Ray White Cannington Summer Newsletter

Recent near-hysterical articles in the press have muddied the thinking of some people when it comes to determining how to react to the slowdown in the WA real estate market.

At the outset, it’s important to point out that a couple of the most alarming predictions come from commentators based overseas and are in contrast to the measured views of the overwhelming majority of local commentators.

In my 25 years in real estate in the area, I’ve been through a number of similar phases in the residential property cycle. If the past is anything to go by, a boom is inevitably followed by a quiet period before the next take-o!.

This means it’s time for investors in particular to be patient. Unless you have to sell, you should be working on reducing your debt while you wait for the next

upturn.In the early 1990s – a period of very low

growth – people disappointed with the poor capital appreciation of their properties baled out of the market.

Three years later, when the market resumed a strong upward trend, they lived to regret that decision. Property owners who held on for those three years were well rewarded for their patience. Importantly, those who bought during the slow three year period, also reaped the bene"ts of the next upward phase in the property cycle.

The lesson was clear. In a low growth period, investors should concentrate on building their equity and their portfolios.

Some investors have clearly learnt this lesson, for there are a number of them coming into our o#ce looking for opportunities.

So if you’re not over-geared, think seriously before you sell. And whether you’re planning to buy or sell come in and talk to us and let’s see what is possible in today’s market.

Now is the time to build your equity and your portfolio

Council takes the leash o! housing development in East Cannington and Queens Park

Michael & Karen Smart, Principals

You may recall that in an earlier edition of this newsletter we spoke of a proposed amendment to the Town Planning Scheme which would bene!t people wishing to undertake small residential developments in East Cannington and Queens Park.

Well, the legislation has now been gazetted, giving the green light to in"ll housing developers who can now go ahead with their planned projects. It is believed some developers had put their projects on hold awaiting a "nal decision from the Canning Shire.

So what does the legislation mean for developers and property owners? For the past

20 years residential property developers in these suburbs have been required to contribute an amount equal to 10% of land value to help meet the Council’s open space costs. This rate has now been halved to 5%.

For owners of sub-divisible property in these two areas, the amendment should increase the value of their properties. Because it will represent a cost saving to developers, the new legislation should also encourage more development in the two suburbs.

If you own sub-divisible property in the areas concerned and would like some idea of your options give Michael Smart a ring – 0418 921 293.

A Merry Christmas and

Happy New Year from us at Ray White Cannington

Is your house appropriate for your retirement?We all know we’re living longer

and with the cost of ‘aged care homes’ rising, more and more

people are choosing to stay at home and receive care in their own homes. Not only is it cheaper, it is often a more satisfying place to age.

With this in mind, people who have reached retirement age need to consider if their home is likely to be appropriate for their older age.

If, for example, you’re still living in the home in which you brought up your family, the question arises – do you need the same amount of space?

For some people, parting with the family home can be an emotional wrench but many retirees, when they consider the practicalities of their homes, decide the move to a smaller home or a retirement estate is worth it in the long run.

Some people simply opt for a smaller home near to where they’ve been living so they can maintain their contacts and be in familiar surroundings.

One of the advantages of downsizing is that it might bring home payments to a conclusion. Better still, it might result in freeing up some capital which can perhaps be used for a holiday or put to another use.

In considering whether it is a viable proposition to stay in your home it is worth having a reality check. What will your physical condition be like in say !ve or 10 years time?

Maybe the home will be !ne for you – or maybe it might be !ne with a few modi!cations.

Key considerations that often need to be made are the demands of the

garden – especially swimming pools and whether your home has stairs. Another consideration is the likely need for maintenance.

Many people in later years come to resent the demands of their swimming pool if there are no grandchildren to enjoy it. And, of course mowing lawns and pruning trees can be a chore – even if some of these tasks can be farmed out to helpers.

One of the !rst things to consider if you have a double storey home is your stairs. Going up and down, up and down, can be a trial for people with sore knees.

It may be possible to re-arrange things by changing bedrooms for example so that you can spend most of your time on one level. You don’t want to be negotiating stairs at night, so ensuring your bedroom and an accessible bathroom is on the same level is a good idea.

Another important thing to consider for later years is eliminating the potential

causes of ‘falls’ and perhaps installing grab bars and grips in the bathroom, assuring sturdy handrails are on both sides of steps, maintaining good lighting especially at stairs, halls and entries and soft lighting for night time mobility.

