JPP News

Can you believe it is Mid February already?
At JPP Buyer Advocates & JPP Property Management we have been flat out � which of course no one is complaining about at the moment.

It is great to see so many investors realising it is a good time with the market the way it is to refinance & add to their property portfolios, or to make a start in the property market.
We have also been busy with homeowners understanding that they have a great opportunity to get into a larger home or to move to a more preferred area. The property opportunities we have seen have been really good.

Our team have secured several great investments at terrific prices in 2012 so far.
Thank you to everyone who contacted us in the New Year to welcome us back again,
We are looking forward to a busy 2012.

Sam James

Top

Market Overview

Choosing the Right Property

With 2012 off and running it was good to see so many groups through the opens on Saturday. It didn�t seem to matter what price range, there were people queuing to go through multi-million dollar homes in the leafy as well as $500k apartments just outside the CBD. With this happening I was surprised to note so many agents asking how interested we were. Many asking if I thought my client would want to make an offer. I thought this strange because most of the properties I went through were Auctions for later in February, and it is unusual for an agent to be actively seeking offers, unless they are genuinely desperate.

I do not know what will happen in Europe through 2012. I do not know whether the US will get out of their woes. Don�t forget it�s an election year over there!! I also don�t know whether the banks will pass on any interest rate changes that the Reserve Bank makes on Tuesday. What I do know is that everyone; vendors, selling agents, financiers, buyers and even politicians are quite nervous. Everyone is trying to work out what will happen next week. But it isn�t next week, nor next month that should be the focus of the buyer. It is the next decade. And unless our population stops growing, which is the one thing Australia cannot afford, then property prices in the top third of suburbs in Melbourne will most likely double.

A buyer should, however try to mitigate risk through reducing drains on cash flow. It is very unlikely you can buy revenue positive in the top third of suburbs in Melbourne, however you can get close to revenue neutral, especially if we get one or two more rate cuts. Looking for homes that will offer good rental return as well as a reasonable depreciation will assist you toward revenue neutrality. BUT this comes at a cost. If you eventually sell the property the depreciation is added back to the Capital Gain that you will pay tax on. So whilst the deduction has made life a little easier along the way, if you have chosen a property specifically for its massive depreciation, and it did not have a good capital growth, you will still be taxed when you sell and the growth will not be as good as it could have been.

Many property spruikers will tell you to buy off the plan or brand new in Mining towns. The reasons will be compelling. They will show you spread sheets and graphs. They will tell you the tax benefits are fantastic. You will actually get a few dollars a year back to you from the rent before you pay the expenses. These all sound good but when you go to sell all that depreciation on the building and goods within the property gets added back to the CGT equation. It is imperative that you seek good financial advice prior to purchasing any investment property that seems too good to be true. It probably will be!

Read the rest of this article at jpp.com.au

Accurately Assessing Property Prices

I was listening to the radio on my way home on Saturday evening and heard a presenter and a town planner talking about Real Estate in Melbourne. A caller had asked a question of the two regarding what the �plus� meant when an advertised property was quoted $490k plus. The caller was looking at a property in Mitcham, on about 750sqm and was thinking about buying it in order to subdivide and develop.

The town planner talked about due diligence which was all good and well. He gave advice similar to: Talk to council to work out whether the area can be developed, and into what. Is it an area that will allow for high density etc. All very good advice! He did eventually get around to talking about the �plus� as being up to or more than 20%, however he also said he didn�t put too much stock in what the agent said. It was really worth what others will pay.

There are four main parts to buying property in Victoria. Working out what your needs are, searching and identifying possible properties, assessing target properties accurately and finally successfully negotiating the sale.

Read the rest of this article at jpp.com.au

Ian James
Director
JPP Buyer Advocates

Top

Spotlight On Melbourne Suburbs

In our regular spotlight section we examine a selection of Melbourne suburbs, highlighting what's happening in these areas right now

Ashwood

Municipality: City of Monash
Population: 12,420 (2006 census)
Postcode: 3147
Location: 14km from Melbourne CBD

Located 14km south east of Melbourne with a population of 12,420. (2006 Census). Developed in the 1950�s Ashwood has a suburban feel with large blocks of land (approx. 600 sqm) and 1950�s cream brick veneer housing. An attractive area for families with a good selection of schools, parks and shopping facilities. The Holmesglen university Chadstone Campus is located in Ashwood and therefore there is quite a large population of students renting in the suburb. There is quite a large proportion of government housing in Ashwood, however the larger proportion of residents are owner occupiers and the housing stock is predominantly detached dwellings.

