Author Archive for Alan Reay – Page 2

bigstock-Chairs-On-Deck-Facing-Ocean-6971165Many people reading this column might be relaxing at a beachside getaway, a wine region in the south-west, a great fishing spot in the Kimberly or perhaps in a heritage town in the wheat belt.

Over summer many people will be enjoying Western Australia's delightful holiday spots, particularly along the coast. Places like Dunsborough, Denmark, Dongara, Lancelin, Cervantes, Albany and beyond. Over the years many people have bought holiday homes in these places.

Today, holiday homes are being purchased as far apart as Exmouth and Esperance. It all depends on people’s budget, allowable travel time and their strategy behind the purchase.

The ideal holiday home for most people is one that is always available for short stays, but this is a costly option for people who need to take out a mortgage on a second home. They are not the inexpensive country option they once were, particularly on the coast.

However, these days an increasing number of buyers are choosing to combine the purchase of a holiday home with long-term investment plans. This is possible because many favoured holiday locations have developed viable rental markets with local tenants leasing properties for extended periods, often beyond the summer holiday.

Some of these places might include Albany, Harvey, Busselton, Margaret River, Gin Gin, York  and Cervantes, for example.

Homes initially purchased as investments in these locations can later be used for holiday purposes.

In places where demand for rental accommodation is seasonal, such as fishing towns, windsurfing spots and agricultural areas, there is a greater likelihood of vacancies for rental properties outside the peak holiday or industry period. However, the rentals are normally much higher in properties leased for short periods and this can partly offset the loss of rental income when the place is vacant.

The benefit of this strategy is that the owner can then take advantage of the seasonal rental market by using the property off season.

Another option for holiday homebuyers is to purchase a unit in a resort development. Some resort operators will guarantee a rental income for a fixed period. In many cases the purchaser is acquiring a share of a managed investment scheme, which includes a stake in the total income and expenses incurred by the resort.

Either way, the most important consideration when buying a holiday home is, as far as possible, to set aside the emotional reactions and approach the purchase with a clear understanding of the real value of the property, its ongoing costs and the likely rental income.

If you are travelling around the state this holiday season and maybe thinking of a holiday home investment, why not drop into the nearest REIWA agency office and talk to the staff about opportunities?


Spare room for extra cash

Wednesday, August 7th, 2013

THERE is nothing new in using a spare room for a bit of extra cash.bigstock--Room-for-Rent-sign-45888079

However, in these days of legal over-complication, it is important you know your rights and obligations.It can be tempting to be very casual about renting out a room: you meet someone, somehow, and you all agree to terms, they move in, pay cash and everything is beautiful.  Now while this may have been the norm back in the 1970s, this is 2013 and you need to get serious.

Back then, tenants were more conditioned to do the right thing and your extra income could be, let's say, ``discreetly'' earned. It is nothing like this today.  Sourcing tenants today is actually much easier than ever before, contact nearby universities or large employment bases such as hospitals.  Consider putting a print ad in the right section of the paper, or go online.

The major difference with tenant selection compared to when leasing a whole property is you will have this person in your home, this means you will share some facilities, will you cope with bumping into them in the morning? You will need to interview them thoroughly and I suggest building a trial period into your agreement.  You can access a standard tenancy agreement or lease, depending on your state, online.  As much as there may be a temptation to avoid the formal tenancy agreements, I strongly advise you treat this very seriously, get advice, get the right agreement and ensure all is executed correctly, and consider adding conditions to your agreement, these may state how the bills for things such as electricity, internet or pay TV are divided and when the tenant needs to pay.  Define access and the use of other areas of your home - even where they may park their car, not smoking, or playing loud music late at night, are reasonable conditions, for example, but you need to accept they will have a right to live there; asking them to stay in their room at all times and only using the shower on alternate nights after 11pm is not really reasonable.  This is effectively a sharing scenario so, unless the rental space is totally independent, you must give this a great deal of thought.

