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~ 1. 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. Top 2. 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. Top 3. 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. Top 4. 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." Top 5. 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. Top 6. 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. Top