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REIQ Demands Qld Gov’t Protect Our Property Market Now

market data

The Real Estate Institute of Queensland (REIQ) is demanding urgent action from the Palaszczuk Government to protect Queensland’s property market right now as a new wave of contagion threatens to undo the State’s recognised efforts of containing COVID-19 to date.

CEO of the Real Estate Institute of Queensland (REIQ) Antonia Mercorella said the peak body had already made numerous calls on behalf of Queensland’s real estate industry for essential temporary measures to help minimise the economic impacts of COVID-19 on the sector. These include a 75% reduction in stamp duty and extending the First Home Buyers Grant to established housing.

Following four months of gains to April 2020, property values have fallen nationally by 1.7% following a third consecutive month of declines in July 2020, with CoreLogic’s Hedonic Home Value Index dropping 0.6% over the month (following -0.4% in May and a further -0.7% in June[1]).

“Record low interest rates, significant policy support and loan repayment holidays for distressed borrowers coupled with an earlier reopening of the economy and our State’s borders have meant the various worst-case scenarios of 20-30% price falls that some economists predicted are unlikely,” said Ms. Mercorella. “However, with Queensland’s unemployment currently at 7.7%[2], consumer sentiment down 5.8 points this month (the second largest fall this year) and the latest consumer price index figures plummeting to a record 72-year low, any significant drops in property prices will only adversely affect consumer confidence and further and stymie economic growth.

“A stable property market is critical to Queensland’s economy during this unprecedented pandemic recession. What’s required is more than token stimulus measures such as land tax liability deferments, when most Queenslanders are not liable to pay land tax, or limited recovery initiatives such as the HomeBuilder grant which outprices many people from qualifying,” continued Ms. Mercorella. “A widespread second wave of COVID-19 infections coupled with the potential for renewed border closures and stricter lockdowns will derail Queensland’s economic recovery. Timing is everything. That’s why we need urgent action now that will have immediate effect.”

In order to maintain stability and optimism in the Queensland property market, the REIQ is urgently asking the Queensland State Government to implement:

  • A 75% temporary reduction in stamp duty: A significant short-term reduction in stamp duty payable on property transactions will have a positive effect on market confidence, boost listings (currently down -12.5% YTD[3]), increase buyer/seller activity and real estate transactions (which fell to their lowest levels in April 2020 (-40%) with sales almost 31% lower than this time last year[4]) and boost investor interest which is needed to offset Queensland’s extremely tight rental market (currently 1.6%[5]).
  • Extend the First Home Buyers Grant to established housing: First home buyers have experienced a 220.3% increase in the price of new construction over the time period 1995/96 to 2017/18 (while CPI over that time was 69.9% and the mean gross household income increased by 64.7%[6]). By allowing first home buyers to access property beyond new construction it will stimulate economic activity through the introduction of increased numbers to the broader property market and expose them to more affordable price points.

“With the NSW Government temporarily axing stamp duty to help boost economic activity to protect its property sector, it’s time our government took similar action,” said Ms. Mercorella. “Particularly when you consider total tax revenue collected across all levels of government increased $31.234 billion (5.9%) from $528.60 billion in 2017/18 to $559.83 billion 2018/19 which included a 7.9% increase in taxes on property ($2.38 billion[7]) – it demonstrates there’s scope for additional measures such as what we’re asking to be temporarily implemented to protect our property market.

“Furthermore, these measures will help to protect the jobs of over 50,000 people who directly rely on our State’s second largest employment sector for work while continuing to deliver housing across Queensland’s thousands of local communities,” added Ms. Mercorella. “As the single biggest purchase in most people’s lives, we call on every Member of Parliament to help protect the property market in their electorates and implement these urgent measures to minimise the economic impacts of COVID-19 on Queensland’s real estate sector before it’s too late.”

