From the weekend Sydney Morning Herald:
ENERGY efficiency in NSW homes is becoming riddled with cheating and mistakes, and NSW is falling behind other states in terms of smart power use, the industry body for measuring energy performance says.
The Association of Building Sustainability Assessors says the introduction of online ''do-it-yourself'' measurement kits for home owners has led to widespread errors under the state's Building Sustainability Index, known as BASIX.
The government said the claim was unfounded, and that NSW performed equal to or better than other states in terms of energy efficiency, and in any case it was the building assessors' job to detect cheatsRead more: http://www.smh.com.au/environment/energy-smart/claims-of-cheating-and-mistakes-in-energy-use-20110902-1jq66.html#ixzz1X7nkuQ75
No direct state-by-state comparison is possible due to a lack of recent data, along with different measurement methods.
The body said the introduction of a free online tool for measuring household energy performance meant thousands of people completing their BASIX certificates online were being misled by green claims. NSW should participate in the national ''six star'' system for energy ratings, it said.
''I see a lot of clients [who] need to get compliance, so they'll tick the fluorescent lighting box because that's a cheap and easy one but they have no intention of keeping the fluoros in there,'' said Tracey Cools, the managing director of Efficient Living, an energy certifier. ''But they'll put them in at the time the certifier comes in there and does the check, and then they'll go back and put their halogens in because that's what they want … There's a lot of cheating that goes on around the DIY system.''
People are being led to believe they are building energy efficient homes but standards were higher in the rest of the country, she said. ''We're a huge way behind the rest of Australia.''
The policy manager of the association, Ross Maher, said there were many anecdotal reports of errors, including fundamental ones such as incorrect floor areas being given for houses, , suggesting a less-than-rigorous approach to filling out BASIX assessments.
Tuesday, September 6, 2011
Wednesday, August 24, 2011
The Block Auction Results
What is the main lesson from the failure to sell three of those four properties at auction? Surely it is that sensible people won't buy a property that's been renovated at the rush by a group of amateurs!
One problem with auction is that you have no cooling off period, so you need to inspect the property thoroughly before bidding. How can you do that when the renovations are still in progress under the watchful eye of the attendant television crew?
This blogger recently had a major home renovation done by a professional company with excellent results. A side benefit was that they brought to my attention significant, and clearly verifiable, problems in my old house of which I had been unaware. They offered solutions with no obligation to use them for rectification. I am sure that when, in some distant time in the future, I come to sell the property, my renovation money will have been well spent.
One problem with auction is that you have no cooling off period, so you need to inspect the property thoroughly before bidding. How can you do that when the renovations are still in progress under the watchful eye of the attendant television crew?
This blogger recently had a major home renovation done by a professional company with excellent results. A side benefit was that they brought to my attention significant, and clearly verifiable, problems in my old house of which I had been unaware. They offered solutions with no obligation to use them for rectification. I am sure that when, in some distant time in the future, I come to sell the property, my renovation money will have been well spent.
Thursday, August 11, 2011
House Price Trends
Mathew Quinn, the Managing Director of Stocklands, advised yesterday that the average size of a four-bedroom house has dropped 20 per cent since 2007 while three-bedroom houses have shrunk by 26 per cent over the same period, as living areas, media rooms and hallways disappeared in more compact designs.
Before this change, Sydney houses were amongst the most expensive in the world, and this was in part because they were the biggest in the world. According to Mr Quinn the average new home grew 10 per cent to a world record 215 square metres in the decade to 2009. Clearly this must have contributed to the sky high cost of Sydney housing!
The concrete used in housebuilding gives off a lot of carbon dioxide as it sets, so the trend to smaller houses will bring environmental benefits both during building and later, with lower energy consumption for heating and cooling the smaller houses.
Before this change, Sydney houses were amongst the most expensive in the world, and this was in part because they were the biggest in the world. According to Mr Quinn the average new home grew 10 per cent to a world record 215 square metres in the decade to 2009. Clearly this must have contributed to the sky high cost of Sydney housing!
The concrete used in housebuilding gives off a lot of carbon dioxide as it sets, so the trend to smaller houses will bring environmental benefits both during building and later, with lower energy consumption for heating and cooling the smaller houses.
Tuesday, June 14, 2011
Sydney House Prices "On the Way Up"
According to the Sydney Morning Herald, Sydney house prices rose over the April quarter and as auction clearance rates have recently consolidated, homeowners can expect house prices to rise over the May quarter.
The latest Australian Property Monitors research has revealed that Sydney house prices rose 1.1 per cent over the April quarter. This followed a fall in house prices of 0.6 per cent over the March quarter.
The biggest contributor to the April rise in house prices came from the top 25 per cent of the market, which increased by 5 per cent. The upper-middle price sectors rose by 1.7 per cent while the bottom 50 per cent of the market recorded no rise in median house prices over the April quarter.
The report continues:
Sydney median house price growth will continue to be driven by the influence of the underlying housing market fundamentals.
Rising incomes as a consequence of low unemployment and emerging shortages of skilled labour will provide buyers with increased incentive, capacity and confidence in the housing market. The Bureau of Statistics reports that Sydney's April unemployment rate was 5 per cent compared to 5.7 per cent a year ago; 42,280 jobs have been created over the past year in Sydney and NSW annual private sector incomes have increased by 4 per cent.
Increased demand for labour will be driven by the unprecedented resources boom driving through an estimated $380 billion investment in mining over the next five years.
The benefits of this strong economic growth will ripple throughout Australia, especially Sydney, as it re-energises as the commercial centre of Australia.
Growing population and increased immigration to meet skill shortages will continue to fuel demand for housing in a city already constrained by a tight rental market and chronically low levels of new home building.
According to the Real Estate Institute of NSW, the rental vacancy rate for suburbs within a 10-kilometre radius of the CBD fell 0.2 per cent to only 0.9 per cent in April. Sydney just has too many people and not enough houses, with no relief in sight.
Official interest rates are expected to remain on hold in the short-term as key measures of economic growth and inflation continue to remain within the Reserve Bank's neutral policy band. Mortgage interest rates and lending costs for new borrowers are currently under downward pressure as competition between banks intensifies as a consequence of dwindling credit growth.
With incomes rising, a shortage of housing and the pressure off interest rate rises in the short term, the fundamentals are signalling increased home buying activity in Sydney through 2011.
The latest Australian Property Monitors research has revealed that Sydney house prices rose 1.1 per cent over the April quarter. This followed a fall in house prices of 0.6 per cent over the March quarter.
The biggest contributor to the April rise in house prices came from the top 25 per cent of the market, which increased by 5 per cent. The upper-middle price sectors rose by 1.7 per cent while the bottom 50 per cent of the market recorded no rise in median house prices over the April quarter.
The report continues:
Sydney median house price growth will continue to be driven by the influence of the underlying housing market fundamentals.
Rising incomes as a consequence of low unemployment and emerging shortages of skilled labour will provide buyers with increased incentive, capacity and confidence in the housing market. The Bureau of Statistics reports that Sydney's April unemployment rate was 5 per cent compared to 5.7 per cent a year ago; 42,280 jobs have been created over the past year in Sydney and NSW annual private sector incomes have increased by 4 per cent.
Increased demand for labour will be driven by the unprecedented resources boom driving through an estimated $380 billion investment in mining over the next five years.
The benefits of this strong economic growth will ripple throughout Australia, especially Sydney, as it re-energises as the commercial centre of Australia.
Growing population and increased immigration to meet skill shortages will continue to fuel demand for housing in a city already constrained by a tight rental market and chronically low levels of new home building.
According to the Real Estate Institute of NSW, the rental vacancy rate for suburbs within a 10-kilometre radius of the CBD fell 0.2 per cent to only 0.9 per cent in April. Sydney just has too many people and not enough houses, with no relief in sight.
Official interest rates are expected to remain on hold in the short-term as key measures of economic growth and inflation continue to remain within the Reserve Bank's neutral policy band. Mortgage interest rates and lending costs for new borrowers are currently under downward pressure as competition between banks intensifies as a consequence of dwindling credit growth.
With incomes rising, a shortage of housing and the pressure off interest rate rises in the short term, the fundamentals are signalling increased home buying activity in Sydney through 2011.
Thursday, June 9, 2011
A Slow RBA Dawn
An article by Robert Gottliebsen in the Business Spectator starts with "Thank Goodness sanity prevailed in the Reserve Bank boardroom." He refers, of course, to the decision not to raise interest rates this month. The Reserve Bank is hopefully well aware of the devastating effect the November interest rate rise, and the associated media storm, had on the property world. That effect is continuing, and any further increase in interest rates could tip the market over the edge into a full housing price collapse.
The Reserve Bank statement talks up the mining boom, but Mr Gottliebsen argues they have not grasped the seriousness of the situation in non-mining Australia. Their statement does include "Growth in credit to households has softened, as have housing prices."
His article includes the sentence, "Tony Abbott and Julia Gillard are clashing horns over the carbon tax and both are missing the main issue."
The Reserve Bank statement talks up the mining boom, but Mr Gottliebsen argues they have not grasped the seriousness of the situation in non-mining Australia. Their statement does include "Growth in credit to households has softened, as have housing prices."
His article includes the sentence, "Tony Abbott and Julia Gillard are clashing horns over the carbon tax and both are missing the main issue."
