The case for reverse mortgages in Australia : applying the USA experience

In the USA, reverse mortgages have been promoted as a means of accessing equity locked up in a residence, especially after the owner/s has retired. Although there have been some teething problems, the concept of mortgaging the family home after achieving freehold ownership has many merits. Often an asset-rich household must survive on relatively small regular income, and is unable to access the increasing wealth of the family home. A reverse mortgage overcomes this hurdle.

The largest asset for many ageing households is their primary place of residence, the traditional house and suburban land parcel. Recently, the Australian housing market has witnessed substantial growth in the value of its capital city housing, especially on the east coast of Australia. This can be attributed to factors such as owner-occupiers trading up to a better class of dwelling, and the continuing gentrification process for owners choosing not to relocate. At the same time, demographic changes have placed pressure on the regular income of retirees, many of whom have no superannuation fund. For example, life expectancy rates continue to rise and there are an increasing proportion of single person households in society. This has placed additional pressure on financial resources of retirees, especially those with a substantial investment in their family home and a relatively small pension.

This paper visits the reverse mortgage scenario in the USA and considers potential implications for the Australian market. Strengths and weaknesses of this product are contemplated, and the viability of reverse mortgages is discussed. Although there are obvious benefits for certain segments of society, reverse mortgages are a unique product and caution should be exercised to ensure the public is fully knowledgeable from the outset.

Factors influencing the rent vs. buy decision - implications for housing markets

This paper considers recent trends in regards to home ownership versus renting in the Australia housing market.

Wealth holdings and portfolio allocation of the elderly : the role of marital history

This paper investigates the role of marital history in terms of explaining differences in wealth holdings and portfolio allocation of older individuals by studying data from the first wave of Health and Retirement Study which was conducted in 1992. The results generally suggest that both men and women suffer from the negative shocks of past marital dissolutions in terms of household wealth accumulation. The significance level, however, differs across currently married couples, single males, and single females. The examination of the asset components of net worth also indicates that both the probability of owning a particular asset and the fraction of wealth allocated to that asset might vary depending on the elderly individuals’ marital history.

Wealth effect of auditor switch during crisis and non-crisis period : the Malaysian experience

This study examines the auditor switch effect on share prices among listed companies in Malaysia, mainly the Second Board companies during economic crisis and the economic growth period. Data on companies listed on the KLSE that reported switching of auditors were gathered from the respective companies’ annual reports for the period of 1990 until 1999. Daily stock prices and the Second Board Index for an interval of 200 days windows were extracted from the KLSE Daily Dairy. The wealth effect of auditor’s switch was investigated using the market model event study methodology. The general findings of the study imply that it is consistent with the theory, the market reacts positively to news involving switching to higher prestige audit firms before the economic crisis but reacted negatively during the economic crisis. News involving switching to lower prestige auditors received negative reaction both before and during the crisis. This study postulate that the negative reaction to switches during the economic crisis (either to higher prestige or to lower prestige auditors) may be due to cost cutting exercise rather than obtaining qualified audit reports.

The macroeconomics of sovereign wealth funds

The dramatic growth in sovereign wealth funds (SWFs) has implications which are still emerging for national economies and globally. This paper considers why SWFs have become key international financial institutions for some countries, particularly developing ones. This adds to the literature on second best development strategies (Hausmann and Rodrik 2003), here applying it to SWFs. A macroeconomic approach is taken towards the phenomenon of reserves accumulation and motives for SWFs. These are evaluated in terms of the pattern of balance of payments and inferred trade and exchange policies. The role of SWFs in promoting country growth and international stability is considered in view of the global financial crisis (GFC).

Household composition and housing expenditures in rental-occupied and owner-occupied markets

This article examines the relationship between household compositions and housing expenditures in rental-occupied and owner-occupied markets. The author finds that renters allocate their budget proportionately between housing and nonhousing goods for an additional household member, leaving the budget share of housing expenditures unchanged. For homeowners, nevertheless, an extra member implies a reduction in housing expenditures as a share of total budget. Although age and gender compositions turn out to be significant in determining the budget share of housing expenditures for renters, they play no major role for homeowners. And although an increase in the number of working members for renters significantly reduces the share of budget spent on housing, it has no significant impact for their owner counterparts. Moreover, keeping total expenditures constant, the main income source of the head of the household does not make any difference in terms of resource allocation across housing and nonhousing goods for both renters and owners.

