Hudson Bond Real Estate Publication - Issue 26
INTERNET’S IMPACT
ON REAL ESTATE
In this special report, we take a look
behind the scenes to reveal the real
impact the Internet has had on the
Real Estate Industry. Without a proper
understanding, we have found that many
homeowners when selling can make the
wrong choices without realising.
The Internet has been a game changer
for real estate and it is important to know
the pluses as well as the minuses.
While the Internet has brought many
positives, particularly the way marketing
costs have been driven down thanks
to web sites lowering the need to rely
on print media and the ease of e-mail
communication with buyers en masse,
there is a down side.
Sellers need to be aware that the
extensive use of the Internet means that
every property has a digital footprint, a
traceable history of prices, sales, etc.
The history of virtually any property
that has been bought, sold or withdrawn
from the market in the past can be found
on the net. This information can impact
both positively and negatively on buyers
and sellers when negotiating the purchase
or sale of a home.
Every property listed in Australia is
promoted on at least one of the two major
real estate web sites – realestate.com.au
and domain.com.au.
These sites are either owned or
controlled by large media companies that
either own or are affiliated with Australia’s
main real estate data companies– RP
Data and Australian Property Monitors.
Few people know that the real estate
web sites automatically share information
about every advertised property every
week.
Whenever your property is put up
for sale, auction or rent, both the price
and the agent you are using, along with
the date the online advertisement was
uploaded, is automatically recorded
in that property’s history. Whether the
property sells or not, whether it is passed
in at auction or withdrawn from the market
is also recorded. This is what creates that
property’s digital footprint.
It is fast becoming a ‘pseudo credit
rating’ for any property.
If there is a lot of activity (buying and
selling or attempting to buy and sell) that is
recorded against your property, the more
likely people will assume that something
may be wrong with your home.
The availability and abundance of
information these days can either greatly
assist in the buying and selling process, or
be detrimental to it.
As a seller you should avoid having
your pricing and advertising history used
against you.
Continued Page 3 ►
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• Internet’s impact on the real estate market
In this issue of
• Pros and Cons of Fixed or Variable Home Loans
Property News
• Consider families when buying investment property
Letter
from the
editor
Dear Readers,
Welcome to our Autumn issue of
Property News for 2013.
As each day passes, the signs for
a growing property market are
strengthening.
With interest rates at an all-time
low, and by anybody’s measure
the economy is doing well. If you
don’t believe me, just take a look at
Europe and you’ll soon realise what
a prosperous period Australia is
experiencing.
Which means for those considering
a property purchase, now could be
the time when you get the chance to
buy a good property, with long-term
potential, for a reasonable price.
As many of our clients will tell you, it
is also the time when selling a home
for a good price is becoming easier.
To help you make the right decisions,
we have included in this issue a
special report on how the Internet is
impacting the real estate market.
It is our belief, that we have a
responsibility to keep the community
well educated in all matters related
to property. We hope you enjoy this
edition of our newsletter and I am
sure you will finish reading this issue
with a better understanding of the
Internet and its impact on the local
market.
Please don’t hesitate to phone us if
you have a question or need our help.
Paul Kounnas
632 Doncaster Road,
Doncaster VIC 3108
P: 03 9840 7700
F: 03 9840 7600
E: [email protected]
hudsonbond.com.au
Disclaimer Notice: Neither Paul Kounnas, Hudson
Bond Real Estate, nor Newsletter House Pty Ltd, nor the
publishers and editors of articles in this issue, accept any
form of liability, be it contractual, tortious or otherwise, for
the contents of this newsletter or for any consequences
arising from its use or any reliance placed upon it. All
the information contained in this publication has been
provided to us by various parties. We do not accept any
responsibility to any person for its accuracy and do no
more than pass it on. All interested parties should make
and rely upon their own enquiries in order to determine
whether or not this information is in fact accurate.
©Newsletter House Pty Ltd 2012 Ph: 02 4954 2100
www.newsletterhouse.com
fIXeD or VArIABLe
which should you choose when
signing for a home loan?
Interest rates are at an all time low,
even some of the Ceos of the four major
banks are talking about the possibility
of lowering interest rates before the
reserve bank. to add to this, prices across
Melbourne are starting to slowly rise.
Which for most people, means that
right now is looking the perfect time to
enter the property market.
how does this impact the financing
of your purchase? Is it better to apply for
a home loan with a fixed or variable rate?
Due to the short length of this article,
and the fact that the author has no
knowledge of your financial situation, we
will present both arguments for choosing
a fixed or variable home loan.
Variable interest rate home loans
These type of home loans come in
two forms: standard variable and basic
variable. Both of these variable home
loans work in a similar way but the main
difference is the interest rate charged and
how much flexibility is available.
This type of loan is affected by
economic conditions both within Australia
and around the world, so you can expect
your home loan repayments to rise and fall
over the term of your loan.
Right now rates are falling, but back
in the 80’s many Australian families
struggled to meet repayments as interest
rates skyrocketed.
the Pros of a Variable Loan
• Your home loan repayments will fall
when interest rates fall.
• You will have the opportunity to reduce
your home loan balance faster.
• Can be very flexible and will often allow
unlimited additional repayments.
• The average variable interest rate is
generally lower than a fixed home loan
rate.
the Cons of a Variable Loan
• If the economy changes from what it is
today and interest rates rise quickly, your
home loan repayments may be more than
those of a fixed interest rate home loan.
• If you have borrowed at or near your
repayment capacity, it is risky if interest
rate do rise.
