Federal election 2019: Will Scott Morrison’s first homebuyer plan seal the deal

Lanai Scarr and Sarah StegerPerthNow

May 13, 2019 2:00AM

The battle over housing is on in the last week of the election campaign with Scott Morrison vowing to make it easier for first-homebuyers to get into the market.

Launching the Coalition’s official bid for re-election, the Prime Minister yesterday unveiled a plan that would enable young people on single salaries of $125,000 or couples on a dual income of $200,000 to only require a deposit of 5 per cent to buy a new home.

The remaining up to 15 per cent of their loan would be guaranteed by the government, saving buyers about $10,000 in lenders mortgage insurance.

The funds would be guaranteed for the lifetime of the loan and if buyers default the taxpayer would be up for the bill via $500 million in equity through the National Housing Finance and Investment Corporation.

The policy was matched by Labor immediately but sector experts say more detail is needed to determine if the measure will have as big an impact as hoped, with the Government yet to decide on regional caps for home purchase prices.

And some suggested the scheme, which will start from January 1 next year, may result in first-homebuyers overextending themselves or become a mechanism that keeps property prices unfairly high.

Even the peak first-homebuyers association said Labor’s reforms to negative gearing and capital gains tax would be better drivers to bring down house prices and get more first-time buyers into the market. “It could work out as a negative for first-homebuyers in the long run because it could keep house prices high,” First Home Buyers Australia director Taj Singh said.

“Labor’s reforms to negative gearing and capital gains are ultimately still a better plan as they will bring down prices overall.”

Mr Morrison said the policy was modelled on a similar policy in New Zealand.

He said it would give Australians wanting to buy a home “the first leg up on the first rung of the ladder”.

The NHFIC would partner with private lenders to deliver the scheme, prioritising smaller lenders to boost competition.

Australian Finance Group chief executive David Bailey said for West Australians in particular the scheme would be a welcome relief. “We’ve been on record saying the WA housing market has been problematic for last couple of years so any stimulus should be welcomed,” he said.

“Particularly in the WA market this will be a very good thing.”

Entrepreneur Dick Smith said he worried it might “encourage young people to get into tremendous debt”.

Louis Christopher from SQM Research said any regional cap on house price needed to be reasonable and warned that the expected uptake might not be as great if caps were too low in cities where house prices were high.

Gus Ledauskas, 31, and his wife Karolina Ledauskiene, 29, are just two of 10,000 Australians who could benefit from the policy.

The couple, who were at a home inspection in Tuart Hill yesterday, have been looking for their first home for several months, and welcomed the announcement.

Real Estate Institute of WA president Damian Collins said the scheme was “certainly welcomed” as was anything that “gets more people into buying a home”.

He said it was encouraging to know the scheme would come through regardless of the election outcome.

“It will get some more homebuyers into the market, especially those who did have a deposit but didn’t want to pay a mortgage insurance,” Mr Collins said.

“WA has already had a good State-based program with Keystart, but this will certainly help more people and give them more options.”

Mr Collins said he was concerned about the scheme’s start date, slated for January, and encouraged both parties to shorten the time line.

“It might cause a delay (in the market) … people who were going to buy now and are ready to do so might sit on the sidelines and wait now, which could impact the market,” he said.

“A wiser idea would be to bring it forward.”

Shadow treasurer Chris Bowen said Labor would match the commitment.

Labor will today launch a blitz reminding Australians of the 2014 Abbott government Budget which they say was a disaster.

“After six years of failure, and six days before an election, the Liberals are desperately trying to tell young Australians they understand their struggles to buy their first home,” Mr Bowen said.


De-cluttering Tips


Article source:  www.realestate.com.au

If you’re intending to sell your home this year, you’ll want to invest some time into de-cluttering – mess and chaos is one of the top turn offs for buyers. We accumulate a lot of things moving through life. Many outlive their usefulness (and if we’re being honest, some didn’t have much use to begin with). But we’re human and stuff sticks to us, which is why it’s important we shed some layers every now and then to maintain order and harmony.

