Thursday, November 26, 2009

Latest Property News from Ted Hanson

Friday 27 November 2009
Quote of the Week

"In the confrontation between the stream and the rock, the stream always wins- not through strength but by perseverance."
~H. Jackson Brown~

Still 50,000 homes short

The recovery in new home building will fall short of what is required to meet increases in Australia's population, according to the latest National Outlook released this week by the Housing Industry Association (HIA).

HIA Chief Economist Dr Harley Dale said that more than six million dwellings will be needed over the next forty years to match Australia's projected population growth.

HIA is forecasting the number of housing starts to increase by 9 per cent over 2009/10 following a drop of 18 per cent last financial year.
Starts are forecast to grow by a further 16 per cent over the period 2010/11 to 2011/12 to reach 166,000 dwellings.

After suffering a 4 per cent decline in 2008/09, total investment in renovations is forecast to increase by 10 per cent over the three-year period to 2011/12, reaching a record worth of $32.8 billion.

The state of the land

The gap between supply and demand for housing land has widened even further, according to a new report released this week by the Urban Development Institute of Australia (UDIA).

The 2009 State of the Land Report has found that there is a substantial undersupply of land for new housing across Australia's major capital cities and that the situation has been ongoing since 2005.

The Report highlights that Melbourne is currently managing its land supply the best of any capital city. On the other hand, Sydney, while delivering higher levels of infill development, is significantly underperforming in greenfield land production and housing supply generally.

According to UDIA National President Stephen Holmes, the Report shows that the gap between land supply and demand has widened and there is a growing undersupply of housing right across Australia.

"Housing demand in Australia is increasing due to changes in household formation, natural population growth, and most significantly, historically high levels of immigration", Holmes says.

"The adequate supply of land to support new housing is the principal driver for ensuring the maintenance of housing affordability in Australia, so unless the supply-side issues are rectified, housing will increasingly become less affordable for Australians."

UDIA has made the following recommendations to start addressing the gravity of the issue and implementing actions to improve land supply production and delivery:

1. That the Productivity Commission be charged with undertaking an inquiry into financing local infrastructure and specifically examine the proliferation and impact of development levies.

2. That the Major Cities Unit of Infrastructure Australia assume responsibility of the inter-Governmental co-ordination of residential land supply to ensure that there is sufficient supply available in all capital cities across Australia.

Tough guys cry, too

We're used to seeing stars like Nicholas Cage and Eddy Murphy winning, losing and toughing it out as celluloid heroes, but even they are vulnerable to the perils of the real estate bust in the United States over the past twelve months, according to Forbes Magazine.

Forbes recently reported that Cage lost two New Orleans properties at auction (a bank was the buyer) for just two-thirds their appraisal value of US$3.4 million.

It is a problem facing many owners of high-end homes across the States, where the asking price of luxury homes has reduced by an average 14% compared with the national average of 10 percent.

Actor-comedian Edie Murphy reportedly slashed the price of his 32-room home by 50 per cent from its original listing price of $30 million, while hip-hop label Def Jam creator Russell Simmons dropped the price on his home by a third to 16.5 million.

Fire-resistant? Irresistible

The growing urban sprawl surrounding Australia's capital cities, combined with the baby boomer tree-change and sea-change phenomena, has increased the need and demand for fire-resistant homes, building advisory service Archicentre warned this week.

Victorian State Manager David Hallett said that stark memories of the major fires that have swept through most states in Australia over the past decade, together with current fires in South Australia, Tasmania and New South Wales, continue to place a focus on the importance of building fire-resistant homes.

"Traditionally people have seen fire resistant homes as a regional or rural issue", Hallett said.

He pointed out that the urban sprawl is placing tens of thousands of new homes on the fringe of major cities every year, often interfacing with state forests.

This situation is being compounded as baby boomers move away from the cities into coastal and rural areas.

"Anyone building a new home or renovating on the urban fringe should ensure fire prevention standards are included in their design and permit applications."

Mr Hallett advised homebuyers to be aware of local, state or national building standards, to complete a Bushfire Attack Level (BAL) assessment of their property before they move in and to consider upgrading the building to reflect current requirements.