[1] CoreLogic Hedonic Home Value Index, August 2020

[2] ABS: 6202.0 – Labour Force, Australia, June 2020

[3] CoreLogic Hedonic Home Value Index, August 2020

[4] CoreLogic Quarterly Economic Review May 2020

[5] SQM Research Quarterly Vacancy Rates July 2020

[6] ABS: 4130.0 – Housing Occupancy and Costs, 2017-18

[7] ABS: 5506.0 – Taxation Revenue, Australia, 2018-19

Source: https://www.reiq.com/wp-content/uploads/2020/08/REIQ-Media-Release-PROTECT-OUR-PROPERTY-MARKET-NOW-04082020.pdf

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Gutter cleaning: Who is responsible, landlords or tenants?

gutter with dry leaves

“I need a gutter clean. But is the landlord or responsible for clearing gutters during a tenancy, and why?”

Kaylee Ferguson, Department Manager for The Property Exchange in Subiaco, WA, explains where responsibility falls for gutter cleaning:

“During a tenancy, the landlord/owner is responsible for cleaning the gutters,” she said.

“This [gutter cleaning] is a maintenance item that the owner is required to undertake as part of their upkeep on a property.”

Kaylee recommended a gutter clean every year to avoid any resultant damage occurring to the property.

Why should I have my gutters cleaned?

The gutters on your rental property collect rainwater from the roof. They carry it away from the foundation of the property through downspouts.

Over time, gutters can become clogged with leaves, insects, nests, sticks and other obstructions – particularly over the winter months when storms can affect nearby trees.

Regular maintenance and gutter clearing are essential for a couple of reasons. When debris builds up, it stops your gutters from functioning the way they should.

If you haven’t given much thought to your gutters, don’t worry. You’re not alone! Gutter cleaning is pretty easy to put off. It’s not an easy chore to do, let alone an enjoyable one – but it is important.

When should I have my gutters cleaned?

It’s relatively easy to know when your gutters need a clean. A well-built gutter will be able to handle most normal periods of rainfall. If you notice that your gutters are beginning to drip or overflow, it’s a sign that they need a clean (or a professional inspection).

You may also notice that birds will hang around your roof if they spot pooling water that’s caused by blocked guttering.

As a general rule, it’s worth having your gutters cleaned once a year. The best time to look at them is in autumn or winter, once the trees surrounding your home have shed their leaves.

However, you may need to clean your gutters more than once a year. Do you have pine or eucalyptus trees near your property? These trees shed throughout the year, and often during the hot summer months. If leaves start blocking your gutters during summer, you could have a fire risk. Clearing debris is essential if you live in a bushfire-prone area.

Property owners: DIY safety tips for gutter cleaning

Gutter cleaning and maintenance can keep your investment property safe from potential storm damage. Regular cleaning will help to extend the life of your gutters and prevent further damage to the building structure.

  • Safety first: Accessing your gutters can be dangerous. Ensure you use proper safety equipment to avoid the risk of falling and sustaining an injury. If you use a ladder to access your gutter, ensure it’s stable. Consider having someone assist you with cleaning and maintaining the gutters. Having someone stand below to help secure the ladder can be a big help.
  • Use the right tools: Your local hardware store should have plenty of options to help you clean your gutters. Invest in a good pair of gardening gloves to protect your hands while you clean. Think about grabbing items like a cylindrical brush to scrub the gutters, or a gutter scoop to remove debris.
  • Assess the condition of your gutters: There are a few red flags to look for once you’ve cleared the debris from your gutters. Can you see any holes, cracks or broken brackets? If so, consider arranging for a roof repair specialist to inspect and repair your roof. Unchecked issues can potentially damage other parts of your home.

Source: https://www.rent.com.au/blog/responsible-gutter-cleaning

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Technology that helps renters turn a house into a home

interior design kitchen

As a renter, it can often feel as though you’re asking your landlord if you’re allowed to sneeze in your own home.

Rest assured, when you want to make modifications to your rental, you just need to ask!