  1. Ask for guidance from those you trust to be honest. Your agent will be impartial, and truly great friends often will be too. Check with them to gauge the full extent of your clutter and where you should focus your efforts. You may only have one room that requires a true work over.
  2. Look beyond what the eye can see. Clutter likes to hide in corners, on shelves and under beds. Hunt it down and don’t just stop with the most obvious areas. A prospective buyer will open cupboards and snoop into nooks and crannies to check out storage and other features. Make sure they get the best impression.
  3. Sort things into these categories. Things moving with you, things to donate and things to toss. Many charities can benefit from goods and clothing you no longer need. Have a garage sale for items you have culled that are in great shape and still worth something. Enough gold coin donations and you could convert mess into a bit of extra money to buy something you need in your new home, or treat yourself to a fancy dinner because you sold so much.
  4. Get a jump start on packing for your new place. Stack those trinkets away and you’ll be ready to invite buyers through your home before you know it. Personal items should be stowed first, keeping any lovely items of neutral décor till last (they could save you from having to invest in furniture or accessories for home staging).
  5. Create space in the kitchen by clearing surfaces. Let the buyer see your counter tops, walls, even the fridge door. Don’t just shove items into another cupboard. Apply the same rigor to removing that clutter as you would any other room, and sort ready for packing, donating or tossing.
  6. Leave some space in cupboards. Even if their contents are impeccably neat, buyers will want them to feel spacious, and be able to picture their own things in there.
  7. The kids aren’t immune. Children’s toys and teenage posters aren’t usually effective property marketing. Cull ruthlessly and store things out of sight.
  8. Store boxes you’ve packed until that SOLD sign goes up. Make sure they’re not visible to people inspecting your home.
  9. Get some help! Enlist family members, friends – whoever can lend a hand to make the process less frustrating and time consuming. Pop on a favourite play list while you clean and sort and before you know it, your place looks like new. If you’re really struggling, or don’t have access to an extra pair of hands, you can explore the services of a professional organiser to give you a road map and set you on the right track.
  10. Start small (but start). Remember the clutter didn’t arrive in your home all at once. It won’t leave that way either. Pick a room or an area and make a start – you’re on your way!

The best smell for your home

Article source:  www.realestate.com.au

If you’re selling your home, you’ll have a bunch of people (wisely) advising you to make sure it smells nice for inspections and viewings to help your chances of landing a sale.

Eric Spangenberg from Washington State University conducted a study out of Switzerland back in 2010 to determine the most “commercially inspiring odours” – that is, what smells make a person feel compelled to make a transaction (or at the least, feel more comfortable about it).

They tested a bevy of smells with Swiss shoppers and found that simple rules. Sales went up and people were more in the mood to buy when a single, uncomplicated odour was in the air, versus multiple or complex whiffs. Spangenberg says this is because the more complicated the scent, the more our brains focus on processing it, rather than processing what’s around us (including stuff to buy or explore).

In a series of separate experiments, the researchers had students solve world problems in competing scent conditions. The students solved more problems in less time when the simple scent was in the air, than with the complicated one or no scent at all. “Most people are processing it at an unconscious level, but it is impacting them – the important thing from the retailer’s perspective and the marketer’s perspective is that a pleasant scent isn’t necessarily an effective scent,” he said. The best scent when selling is clean, fresh air, in other words no overt smell.

Spangenberg advises against the following:

Artificial smells such as sprays or plug ins.

They smell as though they are masking something (they probably are).

A scented candle, incense or pot pourri.

Scent is such a personal thing. You might think the incense sticks you bought in Bali or the expensive candle that you received for Christmas are helping the sale of your property but others may not share your taste or worse might have an allergic reaction to it.

Baking or brewing coffee.

