Latest Property News from Ted Hanson

Friday 26 March 2010 Courage No matter how wonderful our dreams, how noble our ideals, or how high our hopes, ultimately we need courage to make them a reality. Without action, it's as if they never existed. 1. Housing starts to climb The number of housing starts jumped again in the December 2009 quarter, following on a rise in the previous period, according to figures released this week by the Australian Bureau of Statistics. The seasonally adjusted estimate for the total number of dwelling units commenced rose 15.1 per cent in the December quarter, following a rise of 11.0 per cent in the September quarter. The seasonally adjusted estimate for new private sector house commencements rose 13.4 per cent in the December quarter following a rise of 9.9 per cent in the September quarter. The seasonally adjusted estimate for new private sector other residential building rose 18.9 per cent in the December quarter following a rise of 10.0 per cent in the September quarter. 2. Needed: half a million homes by 2020 Australia could face a shortage of almost half a million homes in the next decade, according to a new report released this week. The Housing Industry Association's inaugural Housing to 2020 report shows that if current building trends persist, Australia's cumulated housing shortage would reach 466,000 dwellings by 2020. HIA Senior Economist Ben Phillips said that the report, which focuses on future housing demand and the number of dwellings required in meeting this demand, highlights a current housing shortage that already numbers over 109,000 dwellings. "The reality in many regions and cities in Australia is that affordable, well located land is not available or abundant", Phillips said, pointing to planning restrictions, taxes and labour shortages as the other main culprits behind the problem. "If we don't get a comprehensive supply response to the accumulating housing shortage then the lack of affordable and appropriately located rental properties will only worsen, while pressures on existing home prices will continue at an undesirable rate", he warned. The report provides the first estimates made of Australia's housing shortage at a Local Government Area (LGA) level, showing that shortages exist in just under half (295) of the 669 LGAs across Australia. The majority of the shortages can be found in and around metropolitan Sydney and Brisbane. "It was also found that many of the LGAs with the largest housing shortage are also the same regions with the highest level of demand", Phillips said. "Again, it's the growth areas in the greater Sydney area and in South East Queensland where demand will be amongst the highest in the nation. "The growth areas in and around Melbourne also show high levels of demand. "Current construction levels in most high demand areas are simply not sufficient to meet the needs of a fast growing population," he concluded. 3. Top prize goes to champions of sustainability A husband and wife team creating sustainable buildings that reinforce sense of place, community and identity in increasingly pressured urban environments has been awarded Australia's top national architecture prize - the Australian Institute of Architects 2010 Gold Medal for Architecture. Kerry and Lindsay Clare are the first husband and wife team to win the nation's top architecture prize, with Kerry the second Australian female only in the Gold Medal's 50-year history to receive the honour. Architecturally, Kerry and Lindsay Clare are best known for the creation over the past 31 years of a large range of projects in Queensland (particularly the Sunshine Coast) and NSW (Sydney). Their most iconic project to date is the multiple award-winning Gallery of Modern Art, in Brisbane's cultural precinct. The couple is widely known for their sub-tropical, low impact, sustainable residential projects across regional Queensland. These houses are typically modest in size, elegant, lightweight structures bathed in natural light and cooled by natural ventilation. The Goetz House and Thrupp and Summers House in particular received national attention when designed in the mid-1980s, forging new ground for environmental design. The jury citation noted that the couple's "great body of work demonstrates an appropriate environmental response, developing the concept of efficient low-energy, sustainable solutions decades before legislation made it mandatory". Recent past recipients include high profile architects such as Richard Johnson, Kerry Hill, Glenn Murcutt, Jørn Utzon, Gregory Burgess, Keith Cottier, Brit Andresen and Peter Corrigan. Top 4. Colour your home happy How would you feel about putting your baby to bed in a nursery decorated entirely in black and white? How would you feel about putting your baby to bed in a nursery decorated entirely in black and white? Scientific tests have shown that when humans are exposed to different colours, our physical, mental and emotional states change slightly. The effects can range from an actual physical change in blood pressure and body temperature through to an alteration in our perception of space and distance. It has a marked influence on our mood and even on our appetite. So it's easy to see how colour can play a huge role in the home, not just in the way it looks but how you feel when you are there. The good news is that often you don't need an entire paint-job to change the feel of a room - small accents are sometimes enough. Cushions, artwork, sometimes a rug or a subtly-coloured lamp can add the touch you are looking for. Whether you're looking to adjust, rework or overhaul an existing colour scheme, look for inspiration in your surroundings. A favourite painting, rug, or anything similar can be used as a starting point to build on. If you struggle for inspiration, don't fret - try starting with a scrapbook from magazine cutouts and fabrics, compiling colours or palettes that appeal to you. Of course, you can put together any colours that you like, but there are some standard combinations which designers use for different effects, such as: * The monochromatic scheme - possibly the easiest combination, it uses varying tones from one colour. * Complementary colours - colours which are opposite each other on the colour wheel will form a contrast and create a stimulating effect. * Related colours - colours that lie side by side on the colour wheel create a subtle harmonious effect. When considering different options, keep in mind the occupants who will be affected by the colours you choose - for instance, babies and very young children will be more sensitive to the effects of colour than adults and care should be taken when choosing a colour for their surroundings. The pale peach/pink of the womb (the place they were nurtured and feel safe) is a baby's first experience with colour. Decorating the baby's room in pale pink can help them relax and generate a safe feeling in their new environment. Once you've decided on some possible colour schemes, head down to your local paint supplier to get colour chips in your chosen colours. Look at the chips both in the daylight and at night so you can see how the lighting will affect the colour. As a last resort, you might want to buy a sample pot of your chosen colour and test it on one wall. Another way to play with colours is with "Mycolour", an innovative colour scheming tool on the Dulux website. With a variety of rooms and more than 800 colours to choose from, the program makes it not only easy to match colours throughout an entire room, but is a lot of fun to use. It even allows you to flick a switch to see how the room looks from different angles or in both daylight and at night. Most importantly, have fun finding a colour scheme that expresses your personality and makes you feel good! 5. Quick, hide - it's the policemen again Having police knock on the door is enough to cause anyone anxiety, so it is not surprising that an octogenarian couple in New York have petitioned the NYPD to stop harassing them, after more than 50 visits. Local news sources report that police have knocked on the door of Walter Martin, 83, and his wife Rose, 82, 50-plus times since the couple moved into their home in 2002, looking for suspects or witnesses in murder, robbery and rape cases. The couple has been visited by law enforcement up to three times a week. The Daily News reported its computer search showed 15 other people living at the Marine Park address. The Martins don't know any of them. NYPD are now investigating the possibility of identity fraud. 6. Shower Thoughts The shower isn't just where we do our best singing, but also our best thinking. Unfortunately a lot of the great ideas that come to us end up rinsing out before we get a chance to write them down - which is where AquaNotes come in. With 40 waterproof tear-off sheets of paper and a waterproof pencil that both attach to your shower with suction cups, you're less likely to lose ideas down the drain.

