Publication: Australian Bureau of Statistics
Date: 31 March 2010
ABS Building Approvals show that the number of dwelling units approved fell 3.3% in February 2010 following a fall last month.
The number of dwellings approved fell in New South Wales (-14.6%), Victoria (-1.9%) and South Australia (-23.3%)
There was a fall in the number of approvals for private sector houses (-0.9%) this month following increases in January 2010 and December 2009.
New South Wales (-10.4%), Victoria (-0.5%), Queensland (-0.7%) and South Australia (-5.9%) recorded less private sector houses this month according to the ABS.
The value of total building approved fell 4.5% in February. The value of total residential building approvals rose 1.2% while non-residential building approvals fell 13.0%.
Further information is available in Building Approvals, Australia (cat no. 8731.0) on the ABS website at www.abs.gov.au
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Publication: The Herald Sun
Author: Antonia Magee
Date: April 01, 2010
MELBOURNE'S house prices have outperformed every city in Australia, new benchmark real estate figures show.
According to RP Data-Rismark's Australian housing report, released yesterday, in the three months to the end of February, Melbourne's property prices grew 5.4 per cent.
In the same quarter property in Darwin increased 4.2 per cent, the Sydney market was up 3.8 per cent and Adelaide rose 2.5 per cent.
Over the year to February, Melbourne's prices were up an impressive 19.9 per cent.
The Reserve Bank uses the data when deciding whether to raise, stay or lower interest rates.
Rismark's chief executive, Christopher Joye, said Melbourne's booming market was on the back of strong population growth.
"Melbourne is probably the single most attractive destination for migrants coming into this country," Mr Joye said.
Commonwealth Bank chief economist Craig James echoed Mr Joye's response and said: "Growth always comes down to an imbalance of supply and demand.
"We are seeing the strongest population growth in Victoria since the 1960s," Mr James said.
"Effectively, a lot of people are running into the state from overseas or interstate but developers are not keeping up."
While there may be impressive growth in Melbourne and other major cities, the data showed the rest of the state was not keeping up.
"The rest of Victoria's data has only appreciated 9.9 per cent -- that is half the rate of the city house measures," Mr Joye said.
Melbourne's market has been a hotly debated topic for the past year as economists, real estate agents, experts and consumers argue whether the city's property market is in a highly stressed bubble.
Mr Joye said this was not the case and the RBA was doing everything in its power to steer the national property market to safety.
"What the RBA is worried about is the risk of a major housing boom feeding into a mortgage growth, and then mortgage growth in turn feeding back into prices where you get a bubble.
"They categorically don't believe there is a bubble right now," Mr Joye said.
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Publication: www.yipmag.com.au
Date: April 2010
Author: Geri Forsaith
Legal Q&A
Geri Forsaith, licensed conveyancer with Sydney Property Conveyancing, answers a reader’s question on when does a mortgage become legally binding to both the borrower and lender?
When does a loan becomes ‘yours’ and at what date are lenders obligated to lend you money on the terms and conditions they have specified? On the day we took out our mortgage the bank informed us that a new $8 per month account keeping fee was now going to be charged on the loan. This fee was imposed between the time that we sat down and negotiated (and applied) for the loan and the time we actually took it out.
When obtaining a loan, each purchaser, known as the mortgagor, will be provided by their lender, known as the mortgagee, a set of loan documents plus their terms and conditions that will set out, among other details, the mortgagee’s fees and charges. Loans for residential property are regulated by the Consumer Credit Code and mortgagees are required to disclose all relevant information, including interest rates and fees about your loan, before entering into the loan agreement. The mortgagee may vary any provision of the loan agreement as they choose before and after the loan has been advanced. If a Consumer Credit Code, the Code of Banking Practice or the Electronic Funds Transfer Code of Conduct applies to your loan agreement, the mortgagee may only make changes in accordance with those codes. These changes must be notified to you in writing either directly or by media advertisement. The change will take effect from the time specified in their notice. The mortgagee will not make the loan advance until all their settlement requirements are met – a few of these requirements are:
º The title to each security property
º All searches, certificates and
valuations relating to the security
property have been provided and
º Evidence of council, water and other rates and taxes have been paid for the security property
º
Nothing has happened since you
first applied for the loan that may
be detrimental to your financial
Your loan will become ‘yours’ when settlement of your purchase has taken place, and typically the first loan repayment will be due 30 days after settlement date. To ensure you are fully informed of your loan terms and conditions, it is wise to obtain advice from your conveyancer/solicitor before signing your loan agreement.
