Residential sales by auction : a property type or geographic consideration

The sale of residential property by auction is a preferred sale method by real estate agents, but not always preferred by some vendors and most residential property buyers. In many residential property markets, the performance and measure of residential property market activity is based on the number of properties offered for sale by auction, auction clearance rates and the number of properties sold prior to auction. However, in many specific residential property markets, sale by auction may not be the preferred or supported method of sale. This paper will review the type of residential property sale within the Sydney residential property market and track the auction sales and clearance rates for Sydney over the past 5 months and compare these results in relation to clearance rates, passed in sales, and properties sold prior to auction This will provide a breakdown of real estate agency sale practice over a large metropolitan region to determine the impact of geographic location and socio-economic factors on the auction of residential property. In addition the paper will analyse the weekly auction sales in the Sydney residential property market to determine what areas of Sydney have the greatest number of house auctions and the performance of the auctions in relation location and socio economic factors.

The role of timber plantations in U.K. investment portfolios

Although timber plantations and forests are classified as forms of agricultural production, the ownership of this land classification is not limited to rural producers. Timber plantations and forests are now regarded as a long-term investment with both institutional and absentee owners. While the NCREIF property indices have been the benchmarks for the measurement of the performance of the commercial property market in the UK, for many years the IPD timberland index has recently emerged as the U.K. forest and timberland performance indicator. The IPD Forest index incorporates 126 properties over five regions in the U.K. This paper will utilise the IPD Forestry Index to examine the performance of U.K. timber plantations and forests over the period 1981-2004. In particular, issues to be critically assessed include plantation and forest performance analysis, comparative investment analysis, and the role of plantations and forests in investment portfolios, the risk reduction and portfolio benefits of plantations and forests in mixed-asset portfolios and the strategic investment significance of U.K. timberlands.

Calculation of habitable dwelling surfaces : an empirical analysis for the agglomerations of Munich and Sydney

In many countries the calculation of habitable dwelling surface is characterised by a chaotic variety of calculation variants hardly comprehensible for the end user - sometimes not even reproducible for the expert. Therefore dossiers were analysed on the basis of a random choice in order to determine the method according to which the habitable dwelling surface was measured and to find out wether customers can scrutinize the calculations. The paper compares Sydney and Munich, where in both cases property prices are situated at the high end of the market

The Influence of Farm Management on NSW Rural Property Income and Total Average Annual Returns

The importance of agriculture in many countries has tended to reduce as their economies move from a resource base to a manufacturing industry base. Although the level of agricultural production in first world countries has increased over the past two decades, this increase has generally been at a less significant rate compared to other sectors of the economies. Despite this increase in secondary and high technology industries, developed countries have continued to encourage and support their agricultural industries. This support has been through both tariffs and price support. Following pressure from developing economies, particularly through the World Trade Organisation (WTO), GATT Uruguay round and the Cairns Group developed countries are now in various stages of winding back or de-coupling agricultural support within their economies. A major concern of farmers in protected agricultural markets is the impact of a free market trade in agricultural commodities on farm incomes, profitability and land values. This paper will analyse both the capital and income performance of the NSW rural land market over the period 1990-1999. This analysis will be based on several rural land use classifications and will compare the total return from rural properties based on the farm income generated by both the average farmer and those farmers considered to be in the top 20% of the various land use areas. The analysis will provide a comprehensive overview of rural production in a free trade economy.

The impact of flooding on residential property values in England

Severe flooding throughout England in Autumn 1998 and 2000, has seen an increase in the extent of flood liable residential areas throughout England, as well as an increase in the actual levels of flood damage in all previously recognised flood prone residential areas. The increasing cost of rectifying the damage caused to residential properties from flooding has been of some concern to the residential property valuation profession and sales and leasing agency practices. However, the increasing trend in the frequency of flooding in England, combined with an increase in severity of flooding is now causing some degree of concern in the residential insurance and housing finance sectors. In order to determine and quantify the impact of flooding and flood damage on the residential property market in England, a survey of Chartered Surveyors and Chartered Real Estate Valuers has been carried out across the main flood affected counties of England. This survey will provide similar details to the research completed by Eves (1999, 2001) and Fibbens (1993) in relation to residential property flooding in Australia. This survey provides comprehensive responses in relation to the degree of flood affectation across counties, the effect of flooding on residential property values, the impact of flooding on building insurance premiums and possible difficulties in obtaining finance to purchase residential property in recognised flood areas.

