Minister wants to flood land market

New Housing Minister Bill Marmion has shocked the property market by saying he wants to flood WA with housing lots to cut home prices.

In a speech to Parliament that has set alarm bells ringing throughout the real estate industry, Mr Marmion said the Barnett Government’s aim was to “bring house prices down”.

“The Department of Land is looking at this issue very closely,” he said.

“It owns land and it is looking at its land stocks and will release as much land as possible.

“That will reduce the pressure on housing supplies. Our aim is to bring the median house price down and to have it lower than the median house price in other States.”

Mr Marmion, who took over the job last month after Troy Buswell was sacked, said the only thing the Government could do to achieve its aim was “release more land and houses”. He refused to elaborate on his comments yesterday.

March quarter figures from RP Data put the median house price in Perth at $480,000, equal to Darwin, but behind Sydney ($500,000) and nation-leading Canberra ($510,800).

Hobart had the cheapest prices in Australia at $323,750.

The State Government established an Office of Land and Housing Supply in Thursday’s Budget and is reviewing available government land which Premier Colin Barnett said would “achieve a comprehensive and co-ordinated approach to housing affordability issues”.

Shadow housing minister Mark McGowan warned the policy could result in houses being worth less than what people paid for them.

“If people go into negative equity with their house, that’s the worst possible outcome,” he said.

Real Estate Institute of WA chief executive Anne Arnold said Australians stored their wealth in the family home and it would be “politically unwise for any government to go down that path”.

But the plan won support from developer Nigel Satterley, who said land needed to become more affordable.

But he said the policy would not cut the price of existing houses.

“We’re on the cusp of a block shortage and whatever the Government can do should be encouraged,” Mr Satterley said.

Analysts at RP Data found in April that houses in Perth’s cheapest suburbs cost at least $60,000 more than those in the most affordable areas in the other major Australian cities.

Hillman was named the cheapest suburb in Perth, with a median house price of $280,000 – higher than the cheapest suburb in Adelaide ($200,000), Brisbane ($205,000), Melbourne ($218,000) and Sydney ($219,000).

Perth had less than 10 per cent of its 259 suburbs with a median house price under $350,000, compared with more than 20 per cent in all other big cities.

Blocks of land in Perth were the most expensive in Australia, according to a recent analysis by RP Data and the Housing Industry Association, with a single square metre of “prime earth” now costing an average of $521.

Source  :  www.thewest.com.au

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Perth median house price to hit $500,000

Perth’s median house price is tipped to hit $500,000 mark in the March quarter amid burgeoning confidence, according to the Real Estate Institute WA. 

It follows a 22 per cent jump in the number of properties for sale in the metropolitan area since December, with a current supply of 12,700 properties. 

The figure includes a welcome boost to the notoriously tight market for vacant blocks, with more than 2000 blocks of land for sale at the end of March. 

It is not the first time recently Perth homes have been linked to a half a million dollar median price, with Australian Property Monitors claiming two months ago that homes in the metropolitan area had already reached this level. 

But it is the first time that the more conservative REIWA has made the prediction.

REIWA President Alan Bourke said the increase in listing showed buyers and sellers believed the worst of the global financial crisis was now behind them. 

Soyrce  :  www.thewest.com.au

 

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Stamp duty on home loans under review

STAMP duty on housing loans could be abolished after the Henry tax review, which is likely to recommend states be given a share of income tax to make up the difference.

The most likely path to do this would be for the Commonwealth to give the states the ability to impose their own surcharge on income tax, which would be collected for them by the Australian Tax Office.

 The Henry review has been inundated with submissions calling for the end of stamp duty.

Tax economists argue that the tax on moving house, although easy to collect, leads to poor use of the housing stock and poor labour mobility, The Australian reports.Having to pay stamp duty not only discourages elderly people from moving to more appropriate accommodation, it also deters people from moving house to a better jobs market. 

At a conference conducted by the Henry tax review at the Melbourne Institute last week, both international and Australian tax economists said stamp duty should go, with Melbourne University professor John Freebairn describing the tax as “a piece of garbage”.

The review panel is being influenced by state submissions arguing that replacing stamp duty by extending other state taxes, such as payroll tax or land tax, would be too difficult to implement nationally.

Tasmanian Treasury secretary Don Challen, who is close to the inquiry’s head, federal Treasury secretary Ken Henry, told last week’s conference that reform of state taxes would succeed only with leadership from the national government.                                                                                                                                                     

“If you want to achieve a difficult reform, you’ve got to make it a national one,” Mr Challen said.

He said it would be too hard to win political consensus to extend land or payroll taxes.

“It requires eight lots of political commitment and eight lots of legislation and that path is doomed to failure,” he said.

However, he said he believed states would be willing to act on stamp duty if the commonwealth provided an avenue for alternative revenue.

The idea of giving states a cut of income tax was pressed two years ago by the OECD, which suggested the states “piggy-back” on income tax. The OECD also urged states to drop stamp duty.

One of the world’s leading experts on federal taxes, Canada’s Richard Bird, said the states were heading for a financial crisis because they did not have a sufficient tax base to support their burgeoning health and education costs, which were all rising much faster than the consumer price index.

One of the problems with stamp duty for the states is that it is vulnerable to the state of property markets.

Stamp duty usually raises about $14 billion a year for the states, but the recent state budgets showed big falls of more than $1bn each in NSW and Queensland, in 2008-09, for example.

“In Australia, it should certainly be feasible to permit states to impose a surcharge on the federal personal income tax base,” Professor Bird said.

He said that, ideally, Australia would follow the Scandinavian practice of allowing states to have a flat tax surcharge on income, rather than mirroring the commonwealth’s progressive taxation.

The states would be allowed to set their own level, making states more responsible for their own finances.

