Saturday, 30 November 2013

NSW LEICHHARDT INNER WEST PARRAMATTA ROAD TRENDS construct 2 dwellings over the top of an existing commercial premises


NSW LEICHHARDT INNER WEST PARRAMATTA ROAD TRENDS construct 2 dwellings over the top of an existing commercial premises.

I keep seeing this all up Parramatta Road, especially Leichhardt.
It is getting approved and will be a great cash-flow opportunity .
Take a drive down Parramatta Road and have a look at the new renovation properties above shops.
Commercial shops here are in abundance and now with new 24 hour Gyms in the area, rentals work great.

TRENDS:
http://www.planningalerts.org.au/applications/364473?utm_medium=email&utm_source=alerts

137 Parramatta Road Camperdown NSW 2050

Great Western HighwayGreat Western Highway
To demolish part of the premises and carry out alterations and additions to construct 2 dwellings over the top of an existing commercial premises

Friday, 29 November 2013

USA BUYING - Changes Lending

USA BUYING - Changes Lending

United States: CFPB Ability-To-Repay Rule And Qualified Mortgage Definition

Last Updated: January 15 2013
http://www.mondaq.com
More than twenty months ago, the Board of Governors of the Federal Reserve System (the "Board") first proposed a rule amending Regulation Z to implement an expanded ability-to-repay requirement and to define a "qualified mortgage" in accordance with various Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") amendments to the Truth in Lending Act ("TILA"). Responsibility for rulemaking with respect to Regulation Z passed to the Consumer Financial Protection Bureau ("CFPB") on July 21, 2011. On January 10, 2013, the CFPB completed the initial phase of this rulemaking process by promulgating a final rule that will fundamentally reshape the residential mortgage market (the "2013 ATR Final Rule").1 Effective January 10, 2014, the 2013 ATR Final Rule (i) institutes a broad ability-to-repay requirement applicable to virtually the entire residential mortgage market, (ii) defines a new category of "qualified mortgage" and (iii) establishes a two-tier safe harbor/rebuttable presumption architecture for assessing compliance with the ability-to-repay requirement for "qualified mortgages" that roughly distinguishes between "prime" and "subprime" mortgage loans.
The significance of the 2013 ATR Final Rule cannot be overstated: the ability-to-repay requirement and the "qualified mortgage" standard will define the U.S. residential mortgage market for the foreseeable future. At this juncture, we do not believe that there will be a market for loans that do not meet the "qualified mortgage" standard. We further believe that while these new provisions will contract the availability of credit and likely increase its cost, the provisions will also be effective in improving the credit quality of new residential mortgage loans.
It should be emphasized that a mortgage loan that is not a "qualified mortgage" and that does not meet the ability-to-repay requirement would subject the creditor and subsequent assignees to, among other things, civil liability under TILA and provide the borrower with a defense to foreclosure. In addition to actual damages, statutory damages in an individual or class action, and court costs and attorneys fees, the Dodd-Frank Act also amended TILA to include special statutory damages for a violation of the ability-to-repay requirement equal to the sum of all finance charges and fees paid by the consumer, unless the failure to comply was not material.2
The statute of limitations for civil actions arising from ability-to-repay claims has been extended to three years, and the borrower's defense to foreclosure is not subject to any statute of limitations.

Ability-to-Repay Requirement

The amendments to Regulation Z in the 2013 ATR Final Rule, including the ability-to-repay requirement, apply to a "covered transaction," which is defined as a consumer credit transaction that is secured by a dwelling, including any real property attached to a dwelling.3
The 2013 ATR Final Rule establishes the following general ability-to-repay requirement: "A creditor shall not make a loan that is a covered transaction unless the creditor makes a reasonable and good faith determination at or before consummation that the consumer will have a reasonable ability to repay the loan according to its terms."4 The 2013 ATR Final Rule thus expands and extends the ability-to-repay rule in Regulation Z that has been applicable to "higher-priced mortgage loans" since 20095 to virtually all closed-end consumer credit transactions secured by a dwelling. The specific ability-to-repay requirements in the 2013 ATR Final Rule are similar, but not identical, to those currently in effect for "higher-priced mortgage loans" under Regulation Z. To date, "higher-priced mortgage loans" have been originated and sold in the secondary market without incident. They are fully eligible for sale to Fannie Mae and Freddie Mac as long as they satisfy the underwriting and documentation requirements applicable to that category of loan. The concern for the residential mortgage market is whether or not the 2013 ATR Final Rule in any way compromises the current acceptance of such mortgage loans in the secondary market.
Although the 2013 ATR Final Rule does not impose a particular underwriting model, the creditor must, at a minimum, consider eight (8) discrete underwriting factors pertaining to the individual consumer in determining ability-to-repay:
  • the consumer's current or reasonably expected income or assets (other than the value of the dwelling, including any real property attached to the dwelling) that secures the loan;
  • the consumer's current employment status, if the creditor relies on income from the consumer's employment in determining repayment ability;
  • the consumer's monthly payment on the covered transaction, calculated using the greater of a fully-indexed rate or any introductory rate and using monthly, fully amortizing payments that are substantially equal;6
  • the consumer's monthly payment on any simultaneous loan that the creditor knows, or has reason to know, will be made;7
  • the consumer's monthly payment for mortgage-related obligations (i.e., property taxes, insurance premiums and similar charges required by the creditor, fees and special assessments imposed by a condominium, cooperative or homeowners association, ground rent, and leasehold payments);
  • the consumer's current debt obligations, alimony, and child support;
  • the consumer's monthly debt-to-income ratio, meaning the ratio of total monthly debt obligations to total monthly income ("DTI"), or residual income;8 and
  • the consumer's credit history.
Creditors may develop their own underwriting standards and make changes thereto over time in response to empirical information and changing economic and other conditions.
The creditor must verify the information that it relies upon in determining a consumer's ability-to-repay using reasonably reliable third-party records.9 As a corollary, a creditor generally need not verify, for example, income or assets that it does not rely upon to evaluate the consumer's repayment ability. For the verification of income or assets, the creditor may use tax return transcripts from the IRS, copies of tax returns, Form W-2s, payroll statements, financial institution records, government benefit or entitlement records, check cashing service receipts or funds transfer service receipts. The creditor may verify employment orally, if it prepares a record thereof. If the creditor relies on a credit report to verify current debt obligations or the consumer's application states a current debt obligation not shown in the credit report, the creditor need not independently verify such an obligation. Third-party records include records transmitted electronically. In effect, the 2013 ATR Final Rule prohibits no-documentation and low-documentation loans.

