Real Estate Institute of Victoria chief executive Enzo Raimondo urged political parties to outline how they would address Melbourne’s housing affordability in the lead-up to the state election. “According to the Australian Bureau of Statistics, 10 years ago first-home buyers represented 28per cent of the market,” Mr Raimondo said.

“A year ago it was 27per cent and in August this year it had dropped to 17per cent.”

He said reduced housing affordability was due to rising property prices, shortage of stock and higher state government taxes.

“Ten years ago a first-home buyer in Broadmeadows who received the $7000 grant had nearly $5000 remaining after stamp duty; now they have to pay an extra $6600. Stamp duty revenue has more than trebled in 10 years and is adding significant financial burdens at a time when buyers can least afford it.”

“At the moment, Victoria has the highest stamp duty in Australia and it would be nice if it was reduced to be the same as the other states.”

Based on the median price of a home in the September quarter of 2000, Sunshine residents were left with $2670 of the $7000 grant after paying stamp duty, while St Albans residents were left with $3840.

Story by Zoe Lewis and Tara Murray http://www.brimbankweekly.com.au

Tags: banks, finance, marketing, news, property, rates, stamp duty

Posted in News, Research

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Since the Australian market is almost regulated by its mortgage system hence the government wants more foreign banks to enter and grow their local operations in the country.

The reports reveal that international banks have a very little share in the stock market of Australia that is already dominated by its four big local banks. And these banks control near about 90 per cent of the mortgage market of the continent. Recent updates show that two of these four big banks have increased lending rates more than the central bank of the country last week to prompt Canberra promise reforms for making mortgage market more competitive.

Besides concentrating on the smaller lenders, the government now wants to strengthen more foreign banks to nurture in Australia with Citigroup Inc. (C), ING Groep NV (ING), as well as a few large international banks which wish to prosper their mortgage businesses throughout Australia.

Talking to media personals, Australia’s Treasurer Wayne Swan revealed that they welcome all major and minor foreign investments who had a desire to work in the Australian market.

In an attempt to suppress public outcry against the country’s big banks to prompt government reaction, both Australia New Zealand Banking Group Ltd. (ANZ.AU) and Commonwealth Bank of Australia (CBA.AU) have raised their mortgage rates by 45 to 39 percentage points to hit borrowers after the Reserve Bank of Australia rose its cash rate 25 percentage points to 4.75% previous week. Around 90% of home loans are on variable rates in Australia.

As far as consumers are concerned who are already under pressure of inflation, this adds around A$100 that is US$100 to the average A$300,000 for Commonwealth Bank as well as A$85 mortgage for ANZ every month. National Australia Bank Ltd. (NAB) and Westpac Banking Corp. (WBK) have yet to declare their new lending rates in the wake of hike registered in RBA.

Given the dominance of large local lenders in major cities and the prohibitive fees charged for shifting a mortgage to a new lender, international lenders have been struggling to get a foothold in this thriving economy with both a real-estate and mining boom.

Story by Rajarshi Dutta www.forexdice.com

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Mirvac Group expects to increase earnings by 10 to 14 per cent in the current financial year, saying the company’s strategy remains firmly focused on the Australian property market.

The real estate group says in the year to September 2010 it has experienced 3.5 per cent like-for-like portfolio income growth.

“The tough decisions we took during the last two years to simplify our business have successfully repositioned the group for earnings growth,” Mirvac chairman James MacKenzie told the company’s annual general meeting in Brisbane.

Shares in Mirvac were half a cent higher at $1.265.

Mirvac has forecast operating earnings of between 10.2 and 10.6 cents per stapled security in the current financial year.

“This is an increase of 10 to 14 per cent from the FY2010 results and is the highest expected growth in the Australian Real Estate Investment Trust sector,” Mr MacKenzie said.

“In line with our distribution policy, we expect to pay distributions in FY2011 of between eight and nine cents per stapled security.”

In addition, Mirvac had reduced costs by $25 million per year, he said.

Mr MacKenzie said Mirvac would continue to concentrate on the domestic market and wasn’t considering offshore real estate opportunities.

“Our strategy remains focused on our core strengths of delivering Australia’s pre-eminent residential developments, and managing and owning Australian investment grade properties,” he said.

The residential development market was expected to moderate to single digit growth in the current year, supported by underlying demand and limited supply.

The Queensland and West Australian markets were expected to pick up, while the impact of affordability was expected to slow growth in Melbourne.

Undersupply would continue to underpin prices in Sydney, where rents were expected to outperform the national average over the medium term, Mirvac said.