Latest Property News from Ted Hanson

Friday 19 March 2010 Keeping on track.... It's foolish to be obsessed with past failures. And it's just as foolish to be self-satisfied with one's small achievements. The present and the future are what are important, not the past. ... Those who neglect this spirit of continual striving will start to veer off in a ruinous direction. 1. Home loans on holidays The holiday season put a dent in the number of home loans taken out in January this year, according to figures released this week by the Australian Bureau of Statistics (ABS). In seasonally adjusted terms the total number of owner-occupier loans fell in every state and territory in January 2010 with the exception of the Northern Territory. On a better note, fixed loans for investment housing rose 0.9 per cent. The number of loans fell in New South Wales (down 7.3 per cent), Victoria (down 3.7 per cent), Queensland (9.6 per cent), South Australia (5.5 per cent), Western Australia (11.1 per cent), Tasmania (8.0 per cent) and the Australian Capital Territory (4.3 per cent). The Northern Territory gained 3.6 per cent. 2. Affordability declines Affordable housing is becoming harder to find across the country, according to the latest report released by the Real Estate Institute of Australia (REIA) this week. The REIA Deposit Power Housing Affordability Report for the December quarter shows that housing affordability declined in all states and territories, except for Western Australia. "The proportion of income required to meet loan repayments across Australia has increased from 29.0 per cent in the September quarter, to 30.7 per cent in the December quarter," said REIA President, David Airey. Once again, the Australian Capital Territory remains the most affordable state or territory in which to own a home, where the proportion of income required to meet loan repayments increased to 17.7 per cent, or 13.0 percentage points below the national average. New South Wales remained the least affordable state or territory in which to own a home, where the proportion of income required to meet loan repayments increased to 33.6 per cent; 2.9 percentage points above the national average. There was a noticeable shift over the quarter in the number of home loans to first home buyers, decreasing by 14.6 per cent - evidence that the phasing down of the First Home Owners Grant Boost (FHOG Boost) has started to impact the market. Deposit Power's National Manager, Mr Keith Levy said that one of the biggest factors influencing the property market at the moment is the shift in buyer demographics. "While there is still some activity from first home buyers, with the government incentives returning to normal levels, we are currently seeing more purchases from up-graders and investors", Mr Levy said. Mr Airey added that the average Australian home loan repayment is now $1856 per month. 3. Part-time work cushioned downturn: ABS Growth in part-time work helped offset full-time job losses during the global financial crisis, but younger workers were more affected than the rest of Australia's workforce according to the latest Australian Social Trends released this week by the Australian Bureau of Statistics (ABS). In the year to July 2009, the proportion of people in full-time work fell from 45 per cent to 43 per cent, but this was partially offset by an increase in the number of people working part-time jobs. The switch from full-time to part-time work buffered the drop in women's full-time employment more than it did for men. For women, more than half of the fall in full-time jobs were offset by increases in part-time work, while for men part-time work only made up for around one-third of lost full-time jobs, with a greater proportion becoming unemployed. As with other downturns, the impact was greatest among people under 25, with more than half a million (19 per cent) young people not engaged in either full-time study or full-time work in 2009. Half (53 per cent) the young people who left school in 2008 without year 12 qualifications were unable to find either full-time work or further study opportunities, double the rate experienced by those who had finished year 12. 4. Now for the weather... More extremely hot days, fewer cold ones, wetter in the north and drier in the south: this is not a forecast for Australia's climate but a snapshot of our climate now, the CSIRO announced this week. In a joint CSIRO/Bureau of Meteorology statement, Australia's two leading climate science agencies have produced a report on of the state of the climate to update Australians about how the climate has changed and what it means. Some of the observed changes include: Highly variable rainfall across the country, with substantial increases in rainfall in northern and central parts of Australia, as well as significant decreases across much of southern and eastern Australia. Rapidly rising sea levels from 1993 to 2009, with levels around Australia rising, between 1.5cm and 3cm per decade in Australia's south and east and between 7cm and 9cm in the country's north About half of the observed reduction in winter rainfall in south-west Western Australia can be explained by higher greenhouse gas levels. Bureau of Meteorology Director Dr Greg Ayers said the observed changes showed climate change is real. The report is available on both BOM or CSIRO websites. 5. What are the neighbours singing about? The laugh of the kookaburra, the squark of the sulphur-crested cockatoo and the melodious song of the magpie - these are sounds that most Australians recognise instantly. But our gardens and trees are filled with so many other birds, each with its own song. So how do you identify which ones are your immediate neighbours or visitors when you hear them? A good place to start is the Australian Museum's birdsinbackyards website, which has recordings of the more common birdsongs. It also has a bird finder identification tool that allows you to search, browse or find individual Australian birds, as well as information on creating bird-friendly spaces in your backyard and neighbourhood. 6. Living with dinosaurs Now here's a lounge setting straight out of The Flintstones. Designer Sayaka Yamamoto has created a line of contemporary furniture inspired by the distant past - life-sized replicas of real dinosaur bones made from soft rubber-coated foam. The furniture comes in a variety of designs, including a T-Rex spine, Triceratops skull and big feet.

