How To Sell A Fixer-Upper For Its Old House Charm

Selling a property is never an easy task. Now think about an old house in need of massive renovations. Fixer-Uppers rarely have modern kitchens, spacious bedrooms, or bathrooms with splendid fixtures and faucets. The only way you can make a sale to the audience is if you reach out to the right type of audience. If you were working with a real estate agent, they would have told you some of the tips and insider secrets for a price. We saved you the trouble. Check out the top ways you can sell your Fixer-Upper in least time.

The Right Figure

Make sure that you single out the right price for what your Fixer-Upper is really worth. Some buyers may find your property to meet all their exact requirements but they won’t move forward to approaching you about it because your price is way too high, higher than the range that can be bargained around. There are probably a lot of Fixer-Uppers in the market; it is already extremely difficult to attract people to find one Fixer-Upper better than the other. You should attract them with other factors like price as well. Some mortgage brokers might able to help with this.

Fantastic Copy

When you are writing the marketing copy, make sure it mentions the bargain price you want for your place. Your agent will help you with this. It is important that you show the potential buyers that your low price is not because of any defect in the property but simply because it’s a Fixer-Upper and you want to carry forward the cost savings to the client. Also make sure all the benefits unique to your property are highlighted.

Spend on Advertisements

It is hard to find the right buyer for a Fixer-Upper; you can’t geographically point out a niche. Therefore, you have to advertise them any way you can. For example, print out brochures to hand out locally. Get an ad printed in a lifestyle magazine too that sells across country. Listing the house online can also help you sell your property by auction. Make sure that you list the Fixer-Upper on more than one site. That way you will be able to reach a wider audience. For example, a lot of people like to invest in Fixer-Uppers that may not necessarily be near where they live, but on a countryside where they have a property they can renovate as vacation home.

Don’t Be Afraid to Sell to Other Businesses

A lot of Fixer-Upper owners hesitate to sell to other businesses for their conditions on the price you have quoted. However, in the case of a Fixer-Upper you may not have much of a choice, especially if your property is in major need of some structural changes. More than half of the Fixer-Uppers in the country are sold to other big businesses who revamp the entire property. If you can’t sell off your place to an individual buyer because of serious drawbacks, sell it to a big business.

Why house prices are going down?

Article by :


Stephanie Brennan | | 19.10.2016

There has been a lot of hype in recent times on the property market and the ‘inflated’ house prices with talks of the housing ‘bubble’ bursting, but what does this all mean?

Let’s take a look at the Australian housing market as a whole you through the September 2016 report released by Core Logic:

  • Combined capital city home values increased by 1.0% in September with values rising in all capital cities except for Perth and Darwin
  • Home values were 2.9% higher over the three months to September 2016 with home values in Brisbane, Perth and Darwin falling over the quarter
  • Over the first nine months of 2016, capital city home values have increased by 8.6% and Perth and Darwin are the only cities in which values have fallen
  • Over the past 12 months, combined capital city home values have increased by 7.1% which is up from a recent low of 6.1% at the end of July
  • Across the individual capital cities, the annual change in home values have been recorded at +10.2% in Sydney, +9.0% in Melbourne, +3.0% in Brisbane, +6.5% in Adelaide, -7.0% in Perth, +8.7% in Hobart, -6.0% in Darwin and +9.0% in Canberra
  • Capital city house values have increased by 7.3% over the past year compared to a 6.1% increase in unit values

Source :

So why are house prices going down? If you look at the above figures these are the average across all major cities, meaning that some areas within those cities have experienced higher and lower growth with the average having increased in value over the past 12 months.

So what causes house prices to drop in value? The main factor is supply verse demand. Let’s take a closer look at Brisbane for example. House prices at the moment are increasing, however unit prices are falling due to an oversupply of property with a lack of population growth to outweigh the number of new properties coming onto the market. This not only means the new unit market is devalued but the existing unit market.

So why are house prices in Brisbane increasing if unit prices are falling? The value of land within 5-10kms of the CBD has been increasing over the last 12 months to due developers looking to built units or townhouse on that land and paying a premium for it. This was of course before the banks started to reign in their lending with developers due to an increased risk on their ability to recoup their funds. The other factor driving housing growth in that for an additional $100,000+ more you can buy a 3-4-bedroom house rather than a 1-bedroom unit so purchasers are seeing more value for money in houses over units.

Let’s take a look at why the Perth & Darwin housing market dropped. The short answer is a lack of demand due to limited growth factors such as population growth. There were a number of investors that bought into the Perth market at the time of the mining boom however when you’re looking to invest you need to ensure the area you’re investing in has multiple growth indicators not just one as we’ve seen in Perth. If you rely on one growth indicator, as soon as that reason for growth becomes removed there is no longer anything driving growth and so your investment becomes devalued.


