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I’m livin’ in the 70s how the median price has changed

Are you always kicking yourself for not purchasing property 40 years ago, seeing how exponentially the prices have increased?

Let’s take a trip down memory lane and assume you bought your first home or investment property in 1975.

Across Australia’s capital cities in 1976, median house prices looked like this:

  • Sydney – $36,800
  • Canberra – $35,100
  • Melbourne – $32,900
  • Adelaide – $29,800
  • Hobart – $31,575
  • Perth – $33,000
  • Brisbane – $26,275

There’s a few interesting things that come out of these figures.

  1. How cheap property prices seem when you look back today (not that they seemed inexpensive at the time)
  2. Brisbane was the cheapest capital city 40 years ago, well behind Hobart and Adelaide.

It’s important to keep things in perspective, though.

The average wage in the mid 1970s was around $6,000, according to the Australian Bureau of Statistics, so the median Sydney house price was almost six times’ the value of the average annual income.

Forty years on, both wage and house prices are considerably higher, although they haven’t grown at a consistent pace.

Sydney’s median is now 27 times higher than it was in 1975; if wages had matched that pace, the average wage would now be $162,000.

Of course two of the big reasons behind this are:

  1. There are more two-income families (both partners working) today than there were 40 years ago, increasing disposable household income.
  2. Interest rates have virtually halved substantially; increasing affordability. The standard variable interest rate in 1976 was 9.88%, meaning you needed to pay twice as much interest to service the same dollar value of loan.

House prices today:

Median capital city property values at the end of October 2017 were as follows:

  • Sydney – $905,917
  • Melbourne – $710,420
  • Perth – $462,624
  • Canberra – $582,882
  • Brisbane – $490,525
  • Darwin – $437,910
  • Adelaide – $430,303
  • Hobart – $396,393

Knowing what you know now, who wouldn’t have liked to buy their parent’s house for what your parents paid years ago?

Wouldn’t it be great to have a crystal ball and take a peek into property markets of the future and see where real estate prices will be in another 40 years? In its absence, it’s a pretty safe bet to assume that in the long-term, property values will continue to grow, underpinned by our growing population and the general wealth of our nation.

It’s important to keep this in mind when you’re negotiating your next property deal, as squabbling over $2,000, $5,000 or even $10,000 in today’s dollars is unlikely to have a huge impact on your eventual wealth.

Buying smart, investing in strong growth locations and negotiating the best price for the current market conditions: these are the most important tenants of property investing.

Follow these steps and you’ll be less likely to lament ‘the one that got away’ in years to come!

If you’d like some more information about buying your next home or investment property, feel free to get in touch! We’d love to guide you through the process. Send us an email at brendan@nakededgerealestate.com.au, or give us a call on 6254 6333.

How much does a bathroom renovation cost

Renovating your bathroom can really boost the value of your home, and improve your in-home experience. Although a lot of people want to make this improvement to their house, not understanding the price of the remodeling is a major setback for many.

So how much does a bathroom renovation cost? The cost for a bathroom renovation in Australia can vary from a few thousand dollars for small renovations, to around $50,000 for something more luxury. Before you start peeling tiles off the shower, consider these four costs…

  1. Bathroom Remodeling Costs

The cost of your bathroom remodel depends greatly on your design plans. Perhaps you just want to replace a few of your outdated fixtures, or perhaps you’re planning on tearing everything out and starting from scratch. However, it’s worth keeping the range of prices for common bathroom pieces in mind – before the cost of installation:

  • Tiles will generally cost, at a minimum, $30 per square metre. Premium tiles can cost more than $150 per square metre.
  • A new toilet can range from about $120 for something basic, right up to over $1000.
  • A standard vanity will cost approximately $700, while if you’re looking for something a little more premium, you should expect to spend up to $1500.
  • You’ll likely spend between $600 – $1200 on a new shower enclosure.

Studies have shown that the average amount spent on a bathroom renovation is approximately $17,500, so expect to spend approximately this much if you’re planning a full renovation.

