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Rose Bay and its upward trend

Rose Bay’s median house value has increased year on year whereas other surrounding suburbs have decreased year on year. Rose Bay’s median house value according to www.pricefinder.com.au is $3.9 million currently and was at $3.8 million this time last year. Surrounding suburbs like Vaucluse median house value is $4.7 million currently and was $5.8 million this time last year and Bellevue Hill is currently at $5.25 million and was at $6.3 million last year.

It’s hard to pinpoint the exact reasoning behind Rose Bay’s increase in median housing value. It could have something to do with the fact that many homes are on smaller sized blocks compared to Rose Bay’s surrounding suburbs (and home buyers entering the market enter at the lower end). Vaucluse and Bellevue Hill has a considerable amount of large sized blocks which were sold for huge amounts in 2017, so if any of these purchasers were to sell this year they probably have not received an increase on value after the peak of the market in 2017.

2020 will be an interesting year for housing prices in Sydney. A bull run like 2011-2017 probably won’t be back for many years to come if at all.

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Kirribilli. What a suburb!

Kirribilli is home to the Prime Minister and the Governor-General. It is a picturesque peninsula and is populated with apartments, town houses and homes. According to the 2016 Census, 3,800 people call Kirribilli home with professionals making up 48% of the population compared to that of 23% nationally. Lawyers and bankers are the most prominent professions. The median weekly income is $1,424 compared to the national average of $662.

Homes felt a drop in median values in 2017 wheres apartments barely felt the downward pressure, indicating that the professionals who desire to live in this exclusive enclave are still striving to do so. Home sales have been slow moving to sell with an average of 149 days on market and rentals move relatively quickly with 23 days on market.

Kirribilli is a strong investment suburbs as there is demand from high paid professionals to live in the suburb. The lucky apartments that have one of the most spectacular views in Sydney of the Bridge and Opera House will always be worth a lot of money to someone. Especially overseas investors looking for that postcard view they had always seen on TV/the internet.

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The $30million Boat House

It’s quite amazing a parcel of land sells for $30million in 2017 with nothing but a timber boat shed on it. However, the true worth of this property lies within the very special land parcel. At a staggering 1,974 sum it has the potential to be subdivided and the value of 2 x waterfront homes could well exceed $60 million after completion.

Furthermore, there are literally no waterfronts that exist with a 4 boat berths in Sydney. The floating marina is one of the most unique things about the property. It’s not just the amount of boats you can berth, but the size. The berths can accommodate up to 80 feet boats.

Even with the flat Sydney market in 2019, a $30 million purchase of this lot in 2018 has the potential to be sold for a considerable amount more depending on the owners ability to unlock the land’s full potential.

Well known Sydney family, the O’Neils, purchased it for £9,000 in 1958; they held the property until its sale in 2017.

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Rona House and its illustrious history

This magnificent manor was built in 1883 in the victorian rustic gothic style for industrialist Edward Knox and was designed by architect Gustavus Morell.

Edward Knox’s father started the C.S.R Sugar company. Edward went to school at Knox and after graduating joined the family company. He expanded operations of C.S.R into Queensland, Fiji and New Zealand.

The architect of Rona House, Guastavus Morell, was born in France and is also well known for designing the castle in Darling Point, Swifts.

The Knox family and it’s future generations lived in the house for more than a century until 1989 when the Little family purchased it for $1.25 million in 1991 followed by the purchase from well-known Sydney businessman John Schaeffer for $9.6 million in 2005. The Agnew family purchased it recently in 2018 for $58 million.

Rona House has certainly seen Sydney and the families that have lived it in grow and will surely do so for years to come. It is a beautiful part of Sydney’s history.

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Great Australian Architect’s legacy

The Man Kyoto is a secret garden sanctuary in the middle of a forest in Kyoto Japan. One of Australia’s greatest architects, Kerry Hill, designed it and was one of his last projects before his passing away in 2018. Mr. Hill specialised in hotel design in tropical Asia.

The Man Kyoto is strikingly minimalist. The hotel has 26 guest rooms with floor-to-ceiling windows which frame the spectacular natural surroundings. It was designed to foster peace, relaxation and contemplation. All decorative artefacts, whether it be a vase or artwork, have been individually curated for each space.

The use of shades of black contrasted by light timbers creates spaces that are warm and cosy. This was a true masterpiece, which Kerry Hill left to the world, before he left.

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Would you buy a $10 million shell?

This remarkable 2-level penthouse apartment currently sits high above the Coca Cola sign in the Zenith building in Potts Point.

The penthouse has over 600 sqm in combined outdoor and indoor living. It presents an amazing opportunity for a buyer with imagination who can use this blank canvas to design and build their wildest dreams.

The apartment has 360 degree views of the city, a number of balconies and floor to ceiling glass.

If you have a spare $10 million grab yourself a bargain today.

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4 OUT OF 5 ARE UNDERINSURED

An alarming 80 per cent of property owners are underinsured according to data from the Insurance Council of Australia.

While some may underinsure their property on purpose, believing that an event may never happen to save on costs; there are many home owners and investors that are unaware that they may be underinsured.

It is important to regularly review your insurance policies to ensure that you are adequately covered, and the policy terms are still the same.

When reviewing your cover consider the following:

Building cover

  • Do not include the land value in the insured amount.
  • Have you made any renovations, alterations or additions to the property? These should be factored into the sum insured.
  • What is the current replacement building cost? This is not market value, but the current cost of building the same premises again. This value needs to reflect the costs involved in restoring the property to its existing condition, considering current building standards and codes, and factoring in rising costs due to inflation, labour, etc. To get an accurate estimate of replacement costs, we recommend that you speak with a quantity surveyor or builder or there are online building replacement calculators.