This is the same with investors that purchase in rural areas across Australia. The majority of people want to live within 10-20kms of a major city. Melbourne but more so Sydney have the population growth to sustain consistent capital growth, which is what we are seeing now.

Let’s touch on another reason why house prices may be going down even if the average house price is going up. This occurs when properties are bought substantially over market value, which usually result from an owner-occupier buying at an auction. Investors will always have a limit at an auction because their focus is gaining a Return on Investment (ROI) meaning the numbers need to stack up. Whereas the Owner Occupier are making an emotional investment and are willing to pay top dollar for their dream home but that’s not to say the open market will also want to pay top dollar which is why we see some house prices dropping in areas or cities where house prices are increasing.

Tip: If you’re a first homebuyer and you’re looking to get into the property market, look at properties that are being sold by private treaty and aren’t going to auction. Set your limit particularly if you’re buying to invest rather than to live.

Tip: For the investor that has a property in a housing market that’s decreasing, if you have the rental income to support the current debt on the unit then look to hold. Alternatively, if your rental doesn’t cover the mortgage/expenses or you’re looking for greater growth, you can look to buy and sell at the same time by transferring the current debt on your property directly onto the next property in a better area. Speak to your bank or broker about porting the security and the best way to implement this.


When is the right time to purchase property?


Bessie Hassan | Money Expert at

Whether you’re a homebuyer or an investor, you will wonder whether or not it’s the right time to enter the market. While you can research the demographics, historical price growth trends or the supply and demand of property in different areas, the best way to decide whether it’s a good time to buy a property is to review your personal situation.


While many buyers may be lured by historic low interest rates – currently we are seeing variable home loan rates as low as 3.63%, it’s essential that you reflect on your personal and financial situation to work out if you should take the plunge.

Lifestyle factors such as your job security and number of dependents as well as your financial situation can be telling when it comes to understanding your readiness to buy real estate.

Here are some factors to consider.



  • Job security. When you apply for finance, most lenders prefer that you’ve been in your current job for at least 12 months. Think about where you are in terms of your career path, how stable your job is, and whether your income is sufficient to service mortgage repayments and other costs of purchasing and owning property. If your employment is secure, then you may be ready to buy. On the other hand, if you’re a low-income earner or you only work on a part-time basis, it may not be a good time for you to buy.
  • If you have kids or you’re planning to settle down and have kids, think about how this will influence your ability to buy property. The number of dependents you have can influence your borrowing capacity. Generally, each dependent can lower the amount you can borrow by around $50,000. Most lenders will ask you to factor in the cost of childcare and school fees when listing your day-to-day expenses. Be honest with yourself and your lender when discussing your future lifestyle plans.
  • Travel plans. Review any future trips that you have and consider how this will impact your finances. Frequent overseas trips can put you into further debt which may hinder you capacity to repay a mortgage. If you have several overseas trips planned and you’re not sure whether you’ll be able to afford your repayments, then you may not be ready to purchase property.



  • One of the biggest factors to consider when buying property is knowing how much you can afford to borrow. Use a repayment calculator to get an estimate and remember you should come up with at least a 20% deposit to avoid paying lender’s mortgage insurance (LMI).
  • Financial clean up. To help you decide if you’re ready to buy property, you should reflect on your financial situation and conduct a financial health check. If you have a large amount of personal debt, such as personal loans or credit cards, you may want to take steps to reduce this. For instance, to minimise debt you can leverage interest-free periods by using a 0% balance transfer credit card. Or if you’re struggling to make repayments on your mobile phone plan, for example, contact your provider to see if they can revise your payment plan.
  • A crucial part of knowing if it’s a good time for you to buy is to budget the costs of buying and holding a property. There are several upfront fees you’ll need to budget for such as stamp duty, mortgage application fee and building inspections, however you’ll also need enough savings to cover ongoing costs such as repairs and maintenance and council fees.

No matter what your objective is for buying property, remember that you shouldn’t try to time the market. Instead, you should carefully review your personal and financial situation to decide whether or not you’re ready to buy.

Bessie Hassan is the Money Expert at, one of Australia’s largest financial comparison websites.


Reply to : Six myths about Chinese property buyers By

This is our reply to most biased / paid article published by domain. Busted: Six myths about Chinese property buyers

There are few reasons for writing this reply article.

01. Domain Deleted my Facebook comment.

02. The article will mislead poor first home buyers.

03. The article directly influences on Election results.

04. Chinese reporter (Might own millions worth properties) interviewing another Chinese Investor (Helping  non-English speaking Chinese to buy properties).