Successful tenancies tend to be the ones with clear boundaries from the start,  insurance must not be ignored, accidents do happen, contact your insurer before the tenant moves in to make sure your policy conditions cover you, and if the rental allows sole access to a bathroom or more ``self-contained'' space such as a kitchenette or living area, or individual access, expect more rent, but be aware that if all goes well and you want to start renting out other rooms in the house, check with the relevant authorities because different rules can apply the more rooms you let out.

Now the bad news: you are about to generate extra income for yourself, so your accountant and the taxman will want to know how much you made, worse still if you don't tell them and they find out subsequently, ouch! However, letting them know in advance will allow you to discover what, if any, additional expenses can be claimed to reduce your tax liability, if you have the tenancy agreement in place, the right conditions, interview thoroughly and secure the right tenant, plus sort out insurance and the taxman, you are on your way!

(source: Perthnow - by Andrew Winter - host of Selling Houses Australia)

bigstock-A-plastic-calculator-displays--41935279The cash rate will fall to a low of 2.25% before the end of the year says NAB chief economist Alan Oster.

NAB is forecasting two rate cuts - one in August and now an additional one possibly in November if not sooner -  following a more "sober and realistic" outlook from RBA governor Glenn Stevens.

All the major banks expect a rate cut next week with ANZ changing its forecast from November to August.

"Until yesterday the RBA had been expressing optimism about other drivers of growth picking up," says Oster.

"Yesterday Glenn Stevens provided a much more sober and realistic outlook, suggesting that the economy cannot rely on housing and consumption to plug the growth hole.  This is in line with our forecasts and suggests that having recognised the reality of lower growth with benign inflation more rate cuts are likely.

"We had already been forecasting a 25 basis points rate cut in August to 2.5% and with the governor giving the green light for lower interest rates this now looks a sure thing.

"We now also expect an additional 25 basis point cut to 2.25% before year end – most likely in November after the third quarter CPI although it could be earlier.

"Beyond this, we expect the Australian economy will continue to grow below trend, income growth to be weak, and the unemployment rate to rise to and possibly above 6.25%.

"So the RBA will retain a bias to ease well into 2014 and a cash rate below 2¼% remains a real possibility."

(source: - By Larry Schlesinger)

Categories : Featured, General, News

Renovating tips for first-home buyers

Wednesday, July 24th, 2013

dog as a painter with a brush and colorSOME simple precautions can make life easier and cheaper when doing up old properties.

If the great Australian dream is buying a house on the traditional quarter acre block, then the fantasy is renovating it. Reality TV shows such as The Block, House Rules and Selling Houses Australia don't do anything to dispel the illusion.

Simply follow their lead, knock down a few walls, pull up the carpet to reveal original floorboards and a slap on a new lick of paint to transform a house from dull and drab to sleek and sexy. Well, that's the dream. Reality is something different altogether.

While buying the worst house on the best street is an opportunity to add value to a home, it can also result in stress, tears and cost blowouts if you aren't careful.


Before exchanging contracts, it's essential to conduct a pre-purchase inspection report.

Although they aren't mandatory, Philip Connor from Express Building Reports says it can save a lot of heartache and money.

A standard report will set you back around $500 and will tell you the present condition of the property, the structural integrity of the building and what potentially expensive problems you'll be inheriting.

As building inspectors no longer have to be licensed, Philip suggests the best way to find someone reputable is to look for a person with 15 years of practical experience and who is insured.

"My first question would be, are you insured?'' he says. ``If they make a mistake and they're not insured you can't sue them.''


A property inspection on a house reports on the entire property from fence to fence; it's a different story for apartments.

"With a unit you're inspecting only the unit and the immediate surrounding area,'' Philip says. "It can be problematic because you don't inspect lifts or other people's apartments.''

Philip recommends buying a house rather than an apartment, but if you can't afford to, choose a unit in a smaller block.

