Boom or Bust? Convergence of Factors Impacting Townsville Real EstateMarket

Townsville's property market is a laboratory of capital, social and policy forces impacting on the supply and demand dynamics for accommodation and housing in Australia's 2nd largest economy.

The 'Capital of North Queensland' has seen steady price movements in both acquisition and leasing markets over the past 5 years.

But now the time has come, or we are on the eve of a long awaited uptrend at least, that investors and accommodation consumers realise the benefits from a convergence of economic, policy and political factors pushing prices to the pinnacle of downside trends in the market.

If Warren Buffett's secret to successful investing in business is to be believed, the underlying value of the Townsville property market is undervalued and primed for valued-centric investors.

In comparison to Australian capital cities, significant regional economies and local trends in prices and values, the 'Greater Townsville Region' is a "hot spot" location for investors in the Australian marketplace.

"The arrival of a new agency in Townsville comes as ANZ chief economist Warren Hogan predicts a revival for the property market. Speaking to the Committee of Economic Development of Australia this week, Mr Hogan said “the housing market is in its early stages of a solid cyclic upswing” caused by low interest rates and market shortfalls. He predicted a 15-20 per cent increase in home values between 2013 and 2015 and said Queensland cities could soon experience growth already seen in southern capitals." Townsville Bulletin, Feb 2014.

Townsville in Focus Report May 2014 identified that; "The median house price stood at $355,000 in March 2014, 2.0% below the $358,000 median house price recorded in March 2012 and 6.1% below the peak of the market in December 2009.

A significant lead indicator for the accommodation and housing market is the demand for residential rental accommodation. The Herron Todd White, June 2014 Rent Roll Survey Report shows vacancy rates have continued to increase to 5.45% overall.

As reported by Herron Todd White, "Median house rents have dropped by $5 a week, from $365 to $360 per week, between March 2013 and March 2014. Median unit rents have dropped by $15 a week, from $315 to $300 per week, over the same period."

Townsville Real Estate Blog (TRB) believes rental prices have eased further in the June 2014 quarter based on 'coal face' monitoring, and forecast prices to steady with less easing in the September 2014 quarter. Prices are forecast to steady in the December quarter at the corrected new medians. It is bold to forecast that the unit median price could dip below $300 per week, but there is anecdotal data showing a subdued rate of enquiry on existing stock from professional and semi-professional occupations on existing CBD stock, a period after EOFY that draws higher inflows of this category into the City.

The Far North Queensland and Cairns market is experiencing a revival in demand and prices. A Cairns and Far North Queensland real estate agent said; “There has been a substantial rise (dwelling prices) on the back of high rental demand, which has increased the popularity of people buying instead of paying higher rents,” he said. “That’s the catalyst for the change in the marketplace and obviously the fact that rents have come up has attracted investors back into the marketplace as well, also with the underlying expectation that Aquis (a Chinese and Hong Kong-based 'super-resort' at Yorkeys Knob) will proceed. So there’s confidence in the housing market from that point of view, not only in current rental returns, but expected future capital gain.”, Mr Sterling from Ray White northern beaches said.

Townsville Real Estate Blog reported in March 2013 (Time to Wake and Smell the Roses Townsville Real Estate; Queen Bees are Being Born) that the optimum market for buyers would be 6-12 month away.

Mr McLeod, Principal of Rapid Realty in Townsville said; "The vacancy rates and supply and demand dynamic in the rental accommodation market is like a "canary in a coal mine" as far as sales are concerned. As is seemingly occurring in the Cairns market, a pickup in rental demand should signal a revival in volumes and prices in the sales market."

Ranked from highest to lowest by TRB in terms of the most influential micro-economic factors impacting the supply and demand dynamic in the Townsville property market are:

1. Higher unemployment from mining, government and small business retractions (demand flat)

The top ranked factor is unemployment and government instability. This factor is creating a negative imbalance of demand inflows for accommodation in the market. Higher vacancy rates have occurred as more people move away from the City seeking employment than an equal volume of people moving into the City. The current unemployment rate is approximately 8.5 percent in the district.

