Sydney Land Valuation is affected by a mammoth number of public projects underway and there’s nothing to cheer about due to NSW forced land resumptions read below.
NSW forced land resumptions are leaving many households shattered
When Darryl Kerrigan won his historic case viewers clapped and cheered. In Sydney today with the mammoth number of public projects underway, there’s nothing to cheer about.
NSW forced land resumptions are leaving many household shattered and burnt with the Government able to run rough shot over the valuation process. More often I am hearing of property owners who are not being justly compensated by means of legislated methods that require an expert assessment to argue the case successfully.
Unfortunately those with the experience to argue your case with the Valuer Generals Department or in Court (who is the final arbitrator) are quickly being retained by the Government. This excludes them from being available for the land owner.
Unfair, possibly so. This is only one method the government uses to dispossess people from their home or asset. It is in desperate need of review and has been the focus of many Land Acquisition matters in Court over the past three decades. It has been under review since 2013 and was only recently introduced to Parliament with many of the recommendations either ignored or watered down.
“The Just Terms” Land Acquisition Act 1991
Initially drafted to provide “Just Terms”, it appears to favour one side and not the other. The Valuers General department clearly understands the current climate and regime which governs Land Acquisition and Resumption in NSW. It is a myriad of interpretations set through legal precedents established by the courts over the period of the Legislation. These principles fair or unfair rely on judgements at the time and the judgments rely heavily on the Valuer who attends the matter. “You don’t have to be right, just win the argument.”
Knowing how the system works and having the right people working for you is how you win your case in valuation and in life.
So if I had the chance. I’d like to say to Darryl, nowadays “They are Serious”.
From the above Auction clearance table (Auctions are the true market indicator), it seems that we have some interesting contradictions that must have some basis for explanation – however given the clearance rates and current real estate talk, it makes no sense!
I like to keep in touch with the Sydney residential market (as it’s where I live) and information is everywhere. Some you can believe and other, like most propaganda, is driven by personal interest.
Above are some of the total sales and monetary volumes for the last three months (sorry I missed a couple) that show averages as calculated from the Australian Property News information provided by Domain. I’ve compared them to last year’s figures and found that we have higher clearance rates but a lower volume of sales. The interesting thing is that the averages are about 20% less than last year.
Now that does not make sense – I’ve been in property a long time and I know that if volume is down, and less people are selling, prices should be on the increase.
Could it be that properties are recovering from a down turn? If so, it was only for a relatively short time and seems to have dropped the averages by more than 20%.
Changes in average prices like changes in median prices reflect movement in the market. What type of movement are we currently experiencing? Is the market bouncing right now? Does that mean we have reached the ceiling and are trying to break through or have we reached the end of our rope?
How interesting are the moods and attitudes of the property pundits. When things are good they can never end and when things are bad they will only get worse.
Property can in many ways be treated like trading shares, with many losing all gains between down turns and up turns. This is certainly the case when considering property development, commercial or industrial properties. The residential market should never be treated this way. Residential property or should we say shelter (in economic terms) is considered a necessity in life and as such reacts considerably different to normal trading. This trading is motivated by much more than making and losing money.
When looking back over the years I’m reminded of Tom, who always told me to – “wake up son they’re not making any more land”. Simplistic and easy to sell to a young naive kid, until you realise that “they” are building more and more, making them smaller or more dense in the process. So supply is not a limiting factor, we are going higher and higher to ensure that we don’t have to travel far to work. In fact today’s internet world we are able to move further and further away and take our work with us.
Housing is now coming in many forms and the belief that we will run out is absurd. Properties are becoming smaller with less emphasis on living your life in your home and more interest in living life outside the home. Having a property mortgage and commitment to ensure your future, is beginning to fade into an obscurity of the past. Enjoyment and flexibility with alternative investment opportunities are now becoming much more common in the modern world. Housing is now expected, in socially conscious countries, to be provided by rich landlords or the government. The tenant of today occupies a property with greater power over the possession of that property than ever before.
In Australia, as I have said, we have had an unhealthy appetite for property, which is surprising, considering the amount of land available. Our investment in property has seen returns dwindle and reliance shifted to capital gain. The residential real estate market in Australia is now one of the most expensive in the world. Given the size and state of our economy, a correction was always inevitable. We have unwittingly become victims of the Global Financial Crisis (GFC) even though we appeared to survive its 2008 influence.
Australia had been a spectre of light and a financial safe haven for the rest of the world during the period since the GFC. A sound balance of trade and strong economy (as a result of our mining industry) provided a platform to allow government intervention and stimulus that underpinned us through the world’s turbulent economic time throughout. As a result we have attracted considerable overseas investment into the country in the form of property investment that fuelled the market to this point.
With changing Government policy and tightening finance both here and abroad, our Asian partners have retreated to their origins. China’s shadow banking system appears on the verge of adjustment and many economists and share markets throughout the world are monitoring this intently.
The unprecedented volume of residential development in Sydney and Melbourne is the most concerning aspect of a slowing market. Low interest rates make an appealing case for continued investment however; high volumes of supply suggest a weakening in returns. Is a 2-3% return the new norm for residential investment in property. If so, does this pose a greater strain on the negative gearing cycle for the government tax system? This level of development should be providing the basis of a stronger economy, yet the economic data to date is suggesting an alternative view. Unemployment figures are questioned daily with many choosing to ignore government numbers.
Our population is growing at a greater rate than expected. Or is it? Sydney into the third millennium a publication that was prepared by (the then) Department of Planning provided the blueprint which suggested a greater Sydney population of 4.5 million by 2011. Sydney is very close to that – mark no surprises here. So this construction boom for our unexpected population boom has always been expected. These figures have been extrapolated from an estimated annual growth of 50-60,000 suggesting that the purported 150-200,000 annual number may be over stated.
As information and predictions are being correlated the content will always be questionable as much of the information gathering is inconstant. A combination of local forces, external interests, government mismanagement, greed and the misinformation has created a melting pot of possibilities. Be careful, watchful and sceptical as 2016 may have a lot of surprises. I like the looks of the commercial and industrial property markets as an alternative.
