NEWS: Real estate predictions for Spring 2009

This spring selling season may be the final opportunity for homebuyers to purchase in a climate that has been affected for two years by the global recession, according to McGrath Estate Agents CEO John McGrath. 
He says 2010 will be a strong growth year for property values, starting with well located quality homes between $1m to $3m and then moving north to the luxury home market in 2011. He also notes:

• Spring will be strong with high buyer demand continuing, outweighing an anticipated increase in listing levels. 

• The likelihood of rate rises in the short term along with the upcoming expiry of the First Home Owners’ Boost will take some of the sting out of the sub $600,000 market but this should be balanced by an increase in investor interest and the growth of an economy looking to get back on its feet.  We may see prices in this lower end plateau for the next  9 months while we see this rebalancing of key drivers.

• The upper end recovery is well underway and will continue as the economy stabilises.  Buyers in the prestige sector have re-consolidated their positions and are heading into Spring with money to spend in prestigious suburbs where prices have fallen 15% or more.

• Our auction clearance rates in and around Sydney are now averaging above 70% compared to 46% at the same time last year. This is due to strong demand, limited stock, vendors realigning their price expectations with market values and quality versus quantity.

• Rental yields remain high at an average 5.3% for apartments and 4.4% for houses.  With a slowing of First Home Buyer Activity and unemployment rising in some areas we may see a slowdown of rental demand in 2010, but I still expect rents to increase by around 5% during calendar 2010 (I had previously forecast 5%-10%).

• We may also see less activity among downsizers and Seachange/Treechange buyers over the next year or so as empty nester Australians delay their retirement plans due to weakened superannuation portfolios.

• Good quality commercial property is starting to yield 8%-10% – up significantly from about 6% a few years ago. However, in this economy, there is some question mark on the security of commercial and retail tenants. Sometime during the next 12 months astute investors will return to commercial property, take on the reducing risk and secure the value before increases in 2011.

• Expats are continuing to watch the market very closely via the internet.  We’ve seen young expats utilising the First Home Owners’ Boost as well as families snapping up prestige homes for the future.  This doesn’t mean they’re coming home on mass any time soon though.  Despite perks such as housing allowances and free private school tuition being scaled back, offshore Australians are still the highest paid expats in the world.

• Investment by offshore buyers, particularly from Asia, is growing due to our economic resilience in the global downturn and relaxed FIRB rules enabling temporary residents to buy established homes as well as new ones with no FIRB approval (a process that used to take 30 days). Foreign companies can now buy established homes for their local staff and up to 100% of new apartments can be sold to foreigners – up from 50%.

 John McGrath's top value Sydney suburbs are:  

1.  Double Bay       (-35%)*
2.  North Avoca  (-28%)
3.  Bellevue Hill  (-28%)  
4.  Palm Beach  (-27%)
5.  Seaforth  (-26%) 

* 12 month price changes for houses; Source RP Data on 3 August 2009. 

The best value locations for apartments are:
1.  Ultimo   (-43%)*
2.  Avoca Beach  (-27%)
3.  Balmain East  (-25%)
4.  Milsons Point  (-22%)
5.  Mona Vale  (-21%)* 12 month price changes for apartments; Source RP Data on 3 August 2009.

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RENOVATION INSPIRATION: A smooth Melbourne terrace

I'd rather fancy living here. It's in Brunswick, Melbourne's little Italy. Oh, it makes my heart go all funny. It was a finalist in this year's Australian Institute of Architects Awards. And it's for sale at $725,000 right now!

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Home hint: cheap kitchen fixes

Hate your kitchen but can’t afford a new one? Splash out on shiny new door and drawer handles for the cheapest quick fix. If you need to go further, think about replacing only the cupboard doors and drawer-fronts for less than half the cost of a new kitchen.

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NEWS: First home owner grants

If you're a Australian home buyer waiting to lay your hands on the $14,000 boost to buy an established property before September 30, you'd better be quick.

Initial news about the grant said first home buyers had until September 30 to SIGN A CONTRACT - but a chat with the media spokesperson for Federal Housing Minister Tanya Plibersek today has dashed that.

