A Merry Christmas & Happy New Year to all!!!

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

Well can you believe it, it’s that time of year again, Christmas! It has snuck up on us again but it has been a great year here at Metro that’s for sure.

This past month our team and their respective partners had our Christmas Party, a weekend away in lovely Queenscliff, a beautiful town that we think everyone should visit.

We stayed in the grand old Queenscliff Hotel with its antique furniture and ‘Olde World’ feel, so very lovely. Being such a big group some of us stayed at Athalstane House which by all reports was a relaxing bed & breakfast style of hotel with all the mod cons. We surprised the team with a game of Lawn Bowls in the afternoon complete with prizes for the winners (pink glittered lawn bowls) and for the runners up a copy of the ‘Crackerjack’ DVD. We also had a delicious 3 course dinner and drinks at the Ripview Bistro and the following morning a fabulous buffet breakfast back at the Queenscliff Hotel, although there were a couple of us with sore heads. So all in all a fantastic time was had by all.

So it’s back into the swing of things and our offices are open over the Christmas and New Year Period, our opening hours are below…

Friday 24th December - 9am to 1pm
Saturday 25th December - Closed
Sunday 26th December - Closed
Monday 27th December - Closed
Tuesday 28th December - Closed
Wednesday 29th December - 9am to 4pm
Thursday 30th December - 9am to 4pm
Friday 31st December - 9am to 1pm
Saturday 1st January - Closed
Monday 3rd January - Closed
(NB: We resume our normal business hours 9.00am-5.30pm on Tuesday 4th January 2011)

We all hope you have something fantastic planned for New Years Eve this year and we have heard of a couple of great family friendly events being held in and around the city. One of them being the Free Family Friendly event at Yarra Park from 6pm-9.45pm include roving performers, rides, kids activities, workshops and headline acts on the mainstage. Families are encouraged to bring a picnic rug and relax on the grass to countdown to the 9.15pm fireworks. There is also the family friendly event at Waterfront City at Docklands, for more information on both of these events please visit http://ow.ly/3sS7k .

The team at Metro Property Management would like to take this opportunity to wish you all a very Merry Christmas and a safe, happy and successful New Year in 2011.

Until 2011…

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December and Summer Begins

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

And so it’s the 1st day of Summer and it’s raining…ah Melbourne…

Only 24 days until Christmas and we here at Metro are excited (& a little frightened), the tree has gone up in the office today already!

This month our team has been given $100 each to shop for gifts for the Kmart Wishing Tree, it’s a Christmas tradition now and the team just love it! It’s always a competition to see who gets the most and most interesting gifts for all ages, so far the pile is huge! My boys will come into the office and ‘test drive’ them and then each member has nominated a store nearest to them to take the gifts to, so that our gifts are given to the different charities supported by the various Kmart stores. 

In other news Metro Property Management turned 4 today and we have celebrated with a pizza lunch for the team and some delish cupcakes from our favourite store…The Cupcake Bakery, a great start to the Christmas month of eating.

No doubt the shops will be hectic this weekend with people Christmas ‘shopping till they are literally dropping’, however if you happen to be in the city don’t forget to take the kids (big or small) to see the Myer Christmas Window Display, as usual they are fantastic and will have you all in the Christmas spirit. This years theme is ‘The Nutcracker’ http://ow.ly/3hW6k

Till next time…

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Stamping Out Housing Affordability

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

A collegue of ours Adam Watts (of Lifetime Financial Group) has written the below article that appears on ‘The Weekly Review’ website (a popular website and magazine in Melbourne). I thought you may enjoy this interesting read in regards to the excessive Stamp Duties Victorians in particular are forced to pay....

By Adam Watts (LifeTime Financial Group), www.theweeklyreview.com.au 3/11/10

Why is it that we have all accepted excessive stamp duty on Victorian property? If you compare stamp duties across Australia, and even between countries, you will start to question the exorbitant cost.

Generally, in day-to-day life, you get what you pay for when it comes to the quality or quantity of goods and services. No such logic applies to the application of stamp duty. As Victorians, we are paying higher stamp duty than almost all states and this, combined with an already high and climbing median property price for Melbourne, adds up.

Let’s look at duties across the states.

