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News

Majority of off-the-plan apartments worth less than purchase price, data shows

Shaky confidence in the capital city apartment market is hitting off-the-plan buyers hard, with a significant rise in the number of newly constructed units now worth less at completion than the price they were originally purchased for. 7.30 can reveal that 60 per cent of off-the-plan apartments in Sydney, and 52.9 per cent in Melbourne, were valued lower than their contract price at the time of settlement. In Queensland, 43.1 per cent of units were worth less at settlement than what they were purchased for, and in Western Australia it was 22.5 per cent of apartments. CoreLogic's head of research, Tim Lawless, said there had been a significant oversupply in the high-rise sector, with supply substantially outpacing demand. But he said concerns around construction quality, remediation costs and flammable cladding had had a compounding effect.
ABC 7.30 Report
Tracy Bowden and Kirsten Robb

Territory apartment owners demand time limits on building caretaker contracts

Laws that allow property developers to appoint their relatives to long-term building caretaker contracts should be changed to better protect unit owners in the NT, the Owners Corporation Network says. It comes after residents in a Darwin apartment complex raised concerns that a company owned by the wife of the building's developer was contracted to oversee cleaning, maintenance and repairs for $120,000 per year for 25 years. Under the Northern Territory's Unit Title Scheme Act, such caretaking agreements are permitted because there are no time limits on contracts or disclosure requirements to outline personal connections between the parties.
ABC News
Jano Gibson

Insurers warn Airbnb hosts may not be covered

Insurers have warned 140,000 property owners planning short-term rentals this summer that their home and contents insurance was unlikely to cover “potentially catastrophic” losses. In addition, most insurers regarded short-stay holiday rentals, on platforms such as Airbnb, Stayz, Homeaway, Flipkey and booking.com, as a commercial use of property, which means owners needed to pay for specialist cover. “Otherwise damage or a public liability claim could cost homeowners hundreds of thousands of dollars,” said Insurance Council spokeswoman Lisa Kable. ATO data matching action Landlords also faced extra attention from tax authorities, which are analysing detailed information of 190,000 clients provided by rental platforms. Tax Office officials said the first round of letters will be sent to house and apartment owners during the next few weeks asking them to review their return and the income they earned.
The Australian Financial Review
Duncan Hughes

Queensland Short Term Letting Win!

In considering the appeal against the Body Corporate Commissioner's adjudicatino, the QCAT Magistrate found: 1. The power to make the by-law prohibiting short term letting exists. It does not prohibit but merely regulates. 2. It is also very difficult to see how a by-law which is lawful in terms approved by the Privy Council and which has the lawful effect it seeks to achieve could ever be objectively unreasonable. It is hard to see how a 75% majority can be said to be oppressive when they simply exercise the powers the legislature has given them for a legitimate purpose. 3. The by-law is not misguided (even if that is a reason going to validity). It addresses concerns about nuisance by requiring only residential use. It relaxes that for any written letting over 30 days. It may be aimed at preventing short-term occupants because they are perceived as more likely to generate nuisances and be harder to regulate but the Privy Council has held that is not an inappropriate response. 4. I have held that short-term letting is not a residential activity within the context of these by-laws. 5. What a planning scheme or scheme of development permits in the abstract is irrelevant. What is relevant is what has been built and what that BC has decided to pass. This judgement is open to appeal, but the arguments by the Magistrate are very solid and take an holistic view of the body corporate legislation and landscape.

Mascot Towers engineers find new cracks and warn urgent repairs needed to avoid 'structural failure'

In the latest update on the troubled apartment block, law firm Mills Oakley, acting on behalf of the owners corporation, said engineers had found cracking around the north-eastern transfer beams and the basement was of "significant concern". The report also suggests waterproofing systems used to excavate the basement levels of the new neighbouring Peak Towers construction "likely caused the erosion of fine particles and the destabilisation of land supporting Mascot Towers". Apartment owner Brian Tucker said it was another blow on top of huge levies owners were already being asked to pay, and called on the State Government to provide more financial support through a low-interest loan.
ABC News
Antonette Collins

Tenants lured with big bucks to sub-let properties on Airbnb

The prospect of six-figure earnings is being used to lure rent-investors into sub-letting multiple residential properties through holiday letting websites like Airbnb – without owning any of the homes or even, possibly, the knowledge of the property owners. “How we make a six-figure income on Airbnb using other people’s properties… and how you can too!” announces a website featuring Nicole and Aaron Byerlee, the property power couple behind BnBProfessional, just one of several companies spruiking rent and sub-let seminars. Online videos show pumped-up participants giving rock-star receptions to the rent and sub-let promoters. The potential profits are very real. Research into Airbnb’s online listings has uncovered several “hosts” each with hundreds of properties under their management, with even greater numbers listed on as many as 50 niche websites. The NSW government is currently considering an “industry-led” register of holiday lets, and many see this as the best way to curb the commercial conversion of residential lets as short term rentals. “Without a reliable, independent registry, there is no way property investors can be sure their homes aren’t being used for holiday lets,’ said Jane Hearn, Deputy Chair of the Owners Corporation Network, the peak group for apartment owners in NSW.
Flat-Chat
Jimmy Thomson

Balcony panel of Melbourne high-rise apartment suddenly shatters

Residents of a Melbourne apartment got a fright when a glass balcony facade suddenly shattered, sending a shower of fragments to the footpath far below. The incident at Epic Apartments in Southbank sparked a council investigation into whether the imported glass is putting lives at risk.  Pieces of glass fell 30 floors to the footpath, posing a safety danger.
7 News
Paul Dowsley

