WHEN interest rates were low, the Howard Government claimed the credit, and was given it by grateful voters. Now that rates have risen, and are set to rise still higher, should it take the blame?
In part, no. In part, yes. Interest rates in Australia were bound to rise. Some of the factors that have pushed them up were desirable, others unforeseeable. And in two crucial areas, it has taken pressure off interest rates.
But interest rates have risen more than they would have had the Government treated "keeping interest rates low" as a policy priority, and not just a slogan. It has neglected key jobs, thrown money where it buys votes rather than where the economy needs it, and turned off the "automatic stabilisers" by which budget policy usually takes pressure off interest rates.
As Access Economics director Chris Richardson put it recently: "The Government is throwing money into the economy and the Reserve Bank is taking it out again. We have one foot on the accelerator and the other on the brake. No wonder we're blowing smoke."
There are more important issues for the economy, but certainly there is no economic issue more important for voters. The average new home loan in Melbourne is now approaching $250,000. Add the five interest rate rises since the 2004 election, the sixth likely next month, the seventh expected early next year, and the banks' plans to raise margins, and the monthly payments on that loan would be up almost $400 a month since John Howard pledged to keep interest rates low.
Howard keeps pointing out that they were higher in the past, and so they were. But the people who remember the 17 per cent rates are not the ones paying big mortgages now. They remember when mortgage rates were 6 per cent. Now they are looking at paying 9 per cent. Talking about what went wrong in the 1980s won't solve that.
Nor can the Government credibly use its old line that interest rates are higher here because we are growing and the rest of the world isn't. The International Monetary Fund has just updated its database, and it shows that between 1996 and 2006, of 30 advanced economies, Australia ranked exactly 15th in economic growth per head. The economy overall grew 14th fastest out of the 30 over that decade. Our unemployment rate is now the equal 14th lowest of the 30. A standout? Not us: we are the average Western country.
The Government can defend its record on three grounds. First, as Peter Costello keeps telling us, growth is the goal of economic policy — and one of the things growth does is that it raises interest rates. As the economy grows, fewer resources are left unused, competition for them increases, and their price rises. We could let prices rise to create an inflationary spiral — or try to ration resources by raising interest rates. That's the low-cost option.
Second, Australia's economy has been hit by an X-factor that no one saw coming: the mining boom. Last year half of all the growth in construction across the country was in Western Australia. Mining investment has more than doubled in two years, and is still surging. In mining and construction in the west, everything is in short supply, prices are rising rapidly, and the ripples are reaching the east too.
Third, as Costello and Howard now concede, WorkChoices was designed to slow the pace of wage growth. Tilt the bargaining rules in favour of the employer, as they have done, and you get smaller wage rises and hence less inflationary pressure. Whether it is fair or unfair is another matter, but as Reserve Bank Governor Glenn Stevens says, anything that frees up the labour market helps to hold down inflation.
The same is true of the controversial section 457 visas used to bring in contract workers from overseas wherever employers identify shortages. While it would be better to retrain some of the million or more Australians who are unemployed, underemployed or prematurely retired, it is a low-cost way to cut through inflationary bottlenecks.
But in other ways, the Howard Government has made inflation worse, and helped push interest rates up. On skills training, it dropped the ball in its first budget. Many of its cost savings came from scrapping Working Nation, set up by the Keating government to retrain the unemployed so that, as recovery came, Australia would have the skilled workers to meet its needs. That ball remained dropped until recently.
In 2005-06, the OECD Employment Outlook records, Australia invested just 0.04 per cent of its GDP in training the unemployed, the third lowest among the OECD's 25 rich members. By then, skills shortages were already acute. Skills shortages cause wage rises which cause inflation which causes higher interest rates. On this one, Howard's Government has no excuse.
Second, instead of using budget policy to ease pressure on interest rates, as in the past, Howard has increased the pressure by shovelling money into voters' pockets while the Reserve tries to slow their spending. On Treasury projections, personal income tax will shrink from 12.1 per cent of GDP in 2004-05 to just 10.3 per cent in 2008-09 — adding $20 billion a year to consumers' spending power.
In past booms, monetary and fiscal policy have worked together. More jobs and higher wages increased tax revenues, reducing the need for rate rises to slow the economy. Now the Government has dropped its end so it can deliver big tax cuts.
That means interest rates have to do all the work. So as taxes go lower, rates go higher.
Tim Colebatch is The Age economics editor.
This story was found at: http://www.theage.com.au/articles/2007/10/29/1193618793576.html
Wednesday, October 31, 2007
Tuesday, October 30, 2007
Web 2.0? Don't bank on it just yet
AUSTRALIAN bank infrastructure is "not robust enough" to deliver secure web 2.0 banking and financial services.
That's the warning last week's Future of Banking and Financial Services event in Sydney heard but demand and overseas influence will change how banking is done, delegates were told.
Bank of Queensland chief information officer Iain Blacklaw said such plans captured the imagination but for his bank web 2.0 is "at the furthest edges of the radar screen".
Compared to call centres, ATMs or eftpos "internet banking is the most pervasive but with the least stability. I wonder if the next generation has exponentially more risks?"
He said "Australian banks are not robust enough at the infrastructure level" for the financial services explored overseas where they use wikis - collaborative websites - that invite customers to participate in financial product design.
Wells Fargo built a bank in the virtual world of Second Life and, closer to home, AMP is testing an online environment where customers use avatars - virtual representations of themselves - to try products.
Some commentators believe new classes of financial services will emerge, such as the peer-to-peer lending pioneered by zopa.com.
Executive general manager of IT and management services at Challenger Derek Goh and Goldman Sachs JB Were CIO Richard Tait said that web 2.0 services for Australians were far off.
But Mr Tait said some collaborative tools were good for the bank's use.
"(We are) trying to get people to collaborate and come up with things that will make a lot of money," he said. But legal obligations could stymie some information-sharing tools.
Geoff Wenborn, general manager of technology and innovation at NAB, said banks could not afford to ignore customer expectations of interactive banking tools.
"We have to be able to invest in and provide a robust and secure back end while meeting our regulatory obligations (and) making it open and easy to use.
"It is an enormous challenge," he said.
It is a challenge that Michael Neary, Telstra's enterprise and government industry director, said the finance sector must tackle because there was a sea change in consumer expectations.
"Banking was once a place you go, now it's far more a thing that you do," Dr Neary said.
Telstra research found 4.95 million Australians wanted access to mobile banking services and the mobile phone may replace card payment systems, he said.
Next year's Telstra pilot with Visa and NAB demonstrated at the conference will have about 250 Melburnians use their mobile phones to pay for items less than $35. This sort of payments system was also in demand overseas: Japan has 43,000 terminals that takepayments from mobile phones, Dr Neary said.
But the shift to new technology will be hampered by the skills drought.
Many financial institutions at the conference said it was difficult to find and keep IT staff but they were divided as to whether offshoring was the best solution.
Suncorp CIO Jeff Smith - overseeing the $355 million two to three year program to integrate Suncorp and Promina's information systems - was a DIY proponent. "We aim to have as much in-house as possible," he said, adding that intellectual property was among a bank's greatest assets.
He said offshoring did not lend itself to supporting more agile organisations where there were six-month projects and smaller teams, which was increasingly the case in the financial sector.
Like Suncorp the Bank of Queensland keeps as much IT work as possible in Australia.
And although his was part of a global organisation, Mr Tait claimed that "offshoring is not part of our agenda".
"If we are not sitting on the same floor as the business guys as they are thinking things through then it's a problem," he said. Being even a floor above or below the business team could lead to a mismatch between IT strategy and business plans, he said.
And he questioned the wisdom of more offshoring.
"The real issue with offshoring is are we cutting off our feeder stock for IT management?
"It could be a significant issue for us."
Beverley Head
October 30, 2007
This story was found at: http://www.theage.com.au/articles/2007/10/29/1193618795944.html
That's the warning last week's Future of Banking and Financial Services event in Sydney heard but demand and overseas influence will change how banking is done, delegates were told.
Bank of Queensland chief information officer Iain Blacklaw said such plans captured the imagination but for his bank web 2.0 is "at the furthest edges of the radar screen".
Compared to call centres, ATMs or eftpos "internet banking is the most pervasive but with the least stability. I wonder if the next generation has exponentially more risks?"
He said "Australian banks are not robust enough at the infrastructure level" for the financial services explored overseas where they use wikis - collaborative websites - that invite customers to participate in financial product design.
Wells Fargo built a bank in the virtual world of Second Life and, closer to home, AMP is testing an online environment where customers use avatars - virtual representations of themselves - to try products.
Some commentators believe new classes of financial services will emerge, such as the peer-to-peer lending pioneered by zopa.com.
Executive general manager of IT and management services at Challenger Derek Goh and Goldman Sachs JB Were CIO Richard Tait said that web 2.0 services for Australians were far off.
But Mr Tait said some collaborative tools were good for the bank's use.
"(We are) trying to get people to collaborate and come up with things that will make a lot of money," he said. But legal obligations could stymie some information-sharing tools.
Geoff Wenborn, general manager of technology and innovation at NAB, said banks could not afford to ignore customer expectations of interactive banking tools.
"We have to be able to invest in and provide a robust and secure back end while meeting our regulatory obligations (and) making it open and easy to use.
"It is an enormous challenge," he said.
It is a challenge that Michael Neary, Telstra's enterprise and government industry director, said the finance sector must tackle because there was a sea change in consumer expectations.
"Banking was once a place you go, now it's far more a thing that you do," Dr Neary said.
Telstra research found 4.95 million Australians wanted access to mobile banking services and the mobile phone may replace card payment systems, he said.
Next year's Telstra pilot with Visa and NAB demonstrated at the conference will have about 250 Melburnians use their mobile phones to pay for items less than $35. This sort of payments system was also in demand overseas: Japan has 43,000 terminals that takepayments from mobile phones, Dr Neary said.
But the shift to new technology will be hampered by the skills drought.
Many financial institutions at the conference said it was difficult to find and keep IT staff but they were divided as to whether offshoring was the best solution.
Suncorp CIO Jeff Smith - overseeing the $355 million two to three year program to integrate Suncorp and Promina's information systems - was a DIY proponent. "We aim to have as much in-house as possible," he said, adding that intellectual property was among a bank's greatest assets.
He said offshoring did not lend itself to supporting more agile organisations where there were six-month projects and smaller teams, which was increasingly the case in the financial sector.
Like Suncorp the Bank of Queensland keeps as much IT work as possible in Australia.
And although his was part of a global organisation, Mr Tait claimed that "offshoring is not part of our agenda".
"If we are not sitting on the same floor as the business guys as they are thinking things through then it's a problem," he said. Being even a floor above or below the business team could lead to a mismatch between IT strategy and business plans, he said.
And he questioned the wisdom of more offshoring.
"The real issue with offshoring is are we cutting off our feeder stock for IT management?
"It could be a significant issue for us."
Beverley Head
October 30, 2007
This story was found at: http://www.theage.com.au/articles/2007/10/29/1193618795944.html
Rebellion frustrates e-conveyance
VICTORIA and Queensland have threatened to go it alone on their land title and property transfer systems, but banks and the industry say they're not interested in dealing with players outside the agreed National Electronic Conveyancing System.
Australian Bankers Association director Ian Gilbert said the banks were "dismayed" there had been "alternative discussions" between the states outside the joint initiative to form a central communications exchange.
Victoria, which is to launch its own e-conveyancing system on November 16, has refused to share its software with other states unless they agree to certain conditions.
Mr Gilbert said the banks had invested with the Victorian Government in developing the software, "with the expectation that it would find its way into the national process and, eventually, into a national system. At this juncture, that hasn't happened."
The fate of the $44 million e-conveyancing project is uncertain since the major banks pulled out in September, citing frustration over Victoria's flagging commitment to NECS.
A co-operative venture between state government agencies and industry, NECS aims to establish a nationwide exchange and settlement platform for real estate transactions by 2010.
Simon Libbis, executive director of the National Electronic Conveyancing Office, said all parties had agreed to develop common data standards, and in May engaged the Lending Industry XML Initiative (LIXI) to assist with its mortgage and bank processing expertise.
"With eight land registries and the banks, lawyers and conveyancing firms, it's fairly clear we couldn't get everyone to change their systems to meet the requirements of a central system," he said.
"The whole idea of NECS was to have a system that allows all those systems to talk to each other."
Mr Libbis said five jurisdictions and NECO had signed the agreement with LIXI, and it was understood the ACT was in the process of signing.
"Victoria and Queensland have given us no indication of their plans, so we're working on the basis they don't intend to sign," he said.
"Every other state is strongly supportive as well as the industry, particularly the lending institutions, so we are just getting on with it," he said. "The announcement of our death was a bit exaggerated".
A NECO steering committee meeting will be held in Brisbane on November 23, and the rebel states' alternative position would be discussed then.
The ABA's Mr Gilbert said a national e-conveyancing system required more than just a piece of software: there had to be a governance structure, rules for participation and common data standards to support the process.
"It's recognised the system will need flexibility to accommodate the different state requirements, but there's a core piece that could operate in a fairly standardised way," he said.
"For users, it's important that there should be seamless interoperability across the jurisdictions, with a single point of entry."
Victoria and Queensland were essentially suggesting a return to a state-centric approach, with each jurisdiction using similar software but without the nationwide interoperability.
Mr Gilbert said bankers wanted the NECS steering committee to "bring everybody back to the original focus", and "work collaboratively towards delivering" an e-conveyancing system.
Karen Dearne | October 30, 2007
The Australian IT
Australian Bankers Association director Ian Gilbert said the banks were "dismayed" there had been "alternative discussions" between the states outside the joint initiative to form a central communications exchange.
Victoria, which is to launch its own e-conveyancing system on November 16, has refused to share its software with other states unless they agree to certain conditions.
Mr Gilbert said the banks had invested with the Victorian Government in developing the software, "with the expectation that it would find its way into the national process and, eventually, into a national system. At this juncture, that hasn't happened."
The fate of the $44 million e-conveyancing project is uncertain since the major banks pulled out in September, citing frustration over Victoria's flagging commitment to NECS.
A co-operative venture between state government agencies and industry, NECS aims to establish a nationwide exchange and settlement platform for real estate transactions by 2010.
Simon Libbis, executive director of the National Electronic Conveyancing Office, said all parties had agreed to develop common data standards, and in May engaged the Lending Industry XML Initiative (LIXI) to assist with its mortgage and bank processing expertise.
"With eight land registries and the banks, lawyers and conveyancing firms, it's fairly clear we couldn't get everyone to change their systems to meet the requirements of a central system," he said.
"The whole idea of NECS was to have a system that allows all those systems to talk to each other."
Mr Libbis said five jurisdictions and NECO had signed the agreement with LIXI, and it was understood the ACT was in the process of signing.
"Victoria and Queensland have given us no indication of their plans, so we're working on the basis they don't intend to sign," he said.
"Every other state is strongly supportive as well as the industry, particularly the lending institutions, so we are just getting on with it," he said. "The announcement of our death was a bit exaggerated".
A NECO steering committee meeting will be held in Brisbane on November 23, and the rebel states' alternative position would be discussed then.
The ABA's Mr Gilbert said a national e-conveyancing system required more than just a piece of software: there had to be a governance structure, rules for participation and common data standards to support the process.
"It's recognised the system will need flexibility to accommodate the different state requirements, but there's a core piece that could operate in a fairly standardised way," he said.
"For users, it's important that there should be seamless interoperability across the jurisdictions, with a single point of entry."
Victoria and Queensland were essentially suggesting a return to a state-centric approach, with each jurisdiction using similar software but without the nationwide interoperability.
Mr Gilbert said bankers wanted the NECS steering committee to "bring everybody back to the original focus", and "work collaboratively towards delivering" an e-conveyancing system.
Karen Dearne | October 30, 2007
The Australian IT
Sunday, October 28, 2007
Mr Ruddock, we need a referendum.
What if the States do not resolve their impasse over a uniform national approach to electronic conveyancing?
Will you support a referendum to bring matters of property within Federal jurisdiction, which are currently state controlled matters?
We understand you do support a national approach with quotes such as -
"The same jealousies that resulted in different rail-gauge widths in the 19th century are sabotaging a national electronic conveyancing system in the 21st century," Mr Ruddock said.