2.1. NRAS promoting false economy in new construction (demand flat/oversupplied)

By design, the previous labour government introduced the NRAS scheme to reduce the price of accommodation and housing in the marketplace, which was deemed to be 'overheating' and unaffordable for ordinary people at the time.

Driven by a consumer-centric society seeking cheaper prices, and adopted by a progressive government, this social policy decision is having a significant impact on rental vacancies in the non-subsidised accommodation and housing economy.

"What can be given by the pen, can also be taken by the pen!" NRAS is creating a false economy in the new construction sector. The Abbott government has budgeted for a termination of this scheme if the Federal Budget is carried in the current parliament.

2.2. Middle income families lured into NRAS homes at significant price discounts (demand flat/oversupplied)

Townsville Real Estate Blog have received reports that eligible NRAS tenants have declared over $100,000 in combined personal income yet were approved for the government subsidised and privately funded NRAS properties.

The attraction of middle income consumers to such a scheme demonstrates the depth and breadth of the demographic supported with government subsidised accommodation impacting the private real estate economy.

If the 'silver bullet' of public housing policy could be manufactured, the NRAS scheme would have to rival all social housing schemes in terms of the structural impact it is having on the supply and demand dynamic in the Townsville economy.

2.3 NRAS demand pool slowing and landlords seeking termination (oversupplied)

In recent times, TRB has received direct enquiries from NRAS landlords asking if they can terminate the NRAS contract early because of extended vacancy periods being experienced. NRAS registered property owners were unable to maintain essential cash flow from the NRAS pool of eligible tenants.

It has become evident that the exclusive nature of the NRAS scheme has itself exhausted qualifying tenants to fill vacating properties. Just as credible, the demand-side of this scheme is not meeting the appetite from investors seeking the lucrative $100,000 taxation rebate over 10 years.

3. Sustained low cash interest rates (demand positive)

Sustained low interest rates have contributed substantially to the demand for mortgages impacting the flow of capital into the property market in Townsville.

Mr Hassan of the Westpac-Melbourne Institute said; “While the Reserve Bank did not cut interest rates over the month, some banks have been lowering rates for new loans, reflecting recent declines in market rates as the slowdown in activity has seen a reassessment of prospects for the official cash rate. In August we saw the confidence of those households with a mortgage jump of 12.8%".

Mr Hassan also said "We expect the bank to again leave rates on hold at its July meeting and through the remainder of 2014 and the first half of 2015,'' he said.

The minutes of the RBA board's June meeting noted there were ''uncertainties'' over what impact the federal budget and expected declines in mining investment would have on the economy. Economic slowdown is 'likely', Westpac-Melbourne Institute Leading Index shows.

Read more: http://www.smh.com.au/business/economic-slowdown-likely-westpacmelbourne-institute-leading-index-shows-20140618-3ae3t.html#ixzz3AGhU9sHF

4. Lack of sustained private and public capital projects (demand moderate)

Townsville's $78 billion capital expenditure programmes have by and large run their course such as the Flinders Street Mall redevelopment, new Cruise Ship Terminal and Port expansion, Port Access Road, Jezzine Barracks, Lavarack Barracks developments and expansion of the Townsville Hospital site.

Townsville Enterprise Chief Executive Officer, David Kippin, said, "the March quarter 2014 DSR shows investors have maintained confidence in the development of Townsville North Queensland with major infrastructure, construction and mining activity stimulated by new ventures. Since the December quarter 2013, more than $65M in projects have been proposed including the $50M aged care facility at Fairfield Waters,” David said. The report shows $9B in projects underway, $35B approved and $33B proposed for the region with more than $150M in projects completed since the December quarter 2013. “A number of significant projects have been completed including the $40M Jezzine Barracks and Kissing Point redevelopment which opened at the weekend with celebrations continuing throughout the week.” (Townsville Enterprise website, March 2014)

Employment from these projects, mining and government operations has caused robust and sustained price improvements to rental accommodation in line with the national consumer price index of 2-4 percent. The convergence of capital project completions, reduced private and government capital flows have been the sharp edge of the economic downturn and higher unemployment in the last two quarters.