Thursday, May 26, 2011
Immigrants saved Australia from Financial Crisis
An article by George Megalogenis provides a thought-provoking explanation for why Australia survived the Global Financial Crisis. In America, England, Spain, and so many other developed countries, it was the crash in house prices that triggered the collapse of the banks. But, as GM says, in his final two years as Prime Minister, John Howard initiated a flood of mainly Asian immigrants, such that Australia had the world's fastest population growth rate when the financial crisis hit in 2008.
"Take Howard's immigrants out of the equation and a recession would have been more likely. One of the things that set our economy apart from those of the United States and the United Kingdom was the behaviour of the property market. While their house prices collapsed - creating a vicious cycle of mortgage stress, reduced spending, and job losses - large scale immigration kept our house prices rising because supply was lagging demand. Ordinarily shortages would be read as a case of market failure, and they are. But they also played a valuable role in maintaining the confidence of Australian households to keep consuming while the rest of the developed world turned turtle."
"Take Howard's immigrants out of the equation and a recession would have been more likely. One of the things that set our economy apart from those of the United States and the United Kingdom was the behaviour of the property market. While their house prices collapsed - creating a vicious cycle of mortgage stress, reduced spending, and job losses - large scale immigration kept our house prices rising because supply was lagging demand. Ordinarily shortages would be read as a case of market failure, and they are. But they also played a valuable role in maintaining the confidence of Australian households to keep consuming while the rest of the developed world turned turtle."
Thursday, May 19, 2011
Big Four Aus Banks Credit Rating downgraded
Moody's last night downgraded the AA1 rating of Australia's big four banks to AA2, "relecting our view of the Australian banking system's structural sensitivity to conditions in wholesaly funding markets," according to Moody's senior vice-president Patrick Winsbury.
Australian banks are amongst the biggest users of wholesale funding, meaning they borrow huge amounts of money from abroad to make up the shortfall between what Australians deposit and what they want to borrow.
The subdued outlook for credit has reduced their funding needs, and the banks are taking steps to reduce reliance on wholesale funding.
Australian banks are amongst the biggest users of wholesale funding, meaning they borrow huge amounts of money from abroad to make up the shortfall between what Australians deposit and what they want to borrow.
The subdued outlook for credit has reduced their funding needs, and the banks are taking steps to reduce reliance on wholesale funding.
Wednesday, May 18, 2011
Government Population Strategy
The development group Urban Taskforce’s chief executive, Aaron Gadiel, says the Federal Government's sustainable population strategy released last Friday "avoids imposing any damaging population caps on the nation or on the major cities. We're pleased that the Federal Government has walked away from the notion that some parts of Australia are at carrying capacity".
However this seems rather to distort what the strategy actually says. The Federal Government focuses on boosting growth in regional areas and away from the outer suburbs of capital cities.
The report - Sustainable Australia, Sustainable Communities - does not set a population target, saying adopting one would limit the Government's ability to use the migration program to deal with skills gaps and labour shortages. However Population Minister Tony Burke says the strategy's focus is on where people live rather than setting an arbitrary figure for the size of the population.
Mr Burke says there are natural caps on growth such as the infrastructure and water-supply limits.
"There are natural limits to growth in Australia - it will never be a case of free-for-all," he said.
The report says a balance must be struck between the principles of economic sustainability, making communities livable and environmental sustainability.
Mr Burke says the Government is aiming to encourage business hubs in the outer suburbs and regional areas so people can find employment closer to home.
However this seems rather to distort what the strategy actually says. The Federal Government focuses on boosting growth in regional areas and away from the outer suburbs of capital cities.
The report - Sustainable Australia, Sustainable Communities - does not set a population target, saying adopting one would limit the Government's ability to use the migration program to deal with skills gaps and labour shortages. However Population Minister Tony Burke says the strategy's focus is on where people live rather than setting an arbitrary figure for the size of the population.
Mr Burke says there are natural caps on growth such as the infrastructure and water-supply limits.
"There are natural limits to growth in Australia - it will never be a case of free-for-all," he said.
The report says a balance must be struck between the principles of economic sustainability, making communities livable and environmental sustainability.
Mr Burke says the Government is aiming to encourage business hubs in the outer suburbs and regional areas so people can find employment closer to home.
House Prices "will be flat for ten years".
According to Jessica Darnbrough in the latest Real Estate Business magazine:
"Property price growth will be subdued for the next 10 years," an industry commentator has claimed. Speaking to Real Estate Business, BIS Shrapnel’s managing director Robert Mellor said property prices will grow by no more than 5 per cent each year.
“These are not boom conditions,” he said. “People have to get used to the fact that over the next 5 to 10 years, strong growth will be in the order of five per cent, while weaker years will see just 2 to 3 per cent growth.”
Mr Mellor said Australia is unlikely to see the rapid growth of previous years again anytime soon. “That growth was stimulated by various incentives, and as we are unlikely to see incentives return, we won’t see extraordinary growth return either."
"Property price growth will be subdued for the next 10 years," an industry commentator has claimed. Speaking to Real Estate Business, BIS Shrapnel’s managing director Robert Mellor said property prices will grow by no more than 5 per cent each year.
“These are not boom conditions,” he said. “People have to get used to the fact that over the next 5 to 10 years, strong growth will be in the order of five per cent, while weaker years will see just 2 to 3 per cent growth.”
Mr Mellor said Australia is unlikely to see the rapid growth of previous years again anytime soon. “That growth was stimulated by various incentives, and as we are unlikely to see incentives return, we won’t see extraordinary growth return either."
Monday, May 9, 2011
Rate Rises begin to bite
The Herald Sun reports that:
"ANZ Banking Group boss Mike Smith has revealed his growing concern at how rising interest rates are affecting the ability of some consumers to repay their loans.
He said yesterday poor credit quality was a concern because people were not paying off their credit cards.
Mr Smith's comments on ABC television follow Westpac chief Gail Kelly who, earlier last week, acknowledged a rise in consumer arrears, but said it was not at a level to cause the bank a loss.
Mr Smith said poor credit quality at this time was strange because it normally occurred during periods of rising unemployment.
He said it now appeared to be seasonally related, noting a little bit of a situation where people were going on holidays and not repaying the monthly debt on their credit cards.
"But I think that interest rates are beginning to hurt a little bit now, so the recent rises are beginning to bite," he said, adding that the Queensland floods had contributed to the issue."
Regarding exchange rates, Mr Smith said the Aussie dollar would continue to rise.
"I think we will see it move through $1.10 and get even stronger than that," he said.
"I can't see anything that will knock it off the perch because it's not only the strong Australian dollar, it's also the weak US dollar.
"When you think about what is happening in the States, I can't see them increasing rates for at least 18 months."
"ANZ Banking Group boss Mike Smith has revealed his growing concern at how rising interest rates are affecting the ability of some consumers to repay their loans.
He said yesterday poor credit quality was a concern because people were not paying off their credit cards.
Mr Smith's comments on ABC television follow Westpac chief Gail Kelly who, earlier last week, acknowledged a rise in consumer arrears, but said it was not at a level to cause the bank a loss.
Mr Smith said poor credit quality at this time was strange because it normally occurred during periods of rising unemployment.
He said it now appeared to be seasonally related, noting a little bit of a situation where people were going on holidays and not repaying the monthly debt on their credit cards.
"But I think that interest rates are beginning to hurt a little bit now, so the recent rises are beginning to bite," he said, adding that the Queensland floods had contributed to the issue."
Regarding exchange rates, Mr Smith said the Aussie dollar would continue to rise.
"I think we will see it move through $1.10 and get even stronger than that," he said.
"I can't see anything that will knock it off the perch because it's not only the strong Australian dollar, it's also the weak US dollar.
"When you think about what is happening in the States, I can't see them increasing rates for at least 18 months."
Thursday, April 21, 2011
Shift on Transport Issues
This post is from a correspondent to this blog:
Ministers responsible (in the new O'Farrell Coalition NSW Gov) for the difficult to solve land use & transport interaction problem in Sydney appear to realize that the 'culture of arrogance' (which can lead to deceit & manipulation), under which the NSW RTA has operated for far too long must end. Expensive major roads and so-called 'upgrades' presented as transport solutions are doomed to failure due to traffic induction which feeds into & causes congestion in supporting road networks.
Real solutions are only available from integrated public transport which is service oriented & for commuters is cost effective, easily accessed & safe. The North West Rail Link (NWRL) is an urgently needed solution as long overdue public transport infrastructure. Having previously represented the M2 impacted area of North West Sydney (as member for the former NSW seat of Northcott) Barry O'Farrell has the background knowledge to understand the urgent need for critical rail & supporting feeder bus infrastructure in NW Sydney.
Fortunately, his overwhelming victory in the recent 26 Mar NSW Elections has given the mandate to begin fixing the problems created by previous governments pursuing NO SOLUTION public policy outcomes often manipulated through the political decision making process as NSW RTA 'wish list' initiatives... The issue of political facilitators previously assisting road building vested interests needs to be addressed by a Royal commission with coercive powers.
The issue of OPTIMUM size for a large city like Sydney also needs proper inquiry under arrangements with full transparency.
Ministers responsible (in the new O'Farrell Coalition NSW Gov) for the difficult to solve land use & transport interaction problem in Sydney appear to realize that the 'culture of arrogance' (which can lead to deceit & manipulation), under which the NSW RTA has operated for far too long must end. Expensive major roads and so-called 'upgrades' presented as transport solutions are doomed to failure due to traffic induction which feeds into & causes congestion in supporting road networks.
