Canberra real estate agent Cory McPherson has parted with something priceless to save the life of his co-worker Jenny McReynolds. The father-of-two donated a kidney to Mrs McReynolds who was suffering from polycystic kidney disease an inherited condition that can cause renal failure and death.
A mother-of-three, Mrs McReynolds, said "thank you" was thoroughly inadequate to express her gratitude. The real estate agents were professional competitors before they became colleagues at Richard Luton Properties.
Mr McPherson, 35, made the extraordinary offer to Mrs McReynolds at their work Christmas party in 2006. "Richard Luton made an announcement saying 'anyone who doesn't know, Jenny's very sick. "She's got kidney disease and if anyone's o-positive and has a kidney, please see Jenny'," Mr McPherson said.
"I went up to Jenny almost immediately and I said 'look you might not believe me now but I tell you I'm your man'." Mrs McReynolds, 44, was "floored".
"I couldn't believe it. What an amazing thing for him to do. What a gift. It's lifesaving for me," she said. She was diagnosed with polycystic kidney disease in her early 20s and her health had started to deteriorate in recent times. She was hooked up to a dialysis machine for four-hour stints, three times a week.
Mr McPherson had a battery of tests to ensure he was physically suitable and psychological fit to donate his kidney. The results revealed that the co-workers were "almost a perfect match", which was extremely rare when the donor and recipient were not blood relatives.
The transplant was successfully performed at RPA the Royal Prince Alfred Hospital in Sydney on December 4. Mrs McReynolds spent 712 hours in the operating theatre and seven days in hospital before she was sent home. It took 512 hours to remove the kidney from Mr McPherson who was discharged from hospital after four days.
Mrs McReynolds said people suffered immense hardships and pressures as they waited for a transplant. "A lot of people who do get sick lose their homes [and] they lose jobs," she said.
Mr McPherson said the organ donation rates "aren't impressive" in Australia."So many of us are busy in our own lives. We don't kind of look around much to see the people who are not doing so well and often there's things we can do to help," he said.
Australians who want to become organ donors should discuss their wishes with family and register by telephoning 1800777203 or visiting www.medicareaustralia.gov.au
Simon Turner simon@marquetteturner.com.au
Saturday, February 23, 2008
The (Lack of) Housing Affordability Conference
The federal opposition has called on federal and state governments to cut land tax and stamp duty to help boost rental stock. Thousands of people across the country are skipping meals to pay rising rents, a housing affordability conference in Sydney heard on Thursday. And housing experts warn the home affordability crisis threatens to destabilise the economy and drive the country into recession.
Opposition frontbencher Greg Hunt said on Friday this week's national housing conference was an ideal opportunity for federal Housing Minister Tanya Plibersek to address land tax and stamp duty, to lessen the burden and help increase the stock of homes available for rent.
"These are killers for people and what they do is decrease the rental stock," Mr Hunt, opposition spokesman for Climate Change, Environment and Urban Water, told the Seven Network.
"A lot of people have said we're not willing to pay the cost of holding a rental property if we're whacked with a huge land tax or we have to deal with stamp duty and today is the day, Tanya, stamp duty, land tax and more land releases - you have a great opportunity."
Ms Plibersek said a lot of people had taken money out of investment property and put it into superannuation when favourable tax treatment was introduced last year under the previous government.
She said the Rudd government had committed to introducing the first home saver account to help people into their first house. "We know that as a proportion of all home buyers, first home buyers have shrunk as a proportion, so we want to help them save through a superannuation-style savings account," Ms Plibersek stated. "We've also got a national rental affordability scheme, 50,000 new rental properties, because there is a terrible shortage all around the country."
Experts told the housing conference on Thursday that Australia faced great social unrest and human suffering as well as chronic labour shortages without affordable housing. Professor Rachel Gatt, an affordable housing policy expert from Tufts University, Massachusetts, said the housing affordability equation was brutally simple. "Either wages have to stay high enough so people can afford to buy housing on the private market or if the private market is not able to meet the housing challenge then you need to have government subsidies," she told reporters.
"If you don't have affordable housing, and if your wages don't keep pace with the cost of housing, you are going to find people doubling up with relatives, turning into homeless people and creating a great deal of social unrest and human suffering than what you have now."
Research presented at the conference show people are going without food as they struggle to pay their rent. Professor Terry Burke of the Australian Housing and Urban Research Unit presented the research, which showed 26 per cent of low-income renters sometimes go without food and 42 per cent of low-income renters cannot afford school excursions, Fairfax reported.
Labor says the Howard government failed to acknowledge the rental crisis, despite knowing more than two years ago that more than one third of renters were suffering from rental stress.
Australia's Property Scandal: Town Planner Seeking "Approvals"
A sex-and-property scandal involving a female city planner on a "mission for sex" in return for approvals of high-rise buildings is threatening to engulf the beluigered New South Wales State Government.
An undercover sting by anti-corruption investigators uncovered a web of affairs involving 32-year-old town planner Beth Morgan in the steel-and-surfing city of Wollongong, south of Sydney, with three prominent building developers. Morgan, said by one of the three men to be "on a mission for sex", gave approval for millions of dollars worth of unlawful city building developments in return for gifts and affairs, the powerful Independent Commission against Corruption(ICAC) heard.
Morgan gave testimony to the commission about the affairs, admitted to by two developers, while a third denied the pair actually had a sexual relationship. The scandal, however, also threatens several ministers in the state government.
Australians generally believe their country to be largely corruption free and we rank well on the international index prepared by Transparency International.
Amid the public ICAC hearings, state Premier Morris Iemma promised to sack a senior minister if he was found to have improperly given a job to a Wollongong city councillor linked to the scandal. Four other state ministers have also been indirectly linkedby the ICAC to central figures in the furore.
The ICAC hearings have been given front-page treatment,with corruption investigators documenting lurid details of emails and phone messages between Morgan and her alleged lovers, which in turn have run in newspapers nationally. Adding to public shock are photographs of the stylish Morgan and the men she pursued, receiving from them cameras, cash payments, a China holiday and designer handbags, the ICAC heard.