The Bushfire Attack Level (BAL) assessment is part of the residential building Australian Standard, (AS 3959-2009), to improve the ability of buildings to withstand attack from bushfires. The BAL takes into consideration a number of factors including the Fire Danger Index, the slope of land, types of surrounding vegetation and its proximity to any building.

"Information on fire resistant home design should also become part of apprenticeship training programs for builders and associated trades such as plumbers, electricians, carpenters and landscapers in relation to fire resistant plants as a whole-of-industry approach", Mr Hallett suggested.

"A well-designed and sited home including fire prevention measures stands a significantly better chance of survival especially after the fire has passed."

Archicentre's Bushfire Design Guide, which is available for download, contains advice for homeowners and builders and covers topics including.

Design Principles in Bushfire Prone Areas :

  • Keep the exterior design of the house simple and avoid crevices or cracks where burning material can lodge.
  • Avoid decorative timberwork such as trellis and lattice-work on exposed areas of the building. Remember timber balconies and decks are also high danger areas for trapping burning debris and should be kept to a minimum.
  • Make sure you have any chimneys screened off to stop embers blowing down the chimney during the fire and entering the home.
  • In designing the home ensure the use of leafless guttering or if allowed by council install ground level rubble drain collectors.

Management Issues:

  • Do not store firewood against or under the home
  • Make sure all doors have close fitting screens
  • Clear all debris from guttering and decks
  • Have a fire emergency plan - check with local fire brigade
A natural selection from the shelf

It seems an exceptionally rare and valuable first edition of Charles Darwin's "On the Origin of Species" may not have survived by being the fittest, but by hiding in a toilet bookcase.

A family bought the copy for "a few shillings" in the late 1960s or early 1970s, Reuters reported recently, saying they only recognized it as valuable when they saw another first edition at a Darwin exhibition.

Christie's auction house will offer the book this week on the 150th anniversary of its original publication, and expects it to fetch AU$70,000-110,000.

Walls come down in cookie town

The hunt is on in Norway for the vandals who destroyed an entire city. An entire city made of gingerbread, that is.

Residents of Bergen, home to the traditional pre-Christmas display "Gingerbread City", were in pieces recently when they found all the 1200-1300 "buildings" had been smashed only hours after the project was completed, the Norway Post reports. Each year up to 10,000 people from the larger Bergen region participate in the event, 2,000 of whom had helped to set up and decorate the miniature cookie-structures earlier that day.

While police are investigating the matter, many residents have already begun making new gingerbread houses, including professional bakers intent on seeing the sweetest city around.

Thursday, November 19, 2009

Latest Property News from Ted Hanson

Friday 20 November 2009
Quote of the week

"They may forget what you said, they may forget what you did, but they will never forget how you made them feel."

~Carl W. Buecher~

Construction activity building

The national construction industry continued to grow modestly in October reflecting a rise in building activity, improved employment levels and supplier deliveries, according to the latest Australian Industry Group/Housing Industry Association Performance of Construction Index (Australian PCI®).

The seasonally adjusted Australian PCI® remained relatively steady, up 0.1 points to 50.9, slightly above September's level and still above the 50 point mark separating expansion and contraction.

The continued growth in house building, although at a much slower rate, combined with a boost in apartment building, kept construction in positive territory in October.

Australian Industry Group, Associate Director Public Policy, Dr Peter Burn said that while the growth in the sector is welcome, it clearly remains tentative and uneven.

"While there was a pick-up in the apartment sector, house building grew at a slower pace in October on the back of the winding down of the First Home Owners subsidy and rising interest rates", Dr Burn said.

"This suggests that a durable upturn in housing activity remains some way off."

The continued growth was found to have contributed to a further rise in employment, registering 52.5 on the sub-index.

Investigation urged on blackout threat

Environment groups have this week asked the national energy watchdog to investigate claims by TRUenergy that suggest the company may be about to default on electricity supply contracts.

Over the past year TRUenergy has repeatedly claimed there was a risk of blackouts if it did not receive more compensation under a national emissions trading scheme.

Environment Victoria and the Australian Conservation Foundation (ACF) have this week written to the Australian Energy Regulator, asking the regulator to examine the accuracy of
TRUenergy's claims that the company may be about to default on contracts.

