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$1.4m student pad set to be bulldozed

A CHINESE family has paid $1.4 million for a Sunnybank home for their student son – but will have to demolish it.

In an increasing market trend, Asian buyers are parting with millions of dollars to buy properties for their children studying in Australia.

A Sunnybank home on a 1620sq m double block sold under the hammer for $1.4 million on August 31, with the Chinese bidders buying the property sight unseen for their 23-year-old son Kai Shen who studies in Australia.

 

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The $1.4 million Sunnybank home bought by a Chinese family for their student son

The $1.4 million Sunnybank home bought by a Chinese family for their student son

According to LJ Hooker Sunnybank Hills agent Owen Chen, the son’s parents in China bid for 6 Selvage St over the phone.

Mr Chen said five out of 10 Asian buyers bought homes for teen students studying overseas.

"These parents are also preparing for the future and a time when they can retire to Australia and live in the same homes their children have moved out from," he said.

According to the Foreign Investment Review Board, foreigners may only acquire established dwellings for the purpose of redevelopment.

 

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As Kai Shen and his parents aren’t Australian citizens and 6 Selvage St isn’t a new home, they will need to demolish it and rebuild.

Dave Platter of Juwai.com, which offers property listings, market analysis and property buying guides to Chinese-speaking consumers around the world, said these regulations ensured international buyers added to the housing stock in Australia, which benefited everyone.

"The FIRB requires foreign buyers to demolish existing habitable dwellings and replace them with multiple dwellings as redevelopment does not include refurbishment of an existing dwelling," he said.

Mr Platter said he was unsurprised by the impressive, sight unseen sale of 6 Selvage St.

"Buying homes for teenagers studying in Australia is a big motivator for Asian buyers," Mr Platter said.

"About 18 per cent or one fifth of such buyers buy overseas homes purely for education-based reasons.

"This might seem unusual to Australians but for Asians, it’s perfectly normal as education is very important to them.

"China is also currently the largest source of international students in Australia with Chinese students making up 20 per cent of all international enrolments."

Mr Chen said Mr Shen and his parents were not the only people keen to buy the two-level, four-bedroom home which included a patio, fireplace, bar and quiet, leafy surrounds.

"There were 33 registered bidders at the auction and a crowd of more than 100 people attended the event," Mr Chen said.

"Ninety-seven groups of people also inspected the home during the four-week marketing campaign.

"One reason for the home’s popularity was its very large block – there are not many left in this area of this size."

Mr Shen, who is studying international business at Griffith University, has lived in Australia for seven years.

"I went to high school on the Gold Coast then moved to Brisbane," he said.

"I am the only one of my family here but my parents visit every year."

Mr Chen said the home’s vendors plan to return to Hong Kong to live.

###

RBA keeps rates on hold

Have rates hit rock bottom?

Saving Aussie homes from asbestos

HOME owners and landlords will have to pay for asbestos certificates before selling, leasing or renovating properties, under a federal government proposal to be negotiated with the states.

Workplace Relations Minister Bill Shorten gave his personal backing to the asbestos-alert strategy.

He said one in every three homes built between 1945 and the mid-80s contain asbestos, a mineral fibre that can cause the lethal lung cancer mesothelioma.

“If I was purchasing a home, I would want to know if it contained asbestos or not,” he told News Limited.

“Obviously I am conscious of the additional cost implications associated with mandating such measures.”

Mr Shorten said the government would work with state and territory governments, the Australian Institute of Architects’ Archicentre service, and consumer group Choice.

His department’s Office of Asbestos Safety is seeking public comment on a proposal to require an “asbestos content report” from a licensed assessor before properties are sold, leased or renovated.

The ACT already requires sellers and landlords to provide an “asbestos advice” with each sale or rental contract.

The plan is being championed by government’s Australian Asbestos Management Review chairman, former ACTU assistant secretary Geoff Fary.

Mr Fary said the asbestos reports – including an inspection and sample testing by an accredited laboratory – would cost $150 to $200.

“For the cost people would incur when they’re selling a house, that’s chicken feed,” he told News Limited.

“By doing that, we save people from being exposed to airborne asbestos which could cost them their lives, so it’s a reasonable impost.

“Rather than nitpicking over costs, we need to get on with it.”

Mr Fary said local councils should co-ordinate the certification scheme, and keep certificates in their databases.