Simon Turner simon@marquetteturner.com.au
An undercover sting by anti-corruption investigators uncovered a web of affairs involving 32-year-old town planner Beth Morgan in the steel-and-surfing city of Wollongong, south of Sydney, with three prominent building developers. Morgan, said by one of the three men to be "on a mission for sex", gave approval for millions of dollars worth of unlawful city building developments in return for gifts and affairs, the powerful Independent Commission against Corruption(ICAC) heard.
Morgan gave testimony to the commission about the affairs, admitted to by two developers, while a third denied the pair actually had a sexual relationship. The scandal, however, also threatens several ministers in the state government.
Australians generally believe their country to be largely corruption free and we rank well on the international index prepared by Transparency International.
Amid the public ICAC hearings, state Premier Morris Iemma promised to sack a senior minister if he was found to have improperly given a job to a Wollongong city councillor linked to the scandal. Four other state ministers have also been indirectly linkedby the ICAC to central figures in the furore.
The ICAC hearings have been given front-page treatment,with corruption investigators documenting lurid details of emails and phone messages between Morgan and her alleged lovers, which in turn have run in newspapers nationally. Adding to public shock are photographs of the stylish Morgan and the men she pursued, receiving from them cameras, cash payments, a China holiday and designer handbags, the ICAC heard.
Simon Turner simon@marquetteturner.com.au
Friday, February 15, 2008
Agents Leading Their Clients "Down The Garden Path"
Thousands and thousands of dollars in so-called “marketing” is being ripped out of clients’ hands by real estate agents. Agents that claim they tailor every campaign to suit the needs of each property – as long as it involves thousands of dollars on newspaper ads!
There has been an enormous amount of research done by The National Association of Realtors on how buyers are finding their new home. The results are damning with less than 5% of buyers indicating they found their new home in a newspaper.
The so-called “expert” agents in Sydney are preaching how important it is to capture every possible buyer and therefore place numerous advertisements in several newspapers at the clients’ expense. It seems more than a little suspicious that the majority of the money in a marketing campaign is being spent on newspapers that evidence is suggesting fails more than 95% of the time. If we look at it another way it only succeeds less than 5% of the time – yet it costs a fortune.
So who is really benefiting from this? The answer of course is real estate agents. It is wonderful branding to have pages of property advertisements in the local paper. Those looking through perceive that these agents are successful and fall into the trap of calling them into sell their home and also spend thousands of unnecessary dollars promoting the agent – not their home.
The internet age is well and truly upon us. The National Association of Realtors suggest that more than 80% of buyers find properties on the internet, around 15% from signboards and less than 5% in newspapers. The real estate agent’s own magazine doesn’t get a mention and nor does the agency database. When you decide to sell your home do not fall into the trap of wasting thousands of your hard on dollars on promoting the agent and not your home. Food for thought?
Michael Marquette michael@marquetteturner.com.au
There has been an enormous amount of research done by The National Association of Realtors on how buyers are finding their new home. The results are damning with less than 5% of buyers indicating they found their new home in a newspaper.
The so-called “expert” agents in Sydney are preaching how important it is to capture every possible buyer and therefore place numerous advertisements in several newspapers at the clients’ expense. It seems more than a little suspicious that the majority of the money in a marketing campaign is being spent on newspapers that evidence is suggesting fails more than 95% of the time. If we look at it another way it only succeeds less than 5% of the time – yet it costs a fortune.
So who is really benefiting from this? The answer of course is real estate agents. It is wonderful branding to have pages of property advertisements in the local paper. Those looking through perceive that these agents are successful and fall into the trap of calling them into sell their home and also spend thousands of unnecessary dollars promoting the agent – not their home.
The internet age is well and truly upon us. The National Association of Realtors suggest that more than 80% of buyers find properties on the internet, around 15% from signboards and less than 5% in newspapers. The real estate agent’s own magazine doesn’t get a mention and nor does the agency database. When you decide to sell your home do not fall into the trap of wasting thousands of your hard on dollars on promoting the agent and not your home. Food for thought?
Michael Marquette michael@marquetteturner.com.au
Shopping List: Bread, Milk and a New Home!?
Tesco has set the cat amongst the pigeons of UK estate agencies and property portals by announcing that it intends to launch an online estate agency service. The financial strength behind Tesco could see undercutting the traditional estate agencies. The move is response to the difficulty it experienced with it private sellers website services. Rightmove and Primelocation could also be forced, under competition rules, to list Tesco's properties if it becomes a fully fledged agent.
Tesco now operating in various countries of Europe and Asia are the biggest chain in England, Scotland a Wales with a turnover of over 15 million pounds. It has ventured into various sectors of the market including clothing, electrical goods, and insurance services. Its attempt to enter into the online private sellers market was met by closed doors from competitors who refused Tesco property listings on their websites.
The world's third largest supermarket chain, Tesco's of Britain, has issued a written statement "While being an online estate agent was never our immediate intention, we are so encouraged by the positive reaction from customers to Tesco's entry into this market that we are now reviewing our business with a view to launching a new and exciting online estate-agency service.
Ian Springett, the chief executive of Primelocation.com (the main internet portal that the British use in searching for real estate), said: "We are not surprised to hear that Tesco is planning to launch as an estate agent. Clearly it is an extremely powerful brand and already offers a number of services related to home moving. But it will be entering an already very competitive market and may find it difficult to gain a foothold.
Fronted by TV property expert Louisa Fletcher, www.Tescopropertymarket.com
will begin displaying homes for sale both in Britain and abroad from March – traditionally the busiest period of the year for house hunters.
Simon Turner simon@marquetteturner.com.au
Tesco now operating in various countries of Europe and Asia are the biggest chain in England, Scotland a Wales with a turnover of over 15 million pounds. It has ventured into various sectors of the market including clothing, electrical goods, and insurance services. Its attempt to enter into the online private sellers market was met by closed doors from competitors who refused Tesco property listings on their websites.
The world's third largest supermarket chain, Tesco's of Britain, has issued a written statement "While being an online estate agent was never our immediate intention, we are so encouraged by the positive reaction from customers to Tesco's entry into this market that we are now reviewing our business with a view to launching a new and exciting online estate-agency service.