The role of rural land in mixed asset investment portfolios

Rural land has not always been considered as a major long-term investment with both institutional investors and absentee owners in countries such as U.K. and Australia. Although rural land is included in both single asset and mixed asset portfolios in the U.S, it is not at the same levels as either commercial or industrial property. Rural land occupies over 50% of the total area of Australia, and comprises over 115,000 economic farm properties (excludes rural residential, hobby farms and rural lifestyle blocks. However, less than 1.6% of the total economic farm numbers are actually owned by corporate or institutional investors. This low level of corporate involvement in the Australian rural property market has limited both the investment performance research and inclusion of this rural land type in both property and mixed asset investment portfolios. In the U.S. rural land is also the most extensive real estate type based on total area occupied. The United States Department of Agriculture statistics (1998) show that in 1997 there were 2.06 million farms in the U.S., covering 968 million acres, with a total value of $912 billion and generating an annual income of $202 billion. The level of corporate ownership of farms in the U.S. is also higher than the level of corporate farm ownership in Australia. This high level of institutional ownership in rural land in U.S has provided the opportunity for the rural property asset class to be analysed in relation to it’s investment performance and possible role in a mixed asset or mixed property investment portfolio.

Total rural land performance in a free trade economy

The importance of agriculture in many countries has tended to reduce as their economies move from a resource base to a manufacturing industry base. Although the level of agricultural production in first world countries has increased over the past two decades, this increase has generally been at a less significant rate compared to other sectors of the economies. Despite this increase in secondary and high technology industries, developed countries have continued to encourage and support their agricultural industries. This support has been through both tariffs and price support. Following pressure from developing economies, particularly through the World Trade Organisation (WTO), GATT Uruguay round and the Cairns Group Developed countries are now in various stages of winding back or de-coupling agricultural support within their economies. A major concern of farmers in protected agricultural markets is the impact of a free market trade in agricultural commodities on farm incomes and land values. This paper will analyse the capital and income performance of the NSW rural land market over the period 1990-1999. This analysis will be based on land use and will compare the total return from rural properties based on world agricultural commodity prices.

An analysis and comparison of rural land sales

Rural land prices, in developed, free trade real estate markets, are influenced not only by prevailing economic conditions but also physical factors such as climate, topography and soil type. In broad acre farming and grazing operations, both commodity price and yields determine farm income. Yields, in turn, are a function of climate, topography and soil type. The strength of a rural land market is influenced by the overall rural economy in a Country, State or region. These differences in rural land markets can also vary within smaller regions. It has been held that rural land, in relative safe production areas, is less effected by adverse economic and climatic factors than land in more marginal agricultural areas. This paper will analyse rural land sales in both traditional cropping areas and marginal cropping areas for the period 1975 to 1996. The analysis will determine the overall trend in rural land prices over the period, compare the average annual return between marginal and established farming areas and determine which economic and production factors have influenced this change. The impact of this analysis will also be discussed in relation to rural land appraisal.

Bubble geometry and chaotic pricing behaviour

This paper is a deductive theoretical enquiry into the flow of effects from the geometry of price bubbles/busts, to price indices, to pricing behaviours of sellers and buyers, and back to price bubbles/busts. The intent of the analysis is to suggest analytical approaches to identify the presence, maturity, and/or sustainability of a price bubble. We present a pricing model to emulate market behaviour, including numeric examples and charts of the interaction of supply and demand. The model extends into dynamic market solutions myopic (single- and multi-period) backward looking rational expectations to demonstrate how buyers and sellers interact to affect supply and demand and to show how capital gain expectations can be a destabilising influence – i.e. the lagged effects of past price gains can drive the market price away from long-run market-worth. Investing based on the outputs of past price-based valuation models appear to be more of a game-of-chance than a sound investment strategy.

Dislodgement of commercial property public debt markets : the case of U.S. and Australia

The paper investigates if there are any discernible trends in the U.S. and Australian commercial property public debt markets with the onset of the global financial crisis (GFC). Commercial mortgage-backed securities and unsecured bonds issued by real estate investment trusts for the period 2000 to Q3:2009 are reviewed. It is shown that events in the equity markets have an impact on the pricing of these two instruments. Furthermore, the impact of subdued activity in these financing instruments on the commercial property market is discussed.

Dealing with Post-GFC stress disorder : Bwembya Chikolwa quoted by Christine Retschlag for Property Australia magazine 4th March 2010

Has the GFC really changed the thinking of the property industry? Or are investment managers suffering from post-GFC stress disorder fated to repeat the mistakes of the past? Christine Retschlag reports on the mindset of the market.

