Dec 18, 2023
Interest Rates : What You Need to Know
Interest rates in Australia have been making waves across headlines and conversations, impacting the economy and leaving many uncertain about what the future holds. The recent increase in rates by the Reserve Bank of Australia (RBA) has sparked concerns and discussions, with people wondering when this trend will cease. The effects of fluctuating interest rates vary for individuals depending on their financial circumstances. For those with savings, a rate hike can be advantageous, while it poses challenges for those carrying any form of debt, including mortgages, loans, credit cards, and business finances. Interest Rate Update – Current and Forecast The RBA's decision to raise the cash rate by 0.25 basis points in November, but leaving them on hold in December marked the total 12-month increase in interest rates to 1.25% in 2023. December’s decision to leave interest rates on hold has given us the RBA cash rate for the end of 2023 at 4.35%, the highest level since 2012, BUT still below the long-term average over the last 60 years. Forecasts and the consensus across the big four banks are that it is likely interest rates will remain stable for the majority of 2024 before a potential rate cut between August and December. The Commonwealth Bank is predicting a September rate cut, with rates coming down to 2.85 per cent by May 2025. Westpac agrees about a September 2024 rate cut but is guessing we will need to wait until December 2025 before we see rates down to 2.85 per cent. THE MOST IMPORTANT FACT ABOUT ANY PREDICTIONS IS THAT THEY ARE JUST GUESSES OR ESTIMATES IN A VERY COMPLEX WORLD AND A HIGH PERCENTAGE ARE WRONG. Impact on Borrowers and Property Market For Debt Holders Banks swiftly responded to the RBA's move by increasing their rates, affecting borrowers on variable loans immediately. Those on fixed interest loans will need to plan for changes when their term ends. The increased rates mean higher loan repayments and reduced principal amounts for borrowers. Understanding Key Definitions Monetary Policy and Cash Rate The RBA manages the monetary policy, determining the cash rate monthly, influencing borrowing behavior, economic activity, and inflation rates. This is about to change. Fixed vs. Variable Interest Rates Fixed rates offer stability during a set period but may limit benefits from rate drops and can incur penalties for adjustments. Variable rates fluctuate, allowing extra repayments but subjecting borrowers to increased repayments in a rising rate environment. Always Seek Advice from Qualified Advisors To navigate this changing landscape, understanding these key concepts is crucial. Homeowners should track their interest rates, aligning them with market trends. Comparing rates across lenders and seeking advice from financial experts can aid decision-making. Your financial advisor will aid you in determining the best solution for your needs. But be careful they are not advising you to what earns the highest commission.
Dec 18, 2023
Navigating Mortgages: A Comprehensive Guide for Perth Buyers
For many prospective homeowners in Perth, the journey towards property ownership begins with understanding the intricacies of mortgages. From various types to fluctuating interest rates, the mortgage landscape can be complex. In this article, we break down the essentials of mortgages for Perth buyers, helping you make informed decisions on the path to securing your dream home. Types of Mortgages: Fixed-Rate Mortgages: A fixed-rate mortgage offers stability by locking in an interest rate for a predetermined period, typically ranging from one to five years. This type of mortgage provides predictability in monthly payments, allowing buyers to budget with confidence. In Perth's real estate market, where stability is valued, fixed-rate mortgages are a popular choice. Variable-Rate Mortgages: Variable-rate mortgages, on the other hand, are linked to market interest rates and can fluctuate over time. While the uncertainty may seem daunting, variable-rate mortgages often come with lower initial interest rates, potentially leading to cost savings. Buyers should be prepared for market-driven changes in monthly payments. Split Rate Mortgages: This option combines elements of both fixed and variable rates. Buyers can allocate a portion of the loan to a fixed rate for stability and another portion to a variable rate, benefiting from potential interest rate decreases. It's a flexible approach that caters to different risk tolerances and market conditions. Understanding Interest Rates: Comparison Rate: Beyond the advertised interest rate, it's crucial to consider the comparison rate. This rate includes not only the interest charged but also fees and charges associated with the loan. Comparing comparison rates helps buyers make a more accurate assessment of the overall cost of different mortgage options. Market Rates in Perth: Perth's real estate market dynamics, economic conditions, and Reserve Bank decisions influence mortgage interest rates. Staying informed