"You can get a better feel for the history of smaller buildings,'' he says. "Important issues that apply to units include noise and we don't inspect or comment on noise between units.

"The other is fire. If the unit block isn't certified for fire safety, you could be looking at $15,000-$20,000 to certify it.''


Philip says houses built between 1895-1920 can be affected by rising damp, and those built from 1920-1985 can have asbestos.

"One issue that affects all of these houses is drainage,'' he says.

"Rising damp, termites and wood decay fungi are all basically caused by poor drainage, so if you can solve the drainage problem you can often resolve all three issues with one stroke.

"It's inexpensive, just make sure that the water that comes off the roof is taken away from the base of the building using a stormwater system or conservation tank.

Then you'll need some patience.

"Once you resolve the drainage issue, you need to allow at least three to 12 months for the building to start to dry out,'' Philip says.


"Rising damp is like sex; every generation has to find it out for itself,'' Philip says.

"I've been around for so long I assumed everyone knew what rising damp was but that's not the case.''

Rising damp is when moisture seeps up from the ground through porous building materials, such as brick, and up through the walls of the home. It stains the walls, causes paint and wallpaper to peel, rots skirting boards and generates a musty smell.

While it's unpleasant, it's also treatable.

A damp-proof course, made from lead, slate or asphalt, is used to waterproof walls so moisture doesn't penetrate the bricks.

To ensure they do their job, Philip says the soil needs to be kept at least 500mm below the damp-proof course. ``Rising damp rises only to one metre above ground level, however if ground levels are built up it's going to go another metre,'' he says.


Philip says that inspections don't cover asbestos because it's virtually impossible to detect without ripping up the home.

"The company may say, `If we see fibro then we will flag that as most likely containing asbestos,' but here is the catch: there may be a painted surface that you don't flag as fibro, so you might miss it,'' he says. ``There are some fibro materials that do not contain asbestos, but as a general rule, you should always suspect fibro as having it.''


Philip says it's important to take a realistic look at the numbers before you buy.

"If you're buying a dump in a bad location, watch out. If it's in a great location, it changes the ballpark rules substantially,'' he says.

Paul Myors, energy efficiency specialist from Ausgrid, says renovations over $50,000 require a BASIX certificate, which measures a home's energy efficiency.

Approximately 60 per cent of a home's energy consumption comes from heating, cooling and hot water systems so a major renovation makes it easier to install insulation, reverse cycle air conditioning and a gas hot water system to reduce bills.

John Rose from TKD Architects believes it pays to be aware of local council requirements before buying, otherwise your dream of turning that single level semi into a split level home could be shattered.

"There are always development control plan differences between councils and that can be the character of an area, heritage or environment,'' he says.

"You have to know the local council code requirements, but having said that, in recent years a number of changes have happened to council codes to bring them into line. It's much easier these days to understand how a building can be placed on a site.''

John has seen an increase in clients asking architects to attend site inspections.

"Most people feel that getting a builder's advice is the most important thing but in reality you need to understand if and how you can make it into the home you want. Inner Sydney is full of cottages 40-80 years old that need a substantial amount of work done,'' he says.

"You need to make a judgment call on what good advice is worth to you. Most people are paying for one or two hours of an architect's time, which is between $150-$500.''

John suggests discovering what you can do to a property without approval before purchasing.

Top 10 costly repairs

David Hallett from Archicentre,, lists his top 10 renovation money pits.

Re-stumping:An inspection of the sub-soar area is the only way to tell whether the foundations are solid.

Roofs: A dodgy roof, which includes leaks, scracked roof tiles or poor guttering, can cost tens of thousands of dollars to repair.

Wiring: Blackened power points are an syndicator that the home's wiring is problematic.

Pests: If access hatches to the sub-floor or sceiling are blocked, chances are they could be trying to prevent access which would reveal pest infestations.