This article was written by Christina Zhou. We don’t want to criticise her under the impression she’s Chinese. So we dig deeper.

First,  we look into her LinkedIn profile.


Under her LinkedIn Profile, we saw several articles related to Chinese investment and she’s trying her best to make Chinese investment more appropriate for Australia.




The proof.



Who is Esther Yong ?

In this Domain article. Christina interviewing a person called Esther Young. She’s the one providing facts for this article and keeps saying the Chinese investors not the influence of house prices.

We linkedIn to Esther Young’s Linked In profile and found these.



So, it is very obvious that these two (Reporter and  Esther) are people who profit from Chinese investment and they get paid directly or indirectly for writing these articles.


What others on Facebook, Think about this article??





Strata or Bricks and Mortar ? – the things to weigh up when buying a first home ?

About the Author:

Name: Aris Dendrinos

Agency: Richardson and Wrench – Marrickville

When venturing out of the cave for the very first time into the big bad world of home ownership there are so many choices confronting the would be buyer.

How many bedrooms ? Parking ? On top of the station or nice quiet street ?


But probably the biggest one of all is the “type” of home you would want to live in.

And the two main types are Strata which takes the form of apartments & townhouses or solid Torrens title houses.

So let’s look at the pros and cons of both.

It’s never wise to assume but for the purposes of this article I’m going to assume that the budget would be identical for both items and an equivalent desirable location can be found for either, ie. a luxury two bedroom apartment in Bondi with views compared to a nice two bedroom family home in Marrickville.

So let’s start with apartments/townhouses. Probably the biggest advantage or positive that has rapidly evolved over the past five years is the convenience factor. Apartments, especially many of the new ones are generally situated in central locations that are within easy walking distance to all desirable facilities which include shops, schools, parks and public transport. In many instances if these new apartment developments are large enough the infrastructure is “built-in” with a new supermarket, or open parkland area coming with the package.

With everything speeding up so much in this blink and you’ll miss it technological age, the way of life of your average Sydneysider (or any modern westernized city dweller for that matter) has changed dramatically turning the traditional must haves on a buyers wish list on its head.

For example, the ownership and use of a vehicle is evolving rapidly for many inner city apartment residents. With the advent of Uber along with GoGet car spaces on public streets and in many parking lots of new developments as well as public transport, many people are abandoning ownership of a car altogether and choosing to live a more central, localized lifestyle. The increase in traffic and difficulty to navigate your way around greater Sydney is also a big factor in many  buyers considering an apartment in a key well located suburb of the city to be much better than a nice house in a similar price range which leaves you stuck in gridlock hell during peak hour every weekday.

Other conveniences that an apartment offers include such things as pools, gyms and a higher level of security with intercoms, swipe cards and gates.

In addition to these creature comforts apartments are much lower maintenance than the good old Torrens Title home. You pay your strata levy each quarter and you don’t have to fix the leaking roof, paint the outside or update the building insurance. You also don’t have to clean the common areas or water the back yard to make sure the grass keeps growing. It’s very much a lock and leave kind of life which many young first time buyers find attractive as the growing demands of work and family suck more and more of our time away.


So what could be possibly be bad with this Utopic apartment existence I hear you ask ?

Well for starters if you were to ask me the one character trait a strata title resident needs to have if they want to be happy it would be this – the ability to share and compromise.

No man is an island and this never is more true than in Apartmentland. From noise issues to privacy issues and sharing of common facilities if you aren’t open to a collective way of life then put the big red pen through Strata.

The restrictive nature of this type of property also heightens when you add pets and kids into the mix. Both of these joyful little treasures require more space and time to play which is always in strictly limited supply in apartment buildings.

And forget about changing something quickly in an apartment complex. Big decisions are made generally at a snail’s pace as it takes much longer to get the Body Corporate family together to discuss and agree on a course of action. For example, the younger owners may be all for installing synthetic turf into a common area of the property for kids and pets to play but the long term elderly owner occupiers have neither the money or interest to agree.


So that’s apartments, but what about a house ?

The major benefits of bricks and mortar are fairly simple. First of all you are literally master of your own domain. Whatever you wish to do to your property (subject to council approval of course) is on the table on whatever time frame you want. New roof ? No problem. Rear extension with parking ? Done. Basically you have a far greater ability to change the item thus allowing you to live in it for a longer period and create far more potential for significant capital growth.

And following on from this the land your home sits upon can also change very quickly not only in value but also use thus leading to potentially an exponentially higher sale price and wealth creation levels previously unthinkable. With an apartment this cannot happen.

Houses also tend to sit in clusters of other houses which can make for a greater community experience and outdoor lifestyle with such examples as cul de sacs, street parties, etc. There is obviously more room to move for the future family with outdoor areas that the kids or Fido can play in.

