Byron Property Search Newsletter
February 10
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Hello everybody,
Welcome to the first newsletter of 2010. Hope the new decade sees you well and prosperous.
I have quite a few people saying they have stopped getting my newsletters and missing them. Can you please ensure that my address is in your address book so I do not get caught in your spam filters. Thanks.
Finance stuff
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Surprisingly the Reserve Bank did not raise interest rates today as expected. The cash rate remains the same at 3.75% which translates into home lending to around 6%. The recent increases have not affected property prices however. The Australian median house price rose in 2009 by 6.77% and most of this was in the last 6 months. Expect double digit increases for 2010 - especially here in the bay!
Lending requirements have tightened as expected in the aftermath of the sub prime fiasco. The days of 80% Lo Doc with income declaration are no longer available with the banks. 60% Lo Doc with some of the major lenders is still possible. Most people would agree that lending practices were possibly too lax but not necessarily here in Australia as default rates are remaining extremely low.
This tightening of lending policy may have some impact here. Approval for new finance now is all about proof of serviceability. That is OK where $100K plus incomes are the norm in the cities. Here we have property prices on par with the capital cities but not many wage earners out there are pulling down 6 figure plus incomes. I foresee a slowing of sales as most new purchasers that cross my desk are self-employed or soul traders with small or home based businesses.
KILLING THE GOLDEN GOOSE
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Article in Saturday's Daily Telegraph was sprouting the usual guff about places like Byron Bay and Noosa losing appeal as they are "being loved to death". Usually this is just property reporters finding negative things to write about but in the case of Byron it may have some truth.
Sales figures for the 2481 postcode show a definite decline. In 2007 calendar year there were 472 sales and in 2008 only 228 while 2009 will probably be around the same. Less than half the number of sales than in the peak years. Yes there has been a slump in sales generally due to the GFC but all the bad press about BB being just a "party town" and investors being scared off because of proposed restrictions around holiday letting may be tarnishing the gold on the golden goose.
VIVA LA DIFFERENCE
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This idea that the special nature of our area came home to me last week when I spent three hours in big box supermarkets on the Gold Coast shopping for my daughter. What a soul sucking experience that was and made me shift allegiance on the Mullumbimby Woolworths debate - something that I was ambivalent about previously. Looks like we have lost that fight but we really have to maintain the character and points of difference of our other towns like Mullum, Bangalow and Brunswick Heads.
SYMPATHY FOR THE DEVIL
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I know that some people welcomed the new 'Sate based template' for development applications. The idea to by-pass the bottleneck of council seemed good in theory. The irony now is it looks like the NSW State Planning Department is in a far greater mess than Byron Shire Council ever was. State planning has now introduced something called 'Gateway' to alleviate some of the backlog clogged in the system for years.
Many more locals viewed the idea that the planning process being taken out of our hands as anathema. Many of us in the middle thought there was a better way than the "Just say No" attitude of council. There is room for some development otherwise we will have more grossly inflated property prices and most average people locked out of the market.
I also have sympathy for council as they did try something a few years ago with the eco village rural development zoning. That would have been innovative and a way to have low impact rural development but they got their ass kicked by zealots who just want to pull up the draw bridge. I often have potential clients asking if there are any good "community based" developments they can buy into. They don't exist - just more of the same brick and tile project homes as that is all that people can afford to build with such a restrictive compliance code.
PEST REPORT IS A PEST
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Finally they are about to change the availability of Pest and Building Reports. At present every potential purchaser must order and pay for their own report at a cost of around $350 or $400. New regulation to be introduced will make the vendor responsible for generating one P and B Report that all home seekers can look at. This will be especially good for auctions.
Next thing to change should be doubling of conveyancing solicitors. Other states work very efficiently with one solicitor handling both the purchahser and vendor with this antiquated system of exchanging contracts. Main reason for keeping it is for the extra $$$$ generated by the lawyer lobby.
All the best for a big one in 2010. Happy to take your call for anything dealing with propertyy or finance.
Take care,
Michael Murray