Real solutions are only available from integrated public transport which is service oriented & for commuters is cost effective, easily accessed & safe. The North West Rail Link (NWRL) is an urgently needed solution as long overdue public transport infrastructure. Having previously represented the M2 impacted area of North West Sydney (as member for the former NSW seat of Northcott) Barry O'Farrell has the background knowledge to understand the urgent need for critical rail & supporting feeder bus infrastructure in NW Sydney.
Fortunately, his overwhelming victory in the recent 26 Mar NSW Elections has given the mandate to begin fixing the problems created by previous governments pursuing NO SOLUTION public policy outcomes often manipulated through the political decision making process as NSW RTA 'wish list' initiatives... The issue of political facilitators previously assisting road building vested interests needs to be addressed by a Royal commission with coercive powers.
The issue of OPTIMUM size for a large city like Sydney also needs proper inquiry under arrangements with full transparency.
Home Insulation Test Results
One in four homes inspected after the Federal Government's botched home insulation scheme had varying levels of safety risk and did not meet national building safety standards.
To quote Alison Rehn of the Daily Telegraph, "the disastrous $2.45 billion pink batts program" was axed 12 months ago following the deaths of four installers, many reported injuries, 205 house fires, and scores of complaints about shonky installations and dodgy operators.
Some 58,000 houses had foil insulation fitted. Because of the higher perceived hazard risk with this material, the Government committed to inspect every foil-fitted house, and of the 44,000 inspected so far nearly a third have had the insulation removed, and half of the rest needed safety switches installed.
About 1,100,000 homes had non-foil products installed, perceived to be less of a hazard. However of the 141,000 homes fitted with non-foil insulation products that were targeted for safety inspections, 34,000 (24%) did not comply with standards. The paper doesn't explain why the Government proposed only to inspect little more than ten percent of the houses with non-foil insulation. Perhaps now that the results are in, showing that 24% of those inspected are defective, they will reconsider, and should consider testing all the remaining 83,000 homes!
A number of legal claims are in the offing. One also wonders if anything is being done to compensate the poor honest businesses who stocked up on insulation material only to have the demand slashed by the cancellation of the program.
Alison's word, "disastrous", is certainly appropriate.
To quote Alison Rehn of the Daily Telegraph, "the disastrous $2.45 billion pink batts program" was axed 12 months ago following the deaths of four installers, many reported injuries, 205 house fires, and scores of complaints about shonky installations and dodgy operators.
Some 58,000 houses had foil insulation fitted. Because of the higher perceived hazard risk with this material, the Government committed to inspect every foil-fitted house, and of the 44,000 inspected so far nearly a third have had the insulation removed, and half of the rest needed safety switches installed.
About 1,100,000 homes had non-foil products installed, perceived to be less of a hazard. However of the 141,000 homes fitted with non-foil insulation products that were targeted for safety inspections, 34,000 (24%) did not comply with standards. The paper doesn't explain why the Government proposed only to inspect little more than ten percent of the houses with non-foil insulation. Perhaps now that the results are in, showing that 24% of those inspected are defective, they will reconsider, and should consider testing all the remaining 83,000 homes!
A number of legal claims are in the offing. One also wonders if anything is being done to compensate the poor honest businesses who stocked up on insulation material only to have the demand slashed by the cancellation of the program.
Alison's word, "disastrous", is certainly appropriate.
Wednesday, April 13, 2011
Incentives Hurt Housing Market
A stimulating article on the back page of the Australian on Monday 11 April by David Uren starts by saying "Demand for homes is falling and the supply is rising." Interesting items in the article include: "First home buyer grants, variable rate mortgages and capital gains tax concessions all served to destabilise housing markets." "The Australian housing market is in a worse state than is widely understood. Demand is falling, supply is rising, and the monthly turnover is drifting lower." "There were a record 260,000 properties advertised for sale in the four weeks to 3 April, 24.1% more than a year ago when the market was booming." Monthly sales peaked in May 2010 at 37,500, and by December 2010 were down to 27,500. That translates to over nine months supply of houses on the market. Later David argues: "Australia's property investors are driven by capital gain, not by rental yield. With the increasing weakness in the capital gain outlook, investors are deserting the market." The point about variable rate mortgages is interesting. "People are encouraged to enter the market during periods of low interest rates without fully appreciating the interest rate risk they are taking on."
Friday, March 25, 2011
Residents dismayed by High Rise plan
Residents around Whiteside Ave North Ryde protested in the streets last Sunday about a proposal to develop a site opposite the Optus building to take 270 units in an area currently restricted to two storeys.
The proposal is to build five structures ranging from three to eleven stories! Of course the developer is hoping to use the Labor government's Part 3A powers to approve this.
Victor Dominello, State Liberal MP for Ryde, said that if the Liberals win government at the election this Saturday, one of the first tasks will be to review all outstanding applications submitted under Part 3A.
The proposal is to build five structures ranging from three to eleven stories! Of course the developer is hoping to use the Labor government's Part 3A powers to approve this.
Victor Dominello, State Liberal MP for Ryde, said that if the Liberals win government at the election this Saturday, one of the first tasks will be to review all outstanding applications submitted under Part 3A.
Tuesday, March 22, 2011
Barangaroo Remediation
Extracted from 7 News, by Caris Bizzaca:
NSW Premier Kristina Keneally is under siege from the Opposition, Greens and action groups who say the government has undermined a court case by exempting Sydney's Barangaroo site from environmental laws.
Planning minister Tony Kelly on Wednesday gazetted an order that effectively excises Barangaroo from his department's own planning laws for managing contamination, just days before the government goes into caretaker mode ahead of the state election.
The Sydney Harbour site is at the centre of a case in the Land and Environment Court being pursued by Australians for Sustainable Development (AfSD), a group concerned about contaminated subsoil.
Opposition spokesperson for planning Brad Hazzard said on Thursday it was an "abuse of process".
"The signature on the planning document may be Tony Kelly's but Kristina Keneally's fingerprints are all over it," he said in a statement.
"In September, Ms Keneally confirmed that she was, 'taking direct responsibility and control of Barangaroo' - so there's no ducking that this rotten act is all hers.
"This is an abuse of process and Kristina Keneally is in it up to her eyeballs showing that NSW Labor has no respect for the rule of law and the NSW community."
But Ms Keneally denied she was behind the order.
"This is a planning decision," she said while campaigning in Sydney.
"I am not the minister for planning."
Ms Keneally, who assumed ministerial responsibility for the $6 billion project last September, said she heard about Mr Kelly's action on Wednesday and spoke with him on Thursday morning.
She defended Mr Kelly saying he had simply made a "technical clarification".
NSW Premier Kristina Keneally is under siege from the Opposition, Greens and action groups who say the government has undermined a court case by exempting Sydney's Barangaroo site from environmental laws.
Planning minister Tony Kelly on Wednesday gazetted an order that effectively excises Barangaroo from his department's own planning laws for managing contamination, just days before the government goes into caretaker mode ahead of the state election.
The Sydney Harbour site is at the centre of a case in the Land and Environment Court being pursued by Australians for Sustainable Development (AfSD), a group concerned about contaminated subsoil.
Opposition spokesperson for planning Brad Hazzard said on Thursday it was an "abuse of process".
"The signature on the planning document may be Tony Kelly's but Kristina Keneally's fingerprints are all over it," he said in a statement.
"In September, Ms Keneally confirmed that she was, 'taking direct responsibility and control of Barangaroo' - so there's no ducking that this rotten act is all hers.
"This is an abuse of process and Kristina Keneally is in it up to her eyeballs showing that NSW Labor has no respect for the rule of law and the NSW community."
But Ms Keneally denied she was behind the order.
"This is a planning decision," she said while campaigning in Sydney.
"I am not the minister for planning."
Ms Keneally, who assumed ministerial responsibility for the $6 billion project last September, said she heard about Mr Kelly's action on Wednesday and spoke with him on Thursday morning.
She defended Mr Kelly saying he had simply made a "technical clarification".
Friday, March 18, 2011
Property as an Asset
A really interesting article in The Economist 5th March starts by saying "Property is widely seen as a safe asset. It is arguably the most dangerous of all."
The article, by Andrew Palmer, includes some interesting thoughts:
People buy property for various reasons, but dominant amongst those motives is financial gain. This mixture of motives can be toxic for financial stability. If housing were like any other consumer good, rising prices should dampen demand. But with property, higher prices are seen as a signal to buy. What happens if prices start to drop?
The value of any particular home is set by the latest local transactions. One absurd bid can push up prices for lots of people living nearby. But has it changed the intrinsic value of those properties?
An analysis shows that in America for the past 30 years renting was better financially than buying (but only if the renter meticulously saves the difference between the rent and what a mortgage would be costing).
The article, by Andrew Palmer, includes some interesting thoughts:
People buy property for various reasons, but dominant amongst those motives is financial gain. This mixture of motives can be toxic for financial stability. If housing were like any other consumer good, rising prices should dampen demand. But with property, higher prices are seen as a signal to buy. What happens if prices start to drop?
The value of any particular home is set by the latest local transactions. One absurd bid can push up prices for lots of people living nearby. But has it changed the intrinsic value of those properties?
An analysis shows that in America for the past 30 years renting was better financially than buying (but only if the renter meticulously saves the difference between the rent and what a mortgage would be costing).
Thursday, March 17, 2011
John McGrath Hates Underquoting
John McGrath's blog of 12 April 2010, responding to a question about underquoting, says:
"Hey Sonja, I agree, it's a pet hate of mine too. Guides should reflect the Agent's opinion and the Vendor's expectation. I hope it wasn’t a sale connected with our firm but if it was please let me know so I can look at it right away. John McGrath."