"I have been pressing for the states and territories to focus on the need for a national electronic conveyancing system for some time. A national electronic conveyancing system would remove red tape for business and lower costs for home buyers."
It is simple - Australia has eight separate land registries, eight different conveyancing and property laws, eight different scales of land transfer duties, land registry fees and land tax. There is no uniform approach to conveyancing, planning, survey, vendor disclosure and taxation
At least in the UK, England and Wales have a single land registry system, which will support the introduction of uniform single electronic conveyancing standard. This year, 2007, the UK have introduced a uniform standard to vendor disclosure which includes a energy efficiency (think of the climate change debate) and building inspection report. And they will over time roll out electronic conveyancing unimpeded by parochial state or county rules.
Australia would benefit hugely and immeasurably from property laws being centrally and Federally controlled. This country could have
* a single property register
* uniform property codes
* uniform conveyancing laws
* uniform property transfer fees - stamp duty on transfer and land registration
* uniform taxation of land - land tax, CGT, GST, income tax and negative gearing
* uniform vendor disclosure on the sale of property
* uniform laws for estate agents
* uniform survey regulations
* uniform approach to planning with local input
We already have a common unified approach to GST and CGT on property. We also have the Uniform Credit Code. This needs to be extended to all matters pertaining to property.
Only the States stand in the way of a single unified approach to property laws, management and taxation - and the States would never ever support transferring their current rights. By heck they would lose the right to tax it as they see fit.
What is the Federal government's view?
My personal view is let the people cast their vote. Just maybe the people can see the wisdom for change.
Will you support a referendum to bring matters of property within Federal jurisdiction, which are currently state controlled matters?
We understand you do support a national approach with quotes such as -
"The same jealousies that resulted in different rail-gauge widths in the 19th century are sabotaging a national electronic conveyancing system in the 21st century," Mr Ruddock said.
"I have been pressing for the states and territories to focus on the need for a national electronic conveyancing system for some time. A national electronic conveyancing system would remove red tape for business and lower costs for home buyers."
It is simple - Australia has eight separate land registries, eight different conveyancing and property laws, eight different scales of land transfer duties, land registry fees and land tax. There is no uniform approach to conveyancing, planning, survey, vendor disclosure and taxation
At least in the UK, England and Wales have a single land registry system, which will support the introduction of uniform single electronic conveyancing standard. This year, 2007, the UK have introduced a uniform standard to vendor disclosure which includes a energy efficiency (think of the climate change debate) and building inspection report. And they will over time roll out electronic conveyancing unimpeded by parochial state or county rules.
Australia would benefit hugely and immeasurably from property laws being centrally and Federally controlled. This country could have
* a single property register
* uniform property codes
* uniform conveyancing laws
* uniform property transfer fees - stamp duty on transfer and land registration
* uniform taxation of land - land tax, CGT, GST, income tax and negative gearing
* uniform vendor disclosure on the sale of property
* uniform laws for estate agents
* uniform survey regulations
* uniform approach to planning with local input
We already have a common unified approach to GST and CGT on property. We also have the Uniform Credit Code. This needs to be extended to all matters pertaining to property.
Only the States stand in the way of a single unified approach to property laws, management and taxation - and the States would never ever support transferring their current rights. By heck they would lose the right to tax it as they see fit.
What is the Federal government's view?
My personal view is let the people cast their vote. Just maybe the people can see the wisdom for change.
Friday, October 26, 2007
E-conveyancing 'shemozzle' looms
FOR a lawyer who says he is "red-hot for anything digital", Brett Hayton has a bleak prediction for next month's launch of electronic conveyancing in Victoria.
"It will be a shemozzle," he said.
Mr Hayton said there was very little chance of a flood of electronic property deals when the new pilot system went live on November 16. The reason was that the numbers were stacked against the new system.
Mr Hayton's assessment is not based on a distaste for technology. As well as running Hayton Kosky Lawyers in Bentleigh, Victoria, he has spent years developing his own web-based system for handling property transactions.
His experience with that system, known as 247legal.com.au, has informed his assessment of the Victorian Government's plans.
"There are problems with the government system," he said.
"They must be looking at things over generations.
"It's like they have adopted the view 'build it and they will come'."
In order to make electronic conveyancing a reality, he said, each transaction required four key players - two banks and two lawyers.
Non-lawyer conveyancers might take the place of solicitors in some transactions, but that does not affect his argument.
The problem in Victoria, as he sees it, is that the big banks have withdrawn from the system and there is no obligation on solicitors to switch to the electronic system.
"So let's assume that 50 per cent of lawyers sign up for it. That means a maximum of only one in four transactions is going to be electronic.
"Three-quarters of them will still be on paper - and that's the biggest drawback to the system."
Mr Hayton might even have overestimated the take-up rate among solicitors. Two weeks ago, Law Institute of Victoria chief executive Michael Brett Young warned the state's solicitors that the institute "cannot recommend that its members enter the scheme".
He issued that warning after the Legal Practitioners Liability Committee raised concerns about the possible risks to lawyers who took part.
Talks aimed at resolving the committee's concerns are continuing. But a spokeswoman for the institute said yesterday that nothing had changed.
Mr Hayton, however, said safety was not the main issue with the new system. He was more concerned about the possibility that Victoria's switch to electronic conveyancing might be about to result in two separate systems - paper and electronic.
He is also concerned that other states might adopt this part of the Victoria model - complicating conveyancing by allowing two separate systems to operate side by side in every state. "I once raised this issue at a meeting and asked how I was to know whether a particular transaction was going to be electronic or paper. Do I ring around?
"There was no answer.
"I don't want to see a 50-50 system. It needs to be made compulsory to use the new system and that needs to happen sooner rather than later to avoid mucking around with dual systems.
"The banks have a cogent view. They deal nationally. They don't care where a transaction is settled, but they deal with seven systems now and they don't want to deal with 14."
If these concerns are resolved, he believes firms that embrace electronic conveyancing will eventually have a significant cost advantage over their paper-based competitors.
Eventually, that will place them on the winning side of the rationalisation that he believes will flow through the industry.
Chris Merritt | October 26, 2007
The Australian
"It will be a shemozzle," he said.
Mr Hayton said there was very little chance of a flood of electronic property deals when the new pilot system went live on November 16. The reason was that the numbers were stacked against the new system.
Mr Hayton's assessment is not based on a distaste for technology. As well as running Hayton Kosky Lawyers in Bentleigh, Victoria, he has spent years developing his own web-based system for handling property transactions.
His experience with that system, known as 247legal.com.au, has informed his assessment of the Victorian Government's plans.
"There are problems with the government system," he said.
"They must be looking at things over generations.
"It's like they have adopted the view 'build it and they will come'."
In order to make electronic conveyancing a reality, he said, each transaction required four key players - two banks and two lawyers.
Non-lawyer conveyancers might take the place of solicitors in some transactions, but that does not affect his argument.
The problem in Victoria, as he sees it, is that the big banks have withdrawn from the system and there is no obligation on solicitors to switch to the electronic system.
"So let's assume that 50 per cent of lawyers sign up for it. That means a maximum of only one in four transactions is going to be electronic.
"Three-quarters of them will still be on paper - and that's the biggest drawback to the system."
Mr Hayton might even have overestimated the take-up rate among solicitors. Two weeks ago, Law Institute of Victoria chief executive Michael Brett Young warned the state's solicitors that the institute "cannot recommend that its members enter the scheme".
He issued that warning after the Legal Practitioners Liability Committee raised concerns about the possible risks to lawyers who took part.
Talks aimed at resolving the committee's concerns are continuing. But a spokeswoman for the institute said yesterday that nothing had changed.
Mr Hayton, however, said safety was not the main issue with the new system. He was more concerned about the possibility that Victoria's switch to electronic conveyancing might be about to result in two separate systems - paper and electronic.
He is also concerned that other states might adopt this part of the Victoria model - complicating conveyancing by allowing two separate systems to operate side by side in every state. "I once raised this issue at a meeting and asked how I was to know whether a particular transaction was going to be electronic or paper. Do I ring around?
"There was no answer.
"I don't want to see a 50-50 system. It needs to be made compulsory to use the new system and that needs to happen sooner rather than later to avoid mucking around with dual systems.
"The banks have a cogent view. They deal nationally. They don't care where a transaction is settled, but they deal with seven systems now and they don't want to deal with 14."
If these concerns are resolved, he believes firms that embrace electronic conveyancing will eventually have a significant cost advantage over their paper-based competitors.
Eventually, that will place them on the winning side of the rationalisation that he believes will flow through the industry.
Chris Merritt | October 26, 2007
The Australian
Monday, October 22, 2007
What a waste of paper
What is the largest vendors statement that you might have prepared? We have recently completed a job at a suburb called Waterways and the vendors statement was 430 pages.
This is probably not a record, but when the agent wants 6 copies, no-one wants the responsibility to print the document. Lets see now, 6 copies time 430 pages equals 2580.
As an industry is there support for a standard to create and distribute the section 32 electronically (and still satisfy the legal requirementsof the vendor signing / purchaser acknowledging receipt)?
Is anyone prepared to comment?
This is probably not a record, but when the agent wants 6 copies, no-one wants the responsibility to print the document. Lets see now, 6 copies time 430 pages equals 2580.
As an industry is there support for a standard to create and distribute the section 32 electronically (and still satisfy the legal requirementsof the vendor signing / purchaser acknowledging receipt)?
Is anyone prepared to comment?
Sunday, October 21, 2007
Thursday, October 18, 2007
Not related to conveyancing as such
Alex Roy's Cannonball dreams started with a movie, but it didn't star Burt Reynolds. The film was C'était un Rendez-vous. Made in 1976, it's a dashing precursor to every Jackass-inspired digicam stunt ever posted on YouTube — nine heart-pounding minutes choreographed to a screaming drivetrain. Through a bumper-mounted camera, the viewer becomes the car — traveling more than 80 mph as the anonymous driver revs into the enormous traffic circle around Paris' Arc de Triomphe, steers hammer-down from the Champs Élysées to Sacré-Coeur in Montmartre (through 16 red lights, wrong-way one-ways, stunned pedestrians, garbage trucks, and median strips) to meet up with a beautiful blonde waiting patiently in the park at the Montmartre church.
Wednesday, October 17, 2007
EC Heavy weight title fight
There has been plenty of action before the main fight scheduled for November 16.
Victoria, the heavy weight promoter of the electronic conveyancing crown, is in trouble as the competition between the contenders is hotting up and not a punch has been thrown.
The big banks have hung up their gloves and reckon the Victorian competition is for pussies and has joined ranks calling for a national competition.
The lawyers have cried foul and dont want to punch on with the conveyancers in the opposing corner.
Even the master builders have chipped in and I didn't even know they were a contestant.
The punters thinking that the price of admission would be cut found that even though hardly a front row ticket has been sold has just been told the ticket prices have been upped by 30%.
At the moment this all looks to be shaping up to be an all in brawl.
If you missed the October Newsletter here's the proverbial link
Victoria, the heavy weight promoter of the electronic conveyancing crown, is in trouble as the competition between the contenders is hotting up and not a punch has been thrown.
The big banks have hung up their gloves and reckon the Victorian competition is for pussies and has joined ranks calling for a national competition.
The lawyers have cried foul and dont want to punch on with the conveyancers in the opposing corner.
Even the master builders have chipped in and I didn't even know they were a contestant.
The punters thinking that the price of admission would be cut found that even though hardly a front row ticket has been sold has just been told the ticket prices have been upped by 30%.
At the moment this all looks to be shaping up to be an all in brawl.
If you missed the October Newsletter here's the proverbial link
Saturday, October 13, 2007
LTO Fees - paper vs electronic
Is our government ripping off the public? The new frontier of electronic conveyancing is beckoning and we are getting a sneak preview of the proposed fees under the new electronic regime. The government spins the spin that electronic conveyancing will lower the costs of conveyancing. But the facts are now on the table.
The fees on the left are for paper lodgement.
The fees on the right are for electronic lodgement.
There are no monetary savings using electronic, just a financial penalty for the consumer if they continue with paper lodgement. Electonic lodgement fees are the old paper lodgement fees and over the counter charges are 20 to 30% increases which the consumer has to pay. Go figure? It smacks of monopolistic behaviour. Are government dealings regulated by ACCC?
Refer Google Spreadsheet for the fees
Friday, October 12, 2007
E-conveyancing system in trouble
A feud between Victoria's solicitors and non-lawyer conveyancers threatens to undermine the launch of an electronic conveyancing system that could cut $70 million from the cost of home ownership.
Electronic Conveyancing Victoria is due to begin full operations on November 16 but there is a risk that solicitors may boycott the scheme.
Law Institute of Victoria chief executive Michael Brett Young has warned the state's solicitors that without changes the institute "cannot recommend that its members enter the scheme".
Unless the stand-off is resolved, it threatens to undermine the viability of the e-conveyancing system, which could cut the cost of conveyancing transactions by between $235 and $395, the state Government says.
The scheme had already been rocked when major banks withdrew from it last month because of frustration with a lack of co-operation between Victoria and authorities working on a national e-conveyancing project.
If solicitors join the major banks on the sidelines, the Victorian system would be deprived of the two main industry groups that are central players in most conveyancing transactions.
The institute's concerns were triggered by an adverse assessment of the system by the organisation that provides professional indemnity insurance for the state's solicitors.
The institute is also concerned that non-lawyer conveyancers will be using the new system before their new regulatory regime comes into force next year.
The institute says current legislation governing conveyancers does not provide enough insurance cover.
Mr Brett Young says this means solicitors "do not feel confident" about entering into electronic conveyancing transactions with unregulated conveyancers. However, non-lawyer conveyancers say their insurance cover has satisfied the state Government and solicitors are simply trying to dominate the new system.
Although the major banks have withdrawn from the e-conveyancing system, the Government says talks are continuing. Other financial institutions are still involved, including the Australian Securities Exchange, Bendigo Bank and the credit unions.
To justify the investment made by its members in the Victorian project, a national system needs to emerge, the Australian Bankers Association says.
After the big banks withdrew, the Victorian Government made the software underpinning the system available to all other states for assessment.
Queensland's Department of Natural Resources and Water had earlier conducted tests on the Victorian system and, according to Victoria, found that it could be adapted cost-effectively to meet Queensland's needs.
In Victoria, however, the system's launch may be marred if the state's solicitors heed the institute's warning about potential risks in using the new system.
The institute's concerns originated with the Legal Practitioners Liability Committee, a statutory authority that provides professional indemnity insurance for Victoria's solicitors and most national law firms, but they are also linked to the long-standing antipathy between solicitors and non-lawyer conveyancers, who have won government approval to compete for legal work in conveyancing transactions.
In the current issue of the Law Institute Journal, Mr Brett Young writes that the committee "believes there are greater risks for practitioners operating in this system than under the current system".
"Without the committee's endorsement, the institute cannot recommend that its members enter the scheme."
Talks aimed at resolving the committee's concerns are under way, but that organisation's assessment of the new system appears to be at odds with one commissioned by the Victorian Government.
A spokeswoman for Environment Minister Gavin Jennings, whose department is responsible for the system, said there was a low level of risk associated with the new system.
"A risk assessment by a major accounting and consulting firm has been undertaken to determine the level of cover required by participants. This identified that the level of risk was very low," the spokeswoman said.
Mr Brett Young writes in the Law Institute Journal that the 2008 start date for the conveyancers' regulatory system "raises questions about the ability of conveyancers to be involved in the process, particularly in relation to their ongoing insurance requirements".
"The institute believes the current conveyancing legislation does not provide sufficient insurance coverage for solicitors to feel confident entering into e-conveyancing transactions with unregulated conveyancers," he writes.
However, the rules governing the system require all users of the new system to have a set level of insurance cover. A Mallesons Stephen Jaques overview states that the system's users will be required to sign contracts agreeing to comply with the rules.
The Australian Institute of Conveyancers, which represents non-lawyer conveyancers, says the institute's concerns appear to be based on a misapprehension.
Conveyancers institute Victorian chief executive Jill Ludwell says a government working group responsible for e-conveyancing had talked to the group's insurance broker and was satisfied with the insurance cover in policies for its members.
"We showed them our policy, they had a look and said they were satisfied with $1 million in professional indemnity cover and fidelity cover of $50,000," she says. "Electronic Conveyancing Victoria laid down guidelines for indemnity insurance and that is well and truly covered by members of the conveyancers institute. We get on very well with ECV. We have members helping them get the whole thing up and running. We have no problems with ECV and they seem to have no problems with us," she says.
