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News.com.au
22-07-2025
- Business
- News.com.au
Housing crisis: Baby Boomer tax cut could help first home buyers
Australia's pre-eminent homebuyers association has made a bold call to give Baby Boomers buying to downsize a stamp duty cut for homes worth up to $1m. And they believe one more win for the nation's most successful housing generation could be part of the solution to getting more younger first-home buyers into the market. The Real Estate Buyers Agents Association of Australia have called for Aussie homeowners aged 60-plus to be given a stamp duty concession for purchases worth up to $1m, to encourage them to downsize from larger homes. It would effectively assist Baby Boomers initially, with the generation now aged from 61-79 years old. Acting REBAA president Zoran Solano said stamp duty was a key barrier that was stalling many of those who were considering such a move. 'While some states offer concessions for pensioners, the thresholds are outdated and don't reflect current market price points,' Mr Solano said. 'It's unfair that someone in their 70s pays the same transfer duty as a 30-year-old. 'And for a lot of them it would remove another hurdle and make the overall process smoother.' Acknowledging that Baby Boomers had already had a good run from the housing market, with Finder stats showing that in 1984 it cost 3.3 times the average Aussie wage to buy a home — compared with 10 times the typical income by 2023. They've also enjoyed significant growth in the value of those homes as interest rates have trended downwards, allowing prices to push up more rapidly than many past eras. 'So, yes, they have been fortunate in the growth that they have experienced, but nothing is stopping the next generations from saving hard, working hard and doing the same thing over their lifetime,' Mr Solano said. And, giving Boomers a discount on their stamp duty to downsize, would potentially help younger buyers to make a move. The buyer's agent said anywhere from 25-30 per cent of his clients were downsizers, and many needed to achieve specific outcomes from the sale of their home to ensure they were set up to avoid relying on public healthcare systems as much as possible as they aged. As a result, he estimated there would be tens of thousands, if not hundreds of thousands of people aged 60 plus who might well consider a downsize if the tax burden was reduced for their next home — which would free up more family-sized homes in desirable suburbs for sale, or development into more affordable home options. Mr Solano noted that in one instance recently he'd helped a NSW-based downsizer to purchase a home with a plan to downsize — but when they couldn't sell their existing home for quite enough money, they had walked away from the plan and still resided in their old residence. 'And with a stamp duty discount, she probably would have gone ahead,' he said. Another downsizer he had worked with recently sold the 1200sq m block they had been living on since the 1990s to fund their purchase of a three-bedroom unit, and to top up their super. That had made the home available to a family that would make wider use of the home, or potentially could have led to a developer purchasing it and turning it into multiple more affordable homes. Mr Solano said the latter outcome was the most advantageous, as many downsizers were competing with first-home buyers for more affordable townhouses and units — so increasing the volume of them available would help reduce that competition and price growth. The national property buyers advocacy group is not the only one to make the big call. The Real Estate Institute of Australia also called for a last-home buyer scheme including stamp duty reductions to incentivise older homeowners into freeing up homes for sale and development. President Leanne Pilkington said the proposal had merit given stamp duty could be north of $100,000 for some downsizers, and that it could have a significant impact on the housing market and overall affordability. For those concerned about futher benefits to a generation that had already had a lucky run on the property market, Ms Pilkington said after having done nothing for a lengthy period the time to try something different was upon us. 'This is potentially an exceptional strategy for freeing up property in the middle rings,' she said. 'So it's what do you prefer? Things to just stay the way they are, or would you prefer governments explore what might be possible with regards to the housing crisis?'