Considering a $500,000 property price, the following stamp-duty costs would apply:

Northern Territory $23,928

Victoria $21,970

South Australia $21,330

Australian Capital Territory $20,500

New South Wales $17,990

Western Australia $17,765

Queensland $8750

(Source: www.homeloans.com.au)

So what is Victoria doing with these extra and rising proceeds?

Excessive duties are particularly being felt by younger generations as they attempt to save a house deposit. With banks and other non-banking financial institutions increasing deposit requirements, largely thanks to the global financial crisis, individual property deposit savings have been struggling to keep pace with rising property prices and the associated rising stamp duty.

Higher bank deposit requirements, coupled with flat household income trends – again an outcome of an economic correction – have made it almost impossible for first-time buyers to enter the property market without compromising on size or location.

Today’s reality is that the median property price in affluent Melbourne suburbs is now incurring more than $100,000 of stamp duty for house or investment purchases.

As at June 30, stamp-duty costs on the five most expensive Melbourne suburbs, as per their median price for the quarter, included:

Toorak $114,400

Brighton $93,500

Kew $87,480

Balwyn $82,500

Elwood $78,925

(Source: Herald Sun 18/09/2010)

Stamp-duty costs, even on Melbourne’s median property price at June 30, was near to $30,000. Understanding this cost, how long do you think it actually takes the average Melbourne worker to save $30,000 after tax? I don’t believe this research has been carried out yet, but I would imagine the answer would be “a very long time”.

It is no surprise that households are buying up outer-Melbourne house-and-land packages. Properties are simply more affordable, with the ability to take advantage of additional first-home-buyer government incentives on newly constructed houses.

However, this could be causing an undesired demographic change of young couples and young families moving from the city and its infrastructure and amenities, which may not be as well supplied in and around outer-Melbourne housing estates.

Furthermore, if housing affordability and its associated costs don’t improve in Melbourne, we may also see a migration of residents to other cities or other, more-affordable states.

Why am I so passionate about this financial issue? Not only is it an issue for my younger clients, I have started to contemplate how my son, Oliver, will ever be able to afford inner-suburban housing? Some parents seem to be planning and have invested in or intend to invest in properties (apartments) for the benefit of, and an option for, their children when they eventually move out of the family house.

In addition to viewing it as an investment with tax benefits, maybe these parents also have an ulterior motive – ensuring their children don’t move too far from mum and dad.

So at what point and at what price does the Victorian Government say “we’re charging too much?” If it is not going to reduce its cost, when does it start giving some value back to house buyers with additional facilities and services?

The system needs to improve, because if it doesn’t, we may well be naming our children’s generation as the “renting generation”.

Adam is a Financial Planner for LifeTime Financial Groupadam@yourlifetime.com.au

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A Fantastic End to October!

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

The last week of October was a very exciting one! For one I was very proud to win the REIV Residential Property Manager of the Year 2010 Award at the 17th Annual REIV Gala Awards held at the Crown Palladium Ballroom. It was so very nice to have many of my team attend and share in my joy. I was very shocked to say the least. I was up against some tough competition and to win was such an honor and a fantastic reward for all of the hard work my team and I put into our business. The REIV tell me that this year there were a record number of entries which makes the win all the more special and it helps my team and I feel like we are doing something right. The congratulations from our colleagues and clients have been overwhelming!

In other news I was approached a few months ago for some comments for an article in the “First Property Buyer” Magazine, this is a relatively new magazine and was first brought to my attention at the Home Buyer and Investor Show that we attended a few months ago. Now in it’s 4th issue this is a magazine that is full of interesting information for those purchasing their first property either to live in or to lease out as the magazine not only targets those who have never purchased before but also those who have never been a property investor before . I was asked to make some comments &/or offer advice for an article called “Hired Help” which discussed the reality’s of becoming a landlord, the benefits of assigning a Property Manager to care for your investment, the costs involved and how to find the best Property Manager.

The article is a great read and it was fantastic to have the opportunity to inform the first time investors out there about the benefits of a great Property Manager. (The article “Hired Help” can be found in the “First Property Buyers” Magazine - November 2010 issue on Pages 63-65) For more interesting reading and information on the magazine visit their website http://www.firstpropertybuyer.com.au/

Until next time…

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Real Estate Tale of Two Cities

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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