It has been a year that has defied the pundits' worst predictions of doom, gloom and bubble bursting, where state governments brought in land taxes than rescinded them almost as quickly, where the Reserve Bank raised the official cash rate only once, and an outback woolshed won a national award as an icon of Australian architecture. Here are a few of the highlights of property in 2005:
We're all rich, thanks to property
The property boom of the past few years has helped increase the personal wealth of Australians by more than $50,000, according to Treasury's Economic Roundup released in March 2005. The report stated that, in current prices, Australian net private sector wealth was approximately $5,145 billion at market value as at 30 June 2004 - the first time it has gone over $5 trillion. This represented around $250,000 per Australian. Real net wealth per Australian has increased for 13 consecutive years and has risen by over $51,300 in the past three years alone.
Seachange cities will reinvent themselves
A study by KPMG on Australian housing showed that selected coastal cities in Australia will reinvent themselves over coming decades, as strong population growth and new households trigger a surge in the demand for new dwellings.
In particular, the seachange cities of Mandurah, Hervey Bay, Sunshine Coast, Gold Coast and Cairns will more than double their housing stock over the 30 years to 2031. Most new homes built in Australia over the 30 years to 2031 will be located in Sydney; however, demand will be higher in Melbourne over the short term, while Brisbane sits at "the centre of a broad region of extraordinary demand for new dwellings" over the same period.
The survey also found housing demand is directly linked to social change. Households are getting smaller - where there were 3.2 people per home in 1981, this figure is projected to drop to 2.3 by 2031. Furthermore, the traditional nuclear family is making way for smaller households (singles, couples, single-parents) and this will have a direct bearing on the demand for new homes.
Better protection for tenants
The Standing Committee of Attorneys-General (SCAG) voted to develop national regulations for Residential Tenancy Databases (RTDS), in order to strengthen protection for renters who find themselves blacklisted on databases. Currently the Privacy Commissioner does not have sufficient power to ensure that a RTD operator complies with an order to have a listing removed.
"RTDs are a legitimate tool to help real estate agents avoid tenants from hell", said Queensland Attorney-General, Linda Lavarch. "But they are not meant to blacklist forever a tenant who has made an honest mistake or had a difficult circumstance."
Rising rents lure investors back to the market
A combination of steady interest rates, healthy immigration and a growing population have put demand pressure on rental property, with the result that rents in major cities of Australia have begun to rise and property market analysts are now predicting a further tightening of rents and a fall in vacancy rates, thereby signaling an end to the so-called 'downturn' in property markets.
NSW drops vendor tax
The property industry welcomed incoming NSW Premier Morris Iemma's decision in August to abolish vendor tax as a major step towards getting the state's economy back on track.
Meanwhile, the Real Estate Institute of WA called on the Government to cut stamp duty rates on real estate conveyances, following the announcement that the 2004-05 State Budget will blow out by over 50 per cent to $1 billion.
GST on property - auctioneers told to make it clear up front
Auctioneers must make it crystal clear to all bidders at property auctions if bids are being taken on a GST-exclusive basis, the Australian Competition and Consumer Commission (ACCC) warned in July, adding that auctioneers and vendors who fail to ensure this may be required to make good the consumers' loss.
Survey confirms that our DA processes worsen
A national survey confirmed that, despite some improvements in some states and territories, Australia's development assessment (DA) processes and systems continue to operate inefficiently - generating additional time and monetary costs for building owners and operators, architects, building designers, developers and constructors.
Key findings included longer time delays, rising compliance costs, overly complex systems which create confusion to both applicants and their designers and a lack of uniformity of regulations and planning laws across municipalities. There were also widespread examples of high turnover of planning compliance staff and reports of some councillors overturning the advice received from their planning consent staff to cater for local political considerations.
Waves of energy
The Port Kembla Wave Energy Converter went online in May. Moored just off shore, the steel structure uses the high energy found in deep waves to generate "clean", useful power for up to 500 homes and to serve as a valuable test facility for further technology development.
According to a report released in November 2005, results from the trial indicate the device will produce 20 per cent more power than was originally estimated.
The year of the land tax seesaw
In February the South Australian Government, which had been under pressure to ease land tax rates for more than 18 months, raised the tax-free threshold from $50,000, to $100,000.
This effectively meant that 44,000 investment property owners who were currently paying land tax would no longer have to do so. The restructured scheme was to be back-dated to January 1, with the state's 121,000 land-tax payers to receive a rebate over the next few months.
NSW Treasurer Andrew Refshauge capitulated to pressure in May and reversed land tax changes introduced a year earlier, when the NSW government announced changes in its budget to remove land taxes that were threatening landowners across the state, from investors through to families with just a modest holiday home at the beach. From January 1, 2006, a threshold of $330,000 will be restored, relieving more than 400,000 people of land tax liability on their properties.
The Victorian Government used its Budget to announce a further $823 million in land tax cuts for 2004-2008 and that it would lower the top marginal rate next year to 3.5 per cent, continuing to reduce it to 3 per cent in 2007-2008.
Furthermore, the Government promised it would provide a partial rebate on all 2005 land tax bills in recognition of the fact that benefits to last year's land tax cuts were eroded by massive valuation increases.
The Queensland Government responded by announcing that its Budget would include cuts to land tax for investors of Queensland property from July 2005. The Premier said the tax cuts, which had been promised in the final Budget of the Coalition Government that was never passed by Parliament, would be announced in his September Budget and backdated from July 1, 1999.
The most expensive city
Living in Sydney was found to be more expensive than in any other city in the Pacific region, according to the 2005 Worldwide Cost of Living Survey from Mercer. The survey covers 144 cities around the world and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. Other high-scoring cities in Australia included Melbourne in 68th position and Brisbane in 84th place.
SMS a tradie
Great news for homeowners in July, when it was announced that BANGitUP.com and Telstra had joined forces to make it a lot easier to find a tradesperson in your area - any time of the day - cutting down the hassle of searching through the Yellow Pages then coping with unanswered calls, leaving voice messages and hanging around waiting for tradespeople to turn up with quotes. The way it works is this: you go to the BANGitUP.com website, select the trade (electrician, plumber etc), put in your postcode and the approximate cost of the job and when you want it done - and the system fires off the request, via SMS, to all the appropriate tradesmen in your area. They then send a message back to you via email or mobile phone, often within minutes.