Q My property is
renovated. Can I still claim?
A Yes. We will need to
know how much you spent on
renovations. This is an ATO obligation. If the previous
owner completed the renovations you are still entitled to claim
depreciation. In either case, where the cost of renovation is
unknown, a quantity surveyor has been identified by the ATO as being
appropriately qualified to make that estimation.
Q How much will my property depreciation schedule cost?
A The cost of preparing a tax depreciation schedule varies according
to the type of property you’ve purchased, its location, size and numerous other
factors. Generally, you will find most of the leading quantity surveying
companies offer a money-back guarantee that says you will save twice your fee
in the first year or they give you the report for free. Quantity surveyors’
fees are also 100% tax deductible.
Q How much tax will I save?
A Each property is different and many varying factors must be
considered when preparing a property depreciation schedule. There are several
depreciation calculators on the market. I suggest you Google ‘depreciation
calculator’ to find one. I wouldn’t bother paying for a property depreciation
estimate – the best ones on the market are free in my opinion.
Q How long will it take to complete my schedule?
A Your depreciation
schedule will take approximately two to three weeks to complete, as long as the
quantity surveyor can inspect your property without delay.
Q I bought my property three years ago. Can I still make a claim?
A Yes, you can. Your accountant can amend your previous tax returns
up to two years back. There are some exceptions so please contact your tax
agent or the ATO for clarification.
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Warringah's population growth is set to explode by 25,000 in the next 20 years - the equivalent of welcoming the entire town of Armidale. Targets set by the NSW Government under the North East Subregional strategy has targeted Warringah for an extra 10,300 dwellings by 2031, seeing an additional 25,000 people move into the area.
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The Reserve Bank's latest rate rise should send a clear message to entrepreneurs and executives: interest rates are only heading in one direction.
Yesterday's 25-basis-point rise takes the official cash rate to 4.25% and is the fifth rate rise in the past seven months (including January, when the RBA board doesn't meet). The major banks were quick to step in and lift their rates to around 7%.
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There is a quiet revolution afoot in regards to apartment size.
Developers in Melbourne are leading the charge, having some success convincing banks to rethink their long-held reluctance to lend on apartments of less than 50sq m.
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THE
Reserve Bank of Australia (RBA) is likely to spare borrowers an interest rate
rise in April due to uncertainty surrounding the housing lending figures,
economists say.
The minutes of the RBA's March 2 board meeting, released
on Tuesday, reveal the bank raised the cash rate to four per cent in response to
two months of data suggesting the economy might be growing at or close to
trend.
But last week's Australian Bureau of Statistics (ABS) housing
finance figures may concern the RBA after they showed a seasonally adjusted 7.9
per cent fall in home loan commitments in January.
"I think that will be
enough to spook them, certainly it should spook everyone," ICAP economist Adam
Carr said.
"Given the sharp drop in home lending I almost certainly think
they won't move in April."
But he said the rest of the RBA minutes were
bullish on domestic growth, even as question marks hang over the US, UK
economies and Europe's ongoing sovereign debt crisis.
"But they don't
think the issues, particularly the fiscal issues in Europe, warrant a pausing at
this stage because they're of the opinion that we're not going to see a marked
slowing of global growth as a result of those issues," Mr Carr said.
JP
Morgan economist Helen Kevans said the minutes suggested the RBA would keep
rates at four per cent until May, when they would resume lifting toward a five
per cent cash rate by year end.
"It comes across to us that the RBA is
very comfortable with its moves at the moment," she said.
"They suggest
that the early start to their normalisation process has given them time to be
flexible going forward."
The RBA started its current rate hiking cycle in
October 2009, when it lifted the cash rate off a 49-year low of three per cent
to 3.25 per cent.
Two rapid moves in November and December brought the
interest rate to 3.75 per cent.
The bank paused at its first meeting of
2010 in February before lifting again, to four per cent, this
month.
Commonwealth Bank senior economist Michael Workman agreed, adding
that the RBA would take the rate to 5.5 per cent by the end of 2011.
"Our
view is that they'll continue to lift rates gradually for the rest of this
year," he said.
"Most probably not in our view in April, most probably in
May."
He said the downside risks that haunted the Australian economy six
to nine months ago had largely been erased, with December quarter gross domestic
product figures at a robust 0.9 per cent.