 

  1. So Many Choices!

Your bathroom renovation costs will have a lot of variables, we’ve listed some of the most important and common ones for you to consider below:

Material quality– Do you want tiles or linoleum? Do you want a glass or acrylic shower? The quality of the materials used will greatly affect the cost of your build.

Length of remodelling– How long does it take to do a bathroom remodel? Usually, labour takes two to four weeks. But for larger jobs where you’re changing the core structure of your bathroom, expect to take a bit longer.

Unexpected delays– If you have an older house you may discover asbestos in the walls or fundamental plumbing issues that need to be addressed before the renovation can go on. Delays can raise the price of your renovation, but often they are problems that should be addressed immediately whether you’re renovating or not.

Size of the job– If you’re planning to do a lot of tiling, reroute plumbing, resurface large areas, or alter circuiting, then the job is likely to take longer to finish and cost more money. Spend some time planning your renovation before you jump into it to ensure you make the most of your money.

  1. Planning Ahead & Choosing Contractors

When hiring contractors, make sure they aren’t over or under charging you per hour.  If they’re charging more than $80/hr, then you can probably find someone cheaper. Be wary if they’re charging less than $50/hr. It’s likely they are not experienced or even licensed to do the job, and they may end up causing more harm than good.

You can check if a contractor is licensed here.

Like any build, when renovating your bathroom, the key is to plan in advance. Make sure you get several quotes, analyse the costs of materials, and decide what you really need to change.

  1. More Bathroom Renovation Tips

Try using an online bathroom planner if you’re finding it difficult to decide how to remodel. Using a virtual planner is an easy way to visualise how your finished bathroom will look, and to figure out how much space you really have for all of the modifications you want to make.

If you only have a small bathroom to work with, choose light colours to make it appear a little bigger. Using light-coloured fixtures will also help the style of your bathroom to remain timeless. Choosing on-trend colours often means replacing them several years down the track. If you need additional space for towels, add hooks rather than cupboards as they help to avoid clutter.

Try a dimmer switch if you and your family have different lighting preferences, or indeed if your lighting preference depends on your mood. It’s not much fun taking a bath in harsh, fluorescent lighting, for example, so a dimmer switch can be a nice touch.

 

Finished renovating and ready to sell? We’d love to help you get the best price for your beautiful property. Contact Brendan Leahy today on 0439 998 867 for an obligation free appraisal.

Guest Blog: Ways to know you’ve found the right house

You’re finally ready to buy a new house!

Maybe it’s the first home you’re ever going to purchase yourself, or perhaps it’s a crucial upgrade that you’ve decided to invest in now that your family is getting bigger. Either way, choosing the ideal home is a big decision. In fact, is one of the most significant financial decisions you’re ever going to make.
With so much pressure riding on the right choice, it’s no wonder that so many buyers end up biting their nails over whether a purchase is right for them or not. Move too quickly, and you risk wasting all your budget on a home that’s just not right for you. Sit on the fence for too long, and you could lose your chance of getting the property of your dreams.
So, how do you know whether you’ve really found the right house? Look for the following signs.

 

 

 

 

 

 

 

 

 

  1. It Suits your Budget Perfectly

Ultimately, we’re all limited by how much house we can reasonably afford to buy. You’ll need to sit down with a real estate agent or a mortgage broker before you start looking for homes, and sort through your finances to determine how much you can afford to offer as a down payment, and how much debt you’re comfortable being in and can realistically afford to pay back.
If you’re struggling to figure out what you can afford, there are plenty of great mortgage calculators out there who can help you to do the math. Perhaps the most important thing to remember is that you should never put yourself in a position where you’re going to struggle to make ends meet every month.
Your home is a place of comfort – it shouldn’t be something that fills you with dread every time you see the mortgage payment. If the price of your ideal home leaves you breathing a sigh of relief, then that’s a good sign you’re on the right path.

