How To Find The Best Home Loan For Your Property In Western Australia
Many home buyers don’t actually know how much they can afford to borrow until they actually apply for a loan. This situation is not ideal because an informed home buyer is always in a much better position to make an offer on a property.
Up until about ten years ago it was pretty much the case that the ‘rule of thumb’ for buying a home was that you could borrow about three times your gross household income. So, if a couple was making $110,000 between them each year, a bank might loan up to $330,000.
This rule of thumb doesn’t apply terribly well today with house prices having grown so much. In January this year, the median purchase price for first home buyer in Western Australia was $400,000.
Of course, the price will vary depending on the suburb you are interested in. For example, in 2010, the median purchase price in the popular suburb of Subiaco was $1.3 million while in Kardinya is was $600,000. You can research other Western Australian real estate prices at the REIWA web site.
One way to a smooth start with a home loan is to have a healthy deposit. If you don’t have a deposit, it’s a good idea to start a regular savings program in preparation. Lenders do require evidence of savings before approving a home loan.
A trap for many first time borrowers is to put all their savings into the purchase of a new home. It’s wise to have a cash reserve of at least two months mortgage repayments to cover unexpected costs.
Talk to your financial institution or mortgage broker about the deposit. Most prefer a deposit of around 10 per cent the purchase price, but this is becoming unrealistic. Deposits of 5 per cent are now common.
Ask your lender to outline, in detail, all the fees that apply to the loan. Remember to including mortgage costs, mortgage insurance, stamp duty or any other fees that may apply. These costs are added to your home loan. Rather than looking at how much the bank will allow you to borrow, it makes more sense to concentrate on how much you can comfortably afford.
For more information about home affordability and applying for a home loan, please visit www.reiwa.com.au
What You Need To Know About Selling Your Home In Perth
Perth real estate and homeowners who neglect their homes and then need to sell at short notice often encounter problems because the property simply isn’t ready for sale.
keep your home and garden in top condition. Keep up with regular maintenance on your property. Do annual inspections on the roof and gutters to ensure problems can be fixed in reasonable time. Especially now that it’s getting harder to find and schedule quality tradespeople in Western Australia’s tight labour market.
Inspect the hot water system and air-conditioners regularly. Attend to any faults or repairs quickly. Unresolved issues might be uncovered during an inspection. It’s much easier and cheaper to do regular maintenance on your property than last minute emergency work.
Don’t forget an annual termite inspection too. Many sales are interrupted by the discovery of white ants. This can delay a settlement and result in extra costs to the seller.
You should also be thinking about how you will sell your property? Use the services of a competent, licensed real estate agent with a good knowledge of your local area. Local agents know the Perth real estate market and meet with prospective homebuyers often. Speak to agents about the best strategy to sell your home and set a realistic timeframe for this.
It’s critical that you fix a realistic selling price. It’s important to listen to your agent about setting the right price, and also if he or she suggests you modify the price after a few weeks if potential buyers have shown little or no interest.
Historically, real estate in Perth has generally experienced a five-year property cycle. Like all real estate cycles this includes periods of low activity, recovery, booms and downturns. This cycle will influence the selling price and REIWA agents are well placed to explain where in the cycle your sale is likely to be, and how to best respond to that.
Take time early in the process to arrange or restructure your finance or home loan. Making an appointment with your mortgage broker or bank manager is vital. It might be the case that your existing home loan can be refinanced to include extra funds needed to buy your next home. Arranging your finance early will free up valuable time for when you do eventually sell. Doing this can save you stress, time and money.
Be prepared for a sale by ensuring the property is looking good, following the property market, talking to licensed agents, having the right selling price in mind and meeting with your bank or mortgage broker to plan your finances.
REIWA Dismisses Perth Property Growth Claims By BIS Shrapnel
The Real Estate Institute of Western Australia has dismissed claims by BIS Shrapnel, that house prices in Perth, WA would grow by around 7 per cent each year for the next three years.
REIWA President Alan Bourke said this prediction was not supported by current trends in real estate data.
“REIWA data is showing that the number of properties on the market in Perth has jumped by 32 per cent since January, with more than 14,000 listings currently up for sale in a sluggish market,” said Mr Bourke.
Mr Bourke said the rental market in Perth was also quite soft.He said rents have remained steady for more than a year and a half and that the vacancy rate of available properties is hovering around 4.
“The reality is that the uncertain economic conditions overseas, coupled with concern about the resources super tax and a lowering of the expected migration intake over the next year is making the local market very flat, with many buyers waiting until after winter and the looming Federal election to see how things pan out.