Exemption for Refinancing of "Non-Standard" Mortgages

The 2013 ATR Final Rule includes a special exemption from the general ability-to-repay requirement for a creditor that refinances a "riskier" non-standard mortgage (i.e., an adjustable rate loan, an interest-only loan or a negative amortization loan) into a standard mortgage with more "stable" characteristics. This exemption applies if the following conditions are met:
  • the creditor has considered whether the standard mortgage likely will prevent a default by the consumer on the non-standard mortgage once the loan is recast;10
  • the creditor for the standard mortgage is the current holder or servicer of the existing non-standard mortgage;
  • the monthly payment for the standard mortgage is materially lower than that for the non-standard mortgage;11
  • the creditor receives the consumer's written application within two (2) months after the non-standard mortgage has recast;
  • the consumer has made no more than one (1) payment more than thirty (30) days late during the twelve (12) months preceding the creditor's receipt of the written application;
  • the consumer has made no payment more than thirty (30) days late during the six (6) months preceding the creditor's receipt of the written application; and
  • if the non-standard mortgage was consummated after January 10, 2014, it was made in accordance with the ability-to-repay requirement or was a "qualified mortgage."
The standard loan must have regular periodic payments that do not cause the principal balance to increase, do not allow the consumer to defer repayment of principal and do not result in a balloon payment. In addition, total points and fees may not exceed the level required for a "qualified mortgage," the term cannot exceed forty (40) years, interest must be fixed for at least the first five (5) years, and the proceeds must be used to pay off the outstanding balance of the non-standard mortgage and closing or settlement charges.
These types of transactions would be used to "rescue" consumers in existing adjustable rate, interest-only or negative amortization loans who are vulnerable to default, but likely have far greater prospects of performing under a more conservative obligation.

"Safe Harbor" and "Rebuttable Presumption"

Section 1412 of the Dodd-Frank Act amended TILA to provide that a creditor with respect to a residential mortgage loan, and any assignee of such loan, may presume that the loan has met the ability-to-repay requirement if the loan is a "qualified mortgage." However, as the Board observed in its proposed rule, it is unclear whether Congress intended this provision to constitute a "safe harbor" or a "rebuttable presumption" of compliance with the ability-to-repay requirement. The Board offered two alternative formulations to address this statutory ambiguity, based on competing policy considerations. In the 2013 ATR Final Rule, the CFPB adopted both a "safe harbor" and a "rebuttable presumption," albeit using a much different approach than the Board.
The 2013 ATR Final Rule includes a "safe harbor" for a covered transaction that meets the definition of "qualified mortgage" and that is not a "higher-priced covered transaction," a definition that is substantially the same as the one applicable to a "higher-priced mortgage loan" in current Regulation Z.12 The CFPB views covered transactions eligible for the "safe harbor" as being lower-priced, less risky "prime" loans. For any covered transaction that meets the definition of a "qualified mortgage" and is not a "higher-priced covered transaction," the creditor or assignee complies with the ability-to-repay requirement (i.e., will be conclusively presumed to have made a good faith and reasonable determination of the consumer's ability to repay), although the consumer could still subsequently contend that the covered transaction did not actually meet the criteria for a "qualified mortgage."
The 2013 ATR Final Rule also includes a "rebuttable presumption" standard for a covered transaction that meets the definition of "qualified mortgage" but that is a "higher-priced covered transaction." The CFPB considers "higher-priced covered transactions" to be "subprime" loans extended primarily to consumers with a weaker or less established credit history. For any covered transaction that meets the definition of a "qualified mortgage" but is a "higher-priced covered transaction," the creditor or assignee is merely presumed to comply with the ability-to-repay requirement. However, the 2013 ATR Final Rule sets forth limited grounds on which the presumption may be rebutted.
Rebutting this presumption for "higher-priced covered transactions" requires proof that the creditor did not make a good faith and reasonable determination of the consumer's ability to repay at the time of consummation, and specifically a consumer asserting a violation of Regulation Z must demonstrate that, at the time that the loan was originated,13 the consumer's income, debt obligations, alimony, child support and monthly payments (including mortgage-related obligations) on the covered transaction and any simultaneous loans of which the creditor was aware at consummation left insufficient residual income or assets (other than the value of the dwelling and any attached real property) to meet living expenses, including any recurring, material non-debt expenses of which the creditor was aware at consummation. Importantly, the CFPB indicated that a consumer is less likely to prevail in rebutting the presumption the longer that the consumer has made timely payments, without modification or accommodation, and, for adjustable rate mortgage loans, after recast.

