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Aug 29, 2018
Why the Majority of Owners Use Property Managers
Domain.com report that 1 in 4 landlords do not have a property manager. This can make a large difference in how repair issues such as a blocked toilet is resolved. The 75% who do use property managers won’t need to lift a finger as the property manager arranged an emergency plumber to fix an issue. However, the remaining 25% who take on the DIY approach would be organising tenants, tradies and bills. A property manager does more than just advertise to attract tenants to a property. Here we list some of the ways they can make a landlord’s life much easier. 1. Making maintenance simple The above scenario occurs every week in real estate agencies across the country. REIA president Malcom Gunning said that when the blockage in the toilet is found to be foreign matters, then it becomes the tenant’s problem and cost for repair is theirs to front. Gunning speculates that if you were managing the property yourself, you would likely be in for a one-on-one confrontation with your tenant. “Instead, your property manager becomes the adjudicator and they can have those difficult conversations,” he says. “They can navigate the expectations of both the landlord and the tenant and apply the lease conditions fairly.” 2. Controlling tricky conversations According to Carolyn Parrella, executive manager for landlord insurance specialist Terri Scheer Insurance, it is advantageous to have a buffer between landlords and tenants. “It means you’ve got someone who’s there to take calls when your hot water service breaks down at 8pm,” she says. “It’s less personal, and keeps you at arm’s length. It’s also a time issue – it can be quite time-consuming to arrange maintenance and inspections. If you want to manage your property well, it makes sense to appoint a manager to do it for you.” 3. Hiring quality tradies For smooth and timely repairs, relationships with good tradies is also key. “We’ve got a group of tradies that have worked with us for many years,” says Gunning. “We know they’re reliable and will do a good job and won’t need to be called back. The property manager is aiming for quality service for a reasonable cost.” “We’ve got tradies who we’ve used for some time now” says Cathy Elliot from First National Metro. “We know they are reliable and will provide quality service at a reasonable cost." Instead of paying premium landlord prices, director of Property Alchemy Penelope Valentine says good property managers will always get at least two quotes. “The policy should be to work with the best professionals, making sure everyone is licensed and insured.” 4. Keeping to rights and regulations Valentine believes that trying to manage an investment property yourself is a false economy. “Let’s say your tenant damages your property. If you don’t have the expertise to manage those issues, they can escalate unnecessarily and landlords will find themselves at the tribunal,” she says. “A property manager can save an investor time and money.” Parrella says a professional manager knows the fine details of the regulations that govern tenancy agreements and are also continuously keep up with regulation changes via newsletters, advice bulletins and training as a requirement. “The average investor is not going to know the ins and outs of the law,” she says. “It’s better to leave it to someone who is familiar with the processes and understands what’s involved.” Gunning agrees that navigating the tenancy act when problems arise is where the value of a professional’s skills are most visible. 5. Choosing tenants that fit Valentine says that choosing the right tenant in the first place is a vital part in setting up the tenancy for success. “It’s more involved than investors think. You can go on a gut feeling but there’s so much due diligence that needs to go around that.” Access to tenancy databases allow property managers to avoid tenants with a bad rental history that might include breaking a lease, failing to pay rent or damaging a property. It’s also likely that they’ll keep their own database of prospective tenants for the area they service. “Each Saturday, if you’ve got a reasonably large portfolio, you’re doing open homes and you’ve got a list of people that come through looking to rent,” says Gunning. “So when you get a new listing you can make a call and lease it quickly – you may not even need to do marketing.” 6. Understanding market movements A property manager can also give you a strong and up-to-date understanding of position of the market. “They’re exposed to the whole of the market in their district, so they’ve got a pretty clear indication of rates and can advise when rents should hold, go up or go down,” Gunning says. “In this current market where you’ve got vacancies above 2 per cent, you need a good gauge on what will lease your property. Your property manager can help you set the right rent and show you how to present your property well.”
