We all wait patiently every month to see what the Reserve Board will do with rates and the media goes into a frenzy with news about what any movement up or down will mean. Well in this week’s show Jane Slack-Smith thinks is about time we realised that low interest rates are not a good thing.

One topic guaranteed to cause a strong reaction in the media is negative gearing. Many people with only a hazy idea of what it actually is, blame it for virtually everything from locking first home buyers out of the market, to causing high property prices, to ugly greedy investors rorting the tax system and driving the national Budget into deficit. Today Michael Yardney puts it into perspective for us in the show.

Patrick Bright joins us with some timely tips on buying at auction and, in particular, ways to make sure you don’t pay too much and Cate Bakos tells us, from an agents perspective, where most DIY renovators go wrong.

The number of Gen Y’s who own multiple properties is now on par with Baby Boomers and here is another startling revelation – they are buying them at a younger age. So how are they doing it? Jennifer Duke has the answers and she tells us more about what was revealed in the research.

Carolyn Boyd from Domain has been looking into the suggestion that buying a property in a good school zone will increase the growth potential of your investment and there’s more tips and advice as well.

 
Transcripts:
Carolyn Boyd
Kevin:  A question that comes my way quite often is when buyers are buying a property, if they buy in one of those areas that has good schooling, whether or not that actually adds a premium price. There is good evidence that that is in fact the case, and I know that Carolyn Boyd from Domain has been doing a little bit of research on this.

Hi, Carolyn.

Carolyn:  Hi, Kevin.

Kevin:  A number of agents I’ve spoken to say that there are people who will pay a premium, but it is very general?

Carolyn:  Look, I don’t think it applies to every school zone, but I would say every city in Australia, particularly where schools have zoning – not every school is zoned, but where there is zoning – this would certainly apply as there will be pockets in every single city where families will be prepared to pay more to get into that school zone.

Kevin:  As you say, Carolyn, there’s not zoning in every cap city, is there?

Carolyn:  No, and you might even find in some capital cities, some schools will be zoned and some won’t, depending on demand for those schools and also depending on the size of the school and the number of classrooms available. But certainly those zoned ones – there’s always a few, isn’t there, Kevin, wherever you live – where people really want to get into that school, particularly primary schools, because I think in general, people often prefer to send their children to a public primary school, and you do see more children go off into those private schools for high school.

It’s interesting. I have asked agents, “What is the premium? What will people pay extra to get into that zone?” The answer is sometimes it’s not a question of what they’ll pay extra; it’s a question of they’ll buy that house or they won’t. If it’s in the zone, they’ll buy it; if it’s out of the zone, they’re not interested.

Kevin:  There are, in fact, some cool schools that offer special curriculum, as well, and that, I guess, adds to it. It seems to me as if it’s not very widespread and it’s not something that should be borne in mind if you’re looking at speculating in property, really.

Carolyn:  No, and I think the thing is some of the premium prices will already be priced in to those school zones. People are already paying that money to get in, so you’re going along to purchase the house where you’re already competing against those families, and you might find you’re better off not to buy in the zone or potentially pick a school that you think is up