China banking crisis ‘almost certain’, warns economist Gabriel Stein
Gabriel Stein, of economic consulting firm Oxford Economics, told a Sydney audience on Tuesday that Chinese authorities were understating the extent of bad loans on their banks' books and faced tough choices in dealing with the potential bank failure.Chinese Banks Look to Shadow Banking for Growth
BEIJING—Bad loans and new risks are piling up at China’s banks, as some of its biggest lenders combat weak profits by increasing investments in shadow-banking products that analysts say could worsen their financial position should market conditions deteriorate.“BUBBLE OR NOT” THE PROBLEM IS AHEAD!
It’s amazing the influence and strength of media to accelerate what has been obvious to many for some time. Property like gravity and history has the same principles. Contrary to some beliefs that this one will be different – the higher you throw the rock the further it falls to earth.API and SIBA joint submission Crown Lands Legislation White Paper 2014
This joint submission to NSW Trade and Investment, Crown Lands (T & I) has been prepared by the Australian Property Institute, NSW Division (API) and the Spatial Industries Business Association, NSW Regional Management Group (SIBA), as part of ongoing joint collaborative research efforts and dissemination of factual and dispassionate information about property rights and spatial information in Australia.ANZ chief flags economic headwinds and rising funding costs
Announcing the major bank’s first-quarter profit yesterday, ANZ CEO Shayne Elliott said that although the group’s underlying businesses in Australia remain strong, he sees challenges ahead driven by the volatility in international markets.“TAX RELIEF” or is it ???
Housing is now officially the number one industry in Australia. It employs directly, or indirectly, one in four people in Australia, is the number one income source (through taxation) for our governments and a prominent reason our economy continues to thrive.
Now it looks like the Turnbull government is about to reward us with more money in our pay packets through tax concessions which will provide relief for some. Interestingly it comes at a time of record government debt at about $770 Billion (AUD) and no signs of reduced government spending.
We now proceed into 2018 with many analysts and commentators making headlines with the “ex post facto” comments on the falling condition of the property market. So, it appears that the government has decided that it is a good idea that tax payers continue to meet the commitments of over inflated housing prices.
Why wouldn’t they? After all, government revenue now relies on increasing property prices and interest in the property market. The government owes a record amount, cannot cut spending, cannot rely on a sufficient rise in resource prices and is walking a tight rope with China our number one trading partner.
The large portion of the Australian population is fast approaching retirement with blossoming thoughts of high asset wealth in their property holdings, and it appears that the government is happy for the “Australian Dream” to prosper. They don’t have a choice and it means that the personal tax concessions being mooted might really be relief for the government, more than its people.
Strata Renewals Process – Does Majority Rule?
Strata Schemes Development Act 2015
The introduction of the Strata Schemes Development Act (2015) has been met with a fanfare of support by many Strata lot owners. The changes make it possible for older obsolete buildings to make way to more modern and higher density development.
The Act generally requires development proposal to be tendered and 75% of the Strata Lot owners (calculated by Unit Entitlement) to agree. This would then activate a process by which the Strata Plan could then be terminated and lot owners rewarded with payment.
It seems relatively fair as a majority of seventy-five percent would elect most governments throughout the known world. However, any lot owner who objects has the right to have his concerns addressed by the court. The Act then provides provisions (which are currently uncertain) that pertain to the Courts decision making process. The Court has the right to rule on its interpretation of ‘Just and Equitable in all circumstances”. The term equitable is defined by terms such as just, right, fair and reasonable.
This provision creates a myriad of possibilities and outcomes that may only be resolved by the Land and Environment Court in a Class 3 matter. The arguments are likely to be varied and most certainly involve the valuation principles set out within the Land Acquisition (Just Terms) Act 1991. Issues such as displacement, special value and solatium have long been arguments that now will perpetrate new actions under new legislation.
What might appear on the surface as “Just and Fair” legislation in accordance with democratic principles is likely to provide the Courts, Valuers and the legal profession with a new series of precedents and decisions.