And the downsides ? Well it’s all on you for a start. At least with improvements you know you are potentially getting a return on investment down the line but when it comes to repairs this is pretty unlikely, and the repairs bill for a house can escalate fast. From replacing the entire roof, to new fences, rewiring, and new flooring there is a much larger exposure to unwanted and unexpected costs at the most inconvenient time when money is tight.

The location of a house in an identical price bracket to an apartment will also mean generally a location that is less central to the more popular and necessary facilities in Sydney. This would mean more time is spent each day commuting both to and from work which lessens the amount of enjoyment one can derive from a more attractive property. There isn’t much use owning a lovely home if you hardly ever use it once you tally off sleeping, working and getting to and from work.

In the end it comes down to the apple or the orange. Both taste pretty good so ultimately it’s a personal choice.



People ask me if I think that Australian housing is in a bubble!!!

Kathy Comments From : Kathy Ran -Financially Wise
Financially Wise Page –

There has been a lot said, many megabytes devoted to and much news ink used in commentary
about a bubble in Australian housing.
People ask me if I think that Australian housing is in a bubble. I usually answer in the affirmative and
furthermore tell them that Australia’s and many of the world’s housing has existed in a bubble for
the past 45 or so years.

I will get back to this in a moment, but first I’d like to say that just because Australian housing is in a
bubble, does not mean that it cannot continue for a while longer, although I personally believe we
are closer to the end point than the start point. As John Maynard Keynes supposedly noted, the
market can remain irrational longer than we can remain solvent.
Now, a very quick history lesson on events that happened 45 or so years ago and why this has
created numerous property bubbles in Australia and the world. In 1968 then US President Lyndon
Johnson eliminated US dollar gold cover. That is, the US no longer had to have a percentage of gold
in their reserves to cover each US dollar that was in existence. This was taken a step further in 1971
by the then US president Richard Nixon who suspended the US dollar’s convertibility into gold, which
meant that a US dollar could no longer be exchanged for gold.
Prior to this, under the Bretton Woods agreement in 1944, the US dollar was backed by gold and by
proxy, so were the world’s currencies as they were valued against the US dollar on the exchange
When the gold link was severed, the world changed from a gold backed to a credit backed and
driven economy. This meant the economy would only grow if credit was increasing, so people were
greatly encouraged to accumulate more debt by governments and central bankers. Many people
were happy to oblige.

Anybody who bought property in the past 45 or so years has been the beneficiary of this huge
loosening of credit brought about by the actions of both Presidents Johnson and Nixon.
When looking at Australian house prices from about 1880 until late 1960’s/early 1970’s, prices were
relatively flat, when adjusted for inflation. Once credit was loosened however, from the late 1960’s
onward house prices went parabolic over and above the inflation rate. The gains seen over the past
45 or so years are a product of this huge credit expansion.
Pretty much anybody who purchased property in that time, benefitted from increasing values. With
few exceptions, property prices generally went up far in excess of the inflation rate.
The people who benefitted from this windfall weren’t geniuses, they were just in the right place at
the right time. But many thought they were, because they made money each time they sold
property and because they didn’t understand the underlying parameters that allowed this to occur.
So the myth of property prices doubling every seven to 10 years was born. The fact that this had only
happened over the past 45 or so years wasn’t recognised. “45 years” somehow became “always”.
There were even pretty graphs with a starting year point and an ending year point to support this
property doubling “fact”, but once again, the data was extrapolated and prices averaged out over
the time frame, rather than show actual annual prices for the period in question. And more often
than not, these were not adjusted for inflation. As previously mentioned, inflation adjusted property
prices stayed fairly flat until the late 1960’s. They certainly didn’t double, for example, from 1910 to
1920 or 1930 to 1940, but the graphs made it appear as though it did.
However, in the current environment of low inflation and low interest rates, property prices are now
starting to pull back and I believe they are reverting back to the more normal mean of only
increasing in line with inflation.