Story source: www.smh.com.au

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Sydney, Perth and Brisbane have ranked in the top 10 most expensive logistics rental property markets, according to research released today.

Real estate firm CB Richard Ellis’s first-ever international survey also showed that freight-related property worldwide has recovered to pre-global financial crisis levels.

The most expensive industrial logistics property was to be found in Tokyo, followed by London and Sao Paulo, Brazil.

Sydney ranked seventh at an average of US$9.72 per square foot, with Perth at ninth at US$9.14 and Brisbane on US$8.91. Adelaide and Melbourne ranked at 23 and 24 respectively.

Asked about globally high rentals rates in certain Australian cities, CBRE Global Research and Consulting Executive Director Kevin Stanley says: “In Sydney, Perth and Brisbane, land prices are the highest in the country and this tends to be passed through in the rental cost.”

He says land prices are higher in the three cities because of land shortage or the cost of servicing the land with infrastructure.

Stanley says the performance of the Australian dollar against the US greenback is also playing a role in pushing up property market prices.

Five of the top10 were in the Asia-Pacific region. Tokyo’s rental cost per square foot was US$22.09 and London’s US$19.51,“The contraction in demand for industrial and logistics properties in 2008 and 2009 led to a more than 10 percent decline in our Global Rent Index, bringing rents back to 2003-2005 levels,” CBRE Global Chief Economist Raymond Torto says.

“The US and EMEA [Europe, the Middle East and Africa] had the most significant reduction in rents during the period, with declines of 14 percent and 12 percent, respectively, while the Pacific Region and Asia weathered the storm better with rental declines of 5 percent in both regions.”
The decline in industrial rents eased throughout EMEA, the Americas and the Pacific region in the second quarter of 2010. Rent growth is now well underway across Asia, with rents having increased by over 6 percent since the end of 2009.

“Given the strengthening demand and production levels in the world’s emerging markets we anticipate that global industrial rents for prime logistics properties will stabilise and gradually begin to increase before year-end,” Torto says.

Stanley believes consumer sentiment, increased saving patterns, tighter credit restrictions and the curbing of speculative development will influence the logistics market and the demand for industrial real estate in the future.

“While the demand for property may remain weak in some regions such as the US and EMEA, stable and growing demand levels and limited supply in Asia, Pacific, Latin America and Canada will underpin rental growth in prime locations,” Stanley says.

Story by By Rob McKay www.supplychainreview.com.au

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Centro Properties Group, the Australian shopping-mall owner that ceded control to creditors in 2008, is seeking buyers for more than A$4 billion ($3.9 billion) of assets, said a person with knowledge of the matter.

Centro has set a Dec. 25 deadline for indicative bids for more than 40 properties, including the Galleria in Perth and The Glen in Melbourne, said the person, who declined to be identified because the plans aren’t public. Prospective buyers will be given access to financial information on the assets in the next few weeks, the person said.

Centro, which manages an A$18.6 billion collection of 712 shopping centers in Australia, New Zealand and the U.S., said in July it was in talks with lenders about debt due next year. The company had A$18.4 billion of debt as of June 30, company filings show, as the value of its properties fell and debt costs soared following a A$9 billion buying spree in 2006 and 2007.

“They’re still overleveraged, and there will be a lot more transactions over time, I would suspect,” said Kui Ng, Sydney- based head of property at Access Capital Advisers, which has more than A$12 billion under management globally.

Andrew Scannell, a spokesman for Centro in Melbourne, declined to comment. The Australian Financial Review reported Centro’s plans earlier today.

Goodman Buying

Australia’s 16 listed property trusts reported combined losses of A$19.5 billion and writedowns of A$21.7 billion in the year to June 30, 2009, after their strategy of borrowing to fund overseas investments backfired when property values tumbled and borrowing costs spiked during the credit crunch. Goodman Group today said it is offering A$1.47 billion to buy ING Industrial Fund, as Netherlands-based parent ING Group NV seeks to divest its real estate unit.

Centro shares jumped 6.5 percent, the most in five weeks, to close at 16.5 Australian cents in Sydney.

Former Chief Executive Officer Andrew Scott borrowed to accumulate malls, about 600 in the U.S. alone, then spun off the centers into more than 30 syndicates, three wholesale funds, two unlisted property funds and one listed property fund, which Centro then managed for a fee.

This structure makes a potential sale difficult and “quite complicated,” Ng said.

Centro in August reported a narrower fiscal full-year loss after writedowns on its properties shrank. The shortfall was A$652.7 million in the 12 months ended June 30, compared with a loss of A$3.5 billion a year earlier. Centro wrote down A$487.9 million on its properties, down from A$2.7 billion a year earlier.