about local market trends and seeking professional advice can assist buyers in making timely and strategic mortgage decisions. How to Choose the Right Mortgage: Assess Your Financial Situation: Before diving into mortgage options, evaluate your financial position. Consider factors such as income stability, existing debts, and future financial goals. This assessment will guide you in choosing a mortgage that aligns with your unique circumstances. Future-Proofing: Perth's real estate market may experience fluctuations, and your financial situation may evolve. Choose a mortgage that allows for flexibility and consider potential changes in interest rates or your income over the life of the loan. Professional Advice: Seek guidance from mortgage brokers or financial advisors who specialize in the Perth real estate market. They can provide personalized advice based on your financial goals and market conditions. Read the Fine Print: Thoroughly review the terms and conditions of each mortgage option. Understand the repayment structure, any potential penalties for early repayment, and the flexibility offered. In conclusion, navigating the world of mortgages in Perth requires a blend of market awareness, financial planning, and strategic decision-making. By understanding the types of mortgages available, staying informed about interest rates, and making choices aligned with your financial goals, you can embark on the exciting journey of homeownership in Perth with confidence.
Dec 18, 2023
Embracing Green Living: Eco-Friendly Home Features Transforming Western Australian Residences
As the world increasingly recognises the importance of sustainable living, Western Australia is at the forefront of a green revolution in the real estate sector. Homeowners are becoming more conscientious about their environmental impact and are seeking properties that integrate eco-friendly features. This article outlines some of the key eco-friendly home features that are not only transforming houses but also proving to be advantageous for homeowners across Western Australia. Solar Panels: Harnessing the Power of the Sun Western Australia is blessed with abundant sunlight, making it an ideal location for the integration of solar panels. These sleek, energy-capturing devices have become a popular choice for homeowners looking to reduce their reliance on traditional energy sources. By harnessing the power of the sun, solar panels not only contribute to a greener environment but also lead to substantial cost savings on electricity bills. Energy-Efficient Appliances: A Win for the Environment and Your Wallet Modern, energy-efficient appliances are designed to use less energy while delivering top-notch performance. From refrigerators to air conditioning units, these appliances not only help reduce your carbon footprint but also lead to lower utility bills over time. Homeowners in Western Australia can enjoy a more sustainable lifestyle without compromising on the comfort and convenience of their homes. Rainwater Harvesting Systems: Nurturing the Garden, Conserving Resources In a region where water conservation is crucial, rainwater harvesting systems have gained popularity. These systems collect and store rainwater for later use in irrigation, reducing the reliance on traditional water sources. Homeowners can maintain lush gardens while actively contributing to the conservation of water resources in Western Australia. Passive Design Principles: Harmonising Homes with Nature Passive design principles integrate natural elements to regulate temperature and lighting within a home. Features such as well-placed windows, shading, and ventilation systems enhance energy efficiency and create a harmonious living environment. Western Australian homeowners can benefit from reduced energy consumption and increased comfort by incorporating passive design into their homes. Sustainable Building Materials: A Foundation for a Greener Future When constructing or renovating a home, opting for sustainable building materials is a significant step towards reducing environmental impact. Bamboo flooring, recycled steel, and reclaimed timber are just a few examples of eco-friendly materials that contribute to the longevity and sustainability of a home. By choosing these materials, homeowners in Western Australia actively support a more sustainable construction industry. In conclusion, the shift towards eco-friendly home features is not only a global trend but a transformative movement within Western Australia's real estate market. From harnessing solar power to embracing sustainable building practices, homeowners in the region are actively contributing to a greener and more sustainable future. As real estate professionals, our commitment is to guide you towards properties that not only meet your lifestyle needs but also align with your values for a more sustainable way of living in Western Australia. Bear in mind: Not all these suggestions are practical from a financial point of view. Just implement those that are simple and cost effective for you.
