Property Rentals Flooding In

Talking about floods, we have received a host of new rental listings in the last couple of weeks. After vacancy rate averaging under 1% all this year, suddenly our vacancy rate has shot up to 3.5%. But not to worry, Nicole will find tenants for them very soon!

Home Insurance Flood Cover

The rules have been changed for what insurers must provide. Part of the problem in the Queensland floods was different definitions of flood, meaning that many homeowners had their claims refused despite being knee deep in flood water while their next door neighbour with a different insurer was covered.
From now on all home and content insurance will include flood cover using one common sense definition: Flood means the covering of normally dry land by water that has escaped or been released from the normal confines of: a) any lake, or any river, creek or other natural watercourse, whether or not altered or modified; or b). any reservoir, canal, or dam.
I claimed last year when flood water came down off the street outside due to a blocked storm drain. That would not meet the new definition. Nor would the flood of the basement car park due to an old water main coming unplugged be covered.
Assistant Treasurer Bill Shorten says insurance policies will not go up because of this. He must mean that the insurance companies are taking on all this extra risk at their expense as a Christmas present to the people of Australia, which is very sweet of them. Or maybe they think all the new flood claims will cost less than places like mine that are no longer covered.

Changing Web Sites

Today the Visiontech website that Ray White Beecroft has used since May 2009 will be taken down and replaced by a new Ray White standard website. This common format will make it easier for Ray White customers to find their way around each RW Agency's site.
However it is with sadness that we see the end of our excellent Visiontech website, which has had 16,928 visits over the two and a half years, 7,821 of them unique visitors, with a total of 72,992 page views.
In that time Ray White Beecroft has evolved from a new-comer to Sales in the area to the dominant agency. In 2011 we sold more properties than any other local agent.
Thanks Visiontech for your assistance over this exciting period. We remain the dominant property management force in the area with more than 60% of rentals in the area.

Rail Freight Line

A $1 billion rail freight corridor upgrade between North Strathfield and Newcastle would add to the number of freight trains operating on the Northern Line each day.
The upgrade, to be completed by 2016, was announced by Infrastructure Minister Anthony Albanese at a news conference with Premier Barry O’Farrell this morning.
The project would also lift the corridor’s capacity by 50 per cent, from 29 to 44 freight trains a day.
The upgrade was designed to increase freight train movements, reduce carbon emissions by more than 100,000 tonnes a year and take 200,000 trucks a year off the state’s roads.
“Sydney is the biggest bottleneck on the main line between Melbourne and Brisbane,” federal Infrastructure Minister Anthony Albanese said.
The Federal Government would spend $840 million on the project with the NSW Government contributing $214 million.

RBA Cuts Interest Rates

RBA just announced the widely anticipated 0.25% interest rate cut. Let's see how quickly the banks pass it on.

Free Property Management

Do you have properties managed by other agencies? Want to consolidate your portfolio under one agency? Tell our property department what you want to do, and we will sort it out for you.

To reward you for your increased custom we offer three months free management for any such new properties that you give to us in this manner during 2011.

As well as properties in the Beecroft and Cheltenham areas, we manage properties in Artarmon, Carlingford, Cherrybrook, Dundas, Dural, Eastwood, Epping, Gladesville, Glenhaven, Gorokan, Gosford, Kellyville, Marsfield, Neutral Bay, North Rocks, Oatlands, Pennant Hills, Terrigal, Ultimo, and West Pennant Hills, so are happy to take over properties anywhere within this area.

Shower Heads Scam Stopped

According to the Daily Telegraph:
SHOWER HEADS have been banned from the NSW Energy Savings Scheme by Minister for Energy Chris Hartcher.
The ban follows last week's revelations in The Sunday Telegraph that dodgy salesmen have been making millions selling energy-efficient showerheads.
Showerhead sales boomed following the end of the pink batts scheme last February, with green businesses shifting to the production of energy-saving certificates generated by the sale of showerheads. Under the NSW Energy Savings Scheme, the certificates are then sold to the state's energy companies. More than half the certificates created by the scheme are now generated from the sale of water and energy-saving showerheads.
"In true Labor style, the showerhead component lacks the appropriate monitoring mechanisms leaving it wide-open to manipulation," NSW Minister for Energy Mr Hartcher said. "We are now taking the responsible steps to close the program."
The Ray White Beecroft Property Management department awaits information on how this affects the new Water Efficiency rules coming into force on 1 Jan!

Christmas Period Property Management

Ray White Beecroft will be closed from Friday 23 December 2011 to Tuesday 3 Jan 2012.

Emergency contact numbers over this period are:
Plumber - Peter - 0447 440 232
Electrician - John - 0418 649 115
Hot Water - Parramatta Hot Water - 9630 6683
Storms and Floods - SES - 132 500
If you need to talk to someone from the office - Douglas Macarthur - 0408 817 239.

We hope you all have a great Christmas and a happy new year.

House Price Trends - Sydney doing best.

Capital city home prices nationwide sank 0.5 per cent, seasonally adjusted in October, from a downwardly revised 0.4 per cent fall in September, according to RP Data-Rismark. September's revised drop was twice the 0.2 per cent slide initially reported.
The median dwelling price in capital cities now stands at $448,500.
According to the Sydney Morning Herald, Australia's house prices are falling at an accelerating rate according to figures out today, with Melbourne and Brisbane reporting the steepest drops over the past year and Sydney among the most resilient.
In the ten months to October, seasonally adjusted home prices in Melbourne are down 5.8 per cent, second only to Brisbane's 7.5 per cent fall in that period, according to RP Data.
Sydney's dwelling values are down 1.4 per cent in 2011, while Canberra's are up 0.9 per cent to be the country's best performers. For the nation, seasonally adjusted home prices have dropped 4 per cent so far in 2011.

JPMorgan tips RBA to cut rates

According to the Australian, another investment bank has tipped the Reserve Bank will cut interest rates next month. JPMorgan today forecast the central bank will lower rates due to the "material" deterioration in financial markets since the last board meeting.
JPMorgan, which had expected the RBA to hold rates steady next month, today said the debt turmoil in Europe, tight fiscal policy from Australia's government and a strong Australian dollar have changed its mind. The bank's economists expect the RBA to cut rates by 25 basis points to 4.25 per cent next month, inline with forecasts by Goldman Sachs and UBS.The US investment bank also said it expects two more 25 basis point rate cuts in the first quarter of calendar 2012.