Towards prefabricated sustainable housing - an introduction

Prefabricated building systems are once again gaining popularity. The new prefabricated paradigm offers the integration of several approaches previously ignored: automated manufacturing, integrated building services and environmental sustainable principles. Consistency, predictable environmental control, modular flexibility, quick assembly and affordability are promising features of modern manufactured construction. Though the concept of prefabricated building is not new, this type of construction may be the only hope in obtaining a truely sustainable architecture for our future.

This paper attempts to define and evaluate several prefabricated building systems, ranging from a ‘kit-of-parts’ to fully assembled ‘volumetric’ modules. It aims to categorise various manufactured types among a vast amount of information, and to observe their attributes regarding materials, flexibility, structural integrity, delivery and constructability. This paper suggests that pre-fabricated architecture can deliver high order design and diversity within the framework of waste reduction, renewable systems integration and optimal performance.

Ethnography of housing : a conclusion

This paper is the final report of a research project spanning three years, exploring three field locations and capturing the stories of forty (plus) housing workers. Using an ethnographic research approach, this paper provides an account of how housing workers use language and stories to understand and make sense of their challenging and changing work. First hand accounts ('stories') about every day housing work frame the data in this paper, explaining how housing workers in Victoria have experienced and made sense of the shift from public housing as 'affordable housing for the working poor' to 'housing of last resort for the most vulnerable and needy members of the community'. Using a number of composite stories, this paper provides the reader with a glimpse into the work of public housing staff, transporting the leader from the relatively static world of policy and procedure to the more colorful world of tenants with 'high and complex' needs, 'wicked' problems, weary staff and the daily reality of organisational change.

A unique feature of this research is the comparison of how different workers use stories to build a range of 'socially constructed realities' around the housing work and its wicked problems. This paper compares and contrasts the socially constructed realities of frontline staff with the corresponding social realities of the managers at head office (and vice versa). This 'same problem, different perspective' approach allows the reader to better understand how the same problem is understood and approached in different ways, depending on the individual's organisational role, responsibly and authority. Using stories about 'working with problem tenants', 'collecting rental arrears from the poor and marginalised', 'maintaining old, neglected properties' and 'coping with organisational change', this paper illustrates how the shifting (and sometimes contradictory) construction of housing problems has meant that the organisation has long struggled to devise and implement sustainable remedies to these problems.

The following pages describe how the problems identified in the Housing Office Review (and experienced in the daily work of the 'modern day' housing worker) are simply a contemporary manifestation of 'age old public housing issues'. This paper describes and explains how housing staff have long used narrative to make sense of their often difficult work and ultimately, how they understand and experience a major process of operational policy change associated with the shift from 'public' housing to 'welfare' housing.

A question of continuing control -balancing building quality of housing and building codes

The Building Code of Australia seeks to establish “nationally consistent, minimum necessary standards of relevant, health, safety (including structural safety and safety from fire), amenity and sustainability objectives efficiently”. These goals are laudable – but where are the goals of quality and maintenance, which are also an essential part of achieving adequate and continuing health and safety for the built environment?

Defects such as dampness, settlement and cracking, staining, wood rot, termite damage, rusting, and roof leakage are common enough to suggest that there are still issues with building quality in housing. They are caused by a combination of initial poor workmanship and poor quality materials and latterly by poorly executed or inadequate maintenance.

Local architecture, developed over many years of trial and error, produce buildings linked to their climate and local materials (think of the typical “Queenslander” house). Today’s architecture imports technologies and materials from many differing countries and climates – that are not necessarily suitable for the location, nor is there necessarily the same quality control over the material quality and production. Inappropriate use and inadequate understanding of new materials and techniques can lead to the generation of further defects.

Whilst the building code contains provisions for initial-build material quality and workmanship, there is no continuing control over a house over its life span. Reliance is placed on advertising the need, for example, to employ qualified tradespeople; replace batteries in smoke detectors; and other good advice to help maintain housing to a minimum standard. Is this sufficient?

Mechanisms to make the transfer of knowledge to those who need to use it – be it the workforce or the houseowner – need to be improved. Should the building code be more visual and accessible in it’s content? Should the building code include provisions for maintenance? Should the building code require every house to have a “users manual” – much like a car? An extensive review of literature identifies the scale of the problem of poor quality housing and highlights some suggested causes – inadequate knowledge of the BCA by general housebuilders being one. However little work has been done to investigate what could be done to improve the situation. This work suggests that improvements to knowledge transfer would improve the quality of housing and a model of the knowledge transfer process is proposed, identifying those areas where the knowledge flows need to occur that would impact both the builders and users of housing.