Contents cover

  • Have you added to your possessions, fixtures and fittings?

Landlord cover

  • Has the way you rent out the property changed? For example: changed from short-term to fixed-term, or vice versa.
  • If the type of lease has changed, it is imperative that the type of insurance policy is changed too, as different policies suit different situations and landlords may find themselves inadequately insured for their needs.
  • Has the rent increased? If the weekly rent has increased significantly (for example, exceeds $1,500 per week), you may need to contact your insurer and discuss if this affects your policy in any way?

If disaster strikes, landlords can find themselves in financial trouble if they have failed to update their insurances. Take the time now to review your insurance cover.

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SHORT TERM AND HOLIDAY RENTAL REGULATIONS

You may have heard about the new planning regulations coming into effect for short term and holiday rentals (STHR) in NSW. The latest update is that the proposed legislation has been passed by parliament but has not yet been enacted.

 

At this time there is still not a great deal of detail available with regards to the legislation itself.

 

The information that is available to us right now indicates the following:

 

  • The NSW government will establish a single definition for what constitutes Short term or holiday rental accommodation.
  • When the host is present on-site overnight, STHL will be allowed as ‘exempt development’ all year. This means anyone renting a room in their house or part of their property, such as a granny flat on a short term basis will be allowed to continue to do so without a cap.
  • When the host is not present on-site overnight, STHL will be allowed as ‘exempt development’ with a limit of 180 days for hosts in Greater Sydney and 365 days in all other areas of NSW. This will mean that full time short term rental properties will have a 180 night cap imposed. We are currently working to find out if there is any kind of application or DA process that will allow for our owners to be exempt from this cap. If there is not, then we will be recommending to our owners that we utilize a combination of short and long term rentals throughout the year, which many of our owners already do.
  • Councils outside Greater Sydney will be able to decrease, through their local environmental plans, the 365 day threshold to no lower than 180 days per year and
  • Certain planning rules will apply to properties on bushfire prone land.
  • There will be changes made to the Strata Schemes Management Act that will give strata committees the power to decide if short term rentals will be permitted or not. We encourage all of our owners to keep an eye on their strata notifications and attend strata meetings to stay up to date and ensure that you have your say on any updates to your strata by laws.
  • The NSW government will introduce a code of conduct for STHR that hosts, agents, platforms and guests must adhere to. They will also establish a register and online database that will record any problem guests and hosts that are banned from using accommodation platforms. We think this is a great initiative that will give us an extra tool to help us ensure that we continue to get the highest quality tenants and guests for our owners.

 

For further information on what we have outlined here please visit Fair Trading Website and Planning NSW website.

 

This new policy has not yet been implemented. We will be keeping you updated as and when more information becomes available to us. Feel free to send us an email if you have any questions on how these changes will affect your property.

 

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FIVE COMMON PROPERTY INVESTING MISTAKES

Property investing has long been a mainstream investment strategy for both novices and experts alike. Yet, as rewarding and effective as property can be as an investment, there are some pitfalls that are unfortunately all too common. These can render investments potentially ineffective, if not costly. Here are a few key areas to consider before buying a property, making offers or signing on the dotted line.

Poor financial structures

With property being a major purchase and one that attracts considerable costs in addition to the purchase price, such as stamp duty and legal fees, it is important to consider the ‘how’ of buying just as much as the ‘what’. Other than buying the investment in your own name, you might want to set up a family trust or use your superannuation fund and turn it into a Self-Managed Super Fund (SMSF), to undertake the purchase. Changing the ownership of the property later is going to be a costly exercise, so it is worth considering the options before you decide to buy the right property. Likewise, with the many loans and mortgage products out there, it is good to consider the options before you pursue the right property. Getting the right advice from suitable professionals with experience in structuring investment portfolios is highly recommended.

Lack of solid research and due diligence

Researching the market, looking at competitive pricing, rentability, vacancy rates, and proximity to employment centres, education, transport and shopping should all be part of your due diligence process for sourcing a suitable investment property/location. This should happen well before you even think about buying a property, which many investors overlook. In addition, undertaking research into infrastructure, both current and future, should be a priority as these can have a major bearing on the performance of your investment over time.

Using emotions to make decisions

The most important thing to remember is that you are not buying a home – you are buying an investment. All too often people make investment decisions based on emotion rather than looking at the figures that should be the basis of any investment decision.

 

Over-borrowing without a safety buffer

Interest rates are the lowest they have been and now is the time to buy. However, always allow yourself a buffer in case there is a shortfall in rent; the property requires unexpected repairs or maintenance, or the interest rate goes up.

All these factors can easily occur and you should never leave yourself in a vulnerable situation causing unnecessary stress or potentially even jeopardising your investment. A rule of thumb is to allow for at least 3 months of costs as a buffer as well a having all relevant insurances in place to minimise risk and protect your investment and your capital.

Lack of strategic planning

Fail to plan then plan to fail. It is important to have an investment plan. Know how you need to finance the property and how it will build your wealth. Know your short and long-term goals. Will it reduce your tax bill (negative gearing), add extra income or are you looking at buying with a view of renovating/redeveloping it later?

Property investing is a great wealth creation strategy. To avoid unnecessary risks and mistakes, it is always wise to seek advice from people that are experienced. Seek out qualified experts who hold their own successful property portfolios.

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Our Referral Program

We are currently looking to expand our property portfolio. So if you know anyone who could benefit from our services then please do not hesitate to put them in touch.

*excludes holiday rental properties that are available for less than 6 months.