John, you should check out the 14 Allerton sale last month. Quote price $900,000, sale price $1,117,000, 24% over guide! Yet a comparable house next door sold a year ago for $1,116,000 so luckily for Wayne this one sold below market price.
While you are at it, John, check out all the other recent Wayne Vaughan sales:
8 Dennistone Rd Eastwood 20% over guide.
17 Railway Ave Eastwood 19% over guide.
55 Eastview Ave N Ryde 19% over guide.
74 Ray Road Epping 14% over guide.
24 Angus Avenue Epping 12% over guide.
He almost got 1/17 Pinner Close N Epping right, only 9% over guide.
Wayne is in good company though, Betty Ockerlander of Better Homes clocked up:
41 Stanley Rd Epping 18% over guide.
30 Surrey St Epping 17% over guide.
28 Cecil St Dennistone E 16% over guide.
Come on, OFT, protect the buyers. Let's see some prosecutions to stamp out this pernicious practice. Unfortunately the maximum fine is only $22,000, which is less than the commission, but the OFT can take away the licence of repeat offenders.
Wayne is now being investigated by OFT, so will have to be careful not to sell any of his present under-quoted listings for the correct market price, or he could lose his licence. An interesting problem for an agent, trying to persuade buyers to settle below market price!
"Hey Sonja, I agree, it's a pet hate of mine too. Guides should reflect the Agent's opinion and the Vendor's expectation. I hope it wasn’t a sale connected with our firm but if it was please let me know so I can look at it right away. John McGrath."
John, you should check out the 14 Allerton sale last month. Quote price $900,000, sale price $1,117,000, 24% over guide! Yet a comparable house next door sold a year ago for $1,116,000 so luckily for Wayne this one sold below market price.
While you are at it, John, check out all the other recent Wayne Vaughan sales:
8 Dennistone Rd Eastwood 20% over guide.
17 Railway Ave Eastwood 19% over guide.
55 Eastview Ave N Ryde 19% over guide.
74 Ray Road Epping 14% over guide.
24 Angus Avenue Epping 12% over guide.
He almost got 1/17 Pinner Close N Epping right, only 9% over guide.
Wayne is in good company though, Betty Ockerlander of Better Homes clocked up:
41 Stanley Rd Epping 18% over guide.
30 Surrey St Epping 17% over guide.
28 Cecil St Dennistone E 16% over guide.
Come on, OFT, protect the buyers. Let's see some prosecutions to stamp out this pernicious practice. Unfortunately the maximum fine is only $22,000, which is less than the commission, but the OFT can take away the licence of repeat offenders.
Wayne is now being investigated by OFT, so will have to be careful not to sell any of his present under-quoted listings for the correct market price, or he could lose his licence. An interesting problem for an agent, trying to persuade buyers to settle below market price!
Wednesday, March 16, 2011
Fair Trading disqualifies agents
Two central coast real estate agents have had their licenses revoked by NSW Fair Trading.
Kevin Barnes and Nicole Mars were disqualified from practising as estate agents for 10 and six years respectively, after the duo were found to have obtained $500,000 profit in a property sale.
Fair Trading took action against the pair after a compliant came through from Housing NSW concerning the sale of a property at 1-3 Walmsley Road, Ourimbah.
Fair Trading deputy commissioner Steve Griffin said Fair Trading would continue to take decisive action when real estate agents and businesses acted inappropriately in putting their own interests before that of their clients.
Nice to see Fair Trading showing teeth! There is a great need for this in the real estate industry!
Kevin Barnes and Nicole Mars were disqualified from practising as estate agents for 10 and six years respectively, after the duo were found to have obtained $500,000 profit in a property sale.
Fair Trading took action against the pair after a compliant came through from Housing NSW concerning the sale of a property at 1-3 Walmsley Road, Ourimbah.
Fair Trading deputy commissioner Steve Griffin said Fair Trading would continue to take decisive action when real estate agents and businesses acted inappropriately in putting their own interests before that of their clients.
Nice to see Fair Trading showing teeth! There is a great need for this in the real estate industry!
Friday, March 11, 2011
McGrath Underquoting Again
No doubt the large crowd at the auction of 4 Allerton Road Beecroft were surprised when the advertised price of "Guide over $900,000" resulted in an auction with 69 bids! The first wildly optimistic bid was for $875,000. Bidding then leapt away in $25,000 steps until finally a realistic market sale price of $1,117,000 was reached, 25% above the McGrath Guide Price.
A newly listing vendor says that they went with McGrath because they explained to her that this is their technique. Once people have paid to do building and pest inspections for a property that seems to be a bargain, they will come to the auction and might continue bidding way beyond the limit they had set themselves. Great policy for the vendors, but unkind to the poor buyers who spend their money with no prospect of buying the property.
It is actually also against the law. Trouble is, the Fair Trading Minister's people typically fine the agency $2,200 which is seen as just a trivial tax on a sale which realises commission of $24,000 or more. Apparently the maximum fine is $22,000, so still just matching commission. So the only real threat is loss of licence, which penalty should be applied for repeat offenders!
It's amusing that in 2008, when McGrath was fined for this, John McGrath's response was "I'm obviously disappointed. We've had a great reputation for the exact opposite of this," and no doubt smiled as he said "I think the only thing we're guilty of is achieving a good price for our vendors." Or to put it another way, "Bugger the Buyers". But it's not a fair comment anyway, because a nearly identical property next door sold nearly a year ago for $1,116,000, so the McGrath sale price was at best market value.
Read more: http://www.news.com.au/business/real-estate-agents-busted-for-low-quotes/story-e6frfm1i-1111116430288#ixzz1GFhh9Skd
A newly listing vendor says that they went with McGrath because they explained to her that this is their technique. Once people have paid to do building and pest inspections for a property that seems to be a bargain, they will come to the auction and might continue bidding way beyond the limit they had set themselves. Great policy for the vendors, but unkind to the poor buyers who spend their money with no prospect of buying the property.
It is actually also against the law. Trouble is, the Fair Trading Minister's people typically fine the agency $2,200 which is seen as just a trivial tax on a sale which realises commission of $24,000 or more. Apparently the maximum fine is $22,000, so still just matching commission. So the only real threat is loss of licence, which penalty should be applied for repeat offenders!
It's amusing that in 2008, when McGrath was fined for this, John McGrath's response was "I'm obviously disappointed. We've had a great reputation for the exact opposite of this," and no doubt smiled as he said "I think the only thing we're guilty of is achieving a good price for our vendors." Or to put it another way, "Bugger the Buyers". But it's not a fair comment anyway, because a nearly identical property next door sold nearly a year ago for $1,116,000, so the McGrath sale price was at best market value.
Read more: http://www.news.com.au/business/real-estate-agents-busted-for-low-quotes/story-e6frfm1i-1111116430288#ixzz1GFhh9Skd
Thursday, March 10, 2011
Back on the Gas
On the front page of the Northern District Times this week is an article about an independent petrol station starting up again on the corner of Blaxland and Lovell Roads in Eastwood. The demise of independent petrol stations has been a sad result of Coles and Woolworth discounting, and it is a real pleasure to see a movement to open some of them up again.
Saturday, March 5, 2011
Property Choice Keeping Prices Down
An article in today's Sydney Morning Herald says "prices remain under pressure as discounting increases to secure sales".
Auctioneer Damien Cooley is quoted as saying, "The majority of sellers are becoming a lot more realistic about what their home is worth".
Auctioneer Damien Cooley is quoted as saying, "The majority of sellers are becoming a lot more realistic about what their home is worth".
Friday, March 4, 2011
EcoTransit Sydney Forum Sunday 6 March
EcoTransit Sydney are hosting a community forum at which Liberal, Labor and Greens transport spokespeople will explain their policies on expanding rail services in NW Sydney, and in particular on delivering the long promised North West Rail Link.
Sunday 6 March at 7pm, in the Pennant Hills Community Centre, corner of Yarrara and Ramsay Roads, Pennant Hills.
Come along, listen to the speakers, and have your say.
Sunday 6 March at 7pm, in the Pennant Hills Community Centre, corner of Yarrara and Ramsay Roads, Pennant Hills.
Come along, listen to the speakers, and have your say.
Rail link key in state's growth
This article by Brian Robins is from the SMH, March 3, 2011.
The north-west rail link is the most worthwhile public transport project the state government should pursue, since it has the greatest economic spinoff, research has found. Modelling by the Centre for International Economics, on behalf of the Property Council of Australia, used the multi-criteria approach adopted by Infrastructure Australia, the federal body which has refused to fund most projects nominated by the state due to inadequate assessment and planning.
''Our recent survey of Sydney residents showed just 3 per cent felt we have a good road network and only 32 per cent gave a tick to our public transport system,'' the executive director of the Property Council, Glenn Byers, said. ''It's no surprise the north-west rail link is the highest ranked public transport project in testing its economic upside and strategic importance to Sydney's growth.''
The survey, which ranked a series of transport projects across 16 criteria and then assessed them in terms of which would give the greatest economic fillip to the state's economy, found that taking freight heading to the Botany port off the roads and putting it onto rail would have the greatest single economic impact.
''Collectively, these projects would deliver a $5.8 billion boost to the economy, representing a 1.1 per cent growth in real gross state product,'' Mr Byers said.