However, if you still want to decorate and make your home comfortable without ruffling feathers, there’s some top technology on the market which will help you achieve your goals.

Hanging art

This is often a big one among renters. The landlord is most likely to give the go-ahead, you just need to ask.

However, if you’re concerned, there are ways around making holes in the wall. Using sticky hooks is one way and there has been a lot of advancement in the production of these throughout the years.

Command goes up to a 7.6kg holding weight, so those larger pieces of art can have a place in your household.

Just make sure that you clean the surface of the wall properly before sticking the strip onto it and that it won’t rip away any paint – plaster walls, for instance, aren’t good options.

Command hanging strips range up to $18.

Painting the walls

One of the best ways to brighten up a room is to give the walls a fresh lick of paint.

Renters can feel as though this is a big ask of their landlords, but there are ways to make your landlord feel more at ease about you bringing out the paint and brush.

The rule of thumb for renters is to leave the house as you found it, so if you do paint the walls (with your landlord’s permission), you can always paint them back to the original colour and Tint Paint can help.

The high-tech paint company has developed a colour reader called a Pico, which reads what colour you direct it on to. The company will send out that exact colour from their warehouse.

This means renters can read the colour of the wall prior to painting, so when they leave the rental, they can repaint the walls in the original colour.

Pico retails for $79, which is redeemable in products.

Air conditioning

A lack of air conditioning might not seem like a big deal during winter, but come summer, all you want is some cool air flowing through your stuffy house.

If your landlord isn’t prepared to install air-conditioning within the house, there are some high-tech portable options to choose from.

DeLonghi, which is usually known as a company that makes coffee machines, has a popular portable air conditioner on the market that will keep the whole room feeling cool.

The Pinguino Silent automatically adjusts temperature and humidity, and is very quiet. It also has an A+ energy-efficiency rating so you can feel okay about your bills each month.

The Pinguino Silent retails for $649.

Planting a veggie patch

A garden at a rental usually has to be maintained by the tenant – however, ripping it up and replanting your own veggie patch is likely to give your landlord the grumbles.

High-tech solutions, like the Vegepod, mean you can still have a veggie patch that won’t disturb the pre-existing garden.

The pods are all self-watering, have a protective cover, and produce their own microclimate.

Vegepods start at $169.

Source: https://www.realestate.com.au/news/technology-that-helps-renters-make-a-house-a-home/

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Three Misconceptions About the Queensland Smoke Alarm Legislation

smoke alarm

By now, most people should be aware of the new legislative requirements regarding smoke alarms in Queensland properties. However, three main misconceptions are surrounding these new laws.

The first misconception is the possible extension of the time frame. Now there’s no indication from the government that they are looking to grant a time extension so the deadline of 1 January 2022 is absolutely the date that people are to work towards.

The second misconception is that we have plenty of time. 1 January 2022 sounds far away but it’s not. Especially when you consider that there are around 566,000 rental properties in Queensland and a limited number of skilled electricians to conduct the work, the reality is that the deadline is just around the corner.

The issue of skilled electricians leads to the third misconception, which is that there are plenty of skilled electricians out there to undertake this work. But again, the reality is that we have a shortage of skilled electricians who understand the new legislative requirements.

Our concern is that people are waiting and that we won’t have enough time to meet the pending deadline if people don’t act today.

Not meeting the deadline does present some serious risks to property owners. If you are looking to rent your property, you will not be able to do so if it doesn’t have compliant smoke alarms by 1 January 2022. Similarly, if you are looking to sell your property it will negatively impact the sale process. Therefore, property owners must have compliant smoke alarms by the deadline.

The REIQ is very passionate about this legislation and that is because, at its core, this legislation is about saving lives. There is no Queenslander, there is no Australian who wants to see people losing their lives in house fires. Because of this, it is incredibly important [that] everybody supports these legislative reforms.

