Buying a home in the ACT made easier for some

Alexandra and ezy, i am sure something will come up that fits the bill. In the meantime keep doing what your doing and keep a level unemotional head on your shoulders about it. Worse thing you could do is jump into something that cripples you finacially and emotionally.

The price has come straight from the sellers who have just realised that rebuilding, or building in general, including renovations costs a fortune. I suspect they want out after they renovated, then were not satisfied, had quoting for knockdown rebuild done and were gobsmacked and have now realised to get the new house they want they will need mega bucks, so they are trying to sell this one at an unrealistic price. Soley to attempt to buy something newer. Probably over in wright.

If your are both on salary, have you considered the alternate plan of purchasing an investment home first and negative gearing it. Since july 2012 the proportion on first homebuyers who have turned from looking for a principle place of residence to purchasing a negative geared investment property has risen from 3% to 43%. Happy to provide more information if you require. Be aware of most articles floating around regarding negative gearing as most are spin. Its a lucrative incentive if you are on a reasonable salary, and you wish to purchase property to reduce your taxable income. As is margin lending if your preference is the stock market.

happy to help with info.

vintage123 said :

$645k plus expenses is a lot of money for a first home. Comfortable with dual 100k incomes nil kids, considering interest rates will increase at some time in the future.

I think that particular place is overpriced. It is a good sized block. House is small. Yes it has a granny flat. And yes they have approval to knock down rebuild. But why are they selling. Because the house is small. The cost to knockdown rebuild is North of 700k.

So all of what they have spent on it in the last two years, including interest repaymentsth is priced into the
increased price. It leaves you no fat on the bone.

Your thinking, but I can live in the house with my partner and rent out the granny flat. Yes you could but to do it legally it gets complicated with land taxes, income derivatives and tax declaration. But the biggest hit comes if you sell, whereby you void your zero CGT concession. So normally to rent the granny flat legally is not worth it as any gain in income is frittered away by tax and capital gains.

You could use the granny flat as an office and then claim expenses including mortgage repayments percentage but again it’s complicated.

My advice, find something simpler, less expensive and don’t overcomplicate your repayments with boarders. If you can find one similiar on a good sized lot, no granny flat and one which has been owned for ten years plus, you will find they will be more likely to take a lower price as they probably haven’t recently paid high mortgage repayments or overcapitalised on improvements.

Block size will make you money in long run.

I wouldn’t pay more than $550k for that one in Weston. And they wouldn’t sell it for that.

Time to move on. Next.

If I bought a place with a granny flat, I wouldn’t rent it out – I would use it for a cat rescue. Haha! Not even kidding.

I was considering buying a townhouse just to get into the property market, then I can get a ‘proper house’ down the track, but the body corporate fees on all the ones I have looked at so far are sky high and appear to be unjustified when there is no elevator or gardens that need maintainin etc.

Ezy said :

vintage123 said :

Time to move on. Next.

That house price that has come up after it failed to sell at Auction has shocked me… even with that + in front of it. As for renting out that granny flat – it would be even hard to rent it out as it had no kitchen unless whoever is living in there is happy with 2 min noodles.

Alexandra, did you attend the auction? Was there much interest? I would be very interested who has set that price that it is at now. Greedy vendors or the agent who is out of touch with that particular pocket. I have seen a few homes pop up lately where they have a price on it rather than auction, and the price just seems odd.

I can’t wait for spring – there has been 2 weeks without a property to look at on the weekend. I like that I am getting my weekends back, but it’s not helping my living situation.

I was super shocked too. Especially with the + in front of it.
It really doesn’t make sense to me – the agent seemed to be quite reasonable and realistic when I was speaking to her. She spoke to me like we were both regular people, as opposed to someone that was really pushing a house sale, so if I had to predict who put that price on it, I’d say it was the owners.

I didn’t attend the auction as I had something else on. About 3 days before the auction though, I was apparently the only person who had shown any actual interest, so I would be surprised if there was more than a few people registered for the auction.

The granny flat situation is interesting. They had an appraisal done and apparently you can rent the granny flat for $250 per week. This would only work if you knew the person you were renting to, or felt comfortable with them using your house because as you said, no kitchen, and there’s also no laundry. Considering you can get newish apartments in Canberra that are bigger, with a kitchen and a laundry, that aren’t in someone’s backyard for $300-$350 per week, I don’t think anyone would pay $250 to eat 2 min noodles and wear dirty clothes…

vintage123 said :

Time to move on. Next.

That house price that has come up after it failed to sell at Auction has shocked me… even with that + in front of it. As for renting out that granny flat – it would be even hard to rent it out as it had no kitchen unless whoever is living in there is happy with 2 min noodles.

Alexandra, did you attend the auction? Was there much interest? I would be very interested who has set that price that it is at now. Greedy vendors or the agent who is out of touch with that particular pocket. I have seen a few homes pop up lately where they have a price on it rather than auction, and the price just seems odd.

I can’t wait for spring – there has been 2 weeks without a property to look at on the weekend. I like that I am getting my weekends back, but it’s not helping my living situation.

$645k plus expenses is a lot of money for a first home. Comfortable with dual 100k incomes nil kids, considering interest rates will increase at some time in the future.

I think that particular place is overpriced. It is a good sized block. House is small. Yes it has a granny flat. And yes they have approval to knock down rebuild. But why are they selling. Because the house is small. The cost to knockdown rebuild is North of 700k.

So all of what they have spent on it in the last two years, including interest repaymentsth is priced into the
increased price. It leaves you no fat on the bone.

Your thinking, but I can live in the house with my partner and rent out the granny flat. Yes you could but to do it legally it gets complicated with land taxes, income derivatives and tax declaration. But the biggest hit comes if you sell, whereby you void your zero CGT concession. So normally to rent the granny flat legally is not worth it as any gain in income is frittered away by tax and capital gains.

You could use the granny flat as an office and then claim expenses including mortgage repayments percentage but again it’s complicated.

My advice, find something simpler, less expensive and don’t overcomplicate your repayments with boarders. If you can find one similiar on a good sized lot, no granny flat and one which has been owned for ten years plus, you will find they will be more likely to take a lower price as they probably haven’t recently paid high mortgage repayments or overcapitalised on improvements.

Block size will make you money in long run.

I wouldn’t pay more than $550k for that one in Weston. And they wouldn’t sell it for that.

Time to move on. Next.

From my extensive experience, now is a fantastic time and opportunity to make significant financial gain from property in the ACT. Simply all you need to do is purchase a property as close as possible to a designated Mr Fluffy cluster. Anywhere near those 12 streets with multiple Mr Fluffy homes will be a gold mine. Basically two things are likely to occur. One the rezoning of the land. Two the construction of new homes, probably twin townhouses on the one block. Once this occurs all existing homes in that area will boom in value, due to the existing non affected homes being larger and on a bigger block than the new ones. Albeit the home will be older, but the cost to build the new ones will be so high it will make the current prices in the areas look miniscle, i would even say the current prices are lower than the revised land value of the rezoned fluffy blocks.

Alexandra Craig said :

Ezy said :

Alexandra Craig said :

Looking for some advice here. In the last few days I found a house I like. It’s up for auction and I asked the agent what the price guide is. They told me high $500s to early $600s. I looked the property up online and found the previous listing – it last sold in 2012 for $540,000 and it has since been renovated. New bathroom, new floorboards, bit of work to the yard and new paint. Possibly more, but that’s all I could tell from the pics. I’m being taken for a ride with the ‘high $500s to early $600s’ price guide aren’t I?

I am just curious to see if the one I thought you were looking at was the property that went for auction last weekend and got passed in. It is now up on AllHomes for 645k+

That’s the one.

The first time I expressed interest I was told price guide was high $500s, low $600s.
When I went to the first open home the agent said there hadn’t been much interest.
Second open home and the agent spoke to me again saying that I was the only person who had shown the slightest amount of interest whatsoever and that the owners are really desperate to sell so are now looking for mid $500s.
Property passes at auction, gets put on the market for $645,000+. I’m no expert obviously but I don’t think it’s worth $645k.

That is really frustrating for you – I was at the first open home as well. I think that price that it is at now is too high considering this place sold not long ago at auction for 627k (http://www.realestate.com.au/property-house-act-waramanga-118915583). It was a level above what that home is offering. I would put an offer forward of what you think is reasonable for that home. You never know what will happen.

If it is any consolation – I too have missed out on a home in the last couple of weeks… when mine was the highest offer. I could rant for a long time based on my experience, but it will only frustrate me more.

Ezy said :

Alexandra Craig said :

Looking for some advice here. In the last few days I found a house I like. It’s up for auction and I asked the agent what the price guide is. They told me high $500s to early $600s. I looked the property up online and found the previous listing – it last sold in 2012 for $540,000 and it has since been renovated. New bathroom, new floorboards, bit of work to the yard and new paint. Possibly more, but that’s all I could tell from the pics. I’m being taken for a ride with the ‘high $500s to early $600s’ price guide aren’t I?

I am just curious to see if the one I thought you were looking at was the property that went for auction last weekend and got passed in. It is now up on AllHomes for 645k+

That’s the one.

The first time I expressed interest I was told price guide was high $500s, low $600s.
When I went to the first open home the agent said there hadn’t been much interest.
Second open home and the agent spoke to me again saying that I was the only person who had shown the slightest amount of interest whatsoever and that the owners are really desperate to sell so are now looking for mid $500s.
Property passes at auction, gets put on the market for $645,000+. I’m no expert obviously but I don’t think it’s worth $645k.

Alexandra Craig said :

Looking for some advice here. In the last few days I found a house I like. It’s up for auction and I asked the agent what the price guide is. They told me high $500s to early $600s. I looked the property up online and found the previous listing – it last sold in 2012 for $540,000 and it has since been renovated. New bathroom, new floorboards, bit of work to the yard and new paint. Possibly more, but that’s all I could tell from the pics. I’m being taken for a ride with the ‘high $500s to early $600s’ price guide aren’t I?

I am just curious to see if the one I thought you were looking at was the property that went for auction last weekend and got passed in. It is now up on AllHomes for 645k+

chewy14 said :

rommeldog56 said :

watto23 said :

I paid stamp duty on my house and now i’m paying increased rates. there is no easy way to make the change, but ultimately people who either live on larger blocks of land, or who live on more expensive land will pay more than someone who doesn’t. that seems pretty fair to me. If you want to buy a new car you can buy a cheap economy vehicle, or something more expensive. The end result is fair. The transition has its problems, but this is better and easier to do over 20 years.

