SAlistings

South Australian Property Market – Where to from here?

South Australian Property Market continues record growth

The property sector for 2021 to date in Australia is at record highs. Economically it is interesting times indeed. With border closures, lockdowns and uncertainty driving job prospects, one would anticipate property prices would slump. However, the combination of low interest rates, low stock levels and the love of Australian soil has seen the property market boom. What does this mean for SA?

CoreLogic data released on Friday shows housing values increased by 1.5% in September, bringing the total gain this year to 17.6%. Nationally property prices have rose at the fastest rate since 1989 with South Australia joining the ride with an annual increase of 19.1%, indicating a strong sellers’ market.

Recent statistics report Adelaide’s median property value at $529,376, compare this to Hobart with a median value of $659,622 and it suggests Adelaide has some catching up to do. The Federal Government is rightfully concerned about housing affordability and the rising debt of Australian households and this is likely to lead to Government policy intervention to quell the property market. If Government intervenes we may see prices stabilise, so if you are considering selling, now may be the perfect time.

If you are in South Australia and would like a current market appraisal for your property, SA Listings would be happy to assist. We offer a fixed fee in conjunction with a strong skill set for the sale of one of your biggest assets. SA Listings staff include licensed Land Agents with qualifications in Conveyancing, Property Management, Law and Accounting. It’s a smarter way to go. To find out more visit www.salistings.com.au

Justine Thomson

Source: CoreLogic – 30 September 2021

What is a Form 1?

A Form 1 statement is a legal document providing important information about a property. If you are selling a residential property in South Australia you are required by law to serve a Form 1 document to the prospective purchaser. The Form 1 is usually prepared by your Agent or Conveyancer and signed by the Vendor prior to advertising the property for sale but it can also be prepared and served after the contract is signed.

What is included in a Form 1?

Whilst not an exhaustive list the Form 1 includes but is not limited to:

Property Title
Particulars regarding any mortgage
Particulars regarding any easements
Council rates, Water Rates, Emergency Services Levy and Land Tax details
Zoning information
Council approvals for building works

The Form 1 may not include information about encroachments, condition of the property, whether building regulations are complied with or if the survey of the land is accurate. A prospective purchaser is responsible for finding out anything that is not covered in the Form 1 and needs to do their due diligence on the property they are purchasing.

What does the Form 1 have to do with cooling off rights?

If you buy a property other than at auction, the purchaser has a cooling off period. The cooling off period expires at the end of the second clear business day after the contract was made if the purchaser received the Form 1 prior to making the contract or after the Form 1 was served on you, if you received the Form 1 after making the contract. The Vendor does not have the right to cool off, only the purchaser. The Form 1 details your right to cool off and how you must go about serving the cooling-off notice if you change your mind.

What can happen if the Form 1 is not accurate?

The Form 1 must be factually accurate and complete. If it is incorrect or there is insufficient information, the purchaser may be able to withdraw from the sale or take legal action. It is a very important document and you need to be sure your Agent or Conveyancer understands the law when it comes to preparing a Form 1. A good Agent or Conveyancer is critical to the sale process of one of your biggest assets – your home! So, take care to choose your Agent and Conveyancer wisely and check their qualifications.

How much does a Form 1 cost?

The cost can vary depending on the property and who prepares the Form 1 for you. Government searches required to be ordered will vary with the type of property you are selling. For example, if the property you are selling is part of a strata group managed by a body corporate, you will require body corporate searches and the body corporate manager will charge a fee for this. The nature of the property determines the number of Government searches required to be ordered and this will impact the cost. The other cost involved is the preparation of the actual Form 1 document, some Agents will prepare this document and include this as part of their fee for service, others outsource to a Conveyancer for preparation or will request the Vendor to arrange with their chosen Conveyancer. The cost for a Form 1 with Government searches is significant; however, you will require this legal document to enable you to sell your home. For the 2021 Financial Year the price for a Torrens Title residential property would be in the vicinity of $750 to $850 including GST and for a Community/Strata Title $900 to $1,000 including GST. Please note, this cost is just an indicator, as discussed, it will vary depending on the number of Government searches required and what your provider charges for the service.

