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Reserve Bank keeps rates on hold as 2019 election looms

The Reserve Bank of Australia has today opted to keep interest rates on hold at 1.5% as the Morrison Government prepares to announce a date for the upcoming federal election.

Rates in Australia have been on hold for a record 32 months, since August 2016, when the RBA cut the official cash rate by 25 basis points.

While most experts had anticipated the RBA’s decision to maintain the status quo, it is also a reflection of the precarious state of the economy, according to Chief Economist, Nerida Conisbee.

“The RBA held rates today with economic data still too mixed to make a move. In particular, employment data remains strong with unemployment data low and job vacancies now at their highest level ever recorded,” she says.

“While employment is strong and not many people fear losing their jobs, this is not flowing through to consumer confidence, retail spending or wages growth. All these factors remain subdued.”Tips to keep ahead of the property market

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Reserve Bank Governor Philip Lowe says the RBA was also swayed by the continued decline in house prices.

“Conditions remain soft and rent inflation remains low. Credit conditions for some borrowers have tightened a little further over the past year or so. At the same time, the demand for credit by investors in the housing market has slowed noticeably as the dynamics of the housing market have changed,” he says.

Global markets & flat wages won’t help

While the official cash rate will remain on hold for yet another month, that doesn’t mean home owners won’t see a change in their mortgage repayments.

In fact, with wage growth sitting at 2.3% and major lenders raising their rates outside of the RBA’s monthly meeting, most home owners are more likely to see their housing costs rise and will rein in their spending accordingly.View image on Twitter

Interest Rates in Australia on Hold - Investors Advisors


The RBA has released a snapshot of Key Economic Indicators – 406:15 AM – Mar 8, 201942 people are talking about thisTwitter Ads info and privacy

Australian lenders get a significant proportion of their funding from overseas markets, and with the US economy continuing to recover and rates in the UK and the EU likely to move as Brexit negotiations are finalised, the wholesale cost of debt for banks here will soon rise.

With 41% of visitors surveyed in March predicting major lenders will raise rates, Australians are probably expecting further rate rises from their banks, despite the monthly decision of the RBA.

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Major headwinds for housing pre-election but affordability is rising

Affordability is rising across the country as dwelling values fall, but experts warn of major headwinds for housing in the lead up to the Federal Election.

The latest CoreLogic Hedonic Home Value Index, released Monday, found that national dwelling values had been trending lower for 17 months and fallen by a cumulative 7.4 per cent since peaking in October 2017.

But “despite the broad based weakness, the national index remains 15.9 per cent higher relative to five years ago, highlighting that most property owners remain in a strong equity position.”

“The silver lining here is that housing is now very affordable and first home buyers are proportionally much more active relative to other areas of the country,” especially in markets where values peaked much earlier (2014) such as Darwin (-27.5 per cent) and Perth (-18.1 per cent).

“As dwelling prices trend lower or level out, household incomes are edging higher and mortgage rates remain around the lowest level since the 1960s,” said CoreLogic head of research Tim Lawless. “First home buyers are clearly taking advantage of the improved levels of affordability and less competition in the market.”

Rising House Affordability Australia - Investors Advisors

The good news for Brisbane was that while values were softening, the apartment sector seems to have recovered from over-supply.


The good news for homeowners was that the pace of the decline in property values was now easing off relative to the past four months, especially across Sydney and Melbourne.

The fear though was that the market downturn was “becoming geographically more widespread”, according to CoreLogic head of research Tim Lawless.

He said housing values were lower across six of the eight capitals and five of the seven ‘rest of state’ markets in the past month.

Brisbane was down -0.6 per cent in the past month, with dwelling values dropping by -1.3 per cent in the past 12 months, putting the median value at $489,832. Over the past five years though, dwelling values had actually grown by almost double digits, 9.9 per cent.

Mr Lawless said Brisbane was “previously seen as a level market”.

Rising House Affordability Australia - Investors Advisors

Weakness in Sydney and Melbourne was now spreading, mostly because of credit availability in the owner occupier market. Picture: AAP/Matthew Vasilescu.

“Values have really been edging lower in the last four months. We do see acceleration in the rate of decline in Brisbane despite Brisbane showing strong population growth, affordability, and generally improving conditions, it does look like there are some headwinds based on credit availability.”

But he said the apartment sector’s headwinds appeared to have eased, with it “starting to look healthier in Brisbane”.

“There’s been a rapid slowdown in construction, and the local unit market is looking a lot healthier,” he told The Courier-Mail.


Capital city Month Annual Median value

Sydney -0.9% -10.9% $782,473

Melbourne -0.8% -9.8% $624,425

Brisbane -0.6% -1.3% $489,832

Adelaide -0.2% 0.8% $426,990

Perth -0.4% -7.7% $442,716

Hobart 0.6% 6.0% $464,168

Darwin -0.6% -6.8% $400,316

Canberra 0.0% 3.1% $595,212

Combined capitals -0.7% -8.2% $597,860

Combined regional -0.4% -2.1% $376,728

National -0.6% -6.9% $524,149

(Source: CoreLogic Hedonic Home Value Index, March)


He expected the housing market to “continue to be affected by uncertainty related to the federal election, lending policies and more broadly, domestic economic conditions”.

“Federal elections generally cause some uncertainty, which is likely amplified more so this time around considering the potential for a change of government which will also involve significant changes to taxation policies related to investment.”

“No doubt, some prospective buyers and sellers are delaying their housing decisions until after the election, however, there is no guarantee that certainty will improve post-election, considering the impact of a wind back to negative gearing and halving of the capital gains tax concession is largely unknown.”

“It seems a reasonable assumption that removing an incentive from the market would result in some downwards pressure on activity and prices for a period of time.”

“If elected, the Opposition have flagged that changes to the capital gains tax discount and negative gearing would take effect from January 2020.”

Rising House Affordability Australia - Investors Advisors

The reduction in owner occupier lending was creating widespread impact across major cities.