Three Auctions in One Day

On 10 December, Ray White Beecroft is auctioning 16 Hawkridge Place Dural at 11am, then 56 Boronia Avenue Cheltenham at 1pm, and 68 Cheltenham Rd Cheltenham at 2pm.

Further Interest Rate Cuts in the Wings?

On the back of fresh news that Italy has now become the weakest link in the Eurozone debt crisis, stockmarkets around the world were pummelled again last week as about $30 billion was wiped off the value of Australian companies.
Although bad news for many equity investors, it’s good news for the property market with an increased probability that rates will again be cut. This could be as early as next month when the Reserve Bank (RBA) is next due to meet.
The latest Westpac-Melbourne Institute consumer confidence survey conducted after the RBA’s rate cut last week recorded a bounce of 6%, the first time the index has been positive since June. ICAP economist Adam Carr told the Sydney Morning Herald that while home lending is not booming, the fact that it is recovering at a rapid pace despite global turmoil is testament to how resilient the market is.

Record Empty Rooms in Australian Homes

A survey by the Bureau of Statistics finds there are more empty bedrooms in Australian houses than ever before. Average number of bedrooms per house has gone up from 2.8 to 3.2 over the last fifteen years, while average people per house has gone down from 2.7 to 2.5.
The number of people living in private houses has risen by 23 percent, while the number of houses has risen 28 percent.
The Hornsby Shire Housing Strategy will require the units to be built over the Beecroft Shopping Centre to be a mix of 1, 2 and 3 bedroom units, with not less than 10% of each type.

Solar Panels on Rental Properties

Ray White Beecroft has some information about recovery of electricity costs when a landlord installs a solar panel system, typically costing $30K, on a property to take advantage of NSW government rebates, and then decides to rent it out. Contact Peter Hewitt the Business Development Manager with any queries. Email peter.hewitt@raywhite.com.

Law Change could spark Sales Slump

Anthony Lawes of the Sydney Morning Herald reports that buyers of new appartments could face higher levies and a drop in propery values as a result of NSW changes to the period in which developers have to provide cover for shoddy work.

Previously builders had a statutory warranty period of seven years. The new law changes this, for non-structural defects, to just two years. For structural problems the warranty period reduces to six years. Non-structural defects include painting, acoustics, wiring, lighting, fire hazards etc.

Worst of all, the clock for the warranty starts when the building is finished, not when the new owners move in!

Under the changes, the cost of repairs would shift onto the new owners, as most non-structural defects take several years to surface.

The NSW government justifies the change as a way to re-energise the home building sector, but the chairman of the Owners Corporation Network fears it will have the opposite effect. "The message from this change is, don't buy new and don't buy off the plan because whatever you buy won't have adequate warranty."

Part of the problem apparently is that no home warranty insurance is available for owners in blocks higher than three storeys, so there is no way for the buyer to defray those costs.

This puts an interesting slant on the Hornsby Shire's Housing Strategy, with three or more layers of residential units being built above two levels of mixed commercial and retail. The 'higher than three storeys' rule means that only the lowest level of those new residential units would be covered. Suddenly the penthouse suites don't sound so attractive!

Hornsby Shire Housing Strategy

Apparently the NSW Liberal Planning Minister gazetted the previous (Labor) state government's Housing Strategy on Friday 2 September. There seems to have been no public consultation on this issue since the new Liberal party took over at the election.

Construction Costs per sq m, Sydney

An interesting table is published in Maverick, a bulletin by BMT & Associates. For instance a 4 bedroom full brick home on a level block single level unique design is quoted as between $1,640 and $2,010 per sqm excluding GST. More details can be obtained at their website, http://www.bmtqs.com.au/.

Auction Bidder whose cheque Bounced

A report in the Sydney Morning Herald, by Stephen Nicholls, tells how a buyer who bid $2.3M for a house, and paid the required 10% deposit by cheque, was successfully sued by the vendor. By then the vendor had sold the property to another buyer for $1.95, and the Supreme Court ruled that the failed buyer must pay the difference, $350,000, plus interest.
The failed buyer's solicitor claimed his client had no money, but it turned out she owns several properties, although with significant liabilities.
So the key lesson is, if you can't raise the money in time for settlement, don't bid at auction! If your wealth is in property, then the disappointed vendor will pursue you confident that in time he will get his money.

Offshore Investors Seek Safe Haven

According to Carolyn Cummins in SMH Business Day, Australian real estate has been in hot demand in the past few months as global volatility has led to an investor push to secure property in safe havens.
More than $9 billion of assets have changed hands across the Asia Pacific region in the last three months, mostly in real estate investment trusts.
Ray White Beecroft recently sold Shop 26 in the Arcade, the second commercial property we have sold recently, but both bought by Australian buyers.

Sold in a Week in Beecroft

Peter Raco of Ray White Beecroft has sold a property in less than a week for 10% more than the owner was hoping for!
The property was advertised as being ideal for demolition, like the house two doors down that Ray White Beecroft sold a couple of years ago and which now sports a nice new house.

New Survey of Landlords

An internet survey by Real Estate Business asked agencies and property managers what percentage of your property management business is made up of problem landlords. At this stage with about 300 respondents 75% are saying 0-10%.
What the survey didn't clarify was whether they meant "how many of your landlords are problems", for which 0-10% is a good answer, or "how much of your project management staff are employed working on premises owned by problem landlords", for which the answer is probably much higher.
The same applies to tenants, and even the properties under management. Most are easy, but there are a small number that require much more work.
This is the aspect of property management that this blogger finds most rewarding. Within Ray White Beecroft the property management team pass problems to me, leaving them free to devote their time to the other 90% of the business. But my guess would be that 25% or more of the team's activity is dealing with problems.

Green House Price "Sting"

An article in the Daily Telegraph says that the Federal Government is planning to introduce a mandatory system of energy "star" ratings. Such a scheme has been operating in the ACT since 1999, with properties rated out of six stars. Surveys suggest that in the ACT experience a single star difference in the rating led to a 3% variation in sale price, which in Beecroft could mean some $30,000! According to the article, the cost of having your property assessed will be something like $200.