What is important is your Agent advises you early in the appraisal process that you will require this document to sell your home and there is an additional expense if it is not included in the Agent fee.

Changes to the Form 1

From 1 July 2021 the South Australian Government has updated the Form 1 to include additional disclosure requirements and deleted some items. It is important your Agent or Conveyancer is across these to ensure an accurate Form 1 is served on the purchaser after 1 July 2021. The last thing you would want as a Vendor is legal action from the purchaser for a faulty Form 1!

Ask your Agent to explain the Form 1 document to you, if they cannot explain the Form 1 and all the information in it, then is this the right Agent for you?

Why use an SA Listings agent?

SA Listings offers a fixed agent fee for service, with no hidden extras. You will be advised of the Form 1 costs prior to listing a property for sale. SA Listings understands the Form 1 disclosure requirements and will ensure the document is explained to you and any potential purchasers of your property. The team are licensed land agents, qualified lawyers and conveyancers, providing a strong skill set with the sale of one of your biggest assets – your home! To find out more visit SA Listings.

Justine Thomson

Selling a Tenanted Property

Selling a rental with tenants requires a number of additional requirements the owner and agent must abide by to ensure tenant rights under Legislation are met. While these requirements initially may seem onerous, by keeping a tenant “in the loop” with timely communication, any issues can be dealt with before they become insurmountable problems. There are pros and cons to selling a tenanted property:

Pros:

Rental income continues while the property is on the market.
Buyers benefit from purchasing a tenanted property – reducing costs such as letting fees and time vacant after settlement.
Potential buyers see the property as “rentable”

Cons:

Increased legislative requirements for notice to tenant
Reduced flexibility for opens
Possible lack of control over the standard of presentation of the property
Potential buyer pool – buyers after vacant possession may not be interested

A successful campaign of a tenanted rental keeps the tenant “in the loop” before, during and after the sale. A tenant who does not know what is going on, is uncertain of their future, or is kept in the dark with open times and notice will likely not be accommodating with access to the property for opens.

So, how do you do this?

Notice of Sale

It is a requirement before entering a residential tenancy agreement to advise a prospective tenant if owners have or intend to advertise the property for sale. A tenant can terminate a tenancy if the owner enters into a contract for the sale of the property within 2 months after the start of the tenancy agreement and did not inform the tenant of this intention.

Issue Correct Notices within Required Timeframes

On deciding to sell a tenanted rental property, an owner must advise the tenant with at least 14 days written notice they have entered into a sales agency agreement. Advertising the property or access to the property for the purpose of showing prospective purchasers cannot occur before this 14-day timeframe expires.

Once the initial 14 days has passed, the right of entry to the property for opens is outlined in the Act. These requirements include no more than 2 occasions within any 7-day period, at a time previously arranged with agreement of the tenant. If an agreement cannot be reached, at a time within normal working hours with reasonable notice. Reasonable notice is not defined, but at least 7 days minimum is advised.

Once the property is sold, the tenant must be advised in writing within 14 days or as soon as possible after the contract of sale is entered into of the name of the purchaser and the date from which rent is to be paid to him or her.

Remember, the tenant has a right to stay at the property during any open inspections, including on auction day. The tenant is also entitled to the quiet enjoyment of the property – continuous driving past or prospective purchasers walking around the property may not meet this requirement.

SA Listings tips:

Start an open and honest dialogue with the tenant as soon as the decision to sell the property is made.
All notices MUST be served in a timely manner, erring on the side of caution.
Provide the tenant with a complete schedule of inspections as soon as possible.
Any property manager MUST be in the loop with the decision to sell, plus the intended schedule. Consider combining routine inspections with other required access (such as photo sessions) in order to minimise tenant disruption.
Consider a small rent reduction throughout the campaign. This will show the tenant you are conscious of the disruption to the tenant’s enjoyment of the property.
Stay flexible. The tenant must not unreasonably refuse to allow access. However, be prepared and willing to negotiate access times.

