This competition is run by the Foundation for Young Australians, which is part of a wider international group called the International Youth Foundation, who recognise and reward youth-based leadership initiatives. This is a very impressive accolade to obtain on an international scale, and recognises Chris’s efforts over the past few months.

Chris will be flown to Melbourne next week where he will have the opportunity to present his charity (AYAC) to a panel of judges, who will determine the overall winner. He will discuss upcoming fundraising events as well as the infrastructure he has already set up.

Chris is still organising an AYAC group to run together in the upcoming Sutherland to Surf as a way to raise money for the charity. To join this running group, donate to AYAC or to find out more about their upcoming endeavours, including the Murray River paddle, check out their website.

We wish Chris the best of luck in Melbourne.

www.ayac.com.au

1)      “Off the plan buyers” up to $600,000 will no longer pay stamp duty. This is going to help developers obtain finance because banks want pre sales before firming up financial arrangements for their clients.

2)      Home buyers that buy during construction or at completion will receive a 25% reduction in stamp duty on purchases up to $600,000. This incentive will help some “spec builders”.

3)      “Empty Nesters” (or last home buyers) over 65 are being encouraged to sell their main home and buy another home up to $600,000. Those who do this will pay no stamp duty on the purchase.

4)      First Home buyers are getting $7000 plus they pay little or no stamp duty on home purchases up to $600,000 for another two years.

Those interested are encouraged to read the fine print about the “NSW Home Builders Bonus” by looking at the Office of State Revenue site.

This contrasts with a deficit expected for 2009-2010 of $1bn as recently as December, 2009. Settlements for real estate sales in the booming March quarter should increase the surplus further. Not content, the government has decided to milk the property cash cow further by slapping the new land transfer tax on settlements after June 30, 2010.

The government will no doubt splash the cash during next year’s state election campaign. In the meantime proceeds of the $850mil lottery sale have been used to shore up the superannuation shortfall for NSW public servants (to the extent of $510mil).

Some of these super commitments won’t accrue for a decade. Why can’t the government share some of the proceeds now with ordinary taxpayers that are sick of being sucked dry with tax increases.

The Tools of the Trade
The internet was my link to all properties on the market.

• I set up daily alerts with domain.com.au and realestate.com.au for all of the suburbs I was looking in and the price range I could afford.
• I kept a detailed record of all properties for sale in the our desired suburbs, in particular a record of what the agent was initially quoting and then what the property eventually sold for. It wasn’t long before trends started to appear… especially for some agents! Buyers beware!
• I asked every agent I spoke to be put me on their database or newsletter so I could be informed of any new properties that came onto the market.
• I can honestly say I have never been into a real estate office in the inner west or looked at any dodgy and dated window displays. I may have missed out on some properties by not doing this – but honestly who has the time for that.
• With work commitments extending to Saturday I was very rarely able to go to open houses on the weekend so I made hundreds of calls to agents in an attempt to get through every property I could during the week after work.

While the constant inspections may have driven my husband almost mad – it made one thing possible…when we saw something worth while – we knew straight away! By viewing so many properties – we knew exactly where the market was at – what the property was worth and approximately what it would go for at auction and if it was within our budget!

The Contenders

6 Angel Street, Newtown (Agent said approx $550)
2 bed (tiny dog box) outside laundry and another room which could loosely be described as a bathroom but a bloody fantastic location and rear lane access – not big enough for a car. 112m2 approx.
SOLD at Auction on site Saturday 27 February $652,500
Final bidding was between me and one other bidder – another young couple

48 Renwick Avenue, Marrickville (Agent said approx low to mid $600’s)
3 bed, separate lounge and dining, brick – loads of potential nice backyard. No car space. Woolworths in the street. 294m2 approx
SOLD at Auction on site Saturday 13 March $655,000
Final bidding was between me and one other bidder – actually a group of builders

39 Cary Street, Marrickville (Agent said approx low to mid $600’s)
3 bed, separate lounge and dining, loads of potential, north facing  backyard. No car space. Nice street. 311m2 approx
SOLD at Auction in rooms Wednesday 21 April $765,500
Bidding went over our budget – a older couple bought it. This property was only sold in November 2009 (so less than 6 months ago) for $565,000. The owners made $200,000 in less than 6 months – shocking! This was the auction that tipped us over the edge!