House Sizes (and hence prices?) Reducing

ONE of the nation's biggest developers has said the size of new homes has peaked and that affordability issues would mark the end of the so-called McMansion and the growth of smaller, more efficient homes.
While the average new home grew 10 per cent to a world record 215 square metres in the decade to 2009, the managing director of Stockland, Matthew Quinn, said homes were shrinking and the trend was locked in.
Announcing Stockland's results for the financial year, Mr Quinn said by cutting up to 70 square metres from the size of a new home, buyers could save $40,000-$60,000 a house, making them affordable.
Already the average size of a four-bedroom house has dropped 20 per cent since 2007 while three-bedroom houses have shrunk by 26 per cent over the same period as living areas, media rooms and hallways disappeared in more compact designs.
While one in 10 new homes in Stockland developments had five bedrooms in 2007, only 2 per cent of new homes this year were as big and the percentage of three-bedroom homes had leapt from 21 per cent to 34 per cent in the same period.

Interest Rate Predictions

While not raising rates on Tuesday, the RBA hinted rates might go up later in the year. Then came Tuesday night's American Debt Deal, sparking a run on the stock market and headlines like "fear grips investors". Ian Verrender writes in Sydney Morning Herald that local money markets have dismissed the RBA's thinly veiled warning as ancient news. They are now betting that there will be up to three interest rate cuts this year!

Interest Rates on Hold this month

It looks as though Glen Stevens read my last post! Insurance rates are held steady this month.

Please Dont Raise Interest Rates, RBA!

The real estate market is pretty bad at the moment, still suffering from last November's interest rate rise. The last thing vendors or buyers need is another interest rate rise this month!

When properties can't be sold, owners eventually withdraw them from the market, so tracking withdrawals gives a clue to the buyer demand. So far this year, two out of three Beecroft estate agents had more properties withdrawn from sale than they sold. It is instructive to examine the ratio of sold to withdrawn.

Beecroft Real Estate 6 sold, 10 withdrawn - Ratio 0.6
Raine & Horne 15 sold, 17 withdrawn - Ratio 0.9
Ray White Beecroft 11 sold, 7 withdrawn - Ratio 1.5

Beecroft in Bloom Cocktail Party 9 Sep

Lions Club of Beecroft / Cheltenham is once again holding the Beecroft In Bloom art show, 9 and 10 September, in The Module, Hannah Street.

Ray White Beecroft is sponsoring the Inaugural Cocktail Party for the art show, starting at 6:30 pm Friday 9 September, to be held in the top floor of The Module, Hannah Street. Tickets, $20 each, are available from the Ray White Beecroft office. All proceeds from ticket sales go to The Lions, to be used for local causes.

Signs of Increased Buyer Activity

Weekend auction clearance rates in Sydney recovered to more typical levels this last weekend. No auctions were held in Beecroft of Cheltenham, but Ray White Beecroft experienced a significant increase in visitors to homes open for inspection, issued a number of contracts, and logged several good offers on houses.
One factor in this new interest was Westpac's report that they believe interest rates will fall. There has been a lot of newspaper comment criticising last year's high interest rate increases, which was followed by a major drop in buyer activity. Now it looks as though things are recovering.

Water Efficiency in Rented Properties

Further to my earlier post on this, Ray White Beecroft's property management sent an email to all our landlords reminding them of the end of year deadline, and this time we had over 50 responses asking us to arrange action.

New Off Leash Dog Area

As a dog lover, I am pleased to advise that Hornsby Shire Council has enclosed Ron Payne Park on Woods Street North Epping, and allocated it as an off-leash dog exercise area when it isn't being used for sports. This is good, because the Epping Oval off-leash dog area is similarly constrained, and the two areas are fairly close so hopefully one or other will always be available.

Water Efficiency in Rented Properties

So far, despite repeated emails advising landlords of the situation, only 7% of properties managed by Ray White Beecroft are 'water efficient'. So come the end of this year all the other landlords will cease to be able to charge tenants for water use, unless they take action before then. One can anticipate a flood of demands as the end-of-year deadline approaches, with plumbers working flat out to meet that demand. So landlords are advised to get in early and have their investment properties made 'water efficient'.

Aussies contemplate property options

James Mitchell writes in Real Estate Business news:
Australians are divided over whether now is a good time to buy property.
According to the latest poll by Homeloans Ltd, 48 per cent believe the market is right for investment, 32 per cent are unable to give an opinion claiming that too much uncertainty exists and 19 per cent are adamant that now is not the right time to be buying.
The survey of 2000 first home buyers, homeowners and investors ranked the greatest barriers to home ownership as high property prices, saving for a deposit, and fear of not being able to meet repayments.
“Despite these major concerns, with nearly half of those surveyed claiming now is the time to buy, it does suggest that the market is on the way back up,” Homeloans’ national marketing manager Will Keall said.
“While many of these respondents may not necessarily believe that the market has bottomed out, they anticipate prices to increase in the medium term and are seeking to take advantage of the abnormally high quantity of properties for sale in most parts of the country.”
The report showed rising interest rates were no longer a concern.
However concerns over rising living expenses increased by 7 per cent from last year, with 37 per cent of respondents said increasing living expenses were their main concern over the next 12 months.

Listings on the rise again, sales down

In the Beecroft and Cheltenham areas, the "patch" for Ray White Beecroft, and probably throughout Sydney, the number of properties listed for sale fell dramatically last November, after the Reserve Bank's rate rise and the accompanying media storm.

Listings are now recovering, with nearly as many properties listed for sale as at the last peak. However buyer interest is depressed and clearance rates at auction are low.

If, as seems likely, interest rates go up next month, a fall in house prices seems certain.

Buyer's Market

In April there were 2060 auctions in Australia, with a 53% clearance rate. The previous busiest April was in 2000, with 1700 auctions. Last year there were 1550 auctions with a 69% clearance rate.
Year-to-date clearance rate stands at 55%, marginally better than in December last year. The RP Data-Rismark index shows capital city values fell by 2.1% in the first quarter of 2011, seasonally adjusted, pulled down especially by Brisbane, down 4.6%.