There is an increase in spending in the budget that went to Education and Health. So some of the rate rise covers that. The light rail was not even a major dent in this budget either, so we can’t blame that, so if the rates don’t go up where is the money coming from? Where are the libs getting money from? I suspect rates increased but not as much as labor and less spending on Health and Education. That is a choice to be made at the election, but the Libs don’t have a magic wand and hopefully they will campaign on policies rather than 3 word slogans to scare people to vote for them.

As has already been stated, people with land in “prestige” areas and those with larger blocks, already pay more Annual Rates.

There has been spending of multi millions $ on Light Rail infrastrucure, Consultants and Capital Metro. It’s just that no payments have yet been made to the PPP provider. I note the recent announcement by the ACT Government that m$375 from asset sales will be credited to the stage 1 of Light Rail as a 1 off capital injection. That’s just to get the pa payment to the PPP provider down to announce for next years election. That m$375 should have gone to Health and education instead – or maybe to ease the Mr Fluffy financial burden.

The end result, if my Annual Rates triple much, much faster than would have otherwise been the case if that annual increase was, say, linked to CPI and I get no credit for spending $23K in stamp duty on a house here 3 1/2 years ago, then its not fair at all.

The question is where is the government income meant to come from? The argument about wasteful spending on Capital Metro or other government programs is completely separate from the argument about removing stamp duty.

Yes, prestige areas currently pay more but are they actually paying enough for the benefit of their land? Probably No. We need to increase the efficiency of our land use and make housing mobility easier and this policy does exactly that.

As for whether you paying stamp duty and now higher rates is “fair”, you are assuming that you are never going to move again which is extremely unlikely. If however, you are one of an extreme minority of a handful of people who paid full stamp duty and never move again before you die, then yes that’s probably unlucky. But we shouldn’t be changing policies just because you personally might be adversely affected, the overall greater good is more important in this case.

Isn’t the overall all good just a form of communism or maybe soften it and call it socialism. That just against the grain of the capitalist mentality that has now taken over this country. (Not for the better either).

rommeldog56 said :

watto23 said :

I paid stamp duty on my house and now i’m paying increased rates. there is no easy way to make the change, but ultimately people who either live on larger blocks of land, or who live on more expensive land will pay more than someone who doesn’t. that seems pretty fair to me. If you want to buy a new car you can buy a cheap economy vehicle, or something more expensive. The end result is fair. The transition has its problems, but this is better and easier to do over 20 years.

There is an increase in spending in the budget that went to Education and Health. So some of the rate rise covers that. The light rail was not even a major dent in this budget either, so we can’t blame that, so if the rates don’t go up where is the money coming from? Where are the libs getting money from? I suspect rates increased but not as much as labor and less spending on Health and Education. That is a choice to be made at the election, but the Libs don’t have a magic wand and hopefully they will campaign on policies rather than 3 word slogans to scare people to vote for them.

As has already been stated, people with land in “prestige” areas and those with larger blocks, already pay more Annual Rates.

There has been spending of multi millions $ on Light Rail infrastrucure, Consultants and Capital Metro. It’s just that no payments have yet been made to the PPP provider. I note the recent announcement by the ACT Government that m$375 from asset sales will be credited to the stage 1 of Light Rail as a 1 off capital injection. That’s just to get the pa payment to the PPP provider down to announce for next years election. That m$375 should have gone to Health and education instead – or maybe to ease the Mr Fluffy financial burden.

The end result, if my Annual Rates triple much, much faster than would have otherwise been the case if that annual increase was, say, linked to CPI and I get no credit for spending $23K in stamp duty on a house here 3 1/2 years ago, then its not fair at all.

Actually that money couldn’t have gone elsewhere. As you pointed out it was money that came in from asset sales with a copayment from the commonwealth. The copayment came with the proviso that it be spent on further assets. Think it’s called the asset recycling project. The intent is to spend on capex items to keep the economy flowing not on opex which doesn’t neacisarily have a direct flow down.

rommeldog56 said :

watto23 said :

I paid stamp duty on my house and now i’m paying increased rates. there is no easy way to make the change, but ultimately people who either live on larger blocks of land, or who live on more expensive land will pay more than someone who doesn’t. that seems pretty fair to me. If you want to buy a new car you can buy a cheap economy vehicle, or something more expensive. The end result is fair. The transition has its problems, but this is better and easier to do over 20 years.

There is an increase in spending in the budget that went to Education and Health. So some of the rate rise covers that. The light rail was not even a major dent in this budget either, so we can’t blame that, so if the rates don’t go up where is the money coming from? Where are the libs getting money from? I suspect rates increased but not as much as labor and less spending on Health and Education. That is a choice to be made at the election, but the Libs don’t have a magic wand and hopefully they will campaign on policies rather than 3 word slogans to scare people to vote for them.

As has already been stated, people with land in “prestige” areas and those with larger blocks, already pay more Annual Rates.

There has been spending of multi millions $ on Light Rail infrastrucure, Consultants and Capital Metro. It’s just that no payments have yet been made to the PPP provider. I note the recent announcement by the ACT Government that m$375 from asset sales will be credited to the stage 1 of Light Rail as a 1 off capital injection. That’s just to get the pa payment to the PPP provider down to announce for next years election. That m$375 should have gone to Health and education instead – or maybe to ease the Mr Fluffy financial burden.

The end result, if my Annual Rates triple much, much faster than would have otherwise been the case if that annual increase was, say, linked to CPI and I get no credit for spending $23K in stamp duty on a house here 3 1/2 years ago, then its not fair at all.

The question is where is the government income meant to come from? The argument about wasteful spending on Capital Metro or other government programs is completely separate from the argument about removing stamp duty.

Yes, prestige areas currently pay more but are they actually paying enough for the benefit of their land? Probably No. We need to increase the efficiency of our land use and make housing mobility easier and this policy does exactly that.

As for whether you paying stamp duty and now higher rates is “fair”, you are assuming that you are never going to move again which is extremely unlikely. If however, you are one of an extreme minority of a handful of people who paid full stamp duty and never move again before you die, then yes that’s probably unlucky. But we shouldn’t be changing policies just because you personally might be adversely affected, the overall greater good is more important in this case.

VYBerlinaV8_is_back said :

arescarti42 said :

rubaiyat said :

Cheap money and government tax breaks could not possibly be building us up to a USA style housing bubble?

Nah no way, the people talking about bubbles like the head of the Australian Treasury, major bank economists, global ratings agencies and the RBA are all doomsters at the economic fringe.

Prices at 11x household income are normal, 100% loans to investors are prudent, banks with 3.7% equity capital are safe, unemployment isn’t going to rise, etc. etc. etc.

We’re fine.

Do you really think Canberra property prices will crash, despite several years of stagnation? If anything, we’re soon going to be getting to a point where we’re likely to see some price increases. My guess is two years from now we’ll be in a warm and rising market.

The Mr Fluffy effect, and low (even if not yet lower than at present) interest rates will likely kick things along for a couple of years, but it is difficult to see what will stimulate further significant growth after that.

Regardless of who is in power federally (and even if we manage to avoid a really nasty recession, or worse) the federal budget simply won’t have the money to take Canberra back to anything like the highpoints of earlier years. If that meant relatively stable housing costs for some years to come, surely it would be a significant plus – Canberra might become a slightly more attractive place for private sector economic activity, and Canberrans would have a little more spare money to spend on the goods and services offered by such businesses.

watto23 said :

I paid stamp duty on my house and now i’m paying increased rates. there is no easy way to make the change, but ultimately people who either live on larger blocks of land, or who live on more expensive land will pay more than someone who doesn’t. that seems pretty fair to me. If you want to buy a new car you can buy a cheap economy vehicle, or something more expensive. The end result is fair. The transition has its problems, but this is better and easier to do over 20 years.

There is an increase in spending in the budget that went to Education and Health. So some of the rate rise covers that. The light rail was not even a major dent in this budget either, so we can’t blame that, so if the rates don’t go up where is the money coming from? Where are the libs getting money from? I suspect rates increased but not as much as labor and less spending on Health and Education. That is a choice to be made at the election, but the Libs don’t have a magic wand and hopefully they will campaign on policies rather than 3 word slogans to scare people to vote for them.

As has already been stated, people with land in “prestige” areas and those with larger blocks, already pay more Annual Rates.

There has been spending of multi millions $ on Light Rail infrastrucure, Consultants and Capital Metro. It’s just that no payments have yet been made to the PPP provider. I note the recent announcement by the ACT Government that m$375 from asset sales will be credited to the stage 1 of Light Rail as a 1 off capital injection. That’s just to get the pa payment to the PPP provider down to announce for next years election. That m$375 should have gone to Health and education instead – or maybe to ease the Mr Fluffy financial burden.

The end result, if my Annual Rates triple much, much faster than would have otherwise been the case if that annual increase was, say, linked to CPI and I get no credit for spending $23K in stamp duty on a house here 3 1/2 years ago, then its not fair at all.

VYBerlinaV8_is_back said :

Thanks for your response. I know we have debated this on and off for years, and I’m always interested to hear your response.

No problem.

Many of the factors you mention are large, Australia-wide (and wider) issues. I don’t think they will manifest in the same way in Canberra. I also don’t think things will be as bad as many people predict, but that’s a debate for another time.

I agree that the mining states of WA, NT, and QLD will be hardest hit, but I still expect there to be severe flow on effects in the other states.

My observation is the scale of the coming adjustment is massive, and we’re only at the beginning. The capex projections suggest that mining investment will fall from ~8% of the Australian economy to less than 2% in only 2-3 years. That’s $100+ billion and hundreds of thousands of well paid jobs wiped from the economy. The entire Australian car industry will also be shutting down starting next year, which is projected to wipe out 200k+ jobs, primarily across SA, VIC, QLD and NSW.

We’ve also currently got new housing construction running at multi-decade highs, at a time when net migration and the population growth rate is declining rapidly, and likely to fall further if the economy deteriorates.

Finally the banking system is on very shaky foundations, with all four major banks heavily exposed to mortgage lending, carrying only about $1.2 in capital for every $100 on their mortgage books, and reliant predominantly on offshore sources of funding. Mortgage delinquencies will not have to rise by much before the banks’ offshore creditors demand higher returns on their funds, and either local mortgage rates will go up, or credit will start to be rationed, hitting housing markets nationally. Any significant decline in house prices nationally would probably freeze lending markets and require a government bailout of the major banks.