  1. It Meets Your Must-Have List

With your budget in mind, you’ll probably find that you need to do some prioritising. After all, you might not be able to afford three bathrooms, four bedrooms, and a giant garden. With that in mind, you’re going to need to decide what your “must have” items are, and what your “nice to have” preferences might be.
The perfect home will be the one that checks off all the deal-breakers on your list while covering a few of the nice to have options too. While everyone’s list is different, a few of the things you might consider include:
– A location that’s close to work
– Enough bedrooms for the whole family
– A kitchen that’s large enough to entertain in
– An extra bathroom
– A theatre room

While you should always be willing to compromise when your house-hunting, remember that a property that doesn’t fit your basic needs might not be the right fit.

 

 

 

 

 

 

 

 

 

 

 

 

  1. You No Longer Care about Seeing Other Homes

When you start house hunting, with a little luck you’ll find that there are plenty of homes out there that meet your budget. However, while there might be countless fish in the sea within your local area, once you find the perfect place for you, you’ll no longer be interested in seeing the other options. Ultimately, once you find the one, all the excitement of house hunting goes through the window, and all you can think about is getting your hands on that dream property.
Even if you do decide to look at the other homes in your area, then there’s a good chance that the “one” will be on your mind throughout the entire viewing. You might even find yourself comparing other houses to the property you love – telling yourself that the other garden was bigger, or that there was more “light” in the living room.

If the thrill of the hunt has gone, you might have already found your perfect home!

  1. The Area or Neighbourhood is Perfect

While it’s great to fall in love with a house for its structure or the number of spacious bedrooms it has, it’s also important to remember that you’re not buying a home in a vacuum. In other words, when you invest in a house, you’re also investing in the neighbourhood. Before you even consider making an offer somewhere, you should look at the surrounding area and see if you’re happy with it.
Is there a school nearby that would be great for the kids? Can you access plenty of public transportation if you don’t want to rely on a car? What about the neighbours? Can you consider knocking on a few doors and finding out whether you’re going to get along with the people you live beside? Ask about the nitty gritty like the crime rate in the area and if there is a lot of noise in the evenings when you would rather be relaxing in peace.
It’s a good idea to explore an area thoroughly before you submit an offer. Make sure you’re on the lookout for essential amenities like a grocery store, or bank. It’s also worth looking for fun hotspots like restaurants and parks too.

  1. Is It Right for Today and Tomorrow?

An important point to keep in mind when you’re buying a house is that you’re not just purchasing the property to live in for the next year or so. Most people spend at least a few years in their home, so it’s worth making sure that your house is going to meet all your expectations for today and tomorrow.
Real estate is a solid investment, and you’ll want to make sure that any home you’re thinking of purchasing is a good fit for the life you envision having. Is there are a spare room for any kids you’re thinking of having? If you’re planning to launch your own business or spend more time working from home, is there somewhere you can turn into an office space?

Looking for the Perfect Property Vibes
Ultimately, finding the right house is a lot like falling in love. For many people, you simply know when you’ve found the right one. From the moment you see the property, you’ll be dying to get inside, and every new room will create an even deeper love affair. Even if the house isn’t perfect, the home that’s right for you won’t put you off because you don’t like the paint colour, or you know the kitchen needs a refresh. Just make sure that you don’t let your heart rule your head too much, or you could end up spending more money thanyou realistically have.

Ready to start looking? To see our currently available properties, please click here.

Should I sell or rent my property

Thinking of upgrading to a bigger home, but can’t decide if you should sell your current property, or rent it out as an investment property?

WA has just recorded the strongest rental expectations in Australia for the next 2 years, according to the 2019 NAB Residential Property Survey, coupled with the lowest vacancy rate in six years. So if you can afford to, now is a great time to upgrade into something bigger, and keep your current home as an investment property.

 

“Provided you can afford it, you could make yourself an extra $40,000-$60,000 more, if you hang onto your home and sell in the next two to three years, thanks to the state of the WA market and economy.” – Brendan Leahy, CEO of Naked Edge Real Estate

 

Hear Brendan’s top #3 considerations to help you make the best decision for your situation…

  1. Can you afford to keep your home as an investment property?

If you do decide to rent out your home, you will still have your usual rates to pay, plus ongoing maintenance and repairs. With a rental, hot water systems can fail, and air conditioning systems may need work. So provided that these costs won’t stretch you too thin, I would recommend holding onto your home for another two years or so.