In most cases the legislation will provide a mechanism for gentrification and development with a majority in favour. It will not as many may suggest be a case where the majority will be able to rule un-opposed. There is still protection for the rights and fair treatment of any individual where reason and equity can prevail.
Easements – What you should know
The issue of easements and why you should know, are because easements can provide a headache for most property owners when you don’t understand the rules. Most are not aware that providing an easement today is mostly required by law, much like organising a fence with your neighbour.
Legislation is in place to ensure that easements that are deemed necessary are no longer provided by choice. That doesn’t however mean they are gifted. Importantly, how do we deal with the matter and what beneficial agreement can be reached.
Most Valuers assess easement values based on principles derived through court decisions. In many cases of easement negotiations there is rarely a willing seller. This generally creates a conflict, as a seller has little right to withhold an easement and the buyer must bear all the court costs of enforcing an easement.
Over the years, creation and purpose of an easement have provided valuers with a myriad of issues and arguments on valuation methods and compensation. When considering any methodology Valuers should always have regard to the past decisions made by the courts and in the matters that are pertinent.
What appears to be excluded in their consideration is the cost borne by the applicant in enforcing an easement through the court. Current legislation provides all cost to be carried by an applicant in the matter of securing easements.
In a “land mark” case, costs were awarded against the vendor and in appeal the Court found that the trial judge should not have awarded costs because s88K proceedings are not a claim for damages but rather a claim for an interest in property, for which appropriate compensation was required to be paid. As a result the disposed owner does not have to pay any of the costs associated.
The courts have been clear on their interpretation of the matter of value and mostly to the disappointment of the seller. They consider the practical application of the easement and generally determine a nominal amount as compensation.
Can compensatory value have a better relationship to market value? Does the court satisfy the principles of “willing buyer willing seller” (Spencer V The Commonwealth 1907) in considering the costs of enforcement? Is it appropriate that a Valuer better consider the difficulties in negotiating or enforcing through the Court to provide a possible better outcome for the disposed property owner.
“What would a willing buyer to avoid court costs, pay to a willing seller who is aware that a court assessment may lead to a lesser outcome.”
Under S88K of the Conveyancing Act, the right to an easement is clearly defined, unfortunately the value of such an easement is not as transparent.
S88K easements are the most common situations requiring a Valuers intervention. When faced with the issue of easement, understanding the relationships and costs can provide an opportunity to ensure that a willing buyer may negotiate a better result with a willing seller.
Sydney Property Market – “Nothing To Crow About”
Collecting data on the residential Sydney property market is an interesting exercise that vindicates Donald Trump’s view of “Fake News”. It appears that in order to extract accurate information you need to review data for the past six months rather than weekly as provided by the media and property based reporters who call themselves economist.
Sydney is now well entrenched in a downward cycle with the last six months resulting in 10,087 auction sales at an average of $1,067,185 meaning an overall sales total of $10,764,700,000. In comparison the same period last year had about the same total sales from approximately 7,500 sales meaning the average was about $1,300,000.
These figures indicate a greater number of sales are required to generate the same amount as last year. I’ve been reading intently the relative week to week market coverage which seeks to confuse market conditions with rise and fall in property mediums and find too many contradictions to support any other view than the market is deteriorating.
The simple explanation is that more people are seeing their last opportunity to exit this market in view of reasonable prices, before the full brunt of the market correction is felt. My view of the marketplace has not changed in the past two years with this correction looming. The data collected indicates a market place that has already turned and the only support being provided comes from the industry seer’s who have interest in maintaining positive views rather than expressing the anecdotal evidence.
We now see more and more “brave” economists expressing vocally their views, which they have privately held for the past eighteen months. On review it’s easy to see the confusion – the effects of foreign investment combined with developer greed and market fear is a powerful combination that can convolute marketplaces.
An accurate reporting function for the property industry is long overdue. For too many years it has been driven by rumour and those with biased interests to create a sense of panic and apprehension in a market that has been so proudly an Australian icon. Add to this a dose of Government ineptness with an element of greed and when the smoke disappears from the mirror most will see clearly.