“I expect that the Perth property market will be very steady for at least the next year, then after that we may start to see some modest growth, but nothing like 22 per cent over three years, that just isn’t realistic under current conditions,” Mr Bourke said.
Mr Bourke said Perth was now a buyer’s market. Home opens seeing many people doing the rounds to make sure they saw everything in their price range to ensure the best deal.
“Sellers need to understand that the Perth market will be flat for at least a year, so it’s important to listen to your agent about setting the right price for a quick sale,” Mr Bourke said.
How To Choose A Block Of Land In Perth
You have just arrived at a new land estate with the intention of buying a block on which you will build your future dream home. How will you pick the best block? At the moment there is a huge choice of land estates in Perth.
The decision can be hard to make, especially if there is little or no difference in price. Data by the Real Estate Institute of Western Australia indicates there are more than 2,000 blocks of land currently on the metropolitan Perth real estate market.
If you are in this situation, it’s important not to get flustered and just think about the best site characteristics to suit your building plans.
Imagine the likely house design and its orientation with the block. Think about energy efficiency and try and maximize the areas which face north to receive the winter sun, and conversely minimize the exposed window areas facing west into the summer sun.
Ask the developer or local Council about the minimum distance required between the front of the house and the road and the distance required between the house and side fences. These are known as ‘setbacks’. If you have bought a block and find that the setbacks don’t suit your preferred design you’ll have to change it or possibly chance your luck and seek special consideration from the Council.
What might you see out of your new windows? If you are buying into a production home area make sure you have a good level of privacy that meets your needs.
Does anything have the potential to block your views? What are the builder’s plans for homes around you? Is any urban construction planned by the Council which might later be visible from your site?
How is the lot shaped? How best will your home of choice fit on it? It may be worthwhile to inspect the block with your preferred builder to advise on the suitability of the block for your home design.
If the block slopes, calculate the extra cost that might be involved to level it. Even blocks that look flat can sometimes have a slight sloping that requires some site works.
How will the area drain? If it’s in a low lying area check that the available draining system will prevent flooding and consider any possible run-off water from adjoining blocks on higher ground.
Ask about easements for access, utilities and any other purposes that created their existence. In most cases, you are not permitted to build any structure over an easement. This may include pools, sheds or future extensions.
Finally, if you are lucky enough to be buying a block near any of Perth’s beach areas or in any of the expanding coastal suburbs, you might like to find a well positioned one where you can best catch the cooling sea breeze during summer.
Real Estate Perth: How Winter Can Be A Great Time To Buy
Seasonal weather patterns do influence the real estate market. Real estate in Perth is no exception. February to April and then again from October to November are the peak selling periods for real estate in Perth. During these periods the number of homes sold can be up to 20 per cent greater than other months. Home sales are historically at their lowest levels during the mid winter period of July and August and the holiday months of December and January.
At the end of March this year the number of homes on the market was around 13,000, but this has jumped to more than 14,000 in more recent months. Overall real estate listings in Perth have grown by more than 30 per cent since January.
Home opens are a good indicator of market activity. In warmer months people are more likely to do inspections, while in winter the cooler conditions, shorter days and footy matches on the TV keep most people inside.
Despite fewer sales occurring in winter the average time taken to sell properties does not vary a great deal throughout the year. Fewer sales in winter is usually a result of fewer properties for sale.
Serious home buyers aren’t too concerned about the weather, but interestingly it seems that those who make a decision about buying in winter do so after visiting fewer homes.
Remember to adapt selling strategies during the winter months. Advertising can be more important in winter to attract the more serious home buyers. And if it is cold and wet on the day of a home open, it pays to take some sensible steps to keep the place warm, dry, well lit and welcoming. If necessary, have a stand for umbrellas by the front door and a decent mat to keep the floors tidy.
From a buyer’s perspective, a wet and windy day is an opportunity to see how the home holds up, potentially exposing faults such as leaky roofs or inadequate storm water drainage. Such a day will help a prospective buyer understand the heating needs of the home.
Homebuyers can also find the winter months more beneficial when negotiating on the terms and conditions for a property sale, because the market is slower.
The current Perth real estate market indicates that some asking prices are coming down a little. With many owners still keen to sell, winter could prove an ideal opportunity for first home buyers. So, if you’re in the Perth real estate market for a first home now’s a great time to find a more affordable home and negotiate a good deal on the sale price.
Investing In Real Estate, Perth
If you want to buy an investment property in Perth before the end of this financial year, then you better get a move on as there are just two months to go.
Buying property should never be a rushed affair. All serious investors should be sorting out their finances as soon as pos sible and looking at suitable properties now, especially if you want to make an investment before 30 June 2010.. This is particularly the case for first time investors.
