Trends in Sydney House Sales

There is a good article in SMH Business Day today, comparing auction success rates around Australia. Sydney and Melbourne account for 80% of the overall capital city market, 26,000 for Melbourne and 20,500 in Sydney during 2009. In Melbourne auctions account for 30% of sales, in Sydney 20%. It must be remembered that Melbourne has a higher proportion of units than Sydney, and has more houses than any other state capital.

"The most obvious recent trend has been the weakening of weekend auction success rates since late April in both cities. Detecting price movement trends has been harder."
In February and April 75% of properties sold under the hammer, July's auction clearance rate was 61%.

Housing Strategy Submissions - analysis

The following post is a precis and discussion on a post copied from another blog:

Council's findings on the submissions are in
https://businesspapers.hornsby.councilsonline.com.au/Open/2010/PL_07072010_AGN.PDF

It includes: "Submissions raised objections to the Strategy (or aspects of the Strategy), provided constructive feedback on how it could be improved, indicated support for the Strategy, and suggested other precincts for inclusion." This statement might seem to imply that there was a fairly even distribution between these four categories of respondents. However another council document says only 2% of submissions were in favour of the proposal.

Individual precinct analyses are at:
http://www.hornsby.nsw.gov.au/uploads/documents/Housing_Strategy_Attachment_2.2.pdf
This reports 443 form letters and 168 individual letters were received regarding Beecroft. Of the 168 individual letters relating to Beecroft, 13% (ie 20 letters) were in favour, 4% suggested alterations (the report doesn't say whether they were for or against) and 83% (140 letters) were against. Of the 443 form letters received only 3 (less than 1%) supported the proposal and 440 were against. So of the 611 submissions, at least 580 (95%) were against the proposal.

So the statement in the main report should really read:
"The overwhelming majority of submissions opposed the Strategy. A small number provided feedback on how it could be improved, and a trivial number supported the Strategy."

This puts a slightly different slant on Beecroft resident's views on the council's proposals. Despite that, Beecroft is still to be rezoned for 5 storey mixed development.

Stamp Duty cuts for Pensioners

Under the latest NSW state budget people over 65 will not pay stamp duty when selling an existing property and buying a newly constructed home costing up to $600,000.
The objective was to allow retirees to downsize while staying in the area they now live in. However for elderly residents in Beecroft and Cheltenham, this will have little effect as there is little prospect of any new constuction homes coming available for less than $600,000. Adding the development contribution cap of $20,000 imposed by NSW state government, there seems little prospect of any developers going out of their way to build to suit this market.

Rent Freeze ends

The NSW State Government has refused to bow to pressure to extend its promise not to gouge from last year's $30 pension increase when calculating public housing rentals. Last September under pressure from the Federal Government, the states had agreed not to include the increase in single pensions in rent calculations.
Charmaine Crowe, policy co-ordinator for the Combined Pensioners and Superannuants Association, argues: "A single pensioner in public housing pays at least $3770 in rent per annum. That's comparable to what a pensioner owning a house pays in land rates and home maintenance. Yet the pensioner in public housing has a pension cut of 25%, while the home-owning pensioner keeps the entire amount."

M2 Widening Project - Noise barrier height

I found a really well prepared presentation on the noise problems associated with the proposed widening of the M2. A key element of the presentation covers the noise barriers, and in particular the height of them. The number of trucks using the M2 doubled in 2006 when the M7 opened. The report suggests some 47,000 cars and 7,300 trucks are using the M2 now, and the number of trucks is forecast to rise by 25% over the next ten years.
The noise barrier height is perhaps the critical factor in shielding the neighbourhood from the noise of these trucks, and the existing commonly used 2.4m high barriers are just inadequate. With truck exhausts typically 4.5m high, or more, those barriers achieve very little. A 4.8m barrier would seem to be essential.
Where the motorway is below the level of adjacent houses, such as where it crosses Chilworth Reserve, even higher barriers might be needed.
Of particular concern to residents must be the likelihood of the barriers being removed totally during periods of the two year construction program.

Clearance rates down this month

RP Data reports the national auction clearance rate as 56%. According to their research director "the most surprising factor is that volumes remain so bouyant despite clearance rates trending down for 11 weeks now."

