WHILE some people think the only good cat is a flat cat, research shows that cats in flats can be good for everyone.

"There are so many places I'd live in, and I'd gladly pay to live in them, but I find with pets you have to live in worse houses because despite the fact that you can pay for a nice place you can't get it because they don't allow pets," she said.

A Queensland study has shown that a pet-friendly unit can add up to $15,000 to its resale value.

Australian National Cats spokesman Dr Peter Higgins said units that allowed pets under a strata plan could attract extra revenue when marketed as pet-friendly.

"Everyone knows that cats are good for people's health and this shows there's also a commercial benefit," he said.

Real Estate Institute of South Australia President Greg Moulton said cats were generally considered to be a low-risk pet.

"If the pet happens to be a cat, the risk of damage to the property is minimal, so I guess there is a financial advantage to that particular landlord," he said.

He said landlords could charge more for pet-friendly accommodation to cover costs of potential damage, but tenants could still find good homes that allowed pets.

"I don't think you need to drop your quality of property, but there's no doubt that there's not quite as much choice," he said. "But there are still a heap of landlords that allow pets."

Katie Hannan, 33, of Magill, has been renting with cats for about 12 years and said pet-friendly accommodation was hard to find.

"There are so many places I'd live in, and I'd gladly pay to live in them, but I find with pets you have to live in worse houses because despite the fact that you can pay for a nice place you can't get it because they don't allow pets," she said.

NEWS LTD

It is just a matter of time before individual unit owners will be asked to pay multimillion-dollar damages if a child falls from their apartment building, the head of a strata industry body says.

Mark Lever, the CEO of industry body the Strata Community Association, said that while strata schemes were required to have at least $10 million in public liability insurance, damages payouts for severe injuries where a duty of care was owed could go much higher.

''You would not have to go far in the insurance industry to find that a severely brain-injured child, if it came to a liability claim, would cost you significantly more than $10 million,'' he said. '

'The owners individually would have to make up the shortfall. It's certainly a matter of time before it's tested.''

Mr Lever's views were supported by a strata specialist lawyer, Colin Grace, whose company, Grace Lawyers, acts for owners corporations.

''The horror scenario is a child has up to 18 years of age to sue,'' said Mr Grace. ''If you've got a young child and their entire life is gone, and they can't earn any income - I can see the day where a plaintiff law firm could come up with a pretty serious case.''

Mr Grace said multimillion-dollar cases were rare but increasingly forseeable as more young families move into apartments.

Sydney's two biggest children's hospitals treat, on average, three children a month for critical injuries after falls from buildings.

This month an 18-month-old girl and a three-year-old boy were critically injured after falling from unit windows in incidents in Campsie and the central coast.

Owners corporations have a duty of care to keep common areas safe. Liability is clear where an owners corporation has failed to repair a faulty balcony railing and someone is injured after falling through it.

But some strata law experts argue there may be a further duty of care where the owners corporation has been told about a potential safety risk - such as balconies with low balustrades or windows without child safety locks installed - and has chosen not to act despite the forseeability of accidents.

Jesse Borthwick, from the state's biggest strata insurance company, CHU, said it was seeing more claims for injuries as a result of failure to implement occupational health and safety standards, mostly from incidents in older buildings.

But citing the example of a child climbing on furniture and then falling from a balcony or window, he said it would be ''very difficult to portion any liability to the owner of the unit or the building. People do have some level of responsibility.''

A spokeswoman for the Department of Fair Trading said insurance requirements would be considered in the government's current review of the strata and community title legislation.

SMH

• Builders, developers, owner–builders and tradespeople must warrant that, amongst other things, their work has been performed in a proper and workmanlike manner. Under the current law a homeowner, or subsequent purchaser, has the right to enforce these warranties for up to 7 years after the work was completed.

• Commencing 1 February 2012, the warranty period will be 6 years for structural defects and 2 years for non–structural defects. These periods will be extended by 6 months if the homeowner or subsequent purchaser becomes aware of a defect in the last 6 months of these time periods.