Ian Springett, the chief executive of Primelocation.com (the main internet portal that the British use in searching for real estate), said: "We are not surprised to hear that Tesco is planning to launch as an estate agent. Clearly it is an extremely powerful brand and already offers a number of services related to home moving. But it will be entering an already very competitive market and may find it difficult to gain a foothold.
Fronted by TV property expert Louisa Fletcher, www.Tescopropertymarket.com
will begin displaying homes for sale both in Britain and abroad from March – traditionally the busiest period of the year for house hunters.
Simon Turner simon@marquetteturner.com.au
Thursday, February 14, 2008
NSW Development Crisis
A property developers' lobby group says "radical" changes to the state's planning laws are needed to save New South Wales from a social and economic crisis.
In a submission to the State Government's planning review, the Urban Task Force says the system needs to better integrate the development of housing, workplaces, shopping and recreation areas. It says Sydney's population is expected to grow by more than 1 million people by 2031, meaning more homes, industrial land, and commercial and retail space will be needed.
The task force's chief executive, Aaron Gadiel, says these demands cannot be met under the existing planning laws.
Mr Gadiel says NSW will fall further behind other states without "far-reaching reform" to streamline the process.
"The Urban Task Force would like to see quicker planning approvals," he said. "If the government agency doesn't deal with them or doesn't respond in 90 days, they should be deemed approved.
"We want State Government agencies coming back to councils quicker with their concurrences or approvals, or if they've got a problem, they need to say what those problems are so developers can address them. New developments can take easily 12 to 14 months to be approved or even longer," he said.
"Frankly, the development industry has been voting with its feet. It's been developing in Queensland and Victoria instead of NSW because it's just not profitable to do so here."
In a submission to the State Government's planning review, the Urban Task Force says the system needs to better integrate the development of housing, workplaces, shopping and recreation areas. It says Sydney's population is expected to grow by more than 1 million people by 2031, meaning more homes, industrial land, and commercial and retail space will be needed.
The task force's chief executive, Aaron Gadiel, says these demands cannot be met under the existing planning laws.
Mr Gadiel says NSW will fall further behind other states without "far-reaching reform" to streamline the process.
"The Urban Task Force would like to see quicker planning approvals," he said. "If the government agency doesn't deal with them or doesn't respond in 90 days, they should be deemed approved.
"We want State Government agencies coming back to councils quicker with their concurrences or approvals, or if they've got a problem, they need to say what those problems are so developers can address them. New developments can take easily 12 to 14 months to be approved or even longer," he said.
"Frankly, the development industry has been voting with its feet. It's been developing in Queensland and Victoria instead of NSW because it's just not profitable to do so here."
Straight Talk: Economic Round-Up Blow By Blow
The Reserve Bank says inflation will be worse than almost everyone expected.
Equity prices plummet. The Aussie dollar rises. Respected economists run round like headless chooks squawking "more rate hikes to come!"
Financial markets dramatically mark up the chances that the next rate hike will be in March. Businesses plan their price hikes. Unions think harder about how to protect the bruvvers and sisters.
Ordinary people - whose inflation expectations were already elevated - grimly recalibrate their household budgets.
The government says all this was the Liberal Party's fault. John Howard hits the international speaking circuit. Peter Costello leaves for a supposedly lucrative overseas job. Malcolm Turnbull flips between saying "look what Labor has already delivered" and "there is no problem, inflation is still in the target band".
What about the blame that should be sheeted home to the Reserve itself? It is the agency with formal responsibility for controlling inflation, a responsibility that, after initial scepticism by its then leader, it embraced warmly.It is the organisation that after a long intellectual struggle was given by financial deregulation, including the flexible exchange rate, the technical ability to control inflation. It is the mob that was given salaries sufficient to attract and retain what it saw as the "best and brightest" of Australia's economists.
To read more from Henry Thornton, simply click on the link.
Equity prices plummet. The Aussie dollar rises. Respected economists run round like headless chooks squawking "more rate hikes to come!"
Financial markets dramatically mark up the chances that the next rate hike will be in March. Businesses plan their price hikes. Unions think harder about how to protect the bruvvers and sisters.
Ordinary people - whose inflation expectations were already elevated - grimly recalibrate their household budgets.
The government says all this was the Liberal Party's fault. John Howard hits the international speaking circuit. Peter Costello leaves for a supposedly lucrative overseas job. Malcolm Turnbull flips between saying "look what Labor has already delivered" and "there is no problem, inflation is still in the target band".
What about the blame that should be sheeted home to the Reserve itself? It is the agency with formal responsibility for controlling inflation, a responsibility that, after initial scepticism by its then leader, it embraced warmly.It is the organisation that after a long intellectual struggle was given by financial deregulation, including the flexible exchange rate, the technical ability to control inflation. It is the mob that was given salaries sufficient to attract and retain what it saw as the "best and brightest" of Australia's economists.
To read more from Henry Thornton, simply click on the link.
Buy One House, Give One Free!
Donating money to charitable causes is all very well and good, but there's usually an abstractness about it that makes one wonder if the funds are really helping those who need it. A new project by California eco-urban design firm LJ Urban aims to make giving more concrete—quite literally—by matching its sales of homes domestically with funds to build homes in the impoverished African nation of Burkina Faso.
LJ Urban has designed a new eco-urban community of 35 LEED ND Certified homes in the urban core of Sacramento, its home town. The community is suggestively named Good, and for each home within it that gets sold, LJ Urban has committed to funding the complete training of a West African mason to build sustainable homes for families in Burkina Faso.
By partnering with the Association La Voûte Nubienne (AVN), which has already trained about 60 local masons to build durable homes out of earth bricks and mortar, LJ Urban aims to go beyond just providing homes to impart enduring skills and jobs to the local community. Taking the notion a step further, LJ Urban has also opted to skip the expensive marketing campaign to promote its Good community, and to use that money to train more African masons instead.
So, for every 100,000 people who visit LJ Urban's new, dedicated website by July 1st, the company will fund the complete training of another local Burkina Faso mason—up to 20 in all through this viral approach.
