13
Mar
12

Buying a House in Queensland Australia


Please know this is still under construction as I am still house hunting – I haven’t gotten into pest inspections etc just yet and as I find out more I will pass on the information by updating this post!
Update History
29/5/12 – Added Rates information

Recently my partner and I have been looking at buying a house. I’ve been spending a lot of time trying to figure out how much money to offer, and getting useful information about values. I though the information I’ve gathered could be useful for other first home buyers out there, or even for anyone interested in keeping an eye on property values to judge when / where they should buy.

My Starting Point
I’ve spent the past couple of months monitoring both the rental and sale prices in the suburbs I am interested in. Real Estate is my #1 stop as most realtors seam to list properties on this site. Once I’ve found a place I like the look of I jump over to On The House as this site provides sale history information including details on how long the property has been on the market and any information about asking price changes. Mainly I use this to see how long the property has been on the market which gives you an idea of how desperate the owner is to sell – especially if you can see a trend of dropping the asking price over a number of months.

Investigating a Property

If I am contemplating arranging an inspection or going along to an open house I try to go in with as much information as I can, this is where your local Planning and Development information comes in handy. These websites will provide you with information about any potential issues with the block – this can include flood, fire, soil, surrounding area building permits etc. These sites will also give you the Land Value which is very useful when determining if the asking price is too high (or helping you come up with an offer!) and any zoning information about surrounding areas (good to know if the lovely bush land the property backs onto is reserved as park land or has already been sold off for future building.). Another useful site is Search Annual Valuation Listings. On this site you can enter the street address (leave off the house/unit number) and get a list of the land valuations for all the properties in the street. This can give you a quick view of which houses in the exact same area have the same/similar value, once armed with this knowledge you can check the sales history information available on On The House for the neighbour, to go in with a stronger idea of recent selling prices that are directly relatable to the property you are interested in.

I will also have a birds eye look at the property – previously I used google maps for this however a friend put me onto Near Map which allows you to include the element of time! This gives you the ability to jump back over the past few years to see what sort of big changes have been made; I’ve used this to see when major external changes have been made including yard and roof work. It also can show you where cars are commonly parked (gives you an idea of how busy the neighborhood is and may explain away why there is a dead patch of grass out front). NOTE: Near Map has now removed their free access version. This site now costs money to access

For some people access to internet is critical so it is worth checking what internet is available (or will be available shortly) where you are looking at moving. I have provided links to check with Telstra provided internet. These are not very accurate and for me typically respond with a ‘maybe’ leaving me to call Telstra to confirm.

Asking the Right Questions

  • Renovations – was Building Approval received? (required for things such as remodelling an ensuite that needs new waterproofing, enclosing an existing garage into a new habitable room, etc Credit for info)
  • Type of Construction (double brick? timber frame?)
  • How old is the roof?
  • Is there insulation in the walls?
  • Have any appliances or systems been replaced and, if so, when?

How Much to Offer?

One of the most difficult points is figuring out how much a property is worth in real $$$ values. From some of the earlier sites you can ascertain the land value, and how much the previous owner paid for the house but none of that information covers how much the HOUSE is actually worth. I’ve been working on an approach for calculating an approximate ‘worth’ of the house based on previous costs etc. I will include my current figures at the end of this post as an example. One point that is key to consider is that a house is a depreciating asset – while land appreciates the actually building becomes dated and devalues. I used the Washington Brown House Depreciation Calculator to determine the deprecating value on the property. It helps to have an idea of any improvements and maintenance the owner has made to the property in the time they have owned it. Walking around the properties can give you an idea of how recently improvements have been made (replaced water heater, updated kitchen / bathroom etc). If the property is tenanted and you have an opportunity to speak to the tenant they can be a wealth of knowledge on this front.

It is very useful to know if the owner is a ‘motivated’ seller. How long has the property been on the market? How drastically have they lowered their asking price? This need to sell can give you a bit more flexibility with your starting point for negotiations.

The other thing I’ve been trying to look into is the council rates. Council rates can be into the THOUSANDS per year it’s pretty important when calculating what repayments you can afford to keep in mind setting aside some cash for this – especially useful on the gold coast as paying your rates by the due date actually saves you around 10% off the bill. Searching the GCCC Website I was able to find some fluff information about what charges are included within your rates, but no information on estimating the rates cost of a property. I’ve sent them an email requesting a detailed break down – if I get a response I will put the information on the blog for other GC Home Buyers. I hope other QLD regions are more forth coming with information on how their rates are calculated!