Threshold for mandatory home warranty insurance and cooling off periods

• Commencing 1 February 2012, all residential building work worth more than $20,000 must be covered by mandatory home warranty insurance. The current threshold is $12,000. The new threshold will also apply to the sale of a home by an owner–builder and to cooling off periods.

New small job contracts category

• Residential building contracts must be in writing and include a number of requirements.

• Commencing 1 February 2012, a new category of written contracts for ‘small jobs’ worth between $1,001 and $5,000 will come into effect. A small job contract must be in writing, dated and signed on behalf of both of the parties and contain the following information:

• the names of the parties, including the name and number of the holder of the contractor licence,    a description of the work (including any plans and specifications for the work) the contract price, if known.

Additional home warranty insurance benefits for homeowners

• Under the existing law, if a homeowner makes a home warranty insurance claim, they must pay the first $500 of that claim. After 1 February 2012, homeowners will only be required to pay the first $250 of any claim.

• In addition, all home warranty insurance policies issued after 1 February 2012 will receive a minimum cover of $340,000, regardless of the value of the work.

Definition of ‘related’ corporations to a builder or developer

• Under the existing law, an insurance policy may prevent a builder, developer or a ‘related’ corporation to a builder or developer from being a beneficiary of the home warranty insurance policy for that work.

• The definition of a ‘related’ corporation in the existing law is quite narrow and doesn’t include corporations that most people would consider as being ‘related’. Accordingly the new law provides a wider definition of what it means to be a ‘related’ corporation.

                            
For further details refer to OFT web site at: http://tinyurl.com/6cop68e

THE Reserve Bank's decision not to cut interest rates has dealt a blow to the confidence of buyers and smothered a real estate market that was in the tentative stages of a recovery, agents warn.

From the eastern suburbs out to the west, agents had started the year with a spring in their step, fielding more inquiries and selling more houses than this time last year.

But that continued momentum is now in doubt, according to agents, who fear there will be a slower recovery.

''It's disappointing,'' said Bob Guth, a director of BradfieldCleary, an agency in the eastern suburbs.

''We need rates cuts in the eastern suburbs particularly for confidence and other parts of Sydney for mortgage payments and the opportunity to borrow.''

Vendors will be anxiously waiting to see if the interest rate decision will have any impact on sales this weekend.

Alicia Walsh is desperately hoping her family's Marrickville house will sell on Saturday when it goes to auction.

''A rate cut would have helped but I think if you want to make a long-term investment, it won't stop people from buying and we have had a lot of interest and contracts taken,'' Ms Walsh said.

The president of the Real Estate Institute of Australia, Pamela Bennett, said lower inflation figures showed there was a ''clear indicator to cut rates'' and the fact those cuts were put on hold would dampen any recovery.

''We know that first home buyers are starting to return to the property market but another reduction would have assisted in stimulating the lower end of the market and provided a ripple effect to those buyers trading up,'' she said.

In Blacktown, an area with a high proportion of these buyers, agent Mark Sargent, from Starr Partners, said the decision would hurt those most vulnerable. ''We deal with a lot of first home buyers who have got to pay stamp duty now, which they didn't have to before Christmas [because of the state government grants],'' he said.

The consumer group Choice said homeowners could now consider switching lenders to get a better deal.

''This is the year of the switch but people have to be careful of leaping from the frying pan and into the fire,'' a Choice spokesman, Christopher Zinn, said.

SMH

Owners in strata schemes want more control of buildings where noisy backpackers and students constantly move in and out, and by-laws should be simplified to make it easier to renovate ageing apartments, strata experts say.

The peak body representing the strata sector also wants a clearer definition of what is common property so residents have more certainty over ownership.

The Fair Trading Minister, Anthony Roberts, last night announced the state government would review strata laws in NSW, which were a world-first when they were introduced in 1961.

"The last review of the Strata Schemes Management Act was done in 2004."

"The laws are outdated and no longer effectively support owners … or address the issues associated with ageing buildings, changing demographics and accountability for annual budgets that can amount to millions of dollars," he said.