The Good project was inspired by Toms Shoes, a project that donates a pair of shoes for every one it sells. "[That] approach captivated us because it broke through the 'charity fatigue' all of us have felt at one time or another," LJ Urban's team explains. "The question then became: 'What if we could do something like that with our houses?'…" The project is also reminiscent of One Laptop Per Child's (OLPC's) "Give One Get One" campaign last year through which consumers could donate a laptop and get one for their own use at the same time. A model of giving to bring to your neck of the woods...?
Website: http://www.dosomegoodnow.com/
Simon Turner simon@marquetteturner.com.au
LJ Urban has designed a new eco-urban community of 35 LEED ND Certified homes in the urban core of Sacramento, its home town. The community is suggestively named Good, and for each home within it that gets sold, LJ Urban has committed to funding the complete training of a West African mason to build sustainable homes for families in Burkina Faso.
By partnering with the Association La Voûte Nubienne (AVN), which has already trained about 60 local masons to build durable homes out of earth bricks and mortar, LJ Urban aims to go beyond just providing homes to impart enduring skills and jobs to the local community. Taking the notion a step further, LJ Urban has also opted to skip the expensive marketing campaign to promote its Good community, and to use that money to train more African masons instead.
So, for every 100,000 people who visit LJ Urban's new, dedicated website by July 1st, the company will fund the complete training of another local Burkina Faso mason—up to 20 in all through this viral approach.
The Good project was inspired by Toms Shoes, a project that donates a pair of shoes for every one it sells. "[That] approach captivated us because it broke through the 'charity fatigue' all of us have felt at one time or another," LJ Urban's team explains. "The question then became: 'What if we could do something like that with our houses?'…" The project is also reminiscent of One Laptop Per Child's (OLPC's) "Give One Get One" campaign last year through which consumers could donate a laptop and get one for their own use at the same time. A model of giving to bring to your neck of the woods...?
Website: http://www.dosomegoodnow.com/
Simon Turner simon@marquetteturner.com.au
Thursday, February 7, 2008
Auction Clearances Better Than Last Year
The first auctions of the year last weekend showed an improvement compared with this time last year.The clearance rate for properties rose by almost 10 per cent in Sydney to 56 per cent while the number of houses listed also increased by 10 per cent compared with this time last year.
Of the 77 properties listed in Sydney, 59 were auctioned, with 36 sold, seven more than at the same time in 2007.
Melbourne had a slower start with only 29 properties listed for auction compared with 55 at this time last year. The clearance rate rose by 1 per cent to 50 per cent and out of 27 properties reported as auctioned, 14 were sold compared with 24 out of 49 properties reported as auctioned this time last year.
Whilst it is early days yet, the 2008 story will indeed be an interesting one to follow. Marquette Turner will of course keep you on track.
"Going, going, gone!" - Where Do Auction Hammer & Gavel's Originate?
The cult of Thor had gained in popularity through the Viking Age, so that by the tenth century, he was venerated above all other gods in most parts of Scandinavia. Unlike the grim and aristocratic Odinn, Thor was a god of the people, and a friend of landowner and peasant alike.Thor was patron of justice, his oath-ring could seal any contract, the Althing assembly of Iceland was opened on Thor's day (Thursday). Thor was seen as a protector, defending the old order of the heathen landowners and petty nobles from the predations of the land-grabbing, power-hungry and zealously Christian Kings of Norway.
Wearing the sign of the hammer, then, was not just a symbol of one's trust in Thor, it was also an instrument of his protection.
For more information, see "Hammer in the North: Mjollnir in Medieval Scandinavia", by Daniel Bray.
Apartments Beat Houses in 2007
Apartments were a better investment than houses in 2007, according to data compiled by property researcher RP Data-Rismark.Across all capital cities, unit values increased by 16.9%, compared to 11.9% for houses. And units still produced a better yield for investors of 4.8%, compared to just under 4% for houses.
The best performing market in 2007 was Adelaide with a 27.3% increase in dwelling value to a median of $375,685. Brisbane, with 22.8% capital growth, and Melbourne, with 19.6% capital growth, were next best.
Sydney was more moderate, with 5.9% increase in the value of houses and 10.7% for units. Perth went backwards thanks to affordability constraints; the median house price fell 1.2% to $506,179.
Looking ahead, Marquette Turner believes that 2008 will be a strong year of growth for residential property.
The Property Cycle: What's Happening This Time
In 2000 the NASDAQ stock market collapse in the United States gave rise to Sydney's biggest and most widespread property boom.This time it will be different. The cheaper end of the property market simply will not be invited to the party.
A tanking share market is going to have divergent effects in Sydney. On one hand, in our eastern suburbs and the North Shore there is an army of baby boomers and wealthy business owners with high discretionary income and asset wealth. Property will continue to look good in leafy suburbs.
In this demographic, many nervous “mum and dad” shareholders will retreat from the volatile, and less the welcoming share market and head for the safety of property. For some, the tax-free haven of a more expensive family home is a compelling place to park cash. For others, rising rental returns will provide the reason to transfer equity from shares to property.
Fuelling this trend, apartment prices in inner-urban Sydney markets are starting to look cheap compared with other capitals. Typical prices in the top five national apartment markets are within 16 per cent of each other. Undervalued Sydney apartments will be on the shopping list of many investors and capital growth over the calendar year should exceed 5 per cent. House values are also forecast to grow by 5 per cent, propped up by the top end.
While Sydney's enduring obsession with beach and harbour will ensure the top end of the market continues to record ridiculous prices, there is strong evidence that this year lower- to middle-income mortgage holders and first-home buyers will be further squeezed out of well-located property markets. House values grew by 10 per cent last year in lower North Shore suburbs but Sydney's south-west had a 2 per cent drop in house values over 2007.
Those pinning hopes of a recovery in outer suburban property markets off the back of a faltering share market will be sorely disappointed. In mortgage land, few will be influenced by the fortunes of shares when they do not even hold any. Rising interest rates and record petrol prices do not leave room for such luxuries.
In 2000 a softening share market, buoyed by cheap interest rates and easy credit, was perceived by some to have triggered the frenzied property market that followed. Meanwhile, aggressive mortgage market competition helped baby boomer mums and dads to become landlords. Low interest rates helped. They competed with droves of first-home buyers, and brokers fell over themselves to lend money.