Some investors will choose to leave it to the last minute and hurray their purchase before 30 June, simply as a strategy to claim the allowable tax deductions associated with the investment during this tax period..
Most people however wouldn’t be inclined to do that, because it could mean that as a buyer they have not had adequate time to properly research the Perth real estate market in terms of price, rental returns, availability of stock and so on.
Experienced investors tend to always keep an eye on the local Perth Property market and allow themselves plenty of time to select the best possible property for their needs, expectations and budget.
If you are a first time investor, then now is the time to be talking to professional financial advisers about your aspirations and the amount of money you have available to invest. Consider the areas you are interested in and if possible plan to inspect properties that are suitable..
Account for the extra State Government stamp duty you will pay and don’t forget to factor this extra cost into your plan.. When you sell the property in the future this stamp duty along with some other costs, such as agent’s fees, are tax deductible. Try the Australian Tax Office (ATO) website for more details.
I am often asked by members of the public to give them a tip as to “the best place to invest.Unfortunately, there is no answer to this question.. Your budget and goals will dictate what kind of investment property is best for you.. Are rental returns, land prices, capital growth, development opportunities or tax deductions important to you?? How long will you keep this investment??
There is no such thing as “the best place to invest”, instead try thinking about “the best ways to invest”.. That means getting competent financial advice from professionals. Then talk to some real estate agents about good opportunities in the areas you like..
Consider working with a Buyer’s Agent if you are pressed for time and need to purchase before 30 June..
How To Choose A Block Of Land In Perth
You have just arrived at a new land estate with the intention of buying a block on which you will build your future dream home. How will you pick the best block? At the moment there is a huge choice of land estates in Perth.
The decision can be hard to make, especially if there is little or no difference in price. Data by the Real Estate Institute of Western Australia indicates there are more than 2,000 blocks of land currently on the metropolitan Perth real estate market.
If you are in this situation, it’s important not to get flustered and just think about the best site characteristics to suit your building plans.
Imagine the likely house design and its orientation with the block. Think about energy efficiency and try and maximize the areas which face north to receive the winter sun, and conversely minimize the exposed window areas facing west into the summer sun.
Ask the developer or local Council about the minimum distance required between the front of the house and the road and the distance required between the house and side fences. These are known as ‘setbacks’. If you have bought a block and find that the setbacks don’t suit your preferred design you’ll have to change it or possibly chance your luck and seek special consideration from the Council.
What might you see out of your new windows? If you are buying into a production home area make sure you have a good level of privacy that meets your needs.
Does anything have the potential to block your views? What are the builder’s plans for homes around you? Is any urban construction planned by the Council which might later be visible from your site?
How is the lot shaped? How best will your home of choice fit on it? It may be worthwhile to inspect the block with your preferred builder to advise on the suitability of the block for your home design.
If the block slopes, calculate the extra cost that might be involved to level it. Even blocks that look flat can sometimes have a slight sloping that requires some site works.
How will the area drain? If it’s in a low lying area check that the available draining system will prevent flooding and consider any possible run-off water from adjoining blocks on higher ground.
Ask about easements for access, utilities and any other purposes that created their existence. In most cases, you are not permitted to build any structure over an easement. This may include pools, sheds or future extensions.
Finally, if you are lucky enough to be buying a block near any of Perth’s beach areas or in any of the expanding coastal suburbs, you might like to find a well positioned one where you can best catch the cooling sea breeze during summer.
Real Estate Perth: How Winter Can Be A Great Time To Buy
Seasonal weather patterns do influence the real estate market. Real estate in Perth is no exception. February to April and then again from October to November are the peak selling periods for real estate in Perth. During these periods the number of homes sold can be up to 20 per cent greater than other months. Home sales are historically at their lowest levels during the mid winter period of July and August and the holiday months of December and January.
At the end of March this year the number of homes on the market was around 13,000, but this has jumped to more than 14,000 in more recent months. Overall real estate listings in Perth have grown by more than 30 per cent since January.
Home opens are a good indicator of market activity. In warmer months people are more likely to do inspections, while in winter the cooler conditions, shorter days and footy matches on the TV keep most people inside.
Despite fewer sales occurring in winter the average time taken to sell properties does not vary a great deal throughout the year. Fewer sales in winter is usually a result of fewer properties for sale.
Serious home buyers aren’t too concerned about the weather, but interestingly it seems that those who make a decision about buying in winter do so after visiting fewer homes.
Remember to adapt selling strategies during the winter months. Advertising can be more important in winter to attract the more serious home buyers. And if it is cold and wet on the day of a home open, it pays to take some sensible steps to keep the place warm, dry, well lit and welcoming. If necessary, have a stand for umbrellas by the front door and a decent mat to keep the floors tidy.