Credit availability was also a major headwind, with one indicator of reduced activity coming of the number of housing valuation events “which provides a timely proxy for mortgage activity”, Mr Lawless said. Those valuation events were “around 14 per cent below activity a year ago” — a trend that was also showing in ABS housing finance data in terms of both investor and owner occupier lending through to the end of January.

Mr Lawless said it was the downturn in owner occupier lending that was of concern.

“The value of owner occupier lending is around 2.6 times the value of investor lending, so the substantial drop in owner occupier mortgage commitments perhaps explains why the housing downturn is becoming more widespread.”

Owner occupier housing finance commitments (excluding refinance) were down 17.1 per cent compared with January last year while investment credit was 24.6 per cent lower, he said.How much do I need to retire?

There is even better news for those borrowers who do decide to refinance or follow through with housing loans, with Mr Lawless expecting all the headwinds plus general weakness to see the Reserve Bank cut its cash rate target “later this year”.

“While any cuts to the cash rate may not be passed on in full, a lower cost of debt will provide some positive stimulus for the housing market. Arguably, this stimulus won’t be as effective as previous interest rate cuts due to the high serviceability buffer applied to borrowers, whereby lenders are still required to assess serviceability at a mortgage rate of at least 7 per cent despite mortgage rates which are now available around the 4 per cent mark or even lower.”

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Questions raised over churches’ ability to become property developers without paying tax

An array of Sydney churches have been accused of exploiting loopholes to become pseudo-property developers and keep their tax-free status, prompting renewed calls to examine whether religious organisations should retain such exemptions.

Opponents pointed to four developments across the city as examples why further examination of churches’ ability to pay no tax is warranted.

A leading expert, University of Melbourne taxation professor Ann O’Connell, said churches were beneficiaries of significant tax exemptions on projects that were in competition with entities required to pay tax.

“It’s most obvious at the local government level of concessions. If they’re not paying rates then other residents are subsidising them and you can make the same arguments at the state and federal levels,” Ms O’Connell said.

She said if revenue was collected from churches and other charities, it would reduce the burden on existing taxpayers. 

“But because we don’t even collect data on their income, we don’t know how much tax that we’re not collecting,” Ms O’Connell said. “We don’t know the income of the Catholic Church that we could levy tax on and I think it’s less than desirable.”

A 2018 investigation by The Sydney Morning Herald andThe Age found the Catholic Church in Australia was worth an estimated $30 billion.

Ms O’Connell said despite several reviews suggesting a reassessment of charities’ exceedingly generous tax-free status, nothing has changed due to the lack of political will.

NSW Greens MP David Shoebridge has also questioned whether sweeping tax concessions are appropriate for some church developments.

“It is one thing for an entirely charitable development to get a tax concession but this is very rarely the case,” he said. “Many of these developments are large mixed-use projects with a minority of the project having a charitable aim, but the whole lot gets tax-free status.”

He pointed to four examples of tax-free church developments in Sydney:

Catholic Health Care Seniors Housing, Maroubra Bowling Club Site

  • Catholic Health Care outbid 39 others to acquire the 10,850-square-metre site in 2016 for $28.5 million;
  • It later lodged plans worth $76 million with Randwick City Council for a dual aged care precinct with a 108-bed facility and 63 seniors living units;
  • In 2018, Catholic Healthcare Limited reported a gross income of $291 million, with 85 per cent from tax-free goods and services.
  • Artist’s impression of Catholic Healthcare’s $76 million development. Photo: Supplied

Seventh-Day Adventist Church, Wahroonga

  • The Seventh-Day Adventist Church’s current proposal with NSW Planning is in the eighth modification of its original 3A approval – a now-defunct planning law;
  • The modified application can be approved regardless of local planning laws, if the Planning Minister agrees to it;
  • It currently seeks approval for 175 apartments in four buildings, six storeys high;
  • There were no up-to-date financial details available.
  • An artist’s impression of the proposed apartment development next to the Wahroonga Adventist School, which is opposed by parents, residents and members of the Wahroonga Seventh-Day Adventist Church. Photo: Capital Bluestone

Catholic Cemetery Trust proposal, Varroville

  • The trust’s proposal to develop a $30 million cemetery consists of two chapels, an office, landscaped parklands and walking tracks as part of a five-stage plan in the Campbelltown Scenic Hills;
  • In 2017, Catholic Cemeteries & Crematoria reported a gross income of $31 million, with 82 per cent from tax-free goods and services;
  • A spokeswoman for the Catholic Metropolitan Cemeteries Trust said it was an independent organisation, not a church entity, and any surplus funds were reinvested back into the Trust;
  • Its website says the trust was established by the Archdiocese of Sydney and is a not for profit Catholic organisation.
  • Varroville site and artist’s impression of Macarthur Memorial Park. Photo: Supplied

Greek Orthodox Church-affiliated Estia Foundation, Blakehurst

  • In 2014 the foundation bought a historic waterfront house and the associated pristine bushland on the shores of Kyle Bay, totalling almost 24,000 square metres;
  • It was previously operated by a trust as a small respite home for convalescent children;
  • The foundation subsequently negotiated and gained council approval to rezone the land to redevelop it a $2.5 million respite care centre comprising five new buildings on the ground and surrounding the heritage home;
  • In 2017, Estia Foundation reported gross income of $4 million, with 80 per cent from government grants.
  • View of Estia’s development site from Kyle Bay. Photo: Supplied

But Mr Shoebridge argued the religious organisations were also often given generous planning concessions to facilitate developments like senior housing at densities that would otherwise be unacceptable.

He said Catholic Cemetery Trust secured what was effectively spot rezoning, bypassing local council and directly appealing to the NSW Planning Minister.

Meanwhile, the Seventh-Day Adventist Church continued to exploit a planning loophole that was abolished eight years ago, according to Mr Shoebridge.

Urban Taskforce chief executive Chris Johnson said there should be an even playing field when it came to lucrative developments by churches.

“It depends how much development is occurring … if the churches do get a leg-up then it’s probably OK if it equates to producing social or community housing [for good],” he said.

“A line does need to be drawn somewhere particularly now when apartment dwelling is much more accepted, which means land values go up. Churches have had a lot of land that were worth a small amount but are now probably worth a lot more [because of high-density developments].”

