Consumer Price Index data was released this week which showed a sharp rise in inflation during the March quarter, some of this due to the floods and inclement weather during the quarter, some not. The RBA targets long-term inflation of between 2% and 3% on an annual basis. The all groups inflation indicator increased by 1.6% during the quarter, well above the market expectation and taking annual headline inflation to 3.3%. Importantly, the RBA’s preferred measures (weighted median and trimmed mean) increased by a much lower 0.8% and 0.9% respectively during the quarter. On an annual basis these two measures of underlying or ‘core’ inflation remain well within the RBA’s target range at 2.2% and 2.3% respectively.
The items which recorded the greatest quarterly increases in inflation were: education (5.7%), health (3.9%), food (2.9%) and transportation (2.7%). The increase in education and health is a seasonal blip which occurs each year during the March quarter however, only the increase in food can really be attributed to the weather during the quarter and what’s more that can only be partially attributed to loss of crops. Although there was a sharp rise in inflation some items did record a fall: household contents and services (-1.6%), clothing and footwear (-0.7%) and recreation (-0.6%).
The RBA has their May board meeting next Tuesday and will decide whether or not to adjust official interest rates. Although the CPI figure came in well above market expectations the RBA has stated that they will look through any short-term effects of the cyclones and floods. We would expect that rates will remain unchanged however, given the sharp rises in transportation (petrol) and some strong increases elsewhere, if these persist the RBA may have to lift rates sooner rather than later.
Source: RP Data
Friday, April 29, 2011
Thursday, April 28, 2011
What to do if your property is passed in at Auction
It can be a very frustrating experience to have your property passed in at auction. The lead up to and auction themselves are often emotion-charged experiences and after all of that it can be hugely anticlimactic if the property does not sell at all.
Realistically, the possibility that your property may be passed in should be a consideration when you are initially choosing an agent - you need to feel confident in the agent’s ability to negotiate the best deal on your behalf should your auction be unsuccessful.
So, what are you to do if the possibility becomes a reality - your property is passed in at auction?
The first step is not to worry – the result is not necessarily a bad one. The good news is that the majority of homes will go on to be sold afterwards, if not in the hours immediately post-auction then usually in the days following. Many prospective buyers will even increase their offering from what was bid at auction in order to secure the property, sometimes reaching the reserve price.
It is therefore important to stay calm and focussed – you are still going to be called on to make decisions and to do so requires a clear head.
It is usually the case, and the law in some Australian states, that the first right of negotiation after a property has been passed in rests with the highest bidder. These discussions invariably start directly after the auction has finished with your agent acting on your behalf.
It is important to go into these preliminary negotiations with somewhat of an understanding as to why your property did not sell. For example, you may have set a reserve price that is deemed to be higher than market value, and thus buyers were not prepared to meet it. Having a general idea (aided by your agent’s advice) should help you to better reach a settlement that is favourable to you as well as being realistic.
Depending on your need to sell, it will also be important to go into these discussions prepared to negotiate. You want the best price; however your property may also have been sitting on the market for a fair amount of time, or you could be financially committed to another property that requires funding to settle. It is important that your agent is aware of your situation and the importance of achieving a sale, keeping these in mind throughout their negotiations with potential buyers.
Remember that your agent is looking out for your interests and wants to achieve the best possible sale price for you. Accept that your agent knows the area and market conditions, and try to take their advice in situations where you are unsure as to what will be the best action to take.
In the end, it is a possibility that every auction could end with the property in question being passed in. Just remember to stay calm and focused throughout the negotiations that take place afterwards and, with the help of your agent, you should be able to achieve a satisfactory sale.
Realistically, the possibility that your property may be passed in should be a consideration when you are initially choosing an agent - you need to feel confident in the agent’s ability to negotiate the best deal on your behalf should your auction be unsuccessful.
So, what are you to do if the possibility becomes a reality - your property is passed in at auction?
The first step is not to worry – the result is not necessarily a bad one. The good news is that the majority of homes will go on to be sold afterwards, if not in the hours immediately post-auction then usually in the days following. Many prospective buyers will even increase their offering from what was bid at auction in order to secure the property, sometimes reaching the reserve price.
It is therefore important to stay calm and focussed – you are still going to be called on to make decisions and to do so requires a clear head.
It is usually the case, and the law in some Australian states, that the first right of negotiation after a property has been passed in rests with the highest bidder. These discussions invariably start directly after the auction has finished with your agent acting on your behalf.
It is important to go into these preliminary negotiations with somewhat of an understanding as to why your property did not sell. For example, you may have set a reserve price that is deemed to be higher than market value, and thus buyers were not prepared to meet it. Having a general idea (aided by your agent’s advice) should help you to better reach a settlement that is favourable to you as well as being realistic.
Depending on your need to sell, it will also be important to go into these discussions prepared to negotiate. You want the best price; however your property may also have been sitting on the market for a fair amount of time, or you could be financially committed to another property that requires funding to settle. It is important that your agent is aware of your situation and the importance of achieving a sale, keeping these in mind throughout their negotiations with potential buyers.
Remember that your agent is looking out for your interests and wants to achieve the best possible sale price for you. Accept that your agent knows the area and market conditions, and try to take their advice in situations where you are unsure as to what will be the best action to take.
In the end, it is a possibility that every auction could end with the property in question being passed in. Just remember to stay calm and focused throughout the negotiations that take place afterwards and, with the help of your agent, you should be able to achieve a satisfactory sale.
