Real Estate Tale of Two Cities

Posted by Unknown on Monday, October 4, 2010

From the desk of Leah Calnan, Director Metro Property Management...

My collegue came across the below article that appeared on 'The Age' website yesterday. I thought you may all really enjoy this 'to the point' article about housing shortage, interesting reading...

By Simon Johanson, The Age.com (October 4, 2010)

AUSTRALIA is suffering a chronic housing shortage.

The figure commonly bandied about is that there is a shortfall right now of nearly 200,000 dwellings.

Around the country there are individuals, couples and families struggling to put a roof over their heads. It's a dire situation that's set to get worse.

Goldman Sachs estimates in a recent report that in two years' time the national shortage will be 250,000 dwellings - nine times the size of the next largest housing gap back in the mid-1970s.

A housing shortage is not only hard for those struggling to find a place to live, it also drives up property prices for everyone else and generally makes housing less affordable.

But buried in one of the documents littering my desk is a paragraph from an authoritative BIS Shrapnel building industry prospects paper that states the following:

''For 2009-10 dwelling commencements [in Victoria] are estimated to have lifted 27 per cent to 53,350 starts.'' In other words, 53,000 new houses were started last year.

According to the report this is a record level of housing construction for the state and is above the estimated annual underlying demand for new dwellings.

So what's going on? If, as it turns out, Victoria is building more homes than needed, why does the state still have a housing supply problem?

The answer lies in the fact that it doesn't have a problem, or at least it doesn't have as much of a problem as its northern neighbours New South Wales and Queensland.

Between 2006 and 2010 Victoria, like the rest of the nation, experienced rapid population growth that resulted in pent-up demand for housing.

At the time new home construction couldn't keep up and the state was left with a housing shortfall last year estimated at 42,000 dwellings. It turned on the building-and-land-supply tap and in three years that figure is expected to drop to 29,000 dwellings.

''As of this year, we've had a very strong upturn and we're starting to build more than is required but we also have that pent-up demand from the last three years to work through,'' says BIS Shrapnel senior analyst Angie Zigomanis.

While a deficit of 42,000 dwellings sounds like a lot, Sydney has an even bigger problem.

Figures released last week show Victoria continues to be the powerhouse behind new home construction. NSW, by contrast, dragged its feet with a severe drop in new homes sales.

This year BIS Shrapnel estimates there will be a shortfall in NSW of 99,000 dwellings.

Unlike Victoria, NSW is hampered by the slow release of land for building, geographic limitations to growth on the outskirts of Sydney, higher levies on developers and planning hold-ups.

''It's a combination of developer levies that have been much higher than elsewhere, but also the geography of Sydney makes it more difficult to bring new supply on stream than in Melbourne,'' says Macquarie Bank senior economist Brian Redican.

It's a situation exacerbated by higher interest rates.

''We've seen lending for new construction fall over the previous 12 months and now that's flowing through into people getting fewer approvals from their local governments to build new houses,'' Redican says.

Last year new dwelling starts in NSW were at their lowest level for 50 years - an unprecedented situation for a state facing such an enormous and daunting housing shortfall.

''In NSW the cost of new land has been so much higher than in Victoria that it has been much less profitable for developers to bring new supply into the market,'' Redican says.

In Sydney the cost of developing a greenfield site ($560,000) is more expensive than developing an infill site ($550,000). In other cities, it's the reverse and at least a quarter less expensive, Goldman Sachs estimates.

Because work has started on so few new dwellings, next year's estimate puts the housing shortfall at 111,000 and rising.

For the first time this year, an almost unprecedented event contributed to Melbourne's population jump - while 4280 Victorians moved north, even more Queenslanders (4471) moved south.

Those that brave the southern chill will have an easier job finding a house in Melbourne.

Queensland had an estimated shortfall of 38,000 dwellings this year. That deficit is likely to rise to 56,000 by 2012.

So what will help? More first home buyer grants? Not according to Goldman Sachs.

''The most illogical policy prescription over the past decade has been the preference by federal and state governments to provide first home buyer grants as a way of encouraging new housing supply.''

The major challenge facing Australia is an acute lack of supply, not a shortage of demand.

''Only 16 per cent of first home buyers buy a newly constructed house. The vast majority use the first home buyers grant to bid up the price of the existing housing stock.''

If you are going to fix the problem, you have to start at the source. Sydney, with a little help from Queensland, is almost single-handedly responsible for the entire nation's housing shortage.
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A Day at the Royal Melbourne Show

Posted by Unknown on Wednesday, September 22, 2010

As a kid everyone loves the Royal Melbourne Show, we all want to go along and have a go on the rides, buy showbags, eat lots of junk food and be part of the annual event. It's a Melbourne thing, and something I know I didn't get to do much of as a child as the my parents just couldn't afford it.

Now as a parent of 3 young children, I understand - I get it!

How do other families afford to go?

Let me give you a run down on our day...

Firstly the day before, both my husband and I worked much later to ensure we could take the day off without the stress of work playing in our minds throughout the day.

We planned ahead and purchased an early bird ticket. Great thinking I thought and surely it will be cheaper...... some $55 later, this allowed the 5 of us to be scanned into the gates of the showgrounds. Oh, I forgot to mention the $15 car parking expense as you drive in.... So already we have spent $70 and we have not gone on a ride or purchased a showbag!

The boys were very excited and loved visiting the animal sheds. The size of the chickens and roosters will blow your mind - they are huge and so noisy. We visited the animal baby nursery and we got to pat many of the animals. So then it was ride time...