The findings of the Murray inquiry and the recent dash by APRA to instate stronger lending criteria is in recognition of these huge risks.

I do hope those projections turn out to be wrong, because the economic consequences for Australia are pretty dire.

Canberra property has been flat/falling now for several years. I have always maintained that we will see our ‘crash’ as a period of stagnation, and right now I think we’re about 4 years into that period. I think we have another couple of years to go.

This used to be my base case a few years ago, but due to the aforementioned factors, I struggle to imagine how we’ll escape with only a few years of nominal stagnation.

watto23 said :

I’m in the same boat as you. I paid stamp duty on my house and now i’m paying increased rates. there is no easy way to make the change, but ultimately people who either live on larger blocks of land, or who live on more expensive land will pay more than someone who doesn’t. that seems pretty fair to me.

I too am paying twice. I suspect the easiest thing would have been to credit peoples’ accounts if they’ve already paid stamp duty, but that doesn’t really produce the desired outcome of ‘moar money’, does it…

People with more expensive land already pay more rates than others too.

rommeldog56 said :

watto23 said :

Yes there is emotion especially with senior citizens, but getting rid of stamp duty and moving to a rates based income stream is the fairest option there is.

Fair ? To who ? Im paying my stamp duty on purchase of a house here at least twice and probably more.

Just to rub salt into the wound, when Howard got the GST up, the States & Territories agreed to abolish stamp duties in return for the GST revenues. They never did. Now the Annual Rates increase/reduction in stamp duties here & the ACT Gov’t, bless them, supporting calls for the GST to be increased. It’s more than emotion and fairness, its about double if not triple dipping into Ratepayers.

I’m in the same boat as you. I paid stamp duty on my house and now i’m paying increased rates. there is no easy way to make the change, but ultimately people who either live on larger blocks of land, or who live on more expensive land will pay more than someone who doesn’t. that seems pretty fair to me. If you want to buy a new car you can buy a cheap economy vehicle, or something more expensive. The end result is fair. The transition has its problems, but this is better and easier to do over 20 years.

There is an increase in spending in the budget that went to Education and Health. So some of the rate rise covers that. The light rail was not even a major dent in this budget either, so we can’t blame that, so if the rates don’t go up where is the money coming from? Where are the libs getting money from? I suspect rates increased but not as much as labor and less spending on Health and Education. That is a choice to be made at the election, but the Libs don’t have a magic wand and hopefully they will campaign on policies rather than 3 word slogans to scare people to vote for them.

arescarti42 said :

VYBerlinaV8_is_back said :

Do you really think Canberra property prices will crash, despite several years of stagnation? If anything, we’re soon going to be getting to a point where we’re likely to see some price increases. My guess is two years from now we’ll be in a warm and rising market.

I really do think that. My belief is Australia remains one of the last remaining great housing bubbles from the pre GFC era.

We’ve been able to string it along in the post GFC world owing to the massive commodity price and mining capex boom, which is rapidly coming to an end.

People seem oblivious to the fact that without mining, Australia is just another high cost, uncompetitive, unproductive, massively indebted and overleveraged country like all the others.

My guess is two years from now we’ll either be in or entering into a very severe recession.

Of course I like everyone else cannot foresee the future, so only time will tell.

Thanks for your response. I know we have debated this on and off for years, and I’m always interested to hear your response.

Many of the factors you mention are large, Australia-wide (and wider) issues. I don’t think they will manifest in the same way in Canberra. I also don’t think things will be as bad as many people predict, but that’s a debate for another time.

Canberra property has been flat/falling now for several years. I have always maintained that we will see our ‘crash’ as a period of stagnation, and right now I think we’re about 4 years into that period. I think we have another couple of years to go.

Once the last round of public service cuts is behind us, I’m thinking we’ll see people who were holding off buying deciding to move forward with their purchases. Given the price, location and quality of the new stock (ie high, crap and often poor) there will be significant competition for the better existing properties. Units we currently have too many of, but building of these seems to be slowing, and population will increase. Houses, on the other hand, will grow in value, I suspect significantly.

VYBerlinaV8_is_back said :

Do you really think Canberra property prices will crash, despite several years of stagnation? If anything, we’re soon going to be getting to a point where we’re likely to see some price increases. My guess is two years from now we’ll be in a warm and rising market.

I really do think that. My belief is Australia remains one of the last remaining great housing bubbles from the pre GFC era.

We’ve been able to string it along in the post GFC world owing to the massive commodity price and mining capex boom, which is rapidly coming to an end.

People seem oblivious to the fact that without mining, Australia is just another high cost, uncompetitive, unproductive, massively indebted and overleveraged country like all the others.

My guess is two years from now we’ll either be in or entering into a very severe recession.

Of course I like everyone else cannot foresee the future, so only time will tell.

arescarti42 said :

rubaiyat said :

Cheap money and government tax breaks could not possibly be building us up to a USA style housing bubble?

Nah no way, the people talking about bubbles like the head of the Australian Treasury, major bank economists, global ratings agencies and the RBA are all doomsters at the economic fringe.

Prices at 11x household income are normal, 100% loans to investors are prudent, banks with 3.7% equity capital are safe, unemployment isn’t going to rise, etc. etc. etc.

We’re fine.

Do you really think Canberra property prices will crash, despite several years of stagnation? If anything, we’re soon going to be getting to a point where we’re likely to see some price increases. My guess is two years from now we’ll be in a warm and rising market.

tooltime said :

Now, why there is no cooling off for a home bought at auction, yet my $40 toaster has a 2 year warranty, is one of the great consumer protection mysteries of the modern age …

Because a house is a used item purchased from an individual on an as-is basis whereas a toaster is sold new from a business and you’re (generally) not able to inspect it first

Alexandra Craig said :

Looking for some advice here. In the last few days I found a house I like. It’s up for auction and I asked the agent what the price guide is. They told me high $500s to early $600s. I looked the property up online and found the previous listing – it last sold in 2012 for $540,000 and it has since been renovated. New bathroom, new floorboards, bit of work to the yard and new paint. Possibly more, but that’s all I could tell from the pics. I’m being taken for a ride with the ‘high $500s to early $600s’ price guide aren’t I?

If this is the one I am thinking of (flat out the back) – I would say thats about right, I would think it would go for just over 600 though as it is a little rough around the edges. There was a similar home that was sold a few months ago in Waramanga the renovations were a little more substantial, the house was a 3 bedroom with the 4th being detached. It sold for 627k at Auction and the land value was 50k more.

I attended an auction on the weekend just to have a look. 3 bedroom in Waramanga, north facing, double glazed windows, tasteful renovation and all you need to do is move in. I had a good chat to the agent before hand and I was asked how much I would think it would go for. I told him I would expect 585k. It sold for 590k.

Buyers,

Knowing how agents are remunerated/incentivised gives you an insight into many aspects of the property market. Remember, most agents are on about 2.5% commission (gross) on a home sale. So a $500k home is worth $12,500 to them, $600k home $15k etc….and they’re on a 28-42 day selling agreement.

So, if your offer isn’t big & early, you aren’t giving yourself the best chance of getting your target property. If you are a “fussy buyer/tyre kicker” your calls won’t be returned. The best offers (in my experience) have always come early from genuine buyers who are “conditioned” to current market conditions. I’m not saying I enjoy this environment or the ethics of it, but it is what it is.

Now, why there is no cooling off for a home bought at auction, yet my $40 toaster has a 2 year warranty, is one of the great consumer protection mysteries of the modern age …

arescarti42 said :

rubaiyat said :

Cheap money and government tax breaks could not possibly be building us up to a USA style housing bubble?

Nah no way, the people talking about bubbles like the head of the Australian Treasury, major bank economists, global ratings agencies and the RBA are all doomsters at the economic fringe.

Prices at 11x household income are normal, 100% loans to investors are prudent, banks with 3.7% equity capital are safe, unemployment isn’t going to rise, etc. etc. etc.

We’re fine.

Those comments refer mainly to Sydney, to a lesser degree Melbourne. Canberra has been soft for years, and will continue this way for a another couple at least. Then we’ll see our next jump in prices.

The Australian dream is a pyramid scheme.

rubaiyat said :

Cheap money and government tax breaks could not possibly be building us up to a USA style housing bubble?

Nah no way, the people talking about bubbles like the head of the Australian Treasury, major bank economists, global ratings agencies and the RBA are all doomsters at the economic fringe.

Prices at 11x household income are normal, 100% loans to investors are prudent, banks with 3.7% equity capital are safe, unemployment isn’t going to rise, etc. etc. etc.

We’re fine.

rubaiyat said :

Cheap money and government tax breaks could not possibly be building us up to a USA style housing bubble?

Surely it’s present, not future tense – and the only question is whether it ends with a big bang (perhaps with bouzouki accompaniment…) or a very long, very drawn out whimper.

Alexandra Craig said :

Looking for some advice here. In the last few days I found a house I like. It’s up for auction and I asked the agent what the price guide is. They told me high $500s to early $600s. I looked the property up online and found the previous listing – it last sold in 2012 for $540,000 and it has since been renovated. New bathroom, new floorboards, bit of work to the yard and new paint. Possibly more, but that’s all I could tell from the pics. I’m being taken for a ride with the ‘high $500s to early $600s’ price guide aren’t I?

Maybe, agents want as many people at auction. If you decide the guide is too high you won’t bother going so there’s less appearance of competition and less chance of you making a panic buy and overstretching yourself.

We had one similar about 4 months ago….an “above 600, expecting 650ish, wildly hoping to reach 700”.
6 parties registered to bid. Bidding stared above the minimum “guide price” and went above the maximum “guide price” fairly quickly, then it stalled. 5 minutes of chat from the auctioneer and then somebody asked if the reserve price had been met. He said no. It was already at 710. That killed it, people were so p$ssed off.
From that point onwards, nobody else bid at all because everybody realised we’d all been brought along on a lack of good faith.
If the reserve had been sensible, then maybe people would have stayed in the “auction spirit” and competed, but it was mainly a point of principle. Aside from the fact that 710+ puts you into a different market and you probably wouldn’t have bought that property if you had to pay that price !
Another 5 minutes of the agent walking between bidders whispering in people’s ears..”are you sure you couldn’t manage another 500 dollars”. It was pathetic really and felt like a dirty process.
In the end it broke up because everybody felt so uncomfortable we started walking and left the highest bidder there to negotiate, he really wanted the property and had bid the highest…nobody had any desire to push the price up further just to make that agent a bigger cut of the sale.
Had a good chat walking back to the cars with the other bidders and it was surreal….nobody felt too bad about not having bought it, but we all learned a lesson about how some agents behave.

