The Minister for Consumer Affairs in Victoria intends to ban the use of ‘price plus' in real estate advertisements, to protect consumers against agents underquoting property prices.
Rather than banning the practice, they should just make such adverts legally enforceable. If an agent advertises "Offers over $700,000", then the owner should not be able to refuse an offer of $701,000. Perhaps the law could allow the vendor a week or so delay while the agent tries to attract higher offers, but if none is received then the property should have to go to that first bidder.
Agents like to use the "offers over" method of price advertising because if you put a fixed price people usually bid under it. You might list the property for $750,000, and potential buyers think they know where they stand, but then may choose not to bid because they can't go as high as the listed price. However the vendor might be happy to accept anything over $700,000. How can the agent explain this to potential buyers if "offers over" are not permitted?
To advertise "Offers over $700,000" when the owner has stated that nothing under say $730,000 will be accepted is clearly deceptive and needs to be stopped. But I see nothing wrong with advertising that property as "Offers over $730,000" with hopes that a bidding auction can be started ending at or above the $750,000 the owner really wanted.
Friday, October 29, 2010
Thursday, October 28, 2010
Keneally acts to bring down electricity costs
Kristina Keneally says she will cut electricity bills by delaying infrastructure. Smacks of the NSW government's policy for roads and rail! Now we are to be exposed to power cuts as well as jammed roads and packed trains.
Apparently Energy Australia has given in to government pressure and agreed to defer spending. Why not? They will be able to charge more next year for doing the same work more urgently.
It seems the government's long term plan is to do nothing and prepare to blame the Liberal government next year for both increased electricity bills and power cuts. And of course in the same paper the government brags of having made a surplus because of increased house sales and tax revenue (sales tax and the new ad valorem tax). Is it fair to say you have made a profit by not spending on essentials?
Apparently Energy Australia has given in to government pressure and agreed to defer spending. Why not? They will be able to charge more next year for doing the same work more urgently.
It seems the government's long term plan is to do nothing and prepare to blame the Liberal government next year for both increased electricity bills and power cuts. And of course in the same paper the government brags of having made a surplus because of increased house sales and tax revenue (sales tax and the new ad valorem tax). Is it fair to say you have made a profit by not spending on essentials?
NSW Solar Panel Scheme slashed
In a blog on 7 October I forecast that the NSW government would have to cut the 60c tariff they had set on solar panel systems on people's houses. And indeed today they have done so, effective midnight yesterday!
To put it nicely, this will throw the solar industry into turmoil.
Just as with the sudden cancellation of the Federal government's much reviled home insulation program, this sudden brake on solar panels is going to hurt a lot of people who have invested in the equipment and supplies involved in the scheme. With the home insulation, many entrepreneurs had stockpiled warehouses full of batts, and were left with unsellable stock. Now, solar panel stockists are going to be left with warehouses full of unsellable panels. And part of that problem is that the cost of panels is going down all the time, so those stocks will become increasingly unsellable.
Given the hazards associated with the insulation scheme one can sympathise with the decision to make an immediate cut. But this decision about solar panels could surely have been done a bit more sympethetically, perhaps phasing down the 60c tariff progressively? But most importantly the NSW government should never have allowed the 60c tariff to apply in perpetuity! In yesterday's announcement they confirm the high tariff will continue to be paid, apparently indefinitely!
It just seems strange that a scheme reported in the papers as being so obviously flawed was allowed to continue for nearly a month without any transition phase, and is now suddenly dropped.
To put it nicely, this will throw the solar industry into turmoil.
Just as with the sudden cancellation of the Federal government's much reviled home insulation program, this sudden brake on solar panels is going to hurt a lot of people who have invested in the equipment and supplies involved in the scheme. With the home insulation, many entrepreneurs had stockpiled warehouses full of batts, and were left with unsellable stock. Now, solar panel stockists are going to be left with warehouses full of unsellable panels. And part of that problem is that the cost of panels is going down all the time, so those stocks will become increasingly unsellable.
Given the hazards associated with the insulation scheme one can sympathise with the decision to make an immediate cut. But this decision about solar panels could surely have been done a bit more sympethetically, perhaps phasing down the 60c tariff progressively? But most importantly the NSW government should never have allowed the 60c tariff to apply in perpetuity! In yesterday's announcement they confirm the high tariff will continue to be paid, apparently indefinitely!
