at the Western Sydney International Airport and one at the Aerotropolis.

At St Marys there will be a new station built alongside the existing train station that connects to the T1 Western Line to the Sydney CBD.

The construction of the station is projected to play a vital role in the revitalisation and renewal of St Marys as a strategic centre, with it becoming an important connection between the new airport and the Sydney CBD. 

New stations have also been proposed at Orchard Hills and Luddenham to service a future mixed-use precinct and an education and innovation precinct.

These new stations are projected to become central hubs that will be able to cater to new communities, and allow for new homes, jobs and recreation options to meet the needs of the fast growing western Sydney region.

Will construction affect you?

The Sydney Metro – Western Sydney Airport line will undoubtedly bring about new opportunities for western Sydney communities, making travel between Sydney and the new airport quicker and easier.

Trains will turn up every five minutes and it will take just 15 minutes to travel between St Marys and the Airport terminal.

Overall the project is going to be a game changer for western Sydney, but there are negative aspects that need to be considered too, such as environmental impacts and how people are going to be affected during the project’s construction, for example.

That is why it’s so important that people who live or work in the western Sydney community read the project’s EIS to make themselves familiar with the changes that will be taking place.

How to provide feedback

To review the Western Sydney Airport Project’s EIS and to provide your input visit the interactive portal at www.sydneymetrowsa.com.

house

4 questions you might have about the current property market

We’ve all been bombarded with conflicting news headlines this year, which can make it difficult for people to figure out what is true or not when it comes to how the property market is performing.

It was only a short time ago that house prices were falling and economists were predicting dire times ahead for the market, however while there was a bit of a rough patch it didn’t take long for things to turn around and house prices to make their way back up again.

So, what’s really going on with the property market? Should you jump right in or wait until the dust settles on the rollercoaster that’s been 2020?

Is it a good time to buy?

No matter what is happening in the property market the answer will always be the same – the best time to buy is when you’re in a good financial position to do so.

There is however no arguing that there are a lot of great incentives around at present for buyers, including crazy low interest rates and government grants and concessions.

Changes to lending rules are also expected to come about in March next year, which should make it a little easier for buyers to access credit too.

If that wasn’t enough, most people are predicting property prices to continue on their upwards trajectory as the country (and the world) recovers from COVID-19, so this might be the cheapest that house prices will be for a while.

What incentives are there for first-home buyers?

If you’re a first-home buyer then there’s a lot to be happy about right now.

Not only can you still take advantage of the NSW Government’s $10,000 First Home Owner’s Grant for new purchases along with transfer duty concessions, but there’s also the option of taking up the federal government’s First Home Loan Deposit Scheme.

This scheme allows first-time buyers to get into the property market with a deposit of as little as 5% (and no LMI), meaning you can get into the property market much quicker than you might otherwise have been able to.

On top of this, if you’re building a new home you can still take advantage of the $25,000 HomeBuilder grant – but you’ll have to be quick because it’s set to expire soon!

Are there any properties I should avoid?

There’s little doubt that our property priorities have changed since the pandemic began, but most people are still looking for basic fundamentals like location or a certain number of bedrooms.

At the start of the pandemic people might have been put off by high-density living due to wanting to decrease their interactions with people as much as possible and wanting to have more space during lockdown.

But as time goes on many are realising that the pandemic isn’t going to be around forever and there’s still a lot to love about urban living, such as the sense of community it offers as well as a low maintenance and convenient lifestyle.

Some buyers have been moving away from highly populated areas and favouring lifestyle destinations, but it still remains to be seen whether this will be a long-term trend.

Property prices might be down for certain properties because they don’t have the demand they normally would from tourism or international visitors, but this might simply mean that you can pick up a bargain before things pick up again.

Should I hold off on selling?

Property prices may have dipped somewhat at the start of the pandemic, but overall the property market has been quite resilient and held up relatively well considering the year it’s been.

At present there is a lot of confidence in property and buyers are out in force hoping to get in while interest rates are low and government schemes are still around.

Some markets are performing better or worse than others of course, so it never hurts to do a little bit of research in your own area.

Find out what other properties similar to yours are selling for. It’s also well worth having a chat to local agents for some insider information on what is going on near you.

Everybody’s situation is different, but if you looking to sell you might very well find that there’s no better time than the present.

airport

NSW reserves over $9 billion for rail to Western Sydney Airport

The NSW Government announced a whopping $107.1 billion spend on infrastructure as part of this year’s State Budget, and a big slice of that will be going toward fast-tracking the Sydney Metro Western Airport project.