Other age-friendly home features Direct, level access from the house to the garageWide doorways and hallwaysNon-slip "oor surfacesA front entrance without stepsUser-friendly !xtures for doors and windows that don’t require a strong gripSecurity

If you’re at the point in life when downsizing seems to be a proposition, call us. We can give you an indication of what your home is likely to fetch in the current market and what you would pay for something smaller.

A touch of triviaThe next time you’re washing your

hands and complain because the water temperature isn’t just how you like it, think about how things used to be. Here are some facts about the 1500s:

Most people married in June because they took their yearly bath in May, and they still smelled pretty reasonable by June.

However, since they were starting to smell, brides carried a bouquet of "owers to hide the body odour.

Hence the custom today of carrying a bouquet when getting married.

Baths consisted of a big tub !lled with hot water. The man of the house had the privilege of the nice clean water, then all the other sons and men, then the women and !nally the children. Last of all the babies.

By then the water was so dirty you could actually lose someone in it. Hence the saying, “Don’t throw the baby out with the bath water!”

Electricity prices are climbing and it looks like the upward trend is going to continue for some time. Fortunately there is a lot you can do to reduce your electricity consumption and cut your energy bills by a signi!cant amount.

One of the simplest and most cost-e#ective things you can do to save energy is to reduce your amount of standby power – this is the power used when an appliance is not in use, but is plugged into the wall with the plug switch on the ‘on’ position.

Apparently, the average Australian home wastes 10% of its total energy use on standby power. So to start saving money immediately, just "ick your plug switches to ‘o# ’.

You can also keep your energy costs down by adequately insulating your walls and ceiling. This can save 20 to 30% on your home heating bills. With heating and air conditioning, ensure you take time to choose the most energy e$cient options.

Shut doors to close o# rooms you are not using, cut hot water usage by installing a water-e$cient showerhead and consider using cold water when washing clothes. Front loading washing machines will usually cut hot water use by 60 to 70% compared to top loader machines.

By switching to compact "uorescent light (CFL) bulbs you can cut your lighting costs by 66% and produce fewer greenhouse gas emissions. CFL bulbs also last eight to 10 times longer than the old globes.

Cut costs by conserving energy Summer tipsSet the air conditioner temperature as high as you feel comfortable. The ideal to aim for is 24 deg C or above. Every one degree Celsius decrease can add as much as 10% to your cooling costs.Close your curtains and blinds in the day to keep the heat out.Turn your air conditioner on early during very hot days, and run on low fan settings.If you enter the house and it’s very hot, open the windows and doors to "ush out the heat before switching on the air conditioner.In the evenings, open the doors and windows to let the cooler breeze "ow through the rooms.

As your lifestyle changes, or you simply outgrow your current home, you’ll !nd yourself thinking

about a new home. But do you renovate your current home or move?

If you’re happy with your existing neighbourhood and your children are at local schools, it might make renovating the more appealing option.

But before you start raising the roof, have a careful look at your !nances. It’s important to be realistic about your budget and !nd out the complete cost of the planned renovations.

You also need to be careful of over-capitalising. Be wary of putting too much money into your renovations – money that might never be recovered in a sale.

Renovations also require you having to deal with council regulations, legal issues and the day-to-day inconvenience of living in a construction zone.

It’s important to be aware that the timing of your renovation in relation to the length of time you occupy the premises can be relevant to whether the project is worthwhile or not.

A study in the U.S. found most improvements done with the cost of professional tradesmen do not result in an immediate capital growth equivalent to the cost of the project.

It found that remodeling a kitchen gave the best return – between 80% to 87% of the money invested.

This would indicate that the best time to renovate is after you’ve bought with the intention of staying in the home for some time to come. The worst time to renovate may be just before selling.

This is because capital growth is in the value of the land whereas buildings depreciate.

A complicating factor is that building costs are always rising. Nevertheless there is a general opinion that the smaller the percentage of land involved, the more economically viable a renovation.

Hence, spending money on renovating a home unit or "at could give an immediate pro!table return, whereas you might be better leaving the renovation of a house to the next owner if you think you’ll only be in it for a relatively short time.

But of course there is one further consideration. A home with a modern kitchen may be much easier to sell than a home with a dated kitchen.