By 2020, the projects would help boost employment by creating 5700 jobs and boosting exports by 3.5 per cent, in real terms, the study found. ''The transport projects lead to a larger NSW economy that produces more, exports more and employs more,'' the study found. ''The projects also lead to greater investment in NSW and lower prices for NSW consumers.''
The state government should establish a portfolio of Infrastructure, Planning and Transport, along with an independent infrastructure and planning commission and an independent body similar to Infrastructure Australia to assess, prioritise and help deliver large projects. Taking freight bound for Port Botany off the road involves upgrades to road and rail links in Moorebank, Ingleburn, Minto and Eastern Creek.
The most expensive project would be the M4 East and tunnel to Port Botany, at $9.1 billion, followed by the Western Express, city relief line and Harbour rail link at $8.5 billion. The onus of these projects would be especially acute, since they would be largely funded out of the state budget, with only limited alternative funding prospects, the study found. Similarly, helping improve the position of the Epping-Parramatta rail link in the study was the promise of sizeable federal funding, 80 per cent of the total, it noted.
This story was found at: http://www.smh.com.au/nsw/state-election-2011/rail-link-key-in-states-growth-20110302-1bey2.html
The north-west rail link is the most worthwhile public transport project the state government should pursue, since it has the greatest economic spinoff, research has found. Modelling by the Centre for International Economics, on behalf of the Property Council of Australia, used the multi-criteria approach adopted by Infrastructure Australia, the federal body which has refused to fund most projects nominated by the state due to inadequate assessment and planning.
''Our recent survey of Sydney residents showed just 3 per cent felt we have a good road network and only 32 per cent gave a tick to our public transport system,'' the executive director of the Property Council, Glenn Byers, said. ''It's no surprise the north-west rail link is the highest ranked public transport project in testing its economic upside and strategic importance to Sydney's growth.''
The survey, which ranked a series of transport projects across 16 criteria and then assessed them in terms of which would give the greatest economic fillip to the state's economy, found that taking freight heading to the Botany port off the roads and putting it onto rail would have the greatest single economic impact.
''Collectively, these projects would deliver a $5.8 billion boost to the economy, representing a 1.1 per cent growth in real gross state product,'' Mr Byers said.
By 2020, the projects would help boost employment by creating 5700 jobs and boosting exports by 3.5 per cent, in real terms, the study found. ''The transport projects lead to a larger NSW economy that produces more, exports more and employs more,'' the study found. ''The projects also lead to greater investment in NSW and lower prices for NSW consumers.''
The state government should establish a portfolio of Infrastructure, Planning and Transport, along with an independent infrastructure and planning commission and an independent body similar to Infrastructure Australia to assess, prioritise and help deliver large projects. Taking freight bound for Port Botany off the road involves upgrades to road and rail links in Moorebank, Ingleburn, Minto and Eastern Creek.
The most expensive project would be the M4 East and tunnel to Port Botany, at $9.1 billion, followed by the Western Express, city relief line and Harbour rail link at $8.5 billion. The onus of these projects would be especially acute, since they would be largely funded out of the state budget, with only limited alternative funding prospects, the study found. Similarly, helping improve the position of the Epping-Parramatta rail link in the study was the promise of sizeable federal funding, 80 per cent of the total, it noted.
This story was found at: http://www.smh.com.au/nsw/state-election-2011/rail-link-key-in-states-growth-20110302-1bey2.html
M2 upgrade contract should be cancelled
John Goldberg had this letter published in the Northern District Times on 5 Jan. It is worth repeating now the state election is nearing, and with the EcoTransit Forum taking place on Sunday 6th at the Pennant Hills Community Centre at 7pm.
"Understandable attempts by the Transurban interests to talk up the “benefits” of the M2 upgrade in terms of travel time savings have little credibility (“M2 rubbishes ‘no benefit claim’”. NDT 15 December). The claims of travel time savings are part of a derisible economic analysis prepared by a Transurban consultant with the clear aim of justifying the project.
"The claims have been shown to be spurious by the author in a paper to be published shortly in the refereed Proceedings of the 2010 Australasian Transport Research Forum based on the author’s research at the University of Sydney. The results already reported in the Sydney Morning Herald (7/10/2010) show that Transurban overstated the savings by a factor of four times. This result means that the savings are worth far less than the cost of the project over its concession lifetime.
"Why then proceed with this uneconomic project which will be of minimal benefit to road users? The real reason lies in the need for Transurban to generate increased cash flow. In 2010, the total expenses of Transurban exceeded its total earnings by $234.60 million, and its group debt is over $7 billion and keeps rising. Yet Transurban continues to assert group profitability.
"Increased revenue is to be obtained by taking advantage of induced traffic. This will have the effect of increasing congestion, reducing travel time savings but it is likely to increase revenue. These hopes have been publicly expressed by Mr C.J.Lynch the CEO of the Transurban Group(The Australian, 15-16/5/2010) while the possibility of induced traffic has been marginalised, not unexpectedly, in the EIS published by Transurban and endorsed by the RTA.
"The M2 upgrade affair generally demonstrates that transport planning in a major Australian city cannot be reliably carried out by incompetent agencies such as the RTA using deception and community manipulation disguised as consultation. There is no substance in this M2 upgrade project which would support Kristina Keneally’s2009 claim, clearly influenced by the RTA, that the M2 upgrade project was “critical” infrastructure and one of “state significance”.
"The incoming government should therefore invoke the doctrine of executive necessity and cancel the contract for this essentially fraudulent project and also undertake serious reform of the RTA."
"Understandable attempts by the Transurban interests to talk up the “benefits” of the M2 upgrade in terms of travel time savings have little credibility (“M2 rubbishes ‘no benefit claim’”. NDT 15 December). The claims of travel time savings are part of a derisible economic analysis prepared by a Transurban consultant with the clear aim of justifying the project.
"The claims have been shown to be spurious by the author in a paper to be published shortly in the refereed Proceedings of the 2010 Australasian Transport Research Forum based on the author’s research at the University of Sydney. The results already reported in the Sydney Morning Herald (7/10/2010) show that Transurban overstated the savings by a factor of four times. This result means that the savings are worth far less than the cost of the project over its concession lifetime.
"Why then proceed with this uneconomic project which will be of minimal benefit to road users? The real reason lies in the need for Transurban to generate increased cash flow. In 2010, the total expenses of Transurban exceeded its total earnings by $234.60 million, and its group debt is over $7 billion and keeps rising. Yet Transurban continues to assert group profitability.
"Increased revenue is to be obtained by taking advantage of induced traffic. This will have the effect of increasing congestion, reducing travel time savings but it is likely to increase revenue. These hopes have been publicly expressed by Mr C.J.Lynch the CEO of the Transurban Group(The Australian, 15-16/5/2010) while the possibility of induced traffic has been marginalised, not unexpectedly, in the EIS published by Transurban and endorsed by the RTA.
"The M2 upgrade affair generally demonstrates that transport planning in a major Australian city cannot be reliably carried out by incompetent agencies such as the RTA using deception and community manipulation disguised as consultation. There is no substance in this M2 upgrade project which would support Kristina Keneally’s2009 claim, clearly influenced by the RTA, that the M2 upgrade project was “critical” infrastructure and one of “state significance”.
"The incoming government should therefore invoke the doctrine of executive necessity and cancel the contract for this essentially fraudulent project and also undertake serious reform of the RTA."
Saturday, February 26, 2011
CBA cuts loan rate
The CBA has launched a fee-free standard mortgage at a rate of just 7.24%! Currently Westpac charges 7.86%, ANZ 7.8%, and NAB 7.67%.
Long live competition!
Long live competition!
Friday, February 25, 2011
Australians struggle to enter property market
The following is extracted from today's Real Estate Business:
Australia’s housing affordability problem shows no sign of abating, according to recent figures.
Data from the Australian Bureau of Statistics found residential construction work done fell by 1.1 per cent in the December 2010 quarter.
New residential building work done fell by 1.7 per cent in the December 2010 quarter, following the 5.2 per cent decline in the September 2010 quarter.
On a more positive note, work done on major alterations and additions is again growing, turning in a 2.5 per cent increase for the December 2010 quarter to be up by 6.3 per cent over 2010.
Housing Industry Association senior economist Andrew Harvey said renovations continue to be popular as Australians increasingly look to improve their existing homes rather than face the mounting transaction costs, such as stamp duties, that they will incur if they trade-up to another property.
“Unfortunately Australia’s high property transactions costs do not help the problem of Australia’s undersupply of housing, nor the affordability problems faced by both prospective home owners and those in the market for rental property,” Mr Harvey said.
“Recently the OECD found that Australia has the fourth highest transactions cost on property in the developed world and this situation causes major inefficiencies in terms of locking owners into their existing properties.
"Australian governments need to turn their attention to removing stamp duties on new homes so as to better encourage annual levels of new home building that will help ease the pressure on prospective home owners, particularly young Australians who are really struggling to enter the housing market."
Australia’s housing affordability problem shows no sign of abating, according to recent figures.
Data from the Australian Bureau of Statistics found residential construction work done fell by 1.1 per cent in the December 2010 quarter.
New residential building work done fell by 1.7 per cent in the December 2010 quarter, following the 5.2 per cent decline in the September 2010 quarter.
On a more positive note, work done on major alterations and additions is again growing, turning in a 2.5 per cent increase for the December 2010 quarter to be up by 6.3 per cent over 2010.
Housing Industry Association senior economist Andrew Harvey said renovations continue to be popular as Australians increasingly look to improve their existing homes rather than face the mounting transaction costs, such as stamp duties, that they will incur if they trade-up to another property.