Hornsby Pool - Latest Intentions

Hornsby Aquatic Centre will be replaced with a top-class facility if Hornsby Council’s rates increase is approved, but the project will be scaled back if the application is rejected.
In a best case scenario the new centre will include a 50m outdoor swimming pool, an indoor pool and parking, while the worst case scenario is a 25m outdoor pool.
A council workshop meeting will be held on Wednesday to decide what features the pool, which closed on Christmas Eve because of safety concerns, will include if the rates increase is approved.
What do you think is needed in a new aquatic centre? Comment at:

http://hornsby-advocate.whereilive.com.au/news/story/the-good-bad-and-ugly-of-future-hornsby-pool/

Rising rents will continue through 2011

According to Australian Property Monitors, in Sydney, median asking rents for houses rose +1.0 per cent to $485, while units jumped +2.3 per cent to $450 per week, ensuring Sydney remains one of the most expensive places to rent in the country.

Pet-Friendly Property

Finding properties for tenants with pets is always a problem, as so many owners won't allow pets. It was therefore interesting to read an article by Brittany Stack under the headline "Pet-Friendly property on the rise." Brittany reports that, increasingly, high rise buildings in inner suburbs are welcoming pets. Developers are realising the benefits, in that pet-friendly properties are sold for higher prices, and tenants stay for longer periods of time and take better care of the property. Ray White Beecroft's property manager says we very seldom have problems with pets yet we turn away a lot of applicants for properties because the owner won't allow pets. Flea treatments are an obvious need, but can be done routinely when a pet-owning tenant vacates. The main damage done by dogs is scratching of the back door, and digging up of gardens. Neither is significant in relation to the bond.

Easter Break

Please note that Ray White Beecroft will be closed over the Easter break 21 to 25 April. Peter Hewitt will be remaining in the Beecroft area and can be contacted on 0417 215 774. All tenants have names and contact details for emergency callouts of tradespersons, and I suggest you check that you have that list before the break.

Comment on this blog

For those not familiar with comments and blogs, this is the text of a comment against my earlier 21 March post on access under the M2 viaducts in Chilworth Reserve. And here is a photo of the access path entry gate.

The comment is: "The signage is totally confusing leaving pedestrians thinking there is an alternate path across the creek when they are just being directed in circles along the southern pathway between Orchard and Allerton roads. The access path across the creek must be maintained during the works. Accepting that the path location may change as the work progresses there is no excuse to completely block access across the creek. This must be managed to accommodate both the right of way and safety concerns. If this means moving the fence corridor regularly or employing a safety crossing flag person then so be it. Pedestrian gates should not be found locked shut."

Well done Douglas Macarthur

Ray White Corporate advise us that his results in 2010 put Douglas Macarthur in the top 100 sales people in the state. Recent testimonials indicate why. For selling a house in Murray Farm Road Beecroft: Douglas, thank you for a smooth and stress free process of selling our house. I appreciated your professionalism, enthusiasm, and most importantly to me your easy manner and honest approach during a time that might have been quite daunting, with (my husband) away overseas on business. And for a house in George St Pennant Hills: We found Douglas to be very professional, efficient, throughout the whole process of selling. He has surpassed all our expectations and we have already recommended him highly to friends, family and neighbours.

Population Growth Still Modest

In an article in the SMH Business Day today Aaron Gadiel, chief executive of the developer lobby group Urban Taskforce, worries that Sydney's population is not growing as rapidly as people believed. He suggests that Sydney's property values would "plummet" if there was a government-imposed freeze in its population. Not so long ago the fear was of the opposite, with Kevin Rudd seeking a huge growth in population which justified five storey mixed residential and commercial development of the Beecroft Village shopping centre. I guess residents of Beecroft and Cheltenham will be hoping for a sensible balance between these two extremes! That should surely obviate the need for ruining the character of our lovely village!

Buyer confidence drops, good time to buy

An article by Jessica Darnbrough says: Home buyer confidence has dipped 1.5 per cent since September 2010, according to the Genworth Home Buyer Confidence Index. Speaking at a media briefing in Sydney yesterday, Genworth chief executive officer Ellie Comerford said the dip in confidence was the second consecutive fall since the launch of the index last year. “This fall, despite Australia’s relatively strong economic performance, was driven by the decreased confidence in the natural disaster affected regions of Queensland and Western Australia coupled with growing concern amongst Australian home buyers about the rising cost of living,” Ms Comerford said.

PM Department Battles Paper Wasps

A tenant fresh out from England complained of wasps in the garage. Our PM department investigated and identified them as Paper Wasps. If you look them up on the internet it says “They are 10-15 millimetres long, tan in colour with darker bands and some yellow on the face.” Check that against the yellow faces in this pic I took of the ones in the garage. The internet says “They have a painful sting and will attack if their nest is disturbed”. Asking a specialist, we were advised to spray them at night when they are asleep, with mortein or any other common insect spray. The tenant was reluctant to do this, so our PM person went round and did it for them. All part of our service.

Water Usage in Rented Properties

We are now very confident that we understand how the new laws work. Leases that were in place before 31 Jan 2011 remain able to charge for water usage but will lose that right on 31 Jan 2012 if the water conservation mods have not been completed.

New leases signed after that date will only be able to start charging water usage once the mods have been done. The lease can be signed before the mods are done, and doesn't need to be modified when the mods are completed, but the tenant shouldn't be charged for water until the mods are done.

Obviously the tenant can seek a rebate for any water usage paid that were improperly charged.

House Price Bubble Phobias

An interesting article in the SMH today by Jessica Irvine. Much useful discussion on the issue, ending with a clear assessment that "house price rises will lag income growth for the next 18 months, helping to improve affordability." Her last paragraph says "that's the slowly deflating hiss of an overpumped air mattress you can hear, not a bubble bursting."

Chilworth Reserve Pedestrian Access

Transurban have fenced off the construction site under the M2 viaducts in Chilworth Reserve and have posted this sign.

House Sales Recovering?

There was a staggering fall in the value of houses sold in the Beecroft and Cheltenham area, by all agents, over the months since the hype about interest rate rises in November 2010. However the last month or two have seen a recovery, with the latest figures showing sales value increasing. Still below where it was two years ago, but definitely edging back up.

Another Wayve Vaughan underquote?

