Terry Ryder goes property hotspotting in his comfortable motorhome.

Terry spoke with HT Editor, Michael Berry about how he became a real estate journalist with attitude.

THERE HAS TO BE a good reason for one seasoned journalist to interview another. (I am still waiting to hear back from Rupert Murdoch by the way). However, in Terry Ryder’s case I was intrigued to read his recent Hotspotting column in the Property section of the Weekend Australian. I was impressed that Terry could be so confident of his position vis a vis interest rates that he could … well … shaft the head of the Reserve Bank, Glenn Stevens.

I will acknowledge that the bald-headed Mr Stevens has a faint likeness to Mr Spock, but breathtakingly, Terry asserts he is an android with a head full of wires and computer circuitry. He went on to say that Stevens delivers robotic sermons that have a “steely logic and utter dependence on analysis of cold hard facts”.

Ouch! I guess Mrs Stevens might have something to say about that, but this criticism lies at the core of Terry Ryder’s philosophy. Before taking life-changing decisions on our behalf, Terry asks, do mandarins like Glenn Stevens actually get down on the shop floor to talk to real people about consumer and household pressures?

“ I am always looking for the human element,” he says. “You can’t do everything purely by the numbers which is the reason why economists are so consistently wrong about real estate. Media for some reason think that the best place to go for analysis of real estate are economists. It’s like going to an AFL expert for an analysis of State of Origin Rugby League. You might get an interesting perspective but you’re not going to get expertise because it’s not their area of expertise. And economists get it wrong in real estate continually because they do it by the numbers. If I did that, I would get it wrong every time.”

Clearly, Terry is getting it right because his mainly internet business is flourishing, based on quarterly reports about the likely growth of towns, suburbs, regional areas throughout Australia. His clients are increasingly mum and dad investors who prefer the bricks and mortar of real estate investment to the rigours of the stock market.

“I look for articles and Google alerts that announce drivers of growth,” says Terry, “like a new motorway to be built or a power station. It’s not rocket science. For example, Gladstone is a no-brainer. There is over $100 billion worth of projects coming up in Gladstone – LNG processing facilities, expansion of the port, a new steel mill. So you add up the tens of thousands of jobs being created and these people are going to be looking for somewhere to live. You don’t have to be particularly clever to predict that rents and house prices are going to rise in Gladstone. It is that sort of factor that I am looking for. Sometimes it is more intuitive and not so easy.

“So, we have the quarterly, top ten Queensland hot spots report, and reports for all the other states and territories. Then there are national reports under certain themes such as Ugly Ducklings which looks at the

cheaper areas of capital cities that have potential to grow into a real estate swan. For example, Bulimba in Brisbane has become gentrified in a short space of time.”

Terry doesn’t see the Sunshine Coast hinterland as a hot spot. “It’s growing too fast. It’s a classic ‘hill change’ area which I think is a stronger growth factor than sea change. There’s been a lot of media about sea change moves as great places for capital growth. In fact, it hasn’t worked out that way, because of developer over-supply. The Gold Coast is a classic sea change destination but it’s the worst performer in capital growth in Queensland. In iconic locations like Surfers Paradise for example, prices are lower there than they were five years ago.

“You go to say Byron Bay and it’s a very mediocre performer, but you go inland to the Murwillumbahs and Mullumbimbys and they have really gone ahead. And that’s partly because the inland towns are cheaper and there’s more community. People are looking for affordable lifestyle with community, and I think you get that more in a place like Maleny than you do on the Coast where you’ve got growth problems.”

Terry’s confidence in making predictions in the property industry is based on 30 years experience. In the 1980s he was property editor for the Courier Mail before switching to the Financial Review as a property specialist. Private consultations followed from commercial companies at the big end of town. Along the way he started to write books on property and how to navigate the real estate jungle.

“Hotspotting started five years ago,” says Terry. “I’ve had almost thirty years as a specialist in real estate and I had learnt along the way that what people want to know most of all is what area is going to go next. They want to buy in areas that will show superior capital growth – even when they’re buying their house. And there was nothing out there telling them what were the hot spots of the future.”

Books on real estate help mum and dad investors navigate the property market

With experience has come a confidence to be critical of the real estate industry when it counts.

“The real estate industry is full of shonky operators,” says Terry, “ and the building industry as a lobby continually complains about government artificially controlling land supply. But it’s actually developers who control land supply because most of the land out there is in the hands of the big developers like Stockland, Lend Lease, Australand and others, and they certainly drip feed it to the market.”

Hotspotting is a mixture of experience, analysis of research and what Terry calls gut feel. It is based on getting out there at the coal face, talking to people and seeing what’s happening.