"Qualified Mortgage" Definition

Under the 2013 ATR Final Rule, a "qualified mortgage" must be a covered transaction that meets the following criteria:
  • the covered transaction provides for regular periodic payments that are substantially equal (except for the effect of interest rate changes after consummation on adjustable-rate or step-rate mortgages) and that
    • do not result in an increase of the principal balance (e.g., no negative amortization loans);
    • do not allow the consumer to defer repayment of principal (e.g., no interest-only or graduated payment loans);
    • do not result in a balloon payment (i.e., a scheduled payment that is more than twice as large as the average of earlier scheduled payments), except that certain special criteria apply to a smaller creditor operating predominantly in rural or underserved areas;
  • the covered transaction does not have a loan term in excess of thirty (30) years;
  • the covered transaction does not have total points and fees (including loan originator compensation14) in excess of three percent (3%) of the total loan amount for a loan equal to or greater than $100,00015, less up to two (2) bona fide discount points if the interest rate without any discount does not exceed the average prime offer rate by more than one (1) percentage point;
  • the creditor underwrites the loan (taking into account the monthly payment for mortgage-related obligations) using (i) the maximum interest rate that may apply during the first five (5) years after the date on which the first regular periodic payment will be due and (ii) periodic payments of principal and interest that will repay either the loan amount (i.e., the principal amount of the promissory note or loan contract, even if not fully disbursed at origination) over the loan term or the outstanding principal balance over the remaining loan term as of the date the interest rate adjusts to the maximum;
  • the creditor considered and verified at or before consummation the consumer's current or reasonably expected income or assets (other than the value of the dwelling and any real property attached to the dwelling that secures the loan) and the consumer's current debt obligations, alimony and child support;16 and
  • the consumer's DTI ratio at consummation does not exceed 43%, determined using the consumer's monthly payment17 on the covered transaction (including any mortgage-related obligation) and on any simultaneous loan that the creditor knows, or has reason to know, will be made.
The 2013 ATR Final Rule contains a special exemption to the DTI limitation for a transitional period, based on the CFPB's concern that creditors may be unwilling to make a loan that is not a "qualified mortgage" in the current market, even if the loan is responsibly underwritten. Under the special exemption, a covered transaction with a DTI in excess of 43% may nonetheless constitute a "qualified mortgage" if the other criteria for a "qualified mortgage" are satisfied and if the loan is (i) eligible to be purchased or guaranteed by either Fannie Mae or Freddie Mac while they operate under government conservatorship (or any limited-life regulatory entity succeeding the charter of either), (ii) eligible to be insured by the Department of Housing and Urban Development, (iii) eligible to be guaranteed by the Department of Veterans Affairs, (iv) eligible to be guaranteed by the Department of Agriculture or (v) eligible to be insured by the Rural Housing Service. If one of the aforementioned agencies in (ii) - (v) implements its own definition of "qualified mortgage" in accordance with TILA, the special exemption will expire with respect to that agency. In no event will the special exemption apply to a covered transaction consummated after January 10, 2021. We suspect that the residential mortgage lending market will avail itself of this special exemption, which is the closest that the CFPB comes in allowing a "near miss" category to enjoy the benefits of a "qualified mortgage."
The 2013 ATR Final Rule addresses issues in connection with the points and fees calculation that are part of a broader, integrated set of revisions to Regulation Z. The provisions adopted in the 2013 ATR Final Rule will have the effect of excluding some covered transactions from the category of "qualified mortgages" because they exceed the total points and fees limit. For example, the 3% limit on points and fees includes charges paid to and retained by an affiliate of the creditor (e.g., affiliated title insurance vendor commission, affiliated appraisal provider fee) without regard to whether such costs were actually lower than the consumer could have obtained from an independent third party.18 Consumers may be unable to avail themselves of the efficiencies that affiliated service providers can offer (i.e., consumers may pay higher overall closing costs), and creditors may simply decline to extend credit if confronted with originating a less profitable loan in order for it to be eligible as a "qualified mortgage." In any event, consumers face the prospect of paying higher mortgage costs while creditors will earn less compensation under these new rules.
On a related matter, the CFPB also invited comment on how to calculate loan origination compensation, which is part of the points and fees calculation applicable to the "qualified mortgage" criteria. The CFPB expects to resolve these additional matters in Spring 2013, well in advance of the January 10, 2014 effective date.

Additional Provisions

The 2013 ATR Final Rule also includes other provisions related to statutory mandates in the Dodd-Frank Act, including:
  • a prohibition on prepayment penalties in covered transactions, unless (i) the covered transaction is a fixed-rate, "qualified mortgage" that is not a "higher-priced mortgage loan," (ii) the prepayment penalties do not apply after three (3) years and do not exceed two (2) percent of the outstanding loan balance during the first two years and one (1) percent during the third year, and (iii) the creditor has offered the consumer an alternative covered transaction without a prepayment penalty that contains certain other specified terms;19
  • extension of the record retention requirement to three years to evidence compliance with the ability-to-repay requirement and the prepayment penalty restrictions;20 and
  • a prohibition on inappropriately structuring a closed-end extension of credit as an open-end plan in order to evade compliance.21

Concurrent Proposal

The CFPB also invited comment on proposed amendments to the general ability-to-repay and "qualified mortgage" rule that were not contained in the original proposal or in the text of the Dodd-Frank Act, including:
  • exemptions for nonprofit community-based creditors that help low- to moderate-income consumers obtain affordable housing;
  • exemptions for housing finance agencies and lenders participating in housing finance agency programs intended to foster community development;
  • exemptions for homeownership stabilization programs that work to prevent foreclosures (e.g., programs operating in conjunction with the Making Home Affordable program);
  • extending "qualified mortgage" status to loans originated by smaller creditors (e.g., community banks and credit unions) that make and hold loans in their own portfolios (i.e., a more broadly applicable of version of the exception that now exists for loans with balloon payments made by small creditors operating primarily in rural and underserved areas); and
  • increasing the threshold separating "safe harbor" and "rebuttable presumption" qualified mortgages for smaller creditors (e.g., rural balloon-payment qualified mortgages) to 3.5 percentage points above the average prime offer rate for first-lien loans to reflect the higher cost of funds for such creditors.

QLD Phone tower plan rings alarm bells for St Helens school

Phone tower plan rings alarm bells for St Helens school

The proposed site of a phone tower near St Helens State School in Maryborough.
The proposed site of a phone tower near St Helens State School in Maryborough. Contributed
A PARENTS and citizens committee has united against a proposed Telstra phone tower being erected within 250m of their school.

Kelly Scougall, president of the P and C at St Helens State School in Maryborough, encouraged those opposed to the phone tower being placed so close to the school to lodge an objection with the Fraser Coast Regional Council, which will be in charge of either rejecting or approving the project.
If the application was successful, the land would be rezoned from rural dwelling to telecommunications facility.
"We strongly oppose the rezoning of that land," Ms Scougall said.
"We want to create awareness so people can have a say on this."
Ms Scougall said she hoped if enough people objected, the council would reject the proposed site of the tower.

The public has until December 3 to make a submission. 

Thursday, 28 November 2013

New Lending you want to know about Peer-to-peer mortgages

Peer-to-peer mortgages: 

Opportunity or threat?

by |


Peer-to-peer (P2P) lending allows for lending to take place via an online platform between borrowers and independent funders without a bank or other traditional financial institution.
In the US and UK various P2P sites currently offer alternatives to the big players in the mortgage industry, with many operating in niche mortgage markets.