First home buyers actually have to ensure their MORTGAGE FINANCE IS FINALISED by September 30.
"I thought it was just contracts had to be exchanged by that date, but I found out yesterday that's not the case - the contract has to be further advanced," the spokesman told me.
Earlier this year, the banks were taking up to four weeks to finalise mortgage applications.
Now that 90% of all home loans are being written by major banks, the banks were inundated with first home buyer mortgage applications and some buyers were waiting weeks to have their mortgages approved.
... which would be a disaster if you're still searching for that perfect first home and hoping to snare something by September 30.
Canstar Cannex, a ratings company scrutinising mortgages and financial products, say those mortgage waiting times have been reduced and banks should take one week - maximum two - to process all mortgage applications.
Which means that if you want  your$14K, you'd better get house hunting!
The official statement from Commonwealth Treasury says:

"The First Home Owners Boost (FHOB) is administered by the States and Territories, with funds provided by the Commonwealth.To be eligible for the FHOB, the applicant must first be eligible for the  First Home Owners Grant (FHOG) according to legislation in their state or territory.To be eligible for the FHOG, the applicant must have completed an 'eligible
 transaction'. In most states/territories, legislation provides that an 'eligible transaction' is completed (in the case of purchase to contract a home) when the purchaser becomes entitled to possession and any other requirements under regulations have been complied with. Different provisions exist for contracts to build a home, and also for
building undertaken by owner builders. Entitlement to possession would not occur until finance had been approved. As such, any contracts that were still subject to finance and not finalised before 1 October would not be eligible for the full amount of the relevant
 FHOB grant."

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Weekend property blitz

Celebrity house: Richard Roxburgh sells up in Coogee

Richard Roxburgh -- ex-partner of Miranda Otto -- has sold one of the apartments in his Sydney beachside compound in Coogee. It went to auction the weekend before last and sold for $902,500, above the $850,000 reserve. The actor, who starred in Romulus My Father andEast of Everything, is married to Silvia Colloco. Roxburgh used to own all three apartments in the Coogee triplex, but has now sold the ground floor and top floor apartments.

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News 13% unprepared for interest rate rises

13% unprepared for interest rate rises, according to Domain.com.au poll

With mortgage interest rates at their lowest in almost 50 years, a Domain.com.au survey has discovered 47% of homeowners are budgeting for rate rises between now and Christmas following Reserve Bank of Australia indications that interest rates will rise sooner rather than later.

The Domain.com.au survey found not everyone is well-prepared for coming interest rate hikes, with 13% of respondents saying they have not factored in an interest rate change, and haven’t really thought about it.

 

The survey asked, "When are you factoring an interest rate rise into your mortgage?":

•  Within the next three months - low rates were nice while they lasted - 26%
• Before Christmas - just in time for the holidays - 21%
• Early 2010 - a great way to kick off the New Year - 40%
• I have not factored in a change - to be honest I have not really thought about it - 13% 
  
  Domain.com.au property blogger and author Alex Brooks says, “the RBA’s advance warnings are starting to sink in and it’s great that the majority of consumers are becoming increasingly aware that today’s low rates won’t last forever.”
  RBA Governor Glenn Stevens has made several public comments indicating his concern over property prices rising as our economy strengthens, and has indicated that the current cash rate of 3% is an all-time low that is more likely to move up than down.
  For those of us already living the great Australian dream of owning a home, preparing the household purse strings for the inevitable hikes in interest rates is a must-do.
  Alex Brooks, who has also written a book called Mortgage Stressbusters, says mortgage holders unprepared for rate rises need to take a good look at their household budgets to futureproof themselves from financial problems.
  “There are all kinds of tips and tactics householders can do to make sure that interest rate hikes don’t hurt them,” she says.
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Celebrity house: Rick Stein goes on a South Coast renovation odyssey

Britain's famous television chef has bought a beachfront house in the NSW town of Mollymook, where he also plans to open a new restaurant.

The 62-year-old famously left his wife of 27 years for Australian Sarah Burns, and the pair will marry next year in London and divide their time between Australia and Britain.

The happy couple have bought an unrenovated oceanfront house on a headland in Mollymook, which the Sydney Morning Herald says they paid $1.12 million for.

The 1960s house is on two titles of land, and comes with a nautically themed kitchen (love the anchors and wheels on the handles) and a funky terrazzo bathroom. The property was once owned by Jack Beale, NSW's first minister for the environment.

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Property tip: quality units can outperform houses

There's a real estate myth that houses out-perform units over the long term because land values increase while building values depreciate. As Australia's capital cities have become more expensive, units are starting to outperform houses for short term price growth. This is because units are more affordable and as houses become out-of-reach for the majority of people, buyers snap up units which pushes up the values of units more quickly than the values of houses. 

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Yawn ...

I want to go to bed ... 