A label declaring the location of asbestos in a home could be fixed to the electrical box, in the same way as termite notifications, to alert tradespeople to danger zones.

“It’s entirely possible these days for the label to be a barcode,” he said.

“The tradesperson would simply point their iPhone at that, and get the report showing the location and condition of asbestos in the house.”

Mr Fary said asbestos was more common in Australian homes than overseas because it had been considered a “miracle product” for the tropical climate.

“It wouldn’t rot, it was waterproof and termite proof, and you could cut it, bend it and turn it,” he said.

“It was a product that suited our conditions.”

The Real Estate Institute of Australia said it was still discussing details with the Office of Asbestos Safety.

“Real estate agents … support community safety and awareness of the specific dangers posed by some forms of asbestos in buildings and homes,” chief executive Amanda Lynch said.

###

Lenders slash fixed interest rates

HOME loan customers can expect further rate falls on fixed loans as dozens of lenders continue to slash their fixed rates by more than this month’s cash rate cut.

Eleven lenders have cut their fixed rates on two-year loans by up to double the Reserve Bank of Australia’s latest cash rate drop of 25 basis points, analysis by comparison website RateCity shows.

Thirteen lenders have dropped their fixed rates on three-year loans by more than the latest rate cut and some have also reduced rates by as much as 50 basis points.

RateCity spokeswoman Michelle Hutchison said the competition remained fierce among borrowers and home loan customers were likely to see even more rate falls.

"We are still seeing most lenders drop their fixed rates this month and some have dropped them by more than the cash rate fall,” she said.

"If funding costs drop it’s likely we’ll see more cuts, but at this rate where we’re seeing lenders continue to drop their fixed rates and it looks like there’s still room for them to drop further.

"They haven’t slowed down yet."

The RBA cash rates remains at 2.75 per cent and the next rates decision is on Tuesday.

RateCity data found the average standard variable rate is 5.75 per cent, white the average two-year fixed rate is 5.17 per cent.

The average three-year fixed rate is 5.29 per cent.

The lowest two-year fixed rate is 4.79 per cent and the lowest three-year fixed rate is 4.89 per cent.

Mortgage Choice spokeswoman Belinda Williamson said financial institutions were still "tweaking" fixed rates but she said borrowers should look at both fixed and variable options on their loans.

"They should be weighing up both options considering if they’re saying there’s movements on either side whether it be fixed or variable,” she said.

"Now is the time to do the maths and weigh up what is going to work better for you."

Resi Mortgage Corporation’s chief executive officer Angelo Malizis said fixed rates falls were nearing the end.

"There’s no doubt in my mind that we are getting very close to the bottom of the interest rate environment and as a result of that it’s likely after there’s one more reduction we’re going to see the signs of fixed rates starting to point north,” he said.

"The discussions I’ve had with economists is they expect rates to come off a little bit more but as soon as we have one more variable rate deduction they expect fixed rates to start nudging upwards."

 

 

Fear of homes slipping into sea

GOLD Coast beachfront property owners have accused the city council and State Government of abandoning them to the sea, and are threatening a legal class action as severe erosion gouges away their properties.

For the second time this year, big swells and high tides have stripped away millions of tonnes of sand from the Glitter Strip’s beaches, leaving some oceanfront homes teetering on the brink of steep cliffs.

Beach stairs and viewing platforms have collapsed into the ocean, and sand the council spent tens of thousands of dollars replenishing after ex-Cyclone Oswald battered the coast in January has been washed away.

That erosion was described as the worst the Coast has seen in 40 years but locals say even more sand is now disappearing.

Businessman Terry Taylor said he and fellow residents of a Mermaid Beach unit complex had been forced to spend thousands of dollars sandbagging the property to protect it from voracious erosion.

GCB Sand

This Albatross Avenue home at Nobby Beach required sand-bagging. PIC: David Clark

Mr Taylor said the council and State Government had refused to help, even though the beach was a "public asset".

"We’re starting to get worried. It’s affecting us – one of the ladies that lives here has been in tears," he said.

"I’ll have to keep sandbagging because the council has its head in the sand and has made it clear they’re not going to help us. Is it going to take a home to fall into the sea before they act? Or will it take a class action?"

