Yearly Archives: 2011

Housing demand set to increase on the back of higher population growth

22,771,649. That’s the estimated total of Australia’s population.  According to the Australian Bureau of Statistics there is one birth every 1 minute and 46 seconds and an Australian dies every 3 minutes and 40 seconds.  Every 2 minutes and 44 seconds there is another international migrant crossing the Australian border.  Overall the Australian population increases by one person every 1 minute and 31 seconds.

Population and more importantly, the change in population, is intrinsically linked with housing demand.  To put it simply, more people means more homes.

Unfortunately, for such an important indicator, we only see quarterly updates of Australia’s population estimates at a macro level (ie national and state).  More geographically granular updates are released only annually.  Additionally, there is a long time lag for updating population data.   The official estimates at a state and national level are currently up to date as at March 2011 with the June quarter estimates due to be released on December 19th.

Total population growth has eased since peaking back in the March quarter of 2008 (+0.63% over the quarter – note that there is some seasonality in population growth and Q1 typically shows a higher rate of growth than other periods).  Part of the slow down can be attributed to the migration cuts brought in by the Federal Labor Government (the migration intake quota was virtually halved).  Additionally we have seen a swift rise in the number of permanent and long term departures from Australia which has only recently started to reverse.

In fact, based on the more timely migration data released by the ABS (migration data is released monthly, about a month and a half in arrears – so quite a timely data set in comparison with the demographic statistics report which is quarterly and released about six months in arrears) we are now seeing an ongoing trend of higher net migration rates; fewer residents leaving and more new or returning residents arriving.  The migration data is also quite seasonal, with spikes being recorded during February and July each year.

On a rolling annual basis, the September results for net migration were the highest since August 2010.  This is likely the result of the improved migration intake, with the Federal Budget announcing a 10.5% uplift in the skilled migrant intake and a 7.4% increase in the number of migrant families.   The trend of fewer long term and permanent resident departures is also helping to drive the net migration figures upwards.

Almost without doubt, as the ABS progressively release the new demographic data for the June and September quarters of this year we will see an improvement in population growth figures.  Theoretically the uplift in population growth should translate to greater housing demand; so we should start seeing that reflected in some improved dwelling approval and commencement figures.  That will be a welcome development by the residential building sector where the latest construction data from the ABS showed the value of residential construction was down 3.9% over the year.

Thank you Tim Lawless from RP Data for this article

Keeping our children safe

The NSW Government has launched an education campaign to protect the state’s children from avoidable death and injury. Each year around 8000 children are admitted to hospital because of falls, 50 of which are from windows and balconies. Senior NSW Government Ministers are working collaboratively on the new campaign, which will see 40,000 brochures and posters distributed across the state. Planning and Infrastructure Minister Brad Hazzard says too many young lives are lost in circumstances that can be avoided.

“It’s clear something needs to be done and that is why the NSW Government is making childhood safety a number one priority.”

Health Minister Jillian Skinner says a working party lead by The Children’s Hospital at Westmead has recommended the launch of an education campaign to reduce the incidence of childhood falls.

“The campaign is backed by the recommendations of a report on childhood health and safety.”

Fair Trading Minister Anthony Roberts said posters will be sent directly to all licensed property and strata managers in NSW so they can provide this important information to landlords, rental tenants, strata owners corporations and strata residents.

“The campaign material includes simple tips to avoid injury and save lives:

  • Ensure windows are locked and cannot be opened by a child
  • Install metal window guards with bars less than 10cm apart
  • Keep furniture away from windows and balustrades
  • Remember flyscreens do not provide protection
  • Always supervise children on balconies and in other people’s homes.”

Minister for Citizenship and Communities, Victor Dominello is encouraging all families and local service providers to get behind the campaign by ensuring safety in their homes and public places.

“The safety of our children is too important not to be taken seriously. I encourage all communities to get behind this initiative and take the time to alert others about the dangers of windows and balconies,” Mr Dominello said.

Thank you to Fair Trading for this article

Peace of mind before you sign – buying off the plan

Follow these tips to safeguard against problems with new or off-the-plan purchases.

Out with the old and in with the new. It’s the spring-time clarion call of the NSW government – to encourage apartment buyers, via specially tailored new-year concessions, to choose new or off-the-plan property in order to stimulate the construction industry and get the economy moving.