David Ferguson, the president of Strata Community Australia (NSW), said owners wanted more say in how the residential mix was devised.

''This is not about the incorrect selection of tenants but … where you have people with different lifestyles living in the one building and you end up with eight students moving in next door on short-term rentals with different lifestyles to others in the building,'' he said.

SMH

The Australian Bureau of Statistics (ABS) released its monthly housing finance numbers for October this week which provided some interesting reading.  Broadly speaking, the results are split by investment finance commitments and owner occupier commitments.  For the owner occupier commitments the ABS publishes data which shows both the volume and value whereas for investment they only publish the value.  Although ‘volume’ provides a better measure and is not affected by compositional changes in the type of stock transacting like the ‘value’, both provide a good insight into how the market is performing.

In terms of the volume of owner occupier finance commitments, these increased by 0.7% over the month and by 6.3% over the year.  The volume of owner occupier finance commitments increased for the seventh successive month in October.

At RP Data we like to drill down further into the data, looking at the volume of refinance commitments (which create no new transactions) and the volume of non-refinance commitments (more reflective of a property transaction).  In October, refinance commitments fell by -1.8% however, they are 17.8% higher over the year.  On the other hand, non-refinance commitments rose for the eighth successive month and increased by 2.0% in October.  Over the year, total growth in non-refinance commitments has been fairly limited at just 1.2% however, over the last eight months the volume of commitments has increased by 10.6%.  The data shows that in recent months non-refinance activity has grown however, over the last 12 months the growth in owner occupier finance commitments has almost entirely been driven by refinancing activity.

If we focus on the total value of housing finance commitments we see that the total value fell by -2.5% over the month with owner occupier finance commitments falling by -1.2% and investment finance commitments down -5.5%.  Once we remove the value of refinance commitments, the total value has fallen by a lower -2.4% over the month.  Over the past 12 months, the total value of finance commitments have fallen by -0.7% with owner occupier commitments up 3.5% and investment commitments down -9.3%.  When refinances are removed from the data, the total value of housing finance commitments have fallen by -5.4%, slightly greater than the -4.0% fall in capital city home values over the same period.

Over the last decade, the total value of housing finance commitments has increased at an average annual rate of 5.9% while over the same period, capital city home values have increased by 6.4% annually.  Over the same period, the total value of housing finance commitments excluding refinances have increased at an average annual rate of 4.7%, growing more slowly than both capital city home values and total housing finance commitments.

Clearly the availability and growth in housing finance has contributed to the growth in property values over the past decade.  Since the beginning of 2009, capital city home values have increased by a total of 13.2% however, growth in housing credit has been much more limited.  The total value of housing finance commitments has increased by a total of just 2.7% since the start of 2009 (almost three years) and when refinances are excluded growth is again much lower at just 0.7%.

Despite the fact that the volume of housing finance has been picking up over recent months it does not look as if there will be a rapid expansion in credit for housing over the coming year.  The European sovereign debt problems look as if they will persist at least during the first part of the year, likely resulting in limited credit availability.  Australian households are continuing to take a cautious approach saving 10% of their disposable income and the latest results of the Westpac-Melbourne Institute Consumer Confidence Survey show that 34.9% of respondents believed that the wisest place for savings was either a bank, building society or credit union with a further 26.6% believing that paying down debt was the best way to save.  Overall, these options accounted for 61.5% of responses.

Clearly the typical consumer knows that their debt levels are high and the responsible thing to do is have less debt.  In light of these figures, I would suggest that the growth in housing finance may increase a little further but it will likely take some time until we see the value of housing finance commitments growing at an annual rate of around or in excess of 5% annually oncemore.

by Cameron Kusher

RPData

ANZ will soon disprove the myth perpetuated by many parts of the Australian media and backed by disingenuous statements from federal politicians that implies the Federal Government and Reserve Bank of Australia directly control interest rates charged on mortgages and other loans.

The current Treasurer Wayne Swan has been accused by Business Spectator journalist Stephen Bartholomeusz of "in effect making a direct and misleading linkage between the cash rate and their [bank] funding costs".