In 2007 the correlation between inner vs. outer suburbs and wealthy vs. poor strengthened, with stark contrasts between the thriving inner cities and the struggling outer ‘mortgage belts’. Overall, however, the national property market has performed extremely well, and this general trend has begun to flow over to major regional centres.
The biggest factor in rising prices is demand: we are simply not building enough quality detached owner-occupied housing.
The underlying demand in Australia is approximately 170,000 new starts per annum – this equates to 450 new dwellings per day. According to BIS Schrapnel there will be a deficiency of approximately 100,000 dwellings by June 2008, which equates to eight months of construction. This undersupply is causing a surge in rentals and land prices. With current vacancy rates hovering around the 1% mark (a balanced market is 3%) I cannot foresee prices falling in the short term. Our national population continues to grow in record numbers at 1.5% annually, with our population now estimated at 21 million.
Derailers are rising interest rates, rising oil prices and a looming credit squeeze. However, unlike the last property correction, this time we have high employment levels and a strong stock market. The rich appear to be getting richer and have greater propensity to manage any changes in their financial circumstances. Last time it was corporate debt, this time it will be consumer debt, and it will be the many on the bread line in the mortgage stress suburbs who will suffer the most and be least able to cope with even small changes to their financial circumstances.
Simon Turner simon@marquetteturner.com.auHoweowners Becoming Prey For Some Real Estate Agents
There are concerns that some unscrupulous agents are cashing in as homeowners sell up for less than market value.Federal and New South Wales politicians are calling for an inquiry into online real estate agents who offer quick house sales to people who can no longer pay their mortgages. It is feared the agents are exploiting people who are under pressure to sell their houses below market value due to falling prices and high interest rates.
Some agents have promised to sell houses in just days without the usual fees. One organisation advertises for houses where owners are behind in repayments and face repossession.
Marquette Turner advises that homeowners should avoid dealing with such companies because they are not licensed agents, and despite the code of ethics that we are bound by, unfortunately, our society always has its share of bottom feeders who try to take unfair advantage of people who are in difficulty.
If you are experiencing mortgage stress, make sure that if you're going to sell your home, however you're going to sell it, you get a licensed agent to do so. And, make sure that you go to your lender and let them know the sort of trouble that you're in and get some financial counselling advice.
MONOPOLY: Australia Vs the World
Vote your favourite town onto the first ever global MONOPOLY board! The world’s most popular board game is about to go global – with a world wide vote to decide which of the world’s 22 greatest cities will take pride of place on the first ever international MONOPOLY board – MONOPOLY Here & Now: The World Edition!The new World Edition follows on from the hugely successful election campaign for the all new Australian Here & Now MONOPOLY in 2007, which attracted in excess of 17 million votes from MONOPOLY enthusiasts around the country. Australians are now being asked get on line and get voting again, to ensure Australia is well represented on the first ever global edition of MONOPOLY.
While Sydney and Melbourne are on the voting card together with 66 of the world’s best known cities, any other towns or cities, big or small can also vie for one of two wild card spots on the board to be nominated and determined by public vote. Hasbro are hopeful of not only getting both cities on the board, but even possibly securing the coveted blue position and becoming the new “Mayfair” and “Park Lane”. The most prestigious positions will be assigned to the cities that receive the most votes.
Size does not matter when it comes to winning a spot on the board, for example last year it was the Barossa Valley that secured the most votes in the Australian MONOPOLY elections. With other small towns like Kalgoorlie and Sovereign Hill attracting many more votes than the big cities, proving that community spirit and enthusiasm is the key to securing a spot on the MONOPOLY board.
Australia has already proven we’ve got what it takes when it comes to voting, clocking up more votes in the Australian national elections than either the USA, United Kingdom or Germany did for theirs.
Voting is easy and accessible to everyone from 23rd January 2008 – 28th February 2008 at http://www.monopoly.com/, where you can cast votes for up to 10 nominated cities daily, and nominate 1 wild card city each day. Voting for the top 20 wild card nominations will begin on 29th February and will close on the 9th March 2008.
The twenty cities that receive the most votes will be part of MONOPOLY history as the first cities selected to be on the World edition game board. However, two spaces on the board will be reserved for cities that are nominated through the wild card vote. Any city from any country in the world can be nominated for these property spaces, which means that anywhere from Condobolin to the “Back O’ Bourke” could make it on the board!
Simon Turner simon@marquetteturner.com.au
Thursday, January 31, 2008
How Much Money Do Real Estate Agents Really Earn?
We have all seen real estate agents driving luxury cars of all types. Some agency car parks are like the “magic mile” of German sports cars so the question is how much do agents really earn? Is real estate the easy way to earn your first million dollars?People generally don’t come straight out and ask what I earn, however there are always comments like “You must be doing well for yourself”. The instant perception is that a tailored suit, polished shoes and a BMW equal success. This is probably the conclusion I would draw if I were to see a person randomly in the street and this has definitely been the conclusion drawn by the public when it comes to real estate agents.
The reality is that around 80% of first year real estate agents fail. That means that around 4 out of every 5 new agents drop out of the industry in their first 12 months on the job. An entry level sales agent can expect to earn less than $40,000 in their first year and it is this constant financial battle which proves catastrophic to most people. The average salary in NSW for a residential sales agent is $63,133, with commercial sales agents averaging $96,782. Of course some agents earn well in excess of $1 million dollars but they are a very rare find. Enormous amounts of hard work, dedication and perseverance are needed to perform at the very top level.
Most real estate agents earn between 30-60% commission depending on their sales volume, so when you see agents driving luxury cars ask yourself how much work is required to really make it to the top and stay there? If you believe you can or if you believe you can’t then you are right!
Michael Marquette michael@marquetteturner.com.au
Best Countries To Retire To
Recent research compared the top ten locations for pensioners to retire abroad. The results saw Cyprus and Panama coming tops based on tax, ease of residency, healthcare and average property costs.It is fact that Australia is seeing large numbers of it's people leaving the country to live overseas. Years of being in the Australian housing market has left many retirees with large amounts of equity in their homes and a desire for better things.