Plumbing: Rusted pipes in old homes may shave poor water flow. Check water pressure by having a few taps running to test pressure and see if the water is discoloured.

Painting: If paint has been used to mask a sproblem, you could be up for the cost of repair and repainting.

Plastering: Plastering can be as simple as sminor cracks or major work if restumping a home. Framing: affected by termites will also need replastering.

Rising damp: Damp walls encourage mould and weaken a building's frame.

Guttering and downpipes: Guttering that sis badly fitted, rusted or neglected can cause issues during heavy rains.

Stormwater drains: Underground pipework, including stormwater drains and sewer pipes can be expensive to repair.

(source: Perthnow)

What’s trendy in bathrooms right now?

Thursday, July 18th, 2013

BathroomNEUTRAL tones, luxurious freestanding baths, frameless showers and plenty of natural light and fresh air are all the rage in bathrooms nowadays.

But Angela Gianakis, an interior and exterior consultant for Outside Square, says functionality is always key.

Take freestanding baths, for example. She says they can look fantastic and are easy to get in and out of, but must also be easy to clean around.

Anyone upgrading their bathroom should think carefully about whether the freestanding bath of their dreams will be very difficult to clean around the back and underneath.

She also points out they need to be placed in a handy location to taps.

''Make sure you can add a bit more warm water without having to get our of your bath,'' she advises.

Frameless showers, which are easy to clean, can be found in many of the most modern bathrooms, but they also need to be carefully thought-out and installed in order to avoid leaks, Ms Gianakis says.

''The preparation for a frameless shower is important in making sure that they function well.''

Ms Gianakis says large windows and plenty of natural light are another trend in bathrooms.

''Lighting and ventilation are very important in a bathroom - we all know that things like to grow in warm areas,'' she says, adding small windows can be just as effective and sometimes more practical

''Remember that if you can see out, people can probably see in,'' .

She says she is not a fan of bathroom window treatments (such as blinds and curtains) because they tend to gather dirt, dust and steam.

Ms Ginakis says neutral-toned bathrooms are in vogue at the moment, but can be jazzed up with coloured feature tiles.

''Timber-look'' tiles are also very of-the-moment, she says. They can feature on a wall or around bathroom joinery.


Grow Ideas for your garden

Wednesday, July 10th, 2013

GardenKNOWING where to start with the design and construction of a garden can be a very daunting process.

Looking out over a bare grassed garden with no inspiration and no direction can lead you to think that creating a lush inviting space is almost impossible.

The first step is to find out what gardens you like and work out what sort of garden you want and the way to do this is through research. Trawl the internet and glossy magazines and create a mood board of things you love.
All great gardens start the same way - with a design.

You need to measure all your boundaries and plot all your features such as trees, garden beds, level changes and services so you can draw a scale base plan to scribble your ideas down on. Don't forget to make a few copies.

Once you have a base plan you need a list. Think about everything you want to use your space for - entertaining, growing vegies, somewhere for the kids to play, growing plants and hanging out the laundry. However big or small, write it down as you will need to fit it into the garden.

Now you need to translate the list to the base plan. Before any style is added think about the layout of the areas and plot them with shapes such as circles and squares. This will give you an idea of scale and proportion. It will also let you know if you can fit everything you want into your garden or if you need to start eliminating some of the elements.

Don't try to fit everything in if you are tight on space, work to a scale and be realistic - a 2x1 metre area may be big enough for a dining table but there will be no space to move around and enjoy it.

The space between each element is the space you will be in so it's as important as the element itself.

Now you can add some detail to the plan. What shape will the entertaining area be? What materials will you use?

Will there be any vertical elements? Go through each element and try to think in detail about how you want the final product to look.

By carrying out the previous stages of basic planning, your mind is in the right frame to start thinking about the detail - and once you are thinking about the detail you are no longer worried about where to start.