I found an article in Northern District Times 24 Feb telling of another Wayne Vaughan "triumph", selling a stately Federation home at 17 Railway Avenue Eastwood on 1789sqm for $2,150,000. According to the article, 150 people went through the home open.
But the property was advertised earlier with a guide price of $1,800,000, so again the sale price was 19% over the guide price. What's going on, Wayne? Don't you know the local market? Or are you deliberately deceiving your buyers?

Allerton Road Auction by McGrath

An article on Page 2 of the Northern District Times on 9 March describes the recent auction of 14 Allerton Road by McGrath agent Wayne Vaughan, with 69 bids from just below Wayne's advertised guide price to a final selling price that was 25 % above his guide price.

On a hot rising market, it can be difficult to forecast how an auction will end up, but in today's depressed market that's not a valid excuse. In this case the final sale price was not significantly better than the generally expected price for the property, but anybody who knew the market knew the guide price was ridiculously low.

This spurred me to do a bit of research on Wayne, and McGrath in general.

I found many remarks on the web like, "From what I can see McGrath in Sydney constantly under advertise the values of properties", and "Currently I just don't bother looking if they are listed with McGrath as I've no idea what the true value is".

With so much unhappiness amongst would-be buyers, one hopes the OFT will be doing something about it! Underquoting is defined by laws regulated by the NSW Office of Fair Trading as when "an agent or employee is considered to falsely understate the estimated selling price of residential property ... less than his or her true estimate of that selling price".

The basic rule is that agents must act fairly and reasonably in their dealings with buyers and sellers and the price guide should be consistent with the estimated price in the agreement signed by the agent and vendor.

Under NSW rules, the maximum penalty for deliberately misleading buyers is $22,000. Under new laws the Federal Government is considering putting into effect from January 1, the maximum fine would be $1.1 million for agents and $220,000 for vendors.

We understand that complaints have been made to the Office of Fair Trading and look forward to hearing the results.

Kirkham Bridge Span Widening

In earlier blogs I questioned why it was going to take as long to widen the spans as it was to widen the whole motorway, and why buses and trucks may not be allowed to use the bridge after April of next year until the work is finished.

That was explained very nicely by Peter Colacino of Transurban and a member of his team at the BCCT AGM the other day.

The problem is they have to build a new buttress to support the bridge, in between the two new roadways. They can only do that when the new east-going roadway is built. Meanwhile they have to dig out the bridge on that side before they can build that wider east-going roadway under it, and there will be a time when the eastern span is wider than the original designers intended, supported only by the existing buttress. Transurban engineers will decide before then what weight the wider span can carry and decide what weight limit to apply.

When the wider east-going lane is built, the new buttress can be built to support it, and the existing buttress can then be removed to allow the west-going lanes to be finished. Normal weight limits will hopefully then be restored.

A very complex planning process! Every step is interlinked with steps before and after. Thanks for the explanation, Peter.

(This post was prompted by a question in an email from Elise of MSB)

Alternative Uses for a Swimming Pool

Two years ago a South Turramurra couple turned their saltwater pool into a pond, with aquatic plants and native fish. In the past three years Ku-ring-gai Council’s 'Pool to Pond' program has helped convert more than 40 pools into ponds.
Perhaps a more innovative solution can be seen at 14 Mason Avenue Cheltenham, a property going to auction this weekend. They built a concrete 'roof' over the pool and tiled it, to make a very attractive large garden entertainment and play area. But they also connected it to take rain water from the downpipes, to create an automatic watering system with 40,000 litre capacity to water the large gardens on the property! Beats having large tin tanks around the place!

O'Farrell will dump Home Buyer's Tax

In July last year the Labor government slipped in a new "Ad-Valorem" tax on home buyers, as an un-heralded part of the state budget. The tax adds typically $1,000 to houses in our area and a lot of people don't even know about it until the bill comes in.
Now State Opposition Leader Barry O'Farrell has promised to scrap what he calls Labor's "sneaky" home buyers' tax. He predicts this will make an "almost immediate impact" on lowering house prices.
Property Council NSW executive director Glenn Byers said abolishing the tax will improve investors' perception of Sydney

Guide Price Before Auctions

McGrath have been fined in the past for quoting low "guide prices" before auctions.

This week's Northern District Times reports on an auction sale by McGrath of a property in Beecroft. There were 69 bids at the auction, rising from just below the guide price ($900,000) to 25% above it ($1,117,000)! Sounds impressive, except that the final price was almost exactly the same as the price ($1,116,000) at which an identical property next door had sold a year earlier. So this achieved auction sale price was if anything below market price.

To anyone who knew the local market, the guide price was cleary unrealistic , but the agent was relying on buyers not having that intimate knowledge. Many of those buyers would have paid for building surveys, and realised that was money down the tube once the bidding started.

All those disappointed would-be buyers should register objections with the Office of Fair Trading, and claim back the costs of any building surveys from the selling agent!

"Buyers Desert The Market"

Article in the Australian yesterday was headed "house prices slump as buyers desert the market." Certainly sales have been depressed since the November rate rise and all the associated media hype. In our area, total sales by value, including all agents practicing in the area, over the Christmas period have been the lowest since we started tracking them.
However in the last five weeks Ray White Beecroft has been selling better than one property a week. There are buyers out there, but they are definitely more cautious and vendors need to be realistic. The article in the Australian should be required reading for vendors!

Sale By Tender - Great Result

On 15 Feb I posted about the reasons for offering a property for sale by tender. Well, it worked. After negotiations, a deposit has been paid and accepted. Although the process lacks the excitement of the Fall of the Hammer, the Sale by Tender process works well if any serious buyers have reasons why they can't bid at auction, like needing to offer a delayed settlement. Another great result by Douglas Macarthur.

Water Usage in Rented Properties

We have been trying to clarify the issue of new leases charging for water usage.
The sound track of the OFT video says, for new leases, "Landlords will need to install water efficiency measures in their rented premises before starting a new lease if they want to charge their tenants for water usage."
For existing, pre-31 Jan 2011 leases, the owner is allowed a year to implement those measures. But it seems there is no such flexibility for leases signed since then. The wording implies that there is no way of subsequently implementing the measures and bringing in charges for water usage. So if the owner can't get the work done before the tenant signs the lease, there will be no reason to improve the property later. Is that what the conservation people want?