We did buy at auction eventually and that agent was scrupulously transparent and fair, so they’re not all bad eggs.

madelini said :

It is legal for agents to keep advertisements up if the owner has accepted an offer on a property – if the open home is scheduled for Thursday, but an offer is only accepted on the Wednesday afternoon, no one is really locked in. The other thing is that you can make a competing offer and the Seller can choose whether or not to accept it – if the contract is already issued, in the interest of full disclosure, the first Buyer must be given the opportunity to either up their offer or pull out.

Or more likely, the agent has an established list of waiting buyers to match with a compatible seller, so the deal has been done before it’s marketed.
It goes up on Allhomes as great “sold in 1 day” advertising for the agent.
Worth getting on a few lists with agents who can see you’re serious and have the money ready. They don’t really want to hold multiple open days if they can avoid them.

Alexandra Craig said :

Looking for some advice here. In the last few days I found a house I like. It’s up for auction and I asked the agent what the price guide is. They told me high $500s to early $600s. I looked the property up online and found the previous listing – it last sold in 2012 for $540,000 and it has since been renovated. New bathroom, new floorboards, bit of work to the yard and new paint. Possibly more, but that’s all I could tell from the pics. I’m being taken for a ride with the ‘high $500s to early $600s’ price guide aren’t I?

go to realas.com and have a look

Cheap money and government tax breaks could not possibly be building us up to a USA style housing bubble?

Alexandra Craig said :

Looking for some advice here. In the last few days I found a house I like. It’s up for auction and I asked the agent what the price guide is. They told me high $500s to early $600s. I looked the property up online and found the previous listing – it last sold in 2012 for $540,000 and it has since been renovated. New bathroom, new floorboards, bit of work to the yard and new paint. Possibly more, but that’s all I could tell from the pics. I’m being taken for a ride with the ‘high $500s to early $600s’ price guide aren’t I?

When the agent says that it is because that is what the vender is asking.

You will only know on the day if it is an auction, whether the market agrees and how much the vendor really is interested in selling at a loss. They won’t be the first. One thing I can probably guarrantee is they “Saved heaps” by not employing anyone professional who might have told them something they didn’t want to hear.

Looking for some advice here. In the last few days I found a house I like. It’s up for auction and I asked the agent what the price guide is. They told me high $500s to early $600s. I looked the property up online and found the previous listing – it last sold in 2012 for $540,000 and it has since been renovated. New bathroom, new floorboards, bit of work to the yard and new paint. Possibly more, but that’s all I could tell from the pics. I’m being taken for a ride with the ‘high $500s to early $600s’ price guide aren’t I?

dungfungus said :

It’s encouraging to see the rusted on lefties are now scoping the remote possibility that the Canberra Libs may win the 2016 election. Maybe they have been reading up on what just happened in the UK.
Delicious.

I gather this is directed at me, in which case I don’t think I said or inferred that.

Just stating that the removal of stamp duty was actually a Howard Liebral party policy linked to the GST, which is one of the few Howard policies I agree with. Quite funny to see the local mob now, and at the last election scaremongering the rise in rates, when as I will repeat again it is essentially the implementation of their own policies.

watto23 said :

Yes there is emotion especially with senior citizens, but getting rid of stamp duty and moving to a rates based income stream is the fairest option there is.

Fair ? To who ? Im paying my stamp duty on purchase of a house here at least twice and probably more.

Just to rub salt into the wound, when Howard got the GST up, the States & Territories agreed to abolish stamp duties in return for the GST revenues. They never did. Now the Annual Rates increase/reduction in stamp duties here & the ACT Gov’t, bless them, supporting calls for the GST to be increased. It’s more than emotion and fairness, its about double if not triple dipping into Ratepayers.

watto23 said :

A simplistic view. Rates will go up under a liberal government too. They have to pay for things. Only a small part of rates increases cover the loss from property stamp duty.

Thats stating the obvious. Annual Rates will and should increase – but no where near the programmed average 10% pa for the next 20 years. To say that only a small part of the Annual Rates increases are to cover loss of stamp duty revenue is simply wrong. The ACT Govt has always stated the the increase in Annual Rates & the reduction in stamp duty were revenue neutral. A look at the ACT Gov’t 2015-16 budget papers shows otherwise. In short, the ACT Labour/Greens government lied.

The programmed Annual Rates increases are to pay for the poor fiscal management & priority setting of this ACT Government. Oh – and to to repay the development and transport lobbyists who push these infrastructure initiatives of course.

JC said :

watto23 said :

Masquara said :

Sigh – save $2,900 once, and then pay an extra 1,500 a year in rates for 20 years. Wake up , peeps, and kick out this government!

A simplistic view. Rates will go up under a liberal government too. They have to pay for things. Only a small part of rates increases cover the loss from property stamp duty.

Also the changes to stamp duty mean the people who got lucky bought a piece of land 20 yrs ago that is now valuable pay accordingly. those who want cheaper rates live in less desirable or cheaper suburbs. Its a simple and effective way to ensure people don’t occupy large blocks of land as a single person, unless they are happy to pay for it.

Yes there is emotion especially with senior citizens, but getting rid of stamp duty and moving to a rates based income stream is the fairest option there is. Don’t be under some kind of illusion that under a liberal government rates suddenly stop going up. they will go up, maybe by 8% instead of 10% but quality of services and infrastructure will decrease also.

So by all means vote the government out, but simplistic views and slogans don’t tell the whole story. Understand rather than say I don’t like this, lets vote the other mob in.

Besides it is Liberal party policy anyway. If I recall t was Howard and the Libs who introduced GST with the states and territories to scrap stamp duty.

Besides yet to here from the local lot how they are going to raise revenue to run this town. And save me the bleating about street art, light rail etc. in the grand scheme of things these are minor costs yes even light rail when the cost is spread over a number of years.

It’s encouraging to see the rusted on lefties are now scoping the remote possibility that the Canberra Libs may win the 2016 election. Maybe they have been reading up on what just happened in the UK.
Delicious.

vintage123 said :

JC said :

vintage123 said :

Whilst I am a fan of a visible purchase price, I am also not against transparent auctions. What I don’t like are those silent auctions which a few agents in canberra are using. I have heard horror stories from would be buyers who have seen an ad in all homes with a price and + next to it, only to find out that it’s a silent auction and you have one chance in thirty days to submit your highest offer. Friends of mine, along with the other first week 7000 views on all homes were sucked into a place in nicholls recently that was advertised for 440k+, which appeared way too cheap. I believe they put in an offer of 640k only to not win it. That’s why people don’t like auctions. Especially silent ones, as it is wasting everyone’s time.

+ offers are not really silent auctions, they are in fact no too different to where a pirce is set and people negotiate. Only main difference is + your expected to negotiate up, whereas a price generally (but not always) down. Things get into silent auction mode when two or more people want the place.

You would normally see + campaigns on places where the price is a bit unclear, for examples properties where they have a view, or properties that are next to dumps etc.

Which gets to the Nichols place you mention. If it is the one I am thinking of (26 Anne Clark Ave which is now under offer), then I can see why a + campaign was used, as the place was next to a dump, well a caravan park anyway. Don’t think the fence of the place next door which is on the corner is entirely legal either, as it should end inline with the houses on the main road.

Anyway the wife and I were going to take a look and once we saw the place next door just kept driving. Feel sorry for the owners, but that is reality I guess.

Oh we are going to be selling our place soon and have had them valued for sale. And each agent has suggested a + campaign, as our place has a good view. The theory being they can price what the house should get in that suburb, but the view is the X factor that just depends upon what someone is willing to pay.

It was actually a silent auction, as that is the strategy that particular agent is now using. They give a form to anyone interested, you fill out the form with your offer, and in thirty days they tell you if you won it or not. I know this as I was going to buy an investment property through them but was totally put off by the silent auction scheme. You will notice all of the places they sell are on + offers for exactly 30 days and then under offer.

Take your word that property was a silent auction, as I said I saw the place next door and kept on going. But as said + campaigns are not necessarily silent auctions, which is how I read your post. You can have silent auctions on both offers over and priced campaigns.

watto23 said :

Masquara said :

Sigh – save $2,900 once, and then pay an extra 1,500 a year in rates for 20 years. Wake up , peeps, and kick out this government!

A simplistic view. Rates will go up under a liberal government too. They have to pay for things. Only a small part of rates increases cover the loss from property stamp duty.

Also the changes to stamp duty mean the people who got lucky bought a piece of land 20 yrs ago that is now valuable pay accordingly. those who want cheaper rates live in less desirable or cheaper suburbs. Its a simple and effective way to ensure people don’t occupy large blocks of land as a single person, unless they are happy to pay for it.

Yes there is emotion especially with senior citizens, but getting rid of stamp duty and moving to a rates based income stream is the fairest option there is. Don’t be under some kind of illusion that under a liberal government rates suddenly stop going up. they will go up, maybe by 8% instead of 10% but quality of services and infrastructure will decrease also.

So by all means vote the government out, but simplistic views and slogans don’t tell the whole story. Understand rather than say I don’t like this, lets vote the other mob in.

Besides it is Liberal party policy anyway. If I recall t was Howard and the Libs who introduced GST with the states and territories to scrap stamp duty.

Besides yet to here from the local lot how they are going to raise revenue to run this town. And save me the bleating about street art, light rail etc. in the grand scheme of things these are minor costs yes even light rail when the cost is spread over a number of years.

Masquara said :

Sigh – save $2,900 once, and then pay an extra 1,500 a year in rates for 20 years. Wake up , peeps, and kick out this government!

A simplistic view. Rates will go up under a liberal government too. They have to pay for things. Only a small part of rates increases cover the loss from property stamp duty.

Also the changes to stamp duty mean the people who got lucky bought a piece of land 20 yrs ago that is now valuable pay accordingly. those who want cheaper rates live in less desirable or cheaper suburbs. Its a simple and effective way to ensure people don’t occupy large blocks of land as a single person, unless they are happy to pay for it.

Yes there is emotion especially with senior citizens, but getting rid of stamp duty and moving to a rates based income stream is the fairest option there is. Don’t be under some kind of illusion that under a liberal government rates suddenly stop going up. they will go up, maybe by 8% instead of 10% but quality of services and infrastructure will decrease also.