Gosford Anglican Church’s Father Rod Bower said some property transactions were now occurring to create an income-producing venture to fund compensation schemes.

“The Anglican Diocese of Newcastle absolutely wants proper redress for victims. In order to do that we need to liquidate property and we are prepared to that.”

But he believed a review of tax concessions for not-for-profit organisations should occur when there was complete rethink of the general taxation system.

“Looking at [it] individually is not really going to achieve anything at the moment … because what we have to do is if we take money away from the non-profit sector then we have to look at what we replace that with.”

But Victorian MP Fiona Patten called for greater transparency and accountability of the complex tax structures to re-instill trust that has been lost after the Royal Commission into Institutional Responses to Child Sexual Abuse.

“Given the cover-ups in the church, given the attempts by the church to not recognise the victims of abuse warrants greater scrutiny of those organisations,” Ms Patten, who has long campaigned on these issues, said.

“No one would question the benefits of health, education and other charitable acts like feeding the poor. But I would question what benefits ‘advancing religion’ has on a largely secular society.”

The charitable head of most churches are tax-exempt for the purpose of “advancing religion”.

But subsidiaries, such as Catholic Healthcare Limited and Adventist Health Limited, which are one of the main income-producing vehicles for their respective churches, are granted tax exemptions for other purposes, including relief of poverty, advancing social and public welfare and provision of aged-care accommodation.

Ms Patten said profit-making businesses owned by churches should be transparent as current requirements were insufficient.

Domain contacted all four religious organisations for comment. A Seventh-Day Adventist Church spokesperson said it operated a wide range of services to the benefit of communities around Australia.

NSW Treasurer Dominic Perrottet said charities, benevolent organisations and churches made invaluable and irreplaceable contribution to communities and excessive taxation would put them out of business.

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Hobart market still strong against weaker interstate cities

FOR 17 consecutive months Hobart has been the best performing capital city for home value growth. And March was no different, with Hobart taking the crown for the largest percentage of growth.

After leapfrogging Adelaide, Perth and Darwin last year, the southernmost capital city continues to close in on Brisbane’s median dwelling value (houses and units).

Six months ago the difference between the two cities was over $51,000. But in CoreLogic’s latest report, their March medians were separated by $25,664.

Hobart’s median dwelling value was $464,168, with the report showing an annual change of 6 per cent and a quarterly change of 1.2 per cent.

Canberra had the next best annual results, with 3.1 per cent growth, followed by Adelaide with 0.8 per cent. The remaining cities posted negative results, including -10.9 per cent in Sydney and -9.8 per cent in Melbourne.

CoreLogic head of research Tim Lawless said dwelling values remained at record highs across Hobart and regional Tasmania.

He said although housing market conditions remained relatively healthy, conditions had noticeably softened over the past 12 months with values either slipping or the pace of growth slowing materially.

Real Estate Institute of Tasmania president Tony Collidge described the results as “another strong performance from Tassie”.

He said the report’s findings were in line with REIT expectations.

“Tasmania has one of the strongest performing economies in Australian and this forms the basis for our success,” he said.

Hobart Property Market still Strong against Weaker Cities - Investors advisors

March was another ‘strong performance’ from Tasmania’s residential property market, says REIT president Tony Collidge. Picture: ROGER LOVELL

“While our residential real estate market may slow, it will not derail like the Sydney, Melbourne, and Perth markets have.

“It is possible that the popularity of Hobart may see it surpass Brisbane in the foreseeable future.

“And the real estate market in regional Tasmania continues to excel.”

Hobart Property Market still Strong against Weaker Cities - Investors advisors

Fall Real Estate property consultant Christine Huxtable.

Fall Real Estate property consultant Christine Huxtable said she was not surprised to see that Hobart was still the best performing capital city.

“There are still many more purchasers in the Greater Hobart than properties for sale,” she said.

“Interstate and overseas buyers explain their relocation to Hobart as ‘climate refugees’.

“This expression was used occasionally a couple of years ago but now I hear it more and more often as our temperate climate has great appeal to many, including young families.”

Hobart Property Market still Strong against Weaker Cities - Investors advisors

Hank Petrusma in action at the 2019 Australian Wooden Boat Festival. Picture: RICHARD JUPE

EIS director Hank Petrusma said well-priced Hobart homes were still selling in just a couple of weeks, however “the froth was now off the beer”.

He said 12 months ago the competition to buy was fierce.

“The market is still good but it is calmer than it was,” he said.

“We are not seeing as many Melbourne and Sydney buyers as we were, perhaps because they are now able to look at buying in their own market.”

Mr Petrusma said the right house in the right location would still attract strong competition and fetch an excellent price and there were pockets around Hobart where interest was sensational.

The CoreLogic report showed a 5.1 per cent rental yield in Hobart and 5.4 per cent in regional Tasmania. Darwin was the only city with a stronger result than Hobart (6 per cent).

Meanwhile, the latest Finder RBA Cash Rate Survey has forecast property prices to fall throughout the year across the nation, but not in Hobart where the expectation was a modest rise.


Change in dwelling values month, quarter, annual, median value

Hobart 0.6%, 1.2%, 6.0%, $464,168

Sydney -0.9%, -3.2%, -10.9%, $782,473

Melbourne -0.8%, -3.4%, -9.8%, $624,425

Brisbane -0.6%, -1.1%, -1.3%, $489,832

Adelaide -0.2%, -0.5%, 0.8%, $426,990

Perth -0.4%, -2.9%, -7.7%, $442,716

Darwin -0.6%, -3.9%, -6.8%, $400,316

Canberra 0.0%, 0.0%, 3.1%, $595,212

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Worst house, best street sale lands a bargain

A DERELICT inner city property, vying for the title of Australia’s worst house, sold for less than its land value yesterday after a gruelling auction in the rain that saw 26 bids in 13 minutes.

Brisbane Worst House [Best Street Sale] - Investors Advisors

Is this the worst house in Australia? It certainly is the cheapest in this part of Brisbane since 2016. Picture: Mark Cranitch.