In reality the Federal Treasurer cannot force the banks to move interest rates. All the current Treasurer Wayne Swan can do, short of breaking up/strongly regulating the retail banking oligopoly, is release stern statements like "the heat is on" and try to make it easier to switch a mortgage to a different bank.

A recent Essential Poll result for the question "Which party would you trust most to control interest rates?" predictably resulted in Liberal 42 per cent versus Labor 24 per cent.

In fact looking at the last 15 years of results of News Polls for the Australian newspaper, the perception of participants in each poll has been that the Liberal/National Coalition was better at "handling interest rates" than the Labor party.

Despite the well-known claim by former prime minister Howard that "interest rates will always be lower under a Coalition government than under a Labor government" the reality according to economist and former Labor advisor Stephen Koukoulas is that:

For only 5 months of the 11.5 years of the Howard govt was the cash rate this low (Dec '01 to May '02). For the other 11 yrs, it was higher.

The Australian's Peter Brent astutely points out that:

The consequences of good or bad policy generally take time to arrive, and in the short term external [eg: global economy] factors matter more". For governments elected in the mid 1990's "the economic circumstances were conducive to longevity" and "low inflation, the lowest interest rates and unemployment.

According to Koukoulas:

Until now, banks have done a poor job highlighting how small a part the official rate is in their funding models. That's about to change.

By reviewing rates on the second Friday of each month and breaking out of the tradition of changing mortgage and loan rates in lock step with changes in the RBA cash rate, ANZ is attempting to reduce the howls of outrage directed at them as a member of the big 4 banking oligopoly when RBA cash rate reductions aren't passed on swiftly or in full.

Alan Kohler, ABC News finance commentator and editor-in-chief of Business Spectator, said this was a "smart move" by ANZ to level with their customers.

Kohler had just suggested prior to the ANZ announcement that Australian banks should explain how their "funding costs work then when there's a change in the price of the 26 per cent or so of funds that come from wholesale financial markets, change the interest rate on your loans then, rather than waiting for the first Tuesday of the month, when the RBA board meets".

When making the announcement ANZ Australia chief executive Philip Chronican told the media that:

We just wanted to get out of this exercise where the RBA announces things and everybody expects us to move the next instance… the real world is not like that; we fund ourselves with various instruments, so the RBA cash rate is a pretty small part of the overall picture.

Uncertainty over whether the European sovereign debt crisis will be resolved, or drag on causing further chaos, has resulted in vague hints from several banks including Commonwealth Bank, Bank of Queensland and ANZ that the cost of overseas funding may rise during 2012 and these costs would inevitably be passed on to borrowers.

No wonder the public is misled considering they are offered the usual flood of sound and fury articles on the issue every time there is a rate change eg. Fears the big banks will try to set their own regime on interest rate reviews, ANZ to review interest rates every month, creating rift with RBA, and ANZ chief defends shift on rates.

The media would be well advised to consider the lead of Crikey's Bernard Keane who looks at the bigger picture, pointing out that instead of political jawboning and media indignation it would be more useful to conduct a bi-partisan inquiry into the financial system and more appropriate regulation of Australian banks, which are currently a super profitable "protected species".

Otherwise the uncompetitive status quo described in the report Competition Within The Australian Banking Sector published on May 11, 2011 by the Senate Economics References Committee, will remain with "the four major banks now dominat[ing] the Australian banking market, accounting for around three-quarters of deposits and assets and a larger share of home loans".

abc.net.au

Government grants plus softening house prices make it a good time to launch into home ownership.

There is nothing quite like a cut in interest rates or changes to government subsidies to get people thinking about their next major financial move.

For potential first-home buyers, the prospect of both has been a definite driver towards a slightly softer property market.

Exemptions on NSW stamp duty for first-home buyers are being removed from January on everything but new homes and vacant residential land while a bigger deposit is a must-have. The chief executive of Teachers Credit Union, Steve James, says larger numbers of first-home buyers are increasing their deposit to about 20 per cent of the purchase price and going in with a lot more equity than in previous years.