Changing demographics as baby boomers retire and change from spenders into savers, will impact
on property prices as well, particularly when they start to sell their assets to fund their retirement.
Not just prices for property, but shares and businesses as well.
Overbuilding of flats around Australia’s capital cities will also have a dampening effect on housing
prices, particularly in attached dwellings. Real sustained property price corrections could happen as
soon as the 2017-2018 financial year, if not sooner.
The way global economies are at the moment, there are no guarantees that prices will remain
stable, let alone increase any time soon. And with the oversupply of flats coming into the market,
most likely just as the global markets enter a serious downturn, falling real estate prices are a very
real possibility, particularly from investors exiting the market. When they are not seeing any real
capital gain (after inflation), have very low or no yields and longer vacancy periods, but still have to
put their hand in their pocket every month for expenses, there could be a rush for the exits.
Real estate, after all, is a non-productive consumption item.
Prices may rise but people seem oblivious to the fact they can also fall. What goes up can also come
down. So capital gain only really exists if it is realised. Unless capital gain is locked in (ie. sold at the
highest valuation price), it’s not real capital gain.
You cannot rely on the greater fool theory forever. This is the theory that a greater fool will come
along and pay you more for your “asset” than you paid for it initially.
The banks have been complicit in this, allowing borrowing against any increase in equity so the debt
load is constantly increasing. This strategy is also pushed by property spruikers as a means of
increasing your property portfolio.
Yes, a property investor might have a two million dollar property portfolio. But if it’s secured against
a debt of $2.5 million thanks to falling property prices, that’s hardly a sound financial position to be
in. If and when that happens, the friendly bank won’t be quite so friendly any more.
The problem is that, as previously mentioned, housing is a non-productive consumption item whose
purpose is to provide shelter, but is being sold as an investment item reliant on capital gain rather
than yield.
So, as well as property not doubling every seven to 10 years over a long period of time, Australian
property prices can also actually fall. And this is even more likely at this particular juncture.
We are entering a deflationary period, a period of asset price falls. The reason the massive money
printing or quantitative easing programs we have seen over the past few years by many countries
have not succeeded in increasing asset prices consistently, kick starting the economy or causing
massive inflation or even hyperinflation, is that this money printing has just stopped the deflationary
forces from having their full effect. It’s why the global economy is sluggish at best. With the amount
of money printing carried out by various governments, global economies should be booming. They
are not.
Just as record low, and in some cases negative, interest rates have similarly been unsuccessful in
getting the global economy moving.
There is a train of thought, particularly amongst politicians and central bankers that inflation is good
and deflation is bad. But I disagree. Before the turn of the last century, (and incidentally before the
proliferation of central banks), deflation was as much a part of an economy as inflation. Before the
1900’s, periods of inflation were generally always matched with periods of deflation.
It was only when central banks decided that deflation was a bad thing that we have had persistent
inflation. Inflation has only been a feature of modern economies from about the early 1900’s
onwards (incidentally, the US Federal Reserve Bank came into being in 1913).
Why is deflation the enemy? Deflationary periods are useful to dampen and remove malinvestments
from the markets and bring the economy back into equilibrium. This is now being
prevented from happening.
Japan is well into its third decade of deflation. Asset prices (property, stocks and businesses) are
about half the value they were during the 1980’s and have never recovered those highs. The
various governments of the day have tried desperately to stimulate inflation and asset price growth
through massive quantitative easing (far greater than the US) and zero and negative interest rate
policies. It hasn’t worked. Inflation is still negligible and asset prices are still languishing. And yet
Japan is still ticking along nicely and they’re in no immediate economic trouble. Why? Because
inflation isn’t needed!
And why are our politicians and central banks so desperate to see inflation? Because it increases
asset prices, which brings about the so called “wealth effect”. When asset prices are rising, people
feel wealthier and more secure and this supposedly encourages people to spend more. And why is
this a good thing? Because under a fiat (debt backed, not gold backed) monetary system (pretty
much all developed nations and most developing nations) in order for the economy to grow, we
need to borrow more and get further and further into debt. In other words consume today with
tomorrow’s income.
The record amount of debt we currently have in Australia does not bode well either. Australia is
currently one of the most indebted nations in the world. We have record amounts of private and
corporate debt, and public debt is increasing faster than any other developed nation.
Rising public debt endangers our AAA credit rating, which in turn will increase borrowing costs for
the major banks causing interest rate rises above the RBA “official” rate. Many of the private debt
holders won’t be able to afford any interest rate rises. A massive amount of this private debt is
secured against this non-productive consumption item, property, which will either be defaulted
upon or sold at a loss.
What does this mean for the housing bubble? Who knows! It could continue for another 10 years,
start to deflate next month or pop in a year.
The markets can only be gamed for so long before they revert back to the mean. We are probably
now entering an extended deflationary period and sluggish global economic growth, after more than
100 years of constant inflation. Get used to it. This is most likely the new normal.

It does annoy me a little that the media latch on to stories that the “property bubble” is about to burs!!!!