Matt Symons, CEO of Australian P2P site SocietyOne, says the concept is relatively new in Australia, but with large overseas P2P operators looking to IPO early next year, alongside the introduction of comprehensive credit reporting, P2P lending has real potential to gain traction in the Australian mortgage market.

“Australia likes market-place models and they like going direct and I think that’s why so many people opted out of the super environment and have gone into SMSFs, they want to take that control back.
“On the other side of the market more borrowers are questioning if they’re getting the best deal from their existing banks and they’re shopping around, going to rate comparison sites… so anyone who can offer cheaper and better experience is probably well-placed to pick up some of that market.”
This could potentially add another tool to the brokers’ arsenal, and allow them to offer an alternative option to clients that is relatively unknown.

“I think it offers more natural, less competitive alliance to some brokers. If you can offer to clean credit borrowers a demonstrably better rate that adds immediate value, and often the buyer is not aware of this as at the moment there is no mainstream advertising.
It gives the chance to surprise and hopefully delight the clients with a great loan, 100% digital process, nice and simple, and by the way these guys are not trying to upsell or cross-sell the homeloan and cut brokers out of the commission."
Tanya Sale, CEO of Outsource Financial, however, feels P2P lending will be nothing more than "a fly-by-nighter".
“I can see it working overseas because of issues they’re still experiencing with funding, whereas in Australia we’re going from strength to strength  - you can see from the profitability of our majors how strong the funding and borrowing component is.
“I think it has the potential to go down the path of something similar to non-conforming lending, people who can’t get funding from normal sources, but in Australia we have a lot of sources for personal loans and a lot of unsecured lending, so where’s the space for P2P?”

But it’s these exact reasons that P2P has the potential to take off here, says Symons.

“If you’re making that much margin clearly there are very low default rates and borrowers are paying something other than risk-based pricing. What happens is low-cost competitors can come in in that environment and say to credit-worthy borrowers ‘You may not be getting the best price’.

It’s also a much more validating experience than applying through a faceless credit assessor, waiting two days and hoping and praying someone comes back and says you’re worthy of this loan and here’s the price. That’s something that makes P2P work, is the power of connecting directly.”

Wednesday, 27 November 2013

NSW Before the fall: Balcony safety regulations are still falling short

NSW Before the fall: Balcony safety regulations are still falling short

By Edwin Almeida
Thursday, 21 November 2013

Building codes and the property industry have changed over the years to create safer and more comfortable living standards. The introduction of new and improved materials, and having to deal with population growth, has impacted the building codes and regulations.
The question that needs to be asked is: Are new changes in legislation with respect to material and methods of building enough to maintain a safe living environment?
Even with all the changes over the last two decades, there is one area which has been overlooked by many of the policy makers and policies. This being the area of safety.  I refer to safety issues in and around buildings that were constructed before new regulations were implemented, and changes made to the building standards from the Building Code of Australia (BCA). These standards still fall short, even in and around newly built apartment blocks.
An important issue is the required balcony wall/balustrade height. Years ago it may have been OK to make the minimum height 850mm to ensure safety and protection. Now the current standard is 1000mm.

So what of the older styled buildings that would not comply with the new BCA standards? The law does not require older buildings that follow past standards to comply with current legislation. Another question that must be asked is: Does the new height requirement do enough to prevent injury and fatalities? Many industry experts would say no, the height is still too low.
We find that there is a shift in the demographics of unit occupants. Current trends show that more and more small families are living in units, as houses are just not affordable for some. Houses are beyond the reach of many tenants, as well as owner occupiers. As a result, we have more young children playing and spending time on these balconies.
To cope with these shifts and the common sense that old standards were too low, we now have the railings at 1000mm high but again, what is being done with older unit blocks? We have grave concerns about children falling out windows and changes are being adopted to make unit-living safer in this regard.
Now it’s time we looked deeper into the issues around balconies. Children can easily climb on a chair, a box or other objects to lean over the balcony out of curiosity. Not much assistance is needed in some of the older units as the balcony wall heights don’t require much more than standing on tip toes for a child to lean over the edge.
As the push toward affordable living for young and small families is directed to unit accommodation, local and state governments need to begin to take proactive measures and encourage owners’ corporations to look carefully into adopting measures to ensure more care is taken. I am not asking for a retrospective change to the building code, but rather a proactive adoption of a common sense approach toward safer living standards.
It is frightening to see and inspect older units where there is so much that can go wrong, and in particular around safety issues that involve balconies. All because when the buildings were erected, they complied with the then standards.
Don’t wait for a catastrophe to occur in your unit complex before implementing change. Although you and the strata manager may believe you are not responsible now, make the change, as injury of a tenant will impact your bottom line. A unit owner is impacted by what happens in the entire block. Encourage your strata manager to address these issues before your complex becomes the interest of the nation due to unsatisfactory safety issues. An extension of the balcony height can be both affordable and aesthetically pleasing, all while keeping with the nature of the building.


Edwin Almeida is managing partner and licensee-in-charge of Just Think Real Estate.

Tuesday, 26 November 2013

NSW Landmark achievement for NSW houses

NSW Landmark achievement for NSW houses


Sydney property owners can expect a boost in the near future, according to Residex founder John Edwards, with the median house price in the NSW capital expected to reach $1m over the next seven years.

The prediction follows new data showing the average cost of a Sydney house has reached a ‘significant landmark’ price of more than $700,000.

“If growth continues at an annual rate of just 5.2% per annum, which is a likely outcome and is less than the Residex model predicts, the Sydney median house price will rise to $1 million over the next seven years,” Edwards claims. “In fact, the Residex predictive model suggests this outcome will be achieved a year earlier, by 2019.”

May was a big news month for property news, says Edwards, but whether the news was good or bad depended on your position in the market.

 “If you are anxious for personal wealth gains and you are invested in housing, the May statistics reveal that most markets have produced growth in housing values,” says Edwards. “On the other hand, if you are trying to get funds together to buy a house, then the news is not so positive.”
The research group’s data shows rents are rising, house prices are increasing and home savings deposits are growing at a lower rate.

“In fact, after-tax savings will not be keeping up with house price inflation. For the retired population that rely on investment income, wealth will have decreased due to the share market adjusting down and reducing interest rates.”