Risk averse people tend to steer away
from variable lending, preferring to know
exactly what their repayments will be.
fixed interest rate home loans
These type of home loans offers you
a fixed interest rate so you have a fixed
repayment amount over a set term, usually
between 6 months and 10 years.
A fixed interest rate home loan is set by
your lender and is then offered to you for
the fixed term you are applying for.
fixed interest rate home loans Pros
• You will know how much your loan
repayments will be for a fixed period,
regardless of market interest rate changes.
• Protects you against interest rate rises.
fixed interest rate home loans Cons
• May be less flexible than a variable
home loan rate, limiting additional
repayment options and excluding the
option to redraw.
• If your circumstances change and you
want and/or need to exit the loan early,
some exit fees will apply.
• Over the term of your loan you may end
up paying more than if you had selected
a variable home loan, even in a rising
interest rate market.
As with everything in life, it comes
down to your individual situation and
your ability to manage risk.
Whatever you do, don’t rush your
decision as the four major banks and the
numerous building societies are offering
incentives to win your business.
If you have got stable employment, or
own an established business, and can
show that you are more than capable of
meeting the terms of the loan then your
options are looking good.
We suggest you seek professional
advice before you sign with the first lender,
and weigh up the pros and cons before
making a decision.
how the Internet has
changed real estate
From page 1 ►
Never include the address of your
property when marketing it.
The digital footprint of a property can
be tracked in other ways too. Search
engines such as Google, will often pull up
previous rental or sale ads relating to the
property.
Search engines can also pick up
other information such as development
applications submitted to council, any
reported events nearby such as crimes,
businesses that have been run from the
property or previous publicity of any kind
that the property may have attracted.
If the Sunday papers turn up to do a
story on your auction, the sale or non-sale
will also become available online once
that story is published.
Do a Google search on your own home,
or on the property that you intend to buy,
just to see what comes up. Chances are
that you may be shocked.
Members of the public can also pay
a fee to access the entire advertised
history of a property as well. Furthermore,
independent property analysts are adding
publicly available information to property
histories every day.
While information of itself is neutral,
each end user will form their own opinion
about what that information means
to them. Each party in a home selling
transaction will hope that the decision the
other party makes based on that home’s
digital footprint will result in a favourable
outcome for themselves.
Buyers will often form their offer on the
basis of what the owner previously paid
for the property and assess the general
market growth (or deterioration) since
that point in time. On one level, this seems
logical and sensible for a buyer.
As a seller though, this process of
determining value can seem compromised
and unfair. In instances where the seller
may have paid below market value for
whatever reason (they may have been
very good negotiators or the previous
owner may have wanted to sell quickly at
any reasonable price, or they may have
bought it directly from a family member)
then this process would be flawed. If the
seller has made substantial renovations
since buying, all of these costs may not be
reflected in the buyer’s offer.
In circumstances where all of the facts
are not reflected in the digital footprint,
more confusion can be caused in
negotiations than clarity. Being conscious
of all the facts relating to a property avoids
possible misinformation clouding a positive
outcome for both buyers and sellers if they
rely on using a digital footprint alone.
would you like your home sold
by
the
best
in
the
business?
hudson Bond has a proven success record with an impressive portfolio
of exceptional prices for our vendors.
If you would like your property
sold, call the hudson Bond
team on 03 9840 7700
for a better result
hudsonbond.com.au
Consider families when
you are purchasing an
investment property
Many families are giving up the dream
of owning their own property and are
turning to rental accommodation as
a long-term option. If you are about to
invest in property, this article may help
you in deciding the choices you make.
Due to a growing population, the
demand for quality rental property has
not only grown but the people lining up to
rent a property has changed dramatically
as the cost of living skyrockets.
There is now a large group of young
families who are looking for a rental
property that meets the needs of both
their short term and long term living
arrangements. Many of these, double
income families are willing to pay extra
to secure a stable environment for their
children.
There is a great possibility, that if your
investment property meets these families
needs you may find yourself with a longterm tenant who pays the rent on time and
takes care of your investment.
Some families have come to the
conclusion that renting for the long term
can be less stressful than securing a
mortgage. But at the same time they just
don’t want to sign up for any old property.
Often, when they find the right
property, they are known to treat it as a
home. Making sure the gardens are kept
in good order and the property is kept in a
clean and tidy state.
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In a sense, this type of tenant offers
a landlord the potential of a long-term
secure return.
They are looking to move into a property
that meets the following criteria:
Close to transport, shops and schools
With the price of petrol rising on a
weekly basis and most parents having
to provide dual incomes, renting a home
close to schools, shops, etc, not only saves
them time but slashes the cost of running
a car.
secure grounds, safe location
Australian kids are known for playing
outdoors. Parents are keen to rent property
that allows their children to play outdoors
in a safe environment.
For one thing, if your property is on a
busy road then you would need to consider
putting in appropriate fencing and
secured gating.
You may have the nicest property on
the market but if families don’t feel that
their kids are safe from being run over,
your chances of renting to parents is
greatly diminished.
family friendly property
Mums and dads, when renting for the
long-term, are looking for a place to call
home. They are willing to pay extra for a
property in good condition. They want a
layout that makes for good living. If you
wish to attract tenants who will treat your
investment property like their own than
the property itself needs to be to a certain
standard.
If you want to target this particular
market then don’t expect young families
on reasonable incomes to be interested
in your investment property if it doesn’t
meet the high standards parents expect.
for more information, please contact
our property management department.
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03 9840 7700
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