“That’s what the motor home is for,” adds Terry with a smile. “That’s my mobile office. I like to get around the country which is a cost effective and durable way of doing it. When you visit places you see growth signs that internet research hasn’t turned up. Economists don’t do that and Glenn Stevens doesn’t do that. “

Terry is considering inviting Glenn Stevens to join him on his next motor home trip to Adelaide and South Australia.

ARCHITECT DAVID GOLE says that living in Maleny helps get him into the right head space when it comes to designing homes for the Blackall Range. He must be right because his firm, Riddel Architecture has just been awarded House of the Year by the Sunshine Coast Regional Architecture Awards for David’s design of the Maleny Grove Live Life Village. David spoke to HT about his design concept.

DAVID GOLE has a passion for good design, but design that is also appropriate to its environment. He is particularly pleased that the Australian Institute of Architects has recognised the importance of good design for retirement living, as these environments are often uninspiring and developer-driven.

“I was surprised at this win because we were competing against all those high end homes along the Coast,” says David. “I think they viewed the idea of having a better quality environment for retirement living as being something worth pursuing.”

The first stage of Maleny Live Life Village on Palm Street, Maleny consists of 24, two and three bedroom detached villas and duplexes arranged in groups or hamlets. There is also a spacious community centre and the whole area is landscaped and interlinked by gently curving single lane roads and footpaths.

The villas are fundamentally two or three bedroom homes with two different types of roof line – the scissor truss and the skillion. The duplex villas bring both rooflines together.

“ We group the villas around single lane roadways into hamlets and each villa has a different entrance,” says David. “Within each grouping there is a distinct colouring and there are different versions of garages depending on villa orientation.”

One advantage of living in Maleny is that David knows its climate. “All villas have the long part of the building facing north. Each has an outdoor entertaining area with one bedroom at least facing north. So, we have maximised space for breezes, ventilation and weather.” David read his brief for the village as

breaking a mould for retirement living. He tried to get inside the head of the 21st century retiree who was downsizing but not entering God’s waiting room.

“ My view,” says David,” is that people who retire will spend more time in their homes, so it’s even more important to have lovely qualities in these places.”

David interpreted lovely qualities as soft, muted colours outside that blend with the environment and cool whites inside to suggest airiness and space. High and sloped ceilings add to the sense that you have all the space you need, important perhaps if you are retiring after 40 years in a sprawling farmhouse on 200 acres.

“It was important to give a sense of home and not a pokey apartment or duplex with low ceilings. So, I was trying to achieve something that was uplifting, with qualities of light, ventilation, all providing spaces that were generous but not overly so.

“Part of my brief was that the village should be attractive in the way that the grandchildren would want to come and have a party here, or even have a wedding because it is such a lovely environment.”

The home itself provides a number of options for how you want to live. So, some villas have a multi-purpose space off the living room for craft, computer or reading area. The garage could become a workshop or study and there’s a massive communal shed in the village which will be left in the hands of residents to fit out and use.

The community centre is set up with craft, billiards, library and gym areas and generous community space. And there’s a big fire place.

“The other aspect of this place is that I thought it should be welcoming to the community,” says David. “The entrance roadway connects onto Palm Street, and if you felt like walking in you would be welcome. There is no gate and this is not meant to be an isolated community.

“I am committed to designing buildings and making places that are site and culturally relevant because otherwise what have you got to anchor you?” questions David. “How do you feel a sense of belonging if the building you are in could just be a generic building that could be anywhere?”

Maleny Grove Live Life Village will go on to the Queensland State Architecture Awards announced on June 24.

AFTER 23 YEARS marketing and selling real estate in this area, specifically around the Montville region, I genuinely feel privileged to have been invited to so many interesting and varied properties and to have met so many varied and interesting people.

In simple terms an offer to buy property can be either made verbally – or in writing by way of a contract signed by the purchaser, commonly referred to as “on paper”.

A verbal offer, even if accepted by both parties, is not legally binding on either party.

Whereas, an offer to purchase, committed to paper, signed by both parties and with a deposit paid, is a legally binding contract.

Both parties are bound by the terms and conditions of the contract with the main standard conditions usually – “subject to a satisfactory building and pest inspection” – and – “subject to satisfactory finance approval”, either of which must be satisfied within a specific time period, usually 14 days for the former and 28 days for the latter. The word “satisfactory” leaves many openings for the purchaser to terminate the contract on the basis the building inspection or application for finance is “not satisfactory”.

The standard contract also includes a “cooling off period” whereby on receipt of a fully signed copy of the contract, the purchaser has 5 working days to change their mind.

If they do trigger this clause they may be obliged to pay a penalty equating to 0.25% of the purchase price to the seller.

Given the fairly open-ended ability to “escape” a contract on the finance or building and pest, the cooling off clause is rarely triggered.

As you can see a verbal agreement is not binding, whilst a written agreement in the form of a contract is, but it is not secure until the terms and conditions of the contract are met – and remember – nothing is sold until it’s settled – and – unconditional contracts have been known to fail at settlement!

Unfortunately, the “hand shake” and “gentleman’s agreement” are all but things of the past.

Both buyers and sellers should always seek legal advice before signing any contract documentation.

John Taylor (23 years Range Real Estate experience)

Combining professional expertise with innovative and environmentally-friendly building materials means this pair of entrepreneurs can’t keep up with demand. A new straw bale house in Conondale is their latest project and it was where Michael Berry caught up with Nick Dunn.

Straw bales make a perfect insulation and fire retardant building material in this post and beam construction.

“We largely work with owner builders”, said Nick who was busy applying render to an inside wall of straw bales. “We do ‘living’ or green roofs too, in fact, anything out of the ordinary. I guess it’s about bringing the old style building methods to today’s society.

Straw bale is growing in popularity across Australia, mainly because it has proven its worth and building codes have now embraced it in all states

Nick Dunn applies clay and straw render to a window deep reveal.

Nick and Roger’s current project is a small cottage on a hillside close to the village of Conondale. A basic post and beam framework with a pitched roof was erected first, before straw bales were used. The bales are compressed with wire and grippers or threaded rod, and it is the compression which adds to the solid, load-bearing structure.

Another popular aspect of using straw bales is that friends and relatives can be involved in the building.

“We had a workshop to raise the bales on this house which went up in a weekend”, says Nick.

A spacious sculptural effect is achieved.

Those same people want to come back and be involved in the rendering. That’s the attraction of the straw bale home – anyone can be involved.

Nick says it takes about the same amount of time to build with straw bales as to build a traditional brick home. The bales are totally dried and stored for many months before being delivered on site. Building inspection for a straw bale house is straight forward. It’s defined as a post and beam construction with straw bale infill, and everything is pitched and tied down as for a normal cyclone rated dwelling.

With a final earth plaster on interior walls.

“As for insulation”, says Nick with enthusiasm, “you can’t get better than straw bales. It’s an excellent insulation layer 2-3 times better than the average home which means a reduction in electricity consumption.

“Air can actually pass through the breathable nature of lime and earthern plaster, so you constantly get ‘fresh’ air into the house which people who live in strawbale houses often talk about. We don’t cement render our bales. On the outside of this house we’re going to use lime plaster and earth plaster on the inside. Nick is equally enthusiastic about the fire retardant qualities of straw bales.

“Surprisingly perhaps, because the bales are compressed so tightly, there’s very little air to help them burn.

The straw bales are covered with a 35mm render that is basically made up of clay, sand and straw. A thin top coat with an oxide colour is then applied over it. You can get different colours – blues, greens, and the standard ochre – that all come from natural pigments in the soil.

Nick and Roger have never been busier but they are enjoying the creative element required in their applied building skills. They also have a sculptor joining them who will contribute patterning and other creative moulding to the render.

Beauty is in the eye of the beholder, but Nick is sold on the look of a finished straw bale home. “Aesthetically, I guess it’s what you like, but I think that the deep reveals around the windows and doors … it’s quite beautiful to look at and live in,” says Nick as he gets back to work smearing handfuls of render onto an inside wall.

The legislation that real estate agents and sales people operate under is quite specific in relation to market appraisals and an agent is not allowed to receive payment for them.

A market appraisal is not a valuation, and a valuation can only be conducted by a registered valuer.

Registered valuations are usually under the instruction of a bank or lender for finance purposes and as such they err on the side of conservative.

Invariably the instructions will include a requirement to value the property at a price that the property would sell at within a very specified period – usually no longer than six months and more often three months.

A market appraisal, on the other hand, with the use of past sales information should give a very fair indication of what the market at the time of the appraisal may pay for the property.

It’s necessary for an agent to find recent sales information (within six months), of at least three properties that are comparable to the subject property and within five kilometers.

This is not so easy on the Range and often older sales information and/or greater distances are involved. And, in some circumstances with very unique properties no comparisons are available.
According to the legislation any variation between the comparisons used, requires a detailed written explanation from the agent.

I can’t stress highly enough that the comparisons must be truly comparable and/or a detailed written explanation of how the Agent arrived at their conclusion must be provided to the property owner.

John Taylor
(23 years Range Real Estate experience)

I recently tracked vacant Rural Residential land values in Flaxton over a period of twenty years from 1990 to 2010.

Whilst the annual gain wasn’t consistent, over that period the average was between 10% and 11% per annum.

During the last ten of the twenty years (1994 through 2004) values flat lined and prices did not change, and taking into account inflation property values effectively decreased.