Source: https://www.smokealarmsolutions.com.au/three-misconceptions-about-the-queensland-smoke-alarm-legislation

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Australian property market update – April 2020

suburbDespite a drop in transactions and lowered consumer confidence, positive growth in dwelling values has been recorded in most regions across the country, with national house prices up by 0.3% in April.

National property values: April 2020

Overall, dwelling values have increased by 0.3% for the month, 2.1% for the quarter, and 8.3% compared with this time last year. According to CoreLogic, Australian housing values have shown no evidence of material decline in April.

While most regions have shown an increase in dwelling values, the pace at which values grow has slowed, dropped from 0.7% in March, to 0.3.% in April. This slowdown has meant that April’s result is the smallest month-on-month movement since June 2019.

According to Mr Tim Lawless, CoreLogic’s Head of Research, while housing values were up in April, the trend weakened from mid-to-late March. This time period coincides with the implementation of social distancing policies, which had a large effect on consumer confidence.

While dwelling values have generally improved, home listings are 35% lower year-on-year, and 43% lower than the five-year average. However, there’s a silver lining to lowered activity; according to Mr Lawless, lower supply may protect housing values.

“The reduction in advertisement stock levels at a time of low demand is another factor that should help to insulate housing values from a more material downturn,” he said.

Interestingly, it’s the most expensive housing markets that are being impacted the hardest. CoreLogic’s stratified hedonic index shows that the top quartile of the housing market has weakened the most, with quarterly gains reducing from 6.6% towards the end of 2019, to 2.4% over the three months ending with April.

Across capital city housing markets, the top quartile recorded a 0.1% lift in home values, compared with a 0.3% increase across the middle of the market and a 0.2% increase across the lower quartile. This downward trend was most pronounced in Melbourne’s upper quartile market where dwelling values were down 0.8%.

This is in line with what we’ve seen in the past, as premium housing markets have been more reactive to changes in the economy.

Across the board, every capital city except Melbourne and Hobart recorded an increase in dwelling values in April. But, capital city markets showed weaker performance compared with regional markets.

Rents and rental yields

With Australian borders remaining closed to tourists and continued restrictions on short term rentals, an influx of properties have entered back into the rental market resulting in a surge in supply. Job loss from tenants have also resulted in a decline in demand as many negotiate lower rent or choose to move back in with their parents.

These combined pressures of higher supply and lower demand has weakened rents further in April with rents down across seven of the eight capital cities. The largest drops are seen on the east coast with rents falling -1.1% in Hobart, -0.7% in Sydney, -0.7% in Canberra and -0.5% in Melbourne.

Perth is the only capital city to see a lift in rent over April with an increase of +0.1%.

When looking at gross rental yields, Sydney reaches a new record low of 2.92% while Darwin comes out on top as the capital city with the highest rental yield of 5.8%.

In regional areas, regional Vic has the lowest rental yield in April at 4.5% while Regional NT records +6.7%. The national gross rental yield sits at +3.7%.

What does this mean for the Australian property market? What is the outlook for the months ahead?

The rental market

The rental market is expected to be impacted more significantly in the coming months. According to Tim Lawless, rental yields in Sydney and Melbourne are likely to reduce further as vacancy rates rise with lower rents. Australia’s largest cities have a higher level of risk compared to other markets due to their high exposure to overseas migration as a source of housing demand and downturn in foreign students.

Property prices

While there has been a significant drop in transaction volumes and listings, Australian housing values have remained resilient, posting and increase over the month.

Mr Lawless states that “the magnitude of housing values falls depends on a broad range of factors with most hinging on the timing and extent of social distancing policies being lifted.”

The good news is that so far, the strong effort by Australians to social distance has been successful in flattening the spread of Coronavirus as the country’s cases fall below 1,000 for the first time in over five weeks.

State Governments around Australia have announced plans to slowly lift restrictions. This week, the Western Australian state government announced an ease on restrictions which will allow up to ten people at a time to attend open homes or visit display homes.