The report shows the vast differences in taxation, inheritance laws and the availability of healthcare. How many of us know that France for example has income tax rate of up to 40% plus.
Cyprus tops the list of destinations because it has an income-tax rate of just 5% on pensions for retired residents, as well as low property prices and no inheritance tax. It also scores highly on related issues such as ease of gaining residency, low property buying and selling costs and benefits for pensioners. Not only does Cyprus offer a warm, sunny climate, it also benefits from favourable taxation and healthcare policies.
Panama, now infamously the chosen destination of “back from the dead” British canoeist John Darwin and his wife Anne, comes a close second. This is largely thanks to its pensionado scheme, which offers attractive discounts for pensioners.
Simon Turner simon@marquetteturner.com.au
World's Top 3 Most Expensive Cities for Real Estate
London, New York and Moscow are now the world’s most expensive cities for residential apartment buyers, according a survey by the Global Property Guide (http://www.globalpropertyguide.com/), an international property research firm.Residential apartments in Prime Central London are among the priciest in the world, at US$21,800 to US$36,200 (£10,960 - £18,214 or €16,305 - €27,095) per square metre (sq. m.). Prime Central London includes Belgravia, Chelsea, Mayfair, Notting Hill, Knightsbridge, Regent's Park, South Kensington, St. John's Wood, and St. James.
Prices in other luxurious areas in London such as Wimbledon, Hampstead, Richmond, and Wandsworth range from US$14,142 to US$19,361 (£8,675 - £9,719 or €10,560 - €14,458) per sq. m., also among the highest in the world.
New York comes in second place with property prices in Upper Manhattan ranging between US$13,270 and US$22,923 per sq. m. Apartment prices in Lower Manhattan are around US$12,510 – US$20,456 per sq. m
Moscow comes in third place with central Moscow apartment prices ranging from US$10,764 to US$20,506 per sq. m
Other cities in Europe that are among the top ten most expensive cities for apartment buyers are Paris, Barcelona, and Geneva. Condominium prices in Paris are around US$12,930 to US$18,070 per sq. m.
In Spain, prices of flats in Barcelona are between US$9,160 and US$9,870 per sq. m. Prices of apartments in Madrid are lower than Barcelona, at US$6,535 – US$ 8,000 per sq. m
In Switzerland, prices of flats in Geneva are around US$6,870 - US$10,400 per sq. m. Prices in Geneva are higher compared to Zurich, US$5,900 – US$9,830 per sq. m
Of the three German cities included in the study, Munich is the most expensive with prices of flats at US$3,485 – US$3,700 per sq. m.; followed by Frankfurt at US$2,360 – US$3,300 per sq. m. Property prices in Berlin are still relatively subdued at US$1,840 – US$2,600 per sq. m.
Residential apartments in Istanbul, Turkey are among the cheapest in Europe, at around US$1,850 to US$2,500 per sq. m.
Most Expensive Asia-Pacific Cities
Among the top ten most expensive cities, four are in Asia: Hong Kong, Tokyo, Singapore, and Mumbai.
Residential apartment prices in Hong Kong range from US$10,490 to 14,780 per sq. m., in Tokyo from US$7,600 to US$11,870 per sq. m., and in Singapore from US$11,500 to US$13,340 per sq. m.
Mumbai is a notable exception among the ten most expensive cities; it is located in a poor country, albeit rapidly growing. A mix of high population density, archaic land laws, rapid urbanization and strong economic growth contributes to the surprisingly expensive property prices in Mumbai.
Property prices in Mumbai are around US$8,600 to US$10,300 per sq. m. This is significantly higher than New Delhi (prices at US$1,970 – US$3,260 per sq. m.) or Bangalore. Despite equally rapid economic expansion, property prices in Bangalore are still among the cheapest in the world at US$950 – US$1,900 per sq. m..
Compared to Mumbai, Chinese cities are significantly cheaper. Prices of flats in Shanghai are around US$2,870 to US$3,540 per sq. m. while those in Beijing are priced at US$2,100 to US$2,330 per sq. m.
Properties in Australia are near the top of the scale, with apartment prices in Sydney at around US$6,290 to US$9,690 per sq. m. New Zealand is significantly cheaper than Australia, with apartment prices in Wellington at only US$4,360 – US$4,500 per sq. m.
Do you feel better for now knowing what an expensive city Sydney is!
Simon Turner simon@marquetteturner.com.au
Thursday, January 24, 2008
Is Property A Safe Haven Whilst The Stock Market Is Stormy?
As the stock market slumps into what is now technically a bear market, investor attention turns towards safe havens, particularly Australian residential property.
Historically, as sharemarkets fall, investors head towards bricks and mortar. This time around though, as stocks are falling, the latest property data indicates a further tightening of already chronically low rental stocks with the prospect of increases of between $50 and $100 a week in rents. If the projections are accurate, rental yields will continue to rise, particularly in outer suburbs.
Before you rush for the real estate sales guides, take a steady, deep breath and read on.
Monique Wakelin writes in the Eureka Report that the cardinal sin is to assume that all property is going to provide a short-term, safe haven of income and growth, and to buy quickly and indiscriminately!
The good news for investors is that record low rental vacancy rates and a growing housing shortage have pushed median rents up consistently throughout 2007 with the promise of more to come this year. Australian Bureau of Statistics figures show that in the year to September 2007, average dwelling rents showed their highest growth rate in 17 years. Separately, property group Residex’s measure of the growth in advertised annual rents shows a jump of 18% to 35%, depending on location, over the past 12 months.
Average weekly rent rose by $35, and Residex claims we could see increases of up to $100 a week this year. Further, ANZ's annual property outlook indicates that the long lead times on lease renewals (which prevent investors from raising rents) mean we won’t see true market values emerging until later this year, but we can expect upward movements when lease renewals start to bring the rental increases into the data stream.
Moreover, the latest report from property research agency RP Data says that rents in the outer suburbs have surged ahead of increases in capital values, whereas the opposite is the case for inner urban and coastal locations.
It is true that accurate market rates of rent require relatively long lead times to emerge. Investors can’t raise rents on existing tenancies until leases expire. What's more, there’s nothing uniform about when that occurs. Put simply, no two properties are ever created equal and rental properties are no different.