Environment Victoria Campaigns Director Mark Wakeham said that TRUenergy's 1.3 million customers deserve to know whether they can rely on TRUenergy to deliver on its contracts and whether the company is crying wolf in an attempt to line its own pockets.

"Claims that the electricity supply is at risk and that the company has reduced maintenance spending at Yallourn power station should be thoroughly investigated", Mr Wakeham said.

TRUenergy is 100 per cent foreign owned by CLP Power International (formerly China Light and Power). ACF climate campaigner Phil Freeman said he was concerned about windfall profits going offshore with no benefit to Australian households or taxpayers.

"TRUenergy is already set to receive $738 million worth of free permits in the first five years of the proposed Carbon Pollution Reduction Scheme - there is no case for the company to get more handouts from the public purse", Mr Freeman said.

Not so happy now...

The Westpac-Melbourne Institute Index of Consumer Sentiment fell by 2.5 per cent this month, from 121.4 in October to 118.3 in November.

Westpac's Chief Economist, Bill Evans, commented that considering this drop comes after a second consecutive increase in the Reserve Bank's overnight cash rate and associated increases in variable mortgage rates, it has to be classified as a modest response.

The level of the Index is still 38.3 per cent above its level from a year ago.

The average read for the Index over the last three months (119.7) has, in fact, only been
exceeded in four previous periods of strong optimism since the survey began in 1975. Those were December 1983-May 1984 (120.2); March 1994-July 1994 (121.4); July 2004-February 2005 (119.8) and May 2007-July 2007 (122.1).

"There was a fall of 4 per cent in sentiment towards housing in November", Mr Evans said.

"'Whether now is a good time to purchase a dwelling' is now down by 15 per cent over the last three months.

"However that is a more resilient result than we saw in those periods of consecutive rate hikes in 2002 and 2003 when sentiment towards housing fell by over 30 per cent on both occasions."

Mr Evans said it is likely that the Reserve Bank Board will raise rates when it next meets on December 1, in order to gradually remove more of the stimulus.

"Today's results do, however, signal that the extent of rate hikes in 2010 envisaged by current market pricing is unlikely to transpire", he suggested.

Time to go, e-waste

In case you missed National Recycling Week this month, there's good news across the country for our tech-age waste.

Environment Minister Peter Garrett this week opened a new e-waste recycling facility, which is expected to divert as much as 20,000 tonnes of electronic waste from landfills when it operates at full capacity.

Mr Garrett commended the development of recycling plants capable of processing electronic waste such as computers and televisions, which have been recognised as a priority waste by all levels of government in Australia.

"Recycling delivers important environmental benefits, including energy and water savings, and a reduced demand for landfill space", he said.

The SIMS e-waste recycling plant in Sydney is expected to divert up to 20,000 tonnes of material from landfill per year and recycle up to 98 per cent of the material that passes through its front gate.

A recent snapshot of waste and recycling trends in Australia showed the amount of waste Australia generates has increased by 28 per cent between 2003 and 2007.

"A national waste policy will provide much-needed clarity on what is appropriately dealt with at which level of government, and will improve economic efficiencies by better harmonizing waste policies between jurisdictions", Mr Garrett said.

"It also affords a timely opportunity to revisit waste policy in the context of broader Government policies on climate change and sustainability."

Valued by association

While a good education can be invaluable for a student, new research has found that a good school can also have a marked impact on local property values.

Research done by UK property consultants Savills found properties located within the vicinity of "good" schools are attracting asking prices up to three times higher than their neighbouring counterparts.

Due to the demand for good schools, homes that fall into the right catchment areas come with significantly higher than average asking prices.

According to the research, homes within the vicinity of the top 25 per cent of secondary schools can fetch up to 16 per cent more than properties outside the schools catchment area - up from 13 per cent in 2007. Furthermore, homes in areas with an amalgamation of good state and independent schools can be worth up to three times the county average.

Power now, brown cow

We often see people kicking up a stink over energy conservation, so it's refreshing to see some are using stink to fix the problem.

A plant that converts cow dung into energy for homes began operating in the Netherlands last Friday, Reuters reported this week.