5. Abandoned sales pushing into rental pool. Unsatisfactory vendor price to buyer value expressions and mortgagee in possession events (oversupplied)

Townsville properties are sitting on the market for sale for an average 105-110 days, 88 days for houses and 124 days for units. Over 3000 properties are listed on the market for sale in any one month across the City. Approximately 250-275 properties are sold per month. In February 2014, sale volumes were down to 215 for houses and slight increase in unit sales to 55. On average sellers are discounting the price of their properties by approximately 7-9 percent to achieve a successful sale.

Approximately 450 new properties were listed in May 2014 in postcode 4810, which includes suburbs of Townsville City and surrounding suburbs such as South Townsville, West End, North Ward, etc.  The overwhelming majority of properties do not achieve settlement. Approximately 8-9% of all properties on the market in Townsville actually sell per month. Of these sales, approximately 3% have been distressed sales as 'mortgagee in possession' transactions.

Sellers have opted to place their properties on the rental market contributing to the oversupply of stocks because of unsatisfactory price to vendor value. Just as there has been an increase in mortgagee in possession sales in the past 12-18 months, so too the occurrence of abandoned sales.

6. Abandoned sales pushing into rental pool; excessive strata levy increases (oversupplied)

Although both owner-occupiers and unit investors are abandoning sales due to unsatisfactory 'on the market' value/price considerations, it's the owner occupiers mostly contributing to additional accommodation supply and pushing vacancy rates higher each time an abandoned owner-occupier sale occurs.

Strata unit owners have contended with both inflow and outflow constraints. Holding cost outflows and rental income inflows have been unfavourable. TRB reported on the Strata unit market in December 2013 being the eye of the perfect storm.

http://townsvillerealestate.blogspot.com.au/2013/12/north-queensland-strata-rental-market.html

These concurrent pressures have led to 'on the market' decisions by owners generating further supply of units on the accommodation market in Townsville contributing to 7.40% unit vacancy rate.

Coupled once again with investor-driven new construction, reduced natural demand due to higher unemployment, and the influence of NRAS people movements, excessive strata unit supply is a worthy inclusion in the top 10 factors impacting the Townsville property market.

6.1. New construction; property investment spruiker road shows (oversupplied)

As the 2nd largest regional economy in Australia and a reputation as a government hub for defence, education, civil and social services, mining, transportation and tourism, Townsville is an attractive destination for investors from Australia and overseas.

Sydney-based franchise agent McGrath stated "comments came as mortgage broker AFG reported investment activity in Queensland had jumped from 33.5% in January to 38.7% in June. A lot of that activity is in Brisbane but key regional centres are also attracting attention. For example, our office in Townsville estimates that 50% of investment sales are going to North Queenslanders and up to 40% are going to Sydneysiders." McGrath said "investors were attracted to newer houses around $350,000 to $450,000 and small sites with development potential." (Property Observer, August 2014).

"Developer land stocks have tended to increase due to on-going production over recent months, with our latest survey showing a stock of 587 developer lots available for purchase as at the end of April 2014 compared to 424 at the end of June 2013", as reported by Herron Todd White's May 2014 Townsville in Focus.

With the slight downturn in new house constructions since 2013, combined with underperforming government grant schemes and a slowdown in economic activity, many of the new house constructions have been driven by Southern investors contributing further to an oversupply in the rental market.

“A pick-up in the property spruiking business is a signal things may be getting a little too exuberant,” HSBC Australia’s chief economist Paul Bloxham told the Australian Financial Review.