Staging has moved on and most people have heard the trick of cookie dough, fresh bread baking or coffee brewing, but I think it’s trying too hard.

Most buyers are wise to these tricks and might see it as just that – a trick.

So smells can help sell your house, but just don’t go nuts with the incense, or it might backfire.

It’s time WA received its fair share

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

REIWA is calling for all political parties contesting the Federal Election to commit to ensuring Western Australia has the funds required to keep up with our infrastructure needs.

WA is routinely overlooked at a Federal level when it comes to infrastructure investment. A recent example of this was in the 2019-20 Federal Budget announcement earlier this month, when the Morrison Government allocated $1.6 billion of its $40 billion infrastructure budget to projects in WA.

The $1.6 billion allocation is a mere 4% of Australia’s total $40 billion budget, which is exceptionally low when you consider WA is home to 10% of Australians and WA currently accounts for 15% of the country’s Gross State Product (GSP).

Considering how much our state contributes to the nation’s economy, it is only fair we receive at least the same percentage in Federal infrastructure funding. REIWA is advocating for the implementation of a minimum Federal infrastructure budget based on WA’s contribution to Australia’s GSP. As it stands WA is currently the only state without an independent infrastructure body, tasked with the planning and prioritising of major projects.

The McGowan Government has done its part to ensure we get a fair share of funding through the establishment of Infrastructure WA, which aims to build a strong economy by improving infrastructure coordination and planning, encouraging investment and supporting job creation.

The Infrastructure WA Bill 2019 is currently before the WA Parliament. If this bill is passed, it will enable an independent body to be established and a long-term infrastructure strategy to be put in place.

While the strategy will ensure WA gets its fair share of funding in the future, this is still some years from being a reality. In the meantime, the newly elected Federal Government must ensure WA receives adequate funding.

In the past couple of weeks there have been some positive developments in this space, with the announcement of three Federal funded state projects which include the $1.7 billion transformation of Tonkin Highway, the Metronet Bayswater station upgrade and the Metronet boom-gate blitz planned for the Armadale line.

While REIWA is pleased these projects are receiving funding, the timing of these announcements raises questions about whether this is more about political point scoring to win votes in the upcoming election than give WA its fair share. It is imperative whoever is elected to government ensures WA remains a priority into the future.

Removing negative gearing would hit landlords, tenants hard.

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

Changes to negative gearing and capital gains tax are a hot topic for debate in this year’s Federal Election. The Australian Labor Party has made its intentions clear, having announced its plans to make changes effective January 1, 2020 if elected.

REIWA strongly opposes the decision to meddle with one component of our national tax system. Changing negative gearing and capital gains tax without properly considering all the consequences is a reckless decision, one that will significantly impact everyday Australians and further stifle Western Australia’s already struggling property market.

History has already shown that removing one component of a complicated system does not work. In the 1980’s when negative gearing was removed the impact was so great across the country it was reintroduced just two years later.

One of the biggest myths in property is investors are wealthy moguls with extensive investment portfolios. The reality is the vast majority are ‘mum and dad’ investors with less than two rentals who are utilising property investment to help secure their future. According to data from the Australian Taxation Office, 330,000 Western Australians own at least one investment property and of those, 215,000 rely on negative gearing to help offset losses incurred through owning a rental.

If prospective investors are no longer able to use this mechanism many will reconsider if property investment is financially viable, causing them to withdraw from the private rental market or seek alternative investment options.

This will have huge implications on the WA property market. We’ve already seen the value of investor loans decline 69% since 2015 due to the soft market conditions and subdued consumer confidence levels. Any changes to negative gearing or capital gains tax will only serve to further deter investment in the WA property market, which is the last thing we need.

Our local vacancy rate has declined to 2.3% from a high of 7.3% in a little over 18 months. If landlords are deterred any further from investing in the WA property market, it will be tenants who will ultimately bear the financial burden of this financial change, with a shortage of rental supply guaranteed to push up rent prices and reduce affordability – which is exactly what we saw happen in the 80’s.