US housing expert has some home truths

ANDREW WEST

March 16, 2010

AN ADVISER to the Obama administration has warned the Keneally government to exercise extreme caution before using proposed powers that would allow it to acquire private land and turn it over to property developers.

Henry Cisneros, who was secretary of housing and urban development under President Bill Clinton and now advises the White House Office of Urban Affairs, said the government would have to demonstrate that seizing private land was for ''a larger public good''.

Dr Cisneros, who is in Australia as a guest of the United States Studies Centre at the University of Sydney for a series of lectures and meetings, told the Herald such powers were controversial in the US.

''It's been a raging controversy that's gone all the way up to the Supreme Court,'' he said.

''It is a problem and, in the US, private property is treated so sacredly there would be inhibitions against it. On the other hand, there have been court rulings saying that, for a defined public good, it is allowable.''

Dr Cisneros served four terms as the mayor of San Antonio, Texas, before being appointed to the Clinton cabinet in 1993. He is now a developer of low-income housing and an occasional White House counsellor.

As mayor, he said, he never forced a private owner to sell to the city. ''I did not do it to someone who did not want to sell,'' he said. ''We frequently approached people about selling in order to build a 137-store mall downtown, but it was for business use.''

But if governments can prove that buying private land occupied by a single home or business was to sell it to a developer for medium and high-density dwellings to ease a housing crisis, such powers are justified, he said.

''You could compensate people appropriately, even into the future for the enhanced value,'' he said. ''If fairness can be achieved, if there is a larger public good in creating greater density of housing, then any city that can do it should work at it.''

Dr Cisneros also warned that as Australian cities become more crowded and expensive, governments may have to build ''workforce housing'' for essential staff, such as police, teachers, nurses, and firefighters.

Several years ago, after a fierce storm lashed Seattle, there was no power for several days because repair crews, who could not afford to live in the city, could not return to work from their distant homes. King County in Seattle now has an ordinance that gives workforce housing priority on plots of unused or abandoned land.

In San Jose, California, the city had to offer housing aid to teachers who were resigning after just two years because they could not bear the long commute to school. ''The city was losing all that investment in teacher training,'' Dr Cisneros said.

In nearby San Ramon, police who are forced to live 120 kilometres away now work three 12-hour shifts a week, and stay in dormitories. ''They can't make the commute,'' he said. ''So you're getting dysfunctional policing.''

Makes me MAD - typical heavy handed approach

Private land to be seized for housing

MATTHEW MOORE URBAN AFFAIRS EDITOR

SMH March 12, 2010

THE state government is rushing to prepare laws to create a development authority with sweeping powers to compulsorily acquire and rezone privately owned land for resale to developers.

With Sydney's population set to grow 40 per cent to 6 million in the next 25 years, the government has decided it needs a metropolitan development authority to buy privately owned land near rail and bus routes for medium- and high-density housing.

Legislation for the new authority, believed to be the first of its kind in Australia, will be introduced before June in an attempt to increase housing construction rates, which are the lowest on record even though the city's population is growing at the fastest rate since the 1960s.

Cabinet is still fine-tuning details, including the contentious issue of the amount of compensation paid to landowners whose properties are compulsorily acquired by the government for resale.

While government departments such as the Roads and Traffic Authority have the power to compulsorily acquire land, they can do so only when it is used for a public purpose.

In contrast, the metropolitan development authority would allow compulsory acquisition of land for private companies to construct and sell housing for profit.

A spokesman for the Planning Minister, Tony Kelly, said the move was about ''driving urban renewal at key strategic sites throughout Sydney''.

While the proposal is likely to be contentious, developer groups say it is the only practical way to meet the housing construction targets contained in the principal planning document for Sydney, the Metropolitan Strategy.

It says Sydney needs 26,000 new homes a year but only 14,000 are being built, a shortfall developers say is largely due to the difficulty in obtaining suitable sites.

As well as acquiring land, the authority will decide which areas should be included in new areas for housing and employment and then ''partner with councils'' to rezone them.

The plan for the authority follows the release of draft legislation two years ago by the former planning minister Frank Sartor to give the government powers to compulsorily acquire land for urban renewal where there was a ''net public benefit''.

The proposal lapsed after a public backlash, and developer bodies are keen to avoid this happening again.

One lobby group, the Urban Taskforce, wants the government to pass on to landowners the full increase in value that results from rezoning.

''Landholder compensation must be valued based on the rezoned value of the land following the granting of the final development approval in connection with the urban renewal project,'' the taskforce chief executive, Aaron Gadiel, said in a letter to Mr Kelly.

He said the government should look at the British model where, for 10 years after compulsory acquisition, a landowner is entitled to claim compensation for any increased value of the land from rezoning or other planning approval.

A spokesman for Mr Kelly said this was under discussion. "In relation to issues such as the model of compulsory acquisition, consideration will be given to models from other jurisdictions and to submissions from industry.''

The head of the Property Council, Ken Morrison, said the authority was vital if Sydney was going to house its swelling population as the vast tracts of industrial land used in the past for development had largely gone.

''People think we are talking high rise with Chatswoods everywhere. We're not … there will be a few locations like that, but in most cases it will be medium-density form with five or six storeys.''

Stephen Albin, the chief executive of the Urban Development Institute, a developer group, said while landowners should receive some compensation for increased value from rezoning, they should not receive it all.

''Developers are taking the risk … these landowners are not taking risk. Government has decided for the good of the city, for the good of the community, development must occur.