It has lost more than A$6 billion in market value in the past three years.

The company said in July it had extended and refinanced $2.7 billion U.S. loans and started discussions with creditors on potential restructuring options.

To contact the reporters on this story: Angus Whitley in Sydney at awhitley1@bloomberg.net; Nichola Saminather in Sydney at nsaminather1@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

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Australia’s biggest office landlords are switching off lights and installing more efficient air conditioners ahead of rules demanding reporting of energy use in the nation with the developed world’s second-highest greenhouse gas emissions per person.

The largest property managers are ahead of legislation which comes into effect Nov. 1 requiring owners to reveal office buildings’ energy efficiency to tenants and buyers, according to Simon Wild, Sydney-based principal at sustainable design consultants Cundall. Cundall worked with the U.K. Green Building Council on a study of the nation’s sustainability rating tool, the results of which were released in August.

“The industry, particularly the tier one landlords, have been disclosing for a long time,” Wild said. “Australian companies are very much market-driven about how they can attract the big players in town to reside within their buildings.”

GPT Group, Australia’s second-biggest diversified property trust by market value, cut its buildings’ greenhouse gas emissions by 28 percent between 2005 and 2009 by installing more efficient air conditioners and recycling more waste. Morgan Stanley-backed Investa Property Group’s 21-story Ark building in North Sydney can generate electricity, recycle rainwater and recharge electric cars.

Australia boasts some of the most environmentally friendly real-estate groups in the world, a survey of global companies by Netherlands-based Maastricht University found this year. Sydney- based GPT heads the Dow Jones Sustainability Index’s 21-company real-estate leader list, a third of whose members are Australian, more than any other country.

Energy Efficiency

Australia had the second-highest carbon dioxide emissions per capita among developed nations, according to 2008 figures from the International Energy Agency, the latest data available from the group. Only Luxembourg’s emissions were higher.

The legislation requires owners of office buildings leasing or selling more than 2,000 square meters (21,528 square feet) to reveal their day-to-day energy efficiency on the five-star National Australian Built Environment Rating System. Companies pay A$770 ($752) for a rating to New South Wales state’s Department of Environment, Climate Change and Water, which administers the program nationally, and about A$3,000 for an assessor to review documents including the previous year’s bills, said Yma ten Hoedt, the department’s principal program manager.

The rules will affect 10 percent of office buildings nationally every year, DECCW estimates. Companies must also disclose tenanted areas’ lighting systems’ performance and provide a statement on buildings’ efficiency from Nov. 1, 2011.

Smaller owners, who may not have ratings or necessary documents, will be most affected, said Rebecca Pearce, Sydney- based head of sustainability at CB Richard Ellis Group Inc., the world’s largest commercial property broker.

Tenants

Government agencies, which occupy about a third of offices nationally, will require buildings they lease or own to have a minimum 4.5 star energy rating by next year. The national average is 2.5 stars, with the biggest landlords targeting 4.5 over the next two to four years.

“To have a building vacant because it’s not efficient or rated so tenants don’t want to go into it, we don’t even want to go there,” said Rowan Griffin, head of sustainability at Colonial First State, the asset management arm of Commonwealth Bank of Australia. Colonial manages 34 office properties, valued at about A$4 billion.

Almost 300 tenants occupying about 1.5 million square meters, have committed to the CitySwitch Green Office program, including accounting firm PricewaterhouseCoopers LLP, property broker DTZ, and Commonwealth Bank of Australia, the country’s biggest bank, pledging to achieve at least a four-star tenancy rating.

Improving Performance

PricewaterhouseCoopers has spent A$800,000 replacing light switches in its Sydney office with sensors, according to the CitySwitch website. DTZ is saving A$3,500 a year on the energy bill at its Sydney headquarters by introducing steps such as installing shared printers and setting computing equipment to turn off automatically, the website said.

A one-star efficiency gain means A$2 to A$4 in annual savings per square meter, a Citi Investment Research study in January found. For a 10,000-square-meter office building, that equates to savings of as much as A$40,000 a year.

A University of California, Berkeley, study found buildings rated under a U.S. plan similar to the system used in the incoming Australian rules commanded rents of about 3.5 percent more than comparable properties, and sale prices rose as much as 16 percent. A similar Australian study is expected to be completed in the second quarter of 2011.

Building Management

Companies reach up to four stars by better timing lights and equipment use, installing more efficient systems during upgrades, and better training staff, said Craig Roussac, general manager for sustainability, safety and environment at Investa. The company improved one of its building’s performance by 1.5 stars more than expected by adjusting the way it was run by its manager, he said.