So by all means vote the government out, but simplistic views and slogans don’t tell the whole story. Understand rather than say I don’t like this, lets vote the other mob in.

In regards to the Offers Above (+) scenario. Recently I put 45k on top of the asking price (mainly because the agent seriously undervalued the property… to draw more people in, or not knowing that particular area… I believe the first). At 45k above asking price I thought I was in with a good chance, I later found out that I missed out by 5k. I asked if I could counter and the agent told me it would put them in an awkward position as the buyer was a well known mr fluffy person who had been in the paper etc. I was blown away, who were they working for here? The agent had the chance to make more money for their vendor (They didn’t know I was going to throw in another 20k).

I was so close to sending through the email with the offer, as I am led to believe that all offers in writing have to be presented to the vendor. But in the end I thought about it more. It isn’t ethical to gazump, and I would hate for it to happen to me. I want good karma for me in my next house and decided to let it go. The buyer got it for a bargain.

JC said :

vintage123 said :

Whilst I am a fan of a visible purchase price, I am also not against transparent auctions. What I don’t like are those silent auctions which a few agents in canberra are using. I have heard horror stories from would be buyers who have seen an ad in all homes with a price and + next to it, only to find out that it’s a silent auction and you have one chance in thirty days to submit your highest offer. Friends of mine, along with the other first week 7000 views on all homes were sucked into a place in nicholls recently that was advertised for 440k+, which appeared way too cheap. I believe they put in an offer of 640k only to not win it. That’s why people don’t like auctions. Especially silent ones, as it is wasting everyone’s time.

+ offers are not really silent auctions, they are in fact no too different to where a pirce is set and people negotiate. Only main difference is + your expected to negotiate up, whereas a price generally (but not always) down. Things get into silent auction mode when two or more people want the place.

You would normally see + campaigns on places where the price is a bit unclear, for examples properties where they have a view, or properties that are next to dumps etc.

Which gets to the Nichols place you mention. If it is the one I am thinking of (26 Anne Clark Ave which is now under offer), then I can see why a + campaign was used, as the place was next to a dump, well a caravan park anyway. Don’t think the fence of the place next door which is on the corner is entirely legal either, as it should end inline with the houses on the main road.

Anyway the wife and I were going to take a look and once we saw the place next door just kept driving. Feel sorry for the owners, but that is reality I guess.

Oh we are going to be selling our place soon and have had them valued for sale. And each agent has suggested a + campaign, as our place has a good view. The theory being they can price what the house should get in that suburb, but the view is the X factor that just depends upon what someone is willing to pay.

It was actually a silent auction, as that is the strategy that particular agent is now using. They give a form to anyone interested, you fill out the form with your offer, and in thirty days they tell you if you won it or not. I know this as I was going to buy an investment property through them but was totally put off by the silent auction scheme. You will notice all of the places they sell are on + offers for exactly 30 days and then under offer.

Sigh – save $2,900 once, and then pay an extra 1,500 a year in rates for 20 years. Wake up , peeps, and kick out this government!

Each era had good and bad points IMO. Trusses are good, pine framing bad, mid 1990s saw better tie down regs in the framing code but also a ban on the nasty but effective termite treatments so late 1990s places which were built on slabs have a nasty habit of being eaten. Modern builds use laminated beams which are good and no asbestos which is really good but the crap external claddings are a worry. And of course dodgy builders existed always so i’m not sure the era of the build is an indicator of overall quality, for or against.

vintage123 said :

Whilst I am a fan of a visible purchase price, I am also not against transparent auctions. What I don’t like are those silent auctions which a few agents in canberra are using. I have heard horror stories from would be buyers who have seen an ad in all homes with a price and + next to it, only to find out that it’s a silent auction and you have one chance in thirty days to submit your highest offer. Friends of mine, along with the other first week 7000 views on all homes were sucked into a place in nicholls recently that was advertised for 440k+, which appeared way too cheap. I believe they put in an offer of 640k only to not win it. That’s why people don’t like auctions. Especially silent ones, as it is wasting everyone’s time.

+ offers are not really silent auctions, they are in fact no too different to where a pirce is set and people negotiate. Only main difference is + your expected to negotiate up, whereas a price generally (but not always) down. Things get into silent auction mode when two or more people want the place.

You would normally see + campaigns on places where the price is a bit unclear, for examples properties where they have a view, or properties that are next to dumps etc.

Which gets to the Nichols place you mention. If it is the one I am thinking of (26 Anne Clark Ave which is now under offer), then I can see why a + campaign was used, as the place was next to a dump, well a caravan park anyway. Don’t think the fence of the place next door which is on the corner is entirely legal either, as it should end inline with the houses on the main road.

Anyway the wife and I were going to take a look and once we saw the place next door just kept driving. Feel sorry for the owners, but that is reality I guess.

Oh we are going to be selling our place soon and have had them valued for sale. And each agent has suggested a + campaign, as our place has a good view. The theory being they can price what the house should get in that suburb, but the view is the X factor that just depends upon what someone is willing to pay.

The new builds are cheap and nasty because there is no care put into them. The slab is not filled with quality slab fill and the slab itself is not let to set properly before building commences so there ends up being movement in the building. The townhouse I looked at in Watson was 12 months old when I looked at it, 2 storey. There were gaps between the wall and the stairs and most cornices had cracks appearing. Bedrooms are extremely small and very small combined kitchen, living and dining. All the same designs and not the least bit “homely”. What I bought in Belconnen was built mid 70’s, needed total interior reno but structurally sound and larger for not much more dollars.

Out of interest, what are the main differences between the often referred to quality old builds to these newly referred to cheap and nasty builds. From my expertise I was of the understanding that upgrades to insulation and window glazing have always been options and not inclusions and the majority of older existing homes have neither.

They have and always will be just brick veneer designs.

So what makes these new builds so cheap and nasty.

frg1978 said :

Mysteryman said :

Paul Costigan said :

Two Comments: First I agree about the snapping up of houses in established suburbs. Last year two houses in our immediate area were listed for auction but did not go to auction as they were sold within a week. So I agree – ‘some’ are benefiting – but it is super difficult for the rest.

The other comment relates to quality of the build of new apartments. We have been watching two lots of townhouses being built nearby and the have observed how basic the building quality is. Absolute minimum insulation (almost none), no double glazing and almost no sound proofing between floors and joining walls. The owners/tenants will have high energy bills and will share their lives with their neighbours. I suspect there will be no solar and absolute minimum allowances for greenery (shading).

These deficiencies were the standards when our house was built in the 1960s, but to see this in 2015 does not say much for the ACT’s building requirements. The standard of the build has not changed in decades. So to anyone looking to buy new in established suburbs – you still need to look beyond the gloss and check out the things such as insulation etc as those energy bills are going to get even higher.

PS: I have not commented on the standard of build in new suburbs – that may be another article another time.

You’re absolutely right about the build quality. It’s happening in house and apartments in newer and older suburbs. I’ve been looking at new places and there’s no way I’d pay the money they are asking for a house/apartment with almost no insulation, no double glazing, crappy venetian or vertical blinds, and often no heating/cooling. Most new blocks are tiny and result in house being right up against each other, which makes for all sorts of sound issues.

I don’t believe many of these places actually meet the star ratings they are being given.

This is exactly the case in the new section of Watson where we have purchased a small house and it is my belief that these suburbs will become slums over time due to the poor quality of the building. Everything appears to have been done as cheaply as possible and the developers would not allow any modifications to the plans such as additional insulation etc. There is no ventilation in the roof cavity to allow heat to escape in summer so long after the sun has gone down and the temperature has dropped 10 or more degrees, the heat inside is unbearable with no possibility of cross ventilation due to a lack of windows. And adding these things post-construction can be either very expensive or not possible at all. I really do not know how they achieved the stated EER of 6. On top of this values have dropped significantly in the area, and the houses that are for sale are not moving anyway. Its a learning curve and you make the most of what you have but it is frustrating that the government allows these kinds of developments which do target the entry level buyer.

I also looked at a townhouse in the new part of Watson and couldn’t believe how cheap and nasty it was so ended up buying in an established part of Belconnen.

Beware that developers of Watson are also the developers of Tralee.

vintage123 said :

Ezy said :

vintage123 said :

Ezy said :

vintage123 said :

Hi Alexandra,

Give Justine burke a call, she may be able to find you a little place in Duffy if your interested.
http://www.luton.com.au/consultant?consultant_id=28

I have dealt with her before and can recommend. If you need a hand just let me know and I will call her for you.

Cheers vintage123

This is the area I am looking at – and in my travels, I have come across Justine and Tim a number of times. Absolutely lovely and very professional. The same can be said for the team at McGrath and Peter Blackshaw in Woden and also Michael Potter at One Agency.

Having said that, each agent knows what I am after, they know how long I have been looking and how frustrated I am getting – yet I don’t get any special treatment. Mainly because they aren’t working for me, they are working for the vendor. Their priority is to get the best price for their client – to them, it doesn’t make sense to avoid people bidding and most likely paying more than what the property is worth, just to do people like me a favour.

I know 4 agents personally, and it is the same story. They aren’t going to go out of their way for me in this current market.

Hi ezy,
Have you seen this one, it looks like good value considering location and block size.
http://www.allhomes.com.au/ah/act/sale-residential/40-kallara-close-duffy-canberra/1317003285411
Cheers vintage123

Thanks for that! Yeah – I have inspected this one, Alisa is a great agent. This one is on a good size block, but the way that the house sits is a little awkward when it comes time to extending. Also, the orientation could be better as I found the house quite dark.

If it is in Weston Creek, and on AllHomes – chances are I have looked at it. As mentioned before, I have a very specific list of things. I know I can’t/won’t get everything but the main thing for me is that the house is not on a busy road and has ample yard and garage space.

I agree with your points. What I think is good about this one is that pocket down there will get a green light for sub division around two years from now following the lobbyists using mr fluffy precedence. That particular block is a good one for two town houses as it has a good road frontage 26m allowing side drive and back to back common wall development. At 2 x 363m2 blocks it’s ideal. Also it’s neighbours are even larger are shaped to compliment. These particular ones are a good buy. Here’s one that sold recently.
http://www.domain.com.au/property/sold/house/act/duffy/?adid=2011719272

Thanks for the info – I did check out 26 Blowering street a while ago. Unfortunately the first open home – Justine was given the wrong key to open up, so the open home turned into a ‘walk around an peer into the windows’. This actually happens quite a lot!