The boarded-up 405sq m property at 22 Deighton Rd in the tightly held suburb of Dutton Park was sold sight unseen for $665,000 to a Carina couple buying their first home.

It was the cheapest house sale in three years for the inner city suburb according to CoreLogic property data.

Just half an hour earlier on the same street, a property previously dubbed “Australia’s worst house” also went to auction.

Brisbane Worst House [Best Street Sale] - Investors Advisors

Just down the road, 50 Deighton Rd, Dutton Park used to look like this.

In 2015, the knockdown pre-war building at 50 Deighton Rd, was bought for $668,000 and then demolished to make way for a brand new five-bedroom house.

Brisbane Worst House [Best Street Sale] - Investors Advisors

And now 50 Deighton Rd looks like this. The street is now looking to the new owners of 22 Deighton Rd, to see what they turn it into.

With no registered bidders, that property was passed in with a vendor bid of $1.45 million.

The Public Trustee of Queensland took 22 Deighton Rd to auction with 10 registered bidders among more than 60 standing in heavy rain on the footpath.

Brisbane Worst House [Best Street Sale] - Investors Advisors

Public Trustee auctioneer Simon O’Kelly almost lost his voice in the rain, trying to get the best price for the worst house in a million dollar suburb. Pic: Mark Cranitch.

After a long pause to start, Public Trustee auctioneer Simon O’Kelly suggested $600,000, then a bidder called out $400,000, which was left ‘in the pocket’ until another bid of $550,000 started the auction.

Of the 26 bids, almost half were jumps of $1000 or $2000 each.

Brisbane Worst House [Best Street Sale] - Investors Advisors

More than 60 people crowded around a skip and a caravan which were set up outside 22 Deighton Rd, Dutton Park. Picture: Mark Cranitch.

The rain eased only when Mr O’Kelly raised his wooden gavel to announce the property was on the market at $657,000.

A further six bids were made before the property sold for $665,000, well below the suburb’s median house price of $1.028 million.

The land alone has been valued by the State Government at $700,000.

“It was definitely nerve-racking knowing how much there is to do with it,” Adam Barbaro said after securing the winning bid with his wife Laura.

“What do they say, you buy the worst house in the best street? It’s a good street and if we can work hard and put some value into, that’s our way to get a leg up in the market isn’t it?”

While the property was a bargain for the buyers, it has also become a gift for three beneficiaries including Woolloongabba resident Tom Carter who was present at the auction.

Brisbane Worst House [Best Street Sale] - Investors Advisors

Buyers Adam and Laura Barbaro with one of the beneficiaries of the property, Tom Carter. Picture: Mark Cranitch.

“This house belonged to my grandmother’s cousin,” Mr Carter said.

“She passed away in 2010 but even when she lived here it looked like this.

“I’ve been underneath but she never let anyone upstairs.”

The other beneficiaries are a friend and a Catholic missionary society.

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First-home buyers across Australia’s capital cities: How they saved for their deposit

Saving for a first home can seem an insurmountable task. Whether you’re in Sydney, Brisbane or Adelaide, scraping enough together for a 20 per cent deposit can — and usually does — take years.

So Australians hoping to buy their first home will be buoyed by a new report which has found the average time needed to save a deposit has fallen over the past 12 months in major capital cities.

According  to the Domain First-Home Buyers Report, released on Friday, a dual-income couple aged between 25 and 34, who were each saving one-fifth of their post-tax income, would now reach their dream of owning a house faster in Sydney, Melbourne, Perth and Darwin.

For couples in Canberra, Brisbane and Adelaide, it now takes one month longer to save for a house deposit than it did this time last year.

Certainly, getting that foot on the ladder is a tough task, wherever you are in Australia. Here’s how first-home buyers across all of our capital cities have managed to make the great Aussie dream their reality.


First Home Buyers Australia: How they Save for their Deposit - Investors Advisors
Anthony Medina and Jenny Gao recently bought their first home in Sydney. Photo: Supplied

Anthony Medina and Jenny Gao

Paid: $658,000

How long to save: 5 years

Sydney couple Anthony Medina and Jenny Gao bought their first home in March after years of saving.

Mr Medina decided to start saving for a deposit the moment he finished school and began working as an electrician, but he said it was hard at the outset to save much as an apprentice.

“I’ve been a bit lazy … I always thought of doing [it] but never really pursued anything,” Mr Medina said.

It was not until he met his partner Jenny two years ago that he seriously began saving and looking for property.

“I ran it past her and she thought it was a good idea as well,” he said.

Mr Medina said the combination of a few years of savings under his belt and the property downturn in the past year had created the perfect timing to get his foot in the door.

“I was planning on doing it a couple of years ago but now that prices have dropped, it seemed like a perfect time,” he said.

After saving $150,000 for their deposit, the young couple began looking in November in several areas, including Riverwood, St George and even Concord, where they are currently renting.

They had a budget of $650,000 to $700,000 in the hope of avoiding paying stamp duty.

In the end, they snapped up a two-bedroom unit in Kogarah for $658,000, paying just $1600 for stamp duty.

Mr Medina said they ended up settling for a unit because they wanted to stay within their budget and not live too far out west.

He said the past year of saving for a deposit was the hardest as they were paying $350 a week in rent.

“It was a lot easier maybe prior to a year ago because I was living with my parents; I still had a bit of flexibility but now paying rent, it’s hard to save when you’re paying rent,” he said.

They are a few weeks away from moving into their new home and are already thinking of ways of reducing the stress of their initial mortgage repayments, which will be about $2500 a month.

“We’re thinking of renting out the second room to get a bit of breathing space. if we can rent out just one of the rooms that would help us a lot.”

— Tawar Razaghi


First Home Buyers Australia: How they Save for their Deposit - Investors Advisors
Melbourne first-home buyers Sarah and Nicholas McLoughlin. Photo: Stephen McKenzie

Sarah and Nicholas McLoughlin

Paid: $855,000

How long to save: 18 months

Melbourne couple Sarah and Nicholas McLoughlin bought their first home last November.

They snapped up a four-bedroom, two-bathroom home in Eltham through an expressions-of-interest sale for $855,000.