''The rationale behind the authority and the compulsory acquisition provision is community benefit.

''It's the same as acquiring land for a road or a railway.''

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Friday 12 March 2010 Quote of the Week There may be times when others seem enviable. But others are others and you are you. Rather than comparing your joys and sorrows to those of others, you should aim to surpass your limits in the situation you are in right now. Those who can do this are the true victors in life. Buddhist Philosopher Daisaku Ikeda 1. Construction expands again The national construction industry expanded for a second consecutive month in February to maintain an improving trend in industry conditions, according to the latest Australian Industry Group/Housing Industry Association Performance of Construction Index (Australian PCI®). While an easing in demand and employment saw the seasonally adjusted index slip 4.9 points to 52.8 in February, it remained above the 50-point level indicating an expansion in activity. Fewer new contracts and in some cases, the completion of existing work, together with a contraction in the apartment sector, was behind the slower pace of growth. However, customer enquiries and buyer confidence remained resilient in the month. Australian Industry Group Director of Public Policy, Dr Peter Burn said that the survey results further reinforce the improving trend that has been evident over much of the period since the low point of February last year. "While activity contracted in the volatile apartment sector, the engineering, commercial and house building sectors all reported another month of growth", Dr Burn said. "The house building sector, in particular, experienced solid conditions, in line with official data showing a continued increase in approvals for detached houses. "The survey points to housing activity holding up over coming months with firms reporting a further improvement in their order books and the emerging signs of an increase in investor activity", he added. Apartment building dropped 16.4 points to 42.7 in February, but new orders in the house building sector rose for the sixth consecutive month, lifting the sub index reaching 61.7. Customer enquiries and buyer confidence remained resilient in the month. 2. Act green now, Cities If there was one message to be taken from the Green Cities 2010 Conference held in Melbourne recently, it was "act now", Green Building Council Australia CEO, Romilly Madew reported this week. "The conference confirmed how far our industry has travelled in such a short time", Ms Madew said. "Since Green Cities 2009, the conversation has shifted from how we green our individual buildings to how we should shape our precincts, our communities and our cities." Some of the outcomes and announcements from the conference include: Green Star and NABERS MoU: a new memorandum of understanding between the Green Star and NABERS rating systems was announced, with the intention of improving technical consistency and sharing information on rating tool development, calculators, benchmarks and methodologies. Green Star Communities framework: The GBCA launched its new national framework for sustainable communities. The framework outlines five key principles - liveability, economic prosperity, environmental quality, place making and urban governance - which will inform the development of the Green star Communities rating tool later this year. ASBEC Cities for the future report: The Australian Sustainable Built Environment Council's report points to a bleak future where transport-related greenhouse gas emissions (GHG) increases by almost 50 per cent and travel times increase by a quarter. ASBEC is calling for swift, decisive action from all levels of government to deliver better transport systems in Australia's cities. Continuing Professional Development program: the GBCA announced a new program that will help Green Star Accredited Professionals maintain their knowledge of Green Star and stay in touch with latest trends and technologies in green building. The program will commence in June. Green handbook: The Road to 'Green Property' has been published by global construction consultants Davis Langdon to help developers, property owners and builders come to grips with the overwhelming mass of information and requirements surrounding energy efficiency and sustainability in the property sector. The e-book sets out the complex procedures involved in establishing the greenhouse gas content and emissions across the entire range of property development. 3. Go slow but safe after storms With continuing heavy rain this past week across the Eastern States and changes in weather patterns towards increased severity of storms and heavy rainfall, ongoing maintenance of homes is vital, especially since leaking roofs and guttering can allow water to come into contact with electrical wiring or cause ceiling collapses. Angus Kell, ACT & NSW State Manager of Archicentre said water damage in homes can be quite extensive requiring all particle board cupboards, doors and plaster work to be totally replaced, especially where water penetrates the house and insulation becomes water logged. "It is also important to recognise flood-damaged buildings could take months to dry out and the natural tendency for people to renovate and redecorate as quickly as possible can lead to mould growth and the work having to be repeated", Kell advises. "Home owners should involve professional tradespersons to undertake roof repairs because of the dangers of falling off slippery damaged roofs." While recognising the natural tendency to get in and immediately fix immediate problems such as damaged roofs, Kell suggests it is a matter of safety to wait for professional tradespersons to undertake roof repairs. Likewise, powerpoints and switches can collect mud and impurities in a flood, so it is best to ensure a licensed electrician checks these before reconnecting the power. Following floods, large pools typically form under the house. Kell suggests these areas need to be re-graded to prevent long-term structural damage like rotted floor framing. 4. First home buyers remain confident Two in three first home buyers will not be deterred by higher interest rates, according to results from the 2010 Mortgage Choice First Homebuyers Survey. Furthermore, close to one in three (29 per cent) will have a deposit of 20 per cent or more to contribute towards their first home purchase. Tighter lending criteria is forcing all borrowers, not just first homebuyers, to meet tougher requirements such as providing evidence of genuine savings over consecutive months. The majority of first homebuyers-to-be are taking this advice on board and saving good-sized deposits before purchasing. Despite this, a significant number (78 per cent) were planning to make lifestyle sacrifices in order to purchase, an increase on the 71 per cent in the 2009 survey. First homebuyers' main motivation to purchase property in the next two years was that they wanted to set themselves up financially for the future (72 per cent of respondents). 58 per cent said that they were keen to get their foot in the property market door and 31 per cent saw more benefit in investments such as property than in the share market. Mortgage Choice Senior Corporate Affairs Manager, Kristy Sheppard said that it is good to see that up-and-coming first homebuyers acknowledge the long-term benefits property investment has to offer. "Importantly, the majority understand that good savings and making lifestyle sacrifices get them into good habits and get them through the door sooner", she said. The survey results also highlight a lack of consumer awareness regarding changes to lending criteria that now restrict property buyers from borrowing without a deposit. "Eight per cent of our respondents intended to borrow the full purchase price." Ms Sheppard advises that before committing themselves, potential first homebuyers looking to take advantage of market opportunities should health test their budget, review their savings history, speak to a mortgage professional and prepare themselves for the total cost of property ownership. "It's not just about making loan repayments but the day-to-day expenses of living in your own home as well as lifestyle costs", she said. Key findings include: 65 per cent will purchase their first property with a partner, friend or family member/s in a co-ownership agreement. 52 per cent will purchase an established home. 51 per cent have `some idea' about the purchase process; only 12 per cent said they were well informed. 53 per cent said their largest concern was the time it takes to pay off the loan and own outright. The most common sacrifices being made in order to buy were: cut back on spending (96 per cent), miss out on a holiday (60 per cent), purchase a less expensive property (31 per cent) and take on an additional job (26 per cent). The most popular predicted mortgage size range for these first time buyers is between $300,001 and $400,000, as indicated by 33 per cent of respondents. The most popular first point of contact for mortgage advice was a mortgage broker at 24 per cent, then parents (22 per cent). In 2009, brokers ranked first at 29 per cent with the internet second at 18 per cent. 5. Lifting the lid on bins and chips In the land of fish and chips, you would probably expect to find some chips in the rubbish bin - but privacy campaigners in the UK are up in arms this week about local councils installing microchips in their wheelie bins. The BBC reports that councils say the chips simply identify to which house a bin belongs and may be used to offer incentives - not fines. The Big Brother Watch group, however, thinks there is a more dastardly plot being played out and has compiled a report called Lifting the Lid. "Councils are waiting until the public aren't watching to begin surveillance on our waste habits, intruding into people's private lives and introducing punitive taxes on what we throw away," Big Brother Watch director Alex Deane told reporters. 6. Real Estate Glossary - Mortgage, Mortgagee, Mortgagor You have no doubt heard the terms 'mortgage', 'mortgagee' or 'mortgagor' when dealing with property, but what exactly do these terms mean? A mortgage is an amount of money borrowed against any real estate for security. In other words if you borrow money to buy a home and if you do not pay back the money you borrowed (the mortgage) you may be forced to hand over the property instead. A mortgagee is the lender of the money - the bank or other financial provider, while the mortgagor is the person borrowing the money - the borrower or purchaser of the home.