Wednesday, April 27, 2011
Things to consider when purchasing an apartment
There is no doubt that apartment living can be a very attractive housing option for many people. But before purchasing an apartment, it is important to understand how the ownership of an apartment differs from that of a house, and the responsibilities that you may inherit upon buying into an apartment complex.
Ownership
In the majority of cases the ownership of an apartment or unit comes under strata title – which refers to the individual ownership of a single unit within a multi-unit complex. In owning your apartment you also become a joint owner of the common property with the other owners in your apartment complex.
Depending on your strata scheme, areas such as your external walls, floor and roof may be considered common property, and thus do not below to you. This means you may not be able to renovate or alter them.
Levies
Owners of apartments are obligated to pay rates for the upkeep of the common building of which they are a part owner. Apartment complexes may have two separate funds running concurrently to which the owners must contribute. Typically an Administrative Fund is used for day-to-day operational expenses, while a Sinking Fund is in place for long term expenditure. The Owners Corporation of a building will estimate how much is needed for each year to cover all costs, and this figure is then split between all owners, becoming a fee known as a ‘levy’.
Before buying into an apartment building it is important to consider the state of the building to ascertain whether or not extensive renovations or repairs may need to be undertaken in the near future. If this is the case, and the funds have not already been raised, you as the owner may be asked to contribute to pay a Special Levy to cover the costs. This information can usually be found in the Minutes of meetings held by the owners of the building, and should be identified if you have a Strata search carried out.
Try not to fall into the trap of selecting a building purely because its levies are low. This could be a risky tactic, particularly if the building will be in need of repairs shortly after your purchase. While your general levies may stay the same, a Special Levy established to cover the costs of the work could be far more than you budgeted for.
Pets
Some apartment buildings allow animals while others don’t. If you wish to live with a pet it is important to check this before making your purchase.
In your search for a suitable apartment you will find that many buildings vary, from the way they are maintained to the levies charged. Be sure to have the appropriate studies and reports completed so that you can ensure there are no surprises later on into your ownership.
If you require any further information please don't hesitate to contact me.
Ownership
In the majority of cases the ownership of an apartment or unit comes under strata title – which refers to the individual ownership of a single unit within a multi-unit complex. In owning your apartment you also become a joint owner of the common property with the other owners in your apartment complex.
Depending on your strata scheme, areas such as your external walls, floor and roof may be considered common property, and thus do not below to you. This means you may not be able to renovate or alter them.
Levies
Owners of apartments are obligated to pay rates for the upkeep of the common building of which they are a part owner. Apartment complexes may have two separate funds running concurrently to which the owners must contribute. Typically an Administrative Fund is used for day-to-day operational expenses, while a Sinking Fund is in place for long term expenditure. The Owners Corporation of a building will estimate how much is needed for each year to cover all costs, and this figure is then split between all owners, becoming a fee known as a ‘levy’.
Before buying into an apartment building it is important to consider the state of the building to ascertain whether or not extensive renovations or repairs may need to be undertaken in the near future. If this is the case, and the funds have not already been raised, you as the owner may be asked to contribute to pay a Special Levy to cover the costs. This information can usually be found in the Minutes of meetings held by the owners of the building, and should be identified if you have a Strata search carried out.
Try not to fall into the trap of selecting a building purely because its levies are low. This could be a risky tactic, particularly if the building will be in need of repairs shortly after your purchase. While your general levies may stay the same, a Special Levy established to cover the costs of the work could be far more than you budgeted for.
Pets
Some apartment buildings allow animals while others don’t. If you wish to live with a pet it is important to check this before making your purchase.
In your search for a suitable apartment you will find that many buildings vary, from the way they are maintained to the levies charged. Be sure to have the appropriate studies and reports completed so that you can ensure there are no surprises later on into your ownership.
If you require any further information please don't hesitate to contact me.
Monday, April 11, 2011
JUST SOLD
205/732 Military Rd Mosman
Contemporary 1-bed apartment with unbelievable storage
Situated in the heart of Mosman Village in the recently built ‘M on Military’ complex, this one bedroom apartment has so much to offer. With an incredible 358sqm on title, this is not one to miss!
- 291sqm of secure storage
- Open plan combined lounge and dining
- Modern kitchen includes Smeg appliances
- Large bedroom with built in wardrobes
- Ultra modern bathroom
- Internal laundry
- Large balcony on the quiet side of the building
- Reverse cycle split system air conditioning
- Lift access and video intercom system
- Security undercover carspace
For further details please contact Joshua Wygoda on 0414 666 190.
JUST SOLD - UNDER THE HAMMER
60 Willowie Road Castle Cove
Boasting an elevated northerly aspect with sublime water views over Middle Harbour, this substantial 3 storey, 4 bedroom home offers copious accommodation in a quiet location with views that can never be built out. In original condition and beckoning renovation, this is a rare opportunity to enter this exclusive neighbourhood and create a family home perfectly tailored to your requirements.
- 4 double bedrooms opening to harbour facing balcony
- Spacious formal lounge/dining with cathedral ceilings
- Family room plus eat-in kitchen
- 4 bathrooms inc. ensuite
- 2 auto garages plus driveway parking
- Large in-ground pool
- Prized north facing, tranquil location
- Renovate to create extensive family home
For further details please contact Joshua Wygoda on 0414 666 190
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