SA listings will happily arrange for all of the above requirements to ensure your sale campaign runs smoothly. We also partner with experienced property managers who understand the needs of both tenants and landlords throughout a sales campaign.

Planning and preparation is needed. But if done, there is no reason the sale of a tenanted property should not go smoothly. Contact us for more information.

Justine Thomson

Top Reno Tips Before Listing

I am often asked as an Agent, “What reno’s should I do to my home to maximise the price I achieve on sale?” Usually when a person is asking me this question, the work they are doing to the home is not for them to enjoy but to present the property as best they can to maximise return.

To answer the question, there are 5 key reno’s that will maximise the property price.

Paint: this can be done affordably if you manage yourself and can literally add tens of thousands to the sale price. Internally use a neutral white colour on all walls and ceilings. Do not do feature walls, this can polarise people if they do not have the same taste as you. Bring in colour with soft furnishings and wall art. It is also a good idea to freshen up external timber and gutters with a lick of paint if required.

Update the Kitchen: this is a major selling point of a home. Update door handles, fixtures and fittings. If the budget allows and the cabinetry/benchtops are out-dated, consider replacing the cabinetry with white laminate and upgrade the benchtops.

Update the Bathroom: you do not need to rip out and replace the entire bathroom but look at the quality of the sink, tapware and showerhead. If the tiles are dated, consider replacing or painting. Another low cost exercise is to clean all the mould from the grout. There are great products available on the market to make this job simple and easy.

Spruce up the Garden: the front garden is the first thing a prospective buyer sees. Make sure it is neat, tidy and presents well. Replace any dead plants with new, mow lawns and remove all weeds.

Repair and Patch: Consider fixing any maintenance issues including any holes/cracks in walls, cracked tiles, worn timbers and any appliances not working.

Your home is one of your most important assets and when listing to market you want to maximise your dollar return. Some hard work prior to listing should pay good dividends and will reflect in the final sale price.

Justine Thomson

Take Advantage of a Government Incentive

NRAS, or the National Rental Affordability Scheme. Don’t be bamboozled by the big words, the scheme is easy to understand and provides benefits to a wide demographic of people in Australia. Not only do investors benefit from NRAS but so do tenants and those looking to get a step up on the property ladder. So what is it? Why did it come about? And how does it work?

NRAS is a Federal Government initiative introduced in 2008. It was designed to encourage investment in residential housing to assist people on low to moderate incomes with an opportunity to rent homes at 20% below market rent values. It is not social housing; rather, it is a scheme to provide affordable private rental homes to individuals and families who meet the income threshold. To attract investors, tax-free incentives are provided to those who invest in and own approved NRAS properties.

NRAS was designed to assist in addressing housing supply and affordability. Pressure on the private rental sector, increased rents, the difficulty of low to middle income households to access affordable private rental homes, plus the reduced supply of public housing contributed to the NRAS initiative being created.

NRAS provides benefits to both investors and tenants:

Tenants: Eligible tenants can access private rental accommodation at 20% below the market rate. Tenants’ income may increase up to 25% before their eligibility is affected. Current income eligibility rates are available here: https://goo.gl/vHuAtF

If you are interested in renting an NRAS property and meet the eligibility criteria, it can be an affordable housing solution, to assist you in meeting your financial goals.

Investors: Approved investors are eligible to receive the NRAS incentive for up to 10 years for each approved dwelling where the conditions of allocation for the dwelling are met including renting the property at least 20% below market value rent.

The NRAS incentive for the 2017/2018 year is as follows:

Federal Contribution: $8,335.75

State Contribution: $2,778.58

Total Incentive: $11,114.33

The NRAS incentive comprises two components: the Federal Government contribution is a tax offset and the State Government contribution is a direct cash payment.

The benefits for investors can be significant. For example: If Jane invests in an NRAS property where the market rent is $300, she must rent the property out at $240 per week to be eligible for the NRAS incentive. Jane effectively receives $3,120 less in rent per annum for her property. However this is more than compensated by the above annual NRAS incentive she receives from the Federal and State Government. To understand the full benefit of the NRAS incentive and what it means to you financially, it is best to speak with a qualified Accountant or Financial Planner before purchasing an NRAS property.