Airbnb moguls spruik how to get around the rules

The prospect of six-figure earnings is being used to lure tenants and investors into subletting properties via websites such as Airbnb – without owning any of the homes or, in some cases, the knowledge of the property owners. The potential profits are very real. Research into Airbnb’s online listings has uncovered several “hosts” each with hundreds of properties under their management, with even greater numbers listed on as many as 50 niche websites. The NSW government is considering an “industry-led” register of holiday lets, and many see this as the best way to curb the commercial conversion of residential lets as short term rentals. “Without a reliable, independent registry, there is no way property investors can be sure their homes aren’t being used for holiday lets," said Jane Hearn, deputy chairman of the Owners Corporation Network, the peak group for apartment owners in NSW.
The Australian Financial Review
Jimmy Thomson

Airbnb sent urgent warning of massive tax crackdown from ATO

Airbnb isn't just a hobby, it's a business. That's the message from the Australian Taxation Office to those who use the popular home-sharing service to lease out their properties. Airbnb sent an email out to its Australian members on Thursday night, warning that their personal details - names, addresses and emails - would be given to the ATO.
7 News
Monique Dirkz

Mascot Towers residents given two 'very bad' options after building failure

Residents of the evacuated Mascot Towers are being forced to consider two options to fund urgent remediation works at the 132-unit complex, but fear they won't be able to afford either. At an annual general meeting later this month, apartment owners will be given the option to proceed with a multimillion-dollar special levy or rescind it in favour of a commercial strata loan to fix the building. One resident, who did not want to be named, said "the options presented to us as owners are like choosing a preferred execution method".
The Sydney Morning Herald
Laura Chung

Company behind Opal Tower fiasco caught up in new building defect row

Residents of yet another Sydney apartment block have been rocked by alarming safety fears — this time allegedly involving their balconies. According to a bombshell report by The New Daily, occupants of the Otto Rosebery complex in the NSW capital’s southeast have recently been issued “urgent” instructions. In a safety letter seen by the publication, residents of the tower’s 298 units have been told not to lean on their balconies, allow children to play on them or to let more than three people on them at a time. The warning comes after an investigation allegedly revealed the block’s balustrades were “structurally defective” and of “inadequate strength”. Earlier this year, Owners Corporation Network spokesman Stephen Goddard told news.com.au he believed those incidents could be just the tip of the iceberg, and warned more building defects were likely to emerge. “This is yet another example of systemic failure in the building industry to deliver the building code in residential strata,” he told news.com.au in the wake of the latest situation. “It is an unavoidable truth we suffer systemic failure, so this comes as no surprise. One was an event, two was extraordinary, three is a trend — and what do you call four? An unavoidable truth.”
News.com
Alexis Carey

Balcony safety fears for more apartments linked to Opal Tower builder

The company that built Sydney’s Opal Tower is embroiled in another safety scare at a different city apartment block. Residents of Otto Rosebery have been warned against leaning on their balconies or allowing more than three people to stand on them, after an investigation found the balustrades were of “inadequate strength”. Parents have been warned not to let children play on balconies. Labor MP for Heffron Ron Hoenig said it was shocking that an apartment block could be built with non-compliant balconies. “How does a building get constructed where there is something wrong with the balustrade and something wrong with the weight you can put on balconies?” Mr Hoenig asked The New Daily. “This is just the tip of the iceberg … the whole building industry, particularly in New South Wales, is in crisis.” Mr Hoenig said the cracks in Australia’s construction industry ran so deep that only a royal commission could begin to fix them.
The New Daily
Euan Black

NSW government drags Icon and Ecove into Opal Tower class action

The NSW government's Sydney Olympic Park Authority (SOPA) has dragged Opal Tower builder Icon and developer Ecove into the multi-million-dollar class action for compensation over the failed building. In July, owners launched the lawsuit against SOPA, the owner of the land on which Opal Tower sits, but have had to wait for the case to be heard before the NSW Supreme Court as SOPA launched cross claims against Icon and Ecove. Nine months since the tower was evacuated on Christmas Eve over cracking sounds, not only are owners still in limbo over compensation but many have not yet moved back to their units or been paid promised reimbursements for alternative accommodation.
The Australian Financial Review
Su-Lin Tan

SOPA blasted for delaying Opal Tower return for another Christmas

Homeowners in troubled Opal Towers could miss another Christmas in the building because of preventable remediation delays, the new NSW building commissioner has said. Taking aim at the Sydney Olympic Authority, David Chandler accused the original landowners of not intervening with developers in the interests of owners. He also rebuked the builders, developers and the government for delays in getting tenants back in the building. In a strongly-worded letter to SOPA last week, Mr Chandler chastised SOPA for failing to step in over a commercial conflict and unpaid compensation at a ground floor retail shop owned by developer Ecove. The stalemate has led to a halt in remediation works.
The Australian Financial Review
Su-Lin Tan

NSW releases draft rules to register certifiers

The NSW government has released more draft regulation to tighten rules for private certifiers, days after engineers said new rules for their registration did not go far enough. The new Building and Development Certifiers Regulation 2019 provides administrative detail for its similarly named legislation and will prescribe qualifications, skills and experience necessary for certifier registration. It also will clarify the responsibilities of certifiers with a view to restoring consumer confidence in development, particularly housing. These latest steps are part of sweeping reforms following building failures in Sydney such as Opal Tower and Mascot Towers that are causing buyers to shun apartments.
The Australian Financial Review
Su-Lin Tan

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Robert, Darlinghurst

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Greg, Parramatta

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Pat, St Leonards

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Graham, East Balmain

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Kate, Coogee

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