 

This is because the core fundamentals (namely commodity prices) are in place for the WA market here to have some significant gains over the next couple of years. Keep in mind it is a different case over on the east coast. The market over there has slowed down – and I think it still has some slowing down to do.

 

WA is a mining state, and we’ve recorded strong iron ore price exports of $100 per tonne for the last six months, and based on WA treasury estimates, with every US$1 increase in the iron ore price, WA receives an extra $81 million.

 

The AUD exchange rate is helping as well, each time the Aussie dollar drops by just one US cent, WA’s royalty income is expected to jump by $101 million.

 

  1. Can you afford to upgrade without selling your current home?

Ideally, the choice to maintain your property and rent it out will still allow you to upgrade and afford the home you want. Sometimes by selling the property you could borrow an extra $100,000-$200,000… so maintaining your home and renting it out may reduce that capacity.

 

But you might find you can still afford the home of your dreams in that price point. It is a buyer’s market at the moment, which is great for upgraders because house prices have dropped far below home values – and this market will not last long. There are homes in the Perth hills that were previously worth $900,000+ now available for $650,000.

 

It’s a great time to see what’s around, and speak with your lender to see what you can afford. The cash rate is also at an historic low of 0.25%, so it’s an opportune time to get your finances in a position to upgrade, and secure some long-term capital growth.

 

  1. Is being a landlord for you?

If you find you can afford to keep your home as an investment property, consider whether you have the time, patience, and desire to manage your rental yourself, or if you’d like to hire a property manager to do it for you.

Some of the most important tasks of a landlord (or property manager) are:

  • Finding a reliable tenant that pays rent on time and maintains your property.
  • Collecting and lodging the correct tenancy bond with WA bond administration.
  • Conducting regular routine inspections on the property.
  • Organising prompt maintenance and/or repairs on the property.
  • Ensuring all legal paperwork and documentation are filled out correctly and signed (e.g. tenancy agreements, property condition reports, inspection reports, repair requests etc).

If you work full-time and have a family, you may find it difficult to give your tenant and rental the time and commitment it needs – it totally depends on your circumstances, and headspace.

 

If you’d like more information on how a property manager can help you protect your investment, feel free to get in touch with our sister company, We Love Rentals on (08) 6254 6300. They only do property management, and have 10+ years experience in the industry.

 

And if you’d like a second opinion about whether to sell or rent your property in the current Perth market, feel free to call Brendan on 0439 998 867. He’d be more than happy to answer any questions you may have.

Local is better the benefits of using a local agent

There is so much to consider when choosing a real estate agent to sell your property. There are many agents to choose from and it can be confusing when you try to compare different commission rates, marketing plans, personalities and selling price recommendations. Some would argue that the most important factor is to choose an agent who is active in your local area. An agent’s local knowledge and expertise will often sell a home faster for the best price possible.

Here are just some of the advantages of using a local agent:

Know the Suburb Well

An agent who is selling homes in your suburb or a neighbouring suburb should know all there is to know about the area. Buyers can ask all sorts of questions from the local bus route, the number of primary schools, the high school boundary, local shopping centre expansion plans or road changes. An agent who can talk with authority about the suburb will be able to give the prospective buyer more information and hold a conversation for longer.

Value of the Home

If an agent has sold the house across the road, the one down the street and over the back fence there is a good chance they know what price point to market the home. An out of area agent can look up the selling prices of the homes but they won’t have been through previously sold houses to know how they really compare to the current listing.

Testimonials

When you use a local agent you can ask to see all their testimonials from past clients who also sold in the area. Reading testimonials can give a seller the peace of mind and confidence that their chosen agent will achieve the best possible outcome.

Database of Prospective Buyers

An agent with other listings in the suburb will meet buyers at other home opens. A buyer will often say that the property they are viewing isn’t quite right because they are looking for a particular feature or size. A good agent will take a note of this and if your property is a match, they can make contact with the prospects and invite them to view before the house is even advertised.

