Thursday, November 18, 2010

Latest Property News from Ted Hanson

Friday 19 November 2010
The sound and the fury

Few things divide neighbours like noise. So what can we do about it?

Chances are you entered this world screaming your head off, and your poor mum was likely doing the same: birth is seldom a quiet event.

From that rowdy start, life requires us to navigate a complex love-hate relationship with noise -- to strike a balance between the sounds we hear, and those we make.

Read the full article

Consumer sentiment surprisingly resilient

Consumer sentiment remained reasonably buoyant in the first week of November, surprising analysts after the hike in interest rates by both the Reserve Bank and subsequently the Commonwealth Bank.

The Westpac Melbourne Institute Index of Consumer Sentiment fell by just 5.3 per cent to 110.7 in November.

Westpac's Chief Economist, Bill Evans, commented that it is a surprisingly resilient result, as the average monthly fall in the Index in response to previous rate hikes above the average variable mortgage rate was 9.3 per cent.

"As we saw in the 2005 - 2008 period, increases moving rates above that "normal" level (7.4 per cent) are usually deeply disturbing for consumers", Mr Evans said.

Prior to January 2008, these rate increases were not accompanied by banks increasing their variable mortgage rates by more than the RBA cash rate rise.

At the time of the November survey only one bank had announced its new variable mortgage rate in response to the RBA's rate hike. It is expected that the response could be quite different
once the other major banks clarified their policies.

The report shows that the rate hikes resulted in a 6.8 per cent fall in the confidence of those respondents holding a mortgage compared to a 3.1 per cent fall from those who are tenants.

Other factors will have partially offset the negative impact of the rate hike, including the strength of the Australian dollar, the labour market and the share market.

"Somewhat surprisingly, respondents remain constructive on their finances over the next 12 months (up 0.5 per cent)", Mr Evans said.

"Even more surprising, but certainly welcome, is the very modest fall in opinions on "whether it is a good time to buy a major household item" which after surging by 9.9 per cent last month only fell by 1.9 per cent.

"Along with October, this component is printing its highest levels since the consumer boom periods of 2005 and 2007."

Mr Evans concluded the report by predicting that it is unlikely that there will be any further rate hikes by the Reserve Bank until the June quarter 2011.

Housing finance lifts

Home loans rose slightly in September, according to figures released this week by the Australian Bureau of Statistics (ABS).

In seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions rose 1.0 per cent in the month of September 2010.

The value of loans for owner-occupied housing rose 0.6 per cent, while loans for investment housing rose 1.7 per cent.

The number of loans for the purchase of established dwellings rose 1.6 per cent to 41,369 in September.

The number of loans (seasonally adjusted) for construction rose by 0.5 per cent in September 2010, however loans for the purchase of new dwellings fell by 3.2 per cent, to be down by 33.5 per cent on September 2009.

Over the three months to September 2010 total housing loans dropped by 24.3 per cent compared to the same period in 2009.

In seasonally adjusted terms, the total number of owner-occupier loans increased by 0.4 per cent in New South Wales, 1.1 per cent in South Australia, 4.9 per cent in Western Australia, 1.7 per cent in Tasmania, 2.2 per cent in the Northern Territory and 1.1 per cent in the ACT

Total owner-occupier loans fell by 1.4 per cent in Victoria and by 0.5 per cent in Queensland.

The number of first home buyers, as a percentage of total owner occupied housing commitments, increased slightly from 15.5 per cent in August to 15.9 per cent in September - a modest increase but still well below the long-run national average of 20.1 per cent and dramatically down from the 27.1 per cent level a little more than a year ago.

Buying money still costly - or is it?

The debate over the true cost of offshore wholesale money continues to rage, as borrowers backed by both sides of government lob shots at the big banks for daring to even consider raising interest rates above the Reserve Bank's 0.25 per cent increase, let alone making enormous profits for share holders.

The banks claim their cost of funding has increased sharply and insist they have to pass that cost on to customers while the Reserve Bank and the government counter by saying there is no justification for rate rises above the official cash rate increase.

Who is telling the truth?

According to financial services research company Canstar Cannex, the real cost of funds to the banks is a very complicated and convoluted thing to unravel.

"It's all very well to speculate but very few outsiders are privy to the real figures of each monetary deal done by the individual banks, however, our research does show one very interesting piece of the bank funding puzzle," Cannex research manager Chris Groth said.

"Our interest rate tracking over the last four years has identified a trend which might just support some of what the banks are saying.