It just seems strange that a scheme reported in the papers as being so obviously flawed was allowed to continue for nearly a month without any transition phase, and is now suddenly dropped.
Wednesday, October 27, 2010
Population Big Enough
A poll published by the Australian National University finds that the majority of Australians believe the country has enough people already. "Australians would prefer natural growth to increased immigration."
The report found that "Concerns were mainly about infrastructure and the economy, rather than cultural diversity." The report listed house prices, road congestion, and overcrowding in cities as the driver for those concerns.
The report found that "Concerns were mainly about infrastructure and the economy, rather than cultural diversity." The report listed house prices, road congestion, and overcrowding in cities as the driver for those concerns.
Monday, October 25, 2010
NBN Takeup 11% in Tasmania
An article in The Australian reports that telcos will be provided with $3Billion ($300 per customer) to lure households into connecting up into the National Broadband Network. Results in the first trial, in Tasmania, suggest it might take even more than this!
The NBN project originally planned to run the new fibre cable to the street outside each house, with a total budget of $43 Billion. Now, recognising that many (most?) homes wouldn't pay to connect across their front lawn to the road, the NBN is proposing to wire up to the house. It is not clear whether their budget includes the cost of remediating pavements, drives and gardens in each of the 10,000,000 houses involved.
But that still leaves a large cost in wiring and equipment inside the house, to access the new network. The latest proposal is that telcos will contribute $300 towards that, but of course that extra money had to be paid for by the Federal Government.
In Tasmania apparently about 50% of households consented to having the connection provided, but only 11% have subscribed to the new high speed (and high price) services that will be available.
Mr Turnbull recently called the NBN "reckless and imprudent".
The NBN project originally planned to run the new fibre cable to the street outside each house, with a total budget of $43 Billion. Now, recognising that many (most?) homes wouldn't pay to connect across their front lawn to the road, the NBN is proposing to wire up to the house. It is not clear whether their budget includes the cost of remediating pavements, drives and gardens in each of the 10,000,000 houses involved.
But that still leaves a large cost in wiring and equipment inside the house, to access the new network. The latest proposal is that telcos will contribute $300 towards that, but of course that extra money had to be paid for by the Federal Government.
In Tasmania apparently about 50% of households consented to having the connection provided, but only 11% have subscribed to the new high speed (and high price) services that will be available.
Mr Turnbull recently called the NBN "reckless and imprudent".
Councils lapping up your rates
The Daily Telegraph today has an excellent report on where your rates go - and most of the money doesn't go to benefit the ratepayer. The average household pays $998 every year. Of this the report claims $820 goes on bureaucrats and workers. Of course the councils also tax the public with special rate rises, parking fees, fines, and user charges, so there should be lots of money available for the ratepayers. But no, the latest Department of Local Government data shows, per person, $30 goes to health and environment, $83 on recreation, $65 on community services.
The key point in the report is that councils could merge to reduce costs and share services. But which public servant wants to volunteer to become unemployed? Oh no, wait, they wouldn't be sacked, but they would be put on the temporarily unassigned roster and have nothing to do all day, instead of feeling important managing their swollen departments.
Genia McCaffrey recently told the NSW Councils they need to modernise. "You can do it yourself or have it thrust on you," she said, hopefully prophetically.
The key point in the report is that councils could merge to reduce costs and share services. But which public servant wants to volunteer to become unemployed? Oh no, wait, they wouldn't be sacked, but they would be put on the temporarily unassigned roster and have nothing to do all day, instead of feeling important managing their swollen departments.
Genia McCaffrey recently told the NSW Councils they need to modernise. "You can do it yourself or have it thrust on you," she said, hopefully prophetically.
Gillard Plan to Cut Electricity Bills
The latest scheme by the Federal Government is to make the electricity retailers replace old electrical appliances in all our homes. The proposal is that the retailers be banned from passing the costs on to consumers in higher electricity bills, though I cannot imagine the retails agreeing to that - or at least if they agree it will be because they have worked out how to pass on the costs, which would of course be enormous. And of course the consequence of the activity would be to reduce demand for electricity, which will guarantee the retailers oppose the plan. Rather smacks of Rudd's proposal to tax the miners, relying on the miners generosity and public spiritedness. It will be interesting to see how the proposal survives what can be expected to be a major advertising campaign by the electricity retailers.