James puts the higher savings rate down to a change in the climate. "I think the [global financial crisis] was a wake-up call for everybody and people are saving more and spending less on discretionary items. I think it is about feeling secure," he says.

James says that while most credit assessors are looking for genuine savings from potential buyers, rather than loans from parents, anyone with a reasonable deposit is better off.

As well as giving buyers a bigger equity stake in the property, a larger deposit means lower interest and, possibly, no lenders mortgage insurance costs.

The chief executive at Loan Market, Dean Rushton, says that with the disappearance of no-deposit loans, the ability to save as large a deposit as possible was crucial to getting a loan approved.

He says a survey of Loan Market brokers revealed that the main reason first-home buyers failed to secure finance was because of insufficient savings. This comes at a time when inquiries from first-time buyers are at their highest level in two years.

Rushton says the cut in interest rates and a decline in the property prices in most capital cities would continue to make it more affordable for first-home buyers.

"The key is to get a budget together as soon as possible that can demonstrate you have been saving for a period of time," he says.

Mortgage Choice spokesperson, Belinda Williamson, says borrowers struggling to save a deposit and meet the associated costs of home ownership, due to rising rents and other living expenses, can take heart from some lenders taking into consideration rental payments as evidence of genuine savings.

This is on the basis borrowers have at least a 5 per cent deposit, plus evidence of six to 12 months' worth of continuous rental history and the property is leased through a licensed property manager, she says.

Grants and concessions

As well as stiff competition between lenders, there are still savings to be made from federal and state government first-home buyer grants and concessions.

Despite some early cuts to stamp duty concessions in Victoria, first-home buyers can still take advantage of state-based and national concessions and grants available, including the national First Home Owner Grant, the First Home Bonus scheme and the Regional Bonus offer. Borrowers eligible for all three incentives could save up to $26,500.

NSW first-home buyers still have a few weeks left before the First Home Plus exemptions and concessions are replaced by the First Home - New Home scheme.

Under the new scheme, only first-home buyers purchasing a new home will be eligible for the exemption on stamp duty on homes valued up to $500,000. Buyers of vacant residential land will pay no duty on property valued up to $300,000. Concessions for high-valued new homes and vacant land are also available. The $7000 first-home owner grant remains in place.

For a guide to the first-home owner grant criteria and state-based schemes, see mortgagechoice.com.au.

Time's right to take the plunge

Aimee Quintal, 26, and Matt Sommerville, 31 had hoped to buy a townhouse or a terrace towards the end of next year.

That was before the NSW government's September announcement that from January 1, stamp duty exemptions of up to $17,990 would be limited to people buying new homes.

"It had been our intention to save a 20 per cent deposit and buy something different towards the end of next year but with the announcement about stamp duty coinciding with the end of the lease on the property we were renting, we decided to scale back what we were looking for and enter the market," Aimee says.

The couple put their 20 per cent deposit towards a loan from Teachers Credit Union to buy a two-bedroom apartment in Sydney's inner west.

As well as the $7000 first home owners grant they got a partial concession on the stamp duty due to it being an existing property priced between $500,000 and $600,000.

Aimee says the net result of buying the property with a 20 per cent deposit is that they pay $100 a month more than when they were renting. Plus, they no longer have to save for a deposit.

"We had a pretty comfortable lifestyle when we were saving for the deposit and we didn't deny ourselves but we were diligent," Aimee says of their achievement.

"We moved in a month ago and it is just fantastic to be able to do all the things that make it ours. It is the little things like putting holes in the wall," she says.

Tips for potential first-home buyers

•  Check your credit file - even small blemishes in your credit history can affect your chance of loan approval. Resolve any issues with the relevant debt provider before you apply for a loan.
•  Understand your borrowing capacity - online calculators are a great starting point or sit down with a broker and really assess your circumstances and needs.
• Apply for loan pre-approval to provide you with the security of knowing how much you have to play with. It will help with the property search process, including negotiating a purchase or bidding at auction.

