EXPATS EXCEL! EXPECTATIONS EXCEED! EXCHANGE RATES CLIMB IN BOTH SECTORS!

EXPATS EXCEL! EXPECTATIONS EXCEED! EXCHANGE RATES CLIMB IN BOTH SECTORS!

With the Aussie dollar hitting a three-year high last night of $US61.8, it came as little surprise to see that it is the expats who are really working hard on the top-end of the property market. Already this year we are seeing quite a few big sales, with many agents claiming to have posted the ‘highest sale for the year’. In the last week, we have seen a Balmoral home sell prior to the scheduled auction to an expat for $4 million plus. Then there was another home in Balmoral, which also sold ahead of the closing date, for $5 million plus, and again reportedly to an expat. The biggest sale so far in Balmoral for 2003 was actually a $6 million plus sale which was sold by our very own Steve Patrick, and a double yes, an expat and a subscriber. Now I believe that many of the expats are kicking themselves for not taking advantage of the market when the Aussie dollar was wallowing at $US47.5.

We are experiencing one of the tightest markets as far as listings are concerned and hopefully this will change significantly after Easter – as more positive results evolve from the marketplace. The first-run of auction properties for the year have been posted and it would be fair to suggest that these results are mixed. Once again, we are seeing inflated expectations from a few vendors and a few agents are blaming the events of Iraq for the properties that have failed to sell at auction. However, this does not seem to be consistent with the results from the rest of the market. What is consistent however is that once again this is a ‘white lie’.

At the meeting (on 4 March 2003) the RBA Board decided to leave the cash rate target unchanged at 4.75%, no surprises there. The Reserve Bank may have a few more reductions up their sleeve, but this is probably not the time to ‘play their hand’. Rather, they probably prefer to watch the property market meander away on its present course, and in the short term there is definitely no need to change direction, nor plot a new course. Sydney property markets continue to be the most resilient in the entire World, and whilst we are in our seventh year of prosperous market conditions, given recent share market turmoils, real estate is seen more than ever before as a ‘safe house’.

Bob “The Builder” Carr, must still be awaiting his legal advice regarding the recent Land Tax judgement – where the courts ruled that his Governments applications whilst assessing the tax were ‘just not cricket’. The judges found that the applied method to derive a valuation was defective, unduly selective, and based ‘effectively exclusively’ on four sales. There is still no mention of the fact that the property was never physically inspected. We received quite a few e-mails from subscribers who were horrified at how these figures are determined, so here it is direct from the ‘horses mouth’…

“The most direct evidence for assessing the land value is to compare the property with sales of comparable vacant lands. The comparison between the sales and the land being valued will relate to the size of the land, the services available to it and the uses to which it may be or is being put.

Other factors relating to comparability could include surrounding developments and amenities. These would include both positive factors, such as parks or views, as well as negative factors such as frontage to a busy road.

In areas or types of property development where there are limited sales of comparable vacant land the valuer may use sales of improved properties and make allowances for the value of the improvements. This would be appropriate where houses are either being demolished or extensively renovated.

Investment and commercial properties are valued by a hypothetical development exercise when sales of comparable sites are not available.

There are assumptions applied in valuing certain categories of land, for example special provisions apply to land the subject of a listing on the State Heritage Register (see later), heritage restricted land, coal mines, rent protected land and Crown lease restricted land.

The Courts have consistently applied the above methodologies in determining the value of land.

The contract valuers undertaking the valuation will have available to them a whole range of material and information, including maps, deposited plans, sales evidence etc., that will allow them to determine accurate valuations. The valuer may make an inspection of the locality and in most cases will have a general knowledge of the local area that enables him/her to identify the negative and positive factors.

With the valuer’s professional training and experience he or she is able to analyse and interpret this evidence to determine the land value that is to be placed on individual properties.

The most direct evidence for assessing the land value is to compare the property with sales of comparable vacant lands. The comparison between the sales and the land being valued will relate to the size of the land, the services available to it and the uses to which it may be or is being put.

Other factors relating to comparability could include surrounding developments and amenities. These would include both positive factors, such as parks or views, as well as negative factors such as frontage to a busy road.

In areas or types of property development where there are limited sales of comparable vacant land the valuer may use sales of improved properties and make allowances for the value of the improvements. This would be appropriate where houses are either being demolished or extensively renovated.

Investment and commercial properties are valued by a hypothetical development exercise when sales of comparable sites are not available.

There are assumptions applied in valuing certain categories of land, for example special provisions apply to land the subject of a listing on the State Heritage Register (see later), heritage restricted land, coal mines, rent protected land and Crown lease restricted land.

The Courts have consistently applied the above methodologies in determining the value of land.

The contract valuers undertaking the valuation will have available to them a whole range of material and information, including maps, deposited plans, sales evidence etc., that will allow them to determine accurate valuations. The valuer may make an inspection of the locality and in most cases will have a general knowledge of the local area that enables him/her to identify the negative and positive factors.

With the valuer’s professional training and experience he or she is able to analyse and interpret this evidence to determine the land value that is to be placed on individual properties”.

For those who would like to read more, here is the link.

Now it is alright to state that… “With the valuer’s professional training and experience he or she is able to analyse and interpret this evidence to determine the land value that is to be placed on individual properties”… but in reality, you are taxed on your property and they haven’t got a clue what your property even looks like, let alone if it has a view!! You have to hand it to them though, they’re good! We all knew that some ‘pollies’ love playing with mirrors!!

Cheers and clink…..^ __ ^

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