Apparently the proposal was received in July, but not released until after the election. The report in the Daily Telegraph explains this delay as:
"Sources said the Federal Government had refused to release the report during the election campaign for fear of igniting debate with the Coalition over family electricity bills."
Apparently the proposal was received in July, but not released until after the election. The report in the Daily Telegraph explains this delay as:
"Sources said the Federal Government had refused to release the report during the election campaign for fear of igniting debate with the Coalition over family electricity bills."
M2 Upgrade Concerns raised in NSW Parliament
Greg Smith, Liberal member of NSW parliament for Epping, raised the community's concerns about the M2 Upgrade in Parliament last Friday. Summarising his excellent speach, why put the community through so much disruption and inconvenience, and indirectly tax road users to the tune of $550M, for an upgrade that will be rendered obsolete by the North West Rail Link?
M2 Upgrade - Bus performance indicators
Extract from Hansard 19 October.
Ms CATE FAEHRMANN (Greens): I direct my question without notice to the Minister for Transport. Why did the Government take no action to ensure that performance indicators were included for the M2 expansion that required an increase in bus services and bus patronage rates?
The Hon. JOHN ROBERTSON: I will take that question on notice.
Ms CATE FAEHRMANN (Greens): I direct my question without notice to the Minister for Transport. Why did the Government take no action to ensure that performance indicators were included for the M2 expansion that required an increase in bus services and bus patronage rates?
The Hon. JOHN ROBERTSON: I will take that question on notice.
Over-regulation of the NSW Real Estate Industry
Another quote from the REINSW website:
The State Government recently introduced the Residential Tenancies Act 2010 (uncommenced as at October 2010), a highly prescriptive piece of legislation with 227 sections. When you consider that equivalent Acts in the ACT and Western Australia have 120 sections, it is clear that real estate professionals in NSW are over-regulated.
(And elsewhere in the REINSW website)
The property industry is one of the most heavily regulated by NSW Fair Trading. There are 236 sections in the Property, Stock and Business Agents Act 2002, compared to just 130 in the legislation governing car dealers.
The government claims it is protecting the interests of consumers. But how can real estate professionals be expected to deliver tailored service in a highly prescriptive regulatory environment?
That’s why REINSW, in its Real Agency policy, is calling for the relaxation of inhibitive regulation.
Rather than trying to control the many processes of our complex industry, the government should focus instead on the desired outcome – the delivery of a high quality service, with an adequate safety net in the form of mandatory professional indemnity insurance.
The State Government recently introduced the Residential Tenancies Act 2010 (uncommenced as at October 2010), a highly prescriptive piece of legislation with 227 sections. When you consider that equivalent Acts in the ACT and Western Australia have 120 sections, it is clear that real estate professionals in NSW are over-regulated.
(And elsewhere in the REINSW website)
The property industry is one of the most heavily regulated by NSW Fair Trading. There are 236 sections in the Property, Stock and Business Agents Act 2002, compared to just 130 in the legislation governing car dealers.
The government claims it is protecting the interests of consumers. But how can real estate professionals be expected to deliver tailored service in a highly prescriptive regulatory environment?
That’s why REINSW, in its Real Agency policy, is calling for the relaxation of inhibitive regulation.
Rather than trying to control the many processes of our complex industry, the government should focus instead on the desired outcome – the delivery of a high quality service, with an adequate safety net in the form of mandatory professional indemnity insurance.
Rental Situation in NSW
The following is an extract from the blog of Tim McKibbin, CEO of REINSW, the Real Estate Institute of NSW.
As rental vacancies fell in most parts of Sydney in August, it is clear that NSW continues to face an accommodation crisis for frontline workers.
REINSW believes that this will be a major NSW election issue in 2011.
The overall rental vacancy rate in Sydney fell 0.1% to 1.5% for August 2010, with falls also recorded in the city’s inner and middle suburbs.
What we are seeing are only marginal changes in the rental vacancy rate month to month, with no long-term recover in sight.
It is clear that the trend points towards a continuing crisis in rental accommodation, which is certain to start seriously affecting our frontline industries including teachers, fire, health, ambulance and police.
NSW rental vacancies stuck in 'Groundhog Day'
As rental vacancies fell in most parts of Sydney in August, it is clear that NSW continues to face an accommodation crisis for frontline workers.