At the moment, I’m not really looking to do any subdividing and building. Down the track I will look at investing money elsewhere. I would like to set myself up with the lifestyle that I want – close to Stromlo MTB trails, easy access to everywhere in Canberra and a yard for an active dog, a garden in which to build a sizeable vegetable garden and a great entertainment space (wood fired oven, home brew on tap, smoker bbq). I spend a sizeble amount of time in the kitchen so I want to make sure whatever house I get is able to accommodate a working kitchen with plenty of bench space and almost become the main hub of the home. So a floor plan and that allows me to tweak things would be ideal (a truss roof is even better).

I have a builder on board (Nick from NJR Homes) who is excellent in making sure that I am looking at the right home. He will meet me at the house, and walk around and point out his concerns and quickly sketch out his vision. He is amazing to work with and has helped out a number of times and brought me back to earth when I get too excited.

So as you can read, I do have a bit of a list to work through. I am confident we will find a cracker of a place – it is just being patient.

Holden Caulfield said :

crackerpants said :

…and the final sale prices are withheld on allhomes.

What was that about using the phone?!

If a house has been auctioned that I was interested in and couldn’t attend the auction itself I just ring the agent on Monday.

Secondly, if so many houses are selling “over the odds” isn’t that telling you that your expectation of market prices might be a bit out of date?

As I said, we’re still considering whether to extend or move…we’re somewhere between idle speculation and organising to get an appraisal done. If we’re serious about moving, then yes, I’ll be picking up the phone 🙂

I expect my market expectations are out of date, but as I also said it’s hard to get a handle…at our just-past-idle-speculation stage. It’s a bit chicken and egg, and I think we’ll have to invest a lot of time and energy to determine how buying elsewhere will stack up against extending where we are.

Which brings me to a question I have, and I may as well ask it here – who should I approach for an appraisal/advice? I know real estate agents do it, but suspect they might steer us toward selling and purchasing, and again, not give us quite the accurate handle on the market we need? Any suggestions?

Ezy said :

vintage123 said :

Ezy said :

vintage123 said :

Hi Alexandra,

Give Justine burke a call, she may be able to find you a little place in Duffy if your interested.
http://www.luton.com.au/consultant?consultant_id=28

I have dealt with her before and can recommend. If you need a hand just let me know and I will call her for you.

Cheers vintage123

This is the area I am looking at – and in my travels, I have come across Justine and Tim a number of times. Absolutely lovely and very professional. The same can be said for the team at McGrath and Peter Blackshaw in Woden and also Michael Potter at One Agency.

Having said that, each agent knows what I am after, they know how long I have been looking and how frustrated I am getting – yet I don’t get any special treatment. Mainly because they aren’t working for me, they are working for the vendor. Their priority is to get the best price for their client – to them, it doesn’t make sense to avoid people bidding and most likely paying more than what the property is worth, just to do people like me a favour.

I know 4 agents personally, and it is the same story. They aren’t going to go out of their way for me in this current market.

Hi ezy,
Have you seen this one, it looks like good value considering location and block size.
http://www.allhomes.com.au/ah/act/sale-residential/40-kallara-close-duffy-canberra/1317003285411
Cheers vintage123

Thanks for that! Yeah – I have inspected this one, Alisa is a great agent. This one is on a good size block, but the way that the house sits is a little awkward when it comes time to extending. Also, the orientation could be better as I found the house quite dark.

If it is in Weston Creek, and on AllHomes – chances are I have looked at it. As mentioned before, I have a very specific list of things. I know I can’t/won’t get everything but the main thing for me is that the house is not on a busy road and has ample yard and garage space.

I agree with your points. What I think is good about this one is that pocket down there will get a green light for sub division around two years from now following the lobbyists using mr fluffy precedence. That particular block is a good one for two town houses as it has a good road frontage 26m allowing side drive and back to back common wall development. At 2 x 363m2 blocks it’s ideal. Also it’s neighbours are even larger are shaped to compliment. These particular ones are a good buy. Here’s one that sold recently.
http://www.domain.com.au/property/sold/house/act/duffy/?adid=2011719272

vintage123 said :

Ezy said :

vintage123 said :

Hi Alexandra,

Give Justine burke a call, she may be able to find you a little place in Duffy if your interested.
http://www.luton.com.au/consultant?consultant_id=28

I have dealt with her before and can recommend. If you need a hand just let me know and I will call her for you.

Cheers vintage123

This is the area I am looking at – and in my travels, I have come across Justine and Tim a number of times. Absolutely lovely and very professional. The same can be said for the team at McGrath and Peter Blackshaw in Woden and also Michael Potter at One Agency.

Having said that, each agent knows what I am after, they know how long I have been looking and how frustrated I am getting – yet I don’t get any special treatment. Mainly because they aren’t working for me, they are working for the vendor. Their priority is to get the best price for their client – to them, it doesn’t make sense to avoid people bidding and most likely paying more than what the property is worth, just to do people like me a favour.

I know 4 agents personally, and it is the same story. They aren’t going to go out of their way for me in this current market.

Hi ezy,
Have you seen this one, it looks like good value considering location and block size.
http://www.allhomes.com.au/ah/act/sale-residential/40-kallara-close-duffy-canberra/1317003285411
Cheers vintage123

Thanks for that! Yeah – I have inspected this one, Alisa is a great agent. This one is on a good size block, but the way that the house sits is a little awkward when it comes time to extending. Also, the orientation could be better as I found the house quite dark.

If it is in Weston Creek, and on AllHomes – chances are I have looked at it. As mentioned before, I have a very specific list of things. I know I can’t/won’t get everything but the main thing for me is that the house is not on a busy road and has ample yard and garage space.

Ezy said :

vintage123 said :

Hi Alexandra,

Give Justine burke a call, she may be able to find you a little place in Duffy if your interested.
http://www.luton.com.au/consultant?consultant_id=28

I have dealt with her before and can recommend. If you need a hand just let me know and I will call her for you.

Cheers vintage123

This is the area I am looking at – and in my travels, I have come across Justine and Tim a number of times. Absolutely lovely and very professional. The same can be said for the team at McGrath and Peter Blackshaw in Woden and also Michael Potter at One Agency.

Having said that, each agent knows what I am after, they know how long I have been looking and how frustrated I am getting – yet I don’t get any special treatment. Mainly because they aren’t working for me, they are working for the vendor. Their priority is to get the best price for their client – to them, it doesn’t make sense to avoid people bidding and most likely paying more than what the property is worth, just to do people like me a favour.

I know 4 agents personally, and it is the same story. They aren’t going to go out of their way for me in this current market.

Hi ezy,
Have you seen this one, it looks like good value considering location and block size.
http://www.allhomes.com.au/ah/act/sale-residential/40-kallara-close-duffy-canberra/1317003285411
Cheers vintage123

Alexandra Craig said :

madelini said :

It is legal for agents to keep advertisements up if the owner has accepted an offer on a property – if the open home is scheduled for Thursday, but an offer is only accepted on the Wednesday afternoon, no one is really locked in. The other thing is that you can make a competing offer and the Seller can choose whether or not to accept it – if the contract is already issued, in the interest of full disclosure, the first Buyer must be given the opportunity to either up their offer or pull out.

Yeah, I get that – I thought the dodgy part was allowing people to make offers before the first public open home was held.

Nope – as long as they have a draft contract they can accept offers. That’s why it’s worth establishing contacts with agents, because they can accept offers before even marketing the property publicly if they know of potential buyers looking in that area. It’s also worth straight up calling and asking for a private inspection if you’re really serious, to get in early.

vintage123 said :

Hi Alexandra,

Give Justine burke a call, she may be able to find you a little place in Duffy if your interested.
http://www.luton.com.au/consultant?consultant_id=28

I have dealt with her before and can recommend. If you need a hand just let me know and I will call her for you.

Cheers vintage123

This is the area I am looking at – and in my travels, I have come across Justine and Tim a number of times. Absolutely lovely and very professional. The same can be said for the team at McGrath and Peter Blackshaw in Woden and also Michael Potter at One Agency.

Having said that, each agent knows what I am after, they know how long I have been looking and how frustrated I am getting – yet I don’t get any special treatment. Mainly because they aren’t working for me, they are working for the vendor. Their priority is to get the best price for their client – to them, it doesn’t make sense to avoid people bidding and most likely paying more than what the property is worth, just to do people like me a favour.

I know 4 agents personally, and it is the same story. They aren’t going to go out of their way for me in this current market.

Hi Alexandra,

Give Justine burke a call, she may be able to find you a little place in Duffy if your interested.
http://www.luton.com.au/consultant?consultant_id=28

I have dealt with her before and can recommend. If you need a hand just let me know and I will call her for you.

Cheers vintage123

crackerpants said :

…and the final sale prices are withheld on allhomes.

What was that about using the phone?!

If a house has been auctioned that I was interested in and couldn’t attend the auction itself I just ring the agent on Monday.

Secondly, if so many houses are selling “over the odds” isn’t that telling you that your expectation of market prices might be a bit out of date?

Alexandra Craig said :

Ezy said :

Canberra has had a jump in home values due to the number of buyers injected into the market by the whole Mr. Fluffy saga. These buyers are cashed up, and receive a waiver on stamp duty which gives them the opportunity to have an ace up their sleeve when it comes to purchasing property in the ACT. This has created a little mini housing boom in Canberra which, unfortunately, is not good news for us normal buyers.

Yes! And then I thought ‘okay, maybe I can nab a Mr Fluffy block in Weston Creek’ but apparently they are all being subdivided.

vintage123 said :

It is difficult to provide any useful advice without knowing a little more detail on what it is you are seeking to achieve. Are you purchasing to live in or for investment. Are you looking at a maximum lending high risk purchase scenario or are you halving it with a dual income partner. What’s your borrowing capacity and repayment schedule.

Having 20 years experience in this space I can give you some free advice if you can provide a little more detail.

Cheers vintage 123

Looking for a live-in property, buying it by myself, and I can answer all the other questions in an email 🙂 alexandra.craig@hotmail.com

madelini said :

It is legal for agents to keep advertisements up if the owner has accepted an offer on a property – if the open home is scheduled for Thursday, but an offer is only accepted on the Wednesday afternoon, no one is really locked in. The other thing is that you can make a competing offer and the Seller can choose whether or not to accept it – if the contract is already issued, in the interest of full disclosure, the first Buyer must be given the opportunity to either up their offer or pull out.