The boys are all under 6 so we started in what they call (I think) the kids carnival area. Just a couple of rides for each and $100 gone - just like that.

So then we stopped for a coffee, drink and quick snack for morning tea - yep another $30 gone!

At this stage we had only been at the show for about an hour and we had already spent $200. We wandered around a little more, watching some of the animal shows and rides. You can see the overload of stimulation young kids feel - it's a sensory overload at times.

It was now lunchtime and we found a spot on the grand stand to sit and eat our lunch. A couple of small pizzas, some chips and drinks and another $50 flew out of my purse.

The boys were starting to get tired as you do, so much walking, so we decided to head down to the show bag area and the boys were all allowed to choose a showbag each. So after much pondering (as kids do), they selected a Toy Story 3, Buzz Lightyear and Handy Manny bag each and before my eyes another $72 disappeared from my purse.

Within 3 hours we had spent over $300.

I remember looking around and seeing lots of other mums and dads with their kids and all chock-a-block with showbags - I kept thinking, how can they afford to come to the show and then be able to buy showbags for the kids???

It's sad to think that there are many more kids out there who may never get to experience the joy or surrounds of the show because it's just too expensive for most.....
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What's Happening at Metro in August!

Posted by Unknown on Wednesday, August 11, 2010

From the desk of Leah Calnan, Director of Metro Property Management)...

Well the time has finally arrived where our new website is up and running and we are very excited about it! We hope that you find the new website easy to navigate and that you find all of the wonderful new additions that we have incorporated useful.


We have added fantastic new features such as 'Property Alerts' for our potential tenants and now have several convenient ways of applying for a property, one of which is utilising the popular '1Form' applications website, which includes our very own custom form. For our Owners we now have a quick and easy link for you to receive a 'Rental Assessment' from us, perhaps on a new property you have purchased, and there is also a new option for you to receive an obligation free sales 'Market Appraisal'. There is so much more to our new site so please have a browse around and let us know your thoughts http://www.metropm.com.au/


Also this month we have held two Interactive Discussion groups regarding Self Managed Super Funds and how to actually go about setting one up. We have worked with a company called Super Fusion to bring this valuable information to our clients. We decided to hold this session in our offices and to keep the numbers small so as to encourage questions and open discussion on a subject that can often be a little daunting. The session was a great success and we are looking to hold a couple more sessions in September on the 9th & 22nd from 6-7.30pm at our offices. Seats are again limited to just 12 people per session so if you are interested in attending please do not hesitate to contact Melissa Venn on 03 9831 3006 or via email at melissav@metropm.com.au

Until next time...
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Home Buyer & Investor Show - Melbourne in July

Posted by Unknown on Sunday, July 4, 2010


From the desk of Leah Calnan, Director - Metro Property Management


Metro Property Management is excited to announce that we are exhibiting at this years Home Buyer & Property Investor Show at the Melbourne Convention & Exhibition Centre (MCEC), 2 Clarendon Street, Southbank. The show runs from Friday 23rd July through to Sunday the 25th of July and offers a wealth of knowledge from varied property & finance professionals.

Apart from the Exhibitor stands where you can visit those companies you have an interest in seeing & chatting to there are seminars throughout the day to offer helpful advice & information on all things real estate and finance related. Although this is Metro’s first time exhibiting at the show many of us have attended in years past and felt it was a great opportunity & a ‘one-stop shop’ for those wanting to purchase their first home, an investor purchasing another property or even those interested in building their new home.

As Metro Property Management followers and valued clients we have secured an extra special ticket price just for you...50% off the full $15 entry price, that’s just $7.50 per ticket !!! (your ticket also includes entry to the adjacent expo ‘ Trading & Investing Seminars & Expo’ for free). At that price all of your friends and family can come along to this fantastic event.

In order for you to access this special offer you will need to purchase your ticket before the event and online at the Home Buyer & Investor Show website http://www.homebuyershow.com.au/melbourne/ then, when you go to pay for the tickets you will be asked for a ‘Promo’ code which is: Exhibitor. Enter the promo code and the discount is applied! Make sure you visit us at our fantastic stand (Stand No: H79) and say Hi. We’d love to see you there!
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Be Silly for a Serious Cause

Posted by Unknown on Wednesday, June 23, 2010

From the Desk of Leah Calnan, Director

SIDS & Kids Red Nose Day is Friday 25th June this year and we at Metro Property Management fully support this worthy cause. Red Nose Day (first began in 1988) is a day where you can wear a red nose (if being a ‘clown’ is not already your occupation!) and make a fool of yourself to raise money for a great organization.

SIDS & Kids benefits those that have experienced the death of a baby or child during pregnancy, birth and infancy. They offer a 24hr 7 day a week bereavement support line and offer ongoing support via counseling. The funds raised from the day also go not only to keeping this vital 24hr hotline running but to educate parents, childcare workers & health professionals on how to reduce the risk of SIDS (Sudden Infant Death Syndrome). The organization also conducts research into the prevention and possible causes of the unexpected death of babies and children.

For more information on this great cause please visit the Red Nose Day website http://www.rednoseday.com.au/ and donate online. Alternatively visit a retail store that supports the organization and buy something for yourself, a friend or your children. It’s not just red noses for people, there are red noses for cars too! There’s plush toys, pens, lapel pins, lip balm and bracelets. So why not get involved and keep this charity and their research running for many more years to come.
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