REINSW believes that this will be a major NSW election issue in 2011.
The overall rental vacancy rate in Sydney fell 0.1% to 1.5% for August 2010, with falls also recorded in the city’s inner and middle suburbs.
What we are seeing are only marginal changes in the rental vacancy rate month to month, with no long-term recover in sight.
It is clear that the trend points towards a continuing crisis in rental accommodation, which is certain to start seriously affecting our frontline industries including teachers, fire, health, ambulance and police.
Friday, October 22, 2010
Exclusive Sales Agency Agreements
The Real Estate Industry of New South Wales provides a standard sales agreement that is used by most real estate agencies. This standard 'REINSW Sales Inspection Report and Auction Agency Agreement' form provides for an exclusive sales agency agreement, usually for 90 days. If the property is to be put to auction, the agreement may also stipulate an intended auction date but the auction date does not influence the duration of the exclusive contract.
Under this agreement the vendor can terminate the agreement immediately after the 90 days.
McGrath use their own form, which is subtly but very significantly different. Their exclusive period is for 90 days after the auction. Typically the auction might be six weeks into the contract, so McGrath sign vendors up for well over five months.
Under McGrath's special contract, a vendor wishing to get out of the contract earlier has to give 30 days notice in writing AFTER the first 90 days are over. So the very first time a vendor can get out of a McGrath exclusive agency agreement is after four months.
Under this agreement the vendor can terminate the agreement immediately after the 90 days.
McGrath use their own form, which is subtly but very significantly different. Their exclusive period is for 90 days after the auction. Typically the auction might be six weeks into the contract, so McGrath sign vendors up for well over five months.
Under McGrath's special contract, a vendor wishing to get out of the contract earlier has to give 30 days notice in writing AFTER the first 90 days are over. So the very first time a vendor can get out of a McGrath exclusive agency agreement is after four months.
Wednesday, October 20, 2010
Aussies keen to crack property market
Belinda Luc of Real Estate Business reports:
More than half of Australia's renters are struggling to get into the property market, new research has found.
According to the Bankwest/Mortgage and Finance Association Home Finance (MFAA) Home Finance Index, just 19 per cent of renters are happy to keep renting in a bid to maintain their lifestyle, while the rest are keen to crack the property market.
Bankwest Retail chief executive Vittoria Shortt said rising rents were the reason so many Australians wanted to buy.
“There has been a strong shift in the desire of first time buyers to get onto the property ladder since the March Bankwest/MFAA Home Finance Index,” Ms Shortt said.
“First time buyers also changing their expectations, and are prepared to make trade-offs to enter the property market, like looking further away from the city centre or for a smaller property."
More than half of Australia's renters are struggling to get into the property market, new research has found.
According to the Bankwest/Mortgage and Finance Association Home Finance (MFAA) Home Finance Index, just 19 per cent of renters are happy to keep renting in a bid to maintain their lifestyle, while the rest are keen to crack the property market.
Bankwest Retail chief executive Vittoria Shortt said rising rents were the reason so many Australians wanted to buy.
“There has been a strong shift in the desire of first time buyers to get onto the property ladder since the March Bankwest/MFAA Home Finance Index,” Ms Shortt said.
“First time buyers also changing their expectations, and are prepared to make trade-offs to enter the property market, like looking further away from the city centre or for a smaller property."
Monday, October 18, 2010
Ad Valorem NSW State Tax hitting home sales
The NSW government quietly imposed a new tax on home sales in July, called the "ad valorem" tax. Already the tax, applicable on all sales above $500,000 (so on all sales in Beecroft and Cheltenham) has affected 13,000 property purchases, adding an average of $1,150 to each purchase.
Over the same period, the NSW property market has fallen 2.07%, the worst quarterly fall since the GFC! Residex Chief Executive John Edwards says "this Government is crucifying the property market." There are many experts talking about a crash in house prices, and one wonders if Kristina's new tax could be a trigger for this. The Liberal Party has promised to abolish the tax when they win power in March 2011, but will the damage already be done?
You have to question the logic of such new taxation on the Government's house sale cash cow. On the average Beecroft / Cheltenham house, Stamp Duty is about $35,000, so the new Keneally tax is adding about 3% to revenue, which is only marginally above the lost revenue from the drop in sales. If house prices start to fall, there could be a cascading general loss of confidence as people see their equity, and their prospect of capital gains, plunging.