The McLoughlins had been renting in Eltham for 18 months before buying to save money for a deposit. This allowed them to save more money than when Ms McLoughlin had been renting a separate apartment in South Yarra, while Mr McLoughlin had been sharehousing with his brother in Eltham.

“We did save a bit. We just kind of re-prioritised going out so we saved that for special occasions – for friends’ or families’ birthdays – instead of going out for dinner once or twice a week,” Mr McLoughlin said.

Both have a career with the Department of Health and Human Services, working with people with disabilities.

They made an unconditional offer on the property to buy it.

“We started off by attempting to buy a place in October last year at auction. We didn’t know what we were doing and we sent my parents,” Mr McLoughlin said.

The couple watched the bidding action via an app as they were away when the auction was on. Mr McLoughlin’s parents made the highest bid for the property but, as the price didn’t reach the vendors’ reserve, it was passed in.

“After that we were a bit disillusioned,” he said.

The couple went to other auctions and decided to use a buyers advocate to help them out. They also used a mortgage broker who was a friend to get their finance.

They decided on a 30-year mortgage. As Nicholas is 45, he was asked how he planned to make the mortgage repayments after retirement age.

“We told them Nic would work longer than retirement age,” Ms McLoughlin said with a laugh.

The McLoughlins wanted the type of mortgage where they could still enjoy a good lifestyle.

“We still wanted to be able to save for holidays and have a good quality of life and not be overstretched,” Ms McLoughlin said.

“Saying that, our budget increased quite a bit on our journey of buying our house.”

They have so far only made one mortgage payment since moving into their home a month ago.

“It’s not too bad. It’s more expensive than renting but it’s easier than we expected. We’ve been adding a bit more to the joint account,” Ms McLoughlin said. “We’ve only got one bill so far and we haven’t paid the rates yet.”

— Melissa Heagney


First Home Buyers Australia: How they Save for their Deposit - Investors Advisors
Brisbane first-home buyers Jess Carmichael and James Mulligan at their Kedron home. Photo: Tammy Law

Jess Carmichael and James Mulligan

Paid: $635,000

Saved for: 2.5 years

Jess Carmichael and her partner James Mulligan had been living together in London for four years but buying a house back home in Brisbane was always part of the plan.

The couple, both town planners, did not have a specific goal in mind for their savings but had been putting money away for two years before they moved back to Brisbane in September last year.

For the next six months, they lived with her parents and made the most of the opportunity, saving like mad while researching in earnest.

“It certainly helped a lot. We paid a little bit of board but it was a nominal amount, certainly not equivalent to renting,” Ms Carmichael said.

“We spent a lot of that time researching where in Brisbane we wanted to buy, the average market values in those areas, and that informed our approach in terms of what we could realistically achieve within our budget.”

Settling on the character suburbs around Brisbane’s inner to middle-ring north, they had a list of features that were important to them, such as accessibility to public transport, proximity to parks and having an outlook.

“We looked from September to January, seven different houses every Saturday. It was exhausting but you need to do the research,” Ms Carmichael said.

“To be honest I don’t think a lot of agents took us very seriously because they could tell we were in that research phase.”

The couple enlisted a mortgage broker to help them navigate the home loan process and were conscious of not stretching themselves. They had a 20 per cent deposit, which Ms Carmichael said opened up better interest rate deals for them from banks.

After missing out on a house at Stafford, they snagged a gorgeous two-bedroom character home in a sought-after Kedron street via private treaty for $635,000.

“The only thing this house doesn’t have that the other one did was an outlook. We don’t have a view here. But we’re seven kilometres from the city and in a really nice spot, so we’ve done pretty well,” Ms Carmichael said.

“In hindsight we’re glad we didn’t get the house at Stafford. For the price we paid for this house, I don’t think we compromised really.”

Adjusting to mortgage life has been easy for the couple.

“We’ve actually worked out that our mortgage repayments are less than our rent was in London,” Ms Carmichael said.

“And I think we’ll find the bills more manageable to be honest. The challenge will be to work through a sequence of what we want to do for renovations and planning and saving for those things now.”

— Ellen Lutton


First Home Buyers Australia: How they Save for their Deposit - Investors Advisors
Perth first-home buyers Alicia Manningok and Brendon Dawsonok. Photo: Supplied

Alicia Manning and Brendon Dawson

Paid: $554,000

Saved for: 2 years

For Perth high school sweethearts Alicia Manning and Brendon Dawson, saving a deposit and buying their first home was the result of sacrifice and discipline.

The 27-year-olds moved into their new home in Victoria Park last August after years of savings and a shared dream of home ownership.

On completion of their university degrees and after finding jobs in their respective fields – Dawson is a solicitor and Manning a scientific advisor–  the pair rented and saved hard to build on their savings.

“We were just out of uni, so we basically kept living our uni lifestyle,” Mr Dawson said.

“We were fairly frugal and basically saved one of our incomes while using the other person’s income to live.

“It was hard because effectively we were living on the one salary for the two of us but I think the big advantage was for us was we’d been in a stable relationship for a long time, and we had shared money so it was much more doable and coming out of uni we didn’t have many expenses lifestyle-wise.”

After two years of knuckling down for a deposit, the pair embarked on their home search journey.

“We starting looking around for houses but ended up buying a block, which was probably a bit cheaper because it had an old service road that hadn’t been developed and probably won’t be for a couple of years,” he said.

The state government’s $10,000 WA First Home Owner Grant was an added bonus for the couple and helped sway their decision to build rather than buy an established home.

After securing the block, which cost $304,000, the couple spent another six or so months saving and searching for a builder.

Today, Mr Dawson and Miss Manning are loving living in their three-bedroom, two-bathroom home, which they built for about $250,000.

“It’s great to have somewhere nice that we are actually making payments for, that’s going towards an asset for us,” Mr Dawson said.

— Lisa Calautti


First Home Buyers Australia: How they Save for their Deposit - Investors Advisors
Adelaide first-home buyer Chad Nicolle outside his new home. Photo: Supplied

Chad Nicolle

Paid: $235,000

How long to save: 3 years

Chad Nicolle considered his options carefully before taking the plunge to buy his first home.