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Kitchen innovation: The Flow

Yet another cute kitchen that makes me say "But I waaaaant it". It has some nifty ideas (if you live by yourself in a tiny place, that is). Designed by Studio Gorm, the kitchen uses the water from the dishrack to water the plants and has plenty of space for recycling.Related stories:

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NEWS: fears that insulation grants are fuelling asbestos exposure

Asbestos removal experts are concerned about asbestos dust being stirred up during the installation of ceiling insulation under the government’s $1600 rebate scheme.

With the revelation that asbestos-laden hessian bags have been used in carpet underlay, Queensland asbestos contractors are calling on the Federal Government to put the ceiling insulation scheme on hold because asbestos is present in many roofs and ceilings.

“The Federal Government is creating a very dangerous situation by encouraging the installation of ceiling insulation yet doing nothing to help home owners to first identify the presence of asbestos materials in their homes,”  says Trevor Lyons president of the Demolishers, Recyclers and Asbestos Contractors Association

“The government knows the health risks of being exposed to deadly asbestos fibres – it has funded the removal of asbestos from schools, in fact schools are shut down if asbestos materials are even suspected of being airborne in their environment,” he said.

“Workplaces must also have plans in place to manage asbestos so that staff, customers and visitors to a workplace are not exposed to airborne asbestos fibres – this is legislated.

“Yet the government is quite happy to send these same children home to houses that likely contain some asbestos that may be disturbed during ceiling insulation or sanded and removed during home renovations.

“This situation is not good enough and the government must make dealing with asbestos in homes a priority over the installation of ceiling insulation – we don’t need more people contracting the deadly asbestos cancer mesothelioma.

“There are about 60,000 Queensland homes with asbestos in the roof and ceiling area which could be disturbed when ceiling insulation is installed, and asbestos is likely in other parts of homes – such as carpet underlay and wall sheeting."

While asbestos contractors have a vested interest in calling for their services, it DOES seem someone needs to take control of the issue of asbestos removal in this country (which was one of the largest users of asbestos).

5 REASONS ASBESTOS REMOVAL NEEDS TO CHANGE IN AUSTRALIA

1. There is too much cost on each home owner to bear the problem of past installation of asbestos products. Governments have legislated strict asbestos removal laws, with little funding and NO compulsion for the original manufacturers of the asbestos products to pay.

2. Strict rules encourage illegal dumping of asbestos in bins and even on the street - don't laugh, I see broken asbestos littering the streets and gutters of Sydney - putting the entire community at risk.

3. One idea is that home owners receive a government subsidy to have a qualified, professional auditor identify where asbestos is present in their home and how it should be managed. Unfortunately, I believe there aren't enough well-trained professionals to carry out this kind of work.

4. Another idea is that all homes need to be sold with an asbestos certificate, outlining where asbestos is found in each home so new owners know it is present and how to manage it.

5. Right now, tradies that don't know or understand how common asbestos is are at risk of  being unnecessarily exposed to asbestos materials.

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Carpets made before 1975 may contain asbestos

ABC-TV has just broken a story about asbestos fibres being found in old carpets which had underlays made from hessian sacks used to cart deadly asbestos fibres from the James Hardie factories.

As if asbestos isn't scary enough - the governments have cracked down on asbestos disposal without ANY decent training and regulation (at least that's the case in NSW) and now we discover it could be in our carpets, too?

How many people have ripped up old carpets to polish their floorboards in recent years?

How many of us remotely understand that any house built before the mid-1980s is likely to contain asbestos in some way?

And when are governments and James Hardie going to get serious about removing asbestos in a safe, reasonable, affordable manner?

MORE ABOUT ASBESTOS

• Any home or apartment built before 1993 is likely to contain asbestos in some form or another. Asbestos was not only in fibro sheeting, but also in vinyl floor tiles and in zelemite which was used as a type of masonite, often in electricity meters.
• Fibro sheeting containing asbestos was often used in kitchens, laundries and bathrooms, even in double brick houses. Sometimes old concrete pathways were formed using asbestos sheeting.
• Any renovator doing rebuilding work could uncover asbestos in unlikely places. Older sheets of fibro are often smooth on one side, and dimpled on the non-fascia side.
• Licensed asbestos removal contractors are the best trades to employ to remove asbestos, but will cost more than a general rubbish removal or demolisher as they have higher insurance and training costs.
• Small amounts of asbestos can be removed by renovators. Old fibro sheeting can be wrapped in black plastic and disposed of as a special waste at WSN transfer stations – you will need to ring in advance to obtain a quote. WorkCover have guidelines for the safe removal of asbestos.
• Every local council has a different asbestos removal policy – and renovations requiring DA approval often have strict handling and removal regulations.
• Only a visit by a qualified occupational hygienist (usually an environmental scientist) or licensed asbestos removal contractor can confirm whether asbestos is present in a house or apartment. “Ninety-nine per cent of the time you can tell by looking at the way the house is constructed and how old it is, but sometimes you need lab tests to confirm it,” one asbestos removal expert told me.
• Don’t drill or use circular saws on asbestos sheeting, especially during removal. Minimise all dust and disturbance by spraying water, and dispose of suits and gloves with the asbestos. Asbestos is typically dumped into special landfills that are sprayed with water to minimise dust at all times.

