Thursday, April 30, 2020
LJ Gilland Real Estate: Thanks for the successful Ormiston Sale
LJ Gilland Real Estate: Thanks for the successful Ormiston Sale: I’m writing to let you know about another great sale achieved in Brisbane! We’re pleased to report that 18 Evergreen Street, ORMISTON QLD...
Thanks for the successful Ormiston Sale
I’m writing to let you know about another great sale achieved in Brisbane! We’re pleased to report that 18 Evergreen Street, ORMISTON QLD 4160, Australia has sold in record time and settled yesterday under the current real estate conditions.
During the campaign, we issued 2 contracts and 9 groups inspected the property. We negotiated with 3 to achieve this exceptional sales result on 29th April, 2020.. 18 Evergreen St, Ormiston QLD 4160 This is the second tenanted investment property we have sold for the Valued Property Investor Landlord, the previous tenanted investment property which was located at Thornlands in the year 2007 also received an exceptional sale outcome.
Our Valued Vendor wrote the following to one of the potential buyers for this sale, for which we are thankful and grateful:-
This part is a note for the possible buyers. Carlos and Linda have managed three of our properties and, to date, been the agents for their sales as well. We are not natural landlords, but when Carlos and Linda manage the properties, they treat them as their own. It has been their diligence and sense of ownership that has enabled us to handle investment properties. If you proceed with this purchase, we recommend that you keep them on as rental managers until the process is complete. They managed repairs and maintenance on all properties so that they were never a worry. They know the property and the tenants, are very familiar with the laws of the tenancy and therefore would be able to steer through the process of giving notice and the final weeks the occupancy. They are very diplomatic and appreciate the challenges of dealing with people. We have no concerns about the future because of the amazing ability of Carlos and Linda.
Regards Rod and Kathy> END
We thought we should share this with you as a positive note that we truly are grateful to be working with such like-minded Clients and Landlords. That the successful Sale for this property in particular, even though we planned a strategy for a sale when we leased the property to said tenant back in 2017, then were hit with the challenges and restrictions of e.g. open homes in this COVID-19 environment, whilst having a self-isolating tenant in residence, that all is possible through passionate hard work and teamwork. This is not an appraisal seeking real estate notification. It is simply a big thank you for your continued support, that Carlos and our Team are grateful for your longstanding win-win relationship.
Kind regards,
Linda and Carlos
18 Evergreen Street, Ormiston QLD 4160
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Elephant in the room: Landlord insurance
As each Australian state works out what support and processes are to be put in place for landlords and tenants, the elephant still sits in the corner of the room, waiting to be addressed.
Landlord insurance.
The Insurance Council of Australia website is noticeably quiet to what constitutes a rental default in a pandemic.
The Real Estate Institute of Australia has approached the ICA to obtain clarity on what landlords are best to do, when it comes to claiming for rental defaults versus rental negotiation with a tenant.
"Policies differ on the triggers required for a rental default or loss of rent to be recognised," said REIA president Adrian Kelly.
"In the current circumstances some larger insurers have adopted a case by case approach which may include not relying on trigger clauses like eviction notices – this would not have occurred prior to COVID 19.
"So for landlords the best advice is to contact their insurer and get clear guidance on what they should do. There is no single simple answer."
Mr Kelly said the ICA has advised him that it supports the current approaches taken by state governments to encourage landlords and tenants to renegotiate rental agreements and to also supplement rental incomes where possible.
"Where a landlord and tenant renegotiate rent arrangements, landlords should advise their landlord insurer," said Mr Kelly.
"Where rental payments have been renegotiated between a landlord and tenant it may, under some policies, not constitute a rental default.
"Landlords should contact their insurer with any questions they have on the operation of their specific policy in these circumstances.
"Importantly there is typically no impact on the landlord's ability to claim for damage to a property or any other aspect of the policy not currently excluded."
Mr Kelly said the ICA is still in discussion as to what a uniform approach looks like for landlords and what their real estate agents can advise them.
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Wednesday, April 29, 2020
Are landlords being taken advantage of?
Speaking on the recently launched What’s Making Headlines podcast, which was conducted via Facebook LIVE last Thursday, real estate experts Tom Panos and Phil Tarrant discussed how rental relief measures introduced by the state governments recently may not be being used as they were intended.
“This has been the biggest issue in real estate at the moment. The NSW state government announced $220 million [for residential landlords] on the long weekend, allocated if a tenant was able to show that they had suffered more than 25 per cent distress to their income,” Mr Panos said.
“I know that there’s a strong feeling that this could be opportunistic, with some taking advantage of it. Even today, I was talking to someone who said they were very disappointed with a friend of theirs who said his income only got reduced by 10 per cent — he was a tenant — and he pretty much contacted the office and he tried to get a 60 per cent saving off his rent.”