Townsville Real Estate Blog expects a notable reduction in developer land stock over the coming months. This may be a factor in sale prices and volumes in existing dwelling stock moving higher in the coming 6-18 months, setting the scene for more Sydney and southern investors seeking solid returns as the capital city markets cool off and returns ease.

6.2 New construction; State Government "great start grant" funding (oversupplied)

The Newman Government's repackaged "great start grant" targeted exclusively to first home buyers has contributed relatively minor activity in the housing economy. The government has simply rehashed the first home buyer’s grant, which many experts believe has lost its intended impact as an affordable entry incentive to the housing market for first generation home owners. The housing market has in fact experienced a modest slowdown in new constructions since 2013. 

Townsville Real Estate Blog believes the new construction eligibility for this scheme has contributed to the low popularity of an exhausted policy incentive because new house prices are much higher than comparable functional 2nd generation properties.

New construction products in Townsville are generally located 10-30 kilometres from the CBD. Such developments are North shore, Greater Ascot, Blue wattle, Cosgrove, Mount Margaret, etc. Combined with the premium price structure of new homes, first home buyers are opting to live closer to centres of employment, or social support centres, such a schools, shopping and hobby centres like sport and community participation facilities.

Herron Todd White's Townsville in Focus Report, May 2014 identified; "The trend in housing approvals has maintained a general increase over the last three years, most recently on the back of three large scale unit developments (together involving 238 new apartments) that have been approved thus far in 2013-14. However the number of new houses approved for construction has had a mild slowdown since mid-2013, to a trend average of 102 new approvals per month in March 2014."

7. Federal funding commissioning defence housing green acre developments and in-fill stock (demand flat/oversupplied)

Defence housing stock has received a substantial shot with the release of 98 hectares of land, 1300 lots, 430 of which is committed to defence personnel. The Blue Wattle Master Plan Community is 17 kilometres from the CBD in the suburb of Rasmussen.

In addition to this significant green acre development, defence housing is holding new stock in North Shore, Bohle Plains, etc. Anecdotal reports have confirmed that in the absence of sufficient defence customers, 20-30 surplus houses have been released onto the general rental market into Stockland's North Shore development, again contributing to excess supply.

The strategic importance of defence members on the Townsville economy is significant. As reported by Dr Riccardo Welters, School of Business at James Cook University, The Australian Defence Organisation and Tropical Australia: Its Socio-Economic Impact in Cairns, Darwin and Townsville, the following personnel are members of defence across tropical areas.

8. Reduction in immigration and refugee resettlement inflows (demand negative)

As a direct result of government policy, there has been inflows of 500 to 1000 persons per year being new immigration families mostly from North Africa and Central Asia, with this having reduced to negligible volumes in the past 12 months.

A reduction in immigration settlements to the City has been a relatively minor contributing factor. With a preference for affordable units close to Aitkenvale with nearby education, shops and transportation centres, the reduction has impacted the most sensitive strata unit rental market.

Every profit seeking trader wants to predict the bottom of the property market cycle in order to ride the wave of value growth, and then hold until the planned profit outcome is achieved that determines the optimum time to dispose of the asset.

Since the Global Financial Crisis of 2007, astute investors in Townsville have factored into their Return on Investment (ROI) calculations, that property prices have more downside risk then upside opportunities. From a humble 'coalface' perspective, this manifests in investors requests for rental appraisals and a purchase contract consistent with at least 7 to 9 percent ROI on residential property purchases.

We have seen two changes in government at the State and Federal levels since 2013. Continued political and economic uncertainty in this time has contributed to a sustained bottom in the property cycle. Although not defined as a material contributor to the factors ranked in the content of this blog, political supply at a macro level is a credible risk moving forward for the local economy and investor confidence procuring property.

