Friday, October 23, 2009

Latest Property News from Ted Hanson

Friday 23 October 2009
Quote of the Week

"When written in Chinese, the word 'crisis' is composed of two characters--one represents danger, and the other represents opportunity."

~John F. Kennedy~

House prices to grow by 20 per cent

The strong housing market activity in late 2009 is set to continue into 2010 with ongoing positive incentives for property investors and `upgrader' to enter the market, according to a new report released by QBE Lenders' Mortgage Insurance (QBE LMI).

The latest LMI Housing Outlook 2010 - 2012 (researched and written by BIS Shrapnel) confirms that current low interest rates have helped to alleviate the mortgage pressure on households while bringing housing affordability back to its most attractive level for almost a decade.

Prices at the top end of the market have fallen more than the medians, giving home owners the opportunity to trade up to their next dwelling after selling their current house into the buoyant first home buyer market.

Furthermore, the strong rental environment and stabilisation of house prices are favourable factors for property investors to also come back into the market.

Ian Graham, CEO of QBE LMI, said that the outlook for the housing market is also positive for those who have recently entered the market, particularly first home buyers.

"Low interest rates, solid growth in rents and housing shortages will create favourable conditions for a strong recovery in residential property prices in the second half of 2010, through to 2012", Mr Graham said.

"Double digit house price growth is forecast across all capital cities from June 2009 to June 2012, particularly in those markets with positive affordability (Adelaide +23 per cent) and a continuing undersupply of housing (Sydney +21 per cent and Melbourne +19 per cent)."

The report forecasts that prices in Brisbane could grow by up to 15 per cent as moderate economic conditions offset the affordability advantage. Lower growth is projected for Perth (+12 per cent), influenced by a decline in investment in the resource sector after the record levels seen in recent years.

"Despite a 0.25 per cent rate rise in the first week of October, housing interest rates are expected to remain at a stimulatory level for some time, with the low interest rate environment remaining supportive of the first home buyer", Mr Graham said.

"Demand from first home buyers is expected to continue, notwithstanding the expiration of the First Home Owner Grant Boost Scheme in December 2009."

Not there yet

New home building fell in the June 2009 quarter, according to figures released this week by the Australian Bureau of Statistics. Seasonally adjusted work done on new residential dwellings fell by 1.2 per cent in the June 2009 quarter to an annualised worth of $33.2 billion, 6.5 per cent down on a year earlier.

Work done on detached houses fell by 1.8 per cent over the June quarter to be worth $22.3 billion in annualised terms. Work done on `other residential building' was essentially flat at an annualised $10.9 billion.

Seasonally adjusted new residential work commenced in the June 2009 quarter fell by 7.4 per cent to an anualised $32.3 billion.

Housing Industry Association Chief Economist, Dr Harley Dale said that while 2009/10 should be a healthier year for new residential construction, there is still likely to be a shortage of new dwelling stock.

"We are on the cusp of a moderate recovery in new home starts and that should feed through to a positive year for new dwelling investment in 2009/10", Dale said.

"However, the sixth consecutive decline in the worth of dwelling commencements in the June 2009 quarter highlights that dwelling investment isn't turning the corner yet.

"There are a number of factors likely to constrain the increase in new housing supply over the next 18 months, including projects bogged down in the approvals process and lack of available finance", he added.

"These factors suggest that the pressure lower income rental households face from tight rental market conditions will remain with us for some time to come."

The weakness in seasonally adjusted new residential work done in the June 2009 quarter was primarily reflected in Queensland where activity fell by 13.6 per cent. New residential work done fell by 1.8 per cent in South Australia, by 0.4 per cent in New South Wales and by 0.2 per cent in Western Australia.

New residential work done increased by 5.5 per cent in Victoria and was up by 5.6 per cent in Tasmania, 27.8 per cent in the Australian Capital Territory and 48.6 per cent in the Northern Territory.

Debunking bushfire bunkers

Consumers must carefully examine representations made about fire bunkers before they buy, Australian Competition and Consumer Commission chairman, Graeme Samuel, warned this week.

The ACCC is concerned that some web-based advertising may have given consumers the impression that there was an Australian Standard for bushfire bunkers which their product met.

"The simple fact is that there is currently no Australian Standard for bushfire bunkers", Mr Samuel said.

The ACCC raised concerns with three traders who had made claims about compliance with standards linked to products such as septic tanks or concrete structures.

After the ACCC's approach, the traders promptly removed the representations and are in discussions with the ACCC with the best way to correct any misleading impression given.

