Average Strata Fees
Strata fees are an essential and unavoidable cost of owning an apartment. Fees fall into three types, administrative fund levies, capital works fund and special levies. Strata fees are determined annually by owners at their AGM however, when buying a new apartment strata fees will have been determined by the developer based upon anticipated building expenses. While the building is new and does not have a financial history, there are experienced strata managers able to assist in setting the levies. Understandably buyers often ask for a guide. While there are no direct legal requirements levies for buildings with facilities like a pool and gym tend to fall between 1% and 1.4% of a property’s value, if there are fewer facilities between 0.5% and 0.8%. If fees look very low or very high, it’s worth investigating.
As apartment developments are very popular, projects can offer a wide-range of facilities, and what’s on offer continues to evolve. Some of the trendiest now include roof-top communal areas which can host a wide range of facilities from a viewing deck and lounge area to an outdoor cinema. Gyms are also popular however, with the explosion of 24 hour gyms in almost every neighbourhood, buyers do expect that ‘in-house’ gyms will be well equipped and maintained. Community gardens and swimming pools with a view are also sought after. Buyers also look for facilities that function to encourage social interaction, but also offer private spaces and impressive public areas, as this act to give a building its own unique character.
Housing is Over Taxed
Improving housing affordability is a constant conversation, so is the topic of stamp duty. However, there’s another key issue and that’s the tax burden on new homes, this topic gets less attention than it deserves. Figures published by the Housing Industry Association show that in NSW an estimated 44% of the cost of a new house is made up of a mix of direct and indirect taxes and that includes stamp duty. To help put that figure into perspective according to the HIA the average tax across the residential building sector is around 31%, the economy wide figure is less at 24.4%. The sector also accounts for 13% of GST revenue for the Commonwealth. In any debate about improving affordability taxation needs to be under the spotlight.
OPT Discussion Paper
Over the last decade the number of residential properties sold off-the-plan has risen dramatically. In the 2006/07 financial year, there were 2,148 OTP contracts, that was 1.25% of all residential property sales. Last year there were 29,022 OTP sales or around 11.5% of the market. Over the past five years OTP has grown by 20% per annum, and in some years, more than 50%. Against this background the NSW Minister for Finance, Services & Property announced in November 2017 a discussion paper and submissions closed on the 30 January 2018. The terms of the discussion paper include areas such as contract cooling off period, mandatory disclosure, deposits and sunset clauses. This will be an important topic to watch in coming months.
Household Goods Mixed Signals for Housing
The December 2017 Retail Trade Index issued by the ABS shows some interesting figures. While the general Index increased by 0.2% cafes, restaurants and takeaway food services did better at 0.4% and so did clothing, footwear and personal accessory retailing up by 0.5%. However, for the Household goods sector the trend estimate for retailing rose 0.2% in December 2017. But what a surprise given the housing boom was that the seasonally adjusted estimate fell 2.6%. By industry subgroup the trend estimate rose for electrical and electronic goods retailing 0.7%, and hardware, building and garden supplies retailing at 0.3%, but again fell for furniture, floor coverings, homewares and textile goods retailing -0.5%. Seasonally figures for electrical and electronic goods also fell -4.7%, but our gardens might be in better shape as hardware, building and garden supplies rose 0.3%. The sector has been on a positive track since 2015 however, the recent falls might well align to a cooling of the housing market.
Property Search Terms
It may come as no surprise that every second there are 40,000 Google searches. Among all that activity when it comes to real estate the most popular search term by a big margin is “Houses For Sale”, no surprise there. The next most popular search words are Real Estate, Homes For Sales, For Sale By Owner and Land For Sale, and when a location is added, as might be expected, the search results drop.