Industry Future

by Kevin Hockey
Real Estate Agency Sales

How may the traditional Real Estate agency change?

There’s plenty of discussion about real estate models effecting the real estate industry but what about market forced change?

We are in the middle of a changing attitude with today’s younger generation which has real potential to have a genuine effect on how we run our real estate business.

Property prices in Australia now see us with some of the world’s highest values which for us homeowners has been fantastic. But what about those wanting to enter the market?

A 2017 Federal Budget report stated close to 70 per cent of Australians are very concerned, or somewhat concerned, they will never own a property. Only 14 per cent have no concerns.

It continued by saying “More of us believe owning a home is beyond our grasp, and one in five struggle to keep up with housing payments”

The Findings from a Griffith University report by Andrew Worthington stated
“Housing affordability in Australia has worsened significantly in the past quarter century, including both urban and regional areas, and is now among the world’s most unaffordable”.

The facts are, today’s youth no longer aspire to own their own home. They now place travel as a priority. The cost of purchasing a property is a high factor, they simply believe owning a home is out of reach.

I have 2 sons and I’ve had this conversation with them. Cameron, our youngest moved out in 2015 when he was 20yo into a house with 7 mates mostly from school. They paid $840pw for a beautiful big home on Brisbane’s northside in a great area with a pool. Between them they could split the costs to a very affordable level and live in a home they could never have otherwised hope to afford.

We talked about investing in property. Cameron is a steel fixer and has always earnt good money but the cost to buy was too risky he felt. “What if my work stops” he would say, “I couldn’t afford it”. Turned out his industry slowed down significantly and for the last 2 years his work has been very spasmodic.

We also know children are living longer at home with their parents, another method of saving for today’s generation.

Our future buyers are having a dramatic change of attitude toward the great Australian dream. If this continues what will be its legacy?

How could this effect our businesses?

Could Property Management become of even greater importance than it is now?

What effect would any interest rate rises have on the market?

Are our businesses prepared for any of these changes?

How long can property prices continue to increase at this same rate?

What are your thoughts?

Kevin Hockey
Real Estate Agency Sales
kevin@reas.com.au
www.reas.com.au

Whitsunday Region Rent Roll for Sale #414

Priced to Sell FAST – Don’t miss the opportunity!!! Available immediately is this smaller portfolio in the very popular and sought after Whitsunday region.

Brisbane West Rent Roll for sale #419

Available now is this small portfolio of investment properties on the west side of Brisbane displaying good returns and incomes.

Brisbane East Rent Roll for sale #418

Available now is this small portfolio of investment properties in Brisbane’s East displaying good returns and incomes

South Brisbane Rent Roll for sale #417

Available now is this portfolio of investment properties on the south side of Brisbane displaying good returns and incomes.

Rent Roll for sale Brisbane North #416

Available now is this portfolio of investment properties on Brisbane’s Northside displaying good returns and incomes

Brisbane Rent Roll for Sale #407

Available now is this portfolio of investment properties displaying good returns and incomes.

Hervey Bay

Hervey Bay

Hervey Bay is a Coastal town approx. 3 and a half hours north of Brisbane. The Bay divides the mainland from Fraser Island and is the Tourism region for Whale watching in the months of April to October each year.

Boating and Fishing is another very popular past-time of the Hervey Bay region.

Hervey Bay has long been one of Australia’s fastest growing regions and has a population of approx. 50,000.

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Hervey Bay continues to be one of the stronger markets in regional Queensland for Rent Rolls and Real Estate Businesses. Its growth has leant itself to new development both residentially and commercially and is not affected by the mining industry.

With a larger percentage of newer properties within local portfolio’s the incomes are generally higher than other regional towns and properties easier to manage. Therefore they also generate good demand in most markets.

The Real Estate market is holding well in Hervey Bay and good Real Estate Rent Rolls for sale will achieve a fair market value.
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Real Estate Agency Sales met several potential buyers who would purchase a good Rent Roll within the region. We did list one Agency’s rent roll and a buyer was found quickly after several strong enquiries.

Multiplier:
Hervey Bay: The multiplier for Rent Rolls sold in Hervey Bay is normally mid 2, around 2.40 to 2.55 per $1.

Businesses:
Hervey BayReal Estate Businesses are of interest to potential buyers for their steady values and growth potential. However it remains a relatively small market which means there is always going to be some limits to the amount of potential buyers.

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Agency value is once again determined by at least the 3 major factors, Agency profits, salespeople skills and success history and the Businesses reliance on the Principal for income.

At the moment there are no more Businesses for sale or Property Management rent rolls for sale.

