Newsletter Issue 25

In our last newsletter I suggested that Tasmania would buck the trend of the mainland market that appeared to be slowing down, due to the strength of our economy and other underlying factors. So far, despite persistent media forecasts to the contrary (mainly centered on mainland markets) my predictions have proven correct, with the strongest February, March, and April figures on record for Towns Shearing.

A regular feature of our newsletter is our computer-generated winner of a weekend for two at Hobart's Grand Chancellor Hotel. This time our congratulations go to Mr. & Mrs. Wilkes of Lilydale.

Many of our clients tell us that the joke section of our newsletter is the part they enjoy the most - so much for real estate! Well try this one for size (no disrespect to Scotsmen intended).

A Scotsman went to the dentist and asked how much it was for a tooth extraction. "$85 for an extraction sir," was the dentist's reply. "Och, huv yer no got anythin' cheaper?" replies the Scotsman getting agitated. "But that's the normal charge for an extraction sir," said the dentist. "What about if yer din't use any anaesthetic?" asked the Scotsman hopefully. "Well it's highly unusual sir, but if that's what you want, I suppose I can do it for $70," said the dentist.

"Hmmmm, what about if yer used one of your dentist trainees and still without anaesthetic?" said the Scotsman. "Well it's possible but they are only training and I can't guarantee their level of professionalism and it'll be a lot more painful. I suppose in that case we can bring the price down to say $40," said the dentist.

"Och, that's still a bit much, how about if yer make it a trainin' session and have yer student do the extraction and the other students watchin' and learnin?" said the Scotsman hopefully. "Hmmmmm, well OK it'll be good for the students I suppose, I'll charge you only $5 in that case," said the dentist. "Och now yer talkin' laddie! It's a deal!" said the Scotsman, "Can ye confirm an appointment for the wife next Tuesday?"

A man was walking down the street, when he was accosted by a particularly dirty and shabby-looking homeless man, who asked him for a couple of dollars for dinner. The man took out his wallet, extracted two dollars and asked, "If I give you this money, will you buy beer with it instead?"

"No, I stopped drinking years ago," the homeless man said. "Will you use it to gamble instead of buying food?" the man asked. "No, I don't gamble," the homeless man said. "I need everything I can get just to stay alive." "Will you spend the money on greens fees at a golf course instead of food?" the man asked. "Are you stupid?" replied the homeless man. "I haven't played golf in 20 years!" "Well," said the man, "I'm not going to give you two dollars. I'm going to take you home for a terrific dinner cooked by my wife."

The homeless man was astounded. "Won't your wife be furious with you for doing that? I'm very dirty, and I probably smell pretty bad." The man replied, "That's okay, mate! I just want her to see what a man looks like who's given up beer, gambling, and golf.

Almost one in ten baby boomers are choosing to invest in property to help fund their retirement rather than relying on superannuation, according to a new Nielson Media report compiled for Wizard Home Loans.

The report showed more than 400,000 people, or one out of every ten people aged between 40 and 54 years, wned or bought an investment property last year. The report also showed another 340,000 people in the 40 - 54 year age bracket are planning to buy a property this year, indicating the baby boomer generation is continuing their love affair with property ownership.

In addition, it was pointed out those boomers choosing to invest in superannuation through a non employer fund, only increased by 2% last year, while those choosing to invest in property increased by 17%, signaling baby boomers are relying on property to help fund their retirement.

Ms. Lisa Montgomery, head of consumer information and advocacy at Wizard Home Loans said, "Baby boomers understand they might not get the house price growth of recent years but they have seen tangible gains in the past and that's why they are willing to invest in property."

Negotiating on a property price can be one of the most difficult aspects of home buying and selling. Both the seller and the buyer will want the best possible price and walk away with the feeling of 'winning'. Successful negotiation is not about luck; it's based on the ability to use certain specialised skills and techniques to bring two parties to agreement.

While real estate professionals are trained in the art of negotiation, here are some simple tips that both home buyers and sellers can follow to help the process:

• Think fair pricing - Naturally, the most important aspect of successful negotiation is price. If a property is overpriced to begin with it can deter homebuyers from making an offer. Similarly, making an offer on a property that is far too low could alienate the seller. Look at sales of similar properties in the surrounding area and base offers and selling prices on this.
• Respect the other side - Understanding the other side can be important in negotiating. For example, a buyer who has an urgent 'move in date' may be willing to pay a little bit more for a property. Or a seller who has committed to another property purchase may also be willing to compromise, either on price or perhaps inclusions.
• 'Winning' may mean compromise - A win-win negotiation may not mean the buyer and seller get everything they want. More often, it means give and take on both sides, so focus on your top priorities and don't let emotions overrule sensible judgment.
• Meet in the middle - If the buyer and seller cannot decide on a settlement date, price or inclusions in the sale, it can pay to simply meet in the middle. Meeting half way is a time honoured negotiation strategy beneficial to both parties.

Recently a new group called the Australian Sustainable Built Environment Council (ASBEC) drew together a variety of builders, environmentalists, developers, insurers and government officials to determine how they could educate the public and encourage green building practices throughout Australia.

'Green building' has been defined as the use of building design and construction techniques based upon energy efficiency, water efficiency, indoor air quality and the use of products that have a positive impact on the environment. Facets of green building can include:

• Land planning and design techniques that preserve the natural environment and minimise disturbance of the land.
• Site development to reduce erosion, minimise paved surfaces and run off and protect vegetation, especially trees.
• Water conservation indoors and outdoors.
• Energy efficiency in heating/cooling systems, appliances, lighting and the building designs.
• Selection of materials based on recyclability, durability and the amount of energy used to create the material.
• Waste reduction, re-use and recycling during construction and throughout the life of the home.

The ASBEC group was originally born out of the initiative of the Co-operative Research Centre for Construction Innovation. The aim of the group is to educate property owners to embrace sustainability and green building practice and to clarify what green building means for the building and construction industry.

Currently there are several rating tools used to determine energy efficiency and sustainability. The ASBEC group would like to see a single rating system adopted which could then be merged with the current Building Code of Australia.

Following on from my opening comments regarding the buoyancy in the Tasmanian market, it is interesting that some sections of the industry are still predicting a levelling out of prices. They may be correct of course, particularly if we follow the mainland trends.

In contrast though, a leading ANZ bank economist predicted in his address at a forum held locally in April, that Tasmania would continue to experience a strong market over the next twelve months. Only time will tell and we are all wiser in hindsight. In the meantime if you have any questions regarding this newsletter, please contact me.

Noel R. Towns
Managing Director