Thursday Round-Up

Building History

Builders have a long history in Australia, in fact, Master Builders is Australia’s oldest industry association. Australia’s first Master Builders Association was established in Sydney in 1873. However, the world’s oldest company, also a builder, was Japanese temple building firm Kongo Gumi: founded in 578AD, the company traded for 1,400 years until its liquidation in 2006.

Ground-Hog Day

Property managers take note: in Montreal, residential rental leases mainly all end on the 1st of July, and as a result around 130,000 people move house on that day and they do so every year. By comparison, on a simple average, there are around 25,950 new bonds lodged every month across NSW, just how would Sydney manage if the same numbers were repeated here with 5-months move all happening on the one day?

Property Democracy

Almost on-cue as either State or Federal elections come around we hear government’s pledge ‘to build more homes’. It’s been the case as far back as the 1920’s. However, today’s reality is that providing a greater level of affordable homeownership will require a mix of private development expertise that’s publicly funded. But the number involved will be big, tens of billions. This level of investment and vision will be the only way today’s under-40s will have a realistic way of owning a home, especially those who do not gain an inheritance from mum and day.

Annual Vacancy Fee for Foreign Owners

In December 2017 the Federal Government introduced an annual vacancy fee for foreign owners of residential dwellings. It’s a trend that many governments are following world-wide. Foreign owners are required to pay an annual vacancy fee if their dwelling is not residentially occupied or rented out for more than 183 days (six months) in a year. The annual vacancy fee is promoted as a way of boosting housing affordability, although that connection is yet to be proven. Foreign owners of vacant land do not have to lodge a vacancy fee return until a dwelling has been constructed. The question of how much offshore buyers are inflating the local property market has been one of the big political issue for many years. It will be interesting to see if after collecting information on overseas buyers shows foreigners are having a large impact. Or not!

Foreign Landlords Leave UK Property Market

As governments hit foreign owners with extra taxes, they are turning their backs and leaving, and that trend will have a number of impacts. The UK is one example where the number of foreign investors into the U.K. property market has more than halved since the start of the decade and London has seen the most dramatic fall in investment. The tax hikes are thought to have driven landlords away and this is expected to lead to a possible shortage of available properties for lease. Just 5% of British homes now have overseas owners and new taxes may further reduce this number. Government duty and tax revenue is also falling as foreign buyers leave the market. Since last April, investors have to pay an extra 3% (tax levy) surcharge on the purchase of second properties, while a separate tax on companies buying property in the U.K., pushed up costs further by between ￡3,500 and ￡7,000. However, it’s clear that investors are sensitive to these taxes and that they do not have bottomless pockets.

The Humble Lift

Modern office towers and apartment buildings wouldn’t exist without the humble lift, that’s a simple fact as most of us don’t like to climb more than four or five floors. Lifts have been described as the primary engine of urban density development. Records of mechanical hoists go at least as far back as Archimedes. The Roman Coliseum used them to deliver hapless victims to the lion’s den. The modern passenger lift, originally called a ‘vertical railway’, appeared in the 1850’s. At the Exhibition of the Industry of All Nations, in New York in 1853, Elisha Graves Otis—the man behind what eventually became the giant Otis Elevator company—demonstrated his safety catch, devised to stop the lift platform from falling, and the rest is history.

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