Manure from cows at a nearby dairy farm will be fermented along with grass and food industry residues and the biogas released during the process will be used as fuel for the thermal plant's gas turbines.

According to the plant's operator Essent, the heat generated will be distributed to around 1,100 homes in the area around Leeuwarden in the north of the Netherlands.

Thursday, November 12, 2009

Latest Property News from Ted Hanson

Thursday, November 5, 2009

Latest Property News from Ted Hanson

Friday 06 November 2009
Quote of the Week

"The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy."

~Rev. Dr. Martin Luther King, Jr.~

OCR up to 3.5

The Reserve Bank decided this week to raise the official cash rate (OCR) for the second month in a row.

The move takes the OCR to 3.5 per cent, adding about $45 to the average monthly payment for a typical 25-year, $300,000 mortgage.

In a statement announcing the decision, Reserve Bank Governor Glenn Stevens said that the strong economic conditions in Australia have meant that inflation is not likely to drop as much as previously expected.

Higher dwelling activity and public infrastructure spending are also starting to provide more support to spending.

Inflation has been declining for the past year, but the Reserve Bank Board expects that both CPI and underlying inflation will be consistent with the target in 2010.

"With the risk of serious economic contraction in Australia now having passed, the Board's view is that it is prudent to lessen gradually the degree of monetary stimulus that was put in place when the outlook appeared to be much weaker."

Governor Stevens hinted that there might not be further rises in the near future.

"The adjustments at the October and November meetings will work to increase the sustainability of growth in economic activity and keep inflation consistent with the target over the years ahead", he said.

Home prices rise

House prices in all capital cities have risen over the past twelve months, according to figures released this week by the Australian Bureau of Statistics.

Over the year to September 2009, preliminary estimates show that the price index for established houses for the weighted average of the eight capital cities increased 6.2 per cent.

Annually, house prices rose in Darwin (+12.3 per cent), Melbourne (+8.4 per cent), Canberra (+7.8 per cent), Sydney (+5.9 per cent), Brisbane (+5.6 per cent), Hobart (+5.4 per cent), Perth (+4.4 per cent), and Adelaide (+3.7 per cent).

The movement in the preliminary established house price index between June quarters 2008 and 2009 has been revised from an estimated decrease of 1.4 per cent to an estimated decrease of 0.7 per cent.

Preliminary estimates show the price index for established houses for the weighted average of the eight capital cities increased 4.2 per cent in the September quarter 2009.

The established house price index increased by 4.3 per cent in Sydney, 4.7 per cent in Melbourne, 4.4 per cent in Brisbane, 1.7 per cent in Adelaide, 4.5 per cent in Perth, 1.8 per cent in Hobart, 3.4 per cent in Darwin, and 4.3 per cent in Canberra.

The movement in the preliminary established house price index between March quarter 2009 and June quarter 2009 has not been revised, showing an estimated increase of 4.2 per cent.

National Architecture Awards announced

Australia's major new arts, theatre and `culture palaces' from Canberra to Melbourne to New York, and the architects who designed them, are among major winners at this year's Australian Institute of Architects' National Architecture Awards.

For the first time in four years, Australia's most prestigious residential award returned to Sydney, with the Robin Boyd Award for Residential Architecture/ Houses going to an innovative house on Sydney's northern beaches - the Freshwater House by young Sydney husband and wife team Tony Chenchow and Stephanie Little of Chenchow Little Architects.

In describing the project, a four-bedroom home for a young family of five on a small 332 sq m site, the jury commended the design for providing "an outstanding solution for an elevated site, and achieves a private compound, screened from the neighbours, yet open and expansive towards an outdoor lawn terrace, the beach and sea."

In a second major win for the couple, Chenchow Little Architects shared the National Award for Small Project Architecture for the Ang House in Sydney's Mosman, with young Victorian firm Bellemo & Cat for their Polygreen House in the Melbourne suburb of Northcote.

In a double scoop for fellow young Sydney-based husband and wife team Rachel Neeson and Nick Murcutt of Neeson Murcutt Architecture, the couple received National Awards for Residential Architecture for two strikingly unique houses in NSW and Victoria - the Whale Beach House at Whale Beach in Sydney and Zac's House at Sorrento on the Mornington Peninsular.