Inner Westies at Last!
I would have to say the eventual purchase of our property was a group effort. A friend had also been surfing the internet for us and directed me to 11 Malakoff Street, Marrickville. I had initially discounted this property because it was in a great street, had rear lane access and space for a car. In the inner west this automatically adds $50,000 – $70,000 to any property, and because we didn’t really care if we had a car space or not – I thought it would automatically be out of our price range. Turns out that it wasn’t! The vendor was eager to sell before auction and with all our finance in order, I got my builder brother to give it a good once over before my fantastic sister stepped in with her knowledge of the real estate industry and negotiated the final deal for us.

Sure the property has to be given a lot of tender loving care once we move in – but that’s the fun part! My dad doesn’t have quite the vision I do, having said… “No daughter of mine is going to live in a place like that!” But he has come around and admits it’s all about location, location, location… and we certainly have that. I have always been told to buy the worst house in the best street and that is what we have done. The contracts were exchanged on Tuesday – 4 days before the property was to go to auction and there is no doubt in my mind that I would have had to pay at least $25,000 more on auction day.

With each property we missed out on at auction I was always told by friends that there was a reason for it. I was told “You don’t pick the property, the property picks you.” And that is exactly what this experience felt like. It was like this little house in Marrickville just reached out and tapped on my computer screen and said come and have a look at me.

We have not been able to wipe the smiles off our faces. We are so happy with our property purchase. Finally the search is over and in 12 weeks we will be handed the keys to our new life full of debt and happiness. The inner west dream begins and we couldn’t be happier.

11 Malakoff Street, Marrickville (Agent said above $550)
2 bed plus study, beautiful high ceiling and cornices, rear lane access and what was very generously called a LUG. A lot of work needed but loads of potential. Great street, 12 minutes from work, close to transport, great location, beautiful park in the street. 194m2 approx
SOLD Prior to Auction Tuesday 25 May $625,500 (Agent said there were other offers – but who knows – but we bought it – it’s all ours – yeehaaa!)

Yesterday Premier Keneally quietly introduced a new property tax, being referred to as a land transfer charge. The front page Sydney Morning Herald article today estimates it will “boost the state government coffers by an estimated $90mil annually.”

The new land transfer charge is a buyer’s tax and will be charged on the sale of residential and commercial property worth more than $500,000. Charged at a rate of 0.2% of a sale between $500,000 and $1mil, over $1mil the charge rises to 0.25% for the portion over $1mil. Therefore on $600,000 which is currently the Sydney median house price, the charge is $200, on $1mil, the charge is $1000.

Back in September 2008 I wrote a blog about the NSW state government and how their stamp duty real estate cash cow was drying up due to the Global Financial Crisis and lack of property sales. At that time the state government reliance on stamp duty revenue  as a percentage of total tax revenue was a whopping 20%. The government was crying poor in September 2008 because due to poor economic conditions, less people were buying and selling, the state government was behind in stamp duty revenue by $180mil for the months of July, 2008 and August 2008 alone!

As the housing market starts to recover Premier Kenneally has decided to milk the cow again with another slug at the property market. As if we aren’t contributing enough as it is.

Premier Keneally apparently defended the tax by saying 70% of property transactions would not be affected, hello???! The median house price in Sydney is $600,000. In an article on www.smh.com.autoday, the Real Estate Institute of NSW provided these statistics – “Of the 50 local government areas in Sydney, 34 have average house prices in excess of 500,000”.

Even more ridiculous is the Minister for Lands, Tony Kelly, explaining the new tax as part of a strategy to prevent property fraud? Do they think we are that stupid? Like that is a good enough excuse to waste another $90mil of our money?