What if nobody comes?

The following thought-provoking quotation is taken off the internet:

"The estimated population growth target for Sydney (1.1 million by 2031) is completely unrealistic and there is the danger that planning is done for assumed developments which can never happen. The result will be to upset the lives of many residents who are forced to move out of their homes to make room for high-rises which will become future slums. We can even have the situation that houses are demolished by developers but then the land is left vacant because finance cannot be found in the next financial melt-down."

The same concern applies to Hornsby Shire's Housing Strategy - if they rezone Beecroft and other precincts to 5-storey to meet government targets, and the Federal Government then changes the population prediction, will those rezonings be cancelled?

The same website make this proposition:

"The Federal government has appointed a Population Minister, who will research into the population carrying capacity of Australia. This process including public consultation will take
one year. Until this report is out, all activities in relation to Housing Policies should be suspended."

Buying off the Plan

Under new legislation about unfair contract terms, coming into effect today, people buying properties "off the plan" will have greater protection from developers trying to make last minute changes to the final delivered property, such as reduced room space or inferior light fittings.

New views on house prices

Figures from RPData show typical house prices rose 0.7% in May, giving an annual growth of 11.4%. Most analysts suggest the residential property market is cooling down, as interest rates bite.
One recent study into Sydney home borrowers referred to "the extreme difficulties faced by many households who have struggled to meet their mortgage repayments in recent years." The study recommends that borrowers should receive more independent advice when signing up for a mortgage.

M2 Widening - Speed Limits

I particularly liked this extract from Michael Stove's BCCT submission relating to road noise:

"Speed limits must be kept low to reduce noise and pollution. There is no real need for the speed limit on this part of the M2 to be set at 100kph; a level of 80 kph would be adequate and safer. Apart from any other considerations, peak traffic levels probably mean that a speed of even 80 kph is in real terms unlikely to be achieved."

Several years ago the RTA introduced a trial of narrower lane markings in the west lane between Lane Cove Road and Beecroft Road, giving three lanes at very low cost and rapid implementation. The narrower lanes mandate an 80kph speed limit, which Michael's comment above suggests is no bad thing. The RTA narrow lane trial seems to have been entirely successful, only hampered because it terminates in the two (wider) lanes between Beecroft Road and Pennant Hills Road.

Extending the narrow three lanes solution along to Pennant Hills Road could be done very quickly and without damaging the Chilworth Recreation Reserve. The construction cost and time savings of avoiding the proposed eight lane flyover there would be enormous.

The RTA document rejects this narrower lane marking solution as an alternative to widening the road for reasons that seem very debatable. The "narrow lane / reduced speed / low cost / fast implementation" solution should be re-considered, at least on the Beecroft Road to Pennant Hills Road section westbound.

M2 Widening - BCCT Submission

The Beecroft Cheltenham Civic Trust has put in a most excellent submission opposing the M2 Widening Project. You can read it on http://www.2119.org.au/ by clicking the link at
"The BCCT formally objected to the project due to a number of issues. Please follow this link to view of full submission."
The submission covers noise, effect on vegetation, effect on volunteer work in the area, and perhaps above all "The proposal is not a real solution to the problem it purports to address."
Regarding the Beecroft Rd to Pennant Hills Road section of the M2, the submission rejects the damaging proposal to use Allerton Road for access, and suggests instead the existing and unused access road to the south of the Penant Hills Golf Course. All users of Chilworth Recreation Reserve must applaud that suggestion, if indeed the widening of this section does have to take place. But the submission stresses the long term permanent damage that the widened road would have on the Reserve.

Hornsby Shire Housing Strategy - Carlingford Out but Beecroft Still In?

Hornsby Shire reports revisions to the Shire Housing Strategy, removing Carlingford from the plan, but there is no indication that Beecroft will also be spared.

The mayor, Nick Berman, said the revised plan would still allow the council to meet its allocated target without having to allow 20 storey buildings. "There would still be some medium density blocks close to railway stations," Cr Berman said.

It's not obvious how the planners can delete so many planned new dwellings and still meet their target.