Warning: RBA to crunch housing boom to save economy from overheating

Glenn Dyer writes:

HOUSING AFFORDABILITY, INTEREST RATES

We have been warned: the current housing boom risks ending in tears with the Reserve Bank forced to crunch it to save the rest of the economy from overheating. Its not a new warning from the central bank, but the time is approaching that the bank will stop being nice and bash the housing sector with a brutal rate rise (or rises) that surprises the deliberately deaf and ignorant in politics, business and the media. It's a bit rich when the only consistent voice warning us of the dangers of rapidly rising house prices, is the Reserve Bank and its senior officials and it's really rich that these warnings have fallen on ears made deaf by conflicted self interest. The bank's head of economics, assistant governor Phil Lowe, was the latest in a growing list of senior central bankers out this morning warning of the dramatic impact of rising house prices. He joins governor Glenn Stevens, deputy Ric Battellino, assistant governor Guy Debelle and head of research Anthony Broadbent, who in the past nine months all pointed to the dangers of rapidly rising house prices to the economy and to the country's social fabric. Stevens started the warnings in a speech last July: "If all we end up with is higher prices and not many more dwellings -- then it will be very disappointing, indeed quite disturbing. Not only would it confirm that there are serious supply-side impediments to producing one of the things that previous generations of Australians have taken for granted, namely affordable shelter, it would also pose elevated risks of problems of over-leverage and asset price deflation down the track." The evidence is, so far, that we have ignored this. It is not a case of the first home buyers stimulating prices, it is that state and local governments, existing home owners and others have restricted the supply of new land for housing on a range of grounds, from the political to environmental. That in turn has boosted property prices, making those existing land and home owners richer and more determined to block the releases. As a result prices continue to rise, forcing the cost of all housing, new and existing higher. Rents are rising strongly again, and that will feed through into inflation. State and local governments do nothing except sit back and watch fee income and stamp duty receipts surge. Their warnings are hollow and conflicted. Sure plenty of social policy groups issue warnings, but they lack the clout of the central bank. Their warnings are routinely picked up by the media, especially the Fairfax press and by TV news and current affairs, and then forgotten as the same media outlets breathlessly tell us of where the local and newest hot spots are, or where the bargains are to be found. The approach of Fairfax and News Ltd is instructive: they weigh in with stories warning about the dangers of rising home prices, worsening affordability, and then publicise sales clearances, wonder houses, record prices and all the other ephemera of keeping readers in their real estate and money sections where listings of houses, apartments, loans and other deals generate millions of dollars a year in revenue. The media in fact has an enormous conflict of interest in the real estate market: their publicity helps to power the real estate carousel, without it, the merry-go-round would slow and splutter.