On the other hand, Edwards says international exporters, manufacturers and farmers should have a ‘twinkle in their eye’ as the Australian dollar has adjusted down from its previous high.

Some notable points evident in the May data:


·         House price growth across Australia is now positive for both units and the house and land market;

·         No major capital city (Sydney, Melbourne, Perth) in the house and land market has provided a negative result in the month of May;
·         A slowing in the mining development sector is impacting on growth in Western Australia;

·         The unit market in Victoria is proving to be much more immune to the calculated oversupply issues. There appears to be a very careful release program underway by large developers;

·         Sales activity has improved but needs to improve more significantly in major capital city markets;

·         While auction clearance rates have improved, the volume of stock on the market remains limited and low stock levels are driving price growth. Lower auction clearance rates are expected to continue as vendors start to be less realistic about minimum asking prices given the reported more positive growth news.
*Source: Residex website

Monday, 25 November 2013

ACT Opportunity for investors as ACT government partner with the private sector to grow the dwelling stock in the ACT.

Report calls for housing rethink

Date


In investigation into the provision of community housing in Canberra has recommended the ACT government partner with the private sector to grow the dwelling stock in the ACT.
Housing advocacy group ACT Shelter has also urged a whole-of-government mind shift in the delivery of this form of housing away from the current approach "which tends to be paternalistic".
ACT Shelter will release a report on Wednesday calling for a more united approach to building community housing in the Territory.
Community housing is rental housing provided by not-for-profit, non-government organisations that is affordable and appropriate for low- to moderate-income earners. In the ACT there are just a handful of associations managing about 660 dwellings. These groups include the Havelock Housing Association, Argyle Community Housing and Capital Community Housing.

ACT Shelter executive officer Leigh Watson said the key recommendation from the report was to develop innovative partnership options in redeveloping public housing stock and building new projects. The approach, which occurs in other jurisdictions, involves a community housing provider, the government and a developer/builder.
Ms Watson said the redevelopment of the ABC flats in Braddon and Reid would provide the perfect opportunity to deliver a mix of housing including public, community, affordable and regular market sales.
"It's a holistic approach - it's all about everyone being integrated and all together and being a community," she said.
Ms Watson said the report had been given to the government and she hoped for a positive response.
"It's really clear that the government has to develop a strategy around the development of community housing," she said.
"While housing generally is the responsibility of a range of stakeholders - including the community sector - at the end of the day, housing for people on low to
middle incomes has to be delivered by the government."
Ms Watson said while other people could be involved, such projects would not work without the initial backing and future support of the government.
The Community Housing Options for Growth paper said the development of community housing in the ACT was not consistent with what was occurring in other jurisdictions.
The report said it was clear that a shortage of affordable housing for people on low and middle incomes was having an impact on the homelessness rate in the ACT.
An increase in the public housing waiting list, more people needing supported accommodation and seeking emergency accommodation, and overcrowding and couch surfing, were listed as evidence of the problem.
"The ACT has the lowest level of community-managed housing in the nation, offering the least choice for households in need," the report said.
"As a consequence the sector is generally struggling to acquire the skills and experience provided to their interstate cousins through regular training and information provided by private organisations and peak bodies."
Other recommendations included stock transfer of public housing and management outsourcing as a means to increase social housing and providing input into national policy initiatives that will have a direct benefit for the ACT.

Queensland agents no longer need to disclose commissions to buyers under new laws

       Queensland agents no longer need to disclose commissions to buyers under new laws

By Jennifer Duke
Thursday, 21 November 2013

New laws introduced last night to Parliament have overhauled the Property Agents and Motor Dealers Act (PAMDA), however one of the changes will mean that agents no longer need to disclose their commissions.
Apparently hoping to streamline the system and reduce red tape, the main concern was with the number of government approved forms attached to contracts, said Attorney General Jarrod Beijie.
“Lengthy contracts can often do more harm than good, with many people either skimming over important information or in some cases people are not reading the finer detail at all," said Bleijie.
Warning statements will be incorporated into the contracts themselves.
However, changes to the Act also appear to remove information that some buyers may want to know.
This includes, removing the requirement for agents to disclose to a buyer the commission the agent is receiving from the seller.
Deregulating agents' commissions, to align Queensland with other states and extending statutory limits on lengths of appointments for a sole or exclusive agency from 60 to 90 days, are other changes made under PAMDA.
However, the cooling off period of five days will be maintained under the changes.
The changes to the Property Occupations Bill have REIQ CEO, Anton Kardash, 'thrilled'.
“The majority of the changes also allow for the real estate industry to become more professional and ultimately more accountable and that is good news for everyone as well as for the property market," said Kardash.
Discussing PAMDA yesterday in his Property Observer column, observer Terry Ryder said that the rules were brought in as a result of the culture of the 1990s to "stamp out the worst excesses" of the industry where poor advice is rampant.
"Not only is the advice based on vested interests, but the consumer is paying a price inflated by the outrageous marketing fees – and invariably in a project located in an under-performing market, because developers need to pay massive commissions only when they’re struggling to sell their stock," Terry noted.
Previously, the Queensland disclosure rules were the following (under PAMD form 28):
By law, you as a property agent must disclose:
  • any benefits you receive or expect to receive
  • your relationship to any person you refer the buyer to for professional services, such as financiers, building or pest inspectors
  • any situation where you are part of a corporation and the purchase, or the option to purchase property, is made on behalf of an executive office of the corporation.
As a property developer, you must tell prospective buyers the above information, as well as whether you own at least a 15 per cent interest in the property. The current Duty of Disclosure in New South Wales, according to NSW Fair Trading, for example, is the following:
A real estate agent or salesperson who is acting for a client in respect of the sale or purchase of land is required to disclose certain relationships and any benefits they or others may receive in relation to the sale or for referring the client or a prospective buyer to a service provider.
A real estate agent or salesperson engaged to sell property for a client must make these disclosures to their client (the seller) and also to prospective buyers where applicable.
jduke@propertyobserver.com.au 

Sunday, 24 November 2013

No Housing Bubble on the Horizon by John Edwards

No Housing Bubble on the Horizon

by John Edwards

Founder of Residex Pty Ltd and Consultant to Onthehouse.com.au.
All is going well for Australia relative to most developed countries of the world. The Reserve Bank and the government should be comfortable with the transition process taking place as the country moves away from the mining boom to a more normal economy.