Over the same period, the NSW property market has fallen 2.07%, the worst quarterly fall since the GFC! Residex Chief Executive John Edwards says "this Government is crucifying the property market." There are many experts talking about a crash in house prices, and one wonders if Kristina's new tax could be a trigger for this. The Liberal Party has promised to abolish the tax when they win power in March 2011, but will the damage already be done?
You have to question the logic of such new taxation on the Government's house sale cash cow. On the average Beecroft / Cheltenham house, Stamp Duty is about $35,000, so the new Keneally tax is adding about 3% to revenue, which is only marginally above the lost revenue from the drop in sales. If house prices start to fall, there could be a cascading general loss of confidence as people see their equity, and their prospect of capital gains, plunging.
Wednesday, October 13, 2010
Housing Market "flat".
According to the Australian Bureau of Statistics, the value of investment housing commitments fell by 3.9 per cent in August 2010, seasonally adjusted.
Real Estate Institute of Australia president David Airey said while investment housing had been "the bright spark" of housing finance earlier this year, this is no longer the case.
"We are seeing the cumulative effect of six increases in official rates between October last year and May this year and concerns about further increases in the months ahead, particularly from first home buyers and investors" Mr Airey said.
Real Estate Institute of Australia president David Airey said while investment housing had been "the bright spark" of housing finance earlier this year, this is no longer the case.
"We are seeing the cumulative effect of six increases in official rates between October last year and May this year and concerns about further increases in the months ahead, particularly from first home buyers and investors" Mr Airey said.
Tuesday, October 12, 2010
Apartments with Balconies but no car spaces?
On 4 October I reported how one developer was seeking permission to cut the cost of apartments by deleting the requirement for car parking for residents or visitors. Now the City of Sydney is taking the opposite path, imposing new standards that must force up the cost of new apartments. Their new draft development control plan will require new apartments to have balconies!
The developers responded unenthusiastically. Aaron Gadiel of Urban Taskforce said "last month the City of Sydney published its 562 page draft of a 'simplified' local environmental plan. That plan would be the most complicated planning regulation that any council has come up with. Now the council has developed an additional 873 page DCP."
He concluded his remarks by saying "with this kind of complexity, no wonder so many developers have been forced interstate."
The developers responded unenthusiastically. Aaron Gadiel of Urban Taskforce said "last month the City of Sydney published its 562 page draft of a 'simplified' local environmental plan. That plan would be the most complicated planning regulation that any council has come up with. Now the council has developed an additional 873 page DCP."
He concluded his remarks by saying "with this kind of complexity, no wonder so many developers have been forced interstate."
Friday, October 8, 2010
Housing shortage to worsen
This is a direct extract from Real Estate Business that you can find at http://www.rebonline.com.au/:
According to the Housing Industry Association's (HIA) National Outlook report, housing starts are forecast to decline by a further 4 per cent as federal stimulus for housing construction starts to wind back.
"The fact remains we are not building enough homes to match demand, and going forward our national housing shortage is expected to worsen," HIA chief economist Dr Harley Dale said.
"Renewed weakness in new home starts in 2011 would mean there were only two years in ten when starts have risen. That is an appalling result, which highlights the challenge Australia faces in addressing a large and growing housing shortage that will place considerable further pressure on rental markets."
The report found that by calendar year, housing starts are forecast to increase by 24 per cent in 2010 to a level of 171,442, before dropping by 9.5 per cent in 2011 to a level of 155,155.
"Stimulus measures drove a short-lived recovery in new home building and helped Australia avoid a recession. However, if we want to address Australia's housing shortage then the Federal Government needs to lead from the front on a range of policy areas including further investment in skills and training, reform of the tax system, an end to excessive regulation, increased land supply, reduced planning delays, and ensuring greater competition in the banking sector so there's adequate finance for development," Mr Dale said.
According to the Housing Industry Association's (HIA) National Outlook report, housing starts are forecast to decline by a further 4 per cent as federal stimulus for housing construction starts to wind back.
"The fact remains we are not building enough homes to match demand, and going forward our national housing shortage is expected to worsen," HIA chief economist Dr Harley Dale said.
"Renewed weakness in new home starts in 2011 would mean there were only two years in ten when starts have risen. That is an appalling result, which highlights the challenge Australia faces in addressing a large and growing housing shortage that will place considerable further pressure on rental markets."