Over the next fours year the state will be allocating $9.2 billion to the project, with an immediate $809,953 million of that to be spent this financial year.

The major cash splash is expected to create up to 14,000 jobs during construction, which will provide a massive economic boost for Western Sydney.

NSW Treasurer Dominic Perrottet said the project will “become the transport spine for Greater Western Sydney, connecting communities and travellers with the new Western Sydney International Airport”.

“Our growing Metro network will reach Western Sydney Airport in time for reopening in 2026,” he said.

Another significant project to receive funding from the 2020-21 State Budget is the Sydney Metro West line that will create a second rail connection between the Parramatta and Sydney CBDs. This has been priced at $10.4 billion over four years.

On top of this the west will benefit from more than $656 million being invested into the construction of Parramatta Light Rail Stage 1 and the allocation of $1.3 billion to complete the final stages of the WestConnex Motorway.

NSW Minister for Transport and Roads, Andrew Constance, said these “game changing projects” are creating jobs and delivering economic benefits to local communities.

“By 2024, Sydney will have 31 metro railway stations and a 66km of standalone metro railway system, revolutionising the way our city travels”, he said.

“The Sydney Metro West project alone will help double rail capacity between Greater Parramatta and the Sydney CBD, transforming Sydney for generations to come.”

For more details on the 2020-21 State Budget visit www.budget.nsw.gov.au/budget-detail/building-better-nsw.

flipping property

Is NSW scrapping stamp duty?

The NSW Government has come up with a bold new plan for how tax is paid on property in the state that could bolster the economy by making it easier to purchase a home.

The proposed changes will give people the option to either pay stamp duty and land tax (where applicable) or pay a new smaller annual property tax.

If it gets the go ahead, homebuyers will essentially have the option of paying one big lump sum when they purchase a property or they can opt to pay a small annual fee as long as they own their home.

Why the need for change? 

Stamp duty has come under a lot of scrutiny in recent years, with many arguing that the tax measure is out-dated and a major barrier to breaking into the property market.

According to NSW Treasury, stamp duty adds $34,000 to the upfront cost of buying an average home in NSW, which takes an average of two and half years to save for.

Compare this to back in 1990 when it took an average of one year to save.

The truth is that when stamp duty was introduced in 1865 house prices were much lower and people didn’t move around as much.

A lot has changed since then and with house prices having risen significantly, stamp duty has become a major hurdle for those trying to buy a home.

It’s not just first-home buyers that are affected either. Stamp duty costs can put people off wanting to move homes once they make a purchase because they don’t want to be made to pay the fee again.

Some more details on the proposed changes 

First of all, there’s no need to panic if you already own a home because the proposed changes will only apply to those buying property. There will be no double taxation.

Under the changes, owner-occupied homes will be up for less tax than investment properties.

As for first-home buyers, who are currently eligible for stamp duty concessions on properties worth up to $800,000, they will be given a grant of up to $25,000 that can be used towards the tax or home renovations. 

How you can have a say 

If you’re interested in finding out how the tax reform might affect you then head to www.treasury.nsw.gov.au/property-tax-proposal.

The treasury is also looking for feedback on the changes so you can also head to the above web address if you’re looking to provide any input.

realtor

Should I use the First Home Loan Deposit Scheme if I’m a first-time buyer?

If you’re looking to buy your first home then no doubt you’ve heard about the First Home Loan Deposit Scheme (FHLDS) by now.

But for those who haven’t, it essentially allows first-home buyers the opportunity to get into the market with as little as a 5 per cent deposit, without the need to pay expensive lenders mortgage insurance (LMI).

The program has been incredibly popular ever since it was introduced at the start of this year, with many having to be quick to snap up one of its limited places.

But, just because you can take advantage of the FHLDS does that mean you should?

Is a 5 per cent deposit enough?

Obviously one of the big drawbacks in purchasing a home with a small deposit is that you would need to pay LMI on top, which can add thousands of dollars onto your purchase price.

The FHLDS does eliminate a big cost for those eager to get into the property market as quickly as possible, however it’s important to realise that taking out a home loan with a lower deposit does leave you paying interest on a larger amount, so you will still end up paying more than if your deposit was bigger.

You could end up stuck with a particular loan

While lenders that support the FHLDS have promised not to charge its borrowers a higher interest rate than similar borrowers, it’s worth keeping in mind that a lower-deposit home loan is still likely to attract a higher interest rate than a loan entered into with a larger deposit.

