July Newsletter 2009
Wednesday, July 01, 2009
THE TIME IS NOW...
If you are looking to trade up or get out of the real estate market, now and until September 30th will be an ideal time to take advantage of the 1st home buyer grant, as it will be fazed out after the 30th September and will revert back to the original grant by December 31st 2009.
If you are thinking of selling and building a new home, you will need to act quickly with the State Government announcing in the latest budget that stamp duty on new properties up to $600,000 will be halved, which will equate to savings of up to $11,245. The catch with this is that this grant will end on December 31st 2009 meaning you will need to act very quickly...
With prices of our entry level properties rising between 10% & 15% in the past six months plus this latest grant, what may not have been possible 6 months ago could now be within your reach but not for long.
If you would like us to put you in touch with our mortgage broker to see if under these current conditions you would be able to trade up, please don’t hesitate to contact us. Or if you just want to know what your property is worth in this current spike in interest, please call 9837 7000 to speak to one of our sales people.
ACT NOW !!
With the 1st home buyers purchasing the majority of entry level properties in the area at the moment, will the rental market be as strong at the end of the year as it is now?
We feel that in 6 months (the minimum time a 1st home buyer must stay in their property to qualify for the 1st home buyer grant) we will start to see a number of these properties come onto the rental market as 1st home buyers move back with mum and dad or into share accommodation.
This will mean an increasing number of rental properties which will possibly translate into a softening of rental prices as supply starts to overtake demand. So if your property manager has suggested an increase for your investment property rent and signing a 12 month lease, now is the time to act, as owners that don’t have a secured tenant may need to reduce their rent to keep good tenants from moving to cheaper properties.
If you wish to discuss your leasing options with our Property Management team, please don’t hesitate to contact them on 9837 7000.
High interest rates benefit investors
What happens if rates go up? In today's low-interest-rate environment, one of the common questions property investors ask is, "What happens if I buy now and interest rates skyrocket, like they did in the 1980s?"
It's an understandable concern. Today's historically low interest rates can't be sustained forever because at some point the economy will begin recovering, inflation will grow and rates will rise.
That's part and parcel of the economy's cyclical nature.
When rates do rise, it's doubtful they will hit the dizzying heights of the late 1980s. The major lenders certainly don't think so; they're setting their 10 year fixed rates about 7 per cent.
With vast resources and access to the world's top economic minds, it's highly unlikely that major lenders will make the wrong call about the future direction of interest rates.
But let's say for argument's sake that they do and rates climb back to the heady levels of 20 years ago.
If interest rates go up that far, it's a sign that business and consumer confidence is high. When rates go up, so does inflation. And when inflation rises, so do property values. Yes, your holding costs will be higher because of higher interest rates but as an investor you will benefit on three fronts.
High rental returns
First-home buyers won't be active because property is less affordable in a high-interest-rate environment. This will keep them in the rental market, put pressure on the available rental accommodation and drive up asking rents. The higher the interest rates, the higher the investment yield.
Negative gearing benefits
If your expenditure on the property exceeds your rental income, you'll be able to soften the impact and increase your cash flow by claiming the difference as a tax deduction.
Substantial sale proceeds
If you can't afford to hold the property, you can sell it. While this isn't an ideal scenario, your property will have grown substantially in value during the time of high inflation, so you'll be better off than when you purchased it and that's the aim of investing.
Author: Mark Armstrong Publication: Sydney Morning Herald
** Get out and about these July School Holidays **
If you are stuck for ideas on what to do this coming July School Holidays, then Blacktown City Council has the solution - the Blacktown City School Holiday Guide!
Get active during the School Holiday period and take advantage of the great range of activities and events on offer in Blacktown City.
The Guide will be available from Monday, June 16, 2008 and is a comprehensive listing of all the fun and exciting activities taking place at Council's venues and facilities in your local area. From art, craft and sporting activities at Emerton Youth Recreation Centre, to the first Kids Marathon at Blacktown Olympic Park, there is something for everyone aged between 5 - 18 years old!
Other activities included in the Guide include; Kidz Blitz, NAIDOC Week, music workshops and Acceler8 Learn to Swim School. For a copy of the Blacktown City School Holiday Guide for July, visit www.blacktown.nsw.gov.au