"Prior to the GFC online savings accounts were tracking well below the official cash rate. However, since early 2009 the rates paid to online savings accounts start to track above the official cash rate and they have remained consistently ahead.

"The banks are scrambling over themselves to attract retail deposits to fund their loan books," Mr Groth said.

"While the banks, the government and the Reserve Bank argue over the real cost of funding, Canstar Cannex can confirm that retail deposits are now a more expensive source of funding than they were prior to the GFC.

"This is good news for cashed-up savers but not so good for home loan borrowers."

Adding to the consumer confusion is the current debate about early exit fees, exception fees and the cost to consumers of switching loans. It is little wonder home loan borrowers are nervous about what the future holds.

"In a rate cycle trending upwards there is always the temptation to lock in an interest rate through a fixed-rate product to eliminate the sting of any future rate rises," Mr Groth said.

"We've seen some very attractive fixed rate offers in the market over the past quarter but, by and large, most people prefer to take their chances with variable, as fixed loans account for only 3.4 per cent of borrowers."

Timing is crucial when taking out a fixed rate loan, said Canstar Cannex. Their research shows that in only 9 of the past 36 months (Nov '07 - Oct '10), borrowers would be ahead on their monthly repayments by locking in an interest rate rather than taking a variable rate loan. The greatest return received would have been in April last year where, on a $300,000 loan, almost $3,000 in repayments would have been saved.

"Borrowers should not be discouraged from looking to fix at least part of their loan, as fixing delivers repayment certainty, the potential to save money on repayments and an interest rate buffer should rates increase further," Mr Groth said.

On the flipside, borrowers should remember that they run the risk of losing money if rates decrease and that exiting early from a fixed loan may attract high fees.

"Your best bet is to shop around for the best fixed rates which currently show a 3.29 per cent range between the lowest and highest," Mr Groth said.

"Don't forget that refinancing or switching may attract fees which should be considered when doing the maths on whether fixing or maintaining your current loan is the best way to go."

Canstar Cannex this week released its home loan star ratings report which compared 1,600 home loans from 110 lenders. The report compares fixed and variable home loans for residential as well as investment purposes, awarding five stars to those loans offering outstanding value through a combination of rates and features.

Councils admit fees hit housing costs

A government body has finally acknowledged what the property industry has been saying for years - that infrastructure charges are destroying housing affordability, the Property Council of Australia announced this week.

The Property Council's Acting Executive Director Ken Morrison said comments made in the Courier Mail by Local Government Association of Queensland (LGAQ) President Paul Bell represented a major shift in attitude.

"It is pleasing to see the local government sector recognise that high infrastructure charges cripple housing affordability, and commit to work with industry to find a solution," Mr Morrison said.

"However, more radical changes will need to be made to the current regime -the situation has become so dire that tinkering around the edges is simply not enough", he added.

The Property Council anticipates that a soon-to-be-released draft report by the Queensland Government's Infrastructure Charges Taskforce will result in a fairer infrastructure charging regime for that state.

Unreal estate

Would you invest in a property you couldn't physically visit? How about one that no one else could, either?

In a society where so many things can be done online, it's no surprise that virtual properties are selling - what may surprise is the price tag. One cyber-mogul recently sold off his properties in Entropia Universe (a global online gaming platform with a real cash economy) for nearly AU$345K.

According to numerous Forbes bloggers, the man known in the game as Neverdie mortgaged his real home to purchase land a few years ago for $100K and proceeded to build up his online property portfolio on an exclusive asteroid around the game's first planet. One of his creations - Club Neverdie - became a must-see for users of the game, featuring over a dozen bio-domes, a nightclub, a mall, and other venues in which players could spend real money on virtual goods and services. He is said to have sold off all of his properties over the past year, amounting to around $645K. It may have been a risky move, but it did see a reasonable return on a $100K investment.

Sleep takes flight

We may be flightless mammals, but that has never stopped us from dreaming of flying. Now Dutch design group Tjep has created a space for us to sleep like birds while our dreams take flight.

Tak is essentially a large sofa made of fifty soft rubber branches entangled in the shape of a nest, which can be expanded depending on the size of the flock.

Thursday, November 11, 2010

Latest Property News from Ted Hanson

Friday 12 November 2010
Illawarra Business Awards

The 2010 Integral Energy Illawarra Business Awards will again turn the spolight on the Illawarra business community and celebrate the achievements and diverstiy of the region's business community.

The awards congratulate and recognise the many success stories that make up our local business community. They acknowledge and promote the importance of local business to the future growth and development of the Illawarra, articulate the key drivers of growth for the region and give vital recognition to the region's most successful and innovative businesses.