There has been a surge in business confidence since the announcement of the Federal Election, which seems to have carried forward into the first few weeks of the new government’s term. Notwithstanding this, business conditions remain weak and the next quarter is important in determining the actions of the government and the Reserve Bank.

The Westpac-Melbourne Institute of Consumer Sentiment Index is now 9.2% above its level 12 months ago. There was a solid 4.2% jump in consumer confidence in September and the index stands at 108.32 in October. This means there are more people with a positive attitude to the future than previously.

The current national unemployment rate is 5.6% (seasonally adjusted). Although this is higher than the level seen during the mining boom period, the unemployment rate is still relatively low. While a full employment situation is ideal, the current unemployment figure is significantly lower than the median and average rate for the period from 1978 to today, which is 6.5% and 7.0% respectively.
Graph 1

Improved consumer confidence and lower interest rates have been good news for Australian housing markets. I find it hard to support the bullish press about a potential housing bubble developing and the market powering ahead.

While markets are improving and “red ink” is nowhere near as prevalent as it was this time last year, growth is patchy and there are still markets that have not recovered from the adjustments that occurred over the last three or so years.

Graph 2 displays the combined house and unit trend for Australia wide. While the trend is encouraging, it does not point to anything other than a market presenting modest recovery.
Graph 2

Table 1 presents the position for capital city and regional markets to the end of September 2013. The patched nature of the recovery is evident in the table.
Table 1

Sydney is the standout performer with its house and land market performing strongly. On the other hand, Sydney’s unit market is only performing slightly above inflation (1%). The reason for this is a surplus supply of unit stock. The majority of new stock in Sydney can be found in the unit market, while the house and land market cannot keep up with demand.
The position across Australia is similar. Unit developments are the preferred option for developers and as a consequence, supply is sufficient to ensure growth in the unit market is kept to a relatively low level compared to the house and land market.
Sales activity also confirms that the market is not overheating and we are not entering boom times. Graph 3 presents the total sales activity for dwellings across Australia. The data indicates that while things are improving, there is some way to go before we reach a historically ‘normal’ market. Total sales activity is still lower than it was in 1999.
Graph 3

Growth in the markets has basically been driven by a shortage of stock for sale, particularly in Sydney. However, as the “Spring Selling Season” gets underway, there has been a significant increase in property listings which is helping growth rates to moderate. The slight downturn in the market’s growth is evident in Graph 2.

The predicted forecast average capital growth outcomes over the next five years have been provided in Table 1. You will notice that the predictions are modest average growth rates. Residex models are suggesting that growth in 2014 will be similar to what has been seen this year and that growth will moderate once interest rates start to move up to more normal levels.

I believe that while the economy is doing relatively well and sentiment is improving, it still needs a further boost as interest rate reductions have not stimulated business activity sufficiently. I think there will be a further interest rate reduction, which will probably be the last in the cycle, in the order of 0.25%.
 It is unlikely that the RBA will move on the rate position until February as it will want to assess the impact of the new government, see what flows from the Christmas trading period and if the improved sentiment in the business sector flows into improved investment activity and employment. Inflation does not look as if it is an issue for the RBA as a wage blow-out is unlikely given the potential for a deteriorating employment situation.

For those who are in the market or who can afford to purchase, we are looking at a period of reasonable growth and an increasing cash return from rentals. In short, an attractive and reducing risk profile investment asset class is likely.

Until next month,
John E Edwards.
Founder of Residex Pty Limited and Consultant to Onthehouse.com.au 

Saturday, 23 November 2013

NSW Inner West "Cashflow Manufacturing" everywhere here are some applications.

NSW Inner West "Cashflow Manufacturing" everywhere here are some applications.
Solid Hard Proof.
Learn how to do this and how to FIND, STRUCTURE and CASH FLOW deals live these for Positive Cash Flow.
www.iloverealestate.tv











Friday, 22 November 2013

Australia’s worst places to own property RP Data, July 2013

Australia’s worst places to own property
 RP Data, July 2013

By 

Forget whether they are great places to live, some property markets have not been kind to the people who own property there – not only crashing in value, but lacking signs of strong buyer interest. The following are markets where vendors are struggling to get a good result:
Noosa Heads, Qld
You wouldn’t have much to complain about living in Noosa. The sea has that turquoise colour that screams ‘holiday’, and it hardly ever rains. Too bad about the property values. Apartment prices have tumbled by just short of a third of what they were five years ago, according to RP Data, while the average home owner trying to sell their property is chipping 20% off their asking price just to make a sale. Investors are struggling too. The average rental yield figure on units is just 3.9%. Ouch.
Coochiemudlo Island, QLD
Sandy beaches wrap around this island in Moreton Bay, near Brisbane, which is apparently a popular hangout for turtles. What could be bad about that? Owning a property on this jaw dropping stretch of land would certainly impress most people, but it wouldn’t convince them to take your property off your hands. The average property takes almost a year to sell, and when it does, the owners are getting on average, a quarter less than they originally asked for. Add to that the fact that property values are 7% lower than they were five years ago and you get a property market that, financially speaking, isn’t great to be in.
Berrima, NSW
Perched within the Southern Highlands of New South Wales, Berrima is a popular stop between Canberra and Sydney. It is little more than a village, but that hasn’t’ stopped house prices from averaging in at around $600,000. That may sound impressive, but prices were considerably higher five years ago.
If you had bought back in 2008, you’d be cursing your luck. Prices are close to half of what they were back then, and RP Data July figures suggest that not many people want to buy there anymore. Houses are staying on the market for an average of 229 days, which is more than seven months. Buyers who eventually purchase these houses are also getting great discounts. The accepted offers they’ve made on properties have averaged 20% less than the vendors’ listed price.
Peppermint Grove, WA
Sure, Peppermint Grove is super elite. Who wouldn’t want to own a multi-million dollar home with a swimming pool that is bigger than most peoples’ houses?
But if you’re one of Perth’s super elite who has dropped their money into a Peppermint Grove property and are now looking to sell, you’re unlikely to get a good result.  Property prices have sank by more than a fifth over the last five years, which, considering the average property is valued at $3m, equates to hundreds of thousands of dollars.
Most Peppermint Grove properties are also taking more than five months to sell, and although that is not unusual for properties within that price tag, vendors are still slashing their original asking prices by more than 20%. In other words, even though prices have dropped, vendors are still getting considerably less than they would have wanted and waiting a long time to get it.
Other markets where it is currently tough to sell:

Source: RP Data, July 2013

Treasurer Joe Hockey says Government will dump cap on self-education expenses

Treasurer Joe Hockey says Government will dump cap on self-education expenses

Updated Wed 6 Nov 2013, 3:16pm AEDT
Treasurer Joe Hockey says the Coalition will ditch or change tax measures worth $3.1 billion proposed by the previous government, including a contentious cap on self-education expenses.
The Government has set itself a December 1 deadline to resolve uncertainty over dozens of tax and superannuation policies dating back to 2001.
Of 92 announced but unlegislated proposals, Mr Hockey says the Government will keep 18, amend three and dump seven.
The remaining 64 will be the subject of consultation about whether to cancel or keep them, "with a disposition not to proceed".
Labor announced a $2,000 cap on self-education expenses at the last budget, to save $266 million over the forward estimates.
But the Treasurer says that is "flawed policy" which will be dumped.

"Of the 174,000 taxpayers affected by Labor's cap on self-education, 81 per cent earn less than $80,000 a year," Mr Hockey said.
"They are the people who are trying to invest in their own education to get ahead.
"It was flawed policy with no motivation other than a simple headline."
As previously announced, the Coalition is dropping Labor's proposed fringe benefits tax changes for the car industry.

Key points

  • Coalition to keep 18 of 92 unlegislated tax proposals
  • Remainder will be either dumped, amended or reviewed, a cost of $3.1b to budget
  • Cap on self-education expenses dumped
  • Low-income superannuation tax offset linked to mining tax scrapped
  • Fringe benefits changes for car industry dumped
  • Coalition keeping Labor's tobacco excise increase, raising $5.3b for budget

It is also not proceeding with changes to the tax on superannuation pensions, which Mr Hockey said was worth $313 million at budget time but which were so complex as to be "undeliverable".
But Labor says the Government's decision shows "twisted values" and "wrong priorities".
Opposition treasury spokesman Chris Bowen pointed to the Coalition's plan to scrap the low-income superannuation tax offset linked to the mining tax as "unfair".
"This Government fundamentally doesn't understand, fundamentally does not get that it's unfair for Australia's low and middle-income earners to receive effectively zero tax concession on superannuation when Australia's high-income earners get substantial tax concessions for superannuation," he said.

Thursday, 21 November 2013

Vic Melton 3337 Outlook Ride residents furious over land rezoning

Vic Melton 3337 Outlook Ride residents furious over land rezoning

13:49:PM 19/11/2013

Kurunjang residents have slammed Melton council’s decision to seek approval to rezone land for a 75-lot housing development in Outlook Ride.

There is only one road in and out of the area and they fear the proposed development will add to traffic snarls and prove catastrophic in the event of an emergency.

At its September meeting, the council approved developer Peyton Waite’s application to have 5.2 hectares on Outlook Ride and Gunnawarra Road rezoned from low-density residential to residential 1 to enable the development to take place.

Gail Larkin, who has lived in the area for 26 years, said residents had been left in the dark over the plans.

“The council says it has been open in the whole process, but no one had been notified,” she said. “They have swept it under the carpet.”

Ms Larkin said the development would change the look and “country feel” of the area.

Cr Broden Borg, who voted against the plan, said several concerned residents had contacted him.

“I have safety concerns as it will create more traffic and cause severe safety issues,” he said. “What happens if there is a fire? How do you get out of the area?”

The council has sought Planning Minister Matthew Guy’s approval to rezone the land and allow for public consultation. A planning department spokesman said the proposed amendment was open to public comment until November 24.

“Council will review submissions and, if they cannot be resolved, may request the minister for planning to appoint an independent panel to consider the amendment and submissions,” he said.

Melton planning services manager Bob Baggio said the council had notified a large number of residents living near the site.

“Affected residents also have an opportunity to view any documentation relating to the proposal at the council offices or discuss any issues,’’ he said.

Thiess signs joint venture with RWE

Thiess signs joint venture with RWE 20 November, 2013

  Looking to deliver low cost, high volume continuous mining solutions contractor Thiess and European power generators and lignite miners RWE Generation are joining forces, signing a joint venture agreement.

Establishing the partnership will see RWE’s continuous mining equipment, engineering, operations and maintenance capability added to Thiess’ offering.

Thiess managing director Bruce Munro said the agreement launches the company into a new field of opportunity, allowing it to offer services across the entire continuous mining value chain including in-house design, engineering, operation and maintenance services.

“Once TRWE operations are established in Australia and Indonesia, we are keen to leverage our existing international relationships and expand further into Asia and the Americas,” Munro said.
While dragline and truck/shovel applications will continue to be the major mining methods for many open-cut projects, deeper deposits will require more efficient technologies.

RWE vice president Wolfgang Kortmann said the last five years has seen growth in the application of CME and IPCC equipment which has been accompanied by direct improvements in production efficiency.

“Given the rising costs and declining productivity of some conventional mining applications in Australia, together with ongoing exposure to fluctuating commodity prices, a similar positive shift in the demand for these lower costs continuous mining systems in Australia and beyond is imminent,” 

Wednesday, 20 November 2013

Tasmania BUMPED UP first home buyer grant to $30,000.

Tasmania BUMPED UP first home buyer grant to $30,000.

In an effort to jump-start the state’s flagging economy, Tasmania has unveiled the nation’s most generous first home buyer grant (FHBG) ever: $30,000.

  In an effort to jump-start the state’s flagging economy, Tasmania has unveiled the nation’s most generous first home buyer grant (FHBG) ever: $30,000.

The scheme doubles the previous $15,000 grant and was announced yesterday by premier Lara Giddings. It essentially pays the cost of a home deposit.

