Latest Property News from Ted Hanson

Friday 07 January 2011 Change you can believe in Whether galvanised by that shiny new treadmill under the tree, the trial gym membership in your Christmas stocking, or the flab you've packed on over the holidays, you're determined to get fit in 2011. Full Article 1. Housing shortage will underpin market While the ratio of house prices to income has risen over the past decade, it has eased to below pre-GFC levels, according to the Housing Industry Association (HIA). HIA Economics found that as of September 2010, Australia's house price to household income ratio was 4.1. HIA Senior Economist Andrew Harvey said recently that in terms of the capital cities, the ratio is 4.2, while in Regional Australia the ratio is 4.1. "This is in contrast to claims from some quarters that the ratio is more like six or seven", he commented. Harvey noted that the International Monetary Fund (IMF) recently slashed its earlier view that Australian houses were overvalued by 25 per cent and while stating that prices could be 5 to 10 per cent higher than market value, it signaled that the Australian housing market will continue to be supported by fundamentals including strong population growth and high real incomes. "HIA's work on underlying demand indicates that Australia continues to run large annual deficits between the underlying demand for dwellings and the completion of dwellings, so in the longer term Australia's housing market is underpinned by the immutable forces of insufficient supply and robust underlying demand", he said. HIA's updated projections of the underlying demand for housing suggest that Australia built 22,000 too few dwellings in 2009/10, with a projected deficit of 16,800 dwellings in 2010/11 and 21,000 dwellings in 2011/12. "In addition to the strong fundamentals in terms of housing supply and demand, Australia's housing market has already been correcting in terms of price movements and most Australian home owners can readily meet their debt servicing obligations", Mr Harvey added. Looking forward, supply-side factors such as the increasing scarcity of land in the main urban centres in Australia will continue to play a major role in driving Australia's housing prices, a point also raised by the IMF. "Governments at all levels need to increase their efforts to address these supply side issues as a matter of urgency," Harvey concluded. 2. Councils stockpiling levies Local councils across Sydney are sitting on almost $560 million in unspent infrastructure levies - and some earn more in interest than they spend, according to a recent audit conducted by the Property Council of Australia. The investigation looked into Section 94 levies, based on local government financial statements for 2009-10. These infrastructure levies are built into the cost of new houses and collected on the promise they will be spent on essential infrastructure and community facilities. NSW Executive Director Glenn Byres said the figures show a 12 per cent increase in unspent levies over the past 12 months - up from $499 million in 2008-09. More than $193 million in Section 94 contributions were collected during 2009-10 - but only $168 million was spent. Seven councils raised more in interest on unspent infrastructure levies in the past year than they spent - collectively earning $14.7 million but spending $8.9 million. "Some councils do the right thing but there is a clear case for greater accountability in the collection and use of infrastructure levies," Mr Byres said. "Some of the worst offenders have sought exemptions from the cap on Section 94 contributions and oppose development on the grounds of strained infrastructure. "They would be better served by a regime that trims the amount councils can collect and then ensures it is spent effectively. "The opportunity for fundamental reform of infrastructure levies was missed this year when the NSW Government lost its nerve on plans to overhaul them. "Ultimately, we need structural reform of local government that includes larger councils with strict fiscal rules and in return, the abolition of rate capping." Mr Byres suggested that solutions could include: - Alternative financing methods like Growth Area Bonds - where governments fund infrastructure with a bond then repay it with the growth in property taxes generated by the investment - `Use it or lose it' provisions when unspent money above set benchmarks is reallocated by the Local Government Grants Commission - Stricter enforcement of caps on infrastructure levies and a greater role for IPART in scrutinising S94 plans. KEY FACTS ARISING FROM S94 AUDIT * The audit is sourced directly from the financial statements of councils for 2009-10. In other words, these are figures supplied by councils. * The collective closing balance in S94 funds across 39 Sydney councils as at June 30th, 2010 was $559.181 million. * The equivalent balance for the F2009 year was $499.555 million. * The change represents a 12% increase in unspent S94 levies. * Ku-ring-gai Council had the highest balance in unspent levies at $67.496 million. * It is the second consecutive year Ku-ring-gai has had the highest balance - and it increased by 19.5% from $56.479 million. * Seven councils collected more in interest on levies during 2009-10 than they spent on infrastructure. * Sutherland Council collected $6.897 million in interest - but spent just $3.863 million. 