Let’s just say what this is really about, the NSW state government is bankrupt, desperate and we may as well compare ourselves to the Greek economy because if they are desperate enough to “quietly” under the cover of the federal budget announcements introduce a new property tax things must be really, really, Greek economy style bad!

Apparently there are 35 fraudulent property transactions currently being investigated and what $90mil is needed for that?

Kenneally, I thought you were doing ok till now, I mean the state was a mess when you took over but you have lost me completely with this one.

Teneile Pawley is a local Sutherland Shire young woman. Last year, Teneile at only 17, suffered from 2 cardiac arrests which resulted in moderate brain damage. This has been a devastating blow for Teneile’s family, the local community and her friends at Port Hacking High. Teneile can understand everything, but cannot respond with speech or body movements and now requires operations, hospital care, a specialised wheelchair and rehabilitation.

Natalie Vials from Beach & Bay drew our attention to Teneile’s story and all staff members would love to help in whatever way we can.

Natalie’s husband Steven Vials is competing in a 250km race through the Kimberley Desert, WA in April and dedicating his run to Teneile. Steven hopes to gain sponsorship for this tremendous physical and mental challenge and encourages anyone and everyone to get on board.

Throughout the year Beach & Bay are going to be promoting Teneile’s website and cause – raising awareness and hopefully lots of money. Our initial aim is $20,000 to support Teneile’s immediate medical costs – but ideally we would like to offer ongoing assistance.

I have created a facebook group “For Teneile” which has already gained over 350 members, lots of friends and people from the Sutherland Shire.

Please stay tuned for future fundraising efforts – and in the meantime, dig deep, or even just raid the coin jar. Every dollar counts!

If you would like to donate you can do so through an internet transfer, or with paypal. Please see “Help Teneile” for further information.

The show sold out within minutes and I have since found out that there was an exclusive presale for Mastercard employees the night before. True fans were left scrambling come 9am the next morning and thousands missed out. On top of this tickets are now available on ebay for over $2000 with the lister claiming their “friends couldn’t make it on the night” – only to post 2 more tickets once those had sold.

People are pretty angry to say the least and there is already a huge online debate. The power of social media is not something to ignore and Mastercard may be quite surprised about the backlash that will come because of this. There are already 129 comments of complaint on one website alone, with many referring to reporting it to Office of Fair Trading, A Current Affair and 2BG. Fans are banding together and suggesting ways to really kick up a stink about this.

Some diehard fans had already booked flights and accommodation (a bit extreme) but it does go to show that perhaps the fans should have had the presale, and the Mastercard employees, the general public date.

What do you think about it all? Did you miss out on tickets?

Mastercard you have really botched this one up!

Several manufacturing enterprises have since called it a day, the Bridgestone Tyre Company being the biggest. Thousands of exporters, however, must be feeling the pinch because the AUD is becoming so expensive. One positive aspect of the larger pool of unemployed is that some will be available for the massive resources projects getting underway throughout Australia.

The article in the Australian by David Uren titled “Golden lining to the currency cloud as world dumps greenback,” highlights the impact of the sagging USD on its domestic economy. The USD’s fall (apparently down 35% from its peak in 2002) is proving a major bonus to US exporters whose businesses have taken off. On the capital side, the US government and all the US companies holding international assets are making squillions. For example, the US private equity group TPG that has just lured the Australian public and institutions into buying MYER out, may have originally bought the AUD when it cost around USD 60c. That same AUD is now worth over USD 90c at a time when a lot of American companies like TPG will be tempted to repatriate assets, including their property holdings, from Australia.

The downside for America lies in the potential for serious inflation from all this money swirling around. Firstly there is income from the sale of overseas assets. Then there are various stimulus packages and last but not least there is the inflationary impact of the increasing costs of imported goods. Interest rates in the US may have to rise sooner rather than later. The longer they delay the higher they will have to go. The US Federal Reserve probably should have raised rates before we did.