Yeah, I get that – I thought the dodgy part was allowing people to make offers before the first public open home was held.

FHW said :

Don’t wait for the open home. If you think there is something you would seriously be interested in, ask the real estate agent if you can have a private inspection. Once, most houses were viewed by private inspection, but since open homes became really popular it is easy to forget that there are other avenues.

A couple of days ago I emailed an agent because the open home clashed with an appointment I couldn’t get out of, but I could make it to the open home pretty much as it was finishing so I asked if they could keep it open for literally 5 extra minutes. They said no, and when I asked if I could come before or have a private viewing on another day they just ignored my emails 🙁

My advice for buying a house, getting a spot at daycare etc. is to behave exactly as you would in your professional life – always phone first, and save email contact as a back up for when phone contact fails, for transferring large documents, or for follow-up. Or even better, go in person – unfortunately the communication method that’s most convenient at the time is also least likely to get results – emails are far too easy to ignore.

Good luck! We’re trying to work out whether we should move or extend, and to be honest, extending seems the better option at the moment. Partly because to make the move of great enough significance, we’d have to pay an inflated price, and partly because everything of interest is going for auction. I agree that the whole process is very off-putting, and means that by definition you’re paying over the odds. It’s also very hard to determine what market value is when every appealing house is auction/offers over, and the final sale prices are withheld on allhomes.

justsomeaussie said :

Anyone understanding basic economics will realise that reductions in stamp duty and/or increases to grants only increases the sale price effectivly transferring that additional money to the pockets of the sellers.

It’s the biggest swifty the rich ever pulled. Convinced first home buyers that they deserve grants and exemptions so that they can then raise the sell price and transfer government (our tax) money into their pockets.

Wake up and remove all incentativves for people to buy.

Actually, no. Anyone with a basic understanding of economics will understand that an asset’s true capital value is the net present value of all future income streams. Decreasing the value of that future income stream (i.e. by increasing the ongoing stamp duty liability) will, all else being equal, *reduce* the capital value of the asset.

the economic effect is to remove the ‘frictions’ or transactions costs inherent in disposing of the asset, thereby making people more mobile. The problem is, they appear to have increased rates far more than necessary to recoup the foregone stamp duty.

Ezy said :

Canberra has had a jump in home values due to the number of buyers injected into the market by the whole Mr. Fluffy saga. These buyers are cashed up, and receive a waiver on stamp duty which gives them the opportunity to have an ace up their sleeve when it comes to purchasing property in the ACT. This has created a little mini housing boom in Canberra which, unfortunately, is not good news for us normal buyers.

Yes! And then I thought ‘okay, maybe I can nab a Mr Fluffy block in Weston Creek’ but apparently they are all being subdivided.

vintage123 said :

It is difficult to provide any useful advice without knowing a little more detail on what it is you are seeking to achieve. Are you purchasing to live in or for investment. Are you looking at a maximum lending high risk purchase scenario or are you halving it with a dual income partner. What’s your borrowing capacity and repayment schedule.

Having 20 years experience in this space I can give you some free advice if you can provide a little more detail.

Cheers vintage 123

Looking for a live-in property, buying it by myself, and I can answer all the other questions in an email 🙂 alexandra.craig@hotmail.com

madelini said :

It is legal for agents to keep advertisements up if the owner has accepted an offer on a property – if the open home is scheduled for Thursday, but an offer is only accepted on the Wednesday afternoon, no one is really locked in. The other thing is that you can make a competing offer and the Seller can choose whether or not to accept it – if the contract is already issued, in the interest of full disclosure, the first Buyer must be given the opportunity to either up their offer or pull out.

Yeah, I get that – I thought the dodgy part was allowing people to make offers before the first public open home was held.

FHW said :

Don’t wait for the open home. If you think there is something you would seriously be interested in, ask the real estate agent if you can have a private inspection. Once, most houses were viewed by private inspection, but since open homes became really popular it is easy to forget that there are other avenues.

A couple of days ago I emailed an agent because the open home clashed with an appointment I couldn’t get out of, but I could make it to the open home pretty much as it was finishing so I asked if they could keep it open for literally 5 extra minutes. They said no, and when I asked if I could come before or have a private viewing on another day they just ignored my emails 🙁

I actually wouldn’t be in any rush to be honest. Whilst the Canberra market has been down due to public service budget cuts, and relative to Sydney and Melbourne Canberra is more affordable nowadays and seems better value, but Australian cities on the whole have such overpriced housing relative to incomes and the rest of the world that sometimes I feel like we’re being continually fed the dream (aka pup) of buying into an over priced generational wealth transfer, by the industry that profits from it. Whilst there’s an appeal of ‘settling’ and having your own place (I suppose especially so if you want to start a family) I also get why a whole lot of young people are opting out and retaining the flexibility of renting or just refusing to commit 30+ years of a huge slice of income to cashed up baby boomers who accumulated multiple properties or leveraged up over the years at times when prices were more affordable relative to incomes.

Anyone understanding basic economics will realise that reductions in stamp duty and/or increases to grants only increases the sale price effectivly transferring that additional money to the pockets of the sellers.

It’s the biggest swifty the rich ever pulled. Convinced first home buyers that they deserve grants and exemptions so that they can then raise the sell price and transfer government (our tax) money into their pockets.

Wake up and remove all incentativves for people to buy.

vintage123 said :

House prices are soft at the moment. The last two years has been a good time for first home buyers. If the public service starts hiring post freeze then I can see a mini boom occurring based purely on stabilisation of PS positions which equates to a huge borrowing capacity on dual incomes at historically low interest rates. It wouldn’t be abnormal to see a 20% spike over a couple of months once and IF it begins.

Agree with this. Prices haven’t moved much for several years now, and conditions are starting to build for the next leg up. Stagnation is usually how the property market contracts, and we’ve now had several years. Once the feds start hiring more seriously prices will begin to climb.

I’d say we have another year at least, but once the market starts to move, it tends to move quite a bit.

Its one of lifes biggest stressors, buying a place, so its worth feeling comfortable every step of the way. You’ll have a fair idea after six months, but there isn’t any bargains out there from what I can see. If you’re prepared to compromise, you can probably find a cheaper place in Bungendore, Queanbeyan, Yass, but not Murrumbateman probably. Or go the townhouse / duplex option. Nearly everyone has to make some sort of compromise. I agree staying away from the dodgy new builds, and agree Mr Fluffy issue has blown a little “hot air” under the ACT housing market.

A good agent will look after you – they do exist. Maybe ask if you can view a few places before they come on the market…or place your own elevated offer prior to auction. I’m in QBN, looking to upsize for growing family. A nothing flashy 2 br cottage with 1 bath and no garage on a busy road made $535k around Easter – couldn’t believe it. Another knockdown/rebuild on a great 1100m block made similar price…Banks are still lending like there’s no tomorrow, so stay cautious…Its frustrating when places are going up in value quicker than what you can save, so I’m glad I’m not in your position actually…I can always stay put, cramped admittedly…

Don’t wait for the open home. If you think there is something you would seriously be interested in, ask the real estate agent if you can have a private inspection. Once, most houses were viewed by private inspection, but since open homes became really popular it is easy to forget that there are other avenues.

House prices are soft at the moment. The last two years has been a good time for first home buyers. If the public service starts hiring post freeze then I can see a mini boom occurring based purely on stabilisation of PS positions which equates to a huge borrowing capacity on dual incomes at historically low interest rates. It wouldn’t be abnormal to see a 20% spike over a couple of months once and IF it begins.

I contracted to build my first home in 2000, at the age of 19. At that time it was post-economic crisis and the government was handing out $14k for new builds by first home buyers. In addition, the ACT land development agency was pricing land as if it were a necessity for people to live in the ACT, as opposed to a profit-making opportunity for the government.
Two observations:
1) you are right to avoid auctions. From a purely economic perspective, in order to “win” an auction, you must by definition pay above the market value (i.e. what everyone else is willing to pay). There are also well documented psychological effects that work against you – google “winner’s curse” for an entre into auction theory. As well there is shabby behaviour by agents as noted above.
2) If you find that all the housing stock is selling before you can even attend an inspection, might be best to wait until the market is cooled off. Yes, this requires patience and an ability to make financial decisions free of emotion. But in the long run this might be the dominant strategy.

Southmouth said :

BerraCitizen said :

I don’t understand why people are so afraid of auctions. It’s simple. Set a limit and bid up to that point and stop when your limit is reached. If you bid over your limit then that is your lack of discipline. Obviously it helps to do your homework to know what the house is worth. The excellent thing about an auction is that the the bidding process is more transparent unlike when you have scammer real estate agent call you and say “just checking what your final offer is, as we’ve had some other offers come in”.

I tried to buy a house at auction about 3 years ago. Agent told me the target price was low to mid 9s. I got my ducks lined up for mid to high 9s and the place was passed in at 1.1. Thats why people don’t like auctions.

If you keep an eye on the market for any length of time, check out recent sales etc, it’s very easy to come up with a reasonably accurate estimation of a property’s sale price.

It’s worth doing this regardless of what the agent says so that you are educated to know what’s a reasonable price for the area and type of property you are buying. I’m surprised that people don’t seem to have the initiative to do their own research, you’re not buying a pair of jeans on sale!

Then, if you are buying at auction, you know that anything over the reasonable sale price you have armed yourself with is just money down the drain to win the game!

And if you have the cash to win at all costs, more power to you. 🙂

If it’s any consolation the apartment complex I live in (I’m on the first floor) is in an older suburb, is new and appears to be very well built.

I’ve been in for a couple of years now and would be lucky to turn on the reverse cycle a/c more than 20 times in a year. It is surprisingly well insulated from weather and sound. Especially for sound, I’m next to the lift and you can’t hear it operating. Sometimes the chime of the bell can be heard because of its pitch, but that’s all.

So, there are some building companies that do things properly. FWIW, the complex was built by Morris Property Group.

Whilst I am a fan of a visible purchase price, I am also not against transparent auctions. What I don’t like are those silent auctions which a few agents in canberra are using. I have heard horror stories from would be buyers who have seen an ad in all homes with a price and + next to it, only to find out that it’s a silent auction and you have one chance in thirty days to submit your highest offer. Friends of mine, along with the other first week 7000 views on all homes were sucked into a place in nicholls recently that was advertised for 440k+, which appeared way too cheap. I believe they put in an offer of 640k only to not win it. That’s why people don’t like auctions. Especially silent ones, as it is wasting everyone’s time.