Ms Ludwell says the law institute's warning to solicitors about participating in the system amounts to a threat to conveyancers. "They have it in their minds that electronic conveyancing is going to be legal work."
She rejects Mr Brett Young's assertions that conveyancers have not participated in consultations over the insurance requirement for e-conveyancing. "We have been consulted, and just not in their hearing," Ms Ludwell says.
Mr Brett Young writes in the Law Institute Journal that the law institute supports the system but unless its concerns are addressed, the launch date will be meaningless. He says he would not characterise the committee's view of the new system as an adverse risk assessment.
"They have some concerns over insurance and they want those concerns dealt with," he said. "They are looking to be included in the ongoing review of the system to make sure their concerns are addressed."
One of the committee's main concerns was the possibility that solicitors might be liable under the new system to compensate victims of fraudulent transactions if the fraud had been caused by others, such as conveyancers.
Ms Ludwell says this concern seems baseless because solicitors and conveyancers already work on opposite sides of paper-based conveyancing transactions. "What's the difference?"
Mr Brett Young says the new system posed risks for solicitors that were not present in traditional paper-based conveyancing.
Parties to the new system need to warrant that they have taken reasonable steps to ensure the information provided by another party, such as a conveyancer, is correct, Mr Brett Young says. If the information proves false and the conveyancer has inadequate insurance, there is a risk of liability falling to the solicitor, he says.
Mr Brett Young says he would like to see Victoria's system running as soon as possible. "But it will only work if you get all of the stakeholders on board. These issues can be addressed very quickly and we could then move forward," he says.
Mr Jennings' spokeswoman says the new system will not alter the substance of conveyancing transactions.
The Government has been working with the law institute for more than two and a half years on the e-conveyancing project. Within two weeks, the law institute is due to report on its assessment of the legal framework for the system. The Government will then hold discussions with law institute representatives.
Chris Merritt | October 12, 2007
Business Australian
Electronic Conveyancing Victoria is due to begin full operations on November 16 but there is a risk that solicitors may boycott the scheme.
Law Institute of Victoria chief executive Michael Brett Young has warned the state's solicitors that without changes the institute "cannot recommend that its members enter the scheme".
Unless the stand-off is resolved, it threatens to undermine the viability of the e-conveyancing system, which could cut the cost of conveyancing transactions by between $235 and $395, the state Government says.
The scheme had already been rocked when major banks withdrew from it last month because of frustration with a lack of co-operation between Victoria and authorities working on a national e-conveyancing project.
If solicitors join the major banks on the sidelines, the Victorian system would be deprived of the two main industry groups that are central players in most conveyancing transactions.
The institute's concerns were triggered by an adverse assessment of the system by the organisation that provides professional indemnity insurance for the state's solicitors.
The institute is also concerned that non-lawyer conveyancers will be using the new system before their new regulatory regime comes into force next year.
The institute says current legislation governing conveyancers does not provide enough insurance cover.
Mr Brett Young says this means solicitors "do not feel confident" about entering into electronic conveyancing transactions with unregulated conveyancers. However, non-lawyer conveyancers say their insurance cover has satisfied the state Government and solicitors are simply trying to dominate the new system.
Although the major banks have withdrawn from the e-conveyancing system, the Government says talks are continuing. Other financial institutions are still involved, including the Australian Securities Exchange, Bendigo Bank and the credit unions.
To justify the investment made by its members in the Victorian project, a national system needs to emerge, the Australian Bankers Association says.
After the big banks withdrew, the Victorian Government made the software underpinning the system available to all other states for assessment.
Queensland's Department of Natural Resources and Water had earlier conducted tests on the Victorian system and, according to Victoria, found that it could be adapted cost-effectively to meet Queensland's needs.
In Victoria, however, the system's launch may be marred if the state's solicitors heed the institute's warning about potential risks in using the new system.
The institute's concerns originated with the Legal Practitioners Liability Committee, a statutory authority that provides professional indemnity insurance for Victoria's solicitors and most national law firms, but they are also linked to the long-standing antipathy between solicitors and non-lawyer conveyancers, who have won government approval to compete for legal work in conveyancing transactions.
In the current issue of the Law Institute Journal, Mr Brett Young writes that the committee "believes there are greater risks for practitioners operating in this system than under the current system".
"Without the committee's endorsement, the institute cannot recommend that its members enter the scheme."
Talks aimed at resolving the committee's concerns are under way, but that organisation's assessment of the new system appears to be at odds with one commissioned by the Victorian Government.
A spokeswoman for Environment Minister Gavin Jennings, whose department is responsible for the system, said there was a low level of risk associated with the new system.
"A risk assessment by a major accounting and consulting firm has been undertaken to determine the level of cover required by participants. This identified that the level of risk was very low," the spokeswoman said.
Mr Brett Young writes in the Law Institute Journal that the 2008 start date for the conveyancers' regulatory system "raises questions about the ability of conveyancers to be involved in the process, particularly in relation to their ongoing insurance requirements".
"The institute believes the current conveyancing legislation does not provide sufficient insurance coverage for solicitors to feel confident entering into e-conveyancing transactions with unregulated conveyancers," he writes.
However, the rules governing the system require all users of the new system to have a set level of insurance cover. A Mallesons Stephen Jaques overview states that the system's users will be required to sign contracts agreeing to comply with the rules.
The Australian Institute of Conveyancers, which represents non-lawyer conveyancers, says the institute's concerns appear to be based on a misapprehension.
Conveyancers institute Victorian chief executive Jill Ludwell says a government working group responsible for e-conveyancing had talked to the group's insurance broker and was satisfied with the insurance cover in policies for its members.
"We showed them our policy, they had a look and said they were satisfied with $1 million in professional indemnity cover and fidelity cover of $50,000," she says. "Electronic Conveyancing Victoria laid down guidelines for indemnity insurance and that is well and truly covered by members of the conveyancers institute. We get on very well with ECV. We have members helping them get the whole thing up and running. We have no problems with ECV and they seem to have no problems with us," she says.
Ms Ludwell says the law institute's warning to solicitors about participating in the system amounts to a threat to conveyancers. "They have it in their minds that electronic conveyancing is going to be legal work."
She rejects Mr Brett Young's assertions that conveyancers have not participated in consultations over the insurance requirement for e-conveyancing. "We have been consulted, and just not in their hearing," Ms Ludwell says.
Mr Brett Young writes in the Law Institute Journal that the law institute supports the system but unless its concerns are addressed, the launch date will be meaningless. He says he would not characterise the committee's view of the new system as an adverse risk assessment.
"They have some concerns over insurance and they want those concerns dealt with," he said. "They are looking to be included in the ongoing review of the system to make sure their concerns are addressed."
One of the committee's main concerns was the possibility that solicitors might be liable under the new system to compensate victims of fraudulent transactions if the fraud had been caused by others, such as conveyancers.
Ms Ludwell says this concern seems baseless because solicitors and conveyancers already work on opposite sides of paper-based conveyancing transactions. "What's the difference?"
Mr Brett Young says the new system posed risks for solicitors that were not present in traditional paper-based conveyancing.
Parties to the new system need to warrant that they have taken reasonable steps to ensure the information provided by another party, such as a conveyancer, is correct, Mr Brett Young says. If the information proves false and the conveyancer has inadequate insurance, there is a risk of liability falling to the solicitor, he says.
Mr Brett Young says he would like to see Victoria's system running as soon as possible. "But it will only work if you get all of the stakeholders on board. These issues can be addressed very quickly and we could then move forward," he says.
Mr Jennings' spokeswoman says the new system will not alter the substance of conveyancing transactions.
The Government has been working with the law institute for more than two and a half years on the e-conveyancing project. Within two weeks, the law institute is due to report on its assessment of the legal framework for the system. The Government will then hold discussions with law institute representatives.
Chris Merritt | October 12, 2007
Business Australian
Boycott by Lawyers?
THE bad blood between Victoria's lawyers and the state's conveyancers has just about gone far enough.
At the very least, this antipathy appears to be one of the factors behind the possible boycott by solicitors of Victoria's new system of electronic conveyancing.
That system, the first in the nation, is expected to lead to significant cost savings for everyone who buys and sells property. It deserves to be supported by lawyers.
If solicitors withdraw from the new system, it will have two possible consequences.
In the short term, it will hurt consumers of legal services. Those who choose to leave their conveyancing work with solicitors will be forced to use traditional paper-based conveyancing. And thanks to the Victorian Government, the cost of that traditional service is about to rise.
In the long-term, a boycott will almost certainly backfire.
When South Australia invented the system of Torrens title, that state's solicitors reacted in much the same way and boycotted the new-fangled system.
They favoured the old-system form of title that, when viewed objectively, is nothing but a make-work scheme for the legally trained.
That left a lucrative gap in the market. The result: South Australia is now one of the greatest strong-holds for non-lawyer conveyancers.
If Victoria's solicitors want to achieve the same outcome, they should go right ahead. The conveyancers will steal their lunch.
Chris Merritt | October 12, 2007
Business Australian
I agree with Chris' conclusion, and the comment about lawyers antipathy, but the quotation about a possible lawyer's boycott is not supported by any direct quotation.
At the very least, this antipathy appears to be one of the factors behind the possible boycott by solicitors of Victoria's new system of electronic conveyancing.
That system, the first in the nation, is expected to lead to significant cost savings for everyone who buys and sells property. It deserves to be supported by lawyers.
If solicitors withdraw from the new system, it will have two possible consequences.
In the short term, it will hurt consumers of legal services. Those who choose to leave their conveyancing work with solicitors will be forced to use traditional paper-based conveyancing. And thanks to the Victorian Government, the cost of that traditional service is about to rise.
In the long-term, a boycott will almost certainly backfire.
When South Australia invented the system of Torrens title, that state's solicitors reacted in much the same way and boycotted the new-fangled system.
They favoured the old-system form of title that, when viewed objectively, is nothing but a make-work scheme for the legally trained.
That left a lucrative gap in the market. The result: South Australia is now one of the greatest strong-holds for non-lawyer conveyancers.
If Victoria's solicitors want to achieve the same outcome, they should go right ahead. The conveyancers will steal their lunch.
Chris Merritt | October 12, 2007
Business Australian
I agree with Chris' conclusion, and the comment about lawyers antipathy, but the quotation about a possible lawyer's boycott is not supported by any direct quotation.
States debate the merits of new electronic conveyancing system
THE Victorian Government believes its new electronic conveyancing system could be a sound platform for the development of a national system.
Queensland's Department of Natural Resources and Water has already assessed the new system and, according to the Victorian Government, "found it could be adapted cost-effectively to meet that state's needs".
When the Victorian system goes live on November 16, it will enable electronic settlement for property sales and lodgment of land transfers as well as electronic payment of duty to the State Revenue Office.
It has been in development for five years and builds on the existing Victorian system of electronic lodgment and discharge of mortgages.
It will be the only system of its kind in Australia.
The Victorian Department of Sustainability and Environment, which is responsible for the new system, believes it has accelerated the development of electronic conveyancing around the nation.
But Victoria has only just made the software that underpins the new system available to all other states for assessment. For much of the development period, officials in NSW say they were unable to see the substance of what the Victorians were building.
That period of interstate suspicion appears to be ending. But it did little to foster the development of a national system. Each state has different methods of transferring and registering title to land.
Sources in NSW say there is no doubt that the Victorian system does not meet the needs of its northern neighbour.
Parts of it may be capable of being adapted, but NSW officials want a system that has been designed to meet the needs of their state.
So does this mean Australia is on the verge of a bout of parochialism of the type that left the nation with inconsistent rail gauges?
Responsibility for heading off that sort of calamity rests with an organisation known as the National Electronic Conveyancing System (NECS).
The steering committee for that organisation is chaired by Les Taylor, former general counsel of the Commonwealth Bank and one-time corporate lawyer of the year.
NECS brings together all the states as well as those organisations whose members are involved in conveyancing - including the Law Council, the Australian Bankers Association and the Australian Institute of Conveyancers. Despite the different requirements of the different states, all members of NECS are committed to overcoming the differences and establishing a truly national system.
The Law Council representative on that body is John Corcoran, a former president of the Law Institute of Victoria and an executive member of the Law Council.
"We want a seamless national system," he said.
"Everyone wants that. The question is: how do you deliver that?"
When the NECS steering committee met in Perth at the end of June, it made a decision that could provide a way forward.
"We decided that to the maximum extent possible, we want to use the Victorian system that has been developed.
"We want to adapt what the Victorians have done. So whether you are conveyancing a property at Toowoomba, Perth or anywhere, you just go online and do it through the national system," he said.
"You might need to change the system rules, or the way you identify someone who uses the system, but to the largest extent possible, the investment that has been made should be utilised. In my view there is no risk of a rail-gauge type problem."
One of the main reasons for this is that the key players - lawyers, bankers and conveyancers - are not prepared to tolerate interstate inconsistency.
"The lawyers and banks are key stakeholders. The banks were involved in developing the Victorian pilot but they are now stepping back and want to see it integrated into the national scheme," Mr Corcoran said.
"Right from the beginning, the Law Council has backed a truly national system."
The Australian Bankers Association acting chief executive Ian Gilbert said the banks had tested the Victorian system and found that it worked.
"But we want it to find its way through to a national system. The states need to get together.
"For our members, if it is going to be viable - given the investment involved - then the system needs to be national," Mr Gilbert said.
Chris Merritt | October 12, 2007
Australian Business
Queensland's Department of Natural Resources and Water has already assessed the new system and, according to the Victorian Government, "found it could be adapted cost-effectively to meet that state's needs".
When the Victorian system goes live on November 16, it will enable electronic settlement for property sales and lodgment of land transfers as well as electronic payment of duty to the State Revenue Office.
It has been in development for five years and builds on the existing Victorian system of electronic lodgment and discharge of mortgages.
It will be the only system of its kind in Australia.
The Victorian Department of Sustainability and Environment, which is responsible for the new system, believes it has accelerated the development of electronic conveyancing around the nation.
But Victoria has only just made the software that underpins the new system available to all other states for assessment. For much of the development period, officials in NSW say they were unable to see the substance of what the Victorians were building.
That period of interstate suspicion appears to be ending. But it did little to foster the development of a national system. Each state has different methods of transferring and registering title to land.
Sources in NSW say there is no doubt that the Victorian system does not meet the needs of its northern neighbour.
Parts of it may be capable of being adapted, but NSW officials want a system that has been designed to meet the needs of their state.
So does this mean Australia is on the verge of a bout of parochialism of the type that left the nation with inconsistent rail gauges?
Responsibility for heading off that sort of calamity rests with an organisation known as the National Electronic Conveyancing System (NECS).
The steering committee for that organisation is chaired by Les Taylor, former general counsel of the Commonwealth Bank and one-time corporate lawyer of the year.
NECS brings together all the states as well as those organisations whose members are involved in conveyancing - including the Law Council, the Australian Bankers Association and the Australian Institute of Conveyancers. Despite the different requirements of the different states, all members of NECS are committed to overcoming the differences and establishing a truly national system.
The Law Council representative on that body is John Corcoran, a former president of the Law Institute of Victoria and an executive member of the Law Council.
"We want a seamless national system," he said.
"Everyone wants that. The question is: how do you deliver that?"
When the NECS steering committee met in Perth at the end of June, it made a decision that could provide a way forward.
"We decided that to the maximum extent possible, we want to use the Victorian system that has been developed.
"We want to adapt what the Victorians have done. So whether you are conveyancing a property at Toowoomba, Perth or anywhere, you just go online and do it through the national system," he said.
"You might need to change the system rules, or the way you identify someone who uses the system, but to the largest extent possible, the investment that has been made should be utilised. In my view there is no risk of a rail-gauge type problem."
One of the main reasons for this is that the key players - lawyers, bankers and conveyancers - are not prepared to tolerate interstate inconsistency.
"The lawyers and banks are key stakeholders. The banks were involved in developing the Victorian pilot but they are now stepping back and want to see it integrated into the national scheme," Mr Corcoran said.
"Right from the beginning, the Law Council has backed a truly national system."
The Australian Bankers Association acting chief executive Ian Gilbert said the banks had tested the Victorian system and found that it worked.