Dec 18, 2023
Tips to Stage Your Home Without Using a Professional
Revitalise with Paint Applying a coat of ultra-high-gloss paint to your floors can work wonders, creating a sophisticated and chic look akin to pricey floor renovations. Plus, it’s budget-friendly. Add a touch of luxury with floor rugs. Mirrors for Spaciousness Cover a living room wall with IKEA’s peel-and-stick mirrors to double the room's apparent size. These mirrors not only add brightness and depth but also align with the sought-after "light and bright" atmosphere. Streamline Living Room Furnishings Strike a balance in your living room—bulky furniture can make it seem small, while too little can be uninviting. Find a comfortable middle ground and ensure cleanliness to help buyers envision themselves in the space. Simplify the Kitchen For a minimalist appeal, clear kitchen counters and dining tables of all items, except for a bowl of lemons, which oddly resonates with buyers. Keep it clean and fresh—rubbing a lemon inside the sink can keep it smelling great. Define Every Space Clarify each room's purpose to aid buyers' visualisation. Make it easy for them to see how spaces like guest rooms could function. A clean, inviting environment with thoughtful touches can go a long way. Oversized Pillows for Volume Enhance room volume by decorating your couch with oversized, monochromatic throw pillows. Avoid loud patterns; think of shades like green, pink, yellow, or light orange for a subtle yet impactful touch. Remove Personal Touches Make your home a blank canvas by replacing family photos with neutral decor like coffee table books or candles. Buyers want to imagine themselves living in the space. Hotel-Like Bedrooms Create a hotel-inspired bedroom look with white sheets and pillows, keeping it clean and minimalistic. White towels in the bathrooms add to the aesthetic while removing distracting items from countertops is a must. Add accent colour with bedroom throws and oversized artwork. Declutter Drawers and Closets Keep drawers and closets organised and clutter-free. Neatly folded clothes, uniform hangers, add mirrors to the inside of doors, and IKEA strip lighting for a touch of luxury and enhance your cupboards without breaking the bank. Download our PDF
Dec 18, 2023
10 Tips for Selling Your Home
At Gordon Davies Real Estate, we understand that selling your home is a significant step, and we're here to make it a seamless and successful experience. Whether you're a seasoned seller or navigating this process for the first time, our exclusive set of ten tips will guide you through every stage of the selling journey. First Impressions Last: Enhance Curb Appeal The exterior of your home sets the tone for potential buyers. Refresh your home with high-pressure cleaning or soft washing the exterior, give your garden a good cleanout, mulch all beds and plant some colour. These small things all work towards ensuring your property exudes charm from the moment the buyers arrive, creating a favourable first impression. Simplify and Stage Declutter and depersonalise your spaces to allow buyers to visualize themselves in your home. By creating that space in your home, you will be able to highlight the best features and give buyers room to see themselves in your home. Attention to Detail: Repair and Refresh Prior to your home going to market we suggest that you ensure your home is well maintained. Attending to minor repairs and a fresh coat of paint can make a significant difference in the overall appeal of your home. Showcase Unique Features Gordon Davies Real Estate knows how to spotlight the unique features of your property. Whether it's a breathtaking view, elegant architecture, or modern amenities, we'll ensure these stand out to potential buyers. Professional Presentation: High-Quality Photography Our team believes in showcasing your home with the best visuals. Professional photography captures the essence of your property and draws in more buyers online. Strategic Pricing We'll conduct thorough market research and leverage our expertise to determine the optimal price for your home, ensuring it's competitive yet fair to yield maximum interest. Flexible Showings We understand schedules vary. Our team is dedicated to accommodating potential buyers' timings to showcase your home at its best. Inviting Atmosphere Creating an inviting ambience during home opens makes buyers feel at home. From natural light to pleasant scents and light music these all ensure your property leaves a lasting impression. Negotiation Expertise Count on our negotiation skills to secure the best deal for you. We'll represent your interests and guide you through the negotiation process. Expert Guidance from Gordon Davies Real Estate Partner with our reputable real estate agents who understand the market in-depth. With our expertise, we'll guide you through every step of the selling process. We aim to make your home-selling journey smooth and rewarding at Gordon Davies Real Estate. By following these exclusive tips and collaborating with our experienced team, you're on the path to a successful sale. Trust us to help present your home in the best light, navigate negotiations, and ensure you achieve the best possible outcome
Mar 27, 2019
How the political parties’ policies are having a detrimental effect on most Australians and the economy