“The fact that housing construction is at record lows is not only a problem for the economy, it also means higher home prices for individuals and families across the state,” says the Treasurer, Mike Baird. “We want to make sure our incentives actually encourage activity, not push up home prices.”

As a result, Premier Barry O’Farrell’s budget ruled that from January 1 eligibility for stamp duty concessions will be limited to those buying newly constructed and off-the-plan apartments.

“We believe this is necessary to make buying a new home or apartment relatively more attractive than buying an existing dwelling,” Baird says.

But sometimes buying new or off the plan can be riskier than buying an older, established apartment, so here are Domain’s top-10 spring tips on how to ensure your new buy is blooming wonderful.

1. Check up on the developer and builder

Make sure the developer has a good record in building well-designed apartments, as well as in rectifying any problems afterwards.”Purchasers, particularly of off-the-plan sales, need to undertake due diligence on the vendor,” says strata lawyer Stephen Goddard, the chairman of apartment owners group the Owners Corporation Network. “They can look at other projects done in the past, how they’ve fared over time and what their track record is in fixing any defects.”

2. Make sure the price is right

It’s too easy to be dazzled by a shiny new apartment, a display unit or glossy brochure and forget the simple common sense of checking it’s reasonably priced.”You’ve got to pare it back to the price per square metre,” says the principal of buyer’s agents Sydney Property Finders, Dennis Kalofonos. “You compare that to the price per square metre of similar-standard apartments in the same area which have already been built or established.”In addition, these days you can’t expect an immediate profit if you sell. “Off the plan, generally developers build a premium into their product because it’s two to three years down the track that it’s being finished and bought,” Kalofonos says. “And usually buyers aren’t aware they’re paying 10 to 15 per cent extra just because it’s new.”

3. The devil’s in the details

As well as the square metreage, check all the other proposed measurements, such as ceiling heights, storage spaces and the size of car spaces, as well as the quality of the fittings to be put in.Also, take a photo of everything in the display apartment in case problems arise later. Developers can stint on size and quality – and you don’t want to move in and discover the ceilings are oppressively low, the car space is too narrow to open doors when your neighbour’s car is also parked and nothing is quite what has been promised.

4. Calculate your levies

Make sure the quarterly levies quoted are likely to be the true cost of maintaining the building and its facilities, particularly if the complex has expenses such as lifts, a heated pool, sauna and concierge service.It’s not unknown for developers to underestimate levies in order to make a purchase more attractive, or for levies to rise sharply after the first year or two, when warranties run out.”You need to make sure you know what you are paying for, what you’re getting for that money and whether that’s going to be enough money for what you need to cover,” says Darren Klein of property valuers Value 8. “Builders don’t, as a rule, underestimate levies but it certainly occurs.”

5. View the view – and the potential for losing it

If a building has a fabulous view – factored into the price of the apartment – look carefully at any land in front that could possibly be used for another building that could block you out.”In Sydney at the moment, there are at least four developments where people’s views are under threat by other buildings being erected later by the same developer,” says Flatchat columnist Jimmy Thomson. “They’ve applied for variations on original development applications that now mean they’re building higher or in a place previously earmarked for a park.”So while you can be sold a view, you can never actually own it and that same view can be sold again and again. The only other industry where the same product can be sold again and again is the oldest profession in the world.”

6. Ask to see any contracts in place

Apartment buyers need to be aware of any long-term developer-imposed contracts, says Michael Teys of TEYS Lawyers.”These will hardly ever be in the interests of the owners and the developer will have benefited either by cash or in some other way from putting them in place,” he says.”There’s no justification for locking owners into 10-year or 20-year contracts with, say, a caretaker or gardener. Owners should decide for themselves who they want their contracts to be with – and for how long.”

7. Browse the bylaws

A building’s bylaws either stop residents doing things or oblige them to do other things, says the president of Strata Community Australia, NSW, David Ferguson. It’s imperative purchasers read them before they buy. “They might ban pets, or apportion costs to a particular apartment, for instance, to pay for the exclusive use of a common cupboard,” Ferguson says. “Your lawyer should run you through them first but you should be aware of them and make sure they suit you before you make the decision to buy.”