"But we want it to find its way through to a national system. The states need to get together.
"For our members, if it is going to be viable - given the investment involved - then the system needs to be national," Mr Gilbert said.
Chris Merritt | October 12, 2007
Australian Business
Thursday, October 11, 2007
Agents Selling Authorities
You are selling and have chosen an agent. The Agent has prepared the Agents Selling Authority, usually exclusive for 90 days. But what if you are not happy with the level of service? You are locked in. Have you read the fine print. Probably not.
A suggestion made by estate agent Terry Ryder of McGrath Partners suggests that you consider putting a termination clause in the agency agreement. "It should give you the right to sack your agent if you're not happy with their level of service. Because in standard agreements, you're kind of locked in. A prudent seller would insist on writing in a clause which gives you the right to terminate without incurring any financial penalty."
Take Action
If you aren't happy with the treatment you've received as a buyer or vendor, you can make a complaint to the Real Estate Institute in your State or Territory. You could also contact the Department of Fair Trading, or equivalent in your State.
If you've been left out of pocket, and it was the agent's fault, seek legal advice in relation to your rights.
Top 10 questions to ask agents
1.How long have you been working in this area?
2.What comparable homes have you sold in this area lately?
3.What is the state of the market?
4.How long is it taking you to sell well-priced listings at the moment?
5.How much is my home worth? How have you come up with that figure?
6.Should I sell by auction or private treaty? Why?
7.What marketing strategy do you suggest? Why?
8.What will you do to introduce buyers to my property?
9.How does my house present? What should I do to maximise the sale price?
10.Do you have a list of recent vendors I can speak to?
Source Metropole Property Newsletter
A suggestion made by estate agent Terry Ryder of McGrath Partners suggests that you consider putting a termination clause in the agency agreement. "It should give you the right to sack your agent if you're not happy with their level of service. Because in standard agreements, you're kind of locked in. A prudent seller would insist on writing in a clause which gives you the right to terminate without incurring any financial penalty."
Take Action
If you aren't happy with the treatment you've received as a buyer or vendor, you can make a complaint to the Real Estate Institute in your State or Territory. You could also contact the Department of Fair Trading, or equivalent in your State.
If you've been left out of pocket, and it was the agent's fault, seek legal advice in relation to your rights.
Top 10 questions to ask agents
1.How long have you been working in this area?
2.What comparable homes have you sold in this area lately?
3.What is the state of the market?
4.How long is it taking you to sell well-priced listings at the moment?
5.How much is my home worth? How have you come up with that figure?
6.Should I sell by auction or private treaty? Why?
7.What marketing strategy do you suggest? Why?
8.What will you do to introduce buyers to my property?
9.How does my house present? What should I do to maximise the sale price?
10.Do you have a list of recent vendors I can speak to?
Source Metropole Property Newsletter
Monday, October 01, 2007
Master Builders Association response to EC
VICTORIA will be the first Australian state to enter the brave new world of "electronic conveyancing", but not everyone is happy with the proposed online system for exchanging mortgage documents.
The Master Builders Association says the State Government is using the new system to increase conveyancing fees. This would further reduce housing affordability, as its building and construction members would pass the added costs to consumers.
According to an MBA submission, land transfer fees would remain the same for electronic conveyancing, but would rise by between 16 and 32 per cent for those who stick with paper.
MBA executive director Brian Welch said the Land Victoria increase was yet another weight on housing affordability.
"Those who stick with the paper trail system are going to be penalised," he said.
"We support the initiative … but it discriminates heavily against people who are not computer-based; who are not literate with these systems.
"The State Government finds taxation all too easy to increase and it impacts on housing once again."
Source The Age Natalie Craig 1 Oct 07
You would have thought a positive step was to reduce transfer fees on electronic conveyancing transactions. It sends a positive signal to promote uptake and second the productivity savings are built into the cost of the transaction. Anyhow transfer fees bear no relation to the cost of the transaction, as the MBA point out the transfer fee is a tax. The MBA response is also consistent with the view the government wants to see a return on their investment in EC. The government can charge whatever they like as they hold the monopoly. BH
The Master Builders Association says the State Government is using the new system to increase conveyancing fees. This would further reduce housing affordability, as its building and construction members would pass the added costs to consumers.
According to an MBA submission, land transfer fees would remain the same for electronic conveyancing, but would rise by between 16 and 32 per cent for those who stick with paper.
MBA executive director Brian Welch said the Land Victoria increase was yet another weight on housing affordability.
"Those who stick with the paper trail system are going to be penalised," he said.
"We support the initiative … but it discriminates heavily against people who are not computer-based; who are not literate with these systems.
"The State Government finds taxation all too easy to increase and it impacts on housing once again."
Source The Age Natalie Craig 1 Oct 07
You would have thought a positive step was to reduce transfer fees on electronic conveyancing transactions. It sends a positive signal to promote uptake and second the productivity savings are built into the cost of the transaction. Anyhow transfer fees bear no relation to the cost of the transaction, as the MBA point out the transfer fee is a tax. The MBA response is also consistent with the view the government wants to see a return on their investment in EC. The government can charge whatever they like as they hold the monopoly. BH
Tuesday, September 04, 2007
Attorney-General Philip Ruddock
Attorney-General Philip Ruddock today expressed disappointment in the failure of the states and territories to cooperate in efforts to create a national electronic conveyancing system.
"The same jealousies that resulted in different rail-gauge widths in the 19th century are sabotaging a national electronic conveyancing system in the 21st century," Mr Ruddock said.
"I have been pressing for the states and territories to focus on the need for a national electronic conveyancing system for some time. A national electronic conveyancing system would remove red tape for business and lower costs for home buyers."
The Victorian Government has developed a pilot electronic conveyancing system.
"It is now being reported that Victoria has not yet shared its system with the other states to see if it can be used nationally," Mr Ruddock said.
"As a result, the private sector has lost confidence in the ability of the states and territories to deliver a national system."
"I am extremely disappointed that the failure of states and territories to cooperate has undermined such an important project."
The Australian Government has monitored the development of NECS through the Standing Committee of Attorneys-General (SCAG).
"While I recognise that NECS involves a range of ministers, I am disappointed that the Victorian Attorney-General has been unable to provide leadership on such an important national issue."
"I call on the states and territories to work together in the national interest and make a national electronic conveyancing system a reality."
This is a media release issued by AG Phil Ruddock 3/9/07
"The same jealousies that resulted in different rail-gauge widths in the 19th century are sabotaging a national electronic conveyancing system in the 21st century," Mr Ruddock said.
"I have been pressing for the states and territories to focus on the need for a national electronic conveyancing system for some time. A national electronic conveyancing system would remove red tape for business and lower costs for home buyers."
The Victorian Government has developed a pilot electronic conveyancing system.
"It is now being reported that Victoria has not yet shared its system with the other states to see if it can be used nationally," Mr Ruddock said.
"As a result, the private sector has lost confidence in the ability of the states and territories to deliver a national system."
"I am extremely disappointed that the failure of states and territories to cooperate has undermined such an important project."
The Australian Government has monitored the development of NECS through the Standing Committee of Attorneys-General (SCAG).
"While I recognise that NECS involves a range of ministers, I am disappointed that the Victorian Attorney-General has been unable to provide leadership on such an important national issue."
"I call on the states and territories to work together in the national interest and make a national electronic conveyancing system a reality."
This is a media release issued by AG Phil Ruddock 3/9/07
Monday, September 03, 2007
Banks drop conveyancing pilot
The AFR reports the major banks had walked out of Victoria's electronic conveyancing system, known as ECV, which was to begin operating in November.
Without the bank's support there is no ECV.
The banks have invested heavily in ECV on the condition that it would be used as a model for the national system. The report continues the banks have become increasingly frustrated by a lack of dialogue between Victoria and the other states. They withdrew because Victoria has still to make its software available to the national body NECO.
In a letter to NECO, the Australian Bankers Association called for a national project team to be set up to improve co-operation. "Only through a national project ... can banks and other stakeholders approach a NECO project with confidence that there is one project, one process and one national outcome. Without this the banks will not be able to recommit to work on a project that lacks any certainty of a national roll-out or application"
Bendigo Bank is one of the few entities still in talks with the Victorian Government about the state's electronic conveyancing system (ECV).
Extracts from Australian Financial Review Matthew Drummond 3/9/07
copy articles
Without the bank's support there is no ECV.
The banks have invested heavily in ECV on the condition that it would be used as a model for the national system. The report continues the banks have become increasingly frustrated by a lack of dialogue between Victoria and the other states. They withdrew because Victoria has still to make its software available to the national body NECO.
In a letter to NECO, the Australian Bankers Association called for a national project team to be set up to improve co-operation. "Only through a national project ... can banks and other stakeholders approach a NECO project with confidence that there is one project, one process and one national outcome. Without this the banks will not be able to recommit to work on a project that lacks any certainty of a national roll-out or application"
Bendigo Bank is one of the few entities still in talks with the Victorian Government about the state's electronic conveyancing system (ECV).
Extracts from Australian Financial Review Matthew Drummond 3/9/07
copy articles
Thursday, August 30, 2007
Electronic Conveyancing - An update from Mr Madden
29 May 2007 Public Accounts and Estimates Committee 13
Mr RICH-PHILLIPS - I would like to ask you about the funding for the electronic conveyancing system — firstly, about the contradiction in the information contained in the budget overview which refers to the funding being provided, $6 million over four years, and budget paper 3, which refers to the funding being provided in one year, being the 07–08 year.
The CHAIR — What page is this?
Mr RICH-PHILLIPS — That is page 333. Can you just clarify, please, which is correct — the overview or the budget paper? Is it one year or is it four years?
Mr MADDEN — I am informed that it is over one year.
Mr RICH-PHILLIPS — I understand that is $6 million in addition to $24 million that was provided for the land exchange program. Can you tell the committee how that existing money has been expended in setting up this electronic conveyancing system and how the additional $6 million was spent?
Mr MADDEN — I might ask Peter Harris, secretary of the department, to reply to that. I would ask, Chair, that if there are any supplementary questions that they come through me so that I can respond.
The CHAIR — That is fine. They always do, Minister; don’t worry.
Mr HARRIS — In answer to the basic question for the committee’s benefit, the electronic conveyancing project has proved to be very successful and has met its technical milestones for being deliverable. If I could just ensure that it is in everybody’s mind that this electronic exchange will effectively replace the exchange that might occur otherwise, which would be managed by conveyancers. So when cheques are handed over and titles are provided as a result of a property transaction, this will now be able to occur electronically, with a significant estimated saving for every property transaction of the order of $300 or $400 on average.
It is quite an important piece of technological development for the property industry. It has substantial application outside Victoria — it is potentially a national system — and it has generated quite a lot of interest from the kind of institutions that are involved in electronic conveyancing. In terms of the funding, the project was supplied with funding on an incremental basis, and it has built up by cost over time according to its success. So having met each of its individual technical milestones, this last segment of funding approved by the government budget for this year will ensure that in effect this system is available in Victoria. I believe — I might look across at my adviser at this point — it will be available in the early part of 2008, if not earlier than that.
Ms OVERELL — Yes; the middle of 2008.
Mr HARRIS — Certainly it will be completed in the coming year. Those savings will then flow on to institutions and obviously on behalf of purchasers who care to use the electronic system. The paper-based system will nevertheless remain available for those who do not want to take advantage of that, and there undoubtedly will be some reasons determined by the individual institutions — banks and the like — as to whether or not they choose to go down this path. But we think the savings are very attractive, and the project is therefore likely to be considered quite a success.
Mr RICH-PHILLIPS — I understand the project has been on trial since 2005 and that there have been a couple of trials. I am curious as to why the extra $6 million is required now, if the project is already to a trial stage.
Mr MADDEN — First of all, in terms of the development of this, I understand that it has been ongoing for some time. This is the sort of technology you do not just do on your own. I also understand that you have got to bring people along with you, particularly if you are relying on many of the large financial institutions. I understand that financial institutions such as Westpac, ANZ, Commonwealth Bank, National Australia Bank, Macquarie Bank and Bendigo Bank are already using the mortgage transaction as part of their electronic conveyancing systems, so it is important that those sorts of stakeholders have confidence in the product and that when the extension of that is fully operating, people can feel completely confident about that.
Mr RICH-PHILLIPS — Are there concerns now?
Mr MADDEN — Let us also appreciate that this puts Victoria at the forefront of other Australian states and that in actual fact it is a world leader in terms of financial property settlement and lodgement of land transfers and mortgages. This is groundbreaking, and in terms of the intellectual property that goes with this we will see countries from around the world wanting to replicate what we are doing here in this state. I am not sure whether you have any more comments, Peter, in relation to any of those matters.
Mr RICH-PHILLIPS — You mentioned the banks that are trialling the system now. Have there been any problems in the trial? Have they expressed any concerns with the system that is currently running?
Mr MADDEN — My understanding is that those financial institutions are currently using the system and at this point it appears that they are very supportive of it, so I think all the indications are very supportive, But, of course, I suppose you have to trial these things before you roll them out completely, and that is just the cautious nature of how you would manage something that could have quite profound change and significant implications for the operation of any organisation. As I said, one of the great elements of this is that what we will see — I do not know if you are aware of the way in which they exchange titles and mortgages and all sorts of things at the last minute. Everyone has to come together at the last minute and often you have four parties involved, sitting around the table, and they all have to find a place to meet, and what you do not want is a glitch at the last minute because not only does it stop that transaction, but because there are a lot of linked transactions often for similar times of the day, people sell one property, purchase, and try to combine the dates so that they are not having to use different forms of credit. So it is important that the operation of this is absolutely sound, and no doubt you would not have the banks supportive of it if they did not feel confident about it, and we would expect that when they take it on board fully, it will be a world leader.
The CHAIR — Our family had a transaction last week and it went through very smoothly. In fact it was a day or so ahead of what they originally expected, so I am very grateful for the new system. (BH - what new system is he referring to????? he's getting ahead of himself here)
PUBLIC ACCOUNTS AND ESTIMATES COMMITTEE
Inquiry into budget estimates 2007–08
Melbourne — 29 May 2007
Gordon Rich-Phillips
Party: Liberal Party
House: Legislative Council
Member Public Accounts and Estimates Cttee since 1999.
Justin Madden
Party: Australian Labor Party
House: Legislative Council
Portfolio/Position: Minister for Planning
Ms Genevieve Overell,
General Manager, Office of Planning and Urban Design, Department of Sustainability and Environment
Mr Peter Harris,
Secretary of the Department of Sustainability and Environment;
Mr Bob. Stensholt
Party: Australian Labor Party
Chair, Public Accounts and Estimates Cttee since 2007.
Mr RICH-PHILLIPS - I would like to ask you about the funding for the electronic conveyancing system — firstly, about the contradiction in the information contained in the budget overview which refers to the funding being provided, $6 million over four years, and budget paper 3, which refers to the funding being provided in one year, being the 07–08 year.
The CHAIR — What page is this?
Mr RICH-PHILLIPS — That is page 333. Can you just clarify, please, which is correct — the overview or the budget paper? Is it one year or is it four years?
Mr MADDEN — I am informed that it is over one year.
Mr RICH-PHILLIPS — I understand that is $6 million in addition to $24 million that was provided for the land exchange program. Can you tell the committee how that existing money has been expended in setting up this electronic conveyancing system and how the additional $6 million was spent?
Mr MADDEN — I might ask Peter Harris, secretary of the department, to reply to that. I would ask, Chair, that if there are any supplementary questions that they come through me so that I can respond.
The CHAIR — That is fine. They always do, Minister; don’t worry.
Mr HARRIS — In answer to the basic question for the committee’s benefit, the electronic conveyancing project has proved to be very successful and has met its technical milestones for being deliverable. If I could just ensure that it is in everybody’s mind that this electronic exchange will effectively replace the exchange that might occur otherwise, which would be managed by conveyancers. So when cheques are handed over and titles are provided as a result of a property transaction, this will now be able to occur electronically, with a significant estimated saving for every property transaction of the order of $300 or $400 on average.
It is quite an important piece of technological development for the property industry. It has substantial application outside Victoria — it is potentially a national system — and it has generated quite a lot of interest from the kind of institutions that are involved in electronic conveyancing. In terms of the funding, the project was supplied with funding on an incremental basis, and it has built up by cost over time according to its success. So having met each of its individual technical milestones, this last segment of funding approved by the government budget for this year will ensure that in effect this system is available in Victoria. I believe — I might look across at my adviser at this point — it will be available in the early part of 2008, if not earlier than that.
