Survey: for best bank / mortgage processor of 2008

House sales slump 25%

• Ben Schneiders-The Age
• December 20, 2008

BUYERS kept their hands in their pockets in 2008, scarred by a worsening economy, volatile interest rates and concerns about poor levels of housing affordability.

The number of sales tracked by the Real Estate Institute of Victoria is down 25 per cent on the same time a year ago — returning sales to 2006 levels — while the number of auctions has fallen nearly 8 per cent.

There will be a final rush today and tomorrow — the last big selling weekend of the year — with the REIV expecting about 200 auctions and 500 private sales.

If recent weeks are a guide, sales are likely to be poor. After averaging 82.5 per cent in 2007, clearance rates have averaged 63 per cent this year, and have been barely above 50 per cent in recent weeks.

There are signs the upper end of the market is in sharp decline, while cheaper property has been in more demand, helped by a boost to the Federal Government's first home buyers' grant and a steep fall in interest rates.

The ANZ Housing Snapshot for December said 15 of the top 20 growth suburbs in the September quarter were in suburbs where prices were below Melbourne's median.

Most surveys point to a small fall in prices during 2008, although REIV research has indicated a bigger fall.

The ANZ's head of property and financial system research, Paul Braddick, said the Melbourne market was in for another choppy year in 2009.

He warned that prices could fall by as much as 5 per cent in the first half, but when the financial crisis settles, prices could rise solidly.

"We are reasonably confident that once the overall macro (economic) situation becomes clearer and the uncertainty passes, that prices could recover quite quickly," he said.

Helping the market to recover is a housing shortage and a fall in interest rates.

The Reserve Bank has cut rates from 7.25 per cent in September to 4.25 per cent. This had helped housing affordability — which was at record lows for most of 2008 — return to 2002 levels, Mr Braddick said.

That is still much less affordable than the mid to late 1990s, but a vast improvement. The big unknown for property in 2009 is the depth of the economic slowdown.

Mr Braddick said the difference between his forecasts and those of economists such as Steve Keen, the University of Western Sydney academic tipping a 40 per cent decline in prices, centres on their different views on the economy.

Associate professor Keen has warned of a downturn of Great Depression-style dimensions, while most market or bank economists are forecasting a sharp slowdown or shallow recession.

"That's probably one of the biggest risks out there," Mr Braddick said. "How many people do find themselves unemployed."

SHAPE OF THE MARKET
                                2007         2008

Clearance rate        82.5%        63%

Sales                       56,189       42,465

Auctions                  29,909       26,600

Median price           $485,000   $435,000*

SOURCE: REIV (*Compares December 2007 with September 2008)

Property Transaction Volumes down 20-30%

The Property Services business delivers valuable services to its clients through the quality of its people, industry best practices and industry leading technology. These services include information brokerage, property enquiries and settlement services to leading financial institutions and legal clients. The domestic property and lending markets are a key driver of activity for the business. These markets have experienced a decline in activity as a result of the turbulence in global and local financial markets and broader economic slowdown, where the volume of transactions is, by most measures, 20-30% below activity levels of a year ago. Espreon is not sheltered from the impacts on these markets. The Australian Government has implemented a range of economic stimulus initiatives and the Reserve Bank has lowered interest rates substantially in recent months. In October 2008, housing finance posted its first increase in 9 months, although there remains uncertainty within the community about the future and there appears to be a lack of consumer and business confidence. As we move into 2009 it is hoped confidence begins to turn around. Espreon’s revenues have been impacted by the economic downturn but not to the same extent as the overall market decline. Through this difficult period Espreon has maintained its overall market position and secured new business. It is now well placed to increase its level of business in the event of an improvement in market conditions or a further increased flow of work from clients and improve profitability over the long term. Iain will cover this in more detail shortly. In addition, opportunities exist for the extension of services to current clients and for growth through strategic acquisitions and new product innovation.

Source Espreon Chairman's Address

Pilot of online bank settlement process

Hayton Kosky Lawyers is seeking support from conveyancing practitioners to pilot an online sharing software aimed at improving the bank settlements process. It incorporates an ‘online shared workspace’ and the ‘National Settlement Booking Exchange’ designed to replace the current time-consuming process of booking settlements.
Members who are interested in attending an information session or in participating in the pilot program should contact Brett Hayton. brett at 247legal dot com dot au

View more information

Source Law Institute Victoria LIV eLegal

Property and Environmental Law Section

Conveyancer skims stamp duty

PENSIONERS Rob and Judith Walters are living in a caravan in a barn because of the greed of disgraced conveyancer Ellen Hocking.

Mr Walters, 70, is reduced to tears recalling the forced sale of his home after being fleeced by Hocking.

He and 65-year-old wife Judith are among 17 victims from throughout the Mornington Peninsula and Frankston area who were ripped off by the conveyancer.

In July, Hocking, 45, admitted to 17 counts of deception totalling about $250,000, but police fear this is just the tip of the iceberg.