He paid $235,000 for a two-bedroom villa in the southern suburb of Morphett Vale, settling in October and moving into the home in February after the previous tenant moved out. 

A lifelong Adelaide resident, he had rented on his own for the previous nine years. 

“It took me a very long time to make the decision to buy a house,” Mr Nicolle told Domain. “I weighed up all my options and got into the habit of knowing what it would be like before I started.”

A redundancy payout from a previous job a few years ago gave his nest egg a boost, and he saved for three years before buying. 

So far, paying off a mortgage “hasn’t been too bad” for the 35-year-old, who works as a customer service manager for a fibre optic company and arranged his home loan through Sam Walker at Aussie in Prospect.

He estimated that he pays about $60 to $70 more a week to own rather than rent, and he sets aside cash for council rates and strata fees. 

“I don’t feel any different from renting. The only difference is I have two quarterly bills I wouldn’t have otherwise,” he said. 

This means he isn’t able to save as much money as in the past towards holidays or other goals. He is also in the habit of taking his lunch to work, but says his social life hasn’t changed. 

“I’m still living my life, I’m still doing the things that I want to,” he said. “It’s not as scary as what I thought it would be.” 

— Elizabeth Redman


First Home Buyers Australia: How they Save for their Deposit - Investors Advisors
Joshua and Natalie Graham purchased the home they were renting in December last year. Photo: Ashley St George

Joshua and Natalie Graham

Paid: $447,000

How long to save: 18 months

Paying off a mortgage can be a daunting task for many first-home buyers, but for those in the ACT you might be surprised to know it could mean more money in your pocket with some loan repayments less than the weekly asking rent.

With Canberra’s median asking rent prices the highest in the nation for houses, many renters are looking to get their foot in the property market.

Joshua and Natalie Graham used to rent their three-bedroom house in the southern Canberra suburb of Gilmore and were paying $430 per week.

In December, they purchased the house for $447,000 and they are now paying $380 per week in loan repayments – $50 less than what they paid for rent.

Mr Graham said they were a few months off from starting the search for a home, but when their rental was put up for sale, “buying the place was a no-brainer”.

“We had been saving and met with [a mortgage broker] 18 months before to look at our options and get ourselves into the best position to buy a place,” he said.

“We put in an offer, initially, a low offer as you do, and that got knocked back but we reassessed everything and offered them another $20,000 on top of our original offer and they accepted it.”

From July 1, stamp duty will be exempt on all properties in the ACT for first-home buyers under an income threshold of $160,000. While Mr Graham missed out on the incentive, he’s glad he’s didn’t miss the opportunity to own his rental now.

“The price of homes in Canberra is quite high and so that would’ve helped us. We obviously had the option to defer our stamp duty but because we got it at a pretty good price we decided to pay upfront,” he said.

“But if we were still renting we would wait until the exemption came into place.”

— Lucy Bladen


First Home Buyers Australia: How they Save for their Deposit - Investors Advisors
Thomas Webster and his partner Whitney outside their first home in Howrah. Photo: Supplied

Thomas Webster and his partner Whitney

Paid: $430,000

How long to save: 18 months

Thomas Webster and his partner Whitney recently bought their first property in Howrah, in the wider Hobart area. The couple, who are both in their 30s, paid $430,000 for the three-bedroom, one-bathroom estate through Charlotte Peterswald for Property.

Mr Webster points to challenges around affordability as a motivator for buying. “The rental market in Hobart is just crazy. There’s not much available and the cost is pretty ridiculous.”

The couple were on a rolling lease, which gave them the impetus to buy.

Mr Webster and his partner started seriously saving for a home about 18 months prior to buying. They originally tried saving money for their home loan individually, but soon found that approach wasn’t working.

“It was only once we starting saving together that we really gained momentum,” he said. “We set up a purpose specific account that we both contributed to fortnightly. We couldn’t withdraw money from it unless we both signed off on it.” 

Mr Webster said the most challenging part of buying their first home was the time required to develop an informed understanding of the property market, as well as managing the stakeholders involved. “We’re fortunate that Whitney was a teacher on school holidays, which allowed her to dedicate a fair portion of her break dealing with the bank, real estate agents and conveyancers.

“It was a steep learning curve but the reward of home ownership is well worth the journey.”

Mr Webster said the couple’s combined income and job security – from TasNetworks and from teaching – should make mortgage repayments feasible, but that if they had taken out a larger loan it could have been a different story.

— Isabelle Chesher

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Sydney auctions: Owner-occupiers back in the market as they see value under the hammer

Owner-occupier buyers were in the driver’s seat in Sydney’s home auction market at the weekend as some property investors held back.

A spacious apartment in Cremorne Point sold to downsizing couple for $2.11 million, some $110,000 above reserve.

Across town, a period Kensington home changed hands for the first time since it was built in 1913. The property, at 32 McDougall Street, was purchased by a family with renovation plans for $3.2 million, $350,000 above reserve.

The city’s auction clearance rate was 59.5 per cent from the 353 auctions reported to the Domain Group (639 were scheduled). This was just below last weekend’s preliminary auction success rate of 60.9 per cent, subsequently revised down to 49.2 per cent.

Damien Cooley, of Cooley Auctions, said the number of registered bidders at auctions had spiked up through March.

Sydney Auctions: Owner Occupiers are Back in the Market - Investors Advisors
The period house at 32 McDougall Street, Kensington, was bought by a family who want to renovate. Photo: Ray White Kingsford

Owner-occupiers, including downsizers and upgraders, were showing greater confidence in bidding, he said, but some investors were continuing to observe the demand levels for properties rather than purchase.

“The market is definitely better in 2019 than it was,” Cooley said. “That doesn’t necessarily mean that the prices are increasing but more properties are selling. I think this is coming off the back of buyers seeing value: the market has come back and vendors are recognising that the market is not as good as it was and they are more willing to sell.”

About 50 onlookers turned out for the auction of 14/14-18 Kareela Road, Cremorne Point, which offered three bedrooms and 241 square metres of internal and terrace space.