News.com.au
17-07-2025
- Business
- News.com.au
A beginners guide to commercial property investing
In the world of property investing, commercial property has its own set of unique opportunities that sets it aside from residential property – but it may not be the best strategy for everyone. WHO IS IT SUITED TO? 'I often find people get started after having an existing residential portfolio,' says REBAA buyers agent Zoran Solano from Hot Property Buyers Agency. While residential property investing usually requires a deposit size of about 20 per cent, or possibly less with LMI, commercial property is different, says Solano. 'The barrier to entry with commercial property often requires a larger deposit – often 30 per cent or more depending on the style of the property,' he says. Often, investors will use some of the equity they have built up from investing in residential property over time to fund the deposit for their first commercial purchase. BENEFITS OF COMMERCIAL PROPERTY It's a purchase that appeals to many residential investors because of its potential for stronger yield – both gross and net, Solano says. 'Often a lot of your outgoing costs as a commercial landlord are passed on to the tenants themselves, depending on the lease agreement,' he says. 'Outgoings, even down to the rates, insurance and even land tax, potentially, can be charged to the occupant of the commercial property rather than the landlord themselves.' Buyers agent Steve Palise from Palise Property says commercial property tends to drive much greater returns than residential property when it comes to cash flow. 'Five years ago there were no books or podcasts about it. It was only known by business owners and high net worth,' Palise says. 'Now that people realise you can get three times the cash flow and the same capital growth it is becoming popular.' There is also the potential for longer lease terms, which can create more stable income, as well as higher depreciation tax benefits, he says. POTENTIAL PITFALLS But with any investment, there are also negatives – and risks. 'Vacancy is the biggest killer when it comes to the commercial property sector,' Solano says. 'All we need to do is look at Covid in the last few years and how it's dramatically changed the way people invest in commercial property.' Vacancy rates rose in CBD locations as people relocated to home-based businesses during the pandemic. Industrial property has also seen a rise with the need for warehouses due to online shopping, he says. Investors need to have a clear understanding of who their tenant is and how stable their business is as well as wider economic factors at force, he adds. 'People can run reasonably large and successful businesses remotely or from home as well these days, so that is potentially a bit of a disrupter or a risk that commercial investors need to consider,' he says. There are 'more moving parts to understand' when investing in commercial property, says Palise, which means there are more things you might get wrong. 'There are also different types of property with their own intricacies,' he says, listing retail, industrial and office as three distinct examples. It's also worth noting that zoning and regulations can change over time which makes it hard to forecast how your property will perform, he says. 'Commercial investing needs to be done only once you are educated or using a reputable buyers agent,' he says. RESIDENTIAL VS COMMERCIAL Steve Palise from Palise Property says there are several things that set residential property investment and commercial property investment apart. Here are some of the main differences: * Deposit size – You usually need a deposit of 20-35 per cent for commercial property compared to a deposit of 10-20 per cent for residential property * Yields – Commercial yields tend to come in at a much higher average of 5-8 per cent net, compared with the 3-6 per cent gross yields of residential, according to Palise's calculations * Lease terms – Commercial leases are usually much longer than residential leases, and can be as long as 30 years depending on the contract * Outgoings – While the landlord pays most outgoings, such as repairs, renovations and council rates in the world of residential property, the occupant pays for a lot of these things in commercial leases * Vacancy – Vacancies can be much more drawn out in commercial investing, as long as two years, while residential tends to be one to two weeks on average
West Australian
13-07-2025
- Business
- West Australian
Is your buyer's agent qualified and licensed?
If you engage the services of a buyer's agent, you would assume you are dealing with a qualified licensed professional who is regulated by Western Australia's Department of Local Government, Industry Regulation and Safety – Consumer Protection, as sales agents are. But that isn't always the case. The challenges of finding a property in WA's highly competitive market have seen more people look to using a buyer's agent and the growing demand for this service has led to a rise in poorly trained and unlicensed operators, often based interstate and overseas, who promote themselves as buyer's agents in WA. Last month, Real Estate Buyers Agent Association of Australia (REBAA) launched a campaign to warn consumers about the risks of working with underqualified buyer's agents. REBAA President Melinda Jennison said: 'many new buyer's agents enter the industry with only a superficial understanding of its complexities, putting themselves and the clients they are representing at risk of making uneducated and costly decisions.' REIWA supports these concerns. We are also concerned about the risk to buyers of working with unlicensed buyer's agents and have raised this issue with Consumer Protection. I have previously written in this column about the importance of using a WA buyer's agent if you are buying in WA. Aside from their knowledge of the local market and local legislation, when you engage a WA buyer's agent, you also have the advantage of dealing with someone who is licensed under the Real Estate and Business Agents Act 1978. This gives you peace of mind, as well as protections under WA consumer law. Buyer's agents provide a valuable service. They act solely for the buyer, working to find the right property at the right price, saving time and reducing stress. To reduce risk when engaging a buyer's agent there are some important things to consider:
