It is all happening in the world of Australian Online RealEstate tonight! The Realestate.com.au board have announced the immediate departure of their long serving (since 2001) CEO, Simon Baker. This was a huge surprise, although the fact that he sent out about 50 LinkedIn recommendation requests to people (myself included) late Friday night should have been a bit of a warning. Anyway at least Domain isn’t having the last laugh, their website is currently completely broken, simply stating that “an unexpected error has occurred”. I would say their support team are going to wake up to hundreds of thousands of error emails and a big headache tomorrow.

It is not hard to find doomsday predictions for the Real Estate market. Sites such as Who Crashed the Economy are a collation of tales of pending economic (and particularly housing sector) destruction. There is a trend that indicates mortgage stress and housing price falls are limited to the outer suburbs of Sydney, primarily the west and south-west. Even when you analyse mortgage stress on a nationwide basis these suburbs keep appearing.

So I guess the question is whether this effect will be seen in the more blue label, inner-city suburbs. Most experts seem to think that the next 9 months or so are a good time to buy; if you have some savings tucked away and can ride out high interest rates in the short term. The next official inflation reading comes out on July 23, so a change in rates after this time is entirely possible. Whether the increases end there, or another ones comes in November, is anyones guess. I will be watching these news stories pretty closely, as it seems most of Australia is.

I was prepared to bid at an auction on the weekend, but it sold for $100k (15%) more than the quoted price range, and $50k less than what turned out to be the vendor’s target selling price! Clearly there is still a lot of dodgy underquoting practices from certain agents and turbulent pricing changes are still shaking themselves out in this market. I just have to hang in there and hope (as evil as it is) that a foreclosure can deliver me a reasonably priced dream home.

The NSW Government introduced the First Home Buyer’s Grant Scheme back in the year 2000. The $7000 cash bonus is nice, but it is the stamp duty concession that really helps out. The stamp duty calculator shows that the duty on a $500k home drops from $18,170 to a tiny $180 if you are a first home buyer, a huge saving of $17,990. This saving deteriorates pro-rata however as the price of the home approaches $600k, at which point it becomes unavailable. Means testing by this method is all well and good, as long as the means test is indexed. Back in 2000 property prices were significantly lower than they are today, as shown by the Reserve Bank’s own property price index graph from the May 2008 Regional Economic Performance Report:

This graph clearly shows that property prices have at least doubled in every state in the last 8 years, the same time period the grant scheme has been running. For 8 years of rapid growth the threshold has remained unchanged. NSW is actually the worst state for this, with an Age article citing:

Mortgage repayments account for 29.1% of total first home-buyer income, a one percentage point increase over the December (2007) quarter.

Adding to the cost of housing are taxes and charges, which added $110,000-$115,000 to the typical house and land package in Sydney, Mr Lamont said. In Victoria, that figure is about $57,000.

Surely the NSW Government should be keeping more of a finger on the pulse rather than making huge profits from Stamp Duty. The Federal Government is a little closer with their savings accounts, but $5000 a year is not going to get you a decent deposit anytime soon.

You thought buying a car was complicated! For anyone wanting a checklist (who doesn’t love a checklist) here is basically mine so far:

• Open inspection
• Family inspection / Attempted building inspection
• Check public transport timetables and/or traffic
• Pest inspection
• Building inspection
• Quotes on repairs and alterations
• Check heritage listing
• Check zoning for the area and surrounds
• Council check for previous development applications* (see below)
• Council check for proposed development applications
• Check council codes to see if any planned modifications will have a chance of approval
• Survey inspection and verification (if there is even one post-1881)
• Sewerage and other utility diagrams and connections (and possibly easements)
• Solicitor contract inspection
• Prepare a solicitor/conveyancer to do the conveyancing
• Alteration of contract terms (land tax, mistakes, settlement time)
• Talk to mortgage providers to get pre-approval and negotiate rates
• Understand and compare loan rates, structures, flexibility and features
• Decide whether rates are going up or down over the next 30 years
• Decide whether house prices in the city, suburb and street are going up or down over the next 10 years
• Organising a cheque to pay the deposit on the day of the auction

Exhausting and risk-laden probably sums it up the best. I don’t know how some people move house every year or two!

* On another note Burwood Council (and most impressively most councils) has an online DA system. There is a very simple little hack to get development applications from further back in time. That highly disguised “num_days” parameter can be changed to whatever you like. Maybe 1800 works well?

This came up all of a sudden after I decided to test my SEO by googling my name. That took me to this page on Submissions to the National Broadband Expert Panel. Among them is a submission that I emailed in to the Department of Broadband, Communications and the Digital Economy (hell of a title, although I guess at least it isn’t lumped with Arts anymore). A few things surprise me:

• I appreciate the open tender process, but I don’t remember being told my submission would be made public.
• I am surprised just how few submissions were made. I know the window was only about 2 weeks, but seriously given the state of Australian broadband, the $4.7B+ of taxpayers money on the table, decent media coverage and the email submission method I would have thought more people would be interested.
• I got all excited thinking perhaps the use of the phrase “submissions included” meant that only a few high calibre submissions had been listed. I then came across a submission from Karen. We truly have a bright future in Australia!

One of the spending cuts in last nights Federal Budget 2008 was the Commercial Ready program. Thankfully the R&D Tax Concession is still available, but this relies on the inventor having the capital upfront. The axing of this program will stifle innovation in Australia, particularly when our venture capital system is so underdeveloped relative to the US and other places. Looking down the Commercial Ready page it is clear what a success the program was. Surely keeping Australian innovations in the hands of Australians should be a priority? Now inventors will be forced to take their goldmines offshore to be exploited elsewhere. I also feel sorry for the many supporting consultants who relied on these grants to help themselves and their clients.

Happy New Year everyone! I wish you all a happy and prosporus 2007!

I was in the Sydney CBD for the fireworks last night. I didn’t take any photos (taking
a tripod into bars is not a great idea), but I did manage to find a few online already
this morning that were quite impressive. The first below gives you a rough idea of
why Sydney has the most amazing fireworks show in the world, our harbour is naturally
shaped as a perfect stage. The other two photos are close-ups of some of the smaller
fireworks barges (with some clever use of lens and timings).

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So what is new for me in 2007? Well it is starting off at full pace, with my new CRM
system getting a complete roll-out in January. I will be working my ass off I suspect,
but it will be amazing when it is all up and running. I am sure there will never be
a day when it is 100% finished, something like this is more about the pursuit of perfection
rather than the achievement of it. The business will be changing a lot over the next
12 months as well, I am sure that will significantly add to my workload. I am looking
to take on a junior helpdesk/developer in the next month or two, so if anyone is interested
please contact me. It should be a very exciting year!

This weekend I was at the Bathurst 1000, the greatest V8 race of the year. I took
quite a few photos and have put the best ones on Flickr. Check them out and enjoy!
Now back to thesis…

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Sorry for not posting earlier, I had some problems with dasBlog! (or rather FreeTextBox).
Anyway they are resolved now (thanks to a helpful
post).

The photos below are from RiverFire
2006, a fireworks show that is run every year in Brisbane in Australia. The photo
on the left shows the Story Bridge lit up with fireworks and the picture on the right
shows a F-111
Aardvark doing a fuel burn across the night sky.

         

You can see some more great pictures at this official
photo site, they make some pretty nice desktop backgrounds I have to say.