Comments From : Geoff Schippers

Geoff Schippers of Scout Finance has been a mortgage broker since 1998 and has settled more than 3,000 loans worth in excess of $750,000,000. He has previously been Mortgage Choice Australia’s No. 1 mortgage broker and now runs his own boutique brokerage offering the same exceptional service and unparalleled expertise for mortgages (residential and commercial), strata finance and asset finance. For enquiries, call Scout Finance today on 02 9526 7899 or visit

It does annoy me a little that the media latch on to stories that the “property bubble” is about to burst and sighting the situation in the USA after the GFC as some kind of precedent for what’s going to happen in Australia. It’s absolute garbage.

Firstly, the rise in housing prices in the USA pre-GFC was predicated on unsavoury lending practices that blind Freddie (Mac) should have been able to see coming; loans to borrowers who couldn’t afford them (or worst still didn’t even have jobs) coupled with adjustable rate mortgages that jump up 4% after the introductory period, a legal framework that permits non-recourse mortgages (i.e. walk away from an upside down property with no consequences) and a derivatives market which amplified the effect of rising mortgage default rates and you get an almighty bubble that can do nothing else BUT burst.

Whilst the increasing availability of credit to Australian borrowers has long been the argument for proponents of the Australian property bubble, the fact is that’s it’s never been to the same extend that it was in the USA pre-GFC – ever. Yes, average household debt has risen markedly since the 1950’s, but so too has society changed. Households are no longer single income families, and so with the increasing incidence of double income households, household borrowing capacities have increased accordingly. It becomes a self-fulfilling prophecy that because we earn more we borrow more and therefore we have to earn more but it’s a trend that is unlikely to reverse any time soon.

Furthermore, APRA has actually already been taking pro-active steps to REDUCE the availability of credit to borrowers by demanding more stringent lending criteria of the mortgage providers it regulates. Therefore, even if credit was considered to be too readily available previously (which is contentious to begin with) it’s already tending back the oth er way.

Secondly, property values are a function of supply and demand. It’s been regularly reported recently that Sydney house prices have increased significantly over the last 2-3 years. However, it’s no coincidence that it’s the same city with the greatest shortage of available property! I’ve heard experts quote that net migration into Sydney accounts for an increase in demand for approximately 10,000 dwellings per annum. And what have the state government done to facilitate that development? Antiquated urban planning processes which restrict the supply of new property developments? How about a road and rail network incapable of supporting the increasing size and distribution of the population? Is it any wonder, when we’re always 20 years behind the current population’s needs, why we end up with a shortage of property which in turn drives prices up? Perhaps if the powers that be had the vision, will and finances (or better still, stopped wasting money on things like, for example, a desalination plant!) to bring Sydney into the current decade, we wouldn’t be talking about a “property bubble”.

And thirdly, reports on isolated pockets throughout Australia where the property prices have dropped significantly as being the precursor to a wider housing bubble are nonsense. Any town throughout Australia that has been particularly influenced by the rising and falling fortunes of a single industry (e.g. mining) is in no way indicative of the Australian market on the whole. Generally, mining towns with limited supply of property suffer from sharp rises in rental prices as the industry prospers (again, supply and demand). When out-of-town investors then think they’ve stumbled on the “rental return of a lifetime” and flood the market, property values rise until the perceived rental return becomes normal again. Then, as recent times have shown, when that industry wanes and rental returns decline (back to normal), p roperty prices also decline (back to normal). Yes, I would consider that to be a bubble, but it’s an isolated bubble – not an “Australian housing bubble”.

But again, Sydney needs another 10,000 dwellings per annum just to meet the organic growth in demand for property. Post-GFC, property development all but ceased in Sydney for years and the cumulative effect of that rising demand has put us in the situation we’re in today. Until that demand abates, or supply catches up, how can we expect anything but a continuing rise in property prices?

5 reasons why the Australian housing bubble is far from bursting

Steve headshotComments from Steve Jovcevski. He is a property expert at financial comparison site,

You can read more about Steve on the Mozo blog here:


High credit quality

Strict lending criteria and serviceability requirements ensure Aussie home borrowers who are approved for a loan are quality candidates and can generally afford to repay it. For instance, borrowers can no longer borrow 100% of the property but are required to have at least five per cent deposit and pay Lender’s Mortgage Insurance on low deposit loans.


Fewer foreclosures

In addition to tighter regulations, lenders can also seek financial retribution if a borrower defaults on their home loans. For this reason, borrowers are less likely to default their home loan, resulting in fewer foreclosures.

For a massive property collapse to occur, we’ll need to see wide scale job losses and foreclosures which is in fact, the opposite of what is happening in Australia with unemployment at a steady six per cent.


Regulatory bodies are doing their job

Financial bodies such as the Australian Prudential Regulation Authority are keeping a closing eye on the housing market. Last year when APRA found there were too many investors driving up the market, it stepped in to enforce a 10 per cent cap on investor lending growth.