“You can have an efficient car, but you can be driving it with the handbrake on and completely stuff things up,” Roussac said. “Conversely, you can have someone who’s passionate and skilled, and see an increase in returns.”

To contact the reporter on this story: Nichola Saminather in Sydney at nsaminather1@bloomberg.net.

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net.

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Over the past few months we have seen some staff changes at the Lennox Head Office.

With Alex Kennedy now off & travelling, Diana Joynson has moved into Holiday Lettings & Rentals. Our new face on the front desk is Paula de Vos and I am pleased to introduce Yonika Mantel as my PA.

All in all this is a great team and we are all looking forward to working together and offering the outstanding service we have maintained in the past.

Natalie, Marie, Trish and myself were fortunate enough to attend the Aust Real Estate Conference – AREC 2010 held in Sydney last April. Truly a valuable opportunity to get together with industry leaders and other like minded agents across Australia and New Zealand. To say that the experience was inspiring is an understatement.

Read more about it in our June newsletter!

With 2010 fiscal year end upon us I would like to congratulate my team of hard workers for their effort and dedication which has shown an outstanding growth factor in both sales and rentals, despite the difficult economic climate.

KEEP UP THE GREAT WORK.

You can download a copy of our June 2010 newsletter here

Lois

Lois Buckett Negotiating with a Phone Bidder

A recent article in The Age stated

“Real Estate is no longer a man’s world as more women forge successful careers for themselves in this lucrative industry.

To say that women are a force in real estate is a glaring understatement; they have grown in numbers and are increasingly excelling in every area of the industry from property management to sales, auctioneering and investment advising.
Perhaps one reason for their success is the fact that women are also an increasing power in terms of home buying and property investment in their own right.  Studies show that 18 per cent of women buy property by themselves in Australia.”

This article was particularly interesting to me as an independent Real Estate Agent of the fairer sex and having jumped many a hurdle to attain the level of success and recognition that Lois Buckett Real Estate now represents.

Over the past 6-7 years the office in Lennox Head has been predominantly supported by female co-workers whilst expanding and growing rapidly.  Although the rental, sales and auction markets have fluctuated constantly over the years coastal and hinterland real estate has experienced huge growth over the past decade.

With a sister office opened in Bangalow and a majority of female staff at Lois Buckett Real Estate we have the area well and truly covered.

I personally feel that having women on the team is tremendous.

Generally speaking women have an ability to work methodically, are able to multi-task and easily build relationships with people in all facets of the industry.

From the female perspective, a profession in real estate can offer flexibility and opportunity and a chance to meet people and develop good communication skills in a positive environment.

Having said all this, a few of the male species have now infiltrated the office and this adds a new dimension to the equation!  What I look for in an employee is someone who is passionate about real estate, is truthful and forthright and enjoys working in a team environment.

I’m happy to say that gender is not a governing factor.

The Australian Real Estate Conference (AREC) is scheduled for 16-18 May 2010 at the Sydney Convention and Exhibition Centre.
“Over 2,000 industry professionals attend AREC each year – no other real estate event in the world attracts such a large percentage of the total industry population.  Now in its 13th year, AREC is THE biggest independent real estate conference and trade exhibition in our region.”

This is an excerpt from the AREC guide and I thought it prudent to post this blog.
I have personally attended the past 10 Conferences and am always impressed with the level of information and updates constantly available.
The ability to net-work within the industry is an added bonus to an already worthwhile event.

RP Data and the Bureau of Statistics have recently released results from surveys indicating that people upgrading remain the largest buyer group.

Although there have been minor increases in investor and downsizer activity the “upgraders” are leading the field.

According to the ABS Housing Mobility survey a huge 45% of Australian home owners consider their homes to be too small.  This survey was conducted when interest rates were almost double what they are today.  At that time, the thought of upgrading came with significant financial drawbacks.  However, with interest rates sitting so low, it’s not surprising to see this trend.

With news headlines in December heralding that Australia now leads the world for the largest properties per capita it seems that we all want so much more.

New housing estates boast enormous homes with “parent’s retreats”, several living areas, outdoor living space and a whole lot more – do we really need it ALL?

My advice to prospective purchasers looking for the right real estate solution is:
• prepare a checklist of your requirements
• prioritise the most important points
• mark items that you are not prepared to negotiate on
• consider options that may be negotiable
• set yourself a realistic price maximum
• research – research –research – the best way to find out what’s on the market is to keep in touch with the local agent