IN THIS EDITION: Buyer-FrieNDly MakeoVerS TiPS For iNVeSTorS reDraWiNG FuNDS PluS More

i N S P i r a T i o N F o r y o u r P r o P e r T y

Westpac aWarded First Home Buyers cannex aWardWestpac was recently recognised by caNNeX and awarded a 5-star rating for its outstanding service in the First home Buyers market. 165 australian financial institutions and over 2,200 mortgage products were considered for this inaugural award and Westpac was the pick for First home Buyers. Westpac offers a range of products tailored to first home buyers, along with helpful support materials and easy access options. For details, call 131 900 and talk to a Westpac Home Loan Expert.

save on insuranceFor most of us, our homes are our greatest asset. however, many australians are still underinsured. With Westpac, you save 10% on your premium by combining your home insurance and contents insurance in a single policy. Plus, you can choose to pay by the month for no extra charge. To find out about our flexible cover options, ask at a branch, visit westpac.com.au or call 1300 650 255.

Housekeeping noW online!Now you can stay up to date with the latest housekeeping trends and news online. Just visit westpac.com.au/housekeeping to view our current issue or check out past issues.

Spring makeoverTips to make your home buyer-friendly

Welcomein this bumper edition of Westpac HousekeepingTM, find out how a spring spruce-up can boost the selling potential of your house. Discover the ins and outs of investing in your first property, and also learn how a redraw facility on your loan can help you build wealth.

choosing the right investment property is a little different

from choosing your own home. location is still important,

but you also need to consider a range of other key factors.

The checklist below will help you get started.

T h e W o r D o N

access your extra funds to build wealthlooking to add value to your home or investment property? Thinking about expanding your investment portfolio? or consolidating all your debts into one? a redraw facility may be the solution you’re after.

if you have a redraw facility on your loan, you can access any extra money you’ve built up in your loan for any purpose, any time. There are various ways you can redraw funds – you can make withdrawals through branches, Telephone Banking or internet Banking. it’s a convenient way to get quick access to funds for investment purposes or even sudden expenses.

This option is only available on selected Westpac loans. To find out if your loan is applicable, call a Westpac Home Loan Expert on 131 900 or visit your local branch.

BreakiNG iNTo ProPerTy iNVeSTMeNT12 handy tips for first-time investors

1 establish a clear property investment strategy. Work out whether you want high rental-returns for the short-term or long-term capital growth.

2 Set goals – know what you want to achieve financially and when.

3 Get a property valuation, building inspection report and a search on the property.

4 Seek professional advice. if you’re dealing with a financial adviser make sure they’re licensed by aSic. you should discuss your entire financial position with someone with experience in advising on diversified investments.

5 choose a loan that suits you. consider an interest-only loan option, as the lower repayments will provide greater cashflow to maximise profits from rent, improve the property or seek out other wealth-building opportunities.

6 Buy the property that fits your investment strategy. one strategy is to negative gear your property to gain potential tax advantages. Negative gearing allows you to deduct the costs of owning your investment property from your overall income, reducing your tax bill.

7 if you’re in a property partnership: pool

resources; share expenses such as legal fees and stamp duty; and divide your loan.

8 understand all expenses, including stamp duty, strata levies, and council and water rates.

9 Get landlords’ Protection insurance to cover you if the unexpected happens.

10 Plan ahead: give your tenants a suitable length of lease; make sure your cashflow is sufficient so you can cover the mortgage and other costs if the property is unrented.

11 read and keep all documents. insist on written records and reports.

12 ask questions!

Tips for improving the value of your house

here are some tips for getting your renovations done right.

n Preparing for perfectionBefore commencing, be clear on your long-term plans so you can capitalise on any investments made. a good question to ask yourself is: how long do i intend to stay here? The longer you stay, the longer you’ll have to wait to get a return on your investment.

n homework timeBe sure to do some research so you get the best results.

contact real estate agents and designers to find out what buyers and renters are looking for. This also helps you weigh up current value versus potential value (with renovations taken into account). Next up, consult valuers to assess your home as a finished product – or if you want to do this on your own, add the cost of your home to the cost of your renovations. once you’ve done this, compare other properties that are currently on the market.

n What to renovate?First impressions are lasting. concentrating on cosmetic changes that improve the look and feel of the house can be the most cost-effective way to add value inexpensively and spark winning first impressions.

Focus on creating a look that will appeal to a broad range of tastes (rather than appear dated by the time you come to sell) by opting for classic furnishings and neutral colours. This makes it easier for potential buyers to envisage how the house would feel if they were to snap it up for themselves.

other renovation ideas that add a substantial chunk of value to properties include bigger, more functional bathrooms and kitchens; adding extra room with an extension or converting unused space (like a garage) into another bedroom; and adding decks and outdoor living areas.

n cash friendlyNot all renovations need to bleed your wallet dry. here are handy hints to help keep costs to budget while adding value.

• kit kitchens are inexpensive and easy to install.• change bench tops, cupboard doors or handles – this is a cost-effective

way to create a fresh look.• leave layout as it is – reconfiguring can mean expensive plumbing,

waterproofing and re-wiring.

n Getting started Before you start, budget, budget, budget. Be sure you are ready to commit to your choices and stick to them. changing your mind half way through a room is pricey and costly. and always be sure to allow up to 20% margin for unforeseen costs.

When finding tradies, make sure you get at least three quotes for all jobs, and check that their licences are up to date (the Department of Fair Trading supply this information). also, to get a solid idea of the quality of their work, be sure to visit projects your potential builder or designer has completed.

n Financing optionsTo help you dream big, here are some flexible financing options to bring your plans to life:

• Redraw lets you access any extra money you’ve built up in your existing home loan, for any purpose at any time.