Ms OVERELL — Yes; the middle of 2008.
Mr HARRIS — Certainly it will be completed in the coming year. Those savings will then flow on to institutions and obviously on behalf of purchasers who care to use the electronic system. The paper-based system will nevertheless remain available for those who do not want to take advantage of that, and there undoubtedly will be some reasons determined by the individual institutions — banks and the like — as to whether or not they choose to go down this path. But we think the savings are very attractive, and the project is therefore likely to be considered quite a success.
Mr RICH-PHILLIPS — I understand the project has been on trial since 2005 and that there have been a couple of trials. I am curious as to why the extra $6 million is required now, if the project is already to a trial stage.
Mr MADDEN — First of all, in terms of the development of this, I understand that it has been ongoing for some time. This is the sort of technology you do not just do on your own. I also understand that you have got to bring people along with you, particularly if you are relying on many of the large financial institutions. I understand that financial institutions such as Westpac, ANZ, Commonwealth Bank, National Australia Bank, Macquarie Bank and Bendigo Bank are already using the mortgage transaction as part of their electronic conveyancing systems, so it is important that those sorts of stakeholders have confidence in the product and that when the extension of that is fully operating, people can feel completely confident about that.
Mr RICH-PHILLIPS — Are there concerns now?
Mr MADDEN — Let us also appreciate that this puts Victoria at the forefront of other Australian states and that in actual fact it is a world leader in terms of financial property settlement and lodgement of land transfers and mortgages. This is groundbreaking, and in terms of the intellectual property that goes with this we will see countries from around the world wanting to replicate what we are doing here in this state. I am not sure whether you have any more comments, Peter, in relation to any of those matters.
Mr RICH-PHILLIPS — You mentioned the banks that are trialling the system now. Have there been any problems in the trial? Have they expressed any concerns with the system that is currently running?
Mr MADDEN — My understanding is that those financial institutions are currently using the system and at this point it appears that they are very supportive of it, so I think all the indications are very supportive, But, of course, I suppose you have to trial these things before you roll them out completely, and that is just the cautious nature of how you would manage something that could have quite profound change and significant implications for the operation of any organisation. As I said, one of the great elements of this is that what we will see — I do not know if you are aware of the way in which they exchange titles and mortgages and all sorts of things at the last minute. Everyone has to come together at the last minute and often you have four parties involved, sitting around the table, and they all have to find a place to meet, and what you do not want is a glitch at the last minute because not only does it stop that transaction, but because there are a lot of linked transactions often for similar times of the day, people sell one property, purchase, and try to combine the dates so that they are not having to use different forms of credit. So it is important that the operation of this is absolutely sound, and no doubt you would not have the banks supportive of it if they did not feel confident about it, and we would expect that when they take it on board fully, it will be a world leader.
The CHAIR — Our family had a transaction last week and it went through very smoothly. In fact it was a day or so ahead of what they originally expected, so I am very grateful for the new system. (BH - what new system is he referring to????? he's getting ahead of himself here)
PUBLIC ACCOUNTS AND ESTIMATES COMMITTEE
Inquiry into budget estimates 2007–08
Melbourne — 29 May 2007
Gordon Rich-Phillips
Party: Liberal Party
House: Legislative Council
Member Public Accounts and Estimates Cttee since 1999.
Justin Madden
Party: Australian Labor Party
House: Legislative Council
Portfolio/Position: Minister for Planning
Ms Genevieve Overell,
General Manager, Office of Planning and Urban Design, Department of Sustainability and Environment
Mr Peter Harris,
Secretary of the Department of Sustainability and Environment;
Mr Bob. Stensholt
Party: Australian Labor Party
Chair, Public Accounts and Estimates Cttee since 2007.
Sunday, August 26, 2007
Commsec - 1 million clients
Thirteen years ago, CommSec — or Commonwealth Securities to give it its full name — was a dream in the minds of a clutch of the bank's executives. What would have been the odds of the lumbering Commonwealth Bank launching a stockbroking business that, little more than a decade later, would book more trades on the stock exchange than anyone else?
But a bunch of bankers, used to the bureaucratic ways of the Commonwealth, slipped under the guard of the stockbroking establishment and built a business that now boasts close to 1.5 million accounts, or about a million customers. Its clients have either deserted high-charging established firms or they're new investors who feel comfortable doing their own transactions at a fraction of the rates charged by the big broking firms.
CommSec general manager Matthew Comyn says his full-service broking rivals "tend to look after their most valuable clients but if you're not getting much service and you're paying $100 a trade, and research is more or less freely available from a lot of different sources, then paying $19.95 a trade with us is a fairly easy decision for a lot of people."
Source The Age - Christopher Webb
Full Article Link
But a bunch of bankers, used to the bureaucratic ways of the Commonwealth, slipped under the guard of the stockbroking establishment and built a business that now boasts close to 1.5 million accounts, or about a million customers. Its clients have either deserted high-charging established firms or they're new investors who feel comfortable doing their own transactions at a fraction of the rates charged by the big broking firms.
CommSec general manager Matthew Comyn says his full-service broking rivals "tend to look after their most valuable clients but if you're not getting much service and you're paying $100 a trade, and research is more or less freely available from a lot of different sources, then paying $19.95 a trade with us is a fairly easy decision for a lot of people."
Source The Age - Christopher Webb
Full Article Link
Monday, August 20, 2007
seek.com.au 2007 results
Online job advertiser Seek has reported 62.8 per cent net profit increase and remains confident of future employment conditions and growth prospects.
For the year ended June 30, 2007, net profit increased to $55.5 million from $34.1 million.
Sales revenue jumped to $157 million from $106.2 million.
Earnings before interest, tax, depreciation and amortisation were up to $80.3 million from $49 million.
"We have continued to enjoy strong growth over the past 12 months and have increased our market leadership position," joint chief executive Paul Bassat said.
"SEEK continues to lead the market in unaided awareness, ad volumes, unique browsers and market reach."
Mr Bassat said a "structural shift" was taking place in the Australian classifieds market, and it was likely to follow the US, where 38 per cent of employment advertising is online.
That compared with Australia's 23 per cent and underpinned the rosy outlook.
"Growth opportunities are still evident in the SME (small and medium enterprise) market and a focus on customer acquisition and retention is central to our growth strategy for the year ahead," he said.
"Increasing our market penetration in QLD, SA and WA as well as the Government and Healthcare sectors are also high on our agenda.
Source The Age
For the year ended June 30, 2007, net profit increased to $55.5 million from $34.1 million.
Sales revenue jumped to $157 million from $106.2 million.
Earnings before interest, tax, depreciation and amortisation were up to $80.3 million from $49 million.
"We have continued to enjoy strong growth over the past 12 months and have increased our market leadership position," joint chief executive Paul Bassat said.
"SEEK continues to lead the market in unaided awareness, ad volumes, unique browsers and market reach."
Mr Bassat said a "structural shift" was taking place in the Australian classifieds market, and it was likely to follow the US, where 38 per cent of employment advertising is online.
That compared with Australia's 23 per cent and underpinned the rosy outlook.
"Growth opportunities are still evident in the SME (small and medium enterprise) market and a focus on customer acquisition and retention is central to our growth strategy for the year ahead," he said.
"Increasing our market penetration in QLD, SA and WA as well as the Government and Healthcare sectors are also high on our agenda.
Source The Age
realestate.com.au 2007 results
Online company Real.estate.com.au Ltd has booked an 83.2 per cent increase annual profit and says it is looking for opportunities to enter new markets.
The property search website operator made a net profit of $15.06 million for fiscal 2007, up from $8.2 million in the previous year.
Revenue rose 77.4 per cent to $107.97 million, on the back of organic growth.
"In the coming year we will continue to improve our existing operations while looking for opportunities to enter new markets," chief executive and managing director Simon Baker said.
The main Australian operations delivered earnings before interest, tax, depreciation and amortisation (EBITDA) of $39.13 million, up from $21.14 million, as the margin improved to 45 per cent from 38 per cent.
The United Kingdom operation made an EBITDA loss of $8.18 million in the year ended June 30, compared to a loss of $2.96 million.
But the company's new businesses in Italy and Luxembourg were profitable with EBITDA margins of seven per cent and nine per cent, respectively.
Mr Baker said the company's flagship Australian site, realestate.com.au, continued to gain market share.
In June, it had 100 per cent more unique browsers than the country's second site, domain.com.au, according to Nielsen/NetRatings.
Overall, 7.14 million people visited the websites owned and operated by the group, which was up 44 per cent than in June 2006.
In July, that number rose to 7.6 million.
The number of real estate agent subscribers increased by 59 per cent over the year to 17,011, from 10,713.
Agents are the company's core customers and agent subscriptions are a key performance and revenue driver.
Property listings rose 84 per cent to 1.083 million in June, from a year ago.
In February, Mr Baker said real estate agents were beginning to question the value of traditional media for property listings.
He said that realestate.com.au was significantly cheaper than print media alternatives and had an average revenue per listing per month of between $15 and $20.
The company did not declare a final dividend.
The group operates a stable of global websites including realestate.com.au, property.com.au, homesite.com.au, realcommercial.com.au and propertylook.com.au.
Source The Age
The property search website operator made a net profit of $15.06 million for fiscal 2007, up from $8.2 million in the previous year.
Revenue rose 77.4 per cent to $107.97 million, on the back of organic growth.
"In the coming year we will continue to improve our existing operations while looking for opportunities to enter new markets," chief executive and managing director Simon Baker said.
The main Australian operations delivered earnings before interest, tax, depreciation and amortisation (EBITDA) of $39.13 million, up from $21.14 million, as the margin improved to 45 per cent from 38 per cent.
The United Kingdom operation made an EBITDA loss of $8.18 million in the year ended June 30, compared to a loss of $2.96 million.
But the company's new businesses in Italy and Luxembourg were profitable with EBITDA margins of seven per cent and nine per cent, respectively.
Mr Baker said the company's flagship Australian site, realestate.com.au, continued to gain market share.
In June, it had 100 per cent more unique browsers than the country's second site, domain.com.au, according to Nielsen/NetRatings.
Overall, 7.14 million people visited the websites owned and operated by the group, which was up 44 per cent than in June 2006.
In July, that number rose to 7.6 million.
The number of real estate agent subscribers increased by 59 per cent over the year to 17,011, from 10,713.
Agents are the company's core customers and agent subscriptions are a key performance and revenue driver.
Property listings rose 84 per cent to 1.083 million in June, from a year ago.
In February, Mr Baker said real estate agents were beginning to question the value of traditional media for property listings.
He said that realestate.com.au was significantly cheaper than print media alternatives and had an average revenue per listing per month of between $15 and $20.
The company did not declare a final dividend.
The group operates a stable of global websites including realestate.com.au, property.com.au, homesite.com.au, realcommercial.com.au and propertylook.com.au.
Source The Age
Sunday, August 12, 2007
Living in the 70s
In the mid 80s I worked for a merchant bank that traded bills and bonds. Screen trading was relatively new. Before screen trading, the market for bills, bonds and cash was traders ringing around the market place with their peers to conduct a trade, are you a seller or a buyer, and at what price and quantity? It was less than perfect market. It was also conducted in a certain time frame. All day trading was halted around 11am or it was a case of forward trading. The primary reason for the limited time frame for trading was the necessity to physically settle all trades same day. Settlements were done in the afternoon after bank cheques were drawn (for tens of millions) and you had drawn up your round for physically exchanging bank cheques and securities. Then you got on your bike (or tram) and went from one bank to another settling the trades.
Two changes to the market took place in the mid to late eighties. One, the introduction of screen trading. Two, Austraclear introduced electronic settlements of fixed interest products. In 2006, SFE Austraclear has an inventory of over $600 Billion in securities and trades over $30B daily. The new ASX Austraclear System simplifies settlement complexities and enhances straight-through-processing (STP), office integration and cross border opportunities to facilitate the registering, bookkeeping, clearing and settlement of a broader range of derivative, security and cash asset classes. (source ASX)
The property market - in a nutshell "we" seem to be stuck in the 1970s.
It is an obvious thing to say that "we" need to emulate systems like Austraclear and CHESS. Our current settlement systems for property conveyancing and mortgage processing are hapless. And the efforts of the Land Registries, Revenue Offices, Financial Institutions and Law Societies to bring about the necessary changes on a national basis seems to have been reduced to a morass or quagmire.
First to bring about change "we" don't need big bang changes. What "we" need to do is start to solve the communication quandries between the parties to the settlements chain. With a concerted commitment and co-operation by the Financial Institutions this could be solved quite easily.
Two changes to the market took place in the mid to late eighties. One, the introduction of screen trading. Two, Austraclear introduced electronic settlements of fixed interest products. In 2006, SFE Austraclear has an inventory of over $600 Billion in securities and trades over $30B daily. The new ASX Austraclear System simplifies settlement complexities and enhances straight-through-processing (STP), office integration and cross border opportunities to facilitate the registering, bookkeeping, clearing and settlement of a broader range of derivative, security and cash asset classes. (source ASX)
The property market - in a nutshell "we" seem to be stuck in the 1970s.
It is an obvious thing to say that "we" need to emulate systems like Austraclear and CHESS. Our current settlement systems for property conveyancing and mortgage processing are hapless. And the efforts of the Land Registries, Revenue Offices, Financial Institutions and Law Societies to bring about the necessary changes on a national basis seems to have been reduced to a morass or quagmire.
First to bring about change "we" don't need big bang changes. What "we" need to do is start to solve the communication quandries between the parties to the settlements chain. With a concerted commitment and co-operation by the Financial Institutions this could be solved quite easily.
Sunday, July 22, 2007
The top 10 shitty things lawyers have to contend with FIs
- Haven't I faxed you the Contract, Transfer and Title 3 times already? CBA
- Look, we sent you a copy of the Transfer , yet the name of the Mortgagor is wrong, you need to redo the Mortgage documents. Even worse the ANZ not once but twice lost a stamped Transfer
- For the sixth time, we need a letter confirming the amount of the original loan and the payout figure. Our client urgently needs this to get a deposit release Westpac
- How do I navigate through this phone system - I just want to book in a settlement or change the time
- Quote "We have lost or misplaced the bank cheques; did our settlement clerk take the cheque(s) by mistake?" NAB
- We cant find the title. Which bank, (our firm alone deals with banks that lose titles on average 3 to 4 times a year)
- What do you mean I cant email you? I have a 50 page document I need to send you. This is the year 2010. Westpac: phone, fax or post.
- I have been put on hold for 53 minutes - HSBC
- How come you cant give a payout figure? Settlement is tomorrow and the other side needs three days notice. And hey, how come I cant ever speak to the same person twice?
- What's the loan status? ANZ - two million telephone inquiries a year relating to the status of loan applications
11 What do you mean the title is still in the vendors name? I purchased this ppty 9 months ago - CBA
Friday, July 13, 2007
NECS - the benefits to all industry participants
Electronic / digital conveyancing, because of its nature,
• will provide industry participants with opportunities to organise their work and staffing needs more efficiently,
• to service a wider geographical distribution of transacting parties,
• to save time and expense preparing and correcting documentation, and
• to have greater confidence in the transaction process and in the other participants representing transacting parties.
These benefits will be greater the more an industry participant uses electronic conveyancing.
How will legal and conveyancing practices benefit?
Legal and conveyancing practices will benefit from opportunities to streamline their operations, saving staff time and expense through seamless integration with their case management systems. The information they already collect from their clients will be sent to the NECS and used to prepare the instruments required for the transaction.
• Paralegals and clerks will sign-on to the NECS through their in-house systems and ensure everything is in order for a legal practitioner or licensed conveyancer to certify and sign the instruments prior to the agreed time for settlement.
• Settlement will occur without having to obtain a bank cheque or send anyone to a pre-agreed location to exchange cheques and instruments.
• Lodgment will occur automatically after settlement without the need to instruct a lodging agent, and notification of lodgment will be received and recorded in in-house case management systems almost immediately.
• The conveyancing process will be completed much faster and with less effort.
It will be possible to handle many more transactions at the same time with no additional resources and to settle any number of matters on the same day.