Written by incub8admin on March 27, 2019. Posted in Real Estate News. Owning a home has been the dream of most Australians for decades, and many have made great sacrifices to achieve that goal. As our population increased and the economy grew, so did the value of property, giving people greater equity in their homes. Owners used this capital growth in various ways, for example: To borrow against it to: do extensions supplement retirement income or superannuation offer as assistance or security for their child/ren to purchase a home start a business buy a second property to negative gear (thereby providing rental accommodation for those who could not afford to buy at less than the holding costs for the tenant) To sell to: upgrade to a better home downsize to use the balance for retirement income start or invest in or expand a business other reasons. The owners are the ones who worked hard and took risks and should benefit from their investment. Some used their equity to leave to their children when they died. Many changed houses about every seven years with changing economic circumstances. For a long time, the cost of changing houses was reasonable and didn’t reduce the equity much. Many of the buyers did various things to enable their purchase: Lived with their parents for a few years Took two jobs One party (the carer) took a part-time job Made sacrifices in clothing and food Plus, plus, plus. Many started with very old, small houses not expecting a modern 4 x 2 with all the mod cons. A distinction needs to be made between WA and the east coast. Interestingly, most commentators do not seem to realise that WA exists, or is part of Australia but with a very different economy and market. WA experienced above-average increases in the early 2000s, which collapsed due to the: GFC in late 2008 end of the mining construction boom in 2010. Most falls were around 20% to 30% and turnover virtually halved. Since then, the market has been fairly stagnant – up a bit, down a bit. Last year, we saw the first signs of possible increases due to: The announcement of multi-billion-dollar mining construction contracts Mining exploration going gangbusters Record $ value of grain harvest WA starting to get more GST (which shouldn’t be used to prop up states or territories that haven’t encouraged and built up their economies for years). The increase in confidence in WA has been dampened by negative publicity by the eastern states’ media who just lump WA with the east coast, and for 10 years have experienced years of unsustainable above average price rises (like what happened in WA from 2000–2008). This constant negativity in the eastern states is affecting the growth of confidence and recovery in WA. How are government policies affecting real estate? The major problem is the exorbitant stamp duty for locals of 5.25% on every purchase. This reduces the equity for the owner and, when added to the agent’s commission of approximately 2% plus GST, it virtually reduces the capital to a point where it is not worth selling or changing residences for many years, if at all. The government takes the owner’s equity and prevents them from initiating the abovementioned actions that create more activity and employment. The well-meaning but misguided policies to make housing more affordable can push existing owners into negative equity if, after selling and paying costs, the owners owe more than they have borrowed. This wipes out all the hard work and sacrifices made by the owners to raise a deposit and reduce their mortgage. Often after selling, instead of having $1,000s, they find they still owe the bank money. This will affect thousands if not millions of people’s decisions on making the sacrifice to own their own home. Politicians would be better off exploring and implementing the technologies that enable housing to be built far more economically (even 50% of today’s costs) or building them at prices that are affordable for those who cannot afford traditional construction. Negative gearing is very misunderstood by politicians and self-interest groups. It provides housing at a much lower cost to those who cannot afford or do not want to buy a particular home. The owner/investor receives rent less the cost of: Foregone interest on the deposit Interest payments on the mortgage Interest on stamp duty and settlement costs Rates and taxes Building maintenance Garden maintenance. Why would anyone do this and call it an investment? In the past, when capital growth was at a reasonable level, the investor’s return was: Some tax relief on their losses each year (this would be about half the amount that their costs exceeded their rental income). Capital growth on the sale of the property less the costs of selling. Of which, they would pay nearly half in tax. With capital growth falling (even being negative) and turnover declining, most buyers and investors will decide to pull out of owning/investing in real estate, thus reducing prices and turnover even further. Government income from property transactions will fall dramatically. Politicians would do well to: Reduce stamp duty to 1 to 2% Remove the capital gains tax. This would give the control of capital back into the hands of the individual and remove billions from governments who waste most of it on big (and often wasteful) projects. It would be great if individual home owners (entrepreneurs) invested the capital gains into profitable business and created employment as they watch their profits closely. This is opposed to governments who take money they haven’t earned and give billions to bureaucrats to run huge projects without any skills in getting the best contracts. Invariably they just tax us more to pay for their mistakes whereas private business go broke if they don’t watch the bottom line.