The main shopping strip is located on Warrigal Rd � mostly convenience stores, with a small number of restaurants and coffee shops, and a large (newly renovated) Safeway � however not being far from Chadstone, the Chadstone shopping mall picks up a lot of the retail traffic. There are four major reserves in the area � Ashwood Reserve, Gardiners Reserve, Electra Reserve and Salisbury Reserve, � all offering excellent recreational facilities. Other highlights include a large farmers market which runs on the third Sunday of each month.

Due to population growth, there is a significant amount of re-development taking place in Ashwood. Many of the larger blocks have been subdivided with new double story side by side town houses which appeal to young couples moving into the area. Due to the ageing population, single level town residences are also popular and under increasing demand.

There is no Ashwood train station � the closest stations are Jordanville and Holmesglen, however there are three good bus services

Amenities

Main Schools:

• Ashwood Secondary College
• Ashwood School
• Parkhill Primary School
• Ashwood Memorial Kindergarten
• Ashwood Central Pre School

Transport - Closest train stations are Holmesglen train Station and Jordanville train station. Bus routes 903, 734 and 767 also service the area.

Shopping - Warrigal Rd shopping strip � closest shopping centre is Chadstone Shopping Centre

The predominant housing stock in Ashwood is detached brick veneer post war homes � many of which have now been renovated or replaced with town houses or newer designs. There are a small number of apartment blocks situated closer to the transport hubs and shopping strips. Villa units (typically 4 � 8 sharing a block) and single level town residences are also common.

Top

JPP Property Management

After a very hectic start to the year JPP Property management is hitting its stride. We manage properties all across Metropolitan Melbourne and are leasing in the same areas.

It is interesting at the moment the difference in areas and leasing times. The vacancy rate has nearly doubled in Melbourne and the media has been very quick to jump on this. The REIV released this article in December:

Rental Conditions Ease

The easing of conditions in the rental market that commenced in the middle of 2008 has continued, with the Melbourne metropolitan vacancy rate exceeding three per cent in October.

The Melbourne vacancy rate was 3.1 per cent in October, an increase of 0.7 per cent since September. It is estimated that there are around 349,000 rental homes in Melbourne and a vacancy rate translates to around 10,800 vacant homes.

Read the rest of the article here (source: REIV)

JPP Property Management offers outstanding service with attention to detail that only a boutique agency can. As a family run company the turnover of staff is dramatically lowered meaning that service will not change throughout the time your investment is in our hands.

If you are interested in using JPP Property Management please contact us with any questions that you may have.

As a special for readers of this newsletter we can offer you a month�s free management when you move your property to JPP Property Management.

Just remember you can move your property to us mid lease if you wish.

Just a reminder, have you organized a depreciation schedule for your investment property. Have you organized landlords insurance. If you do not know what these are you should give me a call in the office on 9523 1054

Courtney James-Thursfield

Top

Recent Articles Of Interest

Affordability improves as house prices remain stable

The REIV 2011 December quarter median prices confirm that house and unit prices remained relatively stable over the quarter. The median house price in metropolitan Melbourne was $550,000, representing a minor increase of 1.9 per cent from a revised September quarter median of $540,000.

REIV CEO Enzo Raimondo said that demand in the local residential market improved marginally from the previous quarter, as did housing affordability, due to the two interest rate cuts; however, transaction numbers were significantly lower than for the same time the previous year.

"REIV data confirmed that, overall, the median house price has not changed over the last six months; the key factors driving the current market are a combination of lower consumer confidence, a slowing state economy and an increase in supply."

Read the rest of the article here (source: REIV)

Buyers rights to cool-off change on 1 March

If you are a buyer of residential real estate you will find that, beginning on 1 March, the cooling-off rules have changed.

On that date you will no longer lose your right to cool off just because you sought and obtained advice from your lawyer before you signed your contract.

From 1 March, if you intend to use your lawyer to help you with your purchase you will be on the same footing as someone who employs a conveyancer, so far as cooling-off goes.

Read the rest of the article here (source: REIV)

Supply and demand update

Late last year the Federal Government�s National Housing Supply Council released its 2011 State of Supply report.

The latest report has been eagerly awaited since the 2010 report highlighted an Australia-wide gap of 178,400 between the supply of and demand for homes in 2009.