The Frederick Romberg Award for Residential Architecture - Multiple Housing was presented to Melbourne-based practice Wood Marsh for the 22-storey Balencia Apartments on St Kilda Road in Melbourne.

Of the project, the jury said: "The architects have demonstrated sensitivity, skill and experience in negotiating an impressive balance between the commercial interests of the client, the comfort and amenity of the occupants and architecture's responsibility to the public domain. They have created an exemplary model for sophisticated multiple housing in an urban setting."

The Colorbond® Award for Steel Architecture was presented to young Sydney-based architect James Stockwell for the Snowy Mountains House overlooking Lake Jindabyne.

"James Stockwell's commission to create a robust, economical house for an extended family carefully addresses issues of climatic extremes, simple maintenance, and sustainable objectives. It has its origins in simple alpine huts and basic ski lodges, but here delivered with a straightforward finesse. The house combines autonomy with reasonable construction cost, minimum maintenance, and good longevity, achieving excellent sustainable credentials."

Insulation rebate thins out

Insulating our homes became more expensive but safer this week, with the reduction of government subsidies and the introduction of new regulations.

From November 1, the insulation rebate has been reduced to $1200. Transitional arrangements apply for people who have accepted a quote but are waiting for the work to be done, provided the work is completed by 16 November 2009.

Announcing the changes, Environment Minister Peter Garrett said that demand for the rebate in the first four months of the full roll out of the scheme has been significant and is currently running well above projected demand.

"More than 500,000 Australian households have already installed ceiling insulation putting them on the path to reductions in their heating and cooling costs of up to 40 per cent", Mr Garrett said.

The new safety precautions and consumer protections, which also apply from midnight on Sunday 1 November 2009, include:

  • a ban on metal fasteners for foil insulation such as metal staples or nails
  • mandatory installation of covers over downlights and other ceiling appliances , which have always been commonly used but are not compulsory under Australian Standards
  • a targeted electrical safety inspection program of Queensland homes with foil insulation installed under the program, starting at 10 per cent of installations, with the potential to adjust upwards as results are analysed.

From December 1 the Government will also:

  • publish a 'name and shame list' for any business struck from the installer register as a consequence of failure to meet program guidelines including 'dodgy' behaviour
  • a requirement for the provision of two genuinely independent quotes
  • a mandatory requirement that a formal risk assessment be completed for every installation before any installer is allowed to start work.

The Minister said the creation of a 'name and shame' list was also an important change to the program guidelines.

"Through our audit and compliance program I expect some 6,000 ceilings to have been inspected by the end of November, escalating to 11,000 by the end of the year", he said.

"Insulation installers are on notice that we will not hesitate to strike them from the register, take legal action and name and shame them if they are found doing the wrong thing."

Mr Garrett added that the two-quote rule will encourage householders to shop around, find a reputable installer that they're comfortable with and get value for money.

What did you say, sleepyhead?

Most of us have woken from a deep sleep sometime with pillow creases imprinted on our face, in which case greeting others is the last thing we want to do.

Now a UK-based designer has come up with a way to let your early-morning face speak for you.

With the words Good Morning Sweetheart embroidered on a 100 per cent cotton pillow slip to imprint onto your skin as you enjoy those last few Zs, your loved ones can see how you feel even when you're tired and drowsy.

Vacation with the Jetsons

Hotels often lure vacationers by offering out-of-this-world attractions, though not many can claim to be literally out of this world. With the ultimate goal of being the largest chain of space resorts, Galactic Suite has its sights set on launching the very first private space station as an orbital hotel by 2012.

According to its website, the entire experience will include an 8-week astronaut training course on a tropical island from where the space ship will launch.

After arriving at the outer-space resort, vacationers can enjoy weightlessness, Velcro suits (to help with the weightlessness), showers in a spa room with bubbles of floating water and the experience of orbiting the Earth at 30,000 km/h, completing 15 orbits each day. In simpler terms, travelling around the world in 90 minutes, meaning every 45 minutes you witness the sunrise and sunset.

If things go to plan the galactic resort will be up and running by the end of 2012, and it looks like a 3-day vacation will cost just under AU$5M per person. Better start saving!