Greeting Comrades,
Today we can say goodbye to another financial year.
09/10 has had its share of drama and disruption. The aphorism I like
most right now is: "Life is not about waiting for the storm to pass
but learning how to dance in the rain". (Credit to JC - no not that
one, the other JC). Living in interesting times may be entertaining but
we still need ways to navigate them.
Even modern communication is amazing - skype, facebook, twitter and text.
Who would have thought even 10 years ago we would be saying so little
in so many different ways. We live in the information age but I sometimes
think so much of that information is just dross.
Still trying to house granny!
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Many of you know that I have an interest in the new legislation allowing granny or studio flats on urban blocks over 400 M2. The Sate Government is encouraging this so they can increase urban density without going to the extra expense of added infrastructure like roads and services. It is also an easy way to provide low cost housing.
Our council is a great supporter of low cost housing but its action do not show this. it is the only one (or one of a few) councils in the whole state that is insisting on charging up to $25,000 council contribution for the extra dwelling. Of course, everyone is just going to do what has always been done which is make an extension under the house or out the back and add an illegal kitchen later.
Would be so much better to be able to have it legal with all the benefits that includes but that extra fee is too prohibitive. The BSC is currently considering coming in line with other councils. So now is the time to lobby council to drop the Section 94 contributions.
The big question is why we can't have legal grannies or studio apartments in rural residential areas where they are really needed. The demand for small low cost dwellings never abates and is a good way to house all those people looking for cheap rentals. So while you are at it lobby council to extend this legislation to rural zonings as well. It is within their power and they do not have to wait for State government to do it.
So now is a good time to send a message to council. You can get email
addresses of all councilors here.
Oy vey! Then there's the insurance!
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While we are on the subject of illegal grannies (the backyard dwellings,
not the elderly ladies on motor bikes) we have the problem of the insurance.
If you have an illegal dwelling and your house burns down because of an
unapproved cooking appliance then it may be possible for your insurer
to reneg on coughing up.
Which brings me to another wider problem of home insurance in this area. My experience is that a large number of dwellings here do not have a Section 109 Occupation (or Final) Certificate. Or maybe some parts of the home are not legal. This often comes up when I am involved in a sale with a city solicitor doing the conveyancing and the sale falls over. Having a house without a Final Certificate hardly ever happens in the city but they are very common here. Some insurers will not pay up in these circumstances.
I am in contact with some good local insurance brokers and if you have
any questions, contact me and I will refer you on.
Is Byron still a hot spot?
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Byron Bay has made the list of 10 places NOT to invest or purchase property in www.hotspotting.com.au. It raised the ire of all of Byron's real estate agents and fair enough. The "make it up as you go along" list did not follow any logic or statistics as median house prices here have generally been on the increase or held their own during recent economic upheavals.
The author of the list just pulled the concept out of the air that holiday and tourist hot spots like Byron Bay were over priced and in line for a correction. I believe that Byron will remain a place where people will want to move and live, however living here and running a retail business may be a problem. Many Byron Bay businesses are hurting and have had a terrible season. If the dollar remains high and OS airline tickets remain cheap then tourism will suffer and our local businesses will be in the dolldrums. Many Australians will travel to SE Asian destinations if it is cheaper.
The rents in town will have to come off to give them a chance of surviving.
Witness the closing of the SPAA supermarket in town - after what - less
than a year in business?
"Home of the Brave" for sale!
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Although I am not against the concept in general, the brave purchasers
tempted by the local ads to buy USA property don't have to rush. Recent
reports say that US property is a long way from a quick recovery. There
were over 93,777 home foreclosures in the USA this May which is 44% more
than May last year. The number of homes for sale also rose by 11.5%.This
is in a country with an unemployment rate of 9.7% (or 17% if you include
people not bothering to look for work. More info here.
Mortgage stress and bad advice.
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These days the majority of my incoming calls are people wanting equity
increase or advice on debt. There are also quite a few who are in the
wrong loan to start with who did not get the right advice from their original
credit provider - usually a bank. There are some very good, well informed
people working at banks but many are relatively inexperienced and only
there to provide off-the-shelf product that suits the bank - not you,
the client.
It is also unfortunate that in times of uncertainty most people turn to big, safe institutions as people think they must know what they are doing. (tsk tsk - I could tell you some stories!) It is therefore doubly frustrating to see people with debt problems who were given the wrong advice and would not have a problem if they had have been offered the right options.
However with the start of the this new financial year, we mortgage brokers
have to meet another level of licensing and auditing under ASIC. Not only
is it more expensive to operate with higher fees and tighter regulation
meaning that we are hindered in doing our job with increased bureaucracy.
Property Stuff
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Not much to report from out on the streets except that it is definitely
a buyers market. This coming Tuesday RBA will most likely hold interest
rates at the current rate and many are forecasting that next change in
rates may just as likely be down, not up.
There is a lot of pressure against another rate rise as many people who jumped into the market with the First Home Owner Grant are experiencing mortgage stress already and may be forced to sell with another rate rise. This would bring downward price pressure on the whole market.
Therefore many people are waiting to see what the market is going to do and waiting on the sidelines. So an occasional bargain is out there.
Does anyone out there have an appetite for this fixer upper. Its on an acre of land near the town of Urbenville between Nimbin and Kyogle - yours for $85,000. (more info on request)
As always thanks for your responses. Its nice to know people are reading
and getting value from my newsletters.
Call me anytime,
Michael Murray
0428 555 501