Thursday News and Trends
Among the world’s top 100 brands there are no property companies, with eight out of the top ten brands dominated by technology giants including Google, Apple, Microsoft, Amazon and Facebook. However, furniture giant IKEA does score well in twenty-sixth spot. The UK based Estates Gazette does publish a top 100 list of real estate companies with Brookfield Asset Management from Canada in the number one spot with assets of US$129.5b. Combined the top 100 real estate companies have estimated assets of US$3.6b (AUS$4.8b). It’s interesting that only the USA, China, Japan and Germany have larger GPDs.
With the rising cost of electricity and possible fears over the security of supply the idea of going off-grid is gaining in popularity. However, this is not a new idea and back in 2014 global investment bank UBS was already highlighting the challenges facing Australian energy utilities. USB was also suggesting that the falling cost of solar and battery storage would mean that the average Australian household could find it cost-competitive to go off-grid by 2018. The estimated cost in 2014 was $39,000 for a household consuming the average of around 7 megawatt hours, today that figure sits roughly around $25,000. We’ve also seen some apartment projects turning to solar-power for common areas and to boost hot-water, and the trend is set to continue. But the big energy companies are warning that if more people move off-grid, then those remaining will have to pay more!
Among buyers of both apartments and houses it’s the kitchen and bathroom that are the ultimate trophy rooms. Having a great kitchen and a luxury bathroom are highly coveted items on a buyer’s must have list of features and apartment projects are reflecting this trend. Developers and their design teams are now paying meticulous attention to the detail of finishing in both these key areas. Joinery cabinets reflect this with varied colours and materials being used and quality stone finishes remain key aspects as kitchen and living areas provide beautiful open plan living spaces. Kitchens with informal dining areas and easy access to a balcony or terrace are also key points. Bathrooms are also reflecting this trend with a mix of materials, textures and patterned tiles. Lighting and the use of different colours is also very important along with the use of natural materials.
The number of rental bonds lodged with the NSW Rental Bond Board gives a very reliable insight to the rental market. In 2016 there were a total of 305,111 bonds lodged across NSW which represents a big number of tenancies. Over the last three months the rate of new bonds lodged has been slightly decreasing: August 28,444, September 26,296 and October 25,736. At the end of the year it will be interesting to make a full comparison between 2016 and 2017 trends.
Eliminate Stamp Duty and Introduce a Universal Land Tax
Various tax reviews, including the recent Productivity Commission’s 5-year review, have all suggested that stamp duty should go and be replaced by universal land tax paid annually on all properties. Back in 2010 the Henry Tax Review also proposed that a form of land tax be introduced. However, for many reasons it’s been acknowledged that changes to stamp duty and land tax would need to be implemented over the long-term. That’s already happening under a 20-year plan in the ACT. It would also be necessary to compensate those who have already paid stamp duty, so that they would only begin paying land tax as a property was sold that would then move onto any new land tax. During this transitional phase, there would be revenue shortfall and this will require some form of compensation between the State and Federal Governments. However, change is required and mechanisms need to be found for this long overdue reform.