How will financial institutions and other mortgage lenders benefit?
Financial institutions and other mortgage lenders will similarly benefit from opportunities to streamline their operations.
• The information many lenders already collect and have stored in their loan documentation systems will be automatically used through connections with NECS to populate workspaces and prepare instruments.
• Loans officers will sign-on to NECS through their in-house documentation systems and ensure everything is in order for a supervisor to certify and sign discharge of mortgage and/or new mortgage instruments prior to the agreed time for settlement.
• Settlement will occur without having to obtain a bank cheque or send anyone to a pre-agreed location to exchange cheques and instruments.
• Lodgment will occur automatically after settlement without the need to instruct a lodging agent, and notification of lodgment will be received and recorded in in-house documentation systems almost immediately.
• The process of documenting loans and lodging mortgages will be completed much faster with less effort and resources.
• The same number of staff will be able to handle a significantly greater number of loans and mortgages.
The full benefit of investments in in-house systems will be realised with straight-through processing to the Land Registry via NECS.
How will sole practitioners benefit?
Sole practitioners and small legal and conveyancer practices generally will benefit from the convenience and cost savings possible using NECS.
The practitioner will be able to complete all aspects of a conveyance without having to leave the office or having to use a courier or agent to deliver documents for client signing, to pick-up bank cheques, to attend settlement or to lodge instruments with the Land Registry.
They will be able to complete each conveyance and obtain these benefits using nothing more than an Internet browser. Alternatively, they can install and use one of a number of case management systems specially tailored by software development companies for legal and conveyancer practices.
How will the Land Registry benefit?
The Land Registry will benefit from lodgment of electronic instruments suitable for electronic examination and, ultimately, automatic registration. The electronic instruments will have been checked for consistency and completeness during preparation with opportunities for practitioners and lenders to make corrections on the spot. These checks and corrections during preparation will mean the Land Registry will not have to issue as many requisitions for additional or clarifying information during examination.
Source NSW NECS Update
• will provide industry participants with opportunities to organise their work and staffing needs more efficiently,
• to service a wider geographical distribution of transacting parties,
• to save time and expense preparing and correcting documentation, and
• to have greater confidence in the transaction process and in the other participants representing transacting parties.
These benefits will be greater the more an industry participant uses electronic conveyancing.
How will legal and conveyancing practices benefit?
Legal and conveyancing practices will benefit from opportunities to streamline their operations, saving staff time and expense through seamless integration with their case management systems. The information they already collect from their clients will be sent to the NECS and used to prepare the instruments required for the transaction.
• Paralegals and clerks will sign-on to the NECS through their in-house systems and ensure everything is in order for a legal practitioner or licensed conveyancer to certify and sign the instruments prior to the agreed time for settlement.
• Settlement will occur without having to obtain a bank cheque or send anyone to a pre-agreed location to exchange cheques and instruments.
• Lodgment will occur automatically after settlement without the need to instruct a lodging agent, and notification of lodgment will be received and recorded in in-house case management systems almost immediately.
• The conveyancing process will be completed much faster and with less effort.
It will be possible to handle many more transactions at the same time with no additional resources and to settle any number of matters on the same day.
How will financial institutions and other mortgage lenders benefit?
Financial institutions and other mortgage lenders will similarly benefit from opportunities to streamline their operations.
• The information many lenders already collect and have stored in their loan documentation systems will be automatically used through connections with NECS to populate workspaces and prepare instruments.
• Loans officers will sign-on to NECS through their in-house documentation systems and ensure everything is in order for a supervisor to certify and sign discharge of mortgage and/or new mortgage instruments prior to the agreed time for settlement.
• Settlement will occur without having to obtain a bank cheque or send anyone to a pre-agreed location to exchange cheques and instruments.
• Lodgment will occur automatically after settlement without the need to instruct a lodging agent, and notification of lodgment will be received and recorded in in-house documentation systems almost immediately.
• The process of documenting loans and lodging mortgages will be completed much faster with less effort and resources.
• The same number of staff will be able to handle a significantly greater number of loans and mortgages.
The full benefit of investments in in-house systems will be realised with straight-through processing to the Land Registry via NECS.
How will sole practitioners benefit?
Sole practitioners and small legal and conveyancer practices generally will benefit from the convenience and cost savings possible using NECS.
The practitioner will be able to complete all aspects of a conveyance without having to leave the office or having to use a courier or agent to deliver documents for client signing, to pick-up bank cheques, to attend settlement or to lodge instruments with the Land Registry.
They will be able to complete each conveyance and obtain these benefits using nothing more than an Internet browser. Alternatively, they can install and use one of a number of case management systems specially tailored by software development companies for legal and conveyancer practices.
How will the Land Registry benefit?
The Land Registry will benefit from lodgment of electronic instruments suitable for electronic examination and, ultimately, automatic registration. The electronic instruments will have been checked for consistency and completeness during preparation with opportunities for practitioners and lenders to make corrections on the spot. These checks and corrections during preparation will mean the Land Registry will not have to issue as many requisitions for additional or clarifying information during examination.
Source NSW NECS Update
Thursday, July 12, 2007
Hocking Stuart groups sold
Real estate group Hocking Stuart has been sold - to a group of its own real estate agents.
Greg Hocking and Andrew Stuart, who launched the business in 1985 from an office in Albert Park, today announced the sale to eight franchisees of Hocking Stuart offices around the state.
But neither would say how much they had sold their business for.
Mr Hocking said he was pleased to have sold out of the business.
"It has always been our goal to see Hocking Stuart pass into the hands of ... successors," he said.
The company, which last financial year said it had achieved sales in excess of $2.4 billion, has 42 offices across Victoria, 500 employees and around 11,000 properties under management.
It will now look nationally for a new chief executive officer.
Individual Hocking Stuart offices will remain owned by their directors.
Mr Hocking said he and Mr Stuart had been discussing "an exit strategy" for a number of years.
The company's name and branding would not change, Mr Hocking said, because the new owners were all already involved with the business.
"So from a grass roots level we know what to expect," he said.
Mr Hocking will now focus on a mortgage broking business he has been developing for the last 12 months, while Mr Stuart has retained an interest in Hocking Stuart's Albert Park office.
Source The Age
Clay Lucas
Greg Hocking and Andrew Stuart, who launched the business in 1985 from an office in Albert Park, today announced the sale to eight franchisees of Hocking Stuart offices around the state.
But neither would say how much they had sold their business for.
Mr Hocking said he was pleased to have sold out of the business.
"It has always been our goal to see Hocking Stuart pass into the hands of ... successors," he said.
The company, which last financial year said it had achieved sales in excess of $2.4 billion, has 42 offices across Victoria, 500 employees and around 11,000 properties under management.
It will now look nationally for a new chief executive officer.
Individual Hocking Stuart offices will remain owned by their directors.
Mr Hocking said he and Mr Stuart had been discussing "an exit strategy" for a number of years.
The company's name and branding would not change, Mr Hocking said, because the new owners were all already involved with the business.
"So from a grass roots level we know what to expect," he said.
Mr Hocking will now focus on a mortgage broking business he has been developing for the last 12 months, while Mr Stuart has retained an interest in Hocking Stuart's Albert Park office.
Source The Age
Clay Lucas
Monday, July 09, 2007
LIXI selected for the National Electronic Conveyancing System
The National Electronic Conveyancing Office (NECO) has announced an agreement with LIXI to create common data standards for the National Electronic Conveyancing System (NECS).
The NECS project is a co-operative initiative governed by a National Steering Committee (NSC) consisting of representatives of government land administrations, revenue commissioners, lawyers, conveyancers, bankers and the information brokers and law stationers.
Whilst this is a complex process involving different jurisdictional and industry policies and practices, Simon Libbis, executive director of NECO, says announcing data standards is a major milestone.
“LIXI’s facilitation of data standards for the national roll out of electronic conveyancing is crucial to the project’s progression. LIXI has demonstrated world class innovation and we are very excited to have their expertise available for electronic conveyancing” he said.
According to Socrates Vasiliadis, this agreement solidifies the importance of one standard for the industry.
“This announcement means LIXI is validated as the data standard for the industry and delivers value to our members. This project will change the way transfer of ownership of property is managed and will help the whole settlement process become more simplified” he said.
Property transactions in Australia account for 28% of GDP. The benefits that are expected to flow from the National Electronic Conveyancing System are:
* consumer and practitioner convenience
* user efficiency and consumer benefits
* straight-through processing from dealing preparation to registration
* single interface for national businesses
* common functionality for users in all jurisdictions
* easier cross-border transactions
* transparent application of jurisdiction rule differences.
Industry uptake in LIXI membership has increased since companies are now able to join without licensing IP. Members can therefore join yet hold off on purchasing IP until they’re ready to implement e-commerce facilities in the future.
Source lixi.org.au
The NECS project is a co-operative initiative governed by a National Steering Committee (NSC) consisting of representatives of government land administrations, revenue commissioners, lawyers, conveyancers, bankers and the information brokers and law stationers.
Whilst this is a complex process involving different jurisdictional and industry policies and practices, Simon Libbis, executive director of NECO, says announcing data standards is a major milestone.
“LIXI’s facilitation of data standards for the national roll out of electronic conveyancing is crucial to the project’s progression. LIXI has demonstrated world class innovation and we are very excited to have their expertise available for electronic conveyancing” he said.
According to Socrates Vasiliadis, this agreement solidifies the importance of one standard for the industry.
“This announcement means LIXI is validated as the data standard for the industry and delivers value to our members. This project will change the way transfer of ownership of property is managed and will help the whole settlement process become more simplified” he said.
Property transactions in Australia account for 28% of GDP. The benefits that are expected to flow from the National Electronic Conveyancing System are:
* consumer and practitioner convenience
* user efficiency and consumer benefits
* straight-through processing from dealing preparation to registration
* single interface for national businesses
* common functionality for users in all jurisdictions
* easier cross-border transactions
* transparent application of jurisdiction rule differences.
Industry uptake in LIXI membership has increased since companies are now able to join without licensing IP. Members can therefore join yet hold off on purchasing IP until they’re ready to implement e-commerce facilities in the future.
Source lixi.org.au
Wednesday, June 27, 2007
Penthouse living
Reproduced from Fairfax Domain
Author Ann Pilmer - June 27, 2007
Melburnians are increasingly swapping the purchase of land for air. In a turnaround from conventional wisdom that acquiring land was the way to go, today's urban property buyers are forking out for highrise apartments on footprints little bigger than a sizeable suburban block.
The ultimate purchase is literally the pinnacle of the building, that is, the penthouses and sub-penthouses at the top.
The newest penthouse at 150 Clarendon at East Melbourne was valued at $15 million last month. Top-floor places in Eureka Tower, Lucient, Yve, the Mercy hospital site, Freshwater Place, The Melburnian and the Domain in St Kilda Road usually trade in the high-million-dollar range.
But their owners are far from airheads. They're spending - and making - big money on these "islands in the sky".
A St Kilda Road penthouse-style apartment, for example, increased in value by more than $500,000 in a matter of months. Bought for $2 million in February last year, it was put back on the market twice, selling in May for $2.3 million, then in September for $2.6 million to a London-based buyer.
Penthouse specialist Robert I. Mitchelson of Icon Property, who handled all three sales, says highrise buyers tend to be 45-plus baby boomers who have sold the big family home and still want plenty of living space, but without the maintenance.
"The kids have gone, they are free to travel and have the money for such a lifestyle," says Mr Mitchelson. "They love the security of an apartment because they can lock it up and go and the body corporate will look after the maintenance. They free up their lives."
For many buyers, the penthouse becomes not just a home, it's a lifestyle. And financially, "there's not a better investment" than a good penthouse, says Mr Mitchelson.
"They're as scarce as hen's teeth because they can't be built without the block of lesser apartments underneath and there's not as much apartment building going on."
Mr Mitchelson says demand has always outstripped supply in his agency.
Canny buyers recognise the quality of existing buildings such as Eureka and realise that similar apartments in new developments will be considerably more expensive, reflecting the cost of living and increases in the price of building and land.
The penthouse is also seen as a prestigious buy.
When Eureka Tower was launched seven years ago, there was a rush to buy off the plan by investors keen to rub neighbourly shoulders with celebrities and the city's leading lights. Many of those apartments are now being resold.
Hocking Stuart's Brett Jarvis, a highrise apartment specialist, lives on the 60th level of Eureka Tower (sometimes called "towers" because it's effectively three highrise buildings in one) with wife Jill.
"I bought it way back and wish I'd bought more," he says. "We have a bedroom and a study and plenty of living space with views of Albert Park Lake, the Botanic Gardens, Government House and the yachts on Port Phillip Bay. It's something special. I give traffic reports to people coming to the football. You're 17 minutes from the airport and you can walk everywhere in the city so you don't need a car."
Mr Jarvis says any big apartment near the top of Eureka's 580 apartments on the 88 residential floors, fetches high prices. A penthouse shell on level 86 sold for $7 million. And a 320-square-metre apartment with 290-degree views on the 73rd level is for sale at $4.3 million.
Aside from the "million-dollar" views - which Mr Jarvis reckons more than make up for the price of the apartment - buyers like a big apartment with quality finishes. They are realising that quality comes at a price and because of rising costs new developments will be more expensive than existing ones. Mr Jarvis says good apartments on levels 50 to 60 in the Eureka Tower have jumped, from $100,000 to $600,000 and $700,000, since selling started seven years ago. A spacious 250-square-metre apartment on level 30, completed 21/2 years ago, would have sold at around $985,000 and is $1.4 million today.
He estimates apartment prices leap from $5000 to $10,000 a floor, depending on the view, and average $8000 to $10,000 a square metre.
A lot are bought by overseas buyers who find Melbourne's apartment prices very competitive on a global scale. Many former tenants are also buying into the building, and owners who bought on lower floors often buy higher up as they get used to the style of living.
Tim Blackett of Kay & Burton says a big problem is finding large, quality apartments for buyers selling the family home who don't want maintenance but still want space.
He says the right property with the right space, location, quality finishes, outdoor terrace and views will easily fetch from $10,000 to $15,000 a square metre.
For these buyers, says Mr Blackett, budget is secondary to finding the right property.
Bird's eye on the jams below
One of the best things about high-rise living - apart from the lack of maintenance - is that you can spot the traffic jams before you leave home. That's the view of Fiona and Bob (who did not want to include their last name).
Five years ago, the couple swapped an outer suburban house on two hectares with horses, chickens and dogs for a city penthouse on the 27th floor.
Traffic is not a problem for Bob, who is a property developer. His office happens to be on the ground floor of the building, and while he has a car, he rarely drives, preferring to use a bike for getting around the city.
After three years in their original three-bedroom apartment, the couple also bought the three-bedroom apartment next door and hired Ferntree Gully building company Rori Homes to renovate the two units into one big home.
Their grown children and partners also live with them, so residential space for six adults - and pet pooch Brando - was a priority.
The spaces are vast and include a family area, a formal space on a raised podium with a Versace couch, home theatre, and an entertainment area with a bar bigger than those in an average nightclub.
Fiona and Bob spent more than a $1 million on renovations, including $400,000 on electronics. Now, fibre optic lights around the base of the bar change colour at the push of a button and a television set drops out of the bar's rounded back wall.
The apartment also has three large bedrooms, four balconies (one with a gas barbecue and outdoor heater), gymnasium, five bathrooms, office, six car spaces and three storage cages.
The main bedroom includes a library and two bathrooms. If he doesn't watch the TV mounted on the wall, Bob can sit in his bath and look out onto Albert Park and St Kilda.
Stylish interiors aside, Bob says the penthouse is unique because of its size.
He's not in the market to sell but, if someone came up with $8.5 million, he says he might consider it.
Eureka! Loving the view from 49 floors up
Up-market apartment dwellers are notoriously shy of publicity, so Warren and Raelene Gainsmith of Gainsville Furniture were initially reluctant to tell their story. But they say they have the best of both worlds.
They still have their suburban home and, seven years ago, bought two apartments off the plan and rebuilt them into one on the 49th floor of Eureka Tower (pictured).
They combined the three- and two-bedroom apartments to get more living space and four bedrooms.
They use the apartment, which they moved into two years ago, during the busiest period for their business.
"Having a spot here has been fantastic. We're 30 seconds away from the business so I've cut down on travel time," says Mr Gainsmith, "and we've used the apartment as a display suite and now we've become specialists in apartment fitouts."
