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.

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".

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).

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!

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!

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

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.

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".

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.

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

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."

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!

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."

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."

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!

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).

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."

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.

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!

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?