For more details contact Kevin Hockey from Real Estate Agency Sales on 0447 555 683 or email kevin@reas.com.au

Gympie to Rainbow Beach, Tin Can Bay

Gympie to Rainbow Beach, Tin Can Bay

 

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Our first stop on our Real Estate Agency Sales regional tour was to Gympie, Rainbow Beach and Tin Can Bay.

The region is sometimes considered the very northern tip of the Sunshine Coast but is part of the Wide Bay – Burnett region of Queensland. Rainbow Beach and Inskip Point are the gateway to Fraser Island, the worlds largest sand island and a mecca 4wd driving experience.

Gympie is the major local town with a population of approx. 19,000 and is just 160km north of Brisbane.

Rainbow Beach has spectacular beaches and amazing coloured sand cliffs. You can 4wd on the beach from Noosa to Rainbow Beach, passing through the popular camping area of Double Island Point.

Tin Can Bay is a small coastal town beside the Snapper River and is a well known location for Dolphin Feeding. Bottlenose dolphins come in to the river each day and National Parks runs a well planned dolphin feeding programme to allow visitors the ability to get up close to these beautiful wild animals.

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The area is known as the Cooloola Coast.

This market is generally unaffected by outside influences of other regions such as tourism and the mining sector. Values of Rent Rolls for sale are generally only affected by normal market conditions.

New housing has introduced better rental property and portfolio’s can be influenced by their make up of newer or older properties.

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Photo: Kylie Best from Welcome Home Rentals was one of the agents we met with in the region.

Low property values and rents affect the Property Management income levels and therefore overall potential market value.

The Beachside locations of Rainbow Beach and Tin Can Bay rely heavily on holiday rentals and their rental departments.

Multiplier:
Rainbow Beach and Tin Can Bay: Under $2, currently $1.50 to $1.80 per $1.

Businesses:
In this region Businesses normally carry base value depending upon available staff, their experience and history of achieving sales results. The Business will need to show long term ability to generate profit and the Business’s reliance on the Principal to generate income and profit will also have a significant bearing on the sale.

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At the moment there are no Businesses for sale or Property Management rent rolls for sale.

Real Estate Agency Sales met at least 2 offices in the region who would consider buying a rent roll.

For more details contact Kevin Hockey from Real Estate Agency Sales on 0447 555 683 or email kevin@reas.com.au

Marketing message

Our first stop around Queensland to visit regional offices saw us meet with Principals in Gympie, Rainbow Beach and Tin Can Bay.

Read our Market Report here.

Assigning managements under the new Property Occupations Act 2014 legislation

Assigning managements under the new Property Occupations Act 2014 legislation

In November 2014 new Real Estate legislation in Queensland began when the Property Occupations Act 2014 replaced the Property Agents and Motor Dealers Act. In doing so the appointment form changed to the Form 6 and with it a significant change when it comes to selling and buying a rent roll.

The ability to assign a management from a Seller to a Buyer existed under the PAMD Act however the Form 20a required the Owner of the property (Landlord) to approve the assignment by way of initialing the proposed condition within the appointment form. There was further requirement for the property owner to be notified of the assignment of the management prior to the settlement of the rent roll.

In November 2014 the PAMD Act changed to the Property Occupations Act 2014 and with it the new appointment form, the Form 6.

All Form 6 appointments, under the new legislation, are automatically assignable. There is no provision in the Form 6 for the property owner to agree or not agree to the assignment of their management.

There is still however a requirement for the Seller of a rent roll to notify all Landlords of the sale of the rent roll.

Under Section 113 of the Property Occupations Act it states“The assignee must give each client written notice of theassignment within 14 days after the assignment”.

It goes on to say that the notice of assignment must include the following details:-
(a) the assignee’s name and contact details;
(b) the address of the assignee’s registered office;
(c) the appointment has been assigned without changing theterms of the appointment;
(d) the appointment may be revoked by the client by giving
at least 30 days written notice of the revocation to the
assignee, unless the client and the assignee agree, in
writing, to an earlier day for the appointment to end.

Real Estate Agency Sales recommends written notification of the rent roll sales be provided to all property owners prior to 14 days before settlement. A copy of such notification should then be attached to the Form 6 appointment to be handed to the Buyer of the rent roll for proof of notification.

Can the PAMD appointment form be assigned if it has been agreed to?

Yes, and No.

Under the Property Occupations Act 2014 the PAMD Form is assignable however you will find that all finance institutions want new documentation applicable to the new legislation as part of their willingness to fund the purchase. Therefore whilst it is valid to transfer an assignable PAMD form, the banks will require new Form 6 appointment forms and are not accepting old PAMD forms.

Kevin Hockey
3/9/2015