3. On a roll A rolling stone may gather no moss, but does a rolling city gather occupants? Time will tell, as the Swedish architecture office Jagnefalt Milton has won a Norwegian master plan competition with their idea to have buildings rolling through the city of Åndalsnes on rails. Putting pre-existing railroads back into use, along with adding a few new ones, the winning concept would use the base for new buildings that could be moved around depending on seasons and situations, freeing the stigma of being locked into a location. Among the proposed rolling buildings are a hotel, concert hall and public bath. 4. 10 top ways to make buyers hate your house All homebuyers are looking for something different, but there is one thing that is common to them all - they'll usually turn around and walk back out your door if they notice one or more of these problems. If you really want to sell your house, make sure it's free and clear of the top 10 things that discourage buyers. 1. Odours The way your house smells is the first thing any visitors notice and cigarette smoke, pets, mildew and last night's meal are the worst offenders. Covering up the odours is often not enough - you need to eradicate them so that your house has a clean, fresh atmosphere. Shampoo the carpets and wash the curtains, cushion covers and bed linen. Open the windows and doors to allow plenty of ventilation. Nevertheless, baking a cake on open day is always a good idea, as it has an instant "mmmm..." effect. 2. Dogs that meet you at the door Dogs and open houses do not mix. Fido may frighten or annoy buyers, even if you know he is the sweetest animal around. Likewise, some people are allergic to cats and won't be charmed by your moggie lounging on the furniture. If possible, remove pets while your house is open for inspection. Take your dog for a walk, keep the cat outside or in a carrier basket, put a cover over the bird-cage and get the kids to take the ferret to their friend's house for the day! 3. Dimly Lit Rooms Few homebuyers in Australia are looking to live in a dark house. Besides that, they will want to be able to see what the house looks like "in the daylight". Make sure your house is shown to its best advantage by cleaning the windows and opening curtains and blinds. Replace dim or broken light fittings and turn on lamps in the sitting room or bedrooms. You may consider repainting some rooms with light-reflecting colours or trimming trees that shadow the house. 4. Dirty Bathrooms Dirty bathrooms are an instant turnoff. Scrub them, paint them, and replace some tiles if necessary. Matching (fluffy) towels, clean mirrors and a new shower curtain will make even the dingiest bathroom sparkle. 5. Clutter Leaving your house untidy may make it look "lived in", but it's your stuff, not something the buyers will relate to. They need to be able to picture themselves in the space. Remove the kids' toys, the newspapers you were reading and the clothes your teenager left on the floor, and replace them with a bowl of fruit or a vase of flowers - nothing else. Clear shelves and other surfaces to a minimum - just enough to make them look good, but not overwhelming. 6. Damp Any dampness, mould or even damp smells in the house throw up a red flag to buyers. If you have leaks, fix them. Mould on walls can be cleaned off with a mixture of bleach and detergent. Look for peeling paint in the bathroom as this indicates excessive moisture and lack of ventilation and signals future problems to the prospective owner. 7. Bugs No-one wants to live with spiders, cockroaches, ants or any other type of insect that shouldn't be in the house. Get rid of them and any evidence that they've ever been there (such as spider webs). Ant piles in the lawn are also a deterrent, as they are indicative of a greater problem. 8. Unappealing frontage Unless you were looking for a place to renovate, would you bother walking into a house that looked like a junkyard? Buyers won't expect to pay top dollar for a house with a messy yard, sagging doors or peeling paint. Clean up the yard, plant some flowers and fix the obvious signs of neglect on the exterior of the house. 9. Messy Gutters Gutters with plants growing in them or rusty broken bits hanging down will make buyers wonder what other maintenance tasks have been neglected. Imagine how it will look if it rains on open day and your gutters overflow because you haven't cleaned them in years... 10. Sellers Who Hang Around Go to the beach, have coffee with a friend, do some shopping - but be out of the house when it is open for inspection. Homebuyers feel awkward about opening cupboards and lingering for a really good look at the house if the seller is there. They will also ask more questions and clarify issues if they are talking to an agent rather than the owner. 5. A handle on health It's difficult to feel good about shaking hands with someone who has just been coughing into theirs, or to touch a door handle on a public lavatory after you've washed your hands. The bacteria and viruses our bodies deal with on a daily basis are often hard to avoid, so it's good to see an innovation that helps. With the aim of preventing the spread of communicable diseases from hand to hand, designer Choi Bomi has developed Door Handle with Self-sterilisation. The door handle is home to a UV lamp that constantly sterilises itself while not being used; the moment someone pulls it down to open the door it switches off until it is released, and subsequently cleansed. As a result, it also emits a nice glow while the UV light is activated.