(source:  Charlie Albone - News Ltd)

Categories : Featured, News, Renovating, Tip

bigstock-hand-drawing-house-in-a-whiteb-27027779QUESTION time at Canberra's Parliament House is now over until after the Federal Election, giving us a break for probably a couple of months from the bluster, bravado and frustrating antics of our pollies.

But when buying or selling real estate, question time should never end. We need to constantly question our decisions - often playing chief motivator and devil's advocate at the same time - to ensure we make the right property decisions.

But what to ask?

When selling, make sure you understand why you want to sell. Whims can be incredibly expensive. Try these questions:
* Do I have a case of grass-is-greener syndrome? It's common in these days of instant gratification, so draw up a list of pros and cons about your existing home.
* What are the changeover costs? Stamp duty is a big one, but there are also real estate agent and conveyancing costs, finance charges and possible mortgage break fees.

* What changes are you wanting to make to a new home once you've bought it, and what will that cost?
* Can I afford to buy what I really want? Interest rates are very low, so factor in rises of one or two percentage points when forecasting future mortgage costs.

You also need to question potential real estate agents, and there is a treasure trove online of things you should ask them. Just head for the Google-machine.

When it comes to buying, ask yourself what why you really want the property, does it make financial sense, and how long you plan to stay.

If taking on a new or bigger mortgage, you'll need a secure job and insurance to handle the unexpected.

Have a list of questions to ask a real estate agent. The Real Estate Buyers Association of Australia has some suggestions on this front:
* How did you price this house?
* How long has it been on the market?
* When was the last time the property was sold?
* What are the reasons for selling?

"The important thing to remember in a competitive market is not to let emotion take over and overvalue the property,'' REBAA's Byron Rose says.

Emotion will always be a key factor, but if you ask the right things, question time - for you if not for parliament - is going to be beneficial.


Group of pets together in front of white backgroundBEING a pet owner on the hunt for rental accommodation in Australia can be tough. Every year many renters find themselves left to choose between their ideal home and their furry friends in a market place where rental vacancies are at their lowest in recent memory.

Now a study to find out why landlords systematically say no to animals is being conducted by Dr Emma Power from the University of Western Sydney's School of Social Sciences and Psychology. It involves several welfare organisations and the real estate industry.

Dr Power has interviewed almost 700 pet owners for the study, Renting With Pets In Sydney, and has discovered that for the pet-loving population, renting is tough.

"We know that about 60 per cent of Australians have pets and that about a third of households rent,'' Dr
Power said.

"So something I'd like to get to the bottom of with our study is; why wouldn't agents and landlords want to be pet-friendly when it can really be a competitive advantage for your property?''

"I come at this from the angle of households. It has been proven in many studies that pets do actually increase the health and wellbeing of individuals. And with the rise of single-person households in Australian cities, pet ownership is becoming more popular.

"One of the big things to come out of the study so far has been that 64 per cent of those surveyed said that looking for a rental property while owning a pet was significantly more difficult than before they had an animal.''

Susannah Anderson of Di Jones Real Estate said "pet bonds'' and "pet resumes'' are becoming more common in Sydney as pet-lovers do what they can to find appropriate accommodation.

"We try to explain to our landlords that they want a top tenant who will pay good money and take care of their investment and just like tenants need to put on an application form how many people will be moving in, they should include animals too,'' she said.

Ms Anderson said the pet-lover's problem even extends beyond tenants, because buyers purchasing in apartment buildings that are not ear-marked as pet-friendly are also struggling.

"What I've found is that buyers want to be absolutely sure that they can take their pets with them and will do what they have to do prior to purchasing. It's like finance, you wouldn't buy a place unless your finance had been approved. They want to know that no body corporate will go back on the pet-friendly status,'' she said.

But buyers and renters should be aware that pet bans can be overturned.

Troy Gunasekera, from the Property Club investor group said the answer for tenants and buyers was to be prepared.

"Tenants and buyers need to be aware that bodies corporate cannot absolutely prohibit the keeping of any animal in any circumstances,'' he said.