Mr Lawless concludes that the coming months will provide more clarity on the direction of the housing market and one of the most important indictors for the property market is consumer sentiment. “If consumer spirits start to bounce back to more normal levels, this is when we should start to see housing activity lift from their current low levels”.

Source: https://www.openagent.com.au/blog/australian-property-market-update-april-2020

 

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Residential Tenancies and Rooming Accommodation (COVID-19 Emergency Response) Regulation 2020 – Information for Queensland’s Residential Rental Sector

Covid-19 Emergency Written on Red background

Passed on 24 April 2020, the Residential Tenancies and Rooming Accommo-dation (COVID-19 Emergency Response) Regulation 2020 contains provisional amendments to support tenants and landlords during the COVID-19 emergency.

The regulation, which will be in effect during the COVID-19 emergency period and will end on 31 December 2020, applies to residential tenancy agreements signed before or after 29 March 2020, and landlords, tenants and their agents involved in those agreements.

[View PDF of the COVID-19 Response Regulation]

Here are some of the Act’s implications on people with a residential tenancy agreement in place:

Moratorium on evictions

A landlord (and its agents) are not allowed to evict a tenant for failure to pay rent if: the tenant is experiencing extreme hardship caused by the COVID-19 pandemic.

If they do, the landlord will incur an offence bearing a maximum penalty of 50 penalty points, or equivalent to $6,672.50 at present.

But a landlord is permitted to evict a tenant because of:

  • Any other reason that would be allowed under the RTRA Act, for example, failure to remedy a violation within the allowed remedy period;
  • Failure to pay rent for reasons other than severe difficulties brought about by the COVID-19 crisis.
  • The landlord giving the tenant notice to leave or applying to QCAT for an or-der ending the Tenancy Agreement before 29 March 2020.

The curb on evictions starts from 29 March 2020 and ends on the earlier of a) 39 September 2020; b) the last day of the COVID-19 emergency period, which started on 29 January 2020 and will end when the relevant Minister deems the public health emergency over under section 324 of the Public Health Act 2005 (Qld).

Extending of fixed-term tenancy agreements

If a fixed-term tenancy agreement will terminate on or before 29 September 2020 and the tenant is having a very hard time due to the COVID-19 emergen-cy, the landlord is required to offer the tenant an extension of the term until 30 September 2020 and the offer must be offered prior to the termination of the term of the tenancy agreement.

The tenant is not required to pay any costs that the landlord may incur because of the extension.

If the landlord fails to offer an extension, the landlord will incur an offence equal to the maximum penalty of 50 penalty points.

However, if the tenancy agreement ended before 29 March 2020, the landlord is not required to offer the tenant a term extension, unless the landlord’s notice to leave, or the tenant’s notice of intention to leave is not valid, or the QCAT application is disapproved.

Unpaid rent

If the tenant is provided a show case notice for unpaid rent, the tenant is re-quired to do either of the following within 14 days after receiving the notice: a) pay the unpaid rent; or b) inform the landlord the rent is unpaid because the tenant is experiencing excessive hardship due to the COVID-19 emergency.

Tenancy variation agreements

A tenant and landlord are permitted to enter into an agreement for a rent re-duction for a specific period or a payment plant for unpaid rent, each of which is considered a tenancy variation agreement.

This agreement must be in the approved form and be signed by both the land-lord and the tenant.

Failure to leave due to unpaid rent

If a landlord provides the tenant a notice to leave due to an unremedied breach; and files an application with the QCAT for a termination order due to the ten-ant’s failure to evacuate –

QCAT is bound by the regulation not to approved the landlord’s application if: the unremedied breach concerns the unpaid rent; and the rent is not paid be-cause the tenant is experiencing extreme hardship due to the COVID-19 emergency.