The report found that by calendar year, housing starts are forecast to increase by 24 per cent in 2010 to a level of 171,442, before dropping by 9.5 per cent in 2011 to a level of 155,155.
"Stimulus measures drove a short-lived recovery in new home building and helped Australia avoid a recession. However, if we want to address Australia's housing shortage then the Federal Government needs to lead from the front on a range of policy areas including further investment in skills and training, reform of the tax system, an end to excessive regulation, increased land supply, reduced planning delays, and ensuring greater competition in the banking sector so there's adequate finance for development," Mr Dale said.
Thursday, October 7, 2010
"Bigger Australia Certain"
A report by the Centre for Independent Studies examined 36 different scenarios and found that the population of Australia would increase under all of them except when migration was cancelled, births forbidden, and people not allowed to grow older. Not a surprising conclusion. Did their scenarios not include plague, nuclear war, of armageddon?
The report concludes that "even if" migration were cut in half, to 70,000 a year, the population will still reach 29,000,000 by 2050. The study seems to say "well, that's it mate, just put up with overcrowding."
But my take on that report is that it seems to make cutting migration an absolute imperative! If home grown population increase is so huge, and our infrastructure so stretched, then why are we considering letting anyone else in from outside?
There's an interesting article in the Economist reporting that the number of people in each household in America is increasing, as the economy encourages families to stay together longer. In Sydney, with its high house prices and the large houses that we are building, this trend is likely to happen here, so fewer houses would be needed to house whatever population we end up with.
The report concludes that "even if" migration were cut in half, to 70,000 a year, the population will still reach 29,000,000 by 2050. The study seems to say "well, that's it mate, just put up with overcrowding."
But my take on that report is that it seems to make cutting migration an absolute imperative! If home grown population increase is so huge, and our infrastructure so stretched, then why are we considering letting anyone else in from outside?
There's an interesting article in the Economist reporting that the number of people in each household in America is increasing, as the economy encourages families to stay together longer. In Sydney, with its high house prices and the large houses that we are building, this trend is likely to happen here, so fewer houses would be needed to house whatever population we end up with.
Trust needs to speak out now
An interesting letter in the Northern District Times, by Lesley Goldberg, commented on the failure of the Beecroft Cheltenham Civic Trust to speak out actively in defence of the Beecroft Shopping Village, against the Hornsby Shire Council and NSW government plan to rezone it for five story mixed development. Richard Talbot, who resigned from the Trust in protest, described the BCCT committee as a "council cheer squad".
Domestic Solar Installations Cost Blowout
If you want to install solar panels and take advantage of the NSW government's Clean Energy enterprise, you probably need to hurry. It looks like it's going the way of the home insulation scheme! Another great Green Plan but equally ill-administered and financially unviable.
The domestic solar scheme allows households to install panels on their roofs then sell electricity from those roof panels back to the state at a very attractive price, then draw back coal-fired mains electricity at a third of that price! Apparently the scheme is one of the most generous in the world. The trick is that the system is funded by the power generator utilities, not by the state, which means that other uses of electricity will find their bills going up to pay for it
According to the Daily Telegraph new solar connections are being made nine times faster than expected. One suspects that outrage from consumers when they see their bills will lead the NSW government to can this scheme too.
This smacks of the funding scheme that is planned for the M2 Upgrade, where the contractor, Transurban, will be funding the construction and recouping his costs from increased road tolls. In theory it's cash-neutral for the NSW government, like they intended the Cross City and Lane Cove Tunnel projects to be. It would be nice to see the contract for the M2 upgrade and find out what liabilities will accrue to the tax payer if things don't go as planned.
The domestic solar scheme allows households to install panels on their roofs then sell electricity from those roof panels back to the state at a very attractive price, then draw back coal-fired mains electricity at a third of that price! Apparently the scheme is one of the most generous in the world. The trick is that the system is funded by the power generator utilities, not by the state, which means that other uses of electricity will find their bills going up to pay for it
According to the Daily Telegraph new solar connections are being made nine times faster than expected. One suspects that outrage from consumers when they see their bills will lead the NSW government to can this scheme too.