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Friday 05 March 2010 The Leukaemia Foundation World's Greatest Shave The World's Greatest Shave is one of Australia's biggest fundraising events. Money raised is used by the Leukaemia Foundation to fund free services to support patients and families living with leukaemias, lymphomas, myeloma and related blood disorders. It also funds blood cancer research to find better treatments and cures. More than 125,000 people are expected to shave or colour their hair each year - be one of them! For extra fun, get together a team of friends, workmates or club members! As team captain you can set your team's fundraising goal and keep everyone motivated leading up the day when everyone shaves or colours their hair. Most people will shave between 11-13 March 2010. However if that doesn't suit, you can take part at anytime to suit you, just visit our website at www.worldsgreatestshave.com.au or call 1800 500 088. 1. Closing on average: OCR to 4 per cent The emergency is over and it's time to get things back to `normal', the Reserve Bank told Australians this week when it decided to raise interest rates for the first time since December. The move takes the Official Cash Rate (OCR) to 4.00 per cent. Economists were predicting the rise was almost inevitable, given the OCR had been at a 49-year low of 3 per cent from April to October last year. It was then gradually lifted a quarter of a percentage point each month to December 2009, in a "wait-and-see" progression to gauge the effect. Announcing the decision, Reserve Bank Governor Glenn Stevens pointed out that, for most borrowers, interest rates nonetheless remain lower than average. "The Board judges that with growth likely to be close to trend and inflation close to target over the coming year, it is appropriate for interest rates to be closer to average", Governor Stevens said. "Today's decision is a further step in that process." 2. Fewer homes approved in January Approvals to build new homes dropped in January following a rise in the previous month, according to figures released this week by the Australian Bureau of Statistics. The new data shows that building approvals fell 7.0 per cent to 14,045 in January 2010. The number of approvals for private sector houses rose 0.3 per cent, but there was a fall in the number of approvals for private sector dwellings other than houses (-29.1 per cent). This drop follows strong increases in November and December 2009. The number of dwellings approved fell in Victoria (a drop of 15.9 per cent), Queensland (down 7.4 per cent) and Tasmania (down 27.0 per cent). Victoria (up 4.9 per cent), Queensland (up 0.7 per cent), South Australia (up 4.6 per cent) and Western Australia (up 4.2 per cent) recorded more private sector house approvals this month according to the ABS. These results were offset, however, by a drop of 7.5 per cent in NSW. 3. Building up to boom The Australian economy is on the threshold of a major cyclical upswing. Growth will pick up speed over the next two years and build into a boom later this decade, driven by rolling investment cycles, says leading economic forecaster and industry analyst, BIS Shrapnel. BIS Shrapnel's Long Term Forecasts, February 2010 Update reports the economy currently has enough spare capacity and slack in the labour markets to cater for the initial phase of the upswing without inciting either demand or cost-side pressures. However, the forecaster warns problems will occur in three-to-four years' time when all the major construction cycles synchronise and inflationary pressures re-emerge, leading to higher interest rates. "We are now well and truly into recovery from what turned out to be a modest downturn, and not a recession, as other forecasters predicted at this time last year," says BIS Shrapnel report author and senior economist, Richard Robinson. "But it's now time to look forward not backward. We're into a rebuild phase, rather than a rebound. Initially, housing upswing will become the key driver of growth, the report suggests. Robinson says investment, and particularly the construction side of it, is the primary driver of growth in the economy. "The next phase of investment will underwrite growth in the economy, but the timing and logic of each construction cycle is different, with varying knock-on effects to different sectors and across the states," he says. "From 2010, housing construction will take over from waning public spending as the key driver of growth. "Initially spurred on by a combination of first home owner/builder grants and low interest rates, this upswing will gather momentum into a boom by 2012. Robinson predicts that despite lingering affordability problems, healthy consumer confidence, high rents, a chronic undersupply and rising immigration will continue to boost first home owner, investor and up-grader demand. "But the question is, how long will the housing boom continue in the face of rising interest rates?" he asks. 4. What to consider when selling a vacant house Most houses are sold before their owners move out, but what happens if you have to move away before your home is sold? Or if you have decided to sell your investment property but the tenants have already moved out? Selling a vacant house is not as easy as it may seem at first glance. An empty house always looks and feels empty, so is harder for buyers to imagine themselves at home there. Fittings such as curtains or pictures can distract the eye from marks on the walls, while furniture gives a sense of perspective - prospective buyers may not like your sofa, but at least they can see how it fits in the room. If you have to sell your house while it is vacant, here are a few points to take into consideration. Stay in close contact with your real estate agent. If you're selling long distance you'll have to rely on them more than if you still lived in the house. Stay updated on how many people are viewing your house and see what feedback your agent is getting. If possible, try to leave some furniture in the house. A furnished house is much more attractive and looks bigger than an empty one. Besides, people buy homes, not houses - they want to be able to feel they could live there. If you can't leave some furniture then consider renting furniture to fill out the rooms, or have a stylist come in and do it for you. Make sure the house stays looking good from the street. This will probably mean you'll need to hire someone to mow your lawn, rake the leaves or trim bushes and trees. Before you move out of your house, spruce up the landscaping. Plant new shrubs, lay down some fresh ground cover, or brighten it up with some colourful annuals... just make sure you have someone available to water your new additions otherwise they may not survive. Once your house is empty, go through it and touch up any paint where necessary. Moving furniture can leave scuff marks and scratches which potential home buyers will notice instantly. You might like to consider freshening up the paint in your house with a clean, neutral colour. If the house is empty, the walls are going to stand out. Bold coloured paints (especially in an empty room) can put buyers off, so consider painting them a neutral colour. Have the carpets professionally cleaned. After all, with nothing in the house, all would-be buyers have to look at are the floors and walls. Don't set your unoccupied house up for potential break-ins. Invest in exterior sensor lights that automatically turn on when it gets dark and turn off at sunrise. Make sure you cancel the newspaper subscription and redirect mail before you move. An overflowing letterbox is a sure sign to a would-be burglar that no one is home. If you have a security alarm, use it, but make sure you leave the entrance code with your real estate agent. Finally, be sure to review your home insurance. Some insurance companies have a limit on how long they will cover a home while it remains vacant. 5. Curiosity killed with cat food Not all of us have to deal with cane toads in our area, but we do know that once they move in the little terrors ravage the local flora and fauna and are hard to get rid of. Scientists at Sydney University have just announced a possible solution to the problem - with something as simple as tinned cat food. It's not so much the cat food itself, but the carnivorous ants the food attracts that are also immune to the toads' poisonous skin. A report on the SU website shows that last year, scientists at the university found encouraging evidence of the deadly effect of native meat ants on young cane toads. Now they have further proven their thesis by luring the ants to cane toads with cat food. Professor Shine and his colleagues observed ant-toad interactions on the Adelaide River floodplain 60km east of Darwin, Northern Territory, in the Australian wet-dry tropics during last year's dry season. It was found that ant densities and toad mortalities increased "more than fourfold" with the addition of cat food baits. "We can look at an interaction that's already happening, meat ants are already killing millions of cane toads," Professor Shine explains. "We're just looking to make it a bit easier for them."