Belle Property Neutral Bay co-principal Matthew Smythe said the unit attracted six registered bidders, three of whom participated.

After kicking off with a starting bid of $1.5 million, the property drew bid rises of $25,000 and $10,000 before selling under the hammer for $2.11 million to downsizers from Cremorne.

Sydney Auctions: Owner Occupiers are Back in the Market - Investors Advisors
14/14-18 Kareela Road, Cremorne Point. Photo: Belle Property Neutral Bay

Smythe said the apartment was inspected by 96 groups and had proved popular because of its quality renovation, attractive outlook and double garage.

“This was a strong auction and it sold for close to what it would have achieved at the top of the market in 2017,” Smythe said.

The McDougall Street house in Kensington was bought by a local family planning a renovation. The house had initially been expected by Ray White Kingsford to sell in the range of $2.7 million to $2.8 million but with a final hammer-fall price of $3.2 million, it did substantially better.

Other higher-priced sales reported this weekend included an extended period house on 1214 square metres at 7 Wallis Avenue, Strathfield. This property sold at auction on Saturday for $4.25 million through Georges Ellis & Co.

Meanwhile, a 1890s-built home on 840 square metres, at 47 Meymott Street, Randwick, fetched $3.37 million through McGrath Eastern Suburbs.

Sydney Auctions: Owner Occupiers are Back in the Market - Investors Advisors
The 1890s home at 47 Meymott Street, Randwick, fetched a cool $3.37 million. Photo: McGrath Eastern Suburbs

AMP Capital chief economist Shane Oliver said there had been a slowing in the rate of decline of median house prices in Sydney, while auction clearance rates had bounced off their lows.

“Some might see that as a positive sign,” Dr Oliver said. “And, perhaps the market has been helped by talk of rate cuts, bargain hunters moving in and the possibility that there will be easier bank lending conditions with the royal commission being out of the way.”

Cooley Auctions runs dozens of auctions each weekend and, according to Damien Cooley, a flight to quality is clearly evident.

“All the buyers are flocking to the quality homes and they’re selling well whether they are a house or an apartment,’ he said.

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‘A bit forgotten, in a good way’: Tweed Shire, a green pocket tourists tend to overlook

Bound by the Queensland border, the Pacific Ocean and the Border Ranges National Park, the Tweed – as it’s affectionately known by the locals – flies a little under the national radar.

“Being just south of the border, it’s a little bit forgotten, but in a good way,” says Sophie Carter, of Sophie Carter Exclusive Properties. “It’s not overdeveloped and you can live a coastal lifestyle that’s not as busy as the Gold Coast. We’ve got all the attributes of better-known areas, but without the hustle and scrutiny.”

Only five minutes from Coolanagatta Airport but not under the flight path, Tweed Heads is
the region’s urban centre and provides all the expected urban amenities. But it’s perhaps the shire’s riverfront towns like Murwillumbah that lure the most tree-changers.

Valley views

Tweed Shire: a Green Pocket Tourists Tend to Overlook
Mount Warning in the Tweed Range, gathered in morning mist. Photo: Destination NSW

Owner and director of Madura Tea Estates Stephen Bright spent the first few years of his working life with a big accounting firm in Sydney before moving to the north coast in his 20s, looking for a rural lifestyle with employment opportunities.

“What was attractive at that time was that everything in the Tweed was so idyllic,” he says. “It’s a beautiful valley that’s very close to the far- north coast and beaches, with large tracts of rainforest and a very active agricultural scene in cane, bananas, dairy and logging. And within the valley there’s a significant amount of value-adding going on, like processing for milk and milling for timber.”

Tweed Shire: a Green Pocket Tourists Tend to Overlook
Stephen Bright of Madura Tea NOT FOR REUSE
Stephen Bright of Madura Tea describes Tweed Shire as idyllic. Photo: Supplied

Bright spent his first 17 years as an accountant in Murwillumbah before buying Madura Tea Estates. He has grown the hinterland business by expanding the product range and broadening the distribution through Australia’s largest supermarkets, in turn providing stable employment for the Tweed locals.

Madura now claims 4 per cent of the tea category within the grocery sector in Australia and a tour of the estate allows a close-up view of tea growing, processing and packaging.

Time for a cuppa

Tweed Shire: a Green Pocket Tourists Tend to Overlook
Madura Tea Estates has received approval for an on-site cafe. Photo: iStock

The estate has recently received approval to operate a cafe on site and Bright is looking forward to serving visitors with a cup of their home-grown brew in the near future.

“We’re on the tourist trail so it makes sense to serve light refreshments for visitors,” he says.

A strong cafe and dining culture is already well established in the Tweed, and Carter’s favourites include Cabarita Beach’s Paper Daisy, Cubby Bakehouse in Chinderah, Friday Hut Dining in Possum Creek and Ancora in Tweed Heads.

You’ll also find a cafe at the Tweed Regional Gallery.

Top home in the area

Tweed Shire: a Green Pocket Tourists Tend to Overlook
2402.53 Bay Street Tweed Heads
2402/53 Bay Street, Tweed Heads. Photo: Supplied

A recent renovation has furnished this penthouse with Carrara marble finishes and Miele appliances across a 563-square-metre floor plan.

The property has stunning views over the Tweed River and comes with its own rooftop pool.

Sophie Carter Exclusive Properties are selling the property with a $2.65 million guide.

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Bayside tenants pay Melbourne’s most expensive rent

Bayside renters can expect to dish out more than tenants across the rest of Melbourne and prices are predicted to keep increasing.

CoreLogic data shows it costs a median of $824 weekly to live in a house in the seaside suburbs, while those looking to rent a unit can expect to pay a median of $520 a week.

It’s the most expensive municipality for renters across Victoria.

The asking rent has jumped from $810 for houses and $500 for units in 2017, despite being a challenging period for Melbourne’s real estate market.

Bayside Tenants Pay Melbourne’s Most Expensive Rent - Investors Advisors

It costs $3900 a week to rent the five-bedroom house.

Bayside Tenants Pay Melbourne’s Most Expensive Rent - Investors Advisors

Bayside’s median asking rent is $824 a week for houses.