A report released last month by SQM Research detailed how the Australian Labor Party’s plan to abolish negative gearing would negatively impact tenants. It showed rents would rise across the country by between 7% and 12%, with tenants in Brisbane and Perth likely to be the most affected.

Those vying for our country’s top positions seem to have little regard for the WA property market when considering such dramatic shifts in property taxation policy. This election, REIWA is calling for all contesting parties to commit to not tinkering with negative gearing or capital gains tax until a full government review into the implications has been conducted.

A nice garden can add huge value to your home

West Real Estate   The Weekend West   (14th April 2019)

How much value do you place on your lawn when you are getting ready to list your home for sale? According to a recent survey conducted by Turf Australia and Raine & Horne Real Estate Agents the answer should be “fairly high” as the survey revealed gardens can add more than $100,000 to the value of a home.                                                                                                                                             While this figure might sound too high to be true, the basis for the result is quite simple.

Forty percent of agents surveyed believed a nicely presented lawn could boost the value of a home by more than 20% whilst almost one quarter (23.3%) said it could add more than 30%. Based on the Australian median dwelling price of $524,478 according to CoreLogic, a 20% increase equates to over $100,000.

One of the key markers to pay attention to when looking for this increase was “a nicely presented lawn” meaning the lawn needed to be bright, luscious and green to really hit the spot. Professional renovator and interior designer Bonnie Hindmarsh said re-turfing a front or backyard had the power to provide an instant facelift and could transform a space without costing the earth. “Lawn is a wonderful drawcard for buyers when selling your home,” she said. “Gardens and lawns are nearly always a second thought when renovating, but they can have a powerful impact and can make a great first impression – lawn renovations are a relatively small investment in comparison to other renovations around your home but can have a huge impact on your overall house appeal when selling,” she said.

Among the results from the Turf Australia and Raine & Horne survey, 24% of agents said potential buyers always or usually would not buy a house without lawn, whilst 50% of agents surveyed had advised clients to add lawn to their home pre-sale. According to the real estate agents surveyed, the main attractions of lawn for buyers were the improved look and feel of a property, added lifestyle and relaxation appeal and a safe playing area for children.

In addition to revitalising the lawn, Ms Hindmarsh had other budget friendly renovation tips for preparing a home for sale. “Simple cost effective changes like soft furnishings are a wonderful way to give your home that fresh feel – new cushions for your lounge, some crisp new linen for your bedroom or decluttering are inexpensive ways to freshen up a space,” she said.

“Sprucing up your front door with some new hardware and a coat of paint are fabulous ways to add interest to your property and the cost can be kept low by doing it yourself,” she said.

Another tip from Ms Hindmarsh was to spray the façade using a spray gun. “Paint always gives you the biggest bang for your buck and changing the whole colour of your exterior can happen in as little as two days with the right preparation and tools,” she said.

Her parting piece of advice for getting the house ready for sale was not to get too worked up if things did not quite go to plan. “Renovations are always going to throw a curve ball at you at some stage – roll with it, deal with it and move on,” she said.

“It will make the whole process easier as no matter how much you plan and budget, not everything will be perfect – don’t let perfect get in the way of better,” she said.

Time to abolish heavy burden of stamp duty

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

If you’ve ever purchased a property, you’d be well aware of what a financial impost stamp duty is.

Widely regarded as inefficient, stamp duty presents a significant hurdle for first homebuyers, trade-up buyers and downsizers throughout their property journey, impacting immensely on affordability. It can be as much as 5% of the purchase price of a property.

As part of its “What about WA?” federal election campaign, REIWA is calling for all federal political parties to commit to providing funding for states and territories to undertake a full feasibility study into how phasing out stamp duty could be achieved if elected.