Constraints to cost effective land supply

The ready availability of suitably zoned and serviced land is one of the key factors in the timely and cost effective provision of new land for development. Unfortunately, in many high population growth areas, land that may be available does not have ready access to infrastructure, or the appropriate designation/s (zoning) in place. The corresponding lag in supply frequently bears the blame for the resultant disequilibrium in the market and affordability pressures on the end product. Government has the capacity to respond to the issue of land supply in a number of ways. Proactive measures define longer term goals and set the ground rules moving forwards. Reactive policy decisions are made in an often hostile environment where stakeholder interests conflict. With a trend to increased regulation, government risks further constraining the viability of land development in high growth areas, without full consideration of all the supply side variables. This preliminary paper will identify a number of the variables which may be constraining the supply of land for residential development in South East Queensland given the current regulatory environment. It will examine the interrelationship between these supply side constraints, a full understanding of which is required by government in order for its policies to stimulate, rather than restrict the supply of land in this high growth region.

Housing supply in Australia : the impact of the availability of development finance

Before the Global Financial Crisis many providers of finance had growth mandates and actively pursued development finance deals as a way of gaining higher returns on funds with regular capital turnover and re-investment possible. This was able to be achieved through high gearing and low presales in a strong market. As asset prices fell, loan covenants breached and memories of the 1990’s returned, banks rapidly adjusted their risk appetite via retraction of gearing and expansion of presale requirements. Early signs of loosening in bank credit policy are emerging, however parties seeking development finance are faced with a severely reduced number of institutions from which to source funding. The few institutions that are lending are filtering out only the best credit risks by way of constrictive credit conditions including: low loan to value ratios, the corresponding requirement to contribute high levels of equity, lack of support in non-prime locations and the requirement for only borrowers with well established track records. In this risk averse and capital constrained environment, the ability of developers to proceed with real estate developments is still being constrained by their inability to obtain project finance. This paper will examine the pre and post GFC development finance environment. It will identify the key lending criteria relevant to real estate development finance and will detail the related changes to credit policies over this period. The associated impact to real estate development projects will be presented, highlighting the significant constraint to supply that the inability to obtain finance poses.

Public awareness of “green” and “energy efficient” residential property : an empirical survey based on data from New Zealand

Purpose – The purpose of this paper is to examine the buyer awareness and acceptance of environmental and energy efficiency measures in the New Zealand residential property markets. This study aims to provide a greater understanding of consumer behaviour in the residential property market in relation to green housing issues ---------- Design/methodology/approach – The paper is based on an extensive survey of Christchurch real estate offices and was designed to gather data on the factors that were considered important by buyers in the residential property market. The survey was designed to allow these factors to be analysed on a socio-economic basis and to compare buyer behaviour based on property values. ---------- Findings – The results show that regardless of income levels, buyers still consider that the most important factor in the house purchase decision is the location of the property and price. Although the awareness of green housing issues and energy efficiency in housing is growing in the residential property market, it is only a major consideration for young and older buyers in the high income brackets and is only of some importance for all other buyer sectors of the residential property market. Many of the voluntary measures introduced by Governments to improve the energy efficiency of residential housing are still not considered important by buyers, indicating that a more mandatory approach may have to be undertaken to improve energy efficiency in the established housing market, as these measures are not valued by the buyer. ---------- Originality/value – The paper confirms the variations in real estate buyer behaviour across the full range of residential property markets and the acceptance and awareness of green housing issues and measures. These results would be applicable to most established and transparent residential property markets.

NSW rural land performance : 1990-2008

The annual income return for rural property is based on two major factors being commodity prices and production yields. Commodity prices paid to rural producers can vary depending on the agricultural policies of their respective countries. Free trade countries, such as Australia and New Zealand are subject to the volatility of the world commodity markets to a greater extent than those farmers in protected or subsidised markets. In countries where rural production is protected or subsidised the annual income received by rural producers has been relatively stable. However, the high cost of agricultural protection is now being questioned, particularly in relation to the increasing economic costs of government services such as health, education and housing. When combined with the agricultural production limitations of climate, topography, chemical residues and disease issues, the impact of commodity prices on rural property income is crucial in the ability of rural producers to enter into or expand their holdings in agricultural land. These problems are then reflected in the volatility of the rural land capital returns and the investment performance of this property class. This paper will address the total and capital return performance of a major agricultural area and compare these returns on the basis of both location of land and land use. The comparison will be used to determine if location or actual land use has a greater influence on rural property capital returns. This performance analysis is based on over 35,000 rural sales transactions. These transactions cover all market based rural property transactions in New South Wales, Australia for the period January 1990 to December 2008. Correlation analysis and investment performance analysis has also been carried out to determine the possible relationships between location and land use and subsequent changes in rural land capital values.