Mar 5, 2019
To auction or not to auction..
Written by incub8admin on March 5, 2019. Posted in Real Estate News. Auctions are a very popular method of selling property in the eastern states, however, their offer and acceptance contracts are quite different to what we have in Western Australia which has led to their popularity in those markets. Traditionally, property sales in the Western Suburbs have predominantly been by private treaty. The increase in the number of properties in the area being offered for sale by auction over the last 5 – 10 years has been an interesting development. Whether or not it has increased the likelihood of properties being sold is arguable. I have long believed that the best way to sell your property is by private treaty. Auctions require an unconditional offer being made at the time of auction and for the prospective buyer to have the required deposit on hand. This immediately eliminates a large proportion of prospective buyers. In my experience, the diversity of properties within the Western suburbs plus the diversity of buyers needs and wants means that it can often take some time for properties to sell. It is a fallacy that the best offer will be made within the first few weeks of marketing a property. You might entice buyers who have been actively looking for some time, but they are not necessarily the ones who will make the best offer. Often selling property in the Western Suburbs takes time and patience. There are a few occasions when auctions can be beneficial. There is a high demand for land value blocks in good locations and often these are good properties to auction, particularly if they also have development potential. Some agents suggest auctioning to vendors who may be unrealistic about the value of their property. They use the auction as an indicator of what the market is willing to pay. Not only is it an expensive way to try and convince vendors to reduce their price, but it is also not a true representation of what buyers are willing to purchase a property for. They may be willing to pay more if the settlement time was longer, or the offer could be made conditional to suit their situation at the time. So, to auction or not? In my opinion, in most cases not. Except if you have a land value property, development potential or a property that has appeal to a wide range of buyers.
Feb 18, 2019
Why Dalkeith is (arguably) the best suburb in Perth
Written by incub8admin on February 18, 2019. Posted in Real Estate News. If you are one of the few who are fortunate enough to afford property in Dalkeith, then you are privileged to be living in what I regard to be the best suburb in Perth. Within close proximity and easy access to the city of Perth, the Swan River and the ocean beaches, it is one of the few suburbs that enjoys the benefits of three of the WA’s best features. Being on a peninsula (the Swan River surrounds the suburb on three sides) gives it a more equable climate with the breezes off both the river and the ocean. It remains a low traffic area with quiet leafy streets and its proximity to high quality public and private schools it makes it a highly sought-after suburb for people with school-aged children. Dalkeith is a fairly small suburb that has many large nature reserves and parklands including Masons Gardens, Cruikshank Reserve and Bishop Reserve. In fact, it has 8 parks that cover 17% of the total area, making it one of the leafiest suburbs in Perth. Because of these reasons, Dalkeith retains a village life appeal. Kids can safely play on many of the quiet streets and there is a great sense of community among those who live there. The small shopping areas on Waratah Avenue add to the village feel yet the range of boutique shops and recently revamped IGA add convenience and interest. There’s an eclectic array of homes and people in the suburb which only adds to its character and appeal. From original homes in original condition to modern family homes and riverfront mansions – owned by young families, retirees, foreign investors, multi-generational Australians and new immigrants. I think statistics show that approximately 70% of all purchasers buy for the high quality and diversity of education facilities in the immediate area. For these reasons Dalkeith remains my favourite suburb in Perth and is why I am passionate about selling property in the area.