Property Investment plays a major role in consumer confidence

Negative Gearing | 0 comments | by admin

I have recently made comments in the public domain that as the complicated debate about negative gearing and capital gains tax continues amongst politicians, one certainty about real estate investment is that it plays a major role in consumer confidence and economic stability.

As our biggest industry is in a post mining-construction boom, property underpins Australia’s economy.

I believe that people consider the arguments about changes to negative gearing in the run up to the Federal Election, its important to keep in mind that last December more than 34 per cent of buyer demand came from investors. If you damage that segment of demand, it’s unrealistic to think family house prices won’t be affected.

Investors and renters tend to prefer older style properties. If negative gearing is restricted to newly constructed property, the dynamics of a third of the real estate marketplace will become uncertain. Economists anticipate decade long impacts leading to lower house prices, higher rents, rising unemployment, lower council revenue and lower stamp duty receipts for government, which could affect a broad range of services.

With the bulk of Australia’s family assets held in the family home, falling house prices would affect the confidence that is a critical driver of economic growth and sustainable employment. When values fall, homeowners defer spending on renovations, appliance and furniture purchases, and other activities that stimulate the whole economy and generate jobs.

While it is reasonable to review the fairness of the current negative gearing/capital gains tax arrangements, the Reserve Bank has indicated it would rather change capital gains tax arrangements than negative gearing because the right to deduct the legitimate expenses incurred when earning income is an important principal of Australia’s taxation system.

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John Howard OM AC to provide First National Real Estate keynote in Cairns

John Howard | 0 comments | by admin

I have the pleasure to announce that former Prime Minister John Howard OM AC will deliver the keynote address at the First National Real Estate 2016 National Convention, which will be hosted at the Hilton Cairns this May.

The Convention, which is expected to attract over 400 estate agents from Australia, New Zealand and the South Pacific, will contribute more than a million dollars to the Cairns and Far North Queensland economy.

With property underpinning Australia’s economy and being responsible for one ninth of our national income, proposals to change negative gearing or other property taxation arrangements are likely to polarise political debate in the lead up to the 2016 federal election.

Matters such as these are of significant concern to the property industry and First National Real Estate’s membership is delighted to have the opportunity to receive former Prime Minister Howard’s insights on the subject.

Mr Howard has expressed concerns about scaling back property investment rules, saying ‘Negative gearing has been around forever… I’d be careful’ on Sky News’ Australian Agenda programme.

In principal, our network shares these concerns.

As our biggest industry in a post-mining boom, property is at the centre of Australia’s economy and employs more than a million workers. Negative gearing has helped countless thousands of Australians get a foot on the property ladder, underpins the supply of affordable rental property, helps mums and dads save for their future, and plays an integral role in sustaining consumer confidence.

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Impact of Investors on Rents

Property Investors | 0 comments | by admin

The Australian Bureau of Statistics housing figures released this week provide evidence that investor activity and current negative gearing tax arrangements keep rents lower than they would otherwise be.

The March quarter CPI figures reveal that current levels of investor activity have delivered the lowest increase in rents since 1995. In fact, since investor activity began accelerating in 2013, the rate at which rents have been increasing has slowed.

The figures also show that lending to investors has been trending down for the past nine months. This is likely the result of increased mortgage interest rates for investors and a tightening of lending criteria, since APRA cracked down on more marginal borrowers in late 2014.

The number of owner-occupied housing commitments reduced in March by 0.4 per cent, excluding refinancing, after 18 months of increases.

These figures serve to remind us that while the debate about negative gearing devolves into debates about which income groups get the greatest share of the benefits, negative gearing has played an important role in keeping rents affordable for low income households.

If we abolish or restrict negative gearing, the potential for investors to choose other asset classes instead of property could exacerbate the already slowing trend of investor lending. This would lead to fewer rental properties and rising rents.

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Property buyers should review new withholding tax

Foreign Resident Real Estate | 0 comments | by admin

I recently went on record saying that a new tax policy aimed at stopping foreign investors sending sale proceeds overseas before compliance action can be taken could catch unaware buyers.

The new legislation requires buyers of properties worth more than $2 million to withhold 10 per cent of the purchase price and send it to the Australian Tax Office (ATO), if the vendor is a foreign resident for tax purposes.

First National Real Estate is supportive of this legislation but it is essential that lawyers and conveyancers proactively ensure their clients abide by the new laws.

It is important to note that if buyers don’t retain the 10 per cent withholding tax, they could find themselves liable for a penalty, which could be the full 10 per cent of the purchase price as well as interest. Nobody would want that.

To avoid potential settlement delays and complications, Australian owners selling properties worth more than $2 million must now obtain a clearance certificate from the ATO to prove they’re an Australian resident for tax purposes.

While there is no charge for the certificate, which is anticipated to take several days to obtain via an online application, the ATO warns some applications could take up to four weeks.