Aug 29, 2018
Australia's Construction Surprise Boom Set to Stick
According to Domain.com, it will be some time until Australia’s construction boom cools, with new figures showing building work valued at a record $29.9 billion. The June-quarter saw an increase of 2.5% over the March-quarter figure and a larger increase of 6.5% over the year to date. These results have been a surprise to many, after several forecasts of softer increases being predicted after a weak result in the previous quarter. This rise has been driven by residential construction, which according to Domain.com, increased by 3.1 per cent in the June-quarter. Detatched-homes building work was worth $9.1 billion and units accounted for $8.1 billion. “It’s a very strong result for the quarter – a lot of forecasters were anticipating construction would fall away quite quickly at the peak in 2016,” Geordan Murray, senior economist at the Housing Industry Association, said. “But we’re seeing the level of activity maintained, and it’s proving to be a resilient cycle for residential building,” Mr Murray said. Mr Murray said that the total residential construction work was valued at $19.3 billion, was a preliminary figure that underestimated the true value of contribution to GDP. Total construction work, including residential, non-residential and engineering, in Victoria and NSW were the main drivers of that growth. Mr Murray said home renovations were weaker than other residential construction, down to $2.1 billion. Which is a decrease of 3.1% in the past quarter and 4.6% in the year to date. “That’s probably indicative of the fact that we’re continuing to see the slow growth of household income,” he said. “There’s a lot of residential development happening in the last few years and that involved people purchasing off the plan and that’s due to the delays of when an estate releases free sales through to when construction begins.” Mr Murray expects that construction activity will continue to filter through sales from 18 months to two years ago. Therefore, the value of construction work will remain high for the next 12 months. The strong results follow a strong rebound in building approvals in June. AMP Capital chief economist, Shane Oliver said the surprisingly strong results will not last. “It’s certainly a lot more than I was expecting but that’s probably not going to be sustained because approvals might start to fall down again and you’re seeing a reduction in the crane count,” Dr Oliver said. While he didn’t expect the rate of growth to last, Dr Oliver said it would help the economy for the time being. “The bottom line is it will help the economy [keep] going … there was a lot of concern the economy will deteriorate.”
Aug 28, 2018
Brisbane's House and Unit Market - August 2018
Brisbane’s steady and sustainable growth over the past five years suggests that unlike other capital cities, there is no boost to come - but rather, there is still room for growth. Annual rate of capital gains has weakened as Brisbane has seen a decrease in the annual capital gains from 2.9% a year ago to 1.2% over the past 12 months. Therefore, while Brisbane is the best performing in capital growth, the results are mild and this is only the case as other capital cities have slowed down. Within the unit market, construction peaked almost two years ago. Since then, unit supply is winding down and population growth in the capital city is ramping upwards, we may see local unit market staging a gradual improvement. However, unit values need to rise by 11% before it returns to the previous nominal high which we saw almost a decade ago. According to Corelogic, 23 Brisbane suburbs median house price is $1 million. Below is a summary of West End and surrounding areas’ markets. Median Value of Current House Market: West End: $1,045,682. Highgate Hill: $1,076,921. South Brisbane: $1,157,228. Median Value of Current Unit Market: West End: $479,611. Highgate Hill: $453,643. South Brisbane: $439,973. Brisbane City: $479,457.
Aug 16, 2018
Southern Renters Migrate to Brisbane for More Affordable Rent
While Sydney’s market vacancy rate rises and desperate landlords slash rent in an attempt to hold on to tenants, Brisbane is seeing its own vacancy rate shrink as demand rises and absorbing the surplus stock, easing the concerns about the inner city’s oversupply. While in Queensland, the power may currently reside with the renters for the next year and a half, Research managing director, Louis Christopher predicts the market to favour landlords in two years. An estimated 9886 residential rentals are sitting vacant in Brisbane in comparison to nearly 20,000 in Sydney, news.com.au reports. Sydney’s vacancy rate is now the highest in 13 years as 2.8 per cent of the city’s units and houses are unoccupied. Despite this, the asking rent for a three bedroom house in the city remains the highest in the country at $707 a week. While for a house in Queensland rose 0.1 per cent in July to $452 a week and unit rents remained steady at $370 a week. “For southerners, there’s definitely a standard of living benefit through doing the move — provided they can find a job in Brisbane or thereabouts,” said Mr Christopher. “Up until two years ago that was the problem, but the Brisbane economy has been rebounding thanks to the end of the mining downturn and so job creation has increased and it’s become a little bit easier to do that move and find a job that goes with it,” Mr Christopher said. Mr Christopher said he expected the surplus rental supply in Brisbane to continue to be absorbed in the next 12 to 18 months. However added, two years from now the market will significantly favour landlords. Realestate.com.au chief economists Nerida Conisbee said that over the past year, the online portal had recorded a 12 per cent rise in demand for rental properties in Brisbane. Meanwhile in Sydney, demand for units and houses had fallen 25 per cent over the same period. “We track rental demand on views per listing and Brisbane is well up, so it’s not surprising we’re seeing this drop in the vacancy rate,” Ms Conisbee said. “There just seems to be this recovery occurring in the Queensland economy and renters are often a better indicator of what’s happening than buyers, because they can be driven by speculation.”