Our Politicians...you be the judge

This arrived in my email inbox - you be the judge

The facts as reported separately by Ross Greenwood and Alan Jones.

Just this week Jones said:

A note that was sent to me which explains to me that the six leading members of the Government from Mr Rudd down, the top six have a collective work experience of 181 years. But only 13 in the private sector. If you take out of those 13 years the number that were spent as trade union lawyers that total 11, of the 181 years only two years were spent in the private sector. So the people, who will rack up a net Federal debt minimum of 188 billion, the highest in our history, have virtually no experience in business.

So out of 181 years:

- no years spent running their own business

- no years spent starting their own business

- no years spent as a director of a family business or a company

- no years as a director of a public company

- no years in a senior position in a public company

- no years in a senior position in a private company

- no years working in corporate finance

- no years in corporate or business restructuring

- no years working in or with a bank

- no years of experience in the capital markets

- no years in a stockbroking firm

- no years in negotiating debt facilities with banks

- no years running a small business

- no years at the World Bank or IMF or OECD

- no years in Treasury or Finance.

But these people have plunged Australia into unprecedented debt. Well, in a way you can't blame them. It's clear that the electorate did not do their homework, because the Government is there by right. They were given a thumping majority to lead the country. It's just that no one seemed to ask, most of all the press gallery in Canberra, in what direction.

______________________________________

Then Greenwood the money man did the maths for us and said:

Right now the Federal Government is at pains to tell everyone -including us the mug-punters to the International Monetary Fund that it will not exceed its own, self-imposed, borrowing limits. How much? $200 billion.

And here's a worry. If you work in a bank's money market operation; or if you are a politician; the millions turn into billions and it rolls off the tip of the tongue a bit too easily.

But every dollar that is borrowed, some time, has to be repaid. By you, by me and by the rest of the country.

Just after 5 o'clock tonight I did a bit of maths.

It's so staggering its worth repeating.

First though ... here's what

Chairman Rudd has been saying about - what he calls - these temporary borrowings.

Remember those words ... temporary deficit... but the total Government debt could end up around $200 billion.

So here's a very basic calculation ... I used a home loan calculator to work it out ... it's that simple. $200 billion is $200,000 million (200,000,000,000).

Two hundred thousand million Dollars! The current 10 year Government bond rate is 4.67 per cent. I worked the loan out over a period of 20 years.

Now here's where it gets scary ... really scary.

The repayments on $200 billion come to more than one and a quarter billion dollars - every month - for 20 years.

It works out we - as taxpayers - will be repaying $15.4 billion in interest and principal every year ... $733 for every man woman and child - every year.

The total interest bill over the 20 years is - get this - $108 billion.

And remember, this is a Government that just 18 months ago had NO debt... NO debt NONE!