This smacks of the funding scheme that is planned for the M2 Upgrade, where the contractor, Transurban, will be funding the construction and recouping his costs from increased road tolls. In theory it's cash-neutral for the NSW government, like they intended the Cross City and Lane Cove Tunnel projects to be. It would be nice to see the contract for the M2 upgrade and find out what liabilities will accrue to the tax payer if things don't go as planned.
Tuesday, October 5, 2010
Big Drop in Home Lending
The Daily Telegraph reports that "the traditional spring surge of new home buyers has failed to materialise, raising fresh doubts over the predicted revival of Sydney's wilting property market. The number of new mortgages actually fell 0.3%, compared to 10% spring increases seen in other years.
Compared to September 2009, new mortgage sales declined by 20%.
These figures released on Monday just might have influenced the Reserve Bank in their decision to leave interest rates on hold for another month.
Compared to September 2009, new mortgage sales declined by 20%.
These figures released on Monday just might have influenced the Reserve Bank in their decision to leave interest rates on hold for another month.
RBA leaves Rates on Hold
Slightly against the expectations, the RBA has left interest rates on hold this month. It remains to be seen whether the banks will follow the treasurer's directive to comply!
Monday, October 4, 2010
The apartments we had to have but nobody wants
A damning indictment of the move to high rise apartments is to be found in the Sydney Morning Herald of October 2-3, page 9. "Even free furniture is not tempting buyers."
Apparently after destroying the character of much of once-beautiful Ku-ring-gai to meet the government's insistence on provision of masses of new apartments, the only flaw in the government's plan is that many of those new apartments remain empty! The expected rush of baby boomers wanting to downsize from their empty nests to smaller premises without the hastle of a garden has just not materialised.
One commentator reports that sales have mostly been to "overseas buyers looking for investment." Such buyers mostly just want to park money in Australian real estate, and often aren't very worried if the property can't be rented. An apartment can be left empty without drawing objections from neighbours, whereas an empty house needs at least to have the garden tended. And of course putting a tenant into a small apartment invites damage and loss of value, because tenants aren't as caring as those who rent a house.
It is interesting to go back through the history of the Ku-ring-gai government-forced development. An article by Sue Wellings in The Age, 14 December 2009, predicted exactly what the SMH now reports. She wrote a well reasoned explanation of why she thought the demand just was not there for the apartments the government says we have to have.
So is that what will happen to Beecroft Shopping Village? Is Hornsby Shire going to destroy our lovely village atmosphere by building multi-storey dwellings, only to find that they can't find people to live in them?
Great policy!
Apparently after destroying the character of much of once-beautiful Ku-ring-gai to meet the government's insistence on provision of masses of new apartments, the only flaw in the government's plan is that many of those new apartments remain empty! The expected rush of baby boomers wanting to downsize from their empty nests to smaller premises without the hastle of a garden has just not materialised.
One commentator reports that sales have mostly been to "overseas buyers looking for investment." Such buyers mostly just want to park money in Australian real estate, and often aren't very worried if the property can't be rented. An apartment can be left empty without drawing objections from neighbours, whereas an empty house needs at least to have the garden tended. And of course putting a tenant into a small apartment invites damage and loss of value, because tenants aren't as caring as those who rent a house.
It is interesting to go back through the history of the Ku-ring-gai government-forced development. An article by Sue Wellings in The Age, 14 December 2009, predicted exactly what the SMH now reports. She wrote a well reasoned explanation of why she thought the demand just was not there for the apartments the government says we have to have.
So is that what will happen to Beecroft Shopping Village? Is Hornsby Shire going to destroy our lovely village atmosphere by building multi-storey dwellings, only to find that they can't find people to live in them?
Great policy!
Does public transport mean you don't need a car?
Greg Woodhams, NSW vice president of the Planning Institute of Australia, believes apartments in inner and middle ring suburbs don't need to have all the parking spaces usually mandated by councils, if they have good public transport available. But good public transport just means people will leave their cars at home and go to work by bus or train. It doesn't mean they won't want to have cars. People use cars to go out at night, to go shopping, and to go away for the weekends. Good public transport to work is not sufficient.
Consequently, if Greg has his way, the local streets will be jammed full of resident's cars during the day as well as at night.