The tenant market, like the home buyer market, has only so much capacity to pay. Like the general housing market the tenant market has become multi-layered and multi-faceted and is being driven primarily by affordability issues. For instance, rent movements in the most sought-after inner-urban end of the rental market are less volatile because of perpetual demand. Already relatively high rents for the most sought-after properties tend to rise – over the longer term – in a slow and steady fashion, underpinned by higher demand for locations offering a particular lifestyle.
Even though it is owner-occupiers that drive price growth, the additional demand from tenants helps maintain values. Investors in these prime zones are focused (as they should be) on capital growth first and foremost and rental yields second.
Property investors need to understand where their “consumers” (tenants) come from. About 30% of the Australian population rents, both out of economic necessity and choice, in the short-to-medium term and most do not expect luxurious accommodation. Break this down and we find that outside of the largely lifestyle-driven inner urban areas, the rental “consumer” is in pursuit of comfortable, affordable accommodation. This core pool of renters includes first-home buyers excluded from the market for longer in the face of low housing affordability.
In the real world, irrespective of the data, to suggest that an average rental property that currently returns $320 a week is going to remain in hot demand if it is bumped up to closer to $370 or $420 a week in six months is to misunderstand the realities of market capacity.
The informed investor must instead strike a sensible balance between arriving at a reasonable and sustainable income level that will bridge the gap with loan repayments for an asset and avoid raising rents to a level that would effectively price them out of the market. Investors must look beyond the hype and the generalised data and assess their own assets very specifically.
When a lease is up for review, ask the managing agent what that particular property, in that specific location, with that tenant pool would realistically rent for if it was vacant and being offered to the market for the first time. It is critically important to weigh up the advantages of reliable, steady income from good tenants and moderate rental reviews against dramatic rent increases that lead to high tenant turnover, greatly increased wear and tear and potentially long and costly vacancy periods.
And, let’s not forget the bigger picture; greedy investors who adopt the “let’s raise the rent as far as we can, as quickly as we can” will add further to upward inflationary pressures. That can only bite them where it hurts the most – by way of increased interest rates.
Historically, as sharemarkets fall, investors head towards bricks and mortar. This time around though, as stocks are falling, the latest property data indicates a further tightening of already chronically low rental stocks with the prospect of increases of between $50 and $100 a week in rents. If the projections are accurate, rental yields will continue to rise, particularly in outer suburbs.
Before you rush for the real estate sales guides, take a steady, deep breath and read on.
Monique Wakelin writes in the Eureka Report that the cardinal sin is to assume that all property is going to provide a short-term, safe haven of income and growth, and to buy quickly and indiscriminately!
The good news for investors is that record low rental vacancy rates and a growing housing shortage have pushed median rents up consistently throughout 2007 with the promise of more to come this year. Australian Bureau of Statistics figures show that in the year to September 2007, average dwelling rents showed their highest growth rate in 17 years. Separately, property group Residex’s measure of the growth in advertised annual rents shows a jump of 18% to 35%, depending on location, over the past 12 months.
Average weekly rent rose by $35, and Residex claims we could see increases of up to $100 a week this year. Further, ANZ's annual property outlook indicates that the long lead times on lease renewals (which prevent investors from raising rents) mean we won’t see true market values emerging until later this year, but we can expect upward movements when lease renewals start to bring the rental increases into the data stream.
Moreover, the latest report from property research agency RP Data says that rents in the outer suburbs have surged ahead of increases in capital values, whereas the opposite is the case for inner urban and coastal locations.
It is true that accurate market rates of rent require relatively long lead times to emerge. Investors can’t raise rents on existing tenancies until leases expire. What's more, there’s nothing uniform about when that occurs. Put simply, no two properties are ever created equal and rental properties are no different.
The tenant market, like the home buyer market, has only so much capacity to pay. Like the general housing market the tenant market has become multi-layered and multi-faceted and is being driven primarily by affordability issues. For instance, rent movements in the most sought-after inner-urban end of the rental market are less volatile because of perpetual demand. Already relatively high rents for the most sought-after properties tend to rise – over the longer term – in a slow and steady fashion, underpinned by higher demand for locations offering a particular lifestyle.
Even though it is owner-occupiers that drive price growth, the additional demand from tenants helps maintain values. Investors in these prime zones are focused (as they should be) on capital growth first and foremost and rental yields second.
Property investors need to understand where their “consumers” (tenants) come from. About 30% of the Australian population rents, both out of economic necessity and choice, in the short-to-medium term and most do not expect luxurious accommodation. Break this down and we find that outside of the largely lifestyle-driven inner urban areas, the rental “consumer” is in pursuit of comfortable, affordable accommodation. This core pool of renters includes first-home buyers excluded from the market for longer in the face of low housing affordability.
In the real world, irrespective of the data, to suggest that an average rental property that currently returns $320 a week is going to remain in hot demand if it is bumped up to closer to $370 or $420 a week in six months is to misunderstand the realities of market capacity.
The informed investor must instead strike a sensible balance between arriving at a reasonable and sustainable income level that will bridge the gap with loan repayments for an asset and avoid raising rents to a level that would effectively price them out of the market. Investors must look beyond the hype and the generalised data and assess their own assets very specifically.
When a lease is up for review, ask the managing agent what that particular property, in that specific location, with that tenant pool would realistically rent for if it was vacant and being offered to the market for the first time. It is critically important to weigh up the advantages of reliable, steady income from good tenants and moderate rental reviews against dramatic rent increases that lead to high tenant turnover, greatly increased wear and tear and potentially long and costly vacancy periods.
And, let’s not forget the bigger picture; greedy investors who adopt the “let’s raise the rent as far as we can, as quickly as we can” will add further to upward inflationary pressures. That can only bite them where it hurts the most – by way of increased interest rates.
How Dumb Are Most Real Estate Agents?!
This question has been asked many times. Real estate constantly polls as one of the most untrustworthy professions in the country. Have you ever heard the phrase “trust me I’m a real estate agent?” While this all sounds a little cliché the reality is that the general public has very little trust for real estate agents.They tend to drive flashy cars, wear suits (some cheap, some not) and are always just a little bit late for every appointment to the frustration of buyers, tenants, vendors and landlords. So does this perception that real estate agents are untrustworthy, incompetent and overpaid really have merit?