Source  :  www.news.com.au

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A Boost for the Housing Industry

The residential construction industry has been assisted by growth in the first time home-buyer activity along with the low interest rate.

Home builders are offering some competitive priced housing, and in the last few months things have started to pick up as we see with the display homes traffic which has increased by around 1000 more visitors a week compared to the same period last year.

With the growing concerns of the recession, some homebuyers are investing in the single storey home which is allowing them to lower their debt, rather than building the two storey home.

The Commercial developments throughout Perth have slowed down, but the ones with less financial risk attached to them are still going ahead.

What is happening is there is a  big demand for the first home buyer homes, therfore a lot of  houses being sold are at this price range therefore bringing down the median house price. 

There are also alternative financing options in WA such as the WA Governments Keystart Home Loans which has helped a lot of new home owners get on the property ladder.

Activity in the residential construction is providing  jobs at time when needed.

The first homebuyer’s stimulus is moving through two stages this year  :

From now until October 1, 2009  $21,000 on a house and land package, or a new house built that  has not been lived in.

$14,000 for an established home.

From October 1 until December 31, 2009 the boost will be lowered to  :

$14,000 for a house and land package, or a new built house that has not been lived in.

$10,500 for an established home.

From January 1, 2010 is to be confirmed.

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First-homebuyers urged to take mortgage help on board

An innovative house and land finance package developed in Perth could help more first-homebuyers to secure a home loan reduce their loan repayments. 
  
Based on a four-bedroom, two-bathroom home using part of the home as a rental, therfore allowing first-homebuyers  to afford a buy, part of the home is sealed off from the rest, creating a rentable one-bedroom, one-bathroom home.
  
The rent is taken into account when assessing borrowing capacity and surplus income can be used for bigger mortgage repayments.
  
Housing Edge director Dennis Ward-Fay said the new approach would bring home ownership within the reach of many more first-homebuyers.    
  
“Every application has to be assessed on its own merits but as an example the top four banks would require a couple borrowing for a house and land package valued at $380,000 to be earning an average salary of $63,275. The same couple applying for a Housing Edge loan would require a combined salary of only $56,510.
  
“The home can easily be converted back to a standard four-bedroom, two-bathroom home at a later date if the owners wish,” he said.
 
Homeowners are advised to use a property manager to handle the rent collection and tenancy details.

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Buliding your dream home

When choosing your land and house package think carefully on how you live before choosing the right house for you.         

Make sure the floor plan fits the way you live.

Design your house for you and your life style, you’d be surprised at how many houses don’t fit the way people really live.

I remember when people actually used their living rooms and wouldn’t have dreamed of sitting in the kitchen, much less thinking of it as the centre of the house now 

But that’s exactly what’s happened over the last three decades.  Other changes have occurred too: home offices have become increasingly important, as have master bedrooms, en suites, activity rooms, alfresco’s and pools.

 Any well-designed house must be functional ,  people define their space needs as ‘informal and formal’ or ‘public and private’ rather than thinking of their plan as a series of rooms.

 So think about the way you really live, design your floor plan accordingly, and you’ll be taking the next step towards a well-designed house.

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Trading places on the net

Two WA businesses have joined forces to resurrect the 80s trend of home trading to give today’s buyers a new approach in the tough economic climate.
  
Tradehomes.com.au launched last week, in conjunction with OrangeTee Real Estate, to offer a forum where sellers can advertise their properties and negotiate an equal trade for other property, cash or any item with an asset value.
  
Common trade items include houses, land, vehicles, boats, gold, gems, stocks, bonds and jewellery, providing the traded assets total the value of the property’s price.
  
Trade Homes Australia director Kara Tripp said the service was nothing new but was giving a new breed of buyers and sellers a fresh option in a difficult market.
  
“At the end of the day, trading has always been going on behind the scenes, with people exchanging properties for properties etc; we are just creating a forum for people to do it,” Ms Tripp said.
  
“It is getting harder for some buyers to get finance so it is just thinking outside the box. If they have other assets, such as a boat, it is essentially turning that into property.” 
   

OrangeTee Real Estate was theexchanging properties for properties, providing support for traders at the negotiation and settlement stages.
  
“A lot of people get quite daunted when it comes to negotiating deals, so we thought it would be helpful to have experienced real estate agents on board, for people who like the idea but are not comfortable doing it themselves,” Ms Tripp said.
  
So far, one deal has involved the trade of an apartment for assets that included gemstones and gold.
  
REIWA president Rob Druitt said the practice was fine as long as it was well managed and researched, with all parties seeking the appropriate valuation and advice before entering into discussions.

 

LOUISE BAXTER  www.thewest.com.au

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Builder first, then buy block

I WAS at the Mandurah City Soccer Club as a sponsor recently and, after a conversation with some members, it was apparent there is some confusion regarding building a new home, what is included, what to look for in selecting a block and the process.

With constant changes in the Building Codes of Australia (BCA), you cannot afford to take anything for granted.

I will try to shed some light on the process in future columns, to be published in the Mandurah Coastal Times.

I have extensive experience in the building industry. I started as an apprentice carpenter and sub-contractor. From there, I ran my own building firm and then went into sales and management for one of the largest building companies in WA.

My wife and I relocated to Mandurah six years ago. and I currently work for Danmar Homes as Peel regional manager.

I look forward to this column being of some assistance to all prospective new home buyers. Now for some quick tips:

Firstly, always select a builder before you purchase a block.

Ask if the builder builds to the standards of BCA. Their advice can save a lot of money and frustration.     

If you start right, the chances of problems down the track are limited.                                                                         

My next column will deal with the advantages of house-and-land packages.

To ask Barry a question, phone 9534 8844 or email barry.dye@danmar|homes.com

 

www.inmycommunity.com.au

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