"It's true that not everyone likes pets, but `no pet' policies are not hard and fast. We are starting to see more of independent adjudicators ruling against bodies corporate.''

* Know your local council restrictions: A standard rule is for a property of less than 600sq m, the maximum number of dogs that can be kept is two, regardless of size.
* Seek permission first: An applicant must have body corporate approval before bringing a pet into a scheme.
* The body corporate must be fair and reasonable: A refusal to grant permission for a pet should be based on consideration of the wellbeing of the animal, not the owner (eg refusing approval to house a miniature pony in a three-storey walk-up is reasonable).
* Check your lease agreement: Clauses could already be available in your lease for you to challenge the body corporate or landlord.
* Check with the owner: Before you go to the body corporate, you must first have the agreement of the landlord.
Source: The Property Club

Vet and director of Vetico, Ben Willcocks said pet references and pet bonds could help people convince landlords to be more pet friendly.

"I'm surprised the idea of a pet bond hasn't gone through to the courts,'' he said. ``In a way it could be considered a form of discrimination because everyone has the right to enjoy home life as they want to whether they're renters or not.''

Breed choice: Choose your breed carefully. You want to choose a breed which is suitable for most living arrangements. Criteria may include small to medium size, non-shedding, responsiveness to obedience training and so on. As a rule, any of the ``oodles'' are generally rental-friendly pets.

Obedience training: Take your pup through puppy pre-school and advanced obedience training, to ensure they are well behaved, house-trained pets.

General pet care: Ensure you maintain regular visits to your pup's veterinarian, groomer, hydrobath, and so on. Keep the documentation, so you can show your potential landlord that you look after your pet, just as you will look after their apartment.

Preventable health: Keep your pet on regular worming, flea and tick prevention, and make sure you keep the documentation to show to your potential landlord if necessary.

(source: Kirsten Craze - The Daily Telegraph)

bigstock-Loving-couple-looking-at-their-33303005PERTH people of all ages and incomes are still in love with the dream of a separate house, a new study has found.

The independent report comes as the city and metropolis are about to explode in unit and apartment development over the next few years.

The study, The Housing We'd Choose: A Study for Perth and Peel, surveyed more than 1000 people over six months about what matters most for them in terms of housing and found 79 per cent still want the "white picket fence'' option.
Jointly commissioned by the Departments of Housing and Planning to determine if there is a difference between housing preferences (demand) and what is being built or planned (supply), the report shows the free-standing brick house is still the big favourite.

Department of Housing director-general Grahame Searle said that while most respondents still favoured owning a separate house, they were prepared to make significant trade-offs in location, house type and size to realise their dreams of owning a home.

And in one mismatch between supply and demand, it also found that while 35 per cent of people would choose semi-detached housing as an option, just 12 per cent of Perth's current housing stock is semi-detached.

"This report reveals the enduring aspirations of many Western Australians to own a home, and their willingness to make concessions in order to afford it,'' Mr Searle said.

Affordability is still the biggest determinant in the property scenario, the study shows, underlining the importance of government assistance.

However when it comes to location, Department of Planning director general Eric Lumsden said a key finding showed a strong preference for people to live in the inner regions with easy access to work.

"The study is an important snapshot, which shows that the combination of affordability pressures and desire to live in well-connected locations is driving an evolution in housing,'' Mr Lumsden said.

"We expect to see these evolve further in coming years, as the ageing population and other demographic shifts drive housing demand in the Perth-Peel region.''

The outcomes from the survey support findings from a similar study of Melbourne and Sydney residents performed in 2011 by policy think tank, the Grattan Institute.

The Perth report outlines challenges and opportunities for government, industry sectors, and the local community moving forward to supply the type of housing that people want and can afford.


* Affordability plays a major role in shaping peoples housing choices, often requiring them to make trade-offs between the house they would prefer and the one they eventually choose.