8. Run through the security

Good security is usually a high priority for apartment buyers. “Make sure there are good access control systems either in place or planned for the building,” says the director of Francis Management Building Services, Eric Francis.

“You need a secure front entrance to a building – with electronic swipe keys audited regularly – and access only to the floor on which you live, and common property areas like gyms and pools.”

9. Listen to the noise

Apartments can prove havens from the din of lawn-mowers and barking dogs around suburban houses but if they have poor sound insulation and noisy neighbours, they can be hell on Earth.

“Double check that the apartments are going to comply with the acoustic requirements of the Building Code of Australia,” says the principal consultant of Pollution Control Consultancy and Design, Alex Jochelson. “And that’s an absolute minimum – most engineers are of the opinion those standards aren’t stringent enough.”

10. Ask whether it’s future-proofed

That means not only that it’s cabled for pay TV and broadband but that it’s been thoughtfully designed to be environmentally smart in the years to come. “The biggest cost in the future is going to be the rise in utility costs,” says Christine Byrne of Green Strata.

“So it’s very important to make sure new apartments have good insulation, great glazing, cross-ventilation, eco-friendly alternatives to halogen lighting and maybe solar boosting to take away the need for so much energy.”

Where are the savings?

  • Until December 31, first-home buyers will continue to pay no stamp duty on any property, old or new, up to $500,000 and receive a discount for properties valued up to $600,000.
  • From January 1, stamp duty will be waived only for first-home buyers purchasing newly built and off-the-plan property for less than $500,000, with partial exemptions on new properties priced from $500,000-$600,000.
  • The $7000 first-home buyer grant will be available to all eligible newcomers.
  • From now until July 1 next year, empty-nesters aged 55 and over won’t have to pay stamp duty on new homes. This replaces the previous exemption for only those aged over 65.

Thank you to TEYS lawyers for this article

Netstrata welcomes 5 Wallaroo Close

Netstrata are pleased to announce that they have been appointed as strata manager’s for 5 Wallaroo Close, Killara. The prestige strata scheme will be managed by Brad Wood . Brad said “I look forward to working with the committee in helping them run the scheme more effectively, reducing the amount of their own time that they have been putting into the strata management”.

5 Wallaro

Netstrata support Illawarra Black & White Race Day

Netstrata was proud to support Vision Australia’s Illawarra Black & White Race Day held at Kembla Grange on Saturday 8th October 2011. It was a fantastic day although a little wet, Netstrata Wollongong’s Tanya Gough said “It was great to see so much of the Wollongong Business and Local Community digging deep for a fantastic cause”.

Vision Australia is a partnership between people who are blind, sighted or have low vision. We are united by their passion that people who are blind or have low vision will have access to and fully participate in every part of life they choose.

Netstrata-Winner-300x200 Netstrata-Horse-300x200 Netstrata-Off-Racing-300x200

Netstrata’s Tanya Gough and Sarah Tickner presented the first place ribbon to Mr Ellaval winner of the 2011 Netstrata Plate.

Building and development – solving neighbourhood problems

As buildings age, particularly those that have had their repairs and maintenance neglected, strata communities might choose to redevelop all or part of the building to comply with fire and life safety orders and / or to remain functional and relevant in the current market. Knowledge of building and development process is required.

Similarly, when a neighbor is proposing a new building or a lot owner wants to do structural work, the building and development process becomes relevant to strata community life.

While each state and territory has their own building and development legislative regimes, the process is generally the same:

  1. Environmental plans set out the guidelines for development in a local area – watch for new plans in your area as everyone has a say before they are finalised;
  2. The general rule is that development approval is required from your local authority to erect, structurally alter, or demolish any building, including outhouses and sheds. Excavations and painting of heritage-listed properties also needs approval
    – remember if something does not require development approval, for example because it does not affect the structural integrity of the building, it may still require owners corporation approval under the by-laws;
  3. The subdivision of excess land also requires a development approval;
  4. High impact development applications will require advertising and objections might be lodged on the grounds of effecting views, overshadowing, privacy, encroachments, noise, possible parking problems and changing the streetscape or character of the neighborhood – if you are going up another level or two, the set back of the new floor will be relevant to the way the building looks from below.
  5. Development approvals will cost up to $200,000 for major works because they will require full-scale drawings and an array of experts reports and can take 9 to 18 months depending on the level of objections and the complexity of the issues. If building and development work is being undertaken to comply with fire and life safety orders, temporary measures may have to be taken to protect the safety of occupants and visitors pending the resolution of this often long and drawn out
    process; and
  6. The owners corporation is required to consent to any development approval application but the consent to lodging the application does not stop the owners from objecting to the application – try explaining that to the ‘naysayers’ at your owners corporation meeting!