For most buyers, stamp duty eats away at their deposit for a property, meaning they are forced to borrow this amount on top of the loan to purchase the property. This means they are paying interest on the stamp duty cost across the whole life of their mortgage.

For example, if a family saves $50,000 for a home deposit, which is no easy feat, and is looking to buy a home at the current median house price of $512,000, $18,783 of that deposit will go towards stamp duty.

That family has now lost nearly 38% of their deposit and they will need to borrow more. In addition, they will almost certainly be required to take out Lenders Mortgage Insurance, which will cost them another substantial amount on top of their loan.

This not only hinders affordability, it impacts the ability for households to make appropriate housing decisions in accordance with their lifestyle choices, changing needs or economic reasons like employment.

Stamp duty is also not the lucrative tax it once was for the Western Australian Government. Transactional activity in WA has declined considerably in recent years, with the number of annual property sales falling from over 71,000 in 2013 to less than 40,000 in 2018 – the lowest level of transactions recorded since 1990. This has impacted significantly on the state, with far fewer transactions resulting in far less stamp duty revenue for the WA Government.

By abolishing stamp duty and implementing a broad-based land tax system, the cost of property taxes would be spread across many years, creating a steady stream of reliable income for state and territory governments.

It would also remove the upfront financial burden from homebuyers, helping to make homeownership a reality for more Australians.

Plenty of positives in the 2019-20 Federal Budget

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

REIWA welcomes the 2019-20 Federal Budget handed down by Treasurer Josh Frydenberg on Wednesday 2 April, which predicts a budget surplus of $7.1 billion by the end of the 2019-20 financial year.                                                                                      REIWA President Damian Collins said the country’s improved fiscal position was a good indicator of economic recovery and he hoped WA would not be overlooked by the Federal Government.

“For too long WA has been a mere afterthought of our federal political parties. The country’s improved financial position presents the Federal Government with a good opportunity to increase its investment in Western Australia and help our local economy recover and prosper,” Mr Collins said.      In addition to the projected surplus, the budget includes no changes to property taxes or increases to taxes at all.

“This is welcome news for real estate agents, particularly those operating as a small business who can take advantage of the increase to the instant asset write-off threshold to $30,000. This budget also provides tax relief for those earning less than $126,000, which is welcome news as well as a change in the tax rate to 30 cents in every dollar for those earning between $45,000 and $200,000 from 2024,” Mr Collins said.

“The Federal Government has also recommitted to the Perth City Deal, which REIWA welcomes and is a key advocacy component of the Institute’s 2019 federal election campaign. It is imperative that the Perth City Deal be a priority in 2019-20. Perth has waited more than two years for its City Deal that will provide additional funding for METRONET and other projects that will provide local jobs.”

While overall, the 2019-20 Federal Budget is positive, REIWA is disappointed with the decision to cut overseas migration from 190,000 to 160,000 annually over the next four years. “This policy is aimed at reducing congestion and overcrowding in cities like Sydney and Melbourne. Western Australia on the other hand has seen a decline in overseas migration but needs migrants to fill demand for housing, increase housing construction, create jobs and stimulate economic growth,” Mr Collins said.

“Any plans to cut migration on a national level will further hamper the recovery of the WA economy and property market. REIWA would like to see Perth back on the Regional Migration Scheme to ensure we have the population to support a strong property market and wider economy,” he said.

The Federal Government has also pledged a total of $40 billion to national infrastructure projects, however WA has only been assigned $1.6 billion of this funding.

“WA has yet again failed to receive its fair share of funding. Our state is home to 10% of all Australians and we produce almost 15% of the country’s economic output, so we should receive at least the same percentage in federal infrastructure funding,” Mr Collins said.

REIWA will continue to advocate for a fair share for WA of federal funding, as well as a commitment from the Federal Government to provide funding for the states and territories to conduct a feasibility study into abolishing stamp duty.