Mr Taylor said beachfront residents were seen as wealthy people who should pay their own way. But he said many had already outlaid tens of thousands of dollars on boulder walls because the council and government would not pay.

GCB Sand

Heavy machinery has been brought in to work on a rock retaining wall at Miami Beach on the Gold Coast. PIC: David Clark

"I pay nearly $60,000 a year in rates and have got nothing out of it," he said.

Mr Taylor said while the council had repaired Surfers Paradise beach in time for Easter, it had done "nothing" to restore badly eroded Mermaid and Nobby beaches.

He said the land value of his unit block had slumped from $19.8 million to $9.8 million.

"When you’ve got yards slipping into the sea, people are scared (of buying beachfront property)," he said.

GCB Sand

General beach erosion at Broadbeach. PIC: David Clark

One long-time Albatross Ave resident, who is trying to sell her property, said she was worried the erosion would affect her property values.

"With the amount of rates we pay, the council should be doing something," she said.

The council has asked the State Government for half the estimated $30 million cost of a long-term erosion solution but the plea has so far fallen on deaf ears.

 

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Island for sale for $3.8 million

4 property phases you need to know

LIKE every other investment, residential property follows a cycle. Picking the best time to buy and sell to maximise profit often depends on understanding where you are in a cycle.

Conventional wisdom is that residential property follows a seven to 10-year cycle between peaks. Within those cycles are the usual value, growth, peak and correction phases.
 
But unlike other general asset classes, property is so segmented that individual residential property blocks can have a different cycle to a surrounding suburb or city.
 
Knowing where you are on a property cycle means following a strict process of understanding the macro and micro elements affecting your decision.
 
Local influences
 
In many areas local influences can be as narrow as being on the “right” or “wrong” side of the street/railway line when it comes to investment returns.
 
New infrastructure (roads, rail lines) can boost or deflate values depending on your proximity and access.
 
Likewise the release of new housing areas can affect demand and supply and, therefore, prices. A building boom means more stock and a dampening of prices.
 
Changing demographics within an area can either turn new buyers on or off and can narrow the appeal of properties.
 
Having the right property for buyers attracted to that area is a key element.
 
Property condition
 
Assessing the suitability and construction of an individual property determines the risk of any future costs to rectify problems. Those rectification/modification costs can be pretty hefty if they are unplanned, unexpected and unbudgeted.
 
City variances
 
Every capital city and major regional centres have their own unique influences which affect their cycle.
 
The Gold Coast goes through higher peaks and lower troughs than virtually any other property region.
It’s a real big boom/big bust kind of town.
 
Hobart is really at the mercy of the Tassie economy which, unfortunately, is in steady decline and has been for a few years now.
 
Darwin, like Perth, is driven by the commodities cycle and relies heavily on the prosperity of the resources sector.
 
The Sydney market is influenced by overseas migration numbers and the natural impediment of the Great Dividing Range on new land releases.
 
Brisbane is influenced by local migration from the southern states chasing the sun.
 
Adelaide and Melbourne seem to be more predictable around construction levels.
 
Economic indicators
 
Residential property tends to be a good barometer of a country’s economic health.
 
Maybe that’s why on a comparative global scale Australian property prices are among the most expensive in the world.
 
The most important economic indicators which affect property markets are:
 
– Unemployment: The more people out of work the less likely they are to be able to afford to buy or upscale.
– Interest rates: Lower interest rates mean lower repayments or ability to borrow more to trade up.
– Population growth: A baby boom fuels demand for bigger houses while migration increases the number of potential new buyers.
– Exchange rates: A falling Australian dollar makes our property prices cheaper for expats and foreign buyers using other currencies.
– Consumer confidence: Buying property is a big-ticket item. Low consumer confidence means buyers are less likely to take the risk of staying and more likely to stay put.
 
Where are we now?
 
Property guru Louis Christopher from SQM Research says our major capital cities are recovering from a two-year downturn.
 
That downturn saw residential prices drop 3-10 per cent from their peak. This year there is a modest recovery and he expects that to continue as long as there is no major global economic catastrophe.
 
PROPERTY PHASES: WHEN TO STRIKE
 
– Opportunity Phase: best time to buy. Beginning of cycle.
– Growth Phase: investors more confident as they see values rise.
– Peak Phase: inexperienced and timid investors pile in.
– Correction Phase: buyers over extend, banks tighten credit.