Sold at Auction, Cheltenham Road

Proving our point about the benefits of auctions, Ben the Ray White Auctioneer just succeeded again, selling a fine old house on Cheltenham Road. With about eighty people in attendance, several people had registered to bid, but the high opening bid must have silenced them. Even so Ben had to negotiate between the bidder and the vendors before a second bid was made that the owners accepted. Everyone ended up happy.

More sellers opting for auctions

Ray White has always advocated sale by auction, believing it offers the best prospect for achieving a good sale price in a short time. While lots of houses get passed in at auction, sales statistics clearly show that the auction process works for the vendor, with sales achieved before the auction and in the weeks after the auction resulting in a high overall success rate.

And it seems the market is following the Ray White advice! An article by Kirsten Craze in the Daily Telegraph on Saturday, under the title above, reports that selling under the hammer is the fastest growing method for vendors. She quotes one vendor as saying, "Looking back now I think when we sold our last place we probably sold too cheaply by private treaty." This happens when an agent, keen to collect the commission, encourages the vendor to take an early offer.

The auction method lets the market determine the price for the property. If the property doesn't come up to the vendor's hopes, or the estate agent's optimistic assessment, at least the vendor can have some confidence in the price offered at the auction. That doesn't mean the vendor should always accept the best offer on the day. Unsuccessful bidders often offer more in the days after the auction, and also the auction focuses the interest of many new prospective buyers.

Cost of moving home

An interesting comment is to be found in an article in Real Estate Business:

"Recently the OECD found that Australia has the fourth highest transactions cost on property in the developed world and this situation causes major inefficiencies in terms of locking owners into their existing properties.

"Australian governments need to turn their attention to removing stamp duties on new homes so as to better encourage annual levels of new home building that will help ease the pressure on prospective home owners, particularly young Australians who are really struggling to enter the housing market.

"Housing Industry Association senior economist Andrew Harvey said renovations continue to be popular as Australians increasingly look to improve their existing homes rather than face the mounting transaction costs, such as stamp duties, that they will incur if they trade-up to another property."

New Bus Service starting, "M60"

Hillsbus has announced a new service starting 7 March, the M60 bus, connecting Hornsby through Castle Hill to Parramatta. The service goes through Pennant Hills Railway Station and up Boundary Road. Services every 10 minutes during peak hour and every 15 minutes the rest of the day, from 6am departure each way, with last departure 7.55pm.

Rate Increase Proposal by Hornsby Shire

Robert Ball, General Manager, and Julie Williams, Manager Corporate Strategy, of Hornsby Shire Council gave a most excellent presentation at the Beecroft Bowling Club last night, on the financial status of the shire and the need to consider raising rents above the cap.
The main single reason driving the proposal is to replace the Hornsby Aquatic Centre, a 50 meter pool with grandstands, providing a very important service to the youth, and schools, of the Shire.
However the rest of the justification for the increase involves a plethora of lesser items, like storm drains, road repairs, improved parks and facilities - small individually but hugely important in total.
Most of the Shire's infrastructure and facilities were built between 1945 and 1981, and much of it is reaching the end of its useful life. A very important sentence in the documentation provided reads "during past periods of rapid infrastructure expansion, little or no analysis was done to understand cumulative long term economic, social, and cultural consequences of these decisions". It was very clear from Robert's presentation that the Shire is doing their best not to perpetuate that unhappy situation.
Robert says that in Australia local government gets just 3% of total taxation, yet spends 11% of all public expenditure. The situation is getting worse, with State government passing down to local government expensive new duties without increasing finance. Just one example provided was Transport Infrastructure Development Corp acquiring land worth $580,000 at Berowra railway station without compensating the shire.
Anyway the result of all this is that the Shire needs increased funding from rates if they are to give ratepayers the service we want. After hearing all the facts, and listening to the subsequent debate, I voted for the full increase requested.
To hear more, and to have your input to the debate, please note these events:

22 Feb Have Your Say Session At Cherrybrook Village Shops
24 Feb Have Your Say Session At Hornsby Library
28 Feb Community Meeting - 7pm Council Chambers 296 Pacific Highway Hornsby
1 Mar Have Your Say Session At Brooklyn Marina
2 Mar Have Your Say Session At Kimbriki Tip Tour
7 Mar Community Meeting - 7pm Berowra RSL Club 997 Pacific Highway Berowra
7 Mar Have Your Say Session At Westleigh Shops
14 Mar Have Your Say Session At Epping Library15 Mar 2011 Have Your Say Session At Carlingford Shops

Rates Proposal Meeting

Please note the change of address for tonight's Hornsby Shire Rate Proposal community meeting.
Community Meeting - 7pm The Beecroft Club 128 Copeland Road West, Beecroft

Housing Strategy Planning Meeting

A planning meeting to discuss the Housing Strategy Development Control Plan will be held on 2nd March at First Floor 296 Pacific Highway at 6:30pm. Public participation is invited but those wishing to speak must register in advance.
Relevant documents can be found from 11 days before the meeting at the Shire offices or any council library, or on line at www.hornsby.nsw.gov.au, under Business Papers. Select "from 2008".

M2 Access to Chilworth Reserve - Hot Word

Hills M2 Upgrade Community Relations responded to an enquiry as follows:

"Thank you for your enquiry. As stated in the notification, access to the Devlins Creek compound will be from the M2 only - both eastbound and westbound carriageways. At this stage, it is planned that no access roads will be constructed from Allerton or Redgrove Avenue to this compound.

"For further information regarding the M2 Upgrade Project please visit the project website www.hillsm2upgrade.com.au or contact the project team on 1800 192 266."

I am sure we will all be relieved by that statement, although it is not clear what they mean by access from the westbound carriageway. Is this why they are opening the noise barrier on the south side of that carriageway? We know they have approval to clear a strip along the south side of that carriageway to take the extension for the extra lane, it appears that they will be allowing trucks to use that cleared path to get from the carriageway down into the construction camp. It just would be nice if they explained this in simple words!

M2 Access to Chilworth Reserve

I have been asked numerous times about access to the reserve. Many concerned people don't seem to know about the original access path between the M2 and the golf course. This photograph, looking west under the viaducts, may clarify the issue.

Regarding the Orchard Road access that might be used for vehicles leaving the site, this used to be a pleasant walking track, wide enough for 4WD work vehicles but seldom used. However over the last six months repeated M2 project use has turned it into this:

One wonders what two years use will do!