In my opinion, based on daily conversations with buyers, sellers and landlords around the dining room tables of the City, and critical analysis of broader material research, the property market has over-matured like an ancient Chinese cottage cheese.

References:

World's Oldest Cheese http://www.ibtimes.com/worlds-oldest-cheese-found-3600-year-old-chinese-mummies-made-ancient-technology-1558756

Dr Riccardo Welters, School of Business at James Cook University, The Australian Defence Organisation and Tropical Australia: Its Socio-Economic Impact in Cairns, Darwin and Townsville - http://researchonline.jcu.edu.au/30101/7/30101_Welters_2013.pdf

Sydney Morning herald - http://www.smh.com.au/

Townsville Bulletin - www.townsvillebulletin.com.au/

Townsville Enterprise website - www.townsvilleenterprise.com.au/

Herron Todd White, Townsville in Focus Report May 2014 - http://www.htw.com.au/

Herron Todd White Rent Roll Survey May 2014 - www.htw.com.au/

Cairns Post - www.cairnspost.com.au/

Townsville Real Estate Blog - townsvillerealestate.blogspot.com.au/

Rapid Realty Townsville - www.rapidrealty.com.au

JCU Lecturer Story of Bushranger Ned Kelly Childhood Home; Now Going to Auction

The childhood home of legendary bushranger Edward ‘Ned’ Kelly, built in 1859 and still in original condition, will go to auction next month in Beveridge.

The property, on a 3.5 acre block of land and with heritage-listed bluestone cottage plus accompanying Federation-style home, was built when Ned Kelly was four years old by his father. Indeed, the Irish heritage of John ‘Red’ Kelly is part of the reason why the house was added to the Victorian Register of Historic Buildings in 1992, as it resulted in a design atypical to the region.

The two-room timber cottage is said to have a bluestone chimney, earthen floor and wood-grained braced doors, while the site also has elegant iron gates.

Ned Kelly lived in the home until 1863. Having moved to Avenal, Red Kelly was sent to gaol in 1865 and died a year later, from what were said to be the effects of his imprisonment.

A previous Townsville JCU lecturer, Brad Webb has been credited with creditable historic reporting on Ned Kelly and the Beveridge home was the feature of Ned Kelly's childhood in the early years.

In 1995, Brad Webb launched ‘Ned Kelly: Australian Ironoutlaw’ which today has grown to be one of the largest history related web sites in the world. With nearly 500 html pages, the site attracts over 350,000 visitors a year (that’s 8.5 million hits). It has become a valuable resource for both teacher and student, as well as a sounding board for many Kelly related themes and ideas. It can be found at www.ironoutlaw.com

Complementing his industry experience, Brad taught at James Cook University in Townsville for four years and offered his services at the RMIT School of Advertising in Melbourne from 2004-2009.

Thank you to Brad Webb for the following research:

The Early Years

"The Kelly cottage at Beveridge was constructed by Ned’s father ‘Red’ in 1859. The house has since under gone additional work including a corrugated iron roof. Today it’s state is close to condemnable.

In 1841, Ellen and her six brothers and sisters arrived in Australia from County Antrim, Ireland. Her father, James Quinn, was a free settler who rented land for dairying in Brunswick upon their arrival. In the early 1850s they settled in Wallan near the Merri Creek. While at Wallan, James Quinn hired a young labourer, John ‘Red’ Kelly, fresh from Van Diemen’s Land. Kelly had served a seven year sentence for stealing two pigs after being transported from Tipperary, Ireland. It was in Wallan that John met James’ daughter Ellen and they were to marry soon after at St. Francis’ Roman Catholic Church in Melbourne. Ellen and John lived with the Quinns after they were married and it was here that a young Ned Kelly carved his initials, an EK and two K’s, into the door of his grandfather’s forge. In 1854 the Kelly’s moved a short distance along the Hume Highway to Beveridge after ‘Red’ purchased twenty-one acres for seventy pounds – money he had managed to save from gold digging and horse-dealing.