Residents of Beecroft and Cheltenham are already well aware of this problem. Every day floods of cars arrive to park in Hannah Street and other streets within walking distance of the station, anywhere where parking is not restricted. Yes, Beecroft has excellent public transport, buses as well as the train, but still people need cars. The problem is that the local residents, many of them elderly, therefore need to park within the shopping village because the streets around are choked with commuter cars all day long. If Hornsby Shire Council allows the village redevelopment to go ahead without increased parking spaces to cope with the extra residents, then the village will die because locals won't be able to drive in, do their shopping, and drive home. At present the signs are that the redevelopment will significantly reduce available parking, not increase it.
Consequently, if Greg has his way, the local streets will be jammed full of resident's cars during the day as well as at night.
Residents of Beecroft and Cheltenham are already well aware of this problem. Every day floods of cars arrive to park in Hannah Street and other streets within walking distance of the station, anywhere where parking is not restricted. Yes, Beecroft has excellent public transport, buses as well as the train, but still people need cars. The problem is that the local residents, many of them elderly, therefore need to park within the shopping village because the streets around are choked with commuter cars all day long. If Hornsby Shire Council allows the village redevelopment to go ahead without increased parking spaces to cope with the extra residents, then the village will die because locals won't be able to drive in, do their shopping, and drive home. At present the signs are that the redevelopment will significantly reduce available parking, not increase it.
Apartments without garages
Oakstand Property Group has applied to Woollahra Council to build apartments with no provision for car parking! "Let all the new residents park on the street, the locals won't mind," is their justification.
The reason is that providing car parking adds some $70,000 to the cost of the unit, and of course buyers will be delighted with the cheaper price of the apartments. The developer says the new cheaper apartments "will walk out the door." If only one could assume the buyers will walk, and not bring cars to clog the local streets!
One can only hope that Woollahra Council recognises their responsibility to the existing residents in and around the proposed new development! Parking in the area is already a nightmare, and if allowed this new scheme would have disastrous effects for many years to come. This prospective windfall for developers needs to be stamped on at once!
Residents of Beecroft and Cheltenham have already expressed grave concerns about Hornsby Shire's proposal to rezone the Beecroft Shopping Village with no obvious adequate provision for car parking. The planning documents provided showed one level of underground car parking for each new five storey mixed use block, with between three and four levels of apartments and one to two levels of shops and offices. That clearly implies shoppers will have no parking provided as part of the new developments.
The reason is that providing car parking adds some $70,000 to the cost of the unit, and of course buyers will be delighted with the cheaper price of the apartments. The developer says the new cheaper apartments "will walk out the door." If only one could assume the buyers will walk, and not bring cars to clog the local streets!
One can only hope that Woollahra Council recognises their responsibility to the existing residents in and around the proposed new development! Parking in the area is already a nightmare, and if allowed this new scheme would have disastrous effects for many years to come. This prospective windfall for developers needs to be stamped on at once!
Residents of Beecroft and Cheltenham have already expressed grave concerns about Hornsby Shire's proposal to rezone the Beecroft Shopping Village with no obvious adequate provision for car parking. The planning documents provided showed one level of underground car parking for each new five storey mixed use block, with between three and four levels of apartments and one to two levels of shops and offices. That clearly implies shoppers will have no parking provided as part of the new developments.
Friday, October 1, 2010
M2 Upgrade Controversy Heating Up
The Transurban/RTA's ''road user cost-benefit analysis'' estimated widening the M2 would increase average vehicle speed by 40 km/h in typical stop-start conditions.
But Dr John Goldberg - a former principal scientist with the CSIRO's National Measurement Laboratory, now at the University of Sydney - recently tabled an analysis (which has been peer-reviewed) that disagrees. John predicts that widening the tollway from four lanes to six gives only a 50 per cent chance of the average traffic speed increasing by more than 10 km/h.
A spokesman for Transurban responded that the reference to 40 km/h in the company's analysis was a ''standard speed, used for all road projects assessed in NSW''. Doesn't sound like rigorous scientific methodology!
But Dr John Goldberg - a former principal scientist with the CSIRO's National Measurement Laboratory, now at the University of Sydney - recently tabled an analysis (which has been peer-reviewed) that disagrees. John predicts that widening the tollway from four lanes to six gives only a 50 per cent chance of the average traffic speed increasing by more than 10 km/h.
A spokesman for Transurban responded that the reference to 40 km/h in the company's analysis was a ''standard speed, used for all road projects assessed in NSW''. Doesn't sound like rigorous scientific methodology!
Subscribe to:
Posts (Atom)