Once you have a loan you are also going to find it difficult to refinance or switch lenders, as you won’t have a lot of equity in your home.

Normally to refinance you will need at least 20 per cent equity in a home to avoid paying LMI.

Your property options will be limited

Another big consideration before stepping onto the FHLDS bandwagon is whether or not it’s compatible with the type of property you intend to purchase.

The new round of places released in the latest Federal Budget are limited to those building or purchasing new homes, which eliminates a lot of properties straight off the bat.

The scheme also has price caps and other conditions that may limit property options for those looking to buy through the scheme.

The verdict  

There are undoubtedly some drawbacks of the First Home Loan Deposit Scheme, however it has a lot of positives too.

Saving up for the 20 per cent deposit needed to get a traditional home loan without LMI is no easy feat, and can take a number years for even the most diligent of savers to achieve.

Because of this a lot of first-home buyers have been quite happy to enter the market with a lower deposit (even if they were up for LMI) if it meant they could get a property sooner, particularly in markets where capital gains have been climbing faster than people’s savings.

But now first-home owners may not feel the extra pressure to save up for the full 20 per cent deposit, and can get into the market sooner without having to worry about the extra costs associated with LMI.

The scheme isn’t suitable for everyone, but it is a great bonus for those whose property goals it aligns with.

To find out more about the scheme and whether or not you might be eligible visit www.nhfic.gov.au/what-we-do/fhlds/.

shop

New shopping centre on the cards for St Marys

St Marys could soon be welcoming a new shopping centre to the area, if plans for it can get the tick of approval from Penrith Council.

According to the Western Weekender, Haben Property have submitted an unsolicited request to purchase land at 5-13 Gidley Street to make way for the centre, however the land is currently council owned and being used as a parking lot.

If the shopping centre is approved it’s set to include six specialty shops, a large Coles, state-of-the-art child care centre, medical centre and about 350 car spaces.

Haben Executive Director Melissa Kingham said in the Western Weekender that the proposal was a response to the compulsory acquisition of Station Plaza, where land is needed for the construction of Sydney Metro’s North-South rail link.

“We are only proposing to purchase part of that site, approximately 5,200sqm and 170 car spaces,” Ms Kingham said.

“The car parks are proposed to be replaced with a deck car park to be built by Haben but remain in Council ownership.”

Haben originally had plans to redevelop Station Plaza, however the acquisition of the land means this is no longer able to go ahead.

There’s no doubt that plenty of businesses and members of the community will be hoping to see the development go ahead, with Haben highlighting that it would help save jobs and improve pedestrian links to Queen Street.

Whether or not it will go ahead however is still to be decided by council, so watch this space.

 

Source: westernweekender.com.au

calculator

Aussie tax cuts have kicked in – what does it mean for you?

Some Australian workers may start to see some extra dollars in their bank accounts this month as the Federal Government’s Budget 2020 tax measures start coming into effect.

The tax cuts were initially scheduled to happen two years from now but were brought forward to give the economy a boost in the wake of COVID-19.

Changes to the tax system will mean that from 1 July 1 2020:

  • the low income tax offset will increase from $445 to $700;
  • the top threshold of the 19 per cent tax bracket will increase from $37,000 to $45,000; and
  • the top threshold of the 32.5 per cent tax bracket will increase from $90,000 to $120,000.

The cuts will mean that a person earning $120,000 a year will receive a boost of $47 a week, while someone on $60,000 would see about $20.77 extra a week.

In addition to the above, low- and middle-income earners will receive a one-off tax benefit of up to $1,080 for the 2020-21 financial year.

Around 11 million Australians are expected to see some benefit from the tax cuts, providing people with more money to spend on the things they need.

Tax cuts for businesses

To help keep Aussie businesses strong there are also a number of tax initiatives in place for businesses.

Businesses with a turnover of up to $5 billion will be able to immediately deduct the full cost of eligible depreciable assets acquired from 7:30pm (AEDT) on 6 October 2020, as long as they are first used or installed by 30 June 2022.

To complement this, the Federal Government will also temporarily allow companies with a turnover of up to $5 billion to offset tax losses against previous profits on which tax has been paid.

In normal times, businesses would have to return to profit before they can use their losses, however, these have certainly not been normal times for businesses.

Losses incurred to June 2022 can be offset against prior profits made in or after the 2018-19 financial year.

The Government is also providing businesses with an aggregated annual turnover between $10 million and $50 million access to up to ten small business tax concessions.