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Celebrity house: Mark Tuckey goes beachfront with designer wife

Sydney Morning Herald has reported that furniture designer Mark Tuckey has paid $3.1 million for this deliciously curved beachfront house at Clareville, on Sydney's northern beaches. The old house has an extension designed by seriously wonderful architect Alex Popov, but given Mark's wife Louella's styling expertise, it is sure to be undergoing a makeover.

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Bathtub you don't want to be caught naked in

Now that's the kind of bathtub that looks gorgeous ... but I wouldn't want anyone to catch me soaking within those see-through walls.

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Quote of the week

"I want a house that has got over all its troubles; I don't want to spend the rest of my life bringing up a young and inexperienced house,"Jerome K. Jerome

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Appliances: the colourful fridge range

Those same designers that brought us the iPod fridge have made these eye-poppingly cute colourful retro fridges. They'll be on display at Berlin's fancy appliance fair from September 4. They'll also be unveiling something NEW from designer Karim Rashid, the same man who made method's cute handsoap bottles and a few other fancy things I've written about on this blog. Stay tuned ...

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RENOVATION FIX: Beware of sarking and insulation problems

I applaud ceiling insulation as one of the easiest ways homeowners can reduce their energy bills and make their home a more comfortable temperature all year round. BUT there is a problem with high levels of insulation and what's known as sarking - a reflective foil installed underneath roofing material like tiles or colorbond. You see, if a roof cavity isn't well ventilated and ceiling batts are laid on the floor of that roof cavity then the entire space can turn into a condensation chamber. See that image above? Well, sarking acts like the edge of the glass and if it doesn't breathe or ventilate to the outdoors then the temperature differences can create condensation within the roof cavity. This picture shows some of the droplets along the roofing timbers that can be seen in most homes that have insulation and sarking.

The big problems with condensation often don't make themselves obvious, but include:

1. The water creates a mould-growing environment

2. Moisture appears on the ceiling below, but many think it is a roof leak

3. The south-eastern corner of the house (the least ventilated with little sunlight) can become mouldy

4. The mould can lead to sick building syndrome, where the home occupants are breathing in bad air which can lead to respiratory problems such as asthma.

So what's the solution?

- ensure the roof cavity is ventilated, perhaps with a whirly bird

- if building from new, use breathable sarking rather than solid sarking which allows the moist air to escape

- if the insulation has become soaked and is mouldy, it must be removed and replaced.

With the governments $1600 insulation rebate happening, it's the perfect time for people to be reminded that this CAN be a problem ... but don't let it stop you installing the wondrous insulation material. Any insulation is better than none.

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Kitchen confusion: bedroom-style kitchens are cooking

My, these Italian kitchens look like they belong in a boudoir rather than a humble home. What do you think of the grandiose styles?

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NEWS: PVC shower curtains release toxins in your bathroom

I already knew that shower curtains have Psycho-like ways ... what with trying to stick to you while you shower and all.
Now I KNOW those wafty, mouldy curtains are up to no good -- especially if made from PVC. They are poisonous. Truly.
United States research shows " Polyvinyl chloride (PVC) plastic shower curtains purchased at Bed Bath & Beyond, Kmart, Sears, Target, and Wal-Mart all contain avoidable toxic chemicals including volatile organic compounds (VOCs), phthalates, organotins and metals. Some of these chemicals are volatile, so they are released into the air inside our homes."
As many as 108 chemicals, in fact - some of which can damage the liver, central nervous, reproductive and respiratory system. Gah!
"This investigation shows that PVC shower curtains are significant contributors to indoor air pollution," the 2008 research says. It also found:

* Chemicals with names scarier than my bed-hair were detected in the greatest concentrations in the first 28 days of installing the shower curtain. These chemicals include toluene, cyclohexanone, methyl isobutyl, some of which are banned in America but not Australia.

* Heat and humidity increases the release of chemicals from shower curtains.

* We should buy cotton or PVC-free shower curtains. Better still, stick to a shower cubicle and avoid the manky things all together.

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