From a buyer’s perspective, a wet and windy day is an opportunity to see how the home holds up, potentially exposing faults such as leaky roofs or inadequate storm water drainage. Such a day will help a prospective buyer understand the heating needs of the home.
Homebuyers can also find the winter months more beneficial when negotiating on the terms and conditions for a property sale, because the market is slower.
The current Perth real estate market indicates that some asking prices are coming down a little. With many owners still keen to sell, winter could prove an ideal opportunity for first home buyers. So, if you’re in the Perth real estate market for a first home now’s a great time to find a more affordable home and negotiate a good deal on the sale price.
Rental Income Patterns - WA & Perth Rental Trends
Median rents in regional areas of Western Australia have been reasonably stable during the March 2010 quarter, however there have been some exceptions.
Regional rent figures released today by the Real Estate Institute of WA (REIWA.com.au), show the median rentals in the Pilbara region are still more than triple the price of metropolitan Perth.
Median rents in The mining areas of Port Hedland and Karratha were $1200 and $1600 per week, as reported by Alan Bourke, REIWA President.
“Karratha saw median rents increase by $200 per week during the first three months of this year, while Port Hedland saw them drop back by around $250 per week” Mr Bourke said.
Busselton was the only other region to show a sharp increase in median rents, with typical prices rising by around $20 from $280 to $300 per week during the quarter.
Most other regional centres saw a steady rental market, with places like Geraldton-Greenough, Kalgoorlie-Boulder and Greater Bunbury recording no change.
“Although the Geraldton region saw no fluctuation in its median rent, the vacancy rate of available properties did increase from 4.2 per to 5.2 per cent, a trend that may see some downwards pressure on median rents if it continues”.
“By contrast, the vacancy rate in Kalgoorlie-Boulder tightened from 5.8 to 4.6 in the March Quarter. .
If this trend is maintained, this could influence rents to increase in the medium term.
Although Bunbury showed no overall change, there was a big rise in median rentals for units, which jumped from $265 per week to $290 per week, during the March quarter.
Closer to Perth in the Peel region, Mandurah-Murray saw its median rent increase by $5 to $290 per week, while the vacancy rate dropped by 0.2 per cent to 2.3 per cent. A rate Mr Bourke described as “quite low” .
The vacancy rate in the Mandurah region has tightened considerably from the 3.7 per cent it was showing in the September quarter last year. This may be due in part, that the more affordable rents in Mandurah are attracting some Perth residents, happy to move to the seaside, and are then able to commute to Perth by train for work,” Mr Bourke said.
In Albany, the vacancy rate has grown from 3.8 per cent at the end of last year to 4.2 per cent in the March quarter. Median rents reduced by between $10 - $280 per week.
Mr Bourke said the rental system in the regions was more sensitive to employment conditions and seasonal work opportunities.
Investing In Real Estate, Perth
If you want to buy an investment property in Perth link investment property in Perth before the end of this financial year, then you better get a move on as there are just two months to go. While purchasing property should never be a rushed affair, if anybody is considering the purchase of an investment property before 30 June, then they should be sorting out their finances and looking at suitable properties now. This is particularly the case for first time investors.
Some investors might speed their purchase before 30 June 2010, simply as a strategic move so that they can claim the allowable tax deductions associated with the investment during this tax time.
Most buyers wouldn’t do that. Rushing a real estate purchase would not give the buyer enough time to research the market. Experienced investors always keep an eye on the market and give themselves time to select the best properties for their needs and budget.. Experienced real estate investors allow themselves plenty of time to select the best possible property for their needs and budget.
If you are a first time investor, then now is the time to be talking to professional financial advisers about your aspirations and the amount of money you have available to invest. Make a list of the areas you are interested in and try to inspect properties that suit your needs..
Don’t forget to include Government stamp duty into your costs.. When you sell the property in the future stamp duty along with other costs, such as agent’s fees, can be tax deductible.. The Australian Tax Office (ATO) has a great website where you can read more information about this..
People always ask me to give them a tip as to “the best place in Perth to invest.Unfortunately, there is no answer to this question.. It depends on your investment goals and budget.. Are rental returns, land prices, capital growth, development opportunities or tax deductions important to you?? How long will you keep this investment??
There is no such thing as “the best place to invest,” but, rather “the best ways to invest”.. That means getting competent financial advice from professionals to determine your budget and your loan, and then talk to some REIWA agents about opportunities in the areas that suit your portfolio plan.
A Buyer’s Agent or Advocate can help you save time and energy, especially if you want and need to purchase real estate before the end of the financial year..