“Unfortunately Australia’s high property transactions costs do not help the problem of Australia’s undersupply of housing, nor the affordability problems faced by both prospective home owners and those in the market for rental property,” Mr Harvey said.
“Recently the OECD found that Australia has the fourth highest transactions cost on property in the developed world and this situation causes major inefficiencies in terms of locking owners into their existing properties.
"Australian governments need to turn their attention to removing stamp duties on new homes so as to better encourage annual levels of new home building that will help ease the pressure on prospective home owners, particularly young Australians who are really struggling to enter the housing market."
Monday, February 21, 2011
Main Roads Bonds to fund infrastructure.
Here is an interesting comment in the Daily Telegraph, by Richard Talbot, Fmr NRMA Director & RTA surveyor of Sydney, and now leader of the new political party TheGreys:
"The RTA has been cash strapped now for nearly 2 decades which is why the only new roads we've seen built in NSW have been toll roads. The next NSW Govt should re-introduce government-guaranteed Main Roads bonds like we used to have to provide a long overdue injection into road funding. Borrowing from the public to build major public infrastructure such as roads and rail lines is good for the economy and provides lots of jobs, not to mention the good feeling commuters get from seeing something is actually being done to solve our transport problem."
"The RTA has been cash strapped now for nearly 2 decades which is why the only new roads we've seen built in NSW have been toll roads. The next NSW Govt should re-introduce government-guaranteed Main Roads bonds like we used to have to provide a long overdue injection into road funding. Borrowing from the public to build major public infrastructure such as roads and rail lines is good for the economy and provides lots of jobs, not to mention the good feeling commuters get from seeing something is actually being done to solve our transport problem."
Friday, February 18, 2011
NSW Labour's last splurge?
According to SMH today, the Rozelle Residents Action Group is alarmed at the bulk and scale of the proposed residential and retail development on the Woolooware waterfront Victoria Road site. But thanks to the Labour government's "Project of State Significance" legislation, the minister can approve the development because it is worth a lot of money.
The developer has asked the planning department to declare the new project as a "Project of State Significance" so that the minister can approve it despite local objections. The new project is worth about $200 million, almost twice the estimated cost of the project that was rejected last year. Is that adequate justification for now approving it?
Given that the Liberal party have vowed to terminate this PSS rule and restore planning rights to local authorities, it seems most unethical that Labour's minister should approve the project so close to an election which will throw his party out of office and rescind that planning law!
The developer has asked the planning department to declare the new project as a "Project of State Significance" so that the minister can approve it despite local objections. The new project is worth about $200 million, almost twice the estimated cost of the project that was rejected last year. Is that adequate justification for now approving it?
Given that the Liberal party have vowed to terminate this PSS rule and restore planning rights to local authorities, it seems most unethical that Labour's minister should approve the project so close to an election which will throw his party out of office and rescind that planning law!
Friday, February 11, 2011
North West Rail Link - EcoTransit Community Forum
With the NSW election due very soon, everyone needs to know how the various political parties stand on the North West Rail Link issue. It is therefore good to hear that EcoTransit is organising a forum to allow all those parties to explain their policies.
Come along to the forum on Sunday 6 March at 7pm, at the Pennant Hills Community Centre (corner of Yarrara and Ramsay Roads, Pennant Hills).
Come along to the forum on Sunday 6 March at 7pm, at the Pennant Hills Community Centre (corner of Yarrara and Ramsay Roads, Pennant Hills).
Wednesday, February 9, 2011
New Legislation will impact Buyers
This post is taken straight from Real Estate Business:
The National Consumer Credit Protection Act has come under scrutiny, with industry pundits arguing the new laws will negatively impact both buyers and sellers.
RE/MAX WA managing director Geoff Baldwin is concerned that the newly introduced NCCP Act will negatively impact any borrower over the age of 35, and could potentially impact those who are selling to upgrade.
“Effectively the new responsible lending obligations on banks and brokers depict that a borrower should have the capacity to repay the loan in full at retirement age without selling their owner occupied property,” Mr Baldwin said.
“These changes mean that a borrower aged, say 55 can no longer take out a loan over 30 years but will be restricted to a much shorter term unless they can demonstrate that they will have superannuation or other assets they can sell to finalise the loan at retirement.”
According to Mr Baldwin, the impact that these legislative changes could have to the property market has been totally underestimated.
“There has been little or no public education or communication to ensure people are aware of how they may be affected,” he said.
“Obviously this would mean much higher repayments and in many cases it will disqualify people and exclude them from the market."
The National Consumer Credit Protection Act has come under scrutiny, with industry pundits arguing the new laws will negatively impact both buyers and sellers.
RE/MAX WA managing director Geoff Baldwin is concerned that the newly introduced NCCP Act will negatively impact any borrower over the age of 35, and could potentially impact those who are selling to upgrade.
“Effectively the new responsible lending obligations on banks and brokers depict that a borrower should have the capacity to repay the loan in full at retirement age without selling their owner occupied property,” Mr Baldwin said.
“These changes mean that a borrower aged, say 55 can no longer take out a loan over 30 years but will be restricted to a much shorter term unless they can demonstrate that they will have superannuation or other assets they can sell to finalise the loan at retirement.”
According to Mr Baldwin, the impact that these legislative changes could have to the property market has been totally underestimated.
“There has been little or no public education or communication to ensure people are aware of how they may be affected,” he said.
“Obviously this would mean much higher repayments and in many cases it will disqualify people and exclude them from the market."
Friday, February 4, 2011
NSW Labour At It Again
In the dying days of their disastrous and discredited government, the NSW labour government is making a final gift to the developers, approving the immediate construction of a new cruise ship terminal at White Bay.
Apparently this decision has been made before community consultation is complete. Obviously the objective is to allow work to progress before the election, making it more difficult for the new government to cancel it. Or rather, to increase the cost of such cancellation to the taxpayer if consultation concludes the move is wrong.
Objections have come from the City of Sydney and Leichhardt councils and the National Trust, all of whom argued that the cruise ships should continue to dock at Barangaroo.
The biggest operator of cruise ships, Carnival Cruises, said the present cruise ship berth at Barangaroo is the ideal location because it allows passengers direct access into the city on foot, encouraging them to spend money in the city. The White Bay berth will require fleets of busses running shuttle services down Victoria Road every time a ship docks, with a planned 170 ships this year alone, and many on those ships will not want to queue for busses and so will stay in air conditioned comfort on the ship.
"The move from Barangaroo was always a political, government, decision. We always said we wanted to stay at Barangaroo," said Carnival's chief executive.
But the developers of Barangaroo are not concerned about traffic on Victoria Road, or the effect of such changes on the cruise ship traffic, or the loss of trade to Sydney retailers. And it seems the wishes of those developers count for more than any others when the state government is about to be sacked.
Apparently this decision has been made before community consultation is complete. Obviously the objective is to allow work to progress before the election, making it more difficult for the new government to cancel it. Or rather, to increase the cost of such cancellation to the taxpayer if consultation concludes the move is wrong.
Objections have come from the City of Sydney and Leichhardt councils and the National Trust, all of whom argued that the cruise ships should continue to dock at Barangaroo.
The biggest operator of cruise ships, Carnival Cruises, said the present cruise ship berth at Barangaroo is the ideal location because it allows passengers direct access into the city on foot, encouraging them to spend money in the city. The White Bay berth will require fleets of busses running shuttle services down Victoria Road every time a ship docks, with a planned 170 ships this year alone, and many on those ships will not want to queue for busses and so will stay in air conditioned comfort on the ship.
"The move from Barangaroo was always a political, government, decision. We always said we wanted to stay at Barangaroo," said Carnival's chief executive.
But the developers of Barangaroo are not concerned about traffic on Victoria Road, or the effect of such changes on the cruise ship traffic, or the loss of trade to Sydney retailers. And it seems the wishes of those developers count for more than any others when the state government is about to be sacked.
Thursday, February 3, 2011
Beecroft Cheltenham Civic Trust AGM
The BCCT Annual General meeting is due to be held on Monday 7 March at the Cheltenham Recreation Club.
A new constitution is being proposed with some significant changes. For instance "Membership shall lapse if the subscription is unpaid six months after it is due" is to be changed to lapsing after three months. Given the need to optimise the political power of the voice of the Trust, why would the committee propose deliberately to disenfranchise people in this way?
The influence yielded by the trust is largely determined by membership, and would therefore be greater if this rule was changed to read: "A member shall lose the right to vote at the AGM if the subscription is unpaid for six months after it is due." In other words, the Trust should be claiming to represent anyone who ever paid a membership fee!
What should alarm the local residents most is that there has been no explanation of this or other changes proposed. If these issues concern you, then join the trust, come to the AGM, and have your say!
A new constitution is being proposed with some significant changes. For instance "Membership shall lapse if the subscription is unpaid six months after it is due" is to be changed to lapsing after three months. Given the need to optimise the political power of the voice of the Trust, why would the committee propose deliberately to disenfranchise people in this way?
The influence yielded by the trust is largely determined by membership, and would therefore be greater if this rule was changed to read: "A member shall lose the right to vote at the AGM if the subscription is unpaid for six months after it is due." In other words, the Trust should be claiming to represent anyone who ever paid a membership fee!
What should alarm the local residents most is that there has been no explanation of this or other changes proposed. If these issues concern you, then join the trust, come to the AGM, and have your say!