Southmouth said :

BerraCitizen said :

I don’t understand why people are so afraid of auctions. It’s simple. Set a limit and bid up to that point and stop when your limit is reached. If you bid over your limit then that is your lack of discipline. Obviously it helps to do your homework to know what the house is worth. The excellent thing about an auction is that the the bidding process is more transparent unlike when you have scammer real estate agent call you and say “just checking what your final offer is, as we’ve had some other offers come in”.

I tried to buy a house at auction about 3 years ago. Agent told me the target price was low to mid 9s. I got my ducks lined up for mid to high 9s and the place was passed in at 1.1. Thats why people don’t like auctions.

Underquoting is one of reasons real estate agents have the reputation they do.

BerraCitizen said :

I don’t understand why people are so afraid of auctions. It’s simple. Set a limit and bid up to that point and stop when your limit is reached. If you bid over your limit then that is your lack of discipline. Obviously it helps to do your homework to know what the house is worth. The excellent thing about an auction is that the the bidding process is more transparent unlike when you have scammer real estate agent call you and say “just checking what your final offer is, as we’ve had some other offers come in”.

I tried to buy a house at auction about 3 years ago. Agent told me the target price was low to mid 9s. I got my ducks lined up for mid to high 9s and the place was passed in at 1.1. Thats why people don’t like auctions.

I don’t understand why people are so afraid of auctions. It’s simple. Set a limit and bid up to that point and stop when your limit is reached. If you bid over your limit then that is your lack of discipline. Obviously it helps to do your homework to know what the house is worth. The excellent thing about an auction is that the the bidding process is more transparent unlike when you have scammer real estate agent call you and say “just checking what your final offer is, as we’ve had some other offers come in”.

It is legal for agents to keep advertisements up if the owner has accepted an offer on a property – if the open home is scheduled for Thursday, but an offer is only accepted on the Wednesday afternoon, no one is really locked in. The other thing is that you can make a competing offer and the Seller can choose whether or not to accept it – if the contract is already issued, in the interest of full disclosure, the first Buyer must be given the opportunity to either up their offer or pull out.

It’s just a tight market currently. The best thing to do is to get to know a few agents and make sure that you’re on the list for new properties as they are listed. Also, you can put in pre-auction offers for properties due to go under the hammer, as long as you’re willing to waive the cooling off period (which is standard practice anyway) and exchange relatively quickly after receiving the contract and reviewing it with your solicitor.

Mysteryman said :

Paul Costigan said :

Two Comments: First I agree about the snapping up of houses in established suburbs. Last year two houses in our immediate area were listed for auction but did not go to auction as they were sold within a week. So I agree – ‘some’ are benefiting – but it is super difficult for the rest.

The other comment relates to quality of the build of new apartments. We have been watching two lots of townhouses being built nearby and the have observed how basic the building quality is. Absolute minimum insulation (almost none), no double glazing and almost no sound proofing between floors and joining walls. The owners/tenants will have high energy bills and will share their lives with their neighbours. I suspect there will be no solar and absolute minimum allowances for greenery (shading).

These deficiencies were the standards when our house was built in the 1960s, but to see this in 2015 does not say much for the ACT’s building requirements. The standard of the build has not changed in decades. So to anyone looking to buy new in established suburbs – you still need to look beyond the gloss and check out the things such as insulation etc as those energy bills are going to get even higher.

PS: I have not commented on the standard of build in new suburbs – that may be another article another time.

You’re absolutely right about the build quality. It’s happening in house and apartments in newer and older suburbs. I’ve been looking at new places and there’s no way I’d pay the money they are asking for a house/apartment with almost no insulation, no double glazing, crappy venetian or vertical blinds, and often no heating/cooling. Most new blocks are tiny and result in house being right up against each other, which makes for all sorts of sound issues.

I don’t believe many of these places actually meet the star ratings they are being given.

This is exactly the case in the new section of Watson where we have purchased a small house and it is my belief that these suburbs will become slums over time due to the poor quality of the building. Everything appears to have been done as cheaply as possible and the developers would not allow any modifications to the plans such as additional insulation etc. There is no ventilation in the roof cavity to allow heat to escape in summer so long after the sun has gone down and the temperature has dropped 10 or more degrees, the heat inside is unbearable with no possibility of cross ventilation due to a lack of windows. And adding these things post-construction can be either very expensive or not possible at all. I really do not know how they achieved the stated EER of 6. On top of this values have dropped significantly in the area, and the houses that are for sale are not moving anyway. Its a learning curve and you make the most of what you have but it is frustrating that the government allows these kinds of developments which do target the entry level buyer.

Giving out grants does nothing more than increase purchasing power for those trying to get into a supply constrained market.

I also agree with the commenters regarding poor building standards. Not only are a lot of new Canberra properties under-specced, but also poorly assembled. I own a bunch of Canberra properties, and based on my experience would NEVER touch a brand new build, or even anything up to 10 years old.

It is difficult to provide any useful advice without knowing a little more detail on what it is you are seeking to achieve. Are you purchasing to live in or for investment. Are you looking at a maximum lending high risk purchase scenario or are you halving it with a dual income partner. What’s your borrowing capacity and repayment schedule.

Having 20 years experience in this space I can give you some free advice if you can provide a little more detail.

Cheers vintage 123

Paul Costigan said :

Two Comments: First I agree about the snapping up of houses in established suburbs. Last year two houses in our immediate area were listed for auction but did not go to auction as they were sold within a week. So I agree – ‘some’ are benefiting – but it is super difficult for the rest.

The other comment relates to quality of the build of new apartments. We have been watching two lots of townhouses being built nearby and the have observed how basic the building quality is. Absolute minimum insulation (almost none), no double glazing and almost no sound proofing between floors and joining walls. The owners/tenants will have high energy bills and will share their lives with their neighbours. I suspect there will be no solar and absolute minimum allowances for greenery (shading).

These deficiencies were the standards when our house was built in the 1960s, but to see this in 2015 does not say much for the ACT’s building requirements. The standard of the build has not changed in decades. So to anyone looking to buy new in established suburbs – you still need to look beyond the gloss and check out the things such as insulation etc as those energy bills are going to get even higher.

PS: I have not commented on the standard of build in new suburbs – that may be another article another time.

Excellent comments Paul.
Many of us are always saying how can this happen in a place like Canberra, especially with frosts like we are having this week?
PS Keep a low profile if you are travelling to the burbs.

Paul Costigan said :

Two Comments: First I agree about the snapping up of houses in established suburbs. Last year two houses in our immediate area were listed for auction but did not go to auction as they were sold within a week. So I agree – ‘some’ are benefiting – but it is super difficult for the rest.

The other comment relates to quality of the build of new apartments. We have been watching two lots of townhouses being built nearby and the have observed how basic the building quality is. Absolute minimum insulation (almost none), no double glazing and almost no sound proofing between floors and joining walls. The owners/tenants will have high energy bills and will share their lives with their neighbours. I suspect there will be no solar and absolute minimum allowances for greenery (shading).

These deficiencies were the standards when our house was built in the 1960s, but to see this in 2015 does not say much for the ACT’s building requirements. The standard of the build has not changed in decades. So to anyone looking to buy new in established suburbs – you still need to look beyond the gloss and check out the things such as insulation etc as those energy bills are going to get even higher.

PS: I have not commented on the standard of build in new suburbs – that may be another article another time.

You’re absolutely right about the build quality. It’s happening in house and apartments in newer and older suburbs. I’ve been looking at new places and there’s no way I’d pay the money they are asking for a house/apartment with almost no insulation, no double glazing, crappy venetian or vertical blinds, and often no heating/cooling. Most new blocks are tiny and result in house being right up against each other, which makes for all sorts of sound issues.

I don’t believe many of these places actually meet the star ratings they are being given.

It’s probably worth mentioning that the stamp duty reductions are coming at the cost of rapidly rising rates. Ten percent, year on year for the next few years at least, on top of the 10% increases we’ve already seen.

That saving of about $5900 for a $500,000 home will be negated and paid for many, many times over thanks to the rates increases.

Two Comments: First I agree about the snapping up of houses in established suburbs. Last year two houses in our immediate area were listed for auction but did not go to auction as they were sold within a week. So I agree – ‘some’ are benefiting – but it is super difficult for the rest.

The other comment relates to quality of the build of new apartments. We have been watching two lots of townhouses being built nearby and the have observed how basic the building quality is. Absolute minimum insulation (almost none), no double glazing and almost no sound proofing between floors and joining walls. The owners/tenants will have high energy bills and will share their lives with their neighbours. I suspect there will be no solar and absolute minimum allowances for greenery (shading).

These deficiencies were the standards when our house was built in the 1960s, but to see this in 2015 does not say much for the ACT’s building requirements. The standard of the build has not changed in decades. So to anyone looking to buy new in established suburbs – you still need to look beyond the gloss and check out the things such as insulation etc as those energy bills are going to get even higher.

PS: I have not commented on the standard of build in new suburbs – that may be another article another time.

Canberra has had a jump in home values due to the number of buyers injected into the market by the whole Mr. Fluffy saga. These buyers are cashed up, and receive a waiver on stamp duty which gives them the opportunity to have an ace up their sleeve when it comes to purchasing property in the ACT. This has created a little mini housing boom in Canberra which, unfortunately, is not good news for us normal buyers.

I am currently in the LONG process of trying to find a home, but also I have recently helped my mum buy a home. First up, my mum – I would put her in the entry level townhouse market. Not a lot of options out there but we eventually found a beautiful place for her after we lost out at an auction a few weeks ago. We bought her house via an offers above, rather than the ever popular auction process. Still, it was competitive at this end and the offers above scenario isn’t as transparent as an auction process.

Now my experience, I have been looking for a house for around 6 months. In that time I have sold my first home (via offers above) which went extremely well as it sold within 4 days of being on the market and fetched a higher price than I was expecting. In the 6 months of looking for property, I have looked at over 100 houses. Of which I have registered, bid and lost at 2 auctions, and lost another one at an offers above scenario – and yes, all of these were lost to Mr Fluffy buyers.

I am not sure how much longer it will take to find the house – I am patient, and believe the right home will come along eventually, but I do know that I will be paying more than the market value. There are no bargains to be had out there at the moment – thats for sure.