In their spacious apartment, with its lime green walls and aubergine carpet, mirrors are strategically placed to reflect views to Geelong, Albert Park, Port Phillip Bay and the helipad on the Yarra.
"You don't feel any movement," says Mr Gainsmith, who admits he won't let his young grandchildren on the narrow balcony without adult supervision.
The main bedroom, or parents' retreat, is a vast, angled space, dominated by a central leather bed overlooking the city.
"The city is lit up like a Christmas tree at night," Mr Gainsmith says. "You never get tired of looking at it. We put in a mirrored wall to reflect the lights of the Bolte Bridge, which gives the room a floating effect. "The sunsets are great, too, and there is always so much going on in the city," Mr Gainsmith says.
"On our days off, there is just so much more to do in the city. There's a great community atmosphere at Eureka and we've made some good friends here.
"They tell us the cost of building has gone up about 80 per cent since we bought. And in any future picture of Melbourne, you'll see the Eureka Tower like an icon." He's satisfied that the penthouse has been a "red hot investment".
What makes a great penthouse?
What exactly is a penthouse these days?
According to agents Robert I. Mitchelson and Brett Jarvis, definitions have become a bit elastic.
Once defined as the large, luxurious apartment at the top of the building, a "penthouse" now embraces any large apartment high up in the building.
A sub-penthouse used to be on the floor below the penthouse. Now it includes floors near the top of a tall building, with apartments offering penthouse-style trappings of spaciousness, luxurious finishes and desired location.
Buyers prefer apartments of more than 300 square metres, including plenty of living space. Formal rooms are not a priority and neither is a separate kitchen but sheltered, wide terraces and sweeping views are.
Ideally those views should be on the north-east away from south-west winds and fierce west summer sun.
Mr Mitchelson has had buyers fleeing winds - so strong in parts of Port Melbourne and Docklands that they have had to tie the outdoor furniture down so it didn't blow away - to the more sedate surroundings of St Kilda Road and Southbank.
Most buyers are not height-phobic, even in apartments with walls of floor-to-ceiling glass. "Some of the elderly might worry," Mr Mitchelson says. "But with time you don't even think about it."
Author Ann Pilmer - June 27, 2007
Melburnians are increasingly swapping the purchase of land for air. In a turnaround from conventional wisdom that acquiring land was the way to go, today's urban property buyers are forking out for highrise apartments on footprints little bigger than a sizeable suburban block.
The ultimate purchase is literally the pinnacle of the building, that is, the penthouses and sub-penthouses at the top.
The newest penthouse at 150 Clarendon at East Melbourne was valued at $15 million last month. Top-floor places in Eureka Tower, Lucient, Yve, the Mercy hospital site, Freshwater Place, The Melburnian and the Domain in St Kilda Road usually trade in the high-million-dollar range.
But their owners are far from airheads. They're spending - and making - big money on these "islands in the sky".
A St Kilda Road penthouse-style apartment, for example, increased in value by more than $500,000 in a matter of months. Bought for $2 million in February last year, it was put back on the market twice, selling in May for $2.3 million, then in September for $2.6 million to a London-based buyer.
Penthouse specialist Robert I. Mitchelson of Icon Property, who handled all three sales, says highrise buyers tend to be 45-plus baby boomers who have sold the big family home and still want plenty of living space, but without the maintenance.
"The kids have gone, they are free to travel and have the money for such a lifestyle," says Mr Mitchelson. "They love the security of an apartment because they can lock it up and go and the body corporate will look after the maintenance. They free up their lives."
For many buyers, the penthouse becomes not just a home, it's a lifestyle. And financially, "there's not a better investment" than a good penthouse, says Mr Mitchelson.
"They're as scarce as hen's teeth because they can't be built without the block of lesser apartments underneath and there's not as much apartment building going on."
Mr Mitchelson says demand has always outstripped supply in his agency.
Canny buyers recognise the quality of existing buildings such as Eureka and realise that similar apartments in new developments will be considerably more expensive, reflecting the cost of living and increases in the price of building and land.
The penthouse is also seen as a prestigious buy.
When Eureka Tower was launched seven years ago, there was a rush to buy off the plan by investors keen to rub neighbourly shoulders with celebrities and the city's leading lights. Many of those apartments are now being resold.
Hocking Stuart's Brett Jarvis, a highrise apartment specialist, lives on the 60th level of Eureka Tower (sometimes called "towers" because it's effectively three highrise buildings in one) with wife Jill.
"I bought it way back and wish I'd bought more," he says. "We have a bedroom and a study and plenty of living space with views of Albert Park Lake, the Botanic Gardens, Government House and the yachts on Port Phillip Bay. It's something special. I give traffic reports to people coming to the football. You're 17 minutes from the airport and you can walk everywhere in the city so you don't need a car."
Mr Jarvis says any big apartment near the top of Eureka's 580 apartments on the 88 residential floors, fetches high prices. A penthouse shell on level 86 sold for $7 million. And a 320-square-metre apartment with 290-degree views on the 73rd level is for sale at $4.3 million.
Aside from the "million-dollar" views - which Mr Jarvis reckons more than make up for the price of the apartment - buyers like a big apartment with quality finishes. They are realising that quality comes at a price and because of rising costs new developments will be more expensive than existing ones. Mr Jarvis says good apartments on levels 50 to 60 in the Eureka Tower have jumped, from $100,000 to $600,000 and $700,000, since selling started seven years ago. A spacious 250-square-metre apartment on level 30, completed 21/2 years ago, would have sold at around $985,000 and is $1.4 million today.
He estimates apartment prices leap from $5000 to $10,000 a floor, depending on the view, and average $8000 to $10,000 a square metre.
A lot are bought by overseas buyers who find Melbourne's apartment prices very competitive on a global scale. Many former tenants are also buying into the building, and owners who bought on lower floors often buy higher up as they get used to the style of living.
Tim Blackett of Kay & Burton says a big problem is finding large, quality apartments for buyers selling the family home who don't want maintenance but still want space.
He says the right property with the right space, location, quality finishes, outdoor terrace and views will easily fetch from $10,000 to $15,000 a square metre.
For these buyers, says Mr Blackett, budget is secondary to finding the right property.
Bird's eye on the jams below
One of the best things about high-rise living - apart from the lack of maintenance - is that you can spot the traffic jams before you leave home. That's the view of Fiona and Bob (who did not want to include their last name).
Five years ago, the couple swapped an outer suburban house on two hectares with horses, chickens and dogs for a city penthouse on the 27th floor.
Traffic is not a problem for Bob, who is a property developer. His office happens to be on the ground floor of the building, and while he has a car, he rarely drives, preferring to use a bike for getting around the city.
After three years in their original three-bedroom apartment, the couple also bought the three-bedroom apartment next door and hired Ferntree Gully building company Rori Homes to renovate the two units into one big home.
Their grown children and partners also live with them, so residential space for six adults - and pet pooch Brando - was a priority.
The spaces are vast and include a family area, a formal space on a raised podium with a Versace couch, home theatre, and an entertainment area with a bar bigger than those in an average nightclub.
Fiona and Bob spent more than a $1 million on renovations, including $400,000 on electronics. Now, fibre optic lights around the base of the bar change colour at the push of a button and a television set drops out of the bar's rounded back wall.
The apartment also has three large bedrooms, four balconies (one with a gas barbecue and outdoor heater), gymnasium, five bathrooms, office, six car spaces and three storage cages.
The main bedroom includes a library and two bathrooms. If he doesn't watch the TV mounted on the wall, Bob can sit in his bath and look out onto Albert Park and St Kilda.
Stylish interiors aside, Bob says the penthouse is unique because of its size.
He's not in the market to sell but, if someone came up with $8.5 million, he says he might consider it.
Eureka! Loving the view from 49 floors up
Up-market apartment dwellers are notoriously shy of publicity, so Warren and Raelene Gainsmith of Gainsville Furniture were initially reluctant to tell their story. But they say they have the best of both worlds.
They still have their suburban home and, seven years ago, bought two apartments off the plan and rebuilt them into one on the 49th floor of Eureka Tower (pictured).
They combined the three- and two-bedroom apartments to get more living space and four bedrooms.
They use the apartment, which they moved into two years ago, during the busiest period for their business.
"Having a spot here has been fantastic. We're 30 seconds away from the business so I've cut down on travel time," says Mr Gainsmith, "and we've used the apartment as a display suite and now we've become specialists in apartment fitouts."
In their spacious apartment, with its lime green walls and aubergine carpet, mirrors are strategically placed to reflect views to Geelong, Albert Park, Port Phillip Bay and the helipad on the Yarra.
"You don't feel any movement," says Mr Gainsmith, who admits he won't let his young grandchildren on the narrow balcony without adult supervision.
The main bedroom, or parents' retreat, is a vast, angled space, dominated by a central leather bed overlooking the city.
"The city is lit up like a Christmas tree at night," Mr Gainsmith says. "You never get tired of looking at it. We put in a mirrored wall to reflect the lights of the Bolte Bridge, which gives the room a floating effect. "The sunsets are great, too, and there is always so much going on in the city," Mr Gainsmith says.
"On our days off, there is just so much more to do in the city. There's a great community atmosphere at Eureka and we've made some good friends here.
"They tell us the cost of building has gone up about 80 per cent since we bought. And in any future picture of Melbourne, you'll see the Eureka Tower like an icon." He's satisfied that the penthouse has been a "red hot investment".
What makes a great penthouse?
What exactly is a penthouse these days?
According to agents Robert I. Mitchelson and Brett Jarvis, definitions have become a bit elastic.
Once defined as the large, luxurious apartment at the top of the building, a "penthouse" now embraces any large apartment high up in the building.
A sub-penthouse used to be on the floor below the penthouse. Now it includes floors near the top of a tall building, with apartments offering penthouse-style trappings of spaciousness, luxurious finishes and desired location.
Buyers prefer apartments of more than 300 square metres, including plenty of living space. Formal rooms are not a priority and neither is a separate kitchen but sheltered, wide terraces and sweeping views are.
Ideally those views should be on the north-east away from south-west winds and fierce west summer sun.
Mr Mitchelson has had buyers fleeing winds - so strong in parts of Port Melbourne and Docklands that they have had to tie the outdoor furniture down so it didn't blow away - to the more sedate surroundings of St Kilda Road and Southbank.
Most buyers are not height-phobic, even in apartments with walls of floor-to-ceiling glass. "Some of the elderly might worry," Mr Mitchelson says. "But with time you don't even think about it."
Monday, June 25, 2007
Melbournes winter is hot
Woodards Ruth Roberts. Caulfield auction. Property on the market at 750K sold $895K.
Buxtons Craig Williamson. Reported fierce competition for an ordinary house with a quirky layout on the wrong side of the street. The house, at 12 Huntley Road Bentleigh, sold for $760K, 100K above the reserve.
Craig said there had been 23 requests for contracts, and six bidders competed furiously. 23 requests!!
"South facing, main roads, railway lines, quirky floor plans - it's like "who cares?" he siad. "Its creating real estate heaven."
Buxtons Craig Williamson. Reported fierce competition for an ordinary house with a quirky layout on the wrong side of the street. The house, at 12 Huntley Road Bentleigh, sold for $760K, 100K above the reserve.
Craig said there had been 23 requests for contracts, and six bidders competed furiously. 23 requests!!
"South facing, main roads, railway lines, quirky floor plans - it's like "who cares?" he siad. "Its creating real estate heaven."
Thursday, June 21, 2007
247Legal - digital conveyancing for vendors & clients
247Legal is digital conveyancing. Its makes the conveyancing process simple to follow. Its online. Its interactive. You can follow the progress of your file online. The information is shared with your agent making their job of selling easier.
Wednesday, June 20, 2007
NZ - conveyIT partners with Fairfax Trade Me
The national network of property conveyancers, conveyIT, is now in partnership with New Zealand’s largest online marketplace Trade Me, to provide legal information to Trade Me property buyers.
Property listings on Trade Me have a direct link to conveyIT for purchasers seeking advice. The website also contains a network of local firms throughout the country that will provide property conveyancing for Trade Me members.
Tony Southall, chair of Gibson Sheat Lawyers – the law firm behind the development of the conveyIT system – says, “Increasingly, people are conducting their property transactions over the net, so it is important that legal information is as accessible as the property listings”.
Trade Me Property is the most visited real estate website in New Zealand and currently has over 38,000 properties listed, with an estimated 100,000 listings across New Zealand to appear over the next year.
Trade Me general manager Sam Morgan says conveyIT was selected for its “obvious commitment to eCommerce”.
“The conveyIT website gives the Trade Me community of 1.6 million users a source of free legal information and access to lawyers in their area.”
Property listings on Trade Me have a direct link to conveyIT for purchasers seeking advice. The website also contains a network of local firms throughout the country that will provide property conveyancing for Trade Me members.
Tony Southall, chair of Gibson Sheat Lawyers – the law firm behind the development of the conveyIT system – says, “Increasingly, people are conducting their property transactions over the net, so it is important that legal information is as accessible as the property listings”.
Trade Me Property is the most visited real estate website in New Zealand and currently has over 38,000 properties listed, with an estimated 100,000 listings across New Zealand to appear over the next year.
Trade Me general manager Sam Morgan says conveyIT was selected for its “obvious commitment to eCommerce”.
“The conveyIT website gives the Trade Me community of 1.6 million users a source of free legal information and access to lawyers in their area.”
Sunday, June 17, 2007
Telstra wants out of the Trading Post
Print can't compete with online ad sites
The Age online
James Kirby
June 17, 2007
Three years after Telstra paid a pricey $636 million for the publication, it has put the business back on the block and it will be lucky to cover its costs.
At first glance, it's another flop from Telstra (in this case its directory business, Sensis) but who could have known three years ago that the internet would not just threaten print media in the "non-journalism" categories but beat it out the door.
In the world of job ads, real estate ads, exchange and mart classifieds, such as those in The Trading Post, a whole generation has popped up that would not dream of waiting for a weekly magazine.
They move instantly — and they move online. Telstra's shift into "media without journalists" — as the purchase of The Trading Post was considered in 2004 — was much riskier than buying, say, the Packer group's magazine stable.
With the planned sale of The Trading Post, Telstra is acknowledging it does not have the expertise in traditional media to recreate the publication as a successful print/online hybrid, which it must become to survive.
The 7 per cent drop in interim revenues at The Trading Post in the six months to December is inexcusable. No wonder Telstra CEO Sol Trujillo pulled the trigger. He is much more excited by new media ventures such as SouFun.com, the real-estate website Telstra owns in China that is everything The Trading Post is not — new, exclusively online, low-cost and free of baggage.
The sale of the Packer group's Australian media interests is a sign that shifting traditional media assets into an online environment quickly is too hard. However, Packer's buyers, private equity group CVC, clearly have no fear.
Telstra might not look too clever when it sells The Trading Post. But at least Telstra knows what it doesn't know.
The Age online
James Kirby
June 17, 2007
Three years after Telstra paid a pricey $636 million for the publication, it has put the business back on the block and it will be lucky to cover its costs.
At first glance, it's another flop from Telstra (in this case its directory business, Sensis) but who could have known three years ago that the internet would not just threaten print media in the "non-journalism" categories but beat it out the door.
In the world of job ads, real estate ads, exchange and mart classifieds, such as those in The Trading Post, a whole generation has popped up that would not dream of waiting for a weekly magazine.
They move instantly — and they move online. Telstra's shift into "media without journalists" — as the purchase of The Trading Post was considered in 2004 — was much riskier than buying, say, the Packer group's magazine stable.
With the planned sale of The Trading Post, Telstra is acknowledging it does not have the expertise in traditional media to recreate the publication as a successful print/online hybrid, which it must become to survive.
The 7 per cent drop in interim revenues at The Trading Post in the six months to December is inexcusable. No wonder Telstra CEO Sol Trujillo pulled the trigger. He is much more excited by new media ventures such as SouFun.com, the real-estate website Telstra owns in China that is everything The Trading Post is not — new, exclusively online, low-cost and free of baggage.
The sale of the Packer group's Australian media interests is a sign that shifting traditional media assets into an online environment quickly is too hard. However, Packer's buyers, private equity group CVC, clearly have no fear.