Dwelling approvals continue to fall
Building approvals continue to drop Australia-wide, despite a surprise lift in private house approvals in New South Wales, according to figures released this week by the Australian Bureau of Statistics (ABS).

The total number of dwellings approved fell 6.6 per cent to 12,143 dwellings in September 2010; the ABS reports that this figure has been showing falls for six months, in seasonally adjusted terms.

The largest falls were recorded in Victoria (down 10.0 per cent) and South Australia (down 24.9 per cent).

Tasmania recorded a rise in dwelling approvals (1.0 per cent) this month, while New South Wales (down 1.5 per cent), Queensland (-2.3 per cent) and Western Australia (-2.0 per cent) all fell, in seasonally adjusted terms.

The number of private sector houses approved dropped 2.2 per cent with falls in Victoria (down 3.6 per cent) and Western Australia (down 10.7 per cent), while New South Wales (8.1 per cent), Queensland (0.5 per cent) and South Australia (0.4 per cent) rose.

The value of total building approved fell 3.2 per cent in September in seasonally adjusted terms. The value of total residential building fell by 4.5 per cent while non-residential building fell by 0.7 per cent following a rise last month.

Construction improves

The national construction industry remained soft in October largely due to ongoing weakness in activity and new orders, although the rate of contraction was less than the previous month.

The latest Australian Industry Group Australian Performance of Construction Index (Australian PCI®) in conjunction with the Housing Industry Association lifted 3.2 points to 44.0 in October (readings below 50 indicate a contraction in activity).

While the four major sectors again spent the month in negative territory, there was a distinct slowing in the pace of decline in the house building and commercial construction sectors.

House building lifted 15.5 points to 47.9, the sector's highest reading in five months.

AIG Director Public Policy, Dr Peter Burn, said that project delays and intense competition to secure existing contracts is continuing to have an adverse impact on activity, especially in the engineering construction and apartment building sectors.

New home sales drop

The number of new homes sold rose in September, but not enough to reverse the general trend over recent months, a new report has revealed.

The latest HIA/Jeld-Wen New Home Sales Report, a survey of Australia's major residential builders, showed that the number of new homes sold increased by just 0.6 per cent in September 2010.

However, sales were down by 14 per cent for the September 2010 quarter and 15 per cent below the level of new home sales for the September quarter of the previous year.

HIA Chief Economist, Dr Harley Dale, said that leading indicators signal a contraction in new home building in the post stimulus environment of 2011.

"Warnings from the banks of pending increases in mortgage rates outside of changes in monetary policy have been unhelpful to buyer confidence and are causing potential buyers to stay on the side-lines", Harley Dale said.

"As it stands the lack of available credit from Australian banks to small and medium sized residential developers is contributing to the renewed weakness in new home building conditions that has become evident over the course of 2010," Harley Dale added.

Detached house sales increased by 1 per cent in the month of September 2010 but were down by 15 per cent over the quarter. Sales in the multi-unit sector fell by 2.4 per cent in the month and were down by 1.5 per cent over the quarter.

In the month of September 2010 detached new house sales increased by 5.9 per cent in New South Wales and by 3.6 per cent in Queensland, although both these markets suffered double digit declines in sales volumes in the September quarter.

Sales fell by 3.1 per cent in Victoria in the month of September and were down by 4.6 per cent in South Australia and 1.8 per cent in Western Australia.

Stop ants in their tracks

With all the rain we've been having lately, you may have noticed an increase in the number of ants in your home. Ants marching in lines through the house have long been welcomed as a sign of rain, so long as it is just an occasional visit.

However, an infestation of ants can be a sign of potential structural damage to your house, as well as being a constant nuisance. Whatever the reason they are coming in the house, you'll no doubt want to deter the critters.

If you are averse to using chemical sprays and poisons, let's try some age-old remedies. Old Wives' Tale #714 says that ants will not cross a line of chalk, so you could try laying down some guidelines using a stick of chalk from the local newsagent.

If that doesn't have the desired effect, Old Wives' Tale #715 suggests wiping surfaces with oil from the Pennyroyal plant. Pennyroyal is a mint, which can be grown in a shady spot by the back door so that there are always leaves to crush when needed.

Bottom dollar tree change

Another tiny Australian town is offering annual rents at a smaller figure than its population size, in a bid to strengthen the community and save local schools.

Similar to the effort to pump new life into the drought-stricken NSW town of Cumnock (population 295), a few farming properties around Trundle, NSW, have become the nation's most affordable real estate.