We’re not the US

Earlier this year, investment expert Jonathan Tepper on 60 Minutes tipped that the mortgage bubble in Australia as well as the United States and Ireland would burst with property values plummeting up to 50%. While these predictions gained a fair share of concern, Tepper’s predictions did not compare apples with apples.

Instead, we need to compare large cities with other large cities such as Sydney and New York that tend to behave quite similarly.


We’ve seen this before

It may be difficult to remember the peak of the last property boom all the way back in 2003, but I can guarantee you we were hearing similar doomsday predictions about the property bubble bursting. In terms of the way borrowers are leveraged today versus 13 years ago –it’s pretty comparable.

Because we didn’t have a property bust back then, it’s highly unlikely we’re on the brink of having one now.


Steve is Mozo’s property investment and lending expert. With an extensive knowledge of home loan products and property trends, Steve is full of practical tips to help first homebuyers, refinancers or investors build and get the most out of their property portfolio.

Is Australia becoming the new China?

Nicholas Smedley, Managing Director of Steller

Article By: Nicholas Smedley

Is Australia becoming the new China-The Australian housing market is a topic of much speculation lately. There are many conflicting opinions on whether or not it is set to die down or continue driving property prices further up. According to certain figures, the current population growth in Melbourne alone approximates for 18,000 new homes per annum in the metropolitan area, but at the moment we are currently only producing 9,500 to 10,000 new dwellings. This means that realistically, we might not be seeing the end of the housing boom just yet.

The reason for the sudden influx in demand can be attributed to the increase from foreign investors, which at the moment, are mostly coming from China. Australia is often deemed as a prime market for investment, with the market always being relatively stable. Many foreigners also come to Australia for the education and way of life, which is another reason that they also choose to invest in the country. There is also a new scheme for investment for Chinese investors to invest in developments and properties overseas, if they are worth a certain amount of money. Cities have to sign up to be a part of this scheme, with six cities already on board. This allows investors to easily move their money out of China. The scheme asks for a minimum of RMB 1 million to qualify.

China has also very recently relaxed their one-child policy. This will certainly bring about an increase in their population, causing the Chinese government to allocate up to $3 trillion to buy land abroad for agricultural purposes, as China lacks the land and industry to support it. Chinese investors are now also allowed to spend up to $15 million on farmland before it has to go through the Foreign Investment Board as part of expectations of the population increase.

In addition to these changes, Australia and China have also signed a Free trade Agreement, allowing for up to 5,000 workers a year from China to migrate for work. Their terms of employment do not need to comply with Australian standards. This means that the process, from start to finish, can be controlled completely by investors from China, with Chinese workers based here locally.

These changes will only increase the demand for housing in Australia. With the heat of the market driving up price points and affordability, we are sure to see a rise in long term rental tenancies. The business of real estate has been around for more than a century, and the fundamentals of it haven’t really changed. Australia will most likely see a shift much like in the USA, where landlords will be more supportive and motivated to look after tenants. They will also give more options to allow renters longer term security, as the psyche shifts in the mind of tenants while affordability becomes more and more prevalent. At Steller, we are already seeing requests for multi-year leases in our residential side. Due to the demand, we’ve started offering such options as a 3+3 year lease term to give security to our renters – and added income security for us too.

To avoid making the same mistakes in the past, it is imperative that we move forward by assessing the market condition to attempt to predict a market fall. We also have to keep in mind that during the last market crash, the business relationship between Asia and Australia was not as established as it is today.

However, the question that most will be asking is if the influx of Chinese investors and migrants is something positive for the market. Many argue different sides of the situation, but it really depends on the perspective you put on it. With the growth of real estate increasing at a startling rate, certain individuals warn of the bubble bursting, while major banks take action to keep increasing rates on loans. Some actions that banks have taken are to tighten up their lending requirements, making it harder for people to borrow money. The quality of credit and underlying assets going out is also much better than before.

In my opinion, the market will see a stable, steady growth of five to 10 per cent a year as it’s more than capable of absorbing current and proposed approved developments in the pipeline. With the continued investment of the Chinese and other migrants, we need to concentrate on the increased development of medium density housing and apartments such as those synonymous with Steller.

Are we in a Housing bubble?

[wpdevart_poll id=”1″ theme=”1″]

Are we in a Housing Bubble? Perth Metro Area Focused


by J.Ho Dept. Economics & Property, Curtin University

Do you believe this is a bubble or not? If so, how or why?