"This is equivalent to some people's after-tax salary," Stuart Clues, executive director of the Tasmanian region of the Housing Industry Association, told News Ltd reporters.

"We hope it's enough incentive to have a gold-rush mentality among people trying to get into the housing market in Melbourne and Sydney. Hopefully, this will be enough for them to decide to come and have a crack at living in Tasmania, even if it's only for five years and then see what happens."
Housing industry professionals are overwhelmingly in favour of the move, effective immediately, with LJ Hooker’s Tasmanian regional manager and head of LJ Hooker Home Loans, Paul O’Regan, saying it will undoubtedly stimulate the market.

“For first home buyers in the $350,000 and $400,000 price bracket, the grant covers the normal minimum 5% deposit required by lenders, as well as a significant portion of the further start-up costs like government stamp duty.”

LJ Hooker recently released a white paper, First Home Buyers; a dynamic and changing market, which revealed 1,800 FHBs in Tasmania were expected to enter the first home buyer market in 2014.
This forecasted state figure is up 23% compared with the previous 12 months when there were 1,464 FHBs in Tasmania.

However, the predicted number of Tasmanian FHB is now expected to surge even further with the doubling of the new grant, says O’Regan.

“Buying your first home is an exciting time and with a wide range of mortgage products available. However, there are also rules around first home owner grant eligibility, so now is the time for people to speak with a mortgage broker who can determine the right loan package for your circumstances.”
O’Regan says a recruitment drive is also taking place in Tasmania for more home loan specialists to meet the expected demand of first home buyers and buyers in general.

QLD - A TRAIN and bus tunnel will be built under the Brisbane River as the Newman government's cut-price alternative to the defunct Cross River Rail project.

Transport across the Brisbane River to go underground

Brisbane Underground
An artist's impression of the dual-level Brisbane Underground, which will transport buses and trains through a 5.4km tunnel to link Dutton Park and Bowen Hills. Source: Supplied
A TRAIN and bus tunnel will be built under the Brisbane River as the Newman government's cut-price alternative to the defunct Cross River Rail project.
The $5 billion Brisbane underground will link Dutton Park and Bowen Hills by a 5.4-kilometre tunnel by 2021.
New stations will be built at Woolloongabba, to service sports fans, and Roma Street and George Street in the city, to service the new government precinct and the university.
The world's biggest boring machine will dig a 15-metre-wide tunnel to fit two train lines in the lower section and two bus lanes in the upper section.
The project aims to double the city's train capacity across the river to 48 an hour, remove 200 buses off-inner city streets and get people to work from Beenleigh to the city 14 minutes faster.
Premier Campbell Newman says the project is $3 billion cheaper than Labor's doomed Cross River Rail project and the council's Suburbs to City bus link.
Savings were made by boring one tunnel instead of two, taking an inner-city route that is easier to dig, and dumping plans for a Dutton Park station, which required the resumption of 108 properties.
The need for more trains across the river was flagged as far back as 2005, when the former Labor government was warned the Merivale Bridge would hit capacity in 2016.
Projects failed to get up, but Premier Campbell Newman insists his government will follow through.
"I hope I can convey how excited I am," he said.
"There's been too much conversation in the past."
When asked if the state could afford the project, Mr Newman gladly deferred to his treasurer.
Tim Nicholls said Projects Queensland will turn to the private sector to help build the project.
Direct funding from the Commonwealth isn't expected, but it could be offering private investors a government guarantee to reduce risk.
Infrastructure bonds could also be issued, Mr Nicholls said.
"I'm confident that the finance can be found," he said.
"We wouldn't be doing anything to imperil the state's credit rating.
"There is an appetite in the market for helping government deliver these sorts of projects."
AAP
- See more at: http://www.theaustralian.com.au/news/nation/transport-across-the-brisbane-river-to-go-underground/story-e6frg6nf-1226761967444#sthash.CgIkBTOx.dpufTransport across the Brisbane River to go underground

  • QLD - A TRAIN and bus tunnel will be built under the Brisbane River as the Newman government's cut-price alternative to the defunct Cross River Rail project.

An artist's impression of the dual-level Brisbane Underground, which will transport buses and trains through a 5.4km tunnel to link Dutton Park and Bowen Hills. Source: Supplied
A TRAIN and bus tunnel will be built under the Brisbane River as the Newman government's cut-price alternative to the defunct Cross River Rail project.
The $5 billion Brisbane underground will link Dutton Park and Bowen Hills by a 5.4-kilometre tunnel by 2021.
New stations will be built at Woolloongabba, to service sports fans, and Roma Street and George Street in the city, to service the new government precinct and the university.
The world's biggest boring machine will dig a 15-metre-wide tunnel to fit two train lines in the lower section and two bus lanes in the upper section.
The project aims to double the city's train capacity across the river to 48 an hour, remove 200 buses off-inner city streets and get people to work from Beenleigh to the city 14 minutes faster.
Premier Campbell Newman says the project is $3 billion cheaper than Labor's doomed Cross River Rail project and the council's Suburbs to City bus link.
Savings were made by boring one tunnel instead of two, taking an inner-city route that is easier to dig, and dumping plans for a Dutton Park station, which required the resumption of 108 properties.
The need for more trains across the river was flagged as far back as 2005, when the former Labor government was warned the Merivale Bridge would hit capacity in 2016.
Projects failed to get up, but Premier Campbell Newman insists his government will follow through.
"I hope I can convey how excited I am," he said.
"There's been too much conversation in the past."
When asked if the state could afford the project, Mr Newman gladly deferred to his treasurer.
Tim Nicholls said Projects Queensland will turn to the private sector to help build the project.
Direct funding from the Commonwealth isn't expected, but it could be offering private investors a government guarantee to reduce risk.
Infrastructure bonds could also be issued, Mr Nicholls said.
"I'm confident that the finance can be found," he said.
"We wouldn't be doing anything to imperil the state's credit rating.
"There is an appetite in the market for helping government deliver these sorts of projects."
AAP
  • AAP
  • November 17, 2013 2:42PM
- See more at: http://www.theaustralian.com.au/news/nation/transport-across-the-brisbane-river-to-go-underground/story-e6frg6nf-1226761967444#sthash.CgIkBTOx.dpuf