The median sale price for Bayside houses decreased by 4.1 per cent to $1.8 million during the same period. general manager for rent Kul Singh said prices were impacted by softening sales conditions.

“Investors hold onto stock and look for rental yield growth, which impacts weekly rents, while buyers concerned with further declines also enter the rental market,” Mr Singh said.

Bayside Tenants Pay Melbourne’s Most Expensive Rent - Investors Advisors

Some of Melbourne’s most prestige rentals are found in the area.March 23: Jack Boronovskis’ Victorian property wrap

“These factors result in increased competition for rentals in popular areas, which often end in rental prices increasing.”

Investors are set to earn 2.4 per cent in rental yield a year on their Bayside house, which is below Melbourne’s average 3.1 per cent.

Greater Melbourne’s median asking price for houses is $430 a week, which is an increase from $420 in 2017.

Bayside Tenants Pay Melbourne’s Most Expensive Rent - Investors Advisors

6 White St, Beaumaris is on the rental market for $1600 a week.

Bayside Tenants Pay Melbourne’s Most Expensive Rent - Investors Advisors

The property includes a luxurious outdoor entertaining area.

It costs the same amount to rent in Tasmania, while Sydney, Canberra and Darwin are more expensive at $560, $550 and $500 respectively.

Melbourne units cost a median of $420 a week to rent, which is the third most expensive across the Australian capital cities, behind Sydney and Canberra.

Melton is the cheapest, with a $370 weekly asking price.

Bayside Tenants Pay Melbourne’s Most Expensive Rent - Investors Advisors

112 Beach Rd, Sandringham is for lease at $850 a week.

Bayside Tenants Pay Melbourne’s Most Expensive Rent

It’s priced close to the municipality’s median asking price.March 23: Jack Boronovskis’ Victorian property wrap

Mr Singh said inner-city pockets were more likely to have price jumps because of demand.

“We would expect to see the most popular rental destinations continue to become more expensive due to increased competition, particularly if supply of rental housing decreases as a result of the proposed Labor policies relating to negative gearing and investors,” he said.

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Healesville: The locals love living here and will tell you all about it

Warning: there’s something a little irksome about Healesville locals. They absolutely love living in Healesville, and they’re not afraid to tell you.

“It’s pretty much perfect,” says Benjamin McKenzie, who moved from Brunswick with his partner five years ago when the couple were expecting their first child.

“I really can’t think of a single negative thing to say about Healesville!” long-time local Mia McKay gushes. “I am wracking my brain.”

They’re not the only ones. Wander the main street and ask anyone you meet – you might just find yourself considering a move. And who could blame you?

Set amid the picturesque Yarra Valley, 52 kilometres north-east of Melbourne’s CBD, Healesville marries yesteryear charm with a drool-inducing spread of top-notch gourmet fare – restaurants, wineries, breweries, distilleries and cheese factories are dotted about the surrounding paddocks and hills.

Surveyed in 1864, after years as a layover point on the track to the Woods Point goldfields, the town evolved into a holiday destination for well-to-do Melburnians upon the introduction of a railway line, now resurrected as the Yarra Valley Railway tourist train between Healesville and Yarra Glen.

Cultural experiences abound, with the TarraWarra Art Gallery, Memo theatre and annual Healesville Music Festival (held each November).

There’s country horse racing, an organic market, and the spectacular Bicentennial National Trail that follows historic stock and coach routes all the way to Far North Queensland. Add the cute natives at the famed Healesville Sanctuary, and it all sounds pretty idyllic.

McKay and her partner keep horses, host local music acts on their verandah, and volunteer at the annual music festival. On a Friday night, you’ll find them at Watts River Brewery enjoying the live music and the company of other locals.

It’s a scene that McKenzie enjoys too, adding that he has struck up friendships with other new fathers, a sense of comradery forged over a drop of the house IPA.

Healesville: Locals Love Living Here & Will Tell You Why - Investors Advisors
The kitchen and pizza oven at Giant Steps restaurant in Healesville. Photo: Arsineh Houspian

The McKenzies have never regretted their tree change. “We were getting really sick of the city. It was so busy and polluted. It just felt exhausting … We took a chance and it’s been great.”

Healesville gave them more house and garden for their money, the fresh air they were craving and land enough for a shed, a veggie garden and backyard cricket.

Their property even has a creek flowing through it – I mean, come on. The family enjoys ready access to the bush, as well as the small-town community feel. Life has slowed, in the best of ways.

Barry Plant director Jenny Webb loves Healesville too. “It’s a place that has a slower pace and a country feel, but there’s lots happening,” she says. “People know and help each other here; it’s a nice place to be.”

Healesville property prices have “increased dramatically” over the past five to 10 years, according to The Professionals’ Lyndal McMath-Hall.

And while things have cooled of late – Domain data places the town’s median house price at $610,000 – McMath-Hall notes that as prices rose in 2016-17 buyers spilled over from out-of-reach suburbs such as Lilydale, Mount Evelyn and Mooroolbark, bringing an influx of first-home buyers and young families.

Healesville: Locals Love Living Here & Will Tell You Why- Investors Advisors
It’s famous for its eponymous sanctuary, but there’s plenty more to Healesville. Photo: Justin McManus

Property stock reflects the town’s wide appeal, with a spread that includes smaller units for around $350,000 to $450,000, new townhouses, large family homes that can fetch as much as $750,000, and sweeping million-dollar lifestyle properties.

And once people move here, Webb says, they tend to stick around, even if they need to upgrade or downsize to make it work.

With good schools, shopping and buses, and access to the CBD via trains from Lilydale, the town isn’t set up just for weekend crowds.

When pushed, McKenzie concedes if he has to find a negative, he could do without the tourists that make things “pretty hectic” on weekends. But McKay embraces the visitors – “If they’re coming to appreciate my home town, then I’m pleased about that, I take it as a compliment”.

After all, as Webb points out, without the tourist dollar there wouldn’t be so many jobs, nor the established infrastructure that the locals enjoy year-round. Perhaps not even so many world-class wines to sample without the steady stream of thirsty guests.

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