"So people should expect
gradual cash rate rises," he said.
The minutes highlighted the growth
prospects that could occur if mining sector investment proceeds.
Mr
Workman said gas projects, like the Gorgon project in WA, would significantly
lift Australia's potential growth rate.
"Of course, that's where the
market sees the risk of the cash rate rising above that normal level," he
said.
"But that's really an issue for late next year when we get more
information."
Most economists believe a "normal" cash rate lies between
4.5 per cent to 5.5 per cent.
This article was published in the Toowoomba
Chronicle on March 16.
APS Growth Co-Founder, Anthony Simon believes that
rates will continue to rise due to inflationary pressures.
"Businesses
and Investors are becoming more confident, hence the increase in investment
loans. Inflation is an investors friend; they gain from assets increasing in
value, rather then staying at the price they paid for the asset"
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Australia
faces a housing affordability ''time bomb'' - primed by a dysfunctional
planning system, a chronic undersupply of homes, and unrealistic expectations
from buyers, according to the chief of one of the nation's largest
homebuilders.
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DEPARTMENT store Myer has staked a claim on the
proposed $1 billion Coomera Town Centre, announcing plans to target the city's
booming north for its third Gold Coast store.
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THE state government is rushing to prepare laws to create a development authority with sweeping powers to compulsorily acquire and rezone privately owned land for resale to developers.
With Sydney's population set to grow 40 per cent to 6 million in the next 25 years, the government has decided it needs a metropolitan development authority to buy privately owned land near rail and bus routes for medium- and high-density housing.
Legislation for the new authority, believed to be the first of its kind in Australia, will be introduced before June in an attempt to increase housing construction rates, which are the lowest on record even though the city's population is growing at the fastest rate since the 1960s.
Cabinet is still fine-tuning details, including the contentious issue of the amount of compensation paid to landowners whose properties are compulsorily acquired by the government for resale.
While government departments such as the Roads and Traffic Authority have the power to compulsorily acquire land, they can do so only when it is used for a public purpose.
In contrast, the metropolitan development authority would allow compulsory acquisition of land for private companies to construct and sell housing for profit.
A spokesman for the Planning Minister, Tony Kelly, said the move was about ''driving urban renewal at key strategic sites throughout Sydney''.
While the proposal is likely to be contentious, developer groups say it is the only practical way to meet the housing construction targets contained in the principal planning document for Sydney, the Metropolitan Strategy.
It says Sydney needs 26,000 new homes a year but only 14,000 are being built, a shortfall developers say is largely due to the difficulty in obtaining suitable sites.
As well as acquiring land, the authority will decide which areas should be included in new areas for housing and employment and then ''partner with councils'' to rezone them.
The plan for the authority follows the release of draft legislation two years ago by the former planning minister Frank Sartor to give the government powers to compulsorily acquire land for urban renewal where there was a ''net public benefit''.
The proposal lapsed after a public backlash, and developer bodies are keen to avoid this happening again.
One lobby group, the Urban Taskforce, wants the government to pass on to landowners the full increase in value that results from rezoning.
''Landholder compensation must be valued based on the rezoned value of the land following the granting of the final development approval in connection with the urban renewal project,'' the taskforce chief executive, Aaron Gadiel, said in a letter to Mr Kelly.
He said the government should look at the British model where, for 10 years after compulsory acquisition, a landowner is entitled to claim compensation for any increased value of the land from rezoning or other planning approval.
A spokesman for Mr Kelly said this was under discussion. "In relation to issues such as the model of compulsory acquisition, consideration will be given to models from other jurisdictions and to submissions from industry.''
The head of the Property Council, Ken Morrison, said the authority was vital if Sydney was going to house its swelling population as the vast tracts of industrial land used in the past for development had largely gone.
''People think we are talking high rise with Chatswood's everywhere. We're not . there will be a few locations like that, but in most cases it will be medium-density form with five or six storeys.''
Stephen Albin, the chief executive of the Urban Development Institute, a developer group, said while landowners should receive some compensation for increased value from rezoning, they should not receive it all.
''Developers are taking the risk . these landowners are not taking risk. Government has decided for the good of the city, for the good of the community, development must occur.
''The rationale behind the authority and the compulsory acquisition provision is community benefit.
''It's the same as acquiring land for a road or a railway.''
Author: MATTHEW MOORE URBAN AFFAIRS EDITOR Date: March 12, 2010
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