Water
This information is pulled from the Allconnex website – Allconnex will not be the governing body for much longer for GC Water so this figures are likely to change soon.

Water service charge – $99.46 a half year
Wastewater service charge – $340.02 a half year
——————————————————–
Cost before consumption: $878.96/pa

Water consumption charge – $2.9858 a kilolitre
Consumption Gustimate: 200kL/year – $597.16 per year
——————————————————–
Cost including consumption (estimate): $1476.12/pa

Gold Coast City Council – Explanation of Rates and Charges
I got in touch with a person from GCCC and below is the information I gained in regards to rates (please note this information is correct as of 23/3/12). I emailed them back asking for further information, and they emailed me a copy of the Revenue Statement and Resolution of Rates and Charges for the current financial year. I have located where on the GCCC website that document is located and have provided a link to it in the useful links section at the top of the page.

It is recognised that you are considering purchasing a property on the Gold Coast and that you require information regarding rates and charges. In this regard, please refer to the following as a guide to the yearly rates and charges for 2011/12 raised by the Gold Coast City Council for owner occupied residential houses on the Gold Coast.

Property Transfer Charge: $65.00
The Local Government Act empowers Council to levy a charge for recording the change of ownership. This fee includes but not limited to, costs incurred to the Department of Environment and Resource Management and costing to have the new ownership details updated on to Council records.

General Rate: $736.00 per annum (minimum rate) owner occupied residential house
The general rate is calculated by multiplying the unimproved capital valuation of the property (as determined by the Department of Environment and Resource Management) by a set rate in the dollar of the category in which the property is included. However, to ensure that all lot owners contribute to the cost of Council providing basic works and services, a minimum general rate is payable in each category. It should be noted that duplexes and units may attract a higher minimum rate charge.

I’m not 100% sure (and will update this when I confirm), but I believe 90% of the properties I am looking at fall into the 1C rates category. They tend to have a Property Type of “Fully Detached House”. I do wish that the RPData would include the Rates Category since that information is far more useful then the Property Type (IMO).

1A A residential lot:

  1. Land:
    1. other than a lot in a community titles scheme or multi-unit residential building or multi-unit residential property; and
    2. used for a single unit dwelling; and
    3. not used to provide rental accommodation to either permanent residents or itinerants at any time during the financial year.
  2. All other rateable land (including residential vacant land) that does not fall within another category.

Cost of 1A: $736.00 per annum (Minimum General Rate)

For more information on the rate category that the propety you are looking at falls into navigate to Gold Coast City Council : Rates – Receive your rate notice online via BPAY View (see Links at top of Page) and check out the Land Categorisation Notice

Botanical Gardens Levy: $3.00 per annum
Funds raised from this charge will be used specifically for developing, improving and maintaining the Botanical Gardens known as RosserPark.

City Transport Charge: $111.00 per annum
The City Transport Infrastructure Levy was developed to address the city’s ever-increasing transport infrastructure needs. These needs include maintenance of roads, road widening, curb and channelling, maintenance of footpaths, roundabouts, bus stops, bus shelters etc.

Open Space Preservation Charge: $35.00 per annum
This levy is a flat charge payable on all lots and funds the acquisition of certain lands and non-acquisition purposes directly relevant to the conservation of open space preservation and nature conservation.

Recreational Space: $24.00 per annum
Funds raised from the Recreational Space charge will be used exclusively to acquire large areas of open space for district level parkland, specifically sporting lands.

Refuse (Bin Collection) $221.00 per annum
Refuse charges are dependent of the capacity of the bin servicing the property and the number of times it is collected weekly. The following figure is related to a ‘base domestic collection service’ which is a once-per-week collection of refuse/waste using a receptacle with 140- or 240-litre
capacity, with or without a once-per-fortnight recyclables collection service utilising a 240-litre receptacle.

State Government Fire Services Levy: $161.20 per annum
The Fire and Community Safety Levy is payable and collected on behalf of the Queensland Fire and Rescue Authority. The amount payable is the same for all residential dwellings and units and the funds are used to maintain the State’s fire service plus a broad range of services including fire prevention and fire safety education programs, together with a full range of rescue services, including road accident, building collapse and response to chemical spills.