On top of all these changes, the Government will be enhancing previously announced reforms to invest an additional $2 billion through the Research and Development Tax Incentive.

All of these changes have been designed to help support businesses and keep people in jobs.

Those looking for more information on the Australian tax system can find it on the ATO website.

outer western sydney real estate

Aussie house prices have bounced back

The Australian housing market has seen home prices rise for the first time since the COVID-19 pandemic began.

Figures from CoreLogic’s national home value index showed that residential property values were up by 0.4 per cent in October, following five months of consistent declines.

Values were up in every capital city, except Melbourne. Prices have started to stabilise in the city however, with a decline of just 0.2 per cent for the month.

In Sydney, prices were up by 0.1 per cent for the month, bringing the median property value up to $860,955.

It seems to be the top end of the market that has led Sydney’s price growth, despite having underperformed through most of the pandemic.

October’s monthly results showed the upper quartile was up by 0.3 per cent compared with a 0.2 per cent lift across the lower quartile.

According to CoreLogic’s Head of Research, Tim Lawless: “While this is only one month of data, it has often been the case that premium housing markets lead both the downturn and the upswing, so it will be interesting to see if higher value properties gather further momentum over coming months.”

Consistent with the rise in dwelling values we are also seeing strong auction activity.

“Sydney’s clearance rate breached the 70% mark in late October for the first time since early March, and auction volumes have been at similar levels as last year,” Mr Lawless said.

“Melbourne, which is normally the largest auction market, saw the number of auctions held rise from virtually nothing in September to around 600 auctions over the final week of October”.

Overall, market activity has been on the rise across the country, likely due to record low interest rates, generous government support, improving sentiment and the low number of new virus cases.

While CoreLogic warned of the possibility of distressed sales due to the winding down of JobKeeper and the home loan deferrals expiring, this doesn’t seem to have had an impact on housing market performance as of yet.

If anything the outlook for the property market is looking mostly positive at the moment, and with mortgage rates having just dropped again, there’s a good chance that market activity and property values will continue on their upward trajectory.

 

Source: www.corelogic.com.au

plans

The RBA has cut rates – but are you paying less on your home loan?

Just when you thought rates couldn’t get any lower the Reserve Bank went and cut the official cash rate to a razor thin 0.10 per cent.

But, as always, a drop in the official rate doesn’t necessarily mean that your home loan rate has lowered too.

While a small cut in interest rates may not seem like much, it could actually help you make significant savings, so it’s well worth making the effort to get the lowest rate available to you if you can.

As we mentioned in our blog post last week, refinancing to the lowest interest rate could save the average homeowner around $395 a month.

So, what should you do?

Find out what rates are being offered

The first step in scoring a lower interest rate is seeing what different banks and lenders are actually offering.

A quick online search should give you a good indication of the rates currently available.

Don’t forget to also find out what interest rate you’re paying on your current loan so you have something to compare other deals and rates to.

Call your lender

Once you know what is out there it’s time to call up your current lender to see what they can do for you.

Sometimes all it takes is the mention of a competitive lender’s offer to get your lender to come to the table and offer a better deal.

You may not be able to get your lender to agree to the lowest rate on the market, but any saving is worthwhile and if you like the other benefits that your lender offers you then you might be happy to stay on.

Consider switching – but be mindful of fees

If you’re not happy with your current home loan rate then you always have the option of switching to a new lender.

Before you do this though you should make yourself aware of any fees that your current or new lender may charge you for switching, such as break fees or application fees.

You’ll also want to check out the length of your potential new loan. If you refinance to a new 25 or 30 year loan then it might take you a lot longer to pay it off than your current loan. The longer your loan is, the more interest you’ll pay.

Also be mindful that if you have less than 20 per cent equity in your home you might be up for paying lenders mortgage insurance, which could negate any savings you might make from a lower rate.

Should you fix? 

Many lenders – including the big four banks – have decided not to lower their variable interest rates in line with the RBA, however many have reduced their fixed home loan rates.

This means there are currently some very attractive fixed rate home loans on the market, with rates lower than 2 per cent.

If you want the reliability of knowing how much you will have to spend each month then a fixed home loan could be a good option, but fixed rate loans may mean that you can’t make extra repayments, or that you might be up for break fees if you decide to change loans during the set period.

It’s also worth noting that interest rates look set to stay low for the next few years at least, so there’s little worry of a rate rise anytime soon, if that’s something that concerns you.

For further advice though you should always seek out a financial professional or talk directly with your lender.