SA Listings has a strong understanding of NRAS and works closely with relevant providers in South Australia. SA Listings currently has a NRAS property available in Evanston, South Australia. To find out more about NRAS either as an investor or as a tenant, please contact SA Listings for more information.

Justine Thomson

Preparing Your Home for Sale

Pay attention carefully, this blog could add thousands of dollars to the sale price achieved by your home, with only a relatively small outlay, plus some hard work and elbow grease! How? Well, the formula is simple:

Fresh paint on walls: preferably a neutral or crisp white – it’s amazing what a coat of paint will do
De-clutter: everything packed away in boxes, except the bare essentials
Minimal furniture: key pieces only with modern soft furnishings and accessories
Well kept garden: fresh mulch, neatly cut lawns and healthy plants
Clean windows and walls
Clean pavers and driveway
Repair any noticeable damage to the home: patch holes in walls for example
Remove mould from bathrooms and refresh grout
Basically, present a clean sparkling home that smells fresh!

Clients often ask how the home should look for photography and opens. To help clients visualise what is needed, I can provide pictures of furniture to be showcased in each room, such as those shown below. Take note, while each room in your home will not look exactly like this, I want clients to take away from these pictures the number of furniture pieces in each room and the way it is styled with the soft furnishings and accessories.

The property image above, listed and sold recently by SA Listings, was styled for minimal cost and achieved a sale result of $46,000 in excess of Vendor expectations. Note the following from the photos:

Formal lounge includes 3 key furniture pieces: lounge, coffee table & cabinet
Bedroom includes 3 key pieces: bed and two side tables
Second bedroom includes 3 key pieces: bed, desk and chair
Kitchen: totally clean bench tops with exception of minimal accessories
Lounge includes 4 key pieces: lounge, chair, cabinet and coffee table
Meals includes 2 key pieces: kitchen table and 6 chairs
Outdoor area includes 2 key pieces: outdoor table with chairs
Front yard and rear yard: neat, tidy and clean

In addition to the key furniture pieces, the soft furnishings and accessories in each room really make it pop. Think eye-popping paintings, lamps, neutral toned rugs and fresh flowers, with a common colour scheme. For bathrooms, all you require are matching towels and a beautiful soap dispenser on the vanity.

A big mistake commonly seen in homes on the market, is overcrowding in each room with too many furniture pieces. This can have the impact of making rooms appear small and cramped. Whilst it may be difficult to live without these pieces, for the limited period it is showcased to market it is well worth taking the pain to achieve the gain.

We hope you found this blog informative and if the styling process is too overwhelming, SA Listings can assist you with professional styling. We offer a unique styling service with affordable styling packages. To find out more contact us at http://www.salistings.com.au/contact

Justine Thomson

What Price to Offer?

As an Agent I am often asked the same question from each and every potential purchaser, “How much should I offer?” The answer to this question is: there is no answer! As the Agent selling the home I work for the Vendor and my role is to achieve the best possible price for them – but I’m unable to advise you, the purchaser, of what price you should offer for the property.

However, to give you some insight into ways to determine the offer price to secure the home of your dreams, SA Listings suggests you think about the following points:

Do your own research on the area and current market sale prices for similar properties. To assist you with this, a good Agent should be able to provide you with a list of recent sales of comparable properties in the area.

A good Agent should always consider current market prices for similar properties sold in the area and should price the property accordingly. Your own research, plus the agent’s comparable price list, should give you an indication of where you believe the property price sits. Remember, the price advertised will be the Vendors expectation so your offer should, as a minimum, be in this range.

Have you missed out on previous properties you were interested in? If so, the reason may be is you are low-balling your offer in the hope of securing a property below current market conditions or you may be seeking a property outside your budget. I can tell you, the chances of securing a property using this approach is slim. A good Agent prices the property in accord with current market conditions and if you low-ball an offer the Agent will likely recommend the Vendor reject it. The likelihood of securing a property using this tactic is as probable as daily rain in Dubai. Do not low-ball, go in with your best offer from the start.