M2 Kirkham Bridge Usage Restrictions
There is another nasty rumour going around, that during the period of widening the spans of the Kirkham road bridge over the M2, between Murray Farm Road and Kirkham Street, the single lane left open will be restricted to light vehicles only! No buses for the school kids, and no fire engines!
One hopes therefore that the M2 Project will be devoting significant planning effort into minimising the duration of the span widening activity. It is preposterous to claim it will coincidentally take exactly the same duration as the overall project.
Indeed competent project planning would want this span widening to be completed very early to allow better access for the work gangs widening the road under the bridge. As soon as that work is finished, full two lane access without weight limits should be restored immediately. Obviously this will benefit the community as well as the project.
Meanwhile, what arrangements have been put in place to fight fires in the houses and bushland around Murray Farm Road during the (hopefully very short) period that the fire engines from Beecroft Fire Station are unable to use the bridge?
One hopes therefore that the M2 Project will be devoting significant planning effort into minimising the duration of the span widening activity. It is preposterous to claim it will coincidentally take exactly the same duration as the overall project.
Indeed competent project planning would want this span widening to be completed very early to allow better access for the work gangs widening the road under the bridge. As soon as that work is finished, full two lane access without weight limits should be restored immediately. Obviously this will benefit the community as well as the project.
Meanwhile, what arrangements have been put in place to fight fires in the houses and bushland around Murray Farm Road during the (hopefully very short) period that the fire engines from Beecroft Fire Station are unable to use the bridge?
Tuesday, January 25, 2011
Insurance in Flood Prone Areas
There’s an interesting letter in SMH on Tuesday, “Without a payout, landlords are left in the lurch too”.
Ten years ago the writer bought a house in Graceville, Brisbane, as an investment, without being told that it was in a flood prone area. "We have since discovered the real estate agent is not bound to disclose this information." It continues “On further investigation we have discovered there were protests about our develoment in 1998, which were dismissed by Brisbane City Council." The developers, of course, would build happily if the Council okayed the land.
The problem is, of course, that the Wivenhoe dam was meant to handle flood water and prevent Brisbane flooding ever again. So the Council arguably were right not to put "flood prone" on the relevant 147 certificates for those properties. It appears that Wivenhoe was not utilised to its optimum in controlling the flood water, and it may turn out that the developers were justified in building there. It will be interesting to see what the inquest into all this finds.
Ten years ago the writer bought a house in Graceville, Brisbane, as an investment, without being told that it was in a flood prone area. "We have since discovered the real estate agent is not bound to disclose this information." It continues “On further investigation we have discovered there were protests about our develoment in 1998, which were dismissed by Brisbane City Council." The developers, of course, would build happily if the Council okayed the land.
The problem is, of course, that the Wivenhoe dam was meant to handle flood water and prevent Brisbane flooding ever again. So the Council arguably were right not to put "flood prone" on the relevant 147 certificates for those properties. It appears that Wivenhoe was not utilised to its optimum in controlling the flood water, and it may turn out that the developers were justified in building there. It will be interesting to see what the inquest into all this finds.
Monday, January 24, 2011
Qld Flood Levy Proposal
This post is taken off the http://www.crikey.com.au web site.
A flood levy to pay for the cost of the catastrophic Queensland floods would be lazy policy from a fiscally lazy government. There’s something faintly absurd about a government with a budget loaded with superfluous spending and the lowest debt levels in the developed world insisting that it needs a new tax to pay for the impact of natural disasters — especially when this government itself has been arguing that climate change will cause more extreme weather and preaches “adaptation” to Pacific Island states.
It also suggests this is a government that feels more comfortable playing on voters’ sympathies for the victims of the floods than about making the case for cutting spending in politically sensitive areas.
Slapping a one-off levy on voters and telling them it’s for the floods is clearly more politically palatable than telling voters they’ve gotten used to levels of government spending that aren’t sustainable in the face of an ageing population.
A flood levy to pay for the cost of the catastrophic Queensland floods would be lazy policy from a fiscally lazy government. There’s something faintly absurd about a government with a budget loaded with superfluous spending and the lowest debt levels in the developed world insisting that it needs a new tax to pay for the impact of natural disasters — especially when this government itself has been arguing that climate change will cause more extreme weather and preaches “adaptation” to Pacific Island states.
It also suggests this is a government that feels more comfortable playing on voters’ sympathies for the victims of the floods than about making the case for cutting spending in politically sensitive areas.
Slapping a one-off levy on voters and telling them it’s for the floods is clearly more politically palatable than telling voters they’ve gotten used to levels of government spending that aren’t sustainable in the face of an ageing population.
How to cut your Home Mortgage Rate
Nick Gardner wrote in the Sunday Telegraph about how to trick banks into reducing your mortgage rate. Just tell them you are switching to another lender. Apparently Westpac refuses to release paperwork to solicitors for ten days, while the files are referred to the bank's Retention Unit. This secret group is tasked to offer deals to customers to persuade them to stay with the bank, on condition that the home owner doesn't disclose the details of the deal to others.
Nick says "banks have a lot of discretion in setting the rates that they offer you."
As Nick says, this means the banks are punishing loyal borrowers who continue placidly to pay whatever rate they are offered.
Dean Rushton, a broker of Loan Market Group, says "Loyalty does not pay, and not everybody is a very good negotiator, so get your broker to haggle on your behalf.
Nick says "banks have a lot of discretion in setting the rates that they offer you."
As Nick says, this means the banks are punishing loyal borrowers who continue placidly to pay whatever rate they are offered.
Dean Rushton, a broker of Loan Market Group, says "Loyalty does not pay, and not everybody is a very good negotiator, so get your broker to haggle on your behalf.
Tuesday, January 18, 2011
State Infrastructure Requirements
Given the horrendous damage already inflicted to the state roads and railways in northern NSW, one hopes that the State and Federal government will not be signing off on any more pet 'local' projects. For instance the $500 million proposed for the Epping Parramatta railway needs to be held back until the full extent of infrastructure repairs has been fully assessed. Just a pity that the M2 Widening can't be put on hold and that money re-allocated to where it is going to be desperately needed.
State Silver Sale "A Dud"
Damning articles in the Daily Telegraph and elsewhere are beginning to expose the appalling rip-off of state taxpayers by the Keneally government with the electricity sale. No wonder she closed down parliament early to prevent debate!
Perhaps the best comment was by Andrew Clennell, "Talk about burning the villages on the way out. Kristina Keneally and Eric Roozendaal's appearances at the power inquiry revealed one critical thing: This sale is a dog."
Perhaps the best comment was by Andrew Clennell, "Talk about burning the villages on the way out. Kristina Keneally and Eric Roozendaal's appearances at the power inquiry revealed one critical thing: This sale is a dog."
Thursday, January 13, 2011
Kirkham Bridge to be used as a Truck Park?
The latest rumour is that Transurban wishes to close one lane of the Beecroft bridge over the M2 to use it as a park for construction equipment - nothing to do with the stated reason, of widening the bridge spans!
This was never mentioned in any of the documentation submitted before the project started.
The road belongs to Hornsby Shire, not to the RTA or Transurban, and the Shire needs to ensure that the rights of access to the road by local residents are maintained as far as possible. Transurban should have to justify closing any of the bridge for any part of the 22 months of the project, and must be forbidden to use the closed lane just as a construction car park!
This was never mentioned in any of the documentation submitted before the project started.
The road belongs to Hornsby Shire, not to the RTA or Transurban, and the Shire needs to ensure that the rights of access to the road by local residents are maintained as far as possible. Transurban should have to justify closing any of the bridge for any part of the 22 months of the project, and must be forbidden to use the closed lane just as a construction car park!
Wednesday, January 12, 2011
Thoughts on Epping Bus Ramp Removal
In my post on 6 Jan, I quoted from a letter by John Goldberg, including how Transurban is relying on increased induced traffic on the widened M2 to raise cash flow. Of course for that same reason Transurban has a powerful incentive to get people out of the buses and onto the road.
I confess that I don't know what toll a bus pays to use the M2 from the north west to Epping, but I am sure displacing those commuting passengers into cars and making them drive all the way into the city will significantly increase Transurban's cash flow.
This is where the NSW government and the RTA should be applying brakes and checks on the project to apply an integrated transport solution to north west Sydney's desperate traffic problems.
I confess that I don't know what toll a bus pays to use the M2 from the north west to Epping, but I am sure displacing those commuting passengers into cars and making them drive all the way into the city will significantly increase Transurban's cash flow.
This is where the NSW government and the RTA should be applying brakes and checks on the project to apply an integrated transport solution to north west Sydney's desperate traffic problems.
Funding NSW Flood Damage Repairs
Given the awful events up north in the last few days, one assumes that the NSW government will no longer pursue the commitment of $520 million of state funds to the Epping to Paramatta rail link! Suddenly there are much more urgent needs for that and more funding to be spent rebuilding our damaged state!
It seems a shame that the $550 million funding being provided to widen 21 km of the M2 cannot be reallocated somehow to the same purpose. With roads damaged and destroyed over a large part of northern NSW and Queensland, it seems such a waste to be widening a short stretch of motorway in a project that has been widely labelled unnecessary and unjustiable.
It seems a shame that the $550 million funding being provided to widen 21 km of the M2 cannot be reallocated somehow to the same purpose. With roads damaged and destroyed over a large part of northern NSW and Queensland, it seems such a waste to be widening a short stretch of motorway in a project that has been widely labelled unnecessary and unjustiable.
Monday, January 10, 2011
Federal Government now selling NSW Silver!