UDIA lays out priorities for government

by UDIA WA President – Nick Allingame            www.udiawa.com.au/

UDIA recently launched its 2019 policy priorities document ‘Developing Great Places to Live, Work and Prosper’, with a particular focus on improving housing affordability and providing greater housing choice in every suburb.

The document outlines recommended actions for government across six areas, including housing affordability, streamlining approvals systems, housing choice, infrastructure investment, liveability and environmental outcomes.

Housing affordability remains a significant challenge in Western Australia despite recent declines in the average price of housing.                                                                                                                                              Homeowners remain out of reach for many on low to moderate incomes and this is an issue that must be addressed.

One of the key aspects of tackling housing affordability is providing a range of housing options throughout the metropolitan area so we are offering people options close to public transport links, services and amenities.

Some of the immediate actions in terms of affordability we have outlined for government include increasing the threshold for Keystart loans by 25% so more people can access this important service, facilitating more ‘build-to-rent’ projects and incorporating an affordability impact statement into all relevant cabinet decisions to ensure cost impacts on consumers are minimised and addressed when making new policy.

In the longer term, we would also like to see the abolishment of stamp duty and the introduction of a fairer and more equitable broad-based land tax system to enable more people, such as downsizers, to transition to more appropriate housing.

In terms of creating more housing choice, UDIA has requested the government encourage investment in new housing supply and rental stock by using appropriate housing taxation policies.

A public education campaign around the benefits of increasing housing choice in every suburb, including infill locations, is also needed to bring the community on board with increased density in appropriate areas.

A clear policy framework to deliver quality medium density housing products is also required. That is why UDIA is advocating for the introduction of a medium density housing code, which is part of the next stage of Design WA.

Looking at the longer term future of Perth as a more liveable city, UDIA has been leading the call for a clearer ‘brand Perth’ that will attract people to the state and support the development of our economy.

We would also like to see incentives for local governments to develop and achieve housing strategy density targets.

These are just a taste of the range of actions UDIA has suggested the government needs to take to ensure we are working together to achieve smart, sustainable and liveable communities into the future.

UDIA – the Urban Development Institute of Australia

Buyer’s agents give clients an edge when purchasing property

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

Whether you are looking for your first house, an investment property or a new home to suit your growing family, it can be challenging to navigate the Perth market and the buying and selling process alone.

This is where a buyer’s agent can make a big difference. A good buyer’s agent will work with you, from helping you scour the market for your dream home or investment to negotiating the offer and liaising with the seller and their agent.

Buyer’s agents are still relatively new in Perth, but they can have a significant impact on the success of your purchase. You only need to look at the growing popularity of buyer’s agents in Sydney and Melbourne and indeed other parts of the world like the USA, to recognise these services give buyers and investors an edge when searching for property.

As the name would suggest, buyer’s agents act on behalf of the buyer, helping them to locate their ideal property and negotiate the lowest price with the best terms and conditions the seller will accept. They do all the groundwork and necessary research for you, so you can be sure you’re 100% informed when making the decision to purchase.

On the other hand, seller’s agents, or real estate agents, ultimately work for their client – who is the seller. Their goal is to sell property at the highest price in the shortest timeframe, negotiating contract conditions which benefit the seller. They have to be fair to the buyer but their ultimate duty is to their client.

Buyer’s agents are not tied to any listings. Their focus is on the buyer’s wishes and they can review all properties available on the market, pointing out their strengths and weaknesses.

Hiring a buyer’s agent takes some of the emotion out of the transaction. A buyer’s agent will fairly assess the property’s worth and recommend the appropriate price the buyer should be willing to offer and the conditions a buyer should attach to the contract to buy the property.

Having a buyer’s agent on your side keeps you objective and helps prevent you from overpaying for a property or making mistakes.

Through extensive research, networking and experience, a buyer’s agent will save you money, time and effort. They know the real estate market inside out and understand how different properties can best meet a buyer’s investment strategy.