But like the stock market, a correction eventually occurs and with increasing activity from the period 2003 through 2005 it culminated in a doubling in value in the last six months of that previous ten year period!

So, as you can see from this somewhat radical example, in the past, if you held property long enough the gain would occur, if not annually, at least over a period of time.

What will it do in the future?

Who can say, but I believe property on the Range is very well placed to experience continuing capital gain.

We have a finite land supply on the Range with an area approximately 25kms north to south and an average 10 or so km’s west to east, with escarpments on three sides and 10,000 hectares of National Park controlled land to the north.

Add to this the scenic attractiveness, the climatic advantages, the rural amenity – and – the biggest one of all – the growing desirability to those “trapped” in the ever growing “urban jungles” off Range both locally and elsewhere in Australia.

To establish just where your property stands in relation to capital gain – just ask a reputable Agency for a Market Appraisal which they must complete in writing as a Comparative Market Assessment.

Next month I’ll address this appraisal process in detail.

John Taylor (23 years Range Real Estate experience)

Montville Real Estate
200 Main St,Montville
Phone 5478 5478

An example of where an easement can benefit a property:

John owns a tract of land that borders a national park which is a popular area for bushwalking and fishing. Ruth lives next door to John, but her land does not adjoin the national park. To avoid tresspassing, she must access the national park by walking or driving to a public entry point. Instead, John grants Ruth an easement allowing present and future owners of Ruth’s property to cross John’s land to access the national park.

How does an easement affect the person who grants it? The landowner who grants an easement usually cannot build structures within an easement area or use fencing that would hinder access. Other activities might also be prohibited. Before you purchase property you should know where all easements are located and what restrictions are associated with them.

Can easements affect property values?

Yes it is possible.

• Several easements on a tract of land might seriously limit the choice of building sites.
• High tension lines running through an easement near an otherwise great building site can be unsightly. Resale values may be affected since many people feel that living too close to power lines is a health risk.
• Buyers may simply not like the idea that others have a right to use the land in some way.

Don’t assume that because an easement is not currently being used it will never be used. As long as an easement is registered on the title of the property there is always a possibility that the individual who benefits from it will decide to enforce it.

Easton Lawyers

62 Maple Street, Maleny Ph 5494 3511

6b/3 Obi Obi Road, Mapleton Ph 5478 6500

tove@eastonlawyers.com.au

The Housing Industry Association -CSR Queensland Housing Awards are eagerly contested from regional builders throughout the state. Regarded as Queensland’s highest accolade for building design and site position, the Grandview Homes win was for the open category for all builders with unlimited budgets.

The winning entry is called The Harvard and it comes from Grandview Homes stable of award-winning designs. It was chosen by the owners in Flaxton as the best use of their hinterland acreage and its street appeal.

The winning house scored the highest against all criteria and the judges said “the workmanship was very good, and a step up from flawless. Given the site costs, this home represents good value for money and is very competitive in its category”.

The landscaping for the winning property was by Alexander Landscapes and according to the home owners the on-site judges spent as much time outside the house admiring the landscaping as they did inside.

Grandview Homes managing director, Scott Harrison said he was honoured to receive such high praise and he commended his staff, contractors and suppliers for their high standards of performance.

JUST over a month before Christmas and without any consultation with the real estate industry, the State Government brought in new legislation making it mandatory for every residential property in Queensland on the market or coming on the market after the 1st of January 2010 to have a two page fifty six point Sustainability Declaration in place.

The declaration form is a series of questions on the number and type of energy, water use, disabled or impaired access, pool and electrical safety, smoke alarm features etc.

The obligation to complete the form rests with the property owner and incorrect information can attract a $2,000 fine.

Whilst the form can be completed by another party, agents have been warned by the Real Estate Institute of Queensland not to assist the property owner due to risk exposure – more crazy potential litigation!

Oh yes, and more stupidity – if an owner doesn’t know the answers to questions they can leave the form blank, sign it, and it’s still completely legal!

Regardless of that, in the event an agency listed or maintained an existing listing without a declaration or without stating availability on all displays, signs and making the declaration available at open houses and auctions, the agency could be fined $10,000!

As is often the case with governments and authorities these days “act first and make it work later” seems to have been the process used, as after pressure from the industry, a moratorium on fines is now in place until the 1st of march 2010.

So effectively residential property owners have until then to ensure the Sustainability Declaration is made available to any agency listing their property for sale.

Whilst it’s even more red tape, the intent of the declaration is to provide incentive to make homes more energy efficient and ultimately more desirable when available for sale.

Instead of the – No consultation – Government knows best – big stick approach – it’s just a pity that governments and authorities don’t work with, and for those, they are there to serve.

John Taylor

Montville Real Estate  200 Main St,Montville  Phone 5478 5478