According to the incentives website there are currently 7 farmhouses available with a rental price of $1 a week. Anyone who is looking for bottom dollar rentals and handy with a paint brush and hammer is welcome to apply.

Applicants should also be keen to experience rural living and (preferably) have a family who would love to be part of a vibrant and welcoming community.

Sofa gets a grip

They may seem benign, yet couches are well known to be diabolical thieves of the contents of our pockets. Anyone who's cleaned one out will have been astounded at the veritable treasure trove of coins, pens, keys, notes and anything else that could possibly slip between the cushions.

The key is to beat them at their own game, and that's just what Lost In Sofa does.

Japanese architect Daisuke Motogi's design is in the shape of an armchair but covered with padded cubes that will encourage you to actually store things between them, from books, pens and papers, to cups of coffee, phones and remotes.

Thursday, November 4, 2010

Latest Property News from Ted Hanson

Friday 05 November 2010
Viva La Gong Festival 2010

Wollongong's festival of culture and creativity will bring the heart of Wollongong alive with a spectacular street parade, followed by an artistic extravaganza.

Listen to fabulous music, experience exciting performances by local and visiting acts, and enjoy delicious food from around the world in a carnival atmosphere unique to Wollongong.


Interest rates on the move

THE Reserve Bank of Australia (RBA) moved this week to head off inflation, deciding to lift the official cash rate by 25 basis points to 4.75 per cent, the first rate rise since May this year.

In a statement announcing the decision, Reserve Bank Governor Glenn Stevens made a point that the demand for labour has continued to strengthen and that some further increase is likely over the coming year.

"Given these conditions, the moderation in inflation that has been under way for the past two years is probably now close to ending", Governor Stevens said, adding that inflation is likely to rise over the next few years.

"This outlook, which is largely unchanged from the Bank's earlier forecasts, assumes some tightening in monetary policy", he concluded.

The rate rise means that borrowers with an average mortgage of $300,000 will have to pay an extra $49 a month.

Community spirit is the winner
Public architecture projects demonstrating a winning mix of `community spirit, intensity, humility, beauty and hope for the future' have dominated the nation's top architecture awards for 2010.

From urban design to public, commercial, heritage, interior and sustainable architecture, projects skilfully blending these elements took top honours presented at the 30th Australian Institute of Architects' National Architecture Awards.

A total 33 awards and commendations across 12 categories were awarded to projects in Queensland, NSW, Victoria, Tasmania, South Australia, and offshore in Singapore, Thailand, Japan, Tanzania, Indonesia and India.

Presenting the awards, Jury Chair Melinda Dodson remarked that it has been a contradictory time for architecture, with economic buoyancy followed by economic downturn.

"As architects we're part of a carbon emitting industry, so it's natural that the jury reflected on the future, applied the 'enduring architecture' test, and the essential test of sustainability", Ms Dodson said.

"We were heartened by the many instances of architects demonstrating leadership, advocacy and innovation.

"Projects where a positive transformative act had occurred, resulting in new ideas for the profession and for the community about architecture; architects doing ordinary things in extraordinary ways.

Ms Dodson said that while the 2009 jury worried about a lack of expenditure on public urban design projects, in 2010 the opposite was true.

As a result, the City of Sydney and Australian public emerged as this year's big winners, with five projects commissioned by the council picking up major awards. Surry Hills Library and Community Centre in Sydney by Francis-Jones Morehen Thorp (fjmt) received a National Award for Public Architecture and a National Award for Sustainable Architecture.

The much used and enjoyed Pirrama Park at Pyrmont Hill by Thalis Architecture + Urban Projects/Aspect Studios/CAB received the Walter Burley Griffin Award for Urban Design, while the equally well-frequented Paddington Reservoir Gardens by Tonkin Zulaikha Greer with JMD Design and the City of Sydney received a National Award for Urban Design and National Award for Heritage.

Australia's top award for international architecture, the Jørn Utzøn Award for International Architecture, was awarded to a revolutionary, naturally ventilated 66-storey apartment building in Bangkok, The Met, by Singapore-based practice WOHA.

In total six international projects received Awards and Commendations, including an orphanage in Tanzania, and "extraordinary" house for one of the world's top designers in Japan.

For the first time in the history of the national awards, Australia's most prestigious residential award - the Robin Boyd Award for Residential Architecture - Houses, was presented to a Tasmanian practice and house - the Trial Bay House by Hobart practice HBV Architects. The jury commented that this "exceptional house may be one with such calmness and serenity that it is hard to leave. The remodelling and additions to the Trial Bay House have created such a house."