In January 1859, when his son Ned was nearly four years old, John Kelly built the family a timber cottage. It was a typical Irish style of cottage with an earthen floor and drainage running between rooms. Internally, there were only two rooms and there was no ceiling, while the bluestone chimney dominated the house. By 1862, young Ned had started school in the little town’s new Roman Catholic Church. The two teachers, Thomas and Sarah Wall, also taught Ned’s sisters Annie, aged nine, and Maggie, aged six. A surviving description of Ned by schoolmate Frederick Hopkins states, “He was a tall active lad and excelled all others at school games.” In six months, Ned had learnt to read and write to second class standard, before ‘Red’ sold his farm in 1864 for eighty pounds.

Two of Ellen Kelly’s sisters married members of the Lloyd family and for many years the Kellys, the Quinns and the Lloyds made a formidable clan. John and Ellen Kelly had eight children: Mary, Annie, Ned, Maggie, Jim, Dan, Kate and Grace. After he sold Beveridge, ‘Red’ took the family eighty kilometres north to Avenel in a bid to avoid being caught up with his brother Jim, who was already up to his neck in the horse and cattle stealing and would soon be in trouble with the law. The Kellys thus shifted over the Great Dividing Range, a four day journey with stock, although a gskilled horseman could cover the distance overnight.

It was here in 1865, a young Richard ‘Dick’ Shelton was nearly swept away in the flooded waters of Hughes Creek as he attempted to cross a fallen-tree-footbridge on his way to school. He was rescued by a ten-year-old Ned Kelly, who, without hesitation, jumped into the water fully clothed and paddled young Dick safely to the creek’s bank. The shivering youngsters made their way to the nearby Royal Mail Hotel which was owned by Dick’s parents, Esau and Margaret Shelton. The boys dried themselves by the fireplace and Esau lent Ned some clothes, while Dick retold the near fatal story. The Sheltons rewarded Ned with an elaborate two hundred and twenty-one centimetre long, fourteen centimetre wide green silk sash complete with gold bullion fringes at each end. The colour chosen was symbolic of Irish heritage.

'Ned was able to rescue the seven year old Richard Shelton from drowning when he fell in the creek opposite the Kelly home. His courage must have been exemplary for the Shelton family saw fit to make a public occasion of it by presenting him with a gold-fringed sash.'

It is also probable the Sheltons paid Ned’s father Red’s court fine allowing him to return to his family with an early release from the Avenel lockup where John ‘Red’ Kelly had been charged with stealing a calf from a Mr. Morgan. While the charge of cattle stealing was dismissed, the charge of ‘unlawful possession of a hide’ was upheld and he was fined £25 or six months in gaol. Unable to pay the fine, Red was held at the Avenel lock-up instead of the far harsher Kilmore Gaol. This, more than likely, had something to do with the regard people held for his son Ned and his saving of the Shelton lad. Ned’s bravery may have won his father lenient treatment, a generous remission, and imprisonment in the local lock-up instead of a distant gaol, however, when ‘Red’ returned to the family in the first week of October 1865, he also returned to the bottle and, scarcely more than a year later, died of dropsy — an alcohol induced illness that bloats the body.

The sudden death of his father meant that Ned had to leave school at the age of twelve. John 'Red' Kelly was buried at the Avenel Cemetery in December 1866 and Ned Kelly, at the age of eleven-and-a-half, stepped into his father’s shoes and left his school life behind. The loss of the family breadwinner was a severe blow to the family but Mrs Kelly, a widow at age thirty-three with seven children. was a determined woman. She moved her family to a slab hut on Eleven Mile Creek, not far from Benalla and halfway between Greta and Glenrowan, an area which today is still referred to as ‘Kelly Country’.