As you can see, the rates and charges levied by Council is dependant upon the unimproved capital value of the land and the type of services provided.

Rate notices are issued half-yearly for the periods 1 January to 30 June and 1 July to 31 December. Notices are issued soon after the commencement of each half-year, in January and July. A 10% discount is allowed on the general rate only provided that payment of the relevant rate notice is received on or before the stipulated date, normally 30 days from the date of issue.

Prior to settlement of your purchase of the property your Solicitor would conduct the necessary searches with Council to ascertain the current rates position. Adjustments should be conducted at that time to determine the amount of rates payable (including water consumption charges yet to issue) from your date of possession to the end of the half-year.

Should you have any further queries about this matter please do not hesitate to contact our Council’s Customer Contact Centre on 1300 366 659 (+61 7 5667 5995 if calling from outside Australia). Alternatively, you may contact us via our website http://www.goldcoast.qld.gov.au/rates.

General Advice

I really recommend getting in touch with a mortgage broker, not only can they help you sort out your best deal on financing but they also typically will have subscriptions to a variety of RPData sites. You can purchase these reports yourself at around 50 bucks a pop or you can give your mortgage broker the address of the property you are looking at and they can send you a property profile for free! These are really great for giving you a pretty accurate current market price estimate range – useful to know when the banks aren’t likely to approve a loan for sum higher then THEY value the property at.

I really hope this has been useful, and I would love to hear any of your tips or advice in comments on this post. Happy house hunting!

Calculating Offer – Example

Year Paid/Asking Land Value House “Value” House Depreciation
2002 $175,000 $ 57,000 $118,000 UNKNOWN
2012 $325,000 $202,500 $122,000 $ 23,000

Based on the information above, ignoring any work done during the current owners ownership, this property comes to a value of : 202,500 + 118,000 – 23,000 = $297,500

The next thing to consider is the midpoint market price estimate from the property profile (supplied from mortgage broken or purchased online). This property has a midpoint of $317,500. That’s $20,000 above the result of our calculation.

When there is visible work done to the property you need to consider what value this work has added to the property. Below is a list of changes I know of that have been done to the property:

  • + Ceiling Fans
  • + Lounge
  • + Study
  • – Dishwasher (it is broken)
  • + Updated Bathroom Fittings
  • + Updated Water Heater
  • Repaired bathroom leak and associated water damage (information from tenant)
  • – 2 car Garage

Are those changes worth a $20k increase in our valuation? Possibly. This would be the time I would do some research (talk to some builder friends!) over how much that sort of work would cost. Personally I’m pretty happy with the property and will set the supplied midpoint as my upper limit when negotiating purchase of the property (if we make an offer). This wouldn’t be my starting point, I’m more likely to start the negotiations with an offer closer to $305,000 and work from there.

UPDATE: This property sold (not to us), I believe it ended up selling for $290,000 so a bit lower then my formula guestamated!

Land Value according to Planning and Development data
House “Value”= Paid/Asking – Land Value
Depreciation based on house built in 1996

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4 Responses to “Buying a House in Queensland Australia”


  1. 1 Im sure i had a funky name but cant remember it - NF
    March 14, 2012 at 7:38 am

    Mortgage brokers were awesome, not only did they get rates well below what was listed from most of the banks sites, but getting the rp data on demand was awesome. I emailed my Mortgage broker at stupid hours on the weekends and stuff, and he still always came through with an RP data report on a house a short time later.. Would more than recommend him if you were looking for one 🙂

  2. 2 Senatori
    March 14, 2012 at 9:14 am

    Wow, you are your partner are really smart to work this all out! Good to see a couple that can work out together on comiplicated real estate stuff like this. You two should be proud. I’m going to show this to my husband tonight and convince him that getting is house is not as bad as it seems (especially with twins on the way)

  3. May 22, 2012 at 8:52 pm

    There is some great advice in this post! My boyfriend & I are in the planning/saving a deposit stage of buying our first house (In Queensland!), and I’m reading any good information I come across. Thanks for this!

  4. May 29, 2012 at 3:42 pm

    Hi Everyone,

    not sure if you are subscribed to this post, but I have updated to include information I was sent (a while ago, sorry it took so long!) about rate costs on the gold coast. If you are looking outside the GC the terms used by the Gold Coast City Council may still assist you in searching for this information within your own councils webpage.


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