If renovation is something you’re considering, ask us for an opinion. We can give you our thoughts as to whether it’s likely to be worth your while.

renovate or move?Is it better to

Mee

t the

team

:

Michael SmartPrincipal

Steve HowellProperty Advisor

Susan HallProperty Manager

Allannah ArmstrongProperty Manager

Kelly LandProperty Manager

Cameron SmartProperty Advisor

Karen SmartPrincipal

Robert HalseProperty Advisor

Damien MillsMortgage Broker

Media Support Services 1300 557 660

Are we seeing the !rst signs of scarcity in the rental market?

$

Potential Annual

Cost Savings *

Annual Greenhouse Gas Savings

(CO2-e)**1. Replace your old water heater with a gas boosted solar water heater $

$Replacing an electric water heater Replacing a gas water heater

$630 $491

3,490 kg 1,099 kg

2. Install ceiling insulation $383 1,212 kg

3. Turn o! the second fridge $158 783 kg

4. Turn o" appliances at the wall when not in use, saving standby power $142 703 kg

5. Use a ceiling fan as an e!ective cooling alternative on most summer days $129 637 kg

6. Reduce the length of your shower from 8 mins to 4 mins

$

$

Electric water heater Gas water heater

$113 $69

559 kg 165 kg

7. Wash clothes in cold water instead of hot water $ $

Electric water heater Gas water heater

$98 $60

484 kg 142 kg

8. Turn o! the home computer when not in use, or activate standby shutdown feature $84 415 kg

9. Replace 4 incandescent globes with 4 compact "uorescents, in high use areas $62 305 kg

10. Choose your air conditioner wisely. If you do decide to purchase a reverse cycle air conditioner, ensure it is an energy e#cient high-star rated air-conditioner, rather than a low-star model. Remember, evaporative air conditioners have much lower greenhouse gas emissions than equivalent refrigerated air conditioning systems.

$63 291 kg

* Savings achieved depend upon your current energy usage patterns and will vary according to the mix of actions available to you.

**Buy GreenPower - You can be part of the solution to climate change and support the renewable energy industry by choosing accredited GreenPower for your energy needs. Your home could be powered by sustainable energy.

Top 10 Energy Smart Tips for your home

In this issue we focus on how to save on energy costs in your home. Achieving these savings has become increasingly important because of recent and future increases in electricity costs as well as the desire by many of us to help reduce greenhouse gas emissions.

Elsewhere in this issue you will "nd some thoughts on reducing your energy costs This table compiled by the Government of Western Australia’s O#ce of Energy gets to the nitty gritty, putting "gures to various energy saving measures that you could implement.

REIWA’s recently released !gures for the September quarter showed Perth vacancies dropping by 1% to 3.4%.

And in examining our own rental book we "nd that our vacancies are down to about 1.5%.

Looking at this trend it’s hard to avoid the conclusion that we are in fact seeing the "rst signs of scarcity in the rentals market. Scarcity tends to put pressure on weekly rentals and intending tenants would therefore be advised to sign up to leases soon to avoid rental increases which could be on the cards next year.

For investors, the "gures could be regarded as heartening following a period of a couple of years in which weekly rentals stagnated and in some cases pulled back a little.

4000 properties rezoned – what does it mean for you?

City of Gosnells Amendment 111

An amendment to the City of Gosnells’ Town Planning Scheme has changed the

residential density coding of about 4000 properties in the area.

In a long awaited development, Amendment No. 111 has changed the density coding of these properties from R17.5 to a Split Code Residential zoning with a lower “as of right” R20 code and a higher code ranging from R25 to R60. The move will open up new opportunities for in"ll housing development in the area.

The introduction of the split coding is intended to provide opportunities for the redevelopment of land in areas that are well serviced by public transport and close to commercial centres.

The aim is to:Make more e#cient use of land near commercial, community and public transport facilities;Increase the use of public transport and other more sustainable travel modes like cycling and walking;Improve the viability and vitality of local shops and other businesses; andProvide a range of housing types and sizes to meet the current and future needs of a growing and diverse population.

You will probably have received a notice telling you of the amendment. However, to identify you options it may be a good idea to have a brief chat to Michael Smart. Give him a call at Ray White Cannington and he’ll gladly meet with you.