Consider carefully any conditions you include with the offer. An Agent may recommend a Vendor accept a lower offer if no conditions are attached, for example, a cash unconditional may be more attractive than subject to sale. So be prepared: have finance pre-approvals in place, offer an appropriate deposit and know what you are prepared to do regarding settlement timeframes. Being prepared here provides confidence to the Vendor of your ability to pay for the property and shows you are serious about the property and your offer.

Remember, each property is unique and if you have been searching for some time and this property ticks most of your boxes then don’t miss out, put your best foot forward from the start. Too many people miss out by trying to snag “that bargain” when in reality, had they put in a realistic offer initially they would have secured the property.

One final note, don’t bother asking the Agent where your offer sits compared to others. A good Agent will not disclose this as it is against South Australian legislation. The agent is unable to tell you any details of other offers, other than the fact there are other offers. If you wish, you can ask for this in writing.

If this home is THE ONE, your inner Zen, your sanctuary, the right floor plan, the right location and within budget then don’t be influenced by other offers, just focus on what you want, what you can afford and put forward your best and final offer. You may not get a second chance. If your best offer is not good enough, be prepared to walk away, another one will come along.

If after reading this blog, you are unsure on how to go about the negotiation process you can always engage a Buyers Agent to act on your behalf. SA Listings offers this service – for more information contact SA Listings at info@salistings.com.au

Justine Thomson

Staging a Home for Sale

The whole world is a stage – but should your home be?

What is it buyers look at when visiting an open home? Frankly, ask three different people and you may get four different answers! While one may step back and take in the larger picture of the home as a whole, another may look at the same house through the eyes of the furniture, the art, or even the family photos on the wall, and yet another will simply cast a critical eye over the structural integrity of the home. It may even be that it is easier to answer what is it buyers look at by first ensuring there is nothing in the home that will turn them off as soon as they walk in.

Some examples? Tired, ratty old furniture that has seen better days, magazines or books in the loo, and whilst you may simply love your collection of every set of commemorative babushka dolls from the twentieth century – it may be many buyers will not.

Now of course, most people have some idea that in order to correctly present your home for sale you need to “de-clutter” and “de-personalise,” but what about the styling through out the home? This is where the services of a home styling or staging professional can help – with interior designing skills to make your home stand out that extra mile.

A home stylist will cast a critical eye over the home, and will be able to provide appropriately styled furniture and accessories to suit. For example, large furniture pieces may be comfortable, but they may be cramping the space available, making it look smaller than it really is. Changing them over for smaller, less intrusive pieces that match and compliment other pieces in other rooms creates a sense of space and style. Styling gives potential purchasers an idea of what the home could be for them, not what it currently is for the vendor.

A home stylist may also remove items that stand out and draw the attention of buyers, such as loud artwork or rugs. Again, a flowing sense of style throughout the home will help ensure the home appeals to as broad an audience as possible.

Remember, first impressions count. You want buyers to walk into your home and imagine living there with their family, inviting their friends over to a home they are proud of, a home that is up to date and on trend.

Not every home will require the expense of a stylist or staging. But in some cases, the outlay of a moderate expense may mean a greater return come settlement day.

Should you be interested in property staging, during the appraisal of your home the SA Listings’ team is able to discuss options that best fit your property and budget.

Justine Thomson

Mum and Dad Home Loans

Christmas is fast approaching and we all appreciate the little gifts we receive from loved ones but is helping your adult child buy their first home a help or a hindrance?

It is not difficult to understand why adult children are turning to their parents for a step up on the property ladder. In a Parliamentary report titled, “Out of reach? The Australian housing affordability challenge” (8^th May 2015), there are some shocking statistics. Up until 2001 annual income grew in line with housing prices, since 2001 the growth in property values has dramatically outstripped growth in household incomes. NATSEM [National Centre for Social and Economic Modelling] data shows that house prices increased by 147 per cent compared to income growth of just 57 per cent between 2001 and 2011. In dollar terms, the median price of a house more than doubled from $169,000 to $417,500 while after tax income increased from just $36,000 to $57,000. Whereas in 2001 an average home price in Australia was 4.7 times the average income, by 2011 this had increased to 7.3 times.