* 98 per cent of people surveyed prefer owner occupation rather than renting.

* 88 per cent of people said building materials were important to them when choosing a home. Of these, more than 50 per cent of these people wanted double brick, however over 25 per cent wanted homes made of alternative materials, suggesting that there may be growing demand for different construction types, if they can be delivered at an affordable price.

* Easy access to (not necessarily close proximity to) work was regarded as very important to most people. People were happier to have smaller properties if it meant that they could live in their preferred location.

* There was a strong preference to live in the inner and coastal regions, with two-thirds of people preferring these locations. However only half of respondents were able to choose these locations when constrained by household budget.

* 44 per cent of people indicated that a three bedroom house is the smallest property that they were prepared to purchase, which increased to 46 per cent when affordability and location were taken into consideration.

* When constrained by affordability, only 15 per cent of people said a four-bedroom dwelling was their minimum requirement and only 8 per cent chose a five bedroom house.

* People were more willing to trade-off house type than the number of bedrooms. This suggests that there is likely to be demand for smaller dwellings (eg townhouses, semi-detached homes or apartments) that can be delivered with the right number of bedrooms, in the right locations.

* Majority of people preferred to live in a separate house (79 per cent) if there were no location or affordability constraints. When constrained by location and affordability, this number dropped to 56 per cent.

* Apartments were the least popular housing option (chosen by fewer than 10 per cent of those surveyed), although many of the concerns raised relate to apartment design such as noise transmission. However, people were far more prepared to rent an apartment rather than being long term owner occupiers.

* The findings of the report indicated that 35 per cent of people would choose semi-detached housing when considering location and affordability factors. Just 12 per cent of Perth's current housing stock is semi-detached, suggesting that there is considerable unmet demand for this type of housing.





Friday, April 26th, 2013

bigstock-Family-Of-Four-In-Dream-House-2328792REIWA has reported recently that housing affordability has improved over the last year and that median rents have climbed by 12 per cent.

So, for many people renting a question they are asking themselves is, “Would we be better off to buy?”

Current data show the median purchase price for first home buyers is around $420,000 while metropolitan rents are around $470 per week.

Not everyone is in a position to borrow and meet loan repayments, but for those singles and couples who can afford around $580 a week at current variable interest rates, a mortgage of $373,000 will buy a very suitable unit, villa or house with its own land.

(In this example I am assuming a deposit of $20,000 and eligibility for the $7,000 First Home Owners Grant, so the purchase price would be $400,000. However, there are many cheaper properties throughout WA including the metropolitan area. Some house and land packages are accessible at $300,000 or less and fixed rates can be more affordable than variable rates).

In other words, by paying around $100 more each week on a mortgage as opposed to paying rent, many tenants could transition to home ownership if that suited them and banks approved the loan.

Naturally, the bigger the deposit the smaller the loan and it’s important to keep in mind that renters don’t pay council rates, annual utility charges, building insurance and maintenance which home owners do. Buyers need to factor in about $50 per week to cover this.

The real cost of renting is not the fortnightly payments, but the loss in savings compared to accumulating equity in a home.

There are also good financial reasons to support ownership, but two key factors illustrate its benefit.

First, home ownership can be a stepping stone to increased wealth and long term financial security. Property is highly regarded by financial institutions as security for borrowing to fund a property investment, a business venture or a holiday.

It’s more difficult to borrow against other assets.

Second, home ownership opens up lifestyle opportunities. With your own place you can design and mature the garden, paint and decorate as you wish, have pets (with some strata exceptions), and generally create a home with the liberty and security that can bring.

Households which experience financial difficulty in retirement years are more likely to be living in rental properties, so investing in a home can be a better way to secure your retirement circumstances.

The early decisions you make around real estate can affect your long term outlook, but it’s strongly advisable that you discuss your plans with competent financial advisers, banks and lenders before making a decision and then approaching an agent.
(source: REIWA)