SMH

Drowned girl's mum wanted Mark Harvey's pool fence fixed before death

The mother of a little girl who drowned in AFL coach Mark Harvey's back yard pool asked for permission to block a gap in its fence which she thought posed a danger to the three-year-old.

Property manager Laura Teal told a coronial inquest today that at an inspection in June 2008 Monica Harris raised concerns about a gap at the barbecue on the fence perimeter at the Essendon house.

Ms Teal said plants, bikes, climbing equipment and furniture were located close to the barbecue.

"Ms Harris raised the issue of the pool fence around the barbecue and her concerns about toddler access," she said.

"She asked me to gain the landlord's permission to put up lattice at her own expense."

On September 26, 2008, Lauren Harris drowned in the swimming pool of the house in Roberts St that her parents rented from Harvey and his wife Donna.

The inquest has heard that the bluestone barbecue provided "climbing steps for small children" to a gap in the pool fence.

Ms Teal said after the June inspection she sent Donna Harvey an email which read "(the tenants) are concerned about their 3-year-old getting into the pool enclosure from the sides of the BBQ".

Ms Harvey emailed back "tell them they can put something up near the pool at their own expense".

Ms Teal said she completed a number of courses at the Real Estate Institute of Victoria to become a qualified real estate agent and property manager but pool safety was never mentioned.

"There was nothing in my training that informed me as the the specific requirements, standards, guidelines with regard to pool fences," she said.

"I'm not trained in pool fencing."

After Lauren drowned Ms Teal said Brad Teal Real Estate introduced its own policy that every landlord of a property with a pool or spa had to provide a current compliance certificate or written notification it was compliant.

Ms Teal said the Harrises paid $800 week rent with a $3400 bond and Ms Harvey insisted on a three-monthly inspection of the property.

Before she commenced her evidence deputy state coroner Iain West granted Ms Teal an indemnity against self-incrimination after finding there might be evidence that she had committed a criminal offence.

Under cross examination from Richard Stanley, for the Harris family, Ms Teal said there was "frustration" at the constant stream of emails she exchanged with Ms Harvey following requests from the tenants for maintenance issues to be addressed.

Mr Stanley read out one email to Ms Harvey in which Ms Teal said "you don't understand how sick I feel that I have to call or email you about another drama".

Ms Teal told the inquest she was concerned she was in "constant nagging mode" about the property although she admitted none of the maintenance issues raised by the Harris family were unreasonable.

Mark Harvey, who is currently assistant coach at the Brisbane Lions, passed on his family's condolences to the Harris family from the witness box yesterday.

He denied that in 2004 he received a warning from a building surveyor and in a council notification that the pool fence was unsafe.

The inquest continues.

SUN HERALD

Here is a handy checklist for homeowners. Alternatively, you can arrange an inspection from your local Council.

• Is there a pool fence separating the pool from your house and the neighbourhood?

• Is the outside of the pool fence at least 1.2m high all the way around?

• Is the gap between the bottom of the fence and the ground less than 10cm?

•  Are all vertical or near vertical palings less than 10cm apart?

• Are all horizontal or near horizontal fence rails more than 90cm apart so a small child cannot get a foothold to help climb over the fence?

• Is your pool fence well maintained and in a good state of repair as an effective and safe barrier? (eg. no holes, broken palings)

• Is your pool fence 1.2m clear of any objects such as BBQs, trees, rocks, shrubs and deckchairs that could help a small child climb over the fence?

• Is your clothes line, BBQ or similar object not directly associated with the swimming pool and which could lead to the pool gate being left open located outside of the fenced pool area?

• If the wall of the residence forms part of the child-resistant barrier, is this wall without windows, doors or other openings that permit access to the pool?

• Is there an appropriate resuscitation sign displayed in the immediate vicinity of the pool area?

• Does the gate close and latch by itself from any open position?

• Does the gate open outwards, away from the pool?

• Is the gate release mechanism 1.5m above ground level or alternatively, located inside the gate at 1.2m and covered by an approved shield?

For more information on swimming pool safety, contact your local council.

For water safety information, visit the SafeWaters website.

www.safewaters.nsw.gov.au

SMH