The heroic deed, and the Sheltons, remained firmly in Ned’s memory throughout the remainder of his life. In 1880, Ned proudly wore the sash as a cummerbund under his famous suit of armour in the shootout with police at Glenrowan. While Ned was captured after receiving twenty-eight bullet wounds and executed less than five months later on November 11, 1880, the frayed, blood-stained sash still survives today, and is on display at the Costume and Pioneer Museum in Benella."

Reference:

The Iron Outlaw website, Brad Webb - www.ironoutlaw.com

Real Estate News - wwww.thehomepage.com.au

Higher Agent Commissions Coming; Real Estate Industry Streamlined

The Property Agents and Motor Dealers Act (PAMDA) 2000 has been repealed and replaced with two new pieces of legislation separating the real estate industry from motor dealers and chattel auctioneers.

The new pieces of legislation are; Property Occupations Act 2014, under which Property Agents and Auctioneers will be regulated, and Motor Dealers and Chattel Auctioneers Act 20014 under which Chattel Auctioneers including Motor Dealers will be regulated.

Agent commissions under the new legislation will be deregulated meaning Agents can charge an unlimited commission where a Client and the Agent can agree. A cap on Agents commission of "5% for the first $18,000 then 2 1/2% thereafter" will become redundant.

Principal of Rapid Realty Townsville Aaron McLeod said, 'Agents are unlikely to change the rate of their commission for services in the first instance because it will take some time for the market to adjust to the new pricing culture. The consumer market for real estate services is expected to show some resistance, despite the fact that Agent fees have not changed in decades.", Mr McLeod said.

Mr McLeod commented that "most Agents will not change their commissions including our Agents but residential sales of multiple dwellings and prestige property sales would most likely come under review with higher commissions being charged by Agents due to the comparable risks involved in these types of transactions."

The new legislation also streamlines the amount of forms needed to complete property sales, letting and property management. The Appointment of Agent form now will replace seven existing forms, providing administrative relief for both Vendors and Agents.

The Warning Statement (Form 30c) will be removed altogether but a simple statement placed in a conspicuous position where the buyer signs the contract will be acceptable.

The current lawyer’s certificate form to waiver or shorten the cooling off period in the current legislation will also be removed.

Property Developers needing a specific licence under the current law will be deregulated, while pastoral houses will be included into other licence categories. Residential letting agents will be able to manage multiple sites and the application will be integrated with other real estates.

Business sales will no longer need to state an end date on the agreement for a continuing appointment. An open listing may be ended by any party at any time in writing.

The Queensland Office of Fair Trading being the department that administers and enforces the legislation and regulations have conducted extensive consultation with industry leaders and institutions such as the Real Estate Institute of Queensland.

REIQ chairman Rob Honeycombe said, "The simplified laws would deliver important benefits for both real estate professionals and consumers. He also said, "The Property Occupations Act and other associated legislation passed today (May 2014) wold cut red tape and make it easier to buy and sell real estate throughout Queensland."

Agents will no longer be required to disclose their commissions to the buyer of real estate, as it has been under the current legislation.

The real estate industry anticipates the new legislation to be effective from October 2014 with a moratorium for Agents having to update their practices and procedures.

References:

Office of Fair Trading – www.fairtrading.qld.gov.au

REIQ – www.reiq.com.au

Rapid Realty Townsville – www.rapidrealty.com.au

Farm a Queen Bee; Reserve Bank Board Membership Genius

Townsville and regional economies in Australia have specific and contextual demands impacting on cash flow and capital opportunities, risks and constraints and it must be acknowledged by Australia's political leadership and fiscal policy makers.

In the scope and context of Australia's economic contributions, regional Queensland's economic activity is a significant measure on the Reserve Bank's agenda in setting monetary policy and cash rates that regulate investment decisions and therefore business and consumer confidence.

Townsville Real Estate Blog supports the approach by local Townsville and Regional Queensland economist Colin Dwyer to the Prime Minister, Tony Abbott, Treasurer Joe Hockey and RBA Board to appoint the next Board Member from the pool of capable intellectuals and professionals from our region.