M2 Vegetation Clearing, Chilworth Reserve

I received this missive relating to a meeting held recently by the M2 Widening Project:

"When I went to the meeting last Friday about vegetation clearing it appeared that they are still making up their mind about what they will do for access. While it seems definite that they will use the original access by the golf course for incoming vehicles there now seems doubt that they will come in or leave at Allerton Road.
"They may try to build a ramp for vehicles to leave the site on the southern side of the M2 back onto Orchard Road where the detention ponds are and not on the footpath they use now.
Mark Hood from Hornsby Council has said that Council is not happy for them to use the footpath and there is also Council land involved if they came in from Allerton Road.
"The Allerton Road option would be a real loss because it would involve the clearing of a swathe of bushland which is in good condition just for a temporary access. It seems very unsatisfactory to me that consent has been given for this project without actually looking at conditions on the ground despite concerns expressed in submissions.
"Also Council are saying they are unaware that the M2 currently use the footpath off Orchard Road as access, something I am somewhat incredulous about as I know it has been a problem that trucks use that track for other bushcarers and residents in that area as well as myself since the M2 opened. It has been the only access available for anyone doing work in that area be it Council, the Water or Electricity authorities or the M2.
"I am hopeful that the Allerton Road option will not go ahead but will have to wait and see."

I am unable to name the author of the note, but I post the missive here because it certainly sums up numerous issues that are very strong community concerns.

BCCT AGM - M2 Rep Present

The Beecroft Cheltenham Civic Trust AGM will be held at 7:30pm Monday 7 March at the Cheltenham Recreational Club, Lyne Road.
As well as normal business including election of Committee members, a representative of Transurban will be there to answer questions on the M2 widening, including the Murray Farm Rd Bridge over the M2.

Neighbourhood Watch Meeting

Next meeting of Neighbourhood Watch is Wednesday 23 Feb at 7:30pm, in the committee room at the southern end of the Roselea Community Centre underneath the stage.

M2 Kirkham Bridge Project Intentions

The RTA has clarified the 3 tonne load limit restrictions on the Murray Farm Road bridge over the motorway and how this will affect buses like the 553 service. Although the span widening activity will commence late Feb 2011, only in one phase of that activity will this restriction need to be enforced, and this is currently projected to be from April 2012 until October 2012.

So at least for the next year, kids will be able to get to and from school by bus!

The RTA also state in their latest bulletin that, when one-lane operation is imposed on the bridge, traffic over the bridge will be controlled in alternating directions using signalised traffic control. This matches the opinion of local residents as shown in the recent Beecroft Cheltenham Civic Trust survey.

Sale By Tender

We are offering for sale a beautiful property in Beecroft, but instead of selling at auction, Douglas Macarthur and the owners have agreed to sell by tender. It is worth explaining why they are taking this option.

The problem with bidding at auction is that you have no opportunity to vary the terms of the contract, and in particular the contract settlement date. We have a number of people who really want to buy the property, but have to sell their existing property first, so they want a delayed settlement. This means they daren't bid at a regular auction.

A tender sale process allows each prospective buyer to submit an offer which is a mix of price and settlement date, and the owner is free to choose the most attractive offer out of all those received. The owner is not bound to accept the highest offer, or indeed any offer, but has the opportunity to consider bids from people who just are not in a position to bid at auction.

Buses won't be able to use M2 Kirkham Bridge!

The latest bulletin of the Beecroft Cheltenham Civic Trust states that heavy vehicles including buses will not be able to use the bridge over the M2 between Murray Farm Road and Kirkham Street during the work to widen the spans. Therefore school children living west of the bridge will not be able to travel to their schools by bus! Also presumably fire engines from Beecroft will not be able to attack fires west of the bridge.
Transurban claim the work on widening the spans of the bridge will take 22 months to complete, a strange coincidence because this is also the proposed duration of the whole M2 widening project. Pressure needs to be applied to the project team to actively plan this work as a fast-track activity which will assist the M2 widening project as well as minimising disruption for local residents and businesses.

Complexities of Property Management

One of the joys of property management is the variety! One of the shops we manage lost power, and to fix it we needed to take power off the shop next door, a beauty shop. I went in to negotiate with them, and was given a gap in their schedule late that afternoon, but meanwhile my shop would be without air conditioning. A bit of negotiation and a box of luxury candles allowed the work to start immediately, with the beauty shop clients enjoying wax facials by scented candle-light. A few minutes later air conditioning was restored to our shop and everyone was happy. Including the owner who didn't have to pay for a second visit by the electrician.

Trends Showing Improved Buyer Interest

I have posted before about the fall in buyer interest following the bad publicity about interest rates after the RBA's November 2010 rate rise. Over the Christmas period, the total number of property sales in our area crashed to the lowest since we started operating in Beecroft. Attendances at house opens were low, and market sentiment was decidedly suppressed.

But things seem to have changed dramatically in the last few weeks. Ray White Beecroft sold two houses over last weekend, and had near record attendances at some of our opens. The web site, raywhitebeecroft.com.au, had the most total visits since September last year, and the number of Unique New Visitors was the highest since we started the web site back in 2009.

Of the visitors, there were the usual "flybyes" who left within 10 seconds, but of the rest more than half stayed for between one and ten minutes, indicating more than cursory interest.

So let's look forward to a thriving property market in 2011.

Knowing your Market

Ray White Beecroft has by far the largest rent roll in the Beecroft and Cheltenham areas. As such we know fairly accurately what rent a property can fetch. Our responsibility is to the owner, and we work hard to find good tenants willing to pay the market rent.

We were surprised when another (out of area) agency listed a very expensive property in a prime location in our patch, at a rent 20% below what we believe the property should rent for. Our opinion was confirmed by the agency sending us tenant application forms, asking us for rental references, from three of our tenants!

Yes, we admit, this rental listing is a bargain, and can't blame our people for trying to grab it.

I just feel sorry for the owners who are missing out on such a large slice of the income they are entitled to!

M2 Kirkham Bridge Project Intentions

All sorts of people are asking for information about the M2 Project's intentions for the road bridge over the M2 between Murray Farm Road and Kirkham St. I have today had a reply from the project, presumably giving the latest known intentions, and it states "The traffic management arrangements for the bridge works are still being finalised. These arrangements will (be) approved by the Roads and Traffic Authority in consultation with Hornsby Shire Council".