Good consultants attuned to the special needs of strata communities can help you navigate this difficult area whether as the applicant or the objector.

Thank you for TEYS Lawyers for this Article

Developments for preliminaries in building defects claims

Owners Strata Plan 70579 v Midwest Constructions Pty Limited & Ors [2011] NSWSC 429

Obtaining adequate compensation for owners corporations in building defect matters is a specialised task.
In The Owners Strata Plan 70579 v Midwest Constructions Pty Limited & Ors the Supreme Court considered an owners corporation’s request to vary a referee’s report to make further allowance for superintendence fees, storage costs, protection of goods costs, a contingency allowance, an increased contract period and scaffolding.
Apart for the claim for the superintendence fees issues, where the owners corporation’s evidence was uncontested, the owners corporation’s arguments were rejected by the Court.  Those remaining issues are explored below:
Storage of courtyard topsoil fee:  The court found that the referee was correct to not allow this fee because there was no evidence that it could not be stored on site safely.  Perhaps, if the scheme had a structural engineer’s report to support the argument that the slab could not withstand the soil loading the referee or Court would of found that this fee would be recovered.

  1.  Protection of goods issue:   The owners corporation sought costs for moving and storing goods whilst works in the unit were undertaken.  The expert evidence from the defendants was that covers could be placed on the goods and that whilst some may need more protection than others an allowance should be made for that.  The referee made the allowance suggested by the owners corporation, but it wanted to subsequently change its position to seek a higher amount and was unable to do so.   Expert evidence to determine why and how goods should be protected and how to best protect those goods in light of the anticipated scope and duration should be carefully considered.
  2. Contingency:  A contingency allowance only of 5% instead of the 15% sought was allowed by the referee.
  3. Contract period:  The scheme sought an increased contract period which partially determines the cost of various items including scaffolding hire.   The owners corporation’s evidence on the required contract period was considered to be not transparent or testable.  The builder’s evidence was based on a construction programme with a critical path analysis prepared by an experienced builder and was preferred by the referee and the court.
  4. Mobile or standing scaffolding:   The referee and court found that the cheaper option of mobile scaffolding was to be preferred.  If the owners corporation had put on expert evidence that mobile scaffolding was not appropriate and that fixed scaffolding was, that outcome may have been different

This area of law is regularly evolving and the briefing  of experts and consideration of expert evidence is becoming more and more specialised.

Thank you to Bannermans Lawyers for this Article

Netstrata welcomes the Mile Post at Randwick

Netstrata are pleased to announce that they have taken over the strata management of the iconic M

ile Post strata scheme on Alison Road, Randwick directly opposite the Randwick Race Course.

The scheme is managed by strata manager Liesl Biles and she is looking at working with the Strata Committee with the major capital works which are in the pipeline. Keep your eye out for the changes as your driving up Alison Road.

Mile Post exterior

UDIA Netstrata awards for excellence

Netstrata were again the proud sponsors of the Urban Development Institute of Australia (UDIA) Awards for Excellence. Netstrata sponsored the Medium Density Award category which recognises medium density development with projects being mainly residential. The 2011 award went to Stockland’s Manta development at Little Bay, congratulations.

Over 600 people attended the awards evening which saw it’s largest number of nominees. From a strata management perspective it is fantastic to see so many quality strata developments being completed.

The judges made the following comments in relation to Stockland’s Manta:

The Manta orientation maximises views and cross ventilation and the north facing forecourt together with the related retail and commercial is planned to become the community centre of the Little Bay development. The price point/value for money, and the quality and design of the apartments was confirmed by the 100% sales within a month of the launch. The landscaped roof of the podium adds an attractive amenity for the residents.

Congratulations to all the other finalists including: A2 by FKP Properties, Botanica by Australand, Eko by Crown, Sedyr by Sunland and Parkside at Dunlop by Village Building Company.

Manta Little Bay