In the words of local economist Mr Colin Dwyer:
  
Regional Australian Member of the RBA Board

 It’s interest rate day today, and its time to prosecute a case for a regional Australian to become a member of the Reserve Bank Board. Not one of the nine members of the Reserve Bank board lives in Regional Australia. Not one of the past members of the monetary policy making body has ever lived in regional Australia. How can the RBA board make a decision on behalf of all Australians if they haven’t experienced the conditions in some of those locations?

Regional Australia comprises a third of Australia’s population, contributes most of its exports and many of its tourism destinations. In the past decade regional Australia with its mining industry kept recession and depression from Australia’s door. Its time for some regional Australia recognition.

I first raised this issue in 2010. Next year will be the first chance for a regional Australian to join the RBA board and express regional Australia’s rational expectation regarding monetary Policy and interest rates. In December 2015 Roger Corbett’s position comes up for re-election. Following that Catherine Tanna’s position is available on 29 March 2016, followed by John Akhurst role on 30 July 2016. Two other positions become available in 2017.

In total there are nine members of the RBA board with six non-executive members appointed by the Treasurer. The non-executive members are appointed for terms of up to five years. There is no limit on the number of terms a member may serve.

Are all the previous federal governments saying that there is no regional Australian who has the calibre to be appointed to the board? Next year, surely presents an opportunity for the current federal government to change this value judgement, honour the contribution of regional Australia and ensure regional Australia has a say in monetary policy decisions.

There are many worthy regional Australian contenders for this challenging role and some of them live in Townsville including, Company director Russell Laird, James Cook University Deputy Vice Chancellor Chris Cocklin and Chamber of Commerce president Stephen Moti.

After contributing our fair share over the past half century, its time a Townsville and regional Australian resident was appointed to the Reserve Bank Board. Only this way can a third of Australia’s population be confident that monetary policy decisions are including them.

The economic scorecard for Townsville and much of Queensland's regional economy certainly warrants unprecedented action from our political and business leaders. RBA Board membership is one positive step in a progressive Asian-centric trading zone in which Australia finds itself deeply entrenched.

Townsville is currently experiencing the highest unemployment rate at approximately 10 percent in the State and the property investment and accommodation economy is trending in negative territory with high vacancy rates and a notable decline in new mortgages being written by lenders.

Townsville Real Estate Blog will report on the specific factors our team believes has evolved contributing to the current property investment and accommodation economy in Townsville. Watch this space and visit our previous articles as follows:

North Queensland Strata Rental Market in Eye of Perfect Storm

http://townsvillerealestate.blogspot.com.au/2013/12/north-queensland-strata-rental-market.html

Lead Indicators for Townsville Property Market

http://townsvillerealestate.blogspot.com.au/2013/08/lead-indicators-for-townsvilles.html

Time to Wake up and Smell the Roses; Queen Bees are Being Born

http://townsvillerealestate.blogspot.com.au/2013/03/time-to-wake-up-and-smell-roses.html

Townsville and Central Queensland's property market is experiencing significant challenges on the back of high unemployment, mainly due to misdirected, and perhaps in hindsight for the State government, unintended consequences from policy commitments aimed at remedial budget and economic measures. Many proponents believe these measures are excessive! Political judgement in the context of current sensitivities could cause political damage at the ballot box with a change likely in local representation.

Further uncertainty and policy risks to business from political instability is unwelcome developments in light of the most recent Stafford State bi-election in the northern suburbs of Brisbane. The appointment of a Townsville-based Reserve Bank Board Member could bring both strategic and practical benefits to the region where federal policy influence on military, research, education infrastructure is sustained by federal budgets.

Townsville Real Estate Blog supports Mr Colin Dwyer's insights and respect the foresight of such an important appointment impacting on regional monetary policy, which could also influence like never before, the formation of fiscal policy by incumbent and future governments.