If you would like to find who the Naked Edge Real Estate local area specialist agent is for your area, check out our Suburb Profiles. And for more tips on making a decision on your real estate agent, download our comprehensive, free guide – How to Choose the Right Agent, found on our Blog.

Post Lockdown Market Update – WA is doing well, but the rest of Australia is in trouble…

WA real estate is holding strong.

The number of homes currently on the market has continued to drop and is creating competition for buyers. In the last two months we’ve been flooded with enquiries, private inspection bookings and have had 12 Perth homes go under offer.

I don’t have a crystal ball, but history shows us that after a major event like COVID-19 markets tend to rebound, and rebound very strongly.

Here’s five things insulating Perth from the impacts of COVID-19 compared to other capital cities in Australia …

  1. Listing numbers are down dramatically (and continuing to drop)! In April there were just 6,534 homes on the market. Which is roughly 1,000 homes less than the month before in March (that’s a massive drop in such a small time frame) … And as I’m writing this blog post, that number has dropped even further to just 6,067 homes (according to reiwa.com data). To put that in perspective, this time last year we had just under 12,000 homes (excluding land and units) on the market in Perth. This is creating lots of competition for Perth buyers, because there aren’t enough homes for sale to meet the demand.
  2. When COVID-19 hit, WA was in the recovery phase of the property cycle. This is completely different to over east who were at the peak of their market and will likely see home price declines of 10% and maybe even 20% over the next year or so. Meanwhile, Perth has just come off the back of a 5-year economic slowdown and our property prices have already corrected (we reached the bottom of the market in 2019). As long as we don’t see many distressed sales flood the market (which the mortgage ‘holidays’ and jobkeeper payments are helping with), Perth property prices should remain insulated.
  3. The Perth vacancy rate is very low, currently sitting at 2.2 per cent. When the vacancy rate is this low, renters look to buy their own home, as it is cheaper for them to pay their mortgage than it is to rent. On average people spend 18 months to 2 years to buy a home, and as the Perth rental market began its recovery three years ago, we’re now starting to see more and more renters move into buying their own home. This will increase Perth buyer competition, and again, protect Perth home prices from declining.
  4. WA doesn’t rely heavily on tourism and immigration. Out of the 239,000 people that came to Australia in 2019 under immigration, only 15,000 of them came to WA. While in NSW, Victoria and QLD, 202,000 migrants. You can see how this will have a big impact over east, but little effect on WA. So, when you hear media reports about the Australian real estate market, be mindful that most of the commentary will be coming from over east, and be about national numbers, not local, WA numbers.
  5. Iron ore prices are ramping up again. Prices are currently sitting at $100 per tonne and looking to continue as China ramps up their economy after the pandemic. Brazil and India are two major sources of iron ore and they’re currently having big issues with COVID-19.  So much so that they’ve needed to close down their mines. This lack of global competition should keep iron ore prices in Australia high.

So, if you’re a Perth home buyer my advice is get in and buy now because if you’re waiting for prices to drop then you’re going to be disappointed!

The only thing that I would watch out for is the end of September/October when people start paying back the loans they currently have on hold. But again, I think this is going to be more of a problem over east than in WA. If something was to happen to iron ore prices, then it may be a different outcome. None of us can say exactly what is going to happen, but if we go by history, 2020 is feeling a lot like it was in 2005/06… right before the last Perth property booms.

As always if you or your family have any questions about buying, selling or renting feel free to give me a call any time on 0439 998 867, I’m only too happy to help. Stay safe and healthy!

Want to see recent home sales in your suburb?

You can watch our market update videos for each suburb on our YouTube channel! Simply choose your suburb from the links below…

  1. Bedfordale
  2. Kelmscott Hills
  3. Mount Nasura
  4. Mount Richon
  5. Roleystone
  6. Seville Grove

Ready to find out how much your home is worth?

Book your obligation-free appraisal with Brendan here. He’d be happy to have a chat and answer any questions you have.