Mr Tarrant concurred, noting that he, too, knows about some tenants who are capitalising on the new measures dishonestly.
“The intent of the government is to try and keep jobs intact as much as possible and making sure that not too many Australians are put into unnecessary financial stress,” Mr Tarrant said.
“Now, I get the sentiment about giving people a break if they’ve lost their income. I’m a landlord and have a considerable portfolio, I hear these same stories. The person in the block that I live in who negotiated a 50 per cent reduction in their rent moved back at home with their parents and charged or sub-let that same apartment out to backpackers who couldn’t get back to England for the full freight plus a bit of a margin, so capitalising on other people’s misfortune.
“I think about that poor landlord. It takes away from the people who are wanting to give the breaks to the people that are struggling right now, and I get it. I’m getting the calls coming in now from my landlords around what’s happening with rent reduction and I’ll give it where it’s due, but if you look at any of the documentation, any of the recommendations and any of the requirements coming out of the government, they’re saying, ‘This doesn’t necessarily mean that that debt goes away, it’s still got to sit on your ledger and you’re going to have to pay at some point’.
“My personal view as a landlord, but also as someone who employs a whole bunch of people, the JobKeeper allowance is there to support people meet their requirements.”
Adding to this, Mr Panos advised listeners not to take advantage of the system.
He said: “I get a lot of tenants who have got strong opinions and they make some outlandish comments, saying, ‘You guys are training agents to exploit tenants’. It’s actually the opposite. What we want to do and I think the government wants to do is find out who’s really suffering and help them, and who’s trying to manipulate the system.
“I think one of the things Scott Morrison said that was good is he said, ‘There is no losses, we’re all Australians in this’ — so everyone’s sort of chipping in. So, what does that mean?
“If you’re a tenant and life is good for you, don’t go off and create havoc. If you’re a tenant who’s got genuine problems, it’s simple — go and get your forms printed, get a letter from your employer, go to your agent and say, ‘Here it is. Here’s my situation. I’m not bullshitting’.
“I think you’re going to find landlords want to work with those people. The rental market’s not great, they don’t want their tenants to go, they’d rather work with them.”
During the discussion, Mr Panos and Mr Tarrant also provided insight into the current state of play for property investors in the Australian real estate market.
Best Regards
Linda 姬琳达珍 Debello (LREA)
We do however differ with the RBA’s forecast for growth in 2021 with the RBA forecasting 6–7% and Westpac at 4%.
With the unemployment rate unlikely to fall below 6% and central banks unconvinced about any urgent need to be pre-emptive the cash rate target is likely to hold at 0.25% at least until end of 2023. However the RBA can remain an effective force in the Policy debate through its management of the three year bond yield target.
On Tuesday the Reserve Bank Governor Lowe made a major speech where he outlined the Bank’s key economic forecasts.
These forecasts are based on the Bank’s central outlook for the policy response to the Covid Crisis whereby domestic shutdowns are gradually eased through the June and September quarters and “mostly removed by late in the year”.
Westpac released forecasts on March 31 where the central outlook for the Crisis was similar to the Bank’s central view.
We are encouraged that our forecasts are broadly in line with the forecasts the Governor released in his speech. Westpac forecast that the economy would contract by around 9.5% in the first half of 2020 (RBA minus 10%); the economy would contract by 5% over 2020 (RBA minus 6%); the unemployment rate would lift to 9% by end June (RBA 10%); implying that growth would bounce back by 4–5% in the second half of 2020, (RBA similar).
We do however differ with the RBA’s forecast for growth in 2021 with the RBA forecasting 6–7% and Westpac at 4%.
It appears that, next year, we are heading for a repeat of the last few years when RBA growth forecasts were consistently significantly above our own forecasts. That bullish view is despite the observation that “the twin health and economic emergencies that we are experiencing now will cast a shadow over our economy for some time to come”.
The other key observation was around the outlook for interest rates. The Governor indicated that he expected the three year bond target to remain in place for a “number of years”.
He also reiterated that the cash rate target would not be lifted before the three year bond yield target was lifted.
The choice of the three year bond target rate as the same as the cash rate target is strategic since it sends a clear message that if the Bank is prepared to purchase three year bonds at the overnight cash rate it is reasonable to expect that it is comfortable with the cash rate holding at 0.25% for the full three years.
This does not mean that it cannot lift the rate for the bond yield target. A higher target rate would imply that the Bank now expects the cash rate to be lifted within the three year window therefore signalling an appropriately tighter monetary policy.
A lift in the target rate would see the market’s timing for the cash rate increase brought forward and the arbitrage between swap markets and the bond rate would pin point that expected timing.
BILL EVANS
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