Effective property management the key to a successful tenancy

by Damian Collins – REIWA President     https://reiwa.com.au/

While the majority of tenancies are successful, there remains a portion that results in either the tenant or landlord moving to terminate the agreement prior to the end of the lease.

By far the most common cause of a breakdown in a rental agreement is financial hardship. This is a big problem, as the loss of job or a change in a relationship status can leave people in a worse financial situation than they were when they agreed to the terms of the lease.

On the other hand, landlords are also facing their own financial pressures, including tighter lending criteria, a shift from interest only loans to principal and interest, a reduction in rents over the last few years and loss of equity. With both situations at play, this can often result in significant financial hardship and housing insecurity on both sides.

The next is excessive property damage – this is something that happens less often, but it is very difficult to mitigate the risks. Ultimately, the onus is on the tenant to keep the property to the agreed standard, to avoid a breakdown in the rental agreement and the loss of bond.

So how do we best mitigate the risks involved in a tenancy? The first thing is clear communication between the tenant and the property manager. If you are a tenant experiencing issues, make sure you let the property manager know as soon as possible. They may be able to work with you on behalf of the owner to resolve the issue. If the tenant ignores the issue then the property manager will be left with no choice but to terminate the tenancy.

You may also wish to contact the REIWA Information Service. REIWA receives thousands of calls a year to the REIWA Information Service from both property owners and tenants seeking advice.

It is evident that there is a huge lack of knowledge and understanding of the Residential Tenancy Act, and therefore the rights and responsibilities of each party, which is when these breakdowns occur.

Not every tenancy will be smooth sailing, ultimately knowledge is power. The better you know your rights and obligations and those of the other party, the more likely a tenancy is to be a success.

Hiring an experienced property manager with the skills and knowledge to deal with any situation that arises is the best way to safeguard against the early termination of a lease. When it comes to property managers, the benefits far outweigh the costs.

A REIWA property manager can provide valuable insight, having been through each situation many times before, and can guide and assist both parties to ensure a positive outcome for all involved.

Perth still a buyer’s market

 

by Damian Collins – REIWA President       https://reiwa.com.au/

Perth homebuyers remain the beneficiary of the local property market, but with signs indicating a recovery is on the horizon, the favourable conditions that currently prevail won’t last forever and buyers should act soon if they want to secure a home at current prices.

Last week, REIWA data partner, CoreLogic, released the national home value index results for September which showed that while house values in Perth continue to soften (down 2%), the annual rate of decline has started to ease.

REIWA.com data supports CoreLogic’s findings, with the median house price for September coming in at $505,000, marginally lower (by 1%) than it was the same time in 2017. Comparatively, three years ago the median house price was declining at a more significant pace, recording a 4.2% decline between September 2015 and September 2014. Although prices in Perth remain soft, the rate at which the median price is declining has slowed, which is good news.

Improved affordability in the Perth housing market presents excellent opportunities for first homebuyers to get their foot in the door. This combined with interest rates that remain at record lows, means if you’re in a position to buy, the timing has never been better to secure your dream home.

While Perth buyers are not in danger of the market rapidly accelerating in the next 12 months, there is every chance we will start to see prices strengthen. If you’ve been weighing up whether now is a good time to buy, I’d encourage you to act sooner rather than later.

We are lucky in WA that the dream of homeownership is still attainable. While property markets on the east coast are starting to cool, house prices in major cities like Sydney and Melbourne are still significantly more expensive than in Perth.

The median house value in Sydney sits near $1 million, almost double the price in Perth. You’d be hard pressed to find an affordable home within 10 kilometres of the CBD, but in Perth there is plenty of opportunity to buy below the median house price close to the city, with suburbs like Balga, Westminster, Nollamara, Cloverdale, Redcliffe and Belmont all presenting affordable options.

If you’re not concerned with living close to the city and would prefer to live on the fringe suburbs of Perth metropolitan area, there are even more affordable options, with some properties in the metropolitan area priced as low as $200,000.

If you’re thinking about buying a home or investment property, speak with a local REIWA agent to discuss your options and see what properties are available in your area. You may also wish to speak to a REIWA buyer’s agent, who will be working for you and can help you find the home or investment property you are looking for.

Coast is the most for locals

Extracted from ‘The Joondalup Times’       www.communitynews.com.au

The City of Joondalup has released the findings from its Coastal Survey.

The survey was held from May 31 to June 29 and its results will be used to develop a coastal hazard risk management adaption plan to address risks of erosion and inundation along the City’s coastline.

The City received 1,318 responses, with 88.6% saying they visited the coast at least once a week in summer and just under 80% visiting at least once a week in spring.

Respondents were asked to rate from zero to 10 how important it was to them to be able to visit the coast, with 69.2% rating it 10 – very important – and more than 90% rating it 8 or higher, with an average rating of 9.5.

The most popular coastal areas that are potentially vulnerable to future climate change impacts were Mullaloo and Hillarys beaches, with 62.1% and 57.1% of respondents visiting them most often, along with Pinnaroo Point/Kallaroo (35.8%) and north Burns Beach (32.9%).

The most popular activities were walking, running or sitting on the beach; walking, running or cycling on the coastal path; and visiting cafes, restaurants and shops.

Other feedback included the need to limit development, and to protect and maintain the City’s coastline and its ecosystems.

However, respondents also wanted to develop the coastline in an appropriate way, particularly with the addition of cafes, as well as providing more animal parks and beaches along the coast, particularly for dogs.

Foreign buyer surcharge sends wrong message

 

by Hayden Groves – REIWA President      https://reiwa.com.au/

Last month, REIWA came out publicly to encourage all members of the Western Australian Parliament to oppose the foreign owner duty surcharge, which will be voted on later this year.

The McGowan Government will introduce a new property tax on foreign buyers despite an election promise of no new taxes.

REIWA has been strong in its criticism of this plan as any new property tax would deter much needed investment in the state and only serve to stifle a market that is just starting to show signs of a recovery.

With population growth in WA having slowed considerably over the last couple of years, the WA Government should be implementing policies that attract people to the state, not deterring them with additional taxes.

Aside from Darwin, Perth already has the lowest level of foreign investment and foreign students of any capital in the country. The state is also on the verge of a skills shortage and we need foreign families to fill that void. Introducing a new property tax at this time will only dampen the incentive for foreigners who are not permanent residents to relocate and live here.

For those that do come to WA, they will be inclined to remain in the rental market for the duration of their stay or until they obtain permanent residency, in order to avoid the hefty tax. In the longer term, the impact of this surcharge on foreign investment will be felt by local tenants, who are likely to face increased weekly rent prices due to lowered housing availability.

The consequences of this new tax would not be solely limited to overseas buyers either. Western Australians with foreign spouses who purchase a home together would also be affected by this surcharge, with 50% of the value of the property eligible for the 7% tax under the Government’s proposed legislation.

This new tax does not target ‘wealthy’ investors, something the government has hastened to promote. In fact, land bought to be developed into eight or more dwellings is exempt from the surcharge under the proposed legislation in its current form.

Foreign investment in our state is a positive thing. WA has a long history of migrants coming here to work and raise a family. We should be encouraging this, not deterring it with unjustified taxes.

Any short-term financial gain delivered from this kind of surcharge is likely to be counteracted by long-term losses as investors seek alternative places to invest.