The latest report estimates that the nationwide gap worsened by 8,400 homes to 186,000 and, under current medium-level assumptions, it is projected to grow to 640,200 in 2030. Most of that shortage � 300,000 homes � will be in NSW. Victoria will actually have a small oversupply.

Read the rest of the article here (source: REIV)

Sam James

Top

Technology Monthly

Cancelled Game Consoles

Over the last 30-40 years there have been hundreds of game consoles release, some that did well and some that did not....but what about the ones that never had a chance. There have been many game consoles cancelled mid development, pulled off the shelves weeks or months after release or announced and then never got past the planning stages and this is just a few of my favorites from a long list.

Sega Neptune - After the costly and problematic Sega 32x add-on for the Megadrive was released, Sega began work on creating a standalone version of the 32x which also played Megadrive games (which is what the 32x should have been in the first place), but by the time the prototype was finished the Sega Saturn was ready, so the project was scrapped

Super Nintendo CD - A fairly interesting console add-on that can be credited with creating much of todays industry. During the SNES's life, Nintendo asked 2 companies to create CD add-ons for the console to compete with the Sega CD add-on for the Sega Megadrive - the companies were Sony and Phillips...although both deals failed, Sony and Phillips used the technology they had developed to create their own consoles - the Phillips CD-i (a failure) and the Sony Playstation (one of the big 3 today).

Gizmondo - Not so much cancelled as half finished, the Gizmondo was released in 2005 by Tiger Telematics and was to be a powerful handheld capable of playing games, movies, music and have mobile phone functions such as SMS, MMS and WAP via removable Sim Card.

2 versions of the console were released in the UK, USA and Sweden - a standard one for around $400USD and a Ad-enabled version for around $229USD, the ad-enabled version called 'Smart-Adds' (intentionally misspelled to confuse consumers) would display a maximum of 3 adds per day at random intervals from the home screen, downloaded via the GPRS connection. Unbelievably the Smart-Adds service was never activated meaning that consumers could pay for the cheaper unit and it was exactly the same as the more expensive unit. The Gizmondo sold only 25,000 consoles worldwide and only 8 of the 14 planned games ever saw release giving it the label of worst selling console in history.

I actually have one of these in my collection and the graphics are quite good for the time, I have a prototype game called Jump (a parkour type game) which is particularly impressive. There were plans for a Gizmondo 2 announced in 2008, but the release was constantly pushed back and all but cancelled by the end of that year, and considering the company website has gone offline, and the Co-Founder has been arrested and convicted of fraud, I doubt we will see another Gizmondo.

Panasonic Jungle - The latest victim of poor business decisions is the Panasonic Jungle announced in October of 2010, the console was to be a portable laptop-like device capable of playing MMO's (Massive Multiplayer Online games) on the go, but was cancelled by the company in March 2011 'due to changes in the market' (I would say due to the Nintendo 3DS and PSP Vita).

There are many more consoles that were cancelled or pulled early...a larger list can be found at - Wikipedia (all consoles including cancelled ones) and this YouTube video I found

*Images from the Wikipedia

Chris Thursfield

Top

Recipe: Lemon surprise cake

Ingredients:

• 175 gm. + 1/4 cup white sugar
• 45 gm. plain flour
• A good pinch of table salt
• 1/3 cup fresh lemon juice
• Grated rind of 1 lemon
• 67.5 gm. unsalted butter, melted
• 3 eggs, separated
• 1 1/2 cups milk

Method:

1. Preheat oven to 180C fan forced (200C normal).

2. Whisk 175 gm. sugar, the flour and salt in a large bowl.

3. Add the lemon juice and zest, the melted butter and egg yolks. Whisk again until well combined.

4. Then add the milk and whisk well.

5. In another large bowl, whisk the egg whites to form stiffish peaks, adding the remaining sugar little by little as you do so.

6. Then fold the meringue into the lemon mixture, little by little, using a wooden spoon until light and fluffy.

7. Brush a souffle or oven dish with extra melted butter and spoon in the cake mixture. Then put the dish in a large baking tray and pour in boiling water to come half way up the sides. Cook in the oven for about 45 mins until the top is golden and has risen.

Top

Kind regards from the team at JPP.

If you have a friend or family member looking for property, please feel free to forward our newsletter on to them.

Comment on our Market News Page.

JPP - Facebook and Twitter

For our overseas clients and visitors, JPP has a website translator located in the sidebar of our site.

Having trouble viewing this newsletter? The online version with pictures is available here.