This graph below (source: Master Builders Association), highlights the housing affordability issue in Australia.

The Housing Affordability Ratio is measured by dividing the median house price by the median income of the house purchaser. A ratio of 5 or less, below the green line, is considered affordable, a ratio of 7 or more, above the purple line is severely unaffordable. This horrific statistic can provide some insight as to why parents are assisting adult children fund their first home. Question is, should we be?

This can be a very difficult question to answer. Prior to gifting money to your adult child, funding their deposit or going guarantor on a loan, make sure you consider the following:

Will you have enough money to fund your own retirement if you assist your children?
If you go guarantor on the loan and your adult child’s circumstances change and they can no longer fund the mortgage repayments. Will you be able to meet these repayments? If not, there could be serious consequences for your own financial stability.
Should your adult child be in a relationship and live with their partner and things turn sour resulting in a relationship break up, watch the can of worms open up! If you paid the deposit or funded the home, the law may see it as a gift and the ex-partner walks away with half or more! Alternatively, if you are guarantor on the loan: What are the financial implications with the split?
Have you taught your adult child how to manage their finances on their own? If you are generous and assist them with their first home purchase they may not appreciate the value of a dollar. The best lesson in life when it comes to financial savings is delayed gratification. What you need to give up now to get something in the future can be a great value to instil in your child. If it is out of reach, then maybe it should never have been!
If the bank will not loan the funds to your adult child, the risk must be high. If you guarantor the loan you take on this risk.
Is your adult child willing to make sacrifices to invest in property? When I talk of sacrifices, I refer to their willingness to purchase in an affordable area that may be many kilometres from the city and to also manage their spending carefully.

This is not an exhaustive list but it does provide food for thought. If you do decide to assist your adult child it would be a good idea to ensure agreements are in writing and clearly understood. Life can often change course when we least expect it.

I have an adult child, still studying at University and living at home and understand the difficulty in wanting to provide for their financial future. Maybe times are changing and the reality of home ownership in Australia is now only a dream. Long term leases could pave the way for our kids into the future, so maybe you should be the one investing in another property!

Justine Thomson

The Great SA Property Rip Off

The headline may have caught your attention but this will catch your attention even more. I have calculated stamp duty payable across all states based on the July 2016 Adelaide median residential house price of $445,000.00 and the results will surprise:

QLD: $0

WA: $2,878

VIC: $9,335

ACT: $11,260

NSW: $15,515

TAS: $15,910

SA: $18,580

NT: $19,688

The calculations assume the property is an established residential Torrens Title home purchased to live in.

Effectively, South Aussies are paying 4.18% in additional tax on a $445,000 residential home to live in, compared to their QLD counterparts who pay zip, zilch, nothing! And we pity our poor NT cousins who are ahead of us at 4.42%. I call it a tax because it is. The State Government aptly see it as our “fellow duty” to help out the State Administration to fund the coffers. The differential of the transfer fee between SA and the States is also worth noting but I don’t want to depress you even further.

Stamp duty in SA is a barrier for first home buyers trying to claw the end of their fingernail on the property ladder. Some available options for residential stamp duty relief is to purchase an off the plan apartment or buy land and build.

Over recent years we have had some reforms in residential stamp duty relief with off the plan apartments but is this the right way to go? A policy providing stamp duty relief for off the plan apartments will inevitably increase the supply of apartments under construction but will there be enough demand from South Aussies to live in apartments? We still have a good supply of land available North, South and in the Adelaide hills to support our current population growth. We are not yet Hong Kong with limited land supply and large capital values. The concern with current policy is apartment supply will outstrip demand and basic economics suggests this will have a negative impact on apartment prices.

It would only seem fair to spread the love of stamp duty relief across all types of residential purchases. Alternatively, we can all move to QLD!

Justine Thomson