Virtual inspections

A landlord or its agents are only allowed to inspect the premises or to show them to prospective buyers or tenant through:

  • Virtual inspection: an electronic way of conducting visual inspection
  • Video conferencing
  • Providing access to photos or videos sufficient to allow a judgment to be made on the state of the premises.

For more important provisions relating to residential premises under the newly passed Residential Tenancies and Rooming Accommodation (COVID-19 Emergency Response) Regulation 2020, visit: https://www.legislation.qld.gov.au/view/pdf/asmade/sl-2020-0057

 

 

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The Forgotten Soldier – A Property Manager’s Story

woman sitting infront of laptop with head bowed

By Karen Herbert & Eileen Herbert-Goodall

The panic is palpable, the barrage of phone calls exhausting, the need to facilitate negotiations dire – this is the new normal for property managers all around the country.

It’s hard to comprehend the sheer scale of the battle front that is the unfolding COVID-19 crisis; this battle extends beyond the obvious health calamity and has swiftly ballooned into an economic, social, psychological and emotional disaster for those struggling to pay their rent and/or mortgages. Here’s a snapshot of the cries of desperation swamping property managers daily.

‘I’ve lost my job and have no income to live on.’

‘This is not a game for me. If I don’t get support from you and the owner as the government is providing, then I’ll just stop paying rent.’

‘It’s your responsibility to go to the owner on my behalf and have this discussion to provide an outcome.

‘I’d like to know if my landlords would consider a reduction in my rent during this time?’

‘I’ll be on jobseeker for the next 3-6months and I’m so nervous about my financial situation during this time.’

‘We’re working with the application form in claiming through the RTA but, unfortunately, we aren’t included in the residential status section. We feel hopeless now as we still aren’t eligible for assistance.’

‘Unfortunately, my follow-up with the RTA about the rent assistance up to $2000 didn’t get us any help – so no funding for us. The RTA’s advice was to ask the real estate/landlord to drop the rent value by a percentage for say…3 months, then increase the rent again for the following say…6 months.’ ‘At this point, it seems we do not fit into any box for government funding unfortunately. We’re hoping to be able to access our Super to help in the coming weeks.’

These are the pleas heard by Property Managers as the COVID-19 battle rages on, bringing our nation to a standstill.

The media continues to suggest tenants and landlords need to work together and negotiate rent reductions during these uncertain times; yet, the herculean task faced by Property Managers who must navigate (and help solve) such situations remains unacknowledged. It seems we are invisible in this ongoing battle to keep people afloat and sheltered as they struggle to cover their rent and other bills. Evidently, we wear many hats in the day-to-day management of rental properties; but, during these troubling times, we must now go above and beyond the call of duty.

As a business owner of a Property Management specialist firm, my current daily challenge is to prop up members of my brave team who take desperate phone calls from frightened tenants. My staff must talk to everyday Australian citizens who’ve not only lost their jobs, but also face the possibility of losing the roof over their heads. They patiently listen to these sad stories, offering options and sympathy where they can.

They are the forgotten soldiers, who bring stories of desperation to Landlords, many of whom have also lost their jobs and are now struggling to meet financial commitments.

They are the forgotten soldiers who turn up every day, who return to the trenches to fight another type of war, an unseen war, where the victims lay psychologically and emotionally maimed.

They are the forgotten soldiers who work tirelessly, yet only receive an income on rent collected. So, while rental revenue plummets they, too, are in danger of losing their jobs.

Who then shall then defend the meek?

Who then shall hear their cries of pain?

Who then shall negotiate their suffering?

I think it’s time we remembered these forgotten soldiers, who I dub the Knights of Property Management – the servicemen and women of the Real Estate industry.

I say that we give a huge shout out of thanks to all Property Managers who expose themselves daily to a different kind of risk, like our health workers, are also forced to endure long working hours, psychological distress, fatigue, occupational burnout, stigma, and psychological violence.

For without them, our tenants and landlords have no representation.

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