Aug 14, 2018
Home Office Styling Tips
In the 2016 ABS, 61.5% of West End were said to work full-time with 47% working over 40 hours a week. Within families, 31.5% were made up of two working parents. With that said, the increasing trend of Australian employees working from home is just as important as ever. So to help our busy locals out we’ve created a list of home office styling tips. 1. Write a list of must haves. Don’t allow yourself to be overwhelmed by choices and create a list of what you really need for your office area. In creating this list, think of your space, items you already own, along with costs. This way when you’re looking for luxury items later on, you still have the space and dough to treat yo’ self. 2. Keep it light. The mood of a room can really make or break a day in the office. An important part of the mood is made up of the lighting. If the space isn’t blessed with bountiful natural lighting, invest in some nice lighting for the room. Another way to keep your working mind in a good mind is to decorate the room with feel-good bits and pieces. What you choose depends on your unique style but plants, motivational quotes and art are all fool-proof ways to keep the mood up. 3. Organisers Don’t allow future you to be overwhelmed by inevitable clutter. Stop by your local stationary shop and pick up some organisers to help future you out. 4. Re-use old furniture. This tip is for the Thrift store lovers out there! Small second hand dining table can make for a great desk while adding some unique character to the space that may not have some from a new generic desk. Back to the organiser’s comment earlier, empty candles and vintage glasses make for handy and pretty substitute for holding pencils. 5. Feel free to move things around. Once you have it all together, move the room around until it feels right. To maintain the space’s usefulness for the long-term- think of your own lifestyle, preferences and the convenience of places.
Aug 7, 2018
Retail Stores are Getting Smaller in Order Grow
Coles has announced that it will follow the lead of other large retailers such as Woolworths and Target, by opening smaller-sized supermarkets in more locations. As Australia’s population density increases, many retailers are shrinking to grow as a result of increased pressure on available real estate for retailers. High rents, lack of prime real estate and rising inventory and wage costs have all contributed to need to restructure. Retailers have responded to the increased competition and costs in two ways. The first being ‘rightsizing’; the term used to describe the closure of underperforming and unprofitable locations. Myer is an example of this occurring. The second being ‘downsizing’, which many stores are partaking in by shrinking their store footprints. Established firms, along with retail start-ups are taking this small store a step further by opening ‘micro’ stores. While others are adapting this concept by using their smaller shopfronts as a ‘click and collect’ point for their online customers. Smaller stores appeal to shoppers looking for convenience as limited product offering in the smaller space allows shoppers to make decisions more easily. The stores appeal more directly to affluent baby boomers and millennials who shop more frequently with smaller basket sizes. These shoppers demand personalisation, special services and quality products.
Jul 31, 2018
E-commerce Encourages Change to Retail Industry
If you’ve noticed that retail stores are looking a little more on the miniature side these days, you’re not wrong. Shopping centres across the sunshine state are responding to e-commerce competition by undertaking major refurbishments, changing their tenancy mixes and embracing ‘Omni-channel retailing’ with increased use of a mixture of websites and brick-and-mortar outlets to sell stock. Online spending may currently hold nine per cent of the Australian retail market but it is tipped to grow to 12 per cent by 2022 according to CBRE. In comparison, CBRE predict that brick-and-mortar retail is expected to grow at only about 3.2 per cent. This has caused for Traditional retailers to find new ways to grow sales to stay competitive. Research shows that despite growth in the online shopping; traditional sales volume has increased over the years. According to a 2015 DHL report, Omni-channel shoppers spend up to 30 per cent more than traditional shoppers. This is giving incentive for retailers to invest in Omni-channel technology and transform the traditional retail store. E-commerce is increasingly seen as an opportunity for retailers, rather than a threat due to its opportunity to increase reach and provide a more convenient service.
Jul 24, 2018
Office Designs Show the Value of Social Workplaces
Employees are increasingly expecting more from their work environment, leading to companies seeking for office spaces which offer more than the standard layout. As convenience and enjoyable workplaces are on the list of what employees are looking for, we see changes in new office fit outs are reflecting the trend in Human Resources. Worker’s lunchbreak are also changing as they prefer to eat with colleagues rather than alone. They also prefer to spend time in outdoor lounges and cafes instead of their desks. It is important for the industry to recognise and embrace the fact that offices are becoming centre for social activity. These trends have caused for employees to be drawn to major or central CBD locations. Renewal precincts such as Brisbane are being well sought after. Aesthetics isn’t the only focus in deciding on an office space with special attention being place on reactivating workplaces to promote productivity. Studies have found that vibrant designs encourage collaboration, with better work-life balance in turn delivering better output and efficiencies. The evolution of open plan offices allows for flexibility within the office plan, promoting creativity, productivity and teamwork at its core. The flexible layout allows for Activity Based Working (ABW) as employees don’t have their own designated desk, but rather have access to several different working spaces which they can move around to depending on the task they are completing at that time. Mr Prosser told Commercial Real Estate “Landlords are often increasing their budgets for spec fit outs in order to improve the overall finish to give their tenancies the point of difference they need.”