The Frederick Romberg Award for Residential Architecture - Multiple Housing was presented to Brisbane-based practice Donovan Hill for the Seaspray Resort and Spa at Zilzie in Queensland. The practice also picked up a National Award for Residential Architecture - Houses for their Z House in Brisbane.

In another win for Tasmania, a National Award for Small Project Architecture was presented to the Strangio House by Maria Gigney Architects, with the jury saying "the creative and sensitive conversion of a 170 year old stone barn into a compact but exciting contemporary residence is a superb example of how to reuse old building stock".

House prices plateau

After a run of increases, house prices in Australia's capital cities remained flat through the September quarter, according to figures released this week by the Australian Bureau of Statistics (ABS).

Preliminary estimates show the price index for established houses rose 0.1 per cent in the September quarter 2010. This result follows five consecutive quarters of quarterly increases in the eight capital cities index.

Through the year to September quarter 2010, the index has increased 11.5 per cent.

Prices rose in Melbourne (up by 2.7 per cent), Perth (up 0.4 per cent) and Darwin (up 0.3 per cent) and decreased in Sydney (down 0.9 per cent), Brisbane (down 2.1 per cent), Adelaide (-1.4 per cent), Hobart (-1.4 per cent) and Canberra (-0.4 per cent).

Through the year to September quarter 2010, the index increased 11.5 per cent.

Time to go, e-waste

How many old mobile phones, printer cartridges and dead batteries do you have lying around your home or office? Next week could be the perfect time to finally get rid of them, as National Recycling Week (November 8 - 14) has e-waste in its sights.

About 6,000 tonnes of household batteries end up in landfill each year making them one of the most common forms of hazardous waste disposed of by Australian households, according to environment group Planet Ark.

Together with local councils across Australia, Planet Ark are encouraging residents to round up their used and unwanted batteries, printer cartridges and mobile phones and take them to local collection points for recycling.

"As well as eliminating the risk of landfill environmental contamination, recycling electronic products saves resources as many of the heavy metals contained within these items can be recovered and used to make new products."

Residents can find local battery recycling options on their local Council's page of Planet Ark's website - a service which provides reuse, recycling and safe disposal information for more than 32 different materials ranging from aluminium cans to x-ray film.

"Of the 1,400 e-waste recycling enquiries which Planet Ark receives each day, over 800 relate to household batteries, printer cartridges and mobile phones," says Planet Ark's Manager of Recycling Programs, Janet Sparrow.

"We're really pleased to see so many Australians actively searching for e-waste recycling solutions and we encourage residents who are unsure how to recycle their electronic products to visit Recycling Near You."

"Australia Post offers free recycling of printer cartridges and mobile phones through the `Cartridges 4 Planet Ark' and MobileMuster programs," says Sparrow.

"To recycle your used printer cartridges, place them in the `Cartridges 4 Planet Ark' recycling bins located in store. Mobile phones and accessories can be placed in a MobileMuster Reply Paid satchel which residents can collect at the counter and post in any street posting box."

For further information about any of Planet Ark's National Recycling Week initiatives, visit the PlanetArk website or call the National Recycling Hotline on 1300 733 712.

Surfing the net on top of the world

You think it's hard getting customer service to connect your home phone? Try lodging a complaint from Mount Everest.

Once a gruelling trek requiring courage, strength, and a strong resistance to the adverse effects of total isolation, it is now possible to surf the internet and make video calls through a 3G network set up by a Nepalese telecommunications network around Everest base camp.

Even though less than one third of Nepal's population has access to telecommunications services, Ncell, a subset of Swedish owned company TeliaSonera, will provide coverage for climbers and trekkers all the way to the summit of the world's highest mountain, the UK's BBC reported recently.

The company has also reportedly announced that over the next year it would invest more than AU$100m to boost mobile coverage across the country.

Prose by any other name would sell as sweet

It seems bright colours and nonsensical catchphrases are no longer the selling trump cards they once were.

In a throwback to a more elegant and interesting time, an estate agency in the UK has banned "meaningless jargon and clichés", and had its staff undertake a poetry course to bring more inspiration to their sales material, the UK Telegraph reported recently.

The agency has since featured poems, writing and haikus (a Japanese form of poetry) in listings and on their website.

The Telegraph reports that an oceanfront apartment, originally described as "spacious, high quality, and within short walking distance of local shops", re-emerged as:

"The first thing you see is the sea meeting the sky; like old comrades they share a warm embrace. Coats of armour; the cornice lines up. Without feeling lonely, the room has an echo. Ornate surroundings, the fire begs a match."