Latest Property News for Ted Hanson

Friday 26 February 2010 Quote of the week "Procrastination is attitude's natural assassin. There is nothing so fatiguing as an uncompleted task." 1. Getting out of hot water The Government this week announced a series of changes to the administration of its environmental programs, following some disastrous recent incidents involving shonky operators and materials. The changes include: The establishment of a new household Renewable Energy Bonus Scheme to replace the Home Insulation Program and the Solar Hot Water Rebate. Significant changes to the Green Loans scheme to boost the effectiveness and sustainability of the scheme. It is hoped that the amendments will put householders back in charge of the environmental products installed in their home and make it impossible for shonky operators to continue exploiting this market. Here is what the Government says about the changes: Renewable Energy Bonus Scheme A new household Renewable Energy Bonus Scheme will replace the Home Insulation Program and the Solar Hot Water Rebate Program, both of which have been discontinued as of close of business on February 19 2010. Under the household Renewable Energy Bonus scheme households will be able to receive a rebate for the installation of ceiling insulation or a solar hot water system or a heat pump. $1000 rebates will be available for ceiling installation and solar hot water systems and $600 rebates for heat pumps systems. The new rebate for solar hot water systems and heat pumps will be available for systems installed after February 19 2010. This scheme will institute several key changes to the delivery of ceiling insulation including: Householders - rather than installers - will claim the $1000 rebate directly through the Medicare system. Introducing a new registration scheme requiring all installers to reregister, pay a cash bond, show evidence of meeting the training and skills requirements and provide certified quality assurance and occupational health and safety plans. Introducing a strengthened compliance regime in concert with State and Territory occupational health and safety and fair trading authorities. It is intended that the insulation component of the Renewable Energy Bonus scheme will come into operation by 1 June. In relation to the discontinuation of the Home Insulation Program, installers will have seven days to claim outstanding rebates for work completed prior to close of business 19 February 2010. The Government will carry out checks on any homes that have had insulation (foil or otherwise) installed under the Program. Changes to Green Loans Program The Government will help over an additional 600,000 Australian households tackle climate change through a re-designed and extended Green Loans program. That is on top of the 360,000 assessments already available under the program, of which more than 270,000 have already been booked nationwide. The re-design of the program will include: the discontinuation of the less popular loans component next month to provide for the significant boost to assessment availability; a new cap of 5000 assessors, allowing up to an extra 1200 trained assessors to contract with the Department of Environment, Water, Heritage and the Arts; a weekly cap of 15,000 assessment bookings and a daily and weekly cap per assessor of three and five respectively to ensure greater quality and a more even distribution of work for assessors right around the nation; changed booking arrangements allowing only individual assessors to make bookings. These new arrangements will apply to the end of 2010. Green Start program The Green Start program will now commence from 1 January 2011. This Program will remain directed at helping low-income households and those most at need improve their energy and water efficiency and help tackle climate change. The Program will also include a web-based assessment tool for all households as well as in-home sustainability assessments, providing an ongoing pipeline of work for home sustainability assessors following the Green Loans program. Details of the program will be finalised in the coming months. 2. Home not always safe as houses: ABS Australian households experienced approximately 1.6 million incidents of malicious property damage in one year, according to recent figures released by the Australian Bureau of Statistics (ABS). The ABS Crime Victimisation Survey found that 912,500 households (11 per cent) were victims of at least one incident of property damage in the 12 months prior to interview. The Crime Victimisation Survey, conducted in 2008-09, asked people aged 15 and over whether they experienced a crime in the preceding 12 months for a selected range of personal and household offences (physical assault, threatened assault, robbery, break-in, attempted break-in, motor vehicle theft, theft from a motor vehicle, malicious property damage and other theft). More than half a million Australians (527,400 or 3 per cent) aged 15 years and over were a victim of at least one physical assault in the 12 months preceding the survey. Of those, an estimated 321,300 were men, compared to 206,100 women. The ABS found that, for the most recent incident of physical assault, just over three-quarters (77 per cent) of female victims knew the offender and nearly half (49 per cent) occurred in the home. In contrast, just over half (53 per cent) of male victims knew the offender and less than one in five males (17 per cent) indicated they were physically assaulted in the home. The survey also showed that 718,600 (4.2 per cent) people aged 15 years and over had experienced a threatened assault. 3. Make a turn for the better Leaving home, having a baby or retiring from work have been found to be among the most significant turning points in our lives, so it helps to be prepared. The Australian Securities and Investments Commission (ASIC) has identified these three common turning points in the lives of many consumers and is offering information and interactive tools to help people make informed financial decisions. Creating a budget or spending plan is the first step to planning for any financial turning point. A budget identifies spending patterns and can free up money to be spent on priorities. If you have no idea where to start, have a look at the budget planner on ASIC's consumer website FIDO. ASIC offers the following recommendations for consumers facing these turning points. Leaving home Before cutting family ties make sure you realise all the costs involved with leaving home. Here are some tips to help make the move less costly: Always keep extra savings for an emergency - imagine if you get sick and you can't work; you might not get paid but your landlord still needs to be. Make sure you get home contents insurance that's right for you - replacing uninsured goods such as laptops, cameras or TVs is an unnecessary and annoying expense. If you can't afford to buy new furniture straight away, check out local garage sales. Having a baby Having a baby can be very expensive. Have you thought about how you are going to cover the extra costs on a reduced income? Use the FIDO Budget Planner to see where you're spending money and what you could cut back on. Ask your friends or family if they have any baby furniture or clothes that they aren't using anymore. Make sure you're getting the appropriate assistance from the government and your employer. Go to www.familyassist.gov.au to find out more. If you are planning on taking a long period of time off work, talk to your spouse about them contributing to your super during this time. This can have tax benefits. Reducing income in retirement Whether you've just retired or you've been retired for a long time, you can always benefit from cutting costs, especially if your retirement income has recently fallen. Here are a few practical ways to make your dollars last longer: Consider downsizing to a smaller home. It may free up some of your money. Call Centrelink on 132 300 to see if you qualify for any Commonwealth benefits. It can't hurt to ask. Spend your money wisely. For example, wait for the sales to buy clothes and other items. Doing a comprehensive budget is the first step in planning for any financial turning point. This will enable you to spend your money on what you really want and will prepare you for these important milestones. 4. Your number's up Most of us have been frustrated at some time with driving along a street looking for a house but unable to read the numbers on the mailboxes, fences or houses. Homes that aren't clearly marked or numbered cause inconvenience to visitors, can mean your pizza is cold by the time it arrives, or, in the event of an emergency, could be the difference between life and death. Clearly numbering the outside of your home is important, and so easy to do - Place house numbers on the letterbox, the front of the house or on the garage - wherever they are most visible from the street. The numbers should be large enough to be easily seen from the street, and should be in a colour that contrasts with the surface they are attached to (if your home has a light exterior, white numbers won't easily be seen, so it would be best to use black or dark numbers). Positioning numbers below a verandah or garage light can help make them visible at night. Solar-powered plates make so much sense, and are now available from most hardware stores. Luminous numbers are good, but only if there is already light shining on them. Make sure nearby foliage doesn't obstruct the view of the numbers from the street. House numbers can be found at home centres, hardware stores, lumber yards, department and discount stores, and a variety of other retailers, and come in a wide variety of sizes, colours and styles. 5. Nice to gnome you Ever moved something out of sight before visitors arrived? A small town in Russia recently gave itself a makeover in anticipation of a visit from the country's President Dmitry Medvedev, including the removal of a poster promoting a local theatre play that cited the words "we await you, merry gnome", The Moscow Times reports. It is unclear exactly why the posters were removed, however there is speculation that the move was to avoid offending the President, whose height is estimated to be 162cms. Other housecleaning tasks, it was reported, included removing piles of dirty snow and ice and covering some areas with fresh, clean snow brought in from outside the city. 6. Getting the point Over the years, it has become increasingly uncomfortable to be less than environmentally friendly, in and out of our homes. We've seen soaring utility bills, supermarket-supplied plastic bags outlawed in some places and our waste disposal methods turned completely upside down. Now there's a shower that makes it almost impossible to linger. The Eco Drop Shower is a self-contained environmental-watchdog - the base has little circles that are comfortable to stand on when you start showering, then increase in size and decrease in comfort the longer the water's running. While it encourages much shorter showers, you may have to find somewhere else to practice your singing.