A meeting to discuss these amendments is to be held in council chambers, 296 Pacific Highway, 6:30 pm on Wednesday 7 July.

US Housing Market hits record lows

The housing market in USA "has never been so bad, at least since records started in 1963". Apparently 588,000 home owners faced with negative equity walked away from their homes in 2008, which is allowed in USA, but now apparently Fannie Mae is threatening to take legal action to recoup the outstanding mortgage debt of those poor people. What a mess! Apparently there are now eight months worth of new and existing homes on the market, and of course more foreclosures will add to that.
One wonders what will happen in Australia when first home owners find it's not as easy as they thought to pay a mortgage and all the other costs of home ownership. But for the moment Australian housing markets seem as good a place as any to park money. There are not many good alternatives visible worldwide at the moment!

House Price Rises to Slow

According to BIS Shrapnel, rising interest rates and weaker first home buyer activity will lead to slower house price growth this year. However they say that house prices will not fall, and rents will continue to rise.
Meanwhile figures from the Bureau of Statistics show that lending to property investors rose 11% in the first four months of the year, as investors shy away from the stock market and look for somewhere to park their money. According to BIS Shrapnel, "real estate looks a safer bet than the stockmarket". If you stick your money into a term deposit, you have to pay tax on the interest.

Freedom of Information Law Change July 1

Doing internet searches into RTA freedom of information topics after reading an article in SMH 28 May, I found a great blog on the topic, http://foi-privacy.blogspot.com/ by Peter Timmins. Some good reading there!
A note of caution about the new laws was in a comment on the blog "the changes that this legislation has the potential to make is significant and welcome". Note the word "potential". As The Greens Lee Rhiannon said in welcoming the new laws, "their strength will be largely determined by how well they are championed from on high."

Developer Levy clamp anger

Concern over the State Government budget decision to cap developer levies is causing Sydney councils to pull approvals on new subdivisions, and ban new development applications! This will create havoc with the state's metropolitan strategy which expects councils to house another million residents.
Western Sydney Region of Councils says the decision to cap developer levies at $20K would bankrupt many councils unless either rates rise 300%, or development is halted. Not a difficult decision for existing residents to take! After all, it seems only Kevin Rudd and the developers want his proposed "Big Australia". The recent revolts all around Sydney about housing strategies involving high rise high density units demonstrates the strategy is not wanted by the general public, and huge increases in rates will make it even more unpopular.

State Budget stamp duty cuts

Stamp duty will be cut for the next two years for people buying off-the-plan dwellings, up to $600,000. For people over 65, downsizing by buying a newly constructed home, will also pay no stamp duty so long as the new home is worth no more than $600,000.
Good news, but not very relevant for people in Beecroft or Cheltenham, not much available round here under that amount!

Developer Levy Capped by NSW Government

The state government has imposed a $20,000 cap of developer contributions per lot, effective yesterday, but the levies are only imposed on "essential infrastructure". So far this phrase has not been defined, which makes it rather hard for developers to plan. Even so, the developers are happy with the new rules, because some councils had been imposing levies of $50,000 or more per house.
A spokesman for the Planning Minister says "guidance would be provided to councils within weeks".
Genia McCarrery, head of the Local Government Association says capped levies would result in huge rate increases, particularly in growth areas. Councils would have to spread the cost of developing new land over all the households in the municipality.

Stimulus puts Homes on Hold

Tradesmen working on school building projects around the country are being blamed for the unexpected fall in housing construction over the last six months. New housing investment fell by 4.3% in the December quarter.
But surely the stimulus package was meant to create new jobs, not just divert labour from housing projects onto the high profit school construction activity.

The Great National Broadband Network

Apparently the Tasmanian government has estimated that only 16% of homes will take up the high speed internet system now being installed in Tasmania, the first state to receive the fabulous new $43 billion fibre-optic network of which the Rudd government is so proud.
There are also questions being raised about whether the cost quoted by Stephen Conroy includes the costs of restoring roads and pavements ripped up during the installation, or whether local government will be expected to make good after the installers leave! Given the already parlous state of most local government finances, that little detail certainly needs to be clarified pretty quickly!