Now living in Frankston, she operated in both Somerville (from 2002 to 2004) and Mornington (2003 to 2006).

She will be sentenced at Melbourne’s County Court on December 10.

The Walters have now moved from a four-bedroom, two-storey home to a caravan in a barn and will have a small home built on a relative’s property later this year.

Mr Walters said he was forced to borrow money to pay for the stamp duty of $25,000 that was stolen by the conveyancer.

“Then we were forced to turn around and sell the property we had just bought to pay out what we owed,” he said tearfully.

“The title couldn’t be transferred to our name until the stamp duty was paid - for us a second time.

“The stress has resulted in me having a stroke.

“I have now lost so much confidence I cannot drive by myself.

“I have lost my faith in humanity and find it difficult to trust people. “It upsets me just to think about it,” Mr Walters said.

Sen-Constable Scott Hanley said although the couple had paid their stamp duty to Hocking, it had to be repaid to the State Revenue Office.

Somerville developer Paul Devaney lost $73,000.

The money was skimmed off property deals and home owners have been warned to check their property title to make sure their name is on it.

Frankston Leader newspaper

JP Morgan Chase cuts 500 jobs

JP Morgan Chase & Co. is cutting almost 500 jobs from the Washington Mutual mortgage processing operation in Florence.

The job cuts are among the 9,200 positions JP Morgan plans to eliminate as part of its takeover of Washington Mutual Bank. JP Morgan acquired WaMu in September for $1.9 billion after WaMu became the nation’s largest bank to falter as a result of the credit crunch.

The operation in rural Florence currently employs 876 people and is one of the community’s largest employers.

JP Morgan plans to keep the center open for the foreseeable future after reducing its staff to about 380 — a nearly 60% cut — JP Morgan spokeswoman Nancy Norris said.

On or before Monday, 126 employees received a 60-day notice, Norris said. An additional 370 employees will remain on the staff in a transitional role, with their jobs to be eliminated in phases throughout 2009.

Employees who were laid off already will receive pay at least through February, plus a severance package. Transitional employees will receive double their salary until their jobs are eliminated, plus severance, Norris said.

JP Morgan is working with the laid-off employees to help them find other jobs, she said.

The bulk of JP Morgan’s layoffs were in Seattle, where WaMu was headquartered. Some 3,400 employees are being cut, largely from administrative and back-office support positions that provided services JP Morgan already offers. The rest of the layoffs are scattered at payment and mortgage processing operations across the country.

link

Duty to be paid in 14 days not 3 months

Parliament of Victoria

 

Duties Amendment Bill 2008-12-05

 

9 Reduction in period for payment of duty after

liability arises—Chapter 2

(1) In section 14(2) of the Duties Act 2000, for

"3 months" substitute "14 days".

(2) In section 14(3) of the Duties Act 2000, for

"3 months" (where twice occurring) substitute

"14 days".

(3) In section 15(1) of the Duties Act 2000, for

"3 months" substitute "14 days".

(4) In section 16 of the Duties Act 2000, for

"3 months" substitute "14 days".

(5) In section 22B(4) of the Duties Act 2000, for

"3 months" substitute "14 days".

(6) In the note after section 57M(2) of the Duties Act

2000, for "3 months" substitute "14 days".

(7) In section 69C(2) of the Duties Act 2000, for

"3 months" substitute "14 days".

COAG continues regulatory reform

COAG agreed that a national electronic conveyancing system would be implemented, which will establish a single electronic system for completing real property transaction and lodging land  title dealings.

NECS  is one of five initiatives announced at the meeting for the delivery of a seamless national economy.    The Commonwealth committed to provide funding of $550 million over five years for the implementation of these reforms. 

Arrangements in relation to funding allocation and progressing the initiatives are currently being finalized by COAG senior officials. The communiqué states that this must be completed no later than 12 December 2008.

Soaring stamp duty hits home buyers

Growing stamp duty bills on residential properties are impeding Australian home buyers' ability to enter the housing market, according to a new report.

The inaugural bankwest (bankwest) Residential Stamp Duty Report found stamp duty on the typical home has soared 59 per cent over the past five years, almost double the rise in household income over the same period.

Almost $53 billion in stamp duty receipts, both residential and commercial, has been paid to state and territory governments over the past five years.

Annual stamp duty revenues have increased 77 per cent over that same period.

The research found struggling home buyers were forced to set aside at least 20 per cent of their annual household income to pay stamp duty bills in four out of eight capital cities in July 2008 - Sydney, Melbourne, Adelaide and Perth.

This compared to only two cities - Sydney and Melbourne - in 2003.

Home owners in Sydney and Melbourne would need almost three months of their salaries to pay stamp duty.

Brisbane has the lowest stamp duty bills, with home owners only having to work an average of one month to pay stamp duty for median priced properties.

The rate of stamp duty charged on a property purchase increases as the property's value passes through thresholds.

The data was sourced from state government revenue offices and the Australian Bureau of Statistics.

AAP