• Top Up allows you to extend the credit limit of your variable rate mortgage to use for any personal plans.

• Equity Access Loans enable you to use the equity you’ve built up in your home to raise money for any worthwhile project or purpose. it works like a revolving line of credit where you only pay interest on the money you use and funds are available via a number of methods.

These options are only available on selected loans. To find out more information, visit your local branch and meet with a Westpac Home Loan Expert.

if your property is crying out for a new

look, spring is the perfect time to revel in

renovations. Not only can it create the

perfect excuse to improve the aesthetics

and architecture of your place, but also

when executed correctly, renovations are

an effective way to increase the value of

your home and maximise the selling price

if you move in the future.

The ouTlooko u T l o o k a r T i c l e

We respect your privacy: if you do not wish to receive any further marketing communication from any member of the Westpac Group about products or services, please call us on 132 032, write to us at GPo Box 3433, Sydney 2001 or call in to any of our branches.Things you should know: information is current as at 24 September 2008. The taxation position described is a general statement and should only be used as a guide. it does not constitute tax advice and is based on current tax laws and their interpretation. any application for credit is subject to Westpac’s normal lending criteria. Fees and charges apply. home and contents insurance is issued by Westpac General insurance limited, aBN 99 003 719 319 (WGil), and distributed by Westpac Banking corporation, aBN 33 007 457 141. The policies are subject to conditions, limits and exclusions on cover, which are explained in the policy wording. No Westpac Group company (other then the Bank as the policy distributor and WGil) has any liability in connection with the policy or this document. in some states, when you select Quality or Premier care contents, the Domestic Workers compensation cover is issued and guaranteed only by allianz australia insurance limited, aBN 15 000 122 850. a Product Disclosure Statement (PDS) should be obtained before considering the policy to ensure it is appropriate to your objectives, financial situation, or needs. a PDS can be obtained by calling 1300 350 255 or visiting westpac.com.au This information has been prepared without taking into account your objectives, financial situation or needs, accordingly you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs and you should seek your own independent financial advice.

© 2008 Westpac Banking corporation, aBN 33 007457 141. hlN0001_V2(10/08) WBM0043a

FraNk alleN

Westpac’s Director, Property Markets

iNTereST raTe cuTS To BooST ouTlook For ProPerTy

MeDiaN houSe PriceSJune quarter 2008

average median house price $459,216Median house prices up:Melbourne 4.9% to $451,000Brisbane 0.1% to $420,300adelaide 0.3% to $366,000Darwin 0.8% to $423,299Median house prices down:Sydney -2.1% to $542,000Perth -3.7% to $443,000hobart -3.0% to $325,000canberra -3.2% to $450,000Source: Real Estate Institute of Australia

Finally, interest rates are falling for the first time in over six years. The outlook for property investment is starting to improve and income returns to investors are growing as a national building shortage pushes up rents.

Strong population growth in australia is driving a need for new housing, which isn’t being met by supply. Vacancy rates have dived across the nation and rents have risen to record levels, which is putting money into landlords’ pockets.

Property’s attraction will rise as interest rates fall. Westpac is forecasting a total cut in interest rates of 100 basis points by early next year. The australian economy is slowing and oil prices have fallen, which is taking pressure off inflation. lower interest rates will help to improve home-loan serviceability for property owners.

rental growth is likely to stay strong over at least the next two years. australia is enjoying very strong levels of immigration attracted by low levels of unemployment and an ongoing skills shortage. We’re not building enough to satisfy demand. as long as the population keeps coming in, we will not have enough space to house all the immigrants.

The nation’s population grew by 1.5% during the 12 months ended 30 June 2007, with overseas migration accounting for most of the gain in numbers.

all states and territories experienced positive growth over the 12 months, with

Western australia recording the largest percentage gain of 2.3%, followed by Queensland at 2.2% and the Northern Territory at 2.0%.

That growth is keeping pressure on rents. over the year to June 2008, rents jumped as vacancy rates remained below 2.0% in many parts of australia. rental growth for houses ranged from 7.4% in hobart to 29.1% in Darwin, with workers flocking to the Territory attracted by the mining boom. in Perth, rental growth remained strong at 16.7%.

in Sydney, rental growth was 17.9% with Brisbane behind at 12.4%, canberra at 8.6% and adelaide rents rose 8.0% over the year to June 2008.

With strong population growth and the urbanisation of the population, inner-city areas of capital cities will perform relatively well. a flow of people to the cities will push up rents and property yields. The shortage of accommodation is greatest in Sydney and Brisbane, as migrants flock to those cities attracted by job opportunities. even if developers started building more now, the lead-time needed for development to complete ensures the accommodation shortage is here to stay for some time yet.

rental yields are expected to rise into next year, with property prices not likely to climb quite as sharply as rents. This is likely to provide a new focus on residential investment, particularly if interest rates fall

as we expect. The differential between mortgage rates and property yield should narrow, making the serviceability of investment loans easier.

however, it is still a case of recognising property investment as a long-term investment, as we don’t expect a surge in values over the short term. For investors looking to enter the market, stick to what you can afford and don’t overstretch yourself. Work out your budget and choose the type of property you can afford. units in the inner-city might be an affordable option or a house in a quickly-growing outer suburb – as long as the location is good, you’ll enjoy good gains over the long term.

The paper used in this publication is harvest recycled – Delivering Triple Green environmental Performance: 60% recycled Sugar cane – 40% elemental chlorine-Free (ecF) softwood fibre sourced from sustainable and internationally certified Well Managed Forests.

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