The last comprehensive survey of the public put Doctors, Solicitors, Dentists, Pharmacists, School Teachers and even Accountants all well ahead of Real Estate Agents – the big question is why is this consistently the case? I believe the answer lies in the entry requirements to the profession which only require a 3 day course to become a certified agent. Could you imagine a 3 day crass course in Medicine and you could then operate on unsuspecting patients?
There would be enormous public outrage and the course would be banned in a flash. So why has Real Estate been allowed to offer such crash courses to the profession which bring completely unsuitable people into the industry with absolutely no idea what they are doing? The answer lies with the pressure groups that our Government actually listen to like the Real Estate Institute – they make a small fortune from memberships and training. They have self interest at heart when directing policy and have been allowed to influence decisions for far too long.
There are no base requirements to be a real estate agent. Your English can be disgraceful, as can your people skills. You don’t need to have completed high school and there are no checks in place to see if you even attended school. At Marquette Turner we believe that there is only one way to change the perception of the industry and that is through formal education. My fellow Directors are all studying a Masters degree or a Doctorate and we believe that will change the real estate landscape over the next 20 years. So next time you are deciding which agent is best to sell your home it might be worth asking them what formal qualifications they have. Ask them what formal negotiation and marketing training they have completed – after all you are entrusting your greatest asset to them and you have a right to know that you have chosen the best person for the job.
We have posted two parts of the five part expose of the “Real Estate Cartel in Australia”. This is a must read and the third part will be published in next week’s E Mag. You can catch up on the previous exposes by clicking on the links below.
EXPOSED: The Real Estate Cartels, Part 1 & Part 2
Michael Marquette michael@marquetteturner.com.au
A Little Inflation Is Like Being a Little Bit Pregnant
HAVING a little bit of inflation is like being a little bit pregnant. Is that old adage worth bearing in mind as consumer prices across the globe accelerate? Marquette Turner takes a look at what's going on.According to an index produced by Goldman Sachs, global inflation was 4.8% in the year to November, two percentage points up from the previous year. Prices accelerated in 80% of the countries that Goldman tracks.
By historical standards, this is all small fry. An inflation rate of 5% hardly marks a return to the double-digit price increases that haunted rich countries in the 1970s and emerging economies for far longer. (For much of the 1990s, the average inflation rate in poor countries was 50%.)
Nonetheless, the upswing is broad enough to pose awkward questions. With ever more signals, from weak retail sales to rising joblessness, pointing to an American recession, is the world headed for a bout of stagflation-lite? And will stubborn price pressures constrain the marked easing of monetary policy that America's central bankers now promise?
As The Economist reports, the answers depend on what has been driving inflation up and whether those pressures persist even as economies slow. Ultimately, inflation is a monetary phenomenon, so responsibility lies with central bankers.
Pessimists point out that monetary conditions have been loose in recent years, with real interest rates low and credit growth rapid, particularly in emerging economies.
Others worry that the task of central bankers has become harder as globalisation has shifted from being a disinflationary phenomenon to an inflationary one. The downward price pressure from cheap Chinese goods may be abating while the developing world's rampant demand for resources may continually drive commodity prices higher.
There is some truth to these arguments, but none offers a complete explanation of recent price trends. In some emerging economies monetary laxness is clearly fuelling inflation—in the Gulf states, for instance, as the direct consequence of their dollar pegs.
But elsewhere the picture is less clear. Take China, where fears of social unrest have made inflation one of the government's top concerns and have led it to impose various price controls over the past week. The accumulation of vast foreign-exchange reserves has fuelled domestic money growth and the inflation rate has tripled in the past year. But that rise is almost entirely due to a jump in food prices, particularly of pork. Core inflation (excluding food, but including oil) is running at only 1.4%. Pig disease deserves more blame for China's recent inflation than loose policy. What's more, China's monetary conditions are tightening fast.
More important, China's productivity is growing faster, by 20% a year, according to America's Conference Board, a research organisation. That means overall unit costs are still falling.
It is true that the prices of imports from China are rising after several years of decline. But that has more to do with the weakness of the dollar than with increasing Chinese production costs. And even if the prices of Chinese goods rise, they could still dampen inflation in richer economies, because they are much cheaper than domestically produced equivalents and are gaining market share. As China produces higher value items, it will push down prices of domestically produced goods in ever more industries.
A more direct link between developing countries such as China and inflationary pressure comes through commodity prices. The prices of many raw materials have surged in the past 12 months. The food index is up by almost 50%. The price of oil has risen almost 80%. These jumps are the main cause of higher inflation across the globe. They are also related, at least in part, to structural changes in the global economy.
The world economy is increasingly powered by countries, such as China and India, whose growth is far more energy- and commodity-intensive than that of rich countries. Since 2001, China has accounted for about half of the increase in the world's demand for metals and almost two-fifths of the increase in oil demand.
This shift means that the usual relationship between America's business cycle and commodity prices may change. Past American recessions have sent the prices of oil and other resources down. That may no longer be so. Economists at HSBC say that the correlations between industrial output and commodity prices began to fall apart a few years ago.
But that does not mean commodity prices will continue to surge. Emerging economies may be more resilient to an American recession than hitherto, but they are unlikely to grow faster. At the margin, therefore, the demand for commodities will slow. And in the longer term, higher commodity prices will eventually lead to greater supply. Much of the surge in raw-material prices in recent years reflects the fact that few foresaw the pace of emerging-market growth. All of which suggests that, even if commodity prices don't fall, their rate of increase will ease, and the biggest driver of recent global price pressure will weaken.
Given the American backdrop, the Fed's recent decision to step up the pace of interest-rate cuts is understandable. The weak economy poses a bigger danger than inflation. But there are risks. Even if commodity-price inflation wanes, the falling dollar means America faces other inflationary threats. And if overall price pressure remains stubbornly elevated, inflation expectations may yet rise. If that happens, the Fed will face the unenviable task of curtailing its easing or even raising rates while the economy is weak.
Simon Turner simon@marquetteturner.com.au
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