One hopes that the RTA is examining in detail why it will take 22 months to alter the spans of the bridge, exactly as long as it will take to widen the whole 21 km section of the motorway. This sounds an implausible coincidence to me.

Good project management would put priority onto widening the spans early, to give more clearance for the widening and other work taking place below, and also incidentally to restore full use of the bridge to the local residents.

If the project insists that early completion, and hence full opening of the bridge, is not possible, then one has to conclude there are other reasons for closing one lane of the road for the duration of the project, such as a desire to use the closed lane of the bridge for purposes not currently announced or approved. No such other reasons have yet been published. In the interests of their ratepayers, Hornsy Shire Council needs to examine this issue urgently.

BCCT M2 Bridge Survey - Last Chance

The BCCT survey of resident wishes regarding the Murray Farm Road bridge over the M2 will close 31 January. At present responses overwhelmingly favour traffic light control with alternate traffic directions. The more numbers the BCCT can quote, the more influence their views have. Please, have your say, by clicking the link on the BCCT website 2119.org.au, and also join the BCCT so their representatives have more clout with the various politicians and authorities.

House Purchase Opportunities

An article in the Sun Herald on Sunday by Andrew Wilson says that in Sydney over the last quarter of 2010 there were declining auction clearance rates, falling prices, and flat rental growth. Andrew attributes this largely to the spate of interest rises culminating in the November 2010 rise with all its unwanted publicity. He says that, despite the flat demand and downward pressure on prices, the fundamentals of the Sydney housing market remain rock solid. He believes the malaise is a "short term irrational dose of negative sentiment and a lack of confidence underscored by a herd mentality of buyer negativity."
However he says this mindset will be short-lived and the current period will later be seen to have been a great opportunity to snap up Sydney property before prices regain "their irresistible upward trajectory".
Certainly all of that fits in with the experiences of Ray White Beecroft. Immediately after the November rate rise buyer interest disolved, and the number of house sales in the Beecroft and Cheltenham area was an all time low. But at the same time a number of new listings appeared.
Last week our website, raywhitebeecroft.com, had more hits than at any time since the November rate rise. And this last weekend we had a bumper crop of prospective buyers going through opens at those new properties.

BCCT Survey on M2 Kirkham Road Bridge RESULTS

The results quoted below are copied straight off the BCCT blog (BCCT2119.blogspot.com).

"The survey being conducted by the Beecroft Cheltenham Civic Trust is still open for entries, but interim results are very clear.

96% AGAINST full closure of the bridge (92% "STRONGLY DISAGREED". Another 4% "DISAGREED")

85% AGAINST Tidal Flow (AM one way PM the other). (64% "STRONGLY DISAGREED". Another 21% "DISAGREED")

59% IN FAVOUR of traffic light control alternate directions. (41% "AGREED". Another 18% "STRONGLY AGREED") "

The survey included comments by contributors, and they make interesting reading. Regarding the "Traffic Light Control Alternate Directions, the overwhelming comment is "better than the alternatives."

A lot of the comments relate to the need for 22 months with one lane closed, if the reason for that closure is just to widen the spans. People are beginning to ask if this is a furphy, and are wondering whether the closure is being imposed on residents to suit the convenience of the Project!

M2 Project intentions for Kirkham Road Bridge

According to an article in this week's Northern District Times, Transurban has now given a full written commitment that the bridge would not be closed during the upgrade project.
The Beecroft Cheltenham Civic Trust website, 2119.org.au, now confirms that.
However what has not yet been revealed is, how the one-lane use will be controlled. By far the least disruptive option is to have traffic lights, allowing alternate traffic in both directions. However there has been a proposal to use "Tidal Flow", with access one way in the morning and the other way in the afternoon.
Of course this will be easier for the project, but hugely disruptive to the local residents.
The BCCT is conducting a survey of resident wishes, and this allows respondents to state preference. The results of that survey have not yet been released.

Chilworth Reserve and the M2 Widening Project

Further to my last post, I am now informed that Hornsby Council has received an email from the M2 Construction Group relating to the use of Allerton Road to access the construction camp, which states that they have 'conceded the formal access through the bushland in this location'. There is a suggestion the group may establish a small car park for executives at the end of Allerton Road, but there will only be foot access from there to the construction camp. Obviously this is good news for all the many lovers of the Chilworth Recreation Reserve. Of whom my dog Binzi is one!

Chilworth Reserve and the M2 Widening Project

The RTA and Transurban intend to build a construction camp under the M2 viaducts over Chilworth Recreation Reserve. They will use this while they fill in the gap between the two viaducts and extend the south viaduct out to convert the present M2 into one ten lane highway (one bus lane, three traffic lanes, and a bike lane, each way).
The M2 Upgrade Project has responded to queries about how construction traffic will get to this camp. The BCCT suggested they use the original 1990's construction path between the M2 and the golf course. The M2 Project responds that this "only allows access in - it does not allow access out of the compound area. The existing informal access off Orchard Road has a corridor of Blue Gums, and the potential impacts surrounding this area of vegetation is currently being considered."
An alternative exit path that was at one stage being proposed was to push a complete new road in off the end of Allerton Road, down through the lovely bush areas south of the motorway. It would seem that such an action would impose far more serious and permanent destruction of the park.
Survey and other project vehicles have over the last six months or so broadened that 'informal access' path from Orchard Road into a full width bush car track. Adapting it further to take construction traffic seems a small additional sacrifice compared to the devastation that would result from a complete new road driven in from the eastern end.

Kirkham Bridge Update - "not to be closed"

Greg Smith, State MP for Epping, advises that after significant pressure from the Beecroft and Cheltenham community, the RTA and Transurban have decided not to pursue the option of closing the bridge over the motorway between Murray Farm Road and Beecroft Road! As Greg says, "sanity has prevailed".
I like to think that the petition signed by so many of you helped in influencing this decision. I will retain all your emails in case we need to raise further issues with the project office. One such issue will of course be the Transurban plan for widening the bridge spans while the bridge remains open to traffic. Traffic lights seem the obvious solution, but the community will be pressing to minimise the duration of that obstruction.