"Consumers obtain a high level of comfort from claims that products meet Australian standards," Mr Samuel said.

"The ACCC is conscious that residents in bushfire prone areas are deciding now about how to protect themselves during the fire season.

"In view of this the ACCC moved to investigate the issue and obtained the prompt withdrawal of the representations."

Before making decisions in relation to the best means of protecting themselves from the risk of fire or the possible installation of a fire bunker, consumers should talk to experts in the field.

The Australian Building Codes Board has recently begun work on a national standard for the design and construction of bushfire bunkers for personal use.

The Victorian Bushfires Royal Commission is also considering making interim recommendations in relation to regulation of bushfire bunkers.

No kidding when it comes to child safety

With warm weather on the way, nature is calling young and old alike to venture outdoors.

The mature among us are fairly well-equipped to look after ourselves, however when there are children around it's always best to take safety precautions and keep an eye on them at all times, especially in the vicinity of a swimming pool.

Monday the 26th October is National Kidsafe Day, which coincides with Childrens' Week, providing a great opportunity to increase awareness of unintentional childhood injuries and ways they can be prevented.

If you or the neighbours have a pool, some good points to remember are -

According to the Royal Lifesaving Society of Australia, home swimming pools are the most common site for accidental drowning of children under the age of 4. The good news is many of these accidents can be prevented. There are a number of security features that can be added to home swimming pools to help make them safer.

Pool alarms are one safety item that is becoming popular with homeowners in the United States. In fact, pool alarm sales in the USA have doubled since 1994. When used properly, pool alarms can alert a homeowner if a child enters the water accidentally.

Although alarms vary, generally electronic sensors trigger a loud signal both inside the home and around the pool area alerting others that something has entered the water.

Pool alarms can either be fitted to the edge of the pool or left floating in the water.

Many home owners are starting to use powered safety covers that are like a garage door going across the pool. They are very secure and if a child accidentally falls on the cover, they are not likely to penetrate it.

In many States and Territories, Kidsafe will be participating in local Children's Week events as well as running activities. For more information, visit

The good, the bad, and the eccentric

Would you fancy living in a lighthouse? Or perhaps a superhero lair like the Batcave? What about a replica castle with a drawbridge and dungeon?

Not what most of us want, perhaps. Yet these and more have been designed and built by architects and contractors in the United States, resulting in some weird albeit intriguing homes available on the market.

With their curiosity piqued, Forbes Magazine teamed up with a collection of US real estate agencies to uncover some of the strangest homes on the US market at the moment.

One home that explodes off the list is the Volcano House. Located in Newberry Springs, California, from a distance the house looks like a spaceship that crash-landed in the desert, charring the surrounding hillside. In reality the home is more in this world than out of it, as the dome like structure is built into the top of a real volcanic peak. It is listed at around AU$807,500.

Another even more secretive abode is the Batcave - an angular, jutting Laguna Beach CA estate built into a cliff-side that's almost completely hidden from the road by the mountainous surrounds. Listed at around $12,765,000, it's a fair guess to say the name comes from the entry to the lair, which, just like Batman's, is accessed by driving through a hidden tunnel and ascending into the home (while still in your car) on a hydraulic lift.

For the perpetual rolling stone with a desire to own a home, Apartment at Sea is a residential community at sea, giving luxury homeowners a chance to travel the world without sacrificing the high-end surroundings they're used to. More elaborate and exclusive than a cruise ship, the boat encourages owners to design their own "apartments" - while they may gather no moss, there is a risk of barnacles. Apartments range from $1.5M to $14.5M.

Also among the weird and wonderful homes that made it onto the list is Red Rock Drive Castle, a dentist's 30 year-old castle in Maine. With turrets, a drawbridge and dungeon, it is listed for $3.77M.

Another, Riverfront Playground, has almost every amenity its designers could dream up, including a wedding chapel, a seashell-shaped pool, an orchestra-sized amphitheatre, a 1950s ice cream parlor and an Egyptian-themed lavatory that features a faux sphinx and tomb. It is listed for almost $15M.

Identified Firing Object

The months surrounding the holiday season are often filled with outdoor activities, with friends and family around for a BBQ, party or just a quiet al fresco meal. For the chillier evenings, UFO outdoor fireplaces are an out-of-this-world source of warm mood-lighting.

And they come in environmental peace. Finished in mineral stone, the sleek UFO-shaped burner uses natural plant alcohol, so there's no carbon residue, vapours or smoke.

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