Telstra might not look too clever when it sells The Trading Post. But at least Telstra knows what it doesn't know.
Dont qualify for a loan - turn to the web for help
New York Times
By JULIE CRESWELL
Published: June 16, 2007
Want to buy a home, but hampered by bad credit, an empty bank account or no job? No problem!
That may sound like an exaggeration of a late-night infomercial. But it is, in effect, the pitch that a number of Web sites are making to consumers, saying insolvent home shoppers can be made to look more attractive to lenders.
The sites, for example, offer better credit scores by hitching customers to a stranger’s credit card, or providing them pay stubs from a bogus company. One has even offered a well-stocked bank account to rent for a month or two.
Industry experts say these sites, which are relatively new, played a role in fueling the rampant mortgage fraud that has caused a huge spike in loan defaults in recent months because people bought homes they could not afford.
“There is a whole underground world — an online cottage industry — that has grown up that allows anyone to commit mortgage fraud,” said Constance Wilson, executive vice president at the financial fraud detection firm Interthinx.
Regulators and the mortgage industry are now vowing to crack down on aggressive lending practices that have led to a rising number of foreclosures. But that greater scrutiny, including lenders requiring more documentation than they have in the past, may actually increase demand for some of the services that these Web sites offer.
“We think these types of Web sites are increasing,” said Frank McKenna, chief fraud strategist at BasePoint Analytics, which helps banks and mortgage lenders identify fraudulent transactions.
Policing them is difficult, partly because it is unclear which laws, if any, the Web sites might be breaking (for their customers, though, the laws are clear — anybody who uses fake paycheck stubs or other false documents to misrepresent financial status to a bank or mortgage lender is committing fraud).
The people who operate these sites can also be hard to track down. At the first whiff of trouble, they can easily shut down and then quickly start a new Web site with a different name.
No statistics exist on the number of these Web sites and how many people use them, or whether any of the operators of such sites have been prosecuted.
An examination of loans made last year, including prime and subprime, in which some sort of fraud occurred, showed that incidents of false tax or financial statements had risen to 27 percent from 17 percent in 2002; fraudulent verifications of deposit had climbed to 22 percent from 15 percent four years ago; and false credit reports rose to 9 percent from 5 percent in 2002, according to a report issued this spring by the Mortgage Asset Research Institute based in Virginia.
If any documents were required, it was unclear whether the bogus documents were created by do-it-yourselfers or whether they turned to the products and services sold over the Internet.
Still, Joan E. Ferenczy, director of institutional investigations at Freddie Mac, said there had been a growing discussion in recent months among industry investigators about Web sites offering false identifications and income statements.
“Either it has been underground all along, or there has been a spike of activity there,” she said.
One service that appears to have grown exponentially in recent months, investigators say, are sites that offer to improve an individual’s credit score by adding them onto the credit cards of individuals with good credit scores and histories.
The practice, known as piggybacking, started innocently enough with individuals adding their spouses or children to their credit card accounts as authorized users.
One site, RaiseCreditScoreNow .com, offers to add a person to four separate $20,000 credit lines with 10 years of “perfect payments” for $4,000 (although they do not have access to the actual credit line). Doing so could increase an individual’s credit score by as much as 200 points in 90 days, the site says, and make the difference between qualifying for a home loan or not.
People with strong credit scores and a reliable payment history of at least 24 months on various credit accounts can be paid up to $1,000 for each person they add to the account as an authorized user, the site offers.
Several lawyers said it was unlikely that this practice was illegal, although many warned it could open the person renting out their credit card lines to fraud or identify theft. Attempts to contact the Web site were unsuccessful.
Another company, which operates SeasonedTradeLines.com, claims on its site to have an inventory of more than 100 real, verifiable credit card accounts with perfect payment histories dating back to 1974. The site asks: “How would your life be different with a 700+ credit score?”
A person answering the phone at the company declined to comment. “I’m not going to answer any questions,” he said. “I’m not going to give out any information.”
Last week, the Fair Isaac Corporation, the company that developed FICO credit scores, said it was trying to shut down piggybacking.
Starting in September, Fair Isaac said people who were added to someone else’s credit line would not benefit from the secondhand credit history in its formula, which is used by the three major credit bureaus.
“There is going to be no way to get around the new system,” said Ron Totaro, vice president for global scoring solutions at Fair Isaac.
One Web site that prompted mortgage regulators in Nevada to issue an alert to consumers and the mortgage industry two years ago offered to set up a bank account that could be “rented out” and verified to creditors or lenders at a cost of about 5 percent of the value of the assets. The people renting the assets did not actually have access to them.
While that site has disappeared, fraud experts say others have moved in to replace it.
“We’re seeing now a lot of checking accounts where funds are going in and out,” said Mr. McKenna of BasePoint. “Borrowers begin the month with $4 in the account and end the month with much, much more.”
Other sites offer help to people who need proof that they are working.
For $55, for example, the company that operates VerifyEmployment .net will ostensibly hire a person as an independent contractor, providing a paycheck stub showing an “advance,” with the corporate name and address. Another $25 will assure telephone verification of employment when a lender calls to check.
By JULIE CRESWELL
Published: June 16, 2007
Want to buy a home, but hampered by bad credit, an empty bank account or no job? No problem!
That may sound like an exaggeration of a late-night infomercial. But it is, in effect, the pitch that a number of Web sites are making to consumers, saying insolvent home shoppers can be made to look more attractive to lenders.
The sites, for example, offer better credit scores by hitching customers to a stranger’s credit card, or providing them pay stubs from a bogus company. One has even offered a well-stocked bank account to rent for a month or two.
Industry experts say these sites, which are relatively new, played a role in fueling the rampant mortgage fraud that has caused a huge spike in loan defaults in recent months because people bought homes they could not afford.
“There is a whole underground world — an online cottage industry — that has grown up that allows anyone to commit mortgage fraud,” said Constance Wilson, executive vice president at the financial fraud detection firm Interthinx.
Regulators and the mortgage industry are now vowing to crack down on aggressive lending practices that have led to a rising number of foreclosures. But that greater scrutiny, including lenders requiring more documentation than they have in the past, may actually increase demand for some of the services that these Web sites offer.
“We think these types of Web sites are increasing,” said Frank McKenna, chief fraud strategist at BasePoint Analytics, which helps banks and mortgage lenders identify fraudulent transactions.
Policing them is difficult, partly because it is unclear which laws, if any, the Web sites might be breaking (for their customers, though, the laws are clear — anybody who uses fake paycheck stubs or other false documents to misrepresent financial status to a bank or mortgage lender is committing fraud).
The people who operate these sites can also be hard to track down. At the first whiff of trouble, they can easily shut down and then quickly start a new Web site with a different name.
No statistics exist on the number of these Web sites and how many people use them, or whether any of the operators of such sites have been prosecuted.
An examination of loans made last year, including prime and subprime, in which some sort of fraud occurred, showed that incidents of false tax or financial statements had risen to 27 percent from 17 percent in 2002; fraudulent verifications of deposit had climbed to 22 percent from 15 percent four years ago; and false credit reports rose to 9 percent from 5 percent in 2002, according to a report issued this spring by the Mortgage Asset Research Institute based in Virginia.
If any documents were required, it was unclear whether the bogus documents were created by do-it-yourselfers or whether they turned to the products and services sold over the Internet.
Still, Joan E. Ferenczy, director of institutional investigations at Freddie Mac, said there had been a growing discussion in recent months among industry investigators about Web sites offering false identifications and income statements.
“Either it has been underground all along, or there has been a spike of activity there,” she said.
One service that appears to have grown exponentially in recent months, investigators say, are sites that offer to improve an individual’s credit score by adding them onto the credit cards of individuals with good credit scores and histories.
The practice, known as piggybacking, started innocently enough with individuals adding their spouses or children to their credit card accounts as authorized users.
One site, RaiseCreditScoreNow .com, offers to add a person to four separate $20,000 credit lines with 10 years of “perfect payments” for $4,000 (although they do not have access to the actual credit line). Doing so could increase an individual’s credit score by as much as 200 points in 90 days, the site says, and make the difference between qualifying for a home loan or not.
People with strong credit scores and a reliable payment history of at least 24 months on various credit accounts can be paid up to $1,000 for each person they add to the account as an authorized user, the site offers.
Several lawyers said it was unlikely that this practice was illegal, although many warned it could open the person renting out their credit card lines to fraud or identify theft. Attempts to contact the Web site were unsuccessful.
Another company, which operates SeasonedTradeLines.com, claims on its site to have an inventory of more than 100 real, verifiable credit card accounts with perfect payment histories dating back to 1974. The site asks: “How would your life be different with a 700+ credit score?”
A person answering the phone at the company declined to comment. “I’m not going to answer any questions,” he said. “I’m not going to give out any information.”
Last week, the Fair Isaac Corporation, the company that developed FICO credit scores, said it was trying to shut down piggybacking.
Starting in September, Fair Isaac said people who were added to someone else’s credit line would not benefit from the secondhand credit history in its formula, which is used by the three major credit bureaus.
“There is going to be no way to get around the new system,” said Ron Totaro, vice president for global scoring solutions at Fair Isaac.
One Web site that prompted mortgage regulators in Nevada to issue an alert to consumers and the mortgage industry two years ago offered to set up a bank account that could be “rented out” and verified to creditors or lenders at a cost of about 5 percent of the value of the assets. The people renting the assets did not actually have access to them.
While that site has disappeared, fraud experts say others have moved in to replace it.
“We’re seeing now a lot of checking accounts where funds are going in and out,” said Mr. McKenna of BasePoint. “Borrowers begin the month with $4 in the account and end the month with much, much more.”
Other sites offer help to people who need proof that they are working.
For $55, for example, the company that operates VerifyEmployment .net will ostensibly hire a person as an independent contractor, providing a paycheck stub showing an “advance,” with the corporate name and address. Another $25 will assure telephone verification of employment when a lender calls to check.
Sunday, June 10, 2007
Houses with a past
Does Ontario need a law requiring real estate agents or sellers to disclose whether a home being sold has a history of violence?
The question arises in the wake of the publicity surrounding the sale of a house in rural Lake County, Fla., last month. On May 5, when John and Kathy Johnson and their 24-year old daughter Christina began to move into the $227,000 house they had just bought, they were shocked to learn from a neighbour that the Greenbrier St. residence was the scene of a grisly triple murder and suicide.
Back in February 2006, local police officer Michael Mount shot his estranged wife Kim, fellow officer Joe Gomez and Gomez's wife Serena in a jealous rage, before turning the gun on himself.
Six-year old Justin Gomez inherited the house. His maternal grandmother, Debra James, represented the estates of her daughter and son-in-law. She listed the house with Larry Beard, owner of Beard Pippin Properties Inc.
James specifically instructed Beard not to reveal details of the murders and suicide to potential buyers. A Florida state law allows real estate companies to withhold details about a house if they would tend to stigmatize the property.
That law says that the fact that a property was the site of a homicide, suicide or death is not a material fact that must be disclosed in a real estate transaction.
Since the purchasers were moving into the area from another part of Florida, they were not aware of the home's grisly history.
The Johnsons have decided not to move into the house, and have put it back on the market. Relying on an old Catholic tradition that purports to speed the sale of real estate, they buried a statue of St. Joseph in the yard.
"There was no way we could ever stay here," Kathy Johnson told a local newspaper. "It would be like living in a morgue."
Events such as homicides, suicides and deaths, or even the allegation that a house is haunted have been known to affect the value of a property.
The National Association of Realtors in the U.S. requires its members to reveal all material factors that might affect the desirability of a house, but psychological factors are a grey area.
In a study published in 2000, James Larsen, a professor at Wright State University in Ohio, surveyed more than 100 stigmatized houses, including those associated with murders, sex scandals, suicides and hauntings.
Ohio does not have a law requiring disclosure of real estate stigmas, and Larsen discovered that disclosure practices varied widely. More than one-third of the surveyed brokers disclosed relevant information to all potential purchasers, but 19 per cent never disclosed the information at all.
Larsen's study concluded that stigmatized homes sold for just 3 per cent less than those not associated with scandal or violence, but stayed on the market for 45 per cent longer than average.
American law books are filled with reports of cases involving the lack of disclosure of property stigmas. Typically, the vendors and the real estate agents get sued by unhappy buyers. About half of the U.S. states have disclosure laws, and the other half do not.
Toronto real estate appraiser and educator Barry Lebow is a frequent lecturer on haunted and stigmatized houses.
As the unknowing former buyer of a house that was the site of a messy suicide, Lebow believes Ontario law should protect buyers and require disclosure.
"Quebec has disclosure laws," he told me, "while to the best of my knowledge the rest of the country is a free-for-all."
Frequently, says Lebow, the realtor becomes the "fall guy" for failing to disclose the history of a house, even if the seller is not totally honest with the listing agent.
He called on Queen's Park to enact a law requiring vendor disclosure of events that could stigmatize property.
Perhaps there should even be a registry of stigmatized properties. After all, the Toronto police maintain a list of marijuana grow operations, but not (to my knowledge) a list of the local homes that have been the sites of suicides, murders or other grisly crimes.
In the meantime, for most buyers of stigmatized homes in this province, Ontario law remains "buyer beware."
The question arises in the wake of the publicity surrounding the sale of a house in rural Lake County, Fla., last month. On May 5, when John and Kathy Johnson and their 24-year old daughter Christina began to move into the $227,000 house they had just bought, they were shocked to learn from a neighbour that the Greenbrier St. residence was the scene of a grisly triple murder and suicide.
Back in February 2006, local police officer Michael Mount shot his estranged wife Kim, fellow officer Joe Gomez and Gomez's wife Serena in a jealous rage, before turning the gun on himself.
Six-year old Justin Gomez inherited the house. His maternal grandmother, Debra James, represented the estates of her daughter and son-in-law. She listed the house with Larry Beard, owner of Beard Pippin Properties Inc.
James specifically instructed Beard not to reveal details of the murders and suicide to potential buyers. A Florida state law allows real estate companies to withhold details about a house if they would tend to stigmatize the property.
That law says that the fact that a property was the site of a homicide, suicide or death is not a material fact that must be disclosed in a real estate transaction.
Since the purchasers were moving into the area from another part of Florida, they were not aware of the home's grisly history.
The Johnsons have decided not to move into the house, and have put it back on the market. Relying on an old Catholic tradition that purports to speed the sale of real estate, they buried a statue of St. Joseph in the yard.
"There was no way we could ever stay here," Kathy Johnson told a local newspaper. "It would be like living in a morgue."
Events such as homicides, suicides and deaths, or even the allegation that a house is haunted have been known to affect the value of a property.
The National Association of Realtors in the U.S. requires its members to reveal all material factors that might affect the desirability of a house, but psychological factors are a grey area.
In a study published in 2000, James Larsen, a professor at Wright State University in Ohio, surveyed more than 100 stigmatized houses, including those associated with murders, sex scandals, suicides and hauntings.
Ohio does not have a law requiring disclosure of real estate stigmas, and Larsen discovered that disclosure practices varied widely. More than one-third of the surveyed brokers disclosed relevant information to all potential purchasers, but 19 per cent never disclosed the information at all.
Larsen's study concluded that stigmatized homes sold for just 3 per cent less than those not associated with scandal or violence, but stayed on the market for 45 per cent longer than average.
American law books are filled with reports of cases involving the lack of disclosure of property stigmas. Typically, the vendors and the real estate agents get sued by unhappy buyers. About half of the U.S. states have disclosure laws, and the other half do not.
Toronto real estate appraiser and educator Barry Lebow is a frequent lecturer on haunted and stigmatized houses.
As the unknowing former buyer of a house that was the site of a messy suicide, Lebow believes Ontario law should protect buyers and require disclosure.
"Quebec has disclosure laws," he told me, "while to the best of my knowledge the rest of the country is a free-for-all."
Frequently, says Lebow, the realtor becomes the "fall guy" for failing to disclose the history of a house, even if the seller is not totally honest with the listing agent.
He called on Queen's Park to enact a law requiring vendor disclosure of events that could stigmatize property.
Perhaps there should even be a registry of stigmatized properties. After all, the Toronto police maintain a list of marijuana grow operations, but not (to my knowledge) a list of the local homes that have been the sites of suicides, murders or other grisly crimes.
In the meantime, for most buyers of stigmatized homes in this province, Ontario law remains "buyer beware."
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