Vendors would be well advised to apply for the certificate the moment they appoint a conveyancer and real estate agent. This will assure that the moment a sale price is agreed with a buyer, there will be no impediment to completing a contract of sale and the buyer will have confidence they are not placed at risk.

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Ray Ellis interviewed by The Real Estate Conversation

The Real Estate Conversation | 0 comments | by admin

I was recently interviewed by Neville Sanders from The Real Estate Conversation in an article titled ‘Economy cannot withstand Labor’s Experiment with Negative Gearing’, in which I stated that “the property industry is Australia’s largest employer, currently employing 1.1 million people and providing jobs for one in eight working Australians. If it is adversely affected then every Australian will suffer, either directly or indirectly”.

To read the complete article, please follow this link to The Real Estate Conversation.

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Australian Golf Digest ‘California Dreaming Baja Style’

Australian Golf Digest | 0 comments | by admin

In a recent article titled California Dreaming Baja Style, I wrote for the Australian Golf Digest (August, 2016), I encourage enthusiastic golf travellers that a Mexican golf journey is a must!

The Diamante and Quivira golf courses are my new favourite golf courses. These destinations are found on the Baja peninsula, a state of Mexico, yet traditionally also part of California. I hope you enjoy my articles and venture down south of the border to California Mexico.

Read more at the Australian Golf Digest.

 

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SBS News Television Interview with Ray Ellis, First National Real Estate

SBS Television | 0 comments | by admin

I was interviewed on SBS News in August in which I commented that Australia’s demand for property continues unabated. It is clear homebuyers have been quick to capitalise on the Reserve Bank’s decision to reduce interest rates to historic lows last month.

As the First National Real Estate member offices begin their Spring campaigns, I welcome you to watch this video of the SBS News segment in which I was interviewed.

Watch the SBS Television News Segment  – Interview with Ray Ellis

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Leadership Interview with Ray Ellis

Radio Interviews | 0 comments | by admin

I was recently interviewed by Lee Woodward, a famous industry trainer in Australia. I am pleased to share with you some of the insights about leadership and how I am working with the under 35 year olds in the First National Real Estate network to embrace the leadership challenges to continue to keep our organisation as a leading real estate network in Australia and New Zealand.

Listen Now to the interview.

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Canstar Blue Award for Customer Satisfaction 2016

Canstar Award | 0 comments | by admin

As Australia’s largest network of independent agents, First National Real Estate is delighted to be recognised as the customer satisfaction leader in Australian property services.

First National Real Estate is committed to customer satisfaction. It is therefore no coincidence that we have now won this award in both countries. We see this as confirmation that our business model provides the right environment and tools for agents to excel.

A critical difference between First National and its competitors is that our membership requirements relate specifically to service delivery, not fees. As a not-for-profit cooperative, we provide everything necessary for our members to be leaders in real estate services and the Canstar Award confirms this.

Please read the full Canstar Blue report here at www.canstarblue.com.au/services/real-estate/real-estate-home/ 

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Why 2017 Is A Great Year To Buy Your First Home

First Home Buyers | 0 comments | by admin

I went on public record recently saying that there’s no time like the present if you’ve been waiting to buy your first home because no matter what you’re trying to buy, values in Australia and New Zealand are just going up and up.

According to a CoreLogic RP Data report from January 3, the median dwelling value in Australia for the end of 2016 was $615,000 – an increase of 10.9 per cent through the year. New Zealand didn’t perform too differently, with the median house value in December 2016 sitting at $627,905, having grown by 12.5 per cent.

As year-on-year increases show, home values aren’t indicating that they’re about to slow down. That’s why buying your first home right now is a great idea, because you’ll be striking before homes shoot beyond your budget even more.

When you own a home, you have the opportunity to make capital gains. As the median value increases in both Australia and New Zealand through 2016 show, capital gains in the space of 12 months can help you to build wealth. In fact, if you own a home for 10 years, the value of your purchase might increase by as much as half a million dollars! You’d have to buy in a suburb that is on the verge of growing, and is highly desirable in terms of proximity to amenities, public transport, schools and major centres – but it is possible.

When you rent in a suburb like that, you get all of the advantages of being close to those sorts of places, but your payments won’t be earned back when you leave the home. You’ll pay rent over the time you live in the home, and then when you leave, you don’t reap the rewards.

Of course, renting is a great option for people who can’t yet afford a home deposit, but buying one can shore up your financial future.

First-home buyers have no experience with the buying process, and many find it a daunting task – going to auctions, making bids, competing with others who potentially have a bigger budget. That’s where the friendly team at First National Real Estate can help.

We know what you need to do, and we know how to go about it – particularly for first-time buyers. Don’t be afraid of making a great decision for your financial future. Get in touch with us today to start your buying journey in 2017 on the right foot.

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