According to the SMH, the federal Transport Minister, Anthony Albanese, and Kristina Keneally will sign a contract for the Epping to Parramatta train line before the state election, even though Mr Albanese must know Kristina will be turfed out of office in that election! The contract will be worded so that the $2.1 billion federal funding cannot be re-allocated to suit the wishes of the NSW electorate! So much for democracy!
Barry O'Farrell says the state needs the north-west rail link much more urgently than the E/P train. Surely if the electorate agrees with him, Kristina should not with a clear conscience be able to over-rule that majority view.
Mr Albanese is quoted as saying "this federal Labour government doesn't renegotiate our commitments; we deliver on them." Surely then he shouldn't be negotiating now with the failed NSW Labour government, but should wait until the taxpayers have voted. Then he can negotiate in good faith with the real NSW government.
The SMH says that the matter might be irrelevant. The NSW state will be expected to provide $520 million at the start of the project, but the federal government's contribution of $2.1 billion won't be required until 2014. By then the federal governments could also have changed hands. But in the meantime NSW taxpayers will be up for however much of our money the state manages to spend before Mr O'Farrell cancels the project.
Barry O'Farrell says the state needs the north-west rail link much more urgently than the E/P train. Surely if the electorate agrees with him, Kristina should not with a clear conscience be able to over-rule that majority view.
Mr Albanese is quoted as saying "this federal Labour government doesn't renegotiate our commitments; we deliver on them." Surely then he shouldn't be negotiating now with the failed NSW Labour government, but should wait until the taxpayers have voted. Then he can negotiate in good faith with the real NSW government.
The SMH says that the matter might be irrelevant. The NSW state will be expected to provide $520 million at the start of the project, but the federal government's contribution of $2.1 billion won't be required until 2014. By then the federal governments could also have changed hands. But in the meantime NSW taxpayers will be up for however much of our money the state manages to spend before Mr O'Farrell cancels the project.
Thursday, January 6, 2011
M2 Travel Time Savings Overstated
There is a powerful letter in the Northern District Times this week, questioning the whole concept of the M2 widening project. The letter is from John Goldberg, a highly qualified and experienced traffic engineer.
"The claims of travel time savings are part of a derisible economic analysis, prepared by a Transurban consultant with the clear aim of justifying the project. The claims have been shown to be spurious by (Mr Goldberg) in a paper to be published shortly. Transurban has overstated the savings by a factor of four. This means the savings are worth far less than the cost of the project over its concession lifetime."
Mr Goldberg argues that the project is only going ahead because Transurban needs to generate increased cash flow to service their huge group debt of more than $7 billion. Transurban believes the increased cash flow will mainly come from induced traffic, which will of course increase congestion and reduce the travel time savings.
Mr Goldberg says, "The M2 upgrade affair generally demonstrates that transport planning in a major city cannot be reliably carried out by agencies such as the RTA using community manipulation disguised as consultation."
However that is slightly unfair. The problem with this specific project is that, as the letter reminds readers, Kristina Keneally originally approved the project as "critical infrastructure" back in 2009, thereby removing most of the planning checks and balances that should be applied to such a disruptive and questionable project. If the project had been reviewed in the way the original M2 build was reviewed, many of the serious deficiencies in the new widening project might have been excised from the plan. Just one example is the project's intent to remove the excellent Epping Bus Ramp, which was a mandatory part of the original approval for the M2 back in the 1990's. Of course it was the RTA that persuaded Kristina to sign that infamous ruling.
Mr Goldberg suggests that the incoming government should invoke the doctrine of executive necessity and cancel the contract for this project, and undertake serious reform of the RTA.
"The claims of travel time savings are part of a derisible economic analysis, prepared by a Transurban consultant with the clear aim of justifying the project. The claims have been shown to be spurious by (Mr Goldberg) in a paper to be published shortly. Transurban has overstated the savings by a factor of four. This means the savings are worth far less than the cost of the project over its concession lifetime."
Mr Goldberg argues that the project is only going ahead because Transurban needs to generate increased cash flow to service their huge group debt of more than $7 billion. Transurban believes the increased cash flow will mainly come from induced traffic, which will of course increase congestion and reduce the travel time savings.
Mr Goldberg says, "The M2 upgrade affair generally demonstrates that transport planning in a major city cannot be reliably carried out by agencies such as the RTA using community manipulation disguised as consultation."
However that is slightly unfair. The problem with this specific project is that, as the letter reminds readers, Kristina Keneally originally approved the project as "critical infrastructure" back in 2009, thereby removing most of the planning checks and balances that should be applied to such a disruptive and questionable project. If the project had been reviewed in the way the original M2 build was reviewed, many of the serious deficiencies in the new widening project might have been excised from the plan. Just one example is the project's intent to remove the excellent Epping Bus Ramp, which was a mandatory part of the original approval for the M2 back in the 1990's. Of course it was the RTA that persuaded Kristina to sign that infamous ruling.
Mr Goldberg suggests that the incoming government should invoke the doctrine of executive necessity and cancel the contract for this project, and undertake serious reform of the RTA.
M2 Widening Access to Chilworth Reserve
This is an extract from a most helpful response from the Transurban information line, M2Enquiries@leicon.com.au, about the plans for access to the construction camp to be built under the viaducts in Chilworth Reserve.
"Thank you for your enquiry regarding the M2 Upgrade project.
"The northern access to the compound site at Devlins creek that you are refering to (near the Pennant Hills golf course) is going to be used to access the Devlins Creek compound site during the M2 upgrade. However, this access track does not give access to the southern side of the compound. Access on the southern side near Allerton Road is currently being assessed.
"The old access road between the M2 and the golf course fence only allows access in - it does not allow access out of the compound area.
"The existing informal access off Orchard Road has a corridor of Blue Gums, and the potential impacts surrounding this area of vegetation is currently being considered.
"Pedestrian access under the viaduct at Devlins Creek will be maintained where feasible, but from time to time potential short term closures may be required for safety reasons. Sinage and written notice of closures will be given prior to any closures taking place."
"Thank you for your enquiry regarding the M2 Upgrade project.
"The northern access to the compound site at Devlins creek that you are refering to (near the Pennant Hills golf course) is going to be used to access the Devlins Creek compound site during the M2 upgrade. However, this access track does not give access to the southern side of the compound. Access on the southern side near Allerton Road is currently being assessed.
"The old access road between the M2 and the golf course fence only allows access in - it does not allow access out of the compound area.
"The existing informal access off Orchard Road has a corridor of Blue Gums, and the potential impacts surrounding this area of vegetation is currently being considered.
"Pedestrian access under the viaduct at Devlins Creek will be maintained where feasible, but from time to time potential short term closures may be required for safety reasons. Sinage and written notice of closures will be given prior to any closures taking place."
Building in Flood Affected Areas
One of the most thought provoking articles on the Queensland floods was by Bernadette George in the SMH yesterday. She asks how did those people get planning permission for low-set houses on known flood-prone land!
She urges that the planners responsible for building in those areas should stipulate standards such as "floor levels to be at least two metres above ground level."
As she says, "Many older-style houses up on stilts are taking the current floods in their stride." And on the front page of today's SMH you see a Rockhampton family standing up to their knees in flood water, outside their house which was built on a brick plinth so the living areas are high above the flood water. Obviously their builders planned ahead, but the local planning councils in the area don't seem to have had the same common sense.
One contributing factor to the present flooding is the enormous amount of tree clearing over the decades, which has reduced nature's ability to absorb, retain, and restrict the effects of heavy rain.
As Bernadette says, "Nature is just doing what is entirely predictable." Town planners should be doing the same.
She urges that the planners responsible for building in those areas should stipulate standards such as "floor levels to be at least two metres above ground level."
As she says, "Many older-style houses up on stilts are taking the current floods in their stride." And on the front page of today's SMH you see a Rockhampton family standing up to their knees in flood water, outside their house which was built on a brick plinth so the living areas are high above the flood water. Obviously their builders planned ahead, but the local planning councils in the area don't seem to have had the same common sense.
One contributing factor to the present flooding is the enormous amount of tree clearing over the decades, which has reduced nature's ability to absorb, retain, and restrict the effects of heavy rain.
As Bernadette says, "Nature is just doing what is entirely predictable." Town planners should be doing the same.
More NSW Taxpayer Silver being sold off
According to the Sydney Morning Herald today, the state government will sell large chunks of public land around Royal North Shore Hospital!
Doctors say the plans would make it impossible to meet the demands of a growing population.
The chairman of the hospital's medical staff committee said this could affect NSW patients for the next 30 years.
A submission by Whilloughby Council argues that the sale is ill-considered and that planned high-rise commercial developments could get in the way of helicopters taking patients to the hospital.
One wonders at the motives of the NSW government, continuing to sell off state assets in the dying months of their lamentable rule. They need to remember they are effectively tenants nearing the end of their lease, and the taxpayers are the real owners of these assets. A tenant does not have the right to sell bits of the house before vacating!
Doctors say the plans would make it impossible to meet the demands of a growing population.
The chairman of the hospital's medical staff committee said this could affect NSW patients for the next 30 years.
A submission by Whilloughby Council argues that the sale is ill-considered and that planned high-rise commercial developments could get in the way of helicopters taking patients to the hospital.
One wonders at the motives of the NSW government, continuing to sell off state assets in the dying months of their lamentable rule. They need to remember they are effectively tenants nearing the end of their lease, and the taxpayers are the real owners of these assets. A tenant does not have the right to sell bits of the house before vacating!
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