Perth-City-pricesOverall, I do not believe that there is a bubble across the majority of the Perth Metropolitan housing market; however, I do believe that there are sub-markets within the Perth Metropolitan area which are experiencing bubbles. Some bubbles encompass an entire suburb and some in specific property types in a suburb, such as 1 or 2 bedroom units or apartments. Firstly, I would like to qualify that the bubbles we are referring to are probably caused by a significant drop from the previously strong demand for housing in those areas. The 12 to 36 months lag from planning changes to development construction and finally to completion of new supply makes predicting the market equilibrium a miraculous feat; therefore the high risk, and what used to be high return but more commonly now low return,  in real estate development. Supply created to meet the projected demand now became an over-supply and now blamed on the developers as optimistic exuberance. This however is nothing abnormal in real estate markets as the real estate market cycles do over-correct due to the lags.

APRA and major banks have also made finance more costly and harder to obtain with higher interest rates for owner occupiers, even higher with real estate investment loans and preferring a lower LVR; driving down demand further. In addition, increases in Land Tax in WA over the years may also deter some investors real estate acquisitions as a higher return needs to be achieved to attain a profit.  Some of these changes were brought into the market in the recent months or years and it would be cruel to say that developers should have known that the demand would diminish as this would have been hard to predict for most seasoned developers. Although there were indicators signifying a larger than expected downturn. The discussion on the long term benefits or detriment of these changes that affect housing is probably best left for another article.

One could probably identify potentially bubbly markets with the use of web based real estate marketing sites and searching for suburbs where there are unusually high number of properties for sale and for lease that is persistent over a considerable amount of time. The real problem for developers and property investors arise when the stock of properties that they have built or own cannot be rented out to offset holding costs; which could cause a significant drop in price in a sell off. If the sell off is trickled into the market, there may not be a significant drop in real prices at all.

The typical misconception is that a drop in median house price equates to a drop in real house prices for all housing within the precinct. A drop in median house price does not always equate to a drop in real house prices for all properties in the area as the median is a measure of midpoint between the highest and lowest prices within a range. A drop in median house price in a suburb could be the result of a high number of transaction within the suburb on houses below the previous median price; in this case higher density and more affordable housing. Again something which is quite normal in a subdued market.

Is this the best time to buying your first home? What considerations should one take into account?

Buying your first home comes down to need or want. If it is a necessity, the opportunity arrives for the right price and the buyer can afford the home; I could suggest that anytime could be a good time to buy a home. If you are aiming to venture into home ownership with the main aim of building some asset wealth, then the best time to buy your first home would be, much like a Captain Obvious joke – Buy just before a long and significant real price growth for the real estate you are purchasing. Based on current market conditions and in-line with mainstream research; significant real house price growth is a major determinant to a financial cost benefit analysis decision. The “Buy vs Rent Or Stay at home with Mom and Dad” decision is a subjective matter with no perfect answer and is based on a combination of personal preferences, financial circumstances, social status and expectations of growth in house prices. An understanding of Economics, Finance and Real Estate would prove advantageous.

Based on previous research I have completed with my colleagues (Assoc. Prof. Steven Rowley and Assoc. Prof. Greg Costello at Curtin University) and my opinions on current localised economic conditions in the Perth metro area, first home buyers in Perth taking into account the buy or rent decision should consider:

  1. Purchasing properties in centralised locations with strong fundamentals for long term sustainable demand of the property, for example near retail centres, public transportation and employment opportunity locations, within a reasonable distance from the CBD or activity centres.
  2. Purchasing properties types that will always be in demand and attractive across multiple buyer types for example 3 bedroom 2 bathroom properties where a small family, young couple or shared accommodations for housemates could be potential buyers or tenants.
  • Purchasing properties that are cheaper to wisely maximise government Duty exemption and grants, for example buying a home below the $430,000 where no stamp duty is payable at the moment and a FHOG of $3000 for an existing home or $10,000 for a ‘new’ home, that would require a lower rate of property price growth to achieve a financial benefit as compared to home purchased at $700,000.
  1. Objective of the first home across the mid or long term with considerations of the real estate to be
    • used as is,
    • converted into a rental property and possibly refinanced to purchase the next investment or home,
    • selling the first home to purchase an upgrade home,
    • develop first home for investment or owner occupier (or both); or any other possibilities
  2. Other basic considerations that one should consider could be
    • local council’s plans, budgets and developments for precinct,
    • safety and crime rate of the precinct,
    • statistical information such as Census information of the precinct,
    • composition of housing types and tenures,
    • future supply of new housing in the precinct such as building approvals in the precinct,
    • certainty of personal/household income,
    • career mobility requirements,
    • personal life goals or family unit dynamics,
    • future financial constraints,
    • possible refurbishment, extension, redevelopment of your property to meet your needs; and
    • always keep yourself informed, gain as much knowledge about real estate as possible, ask for and read all documents to know what you are signing, and seek reliable professional advice where required.