So the world has dumped the greenback and justifiably so. Central banks like India are buying gold instead (200 tonnes in the past week or just short of Australia’s annual production). Companies like the private equity group TPG that just made over AUD 1.5 billion flogging Myer shares to an unsuspecting Australian public will not be leaving the proceeds in USD for long. They will probably put the money straight into the Chinese Yuan which surely can not be pegged to the USD for much longer, but about that in another blog…

We are a trillion US dollar economy compared with the US 14 trillion USD economy and the USD 60 trillion world economy. Our country is only a speck internationally, traditionally only 2% of turnover for global giants like Nestle, Unilever & Shell. However, our interest rates are internationally high by comparison. So where is a lot of hot money going to flow, if not into the AUD? If the RBA continues along this path whilst the huge US economy keeps deflating and the USD keeps falling, our currency will reach parity with the USD in very short order.

This could be fatal for our exports, especially in the manufacturing sector which will become uncompetitive with imports if they haven’t already become so.

Since I recently predicted, wrongly as it turns out, that US rates would rise before Australia’s, the US economy has continued to weaken. Unemployment has risen to 9.8%. President Obama’s health care reform is stalled, Afghanistan is a quagmire, Chicago lost the 2016 Olympics to Rio, gold continues to break records (because those in the know have lost faith in the USD).

So, whilst US interest may not have risen for domestic reasons, investors will vote with their feet and search for a currency that is rising.

What better place to put their money than in Australia, which is politically stable, supplies the world with resources and now has one of the highest interest rates in the world (but lower than India and Brazil), and a rising dollar.

The upward pressure on the AUD will rise each time the RBA ratchets up the cash rate. Inevitably more money will flow into the AUD pushing it rapidly towards 1AUD = 1USD. As the Aussie dollar buys more US dollars, imports get cheaper, outbound tourism will boom and inflation may abate, but….on the other hand, exports, import/ competing manufacturing, inbound tourism, property and jobs will all suffer.

Is inflation that much of a problem that this should be allowed to occur?

Hopefully, at least the Federal Government will maintain its fiscal stimulus. In any event, Mr Turnbull, which schools precisely, would you deny their once in a generation opportunity for a new (“freebie”) multi purpose hall?

Whilst I may have been wrong in predicting that Australian interest rates would not rise until they do in the US, the consequences of the rise, yesterday, will seriously hurt sectors that do not need further shocks.

Another consequence of the tightening of monetary policy will be that the Federal Government will have to bring in a tough Federal Budget next year if it is to avoid unnecessary rate rises now that Mr Stevens has put his hand on the interest rate trigger. Will the Federal Government want to have a tough Budget before the next election? I don’t think so. No wonder it’s looking for an excuse for a double dissolution. What better time then when the Liberals and Nationals are imploding.

Henk Emans, B. Comm, MBA, LREA

I understand that a lot of China’s gold is stored in London but that it is pulling at least some of it back to start storing it in Hong Kong. The other worrying development for the US is that China is to allow its citizens to hold gold.

These developments are good for Australia because we dig up lots of the yellow metal (about 10% of the world’s supply) and production has started to rise again (up 2 tonnes in last quarter) with new mines still coming on stream (Boddington the largest with expected annual production of approx.7 tonnes rising to 30tonnes) but not so good for America because interest rates in the US will have to rise to make their Treasury Notes (TN’s) more attractive. If they do rise in the US (they already are rising at the long end) then there will be less pressure on our dollar and on our interest rates.

The Australian Reserve Bank knows that if it increases Australian interest rates (already high by international comparison) our currency will become more attractive to foreign investors who will want to buy more AUD which will rise and make our exports less competitive and lead to job losses.

If rates in the US do rise to make TN’s more attractive, the US$, which has already lost 12% of its value in the last year compared to the Chinese yuan, may slow its slide.

US GDP in 2008 was approx US14 trillion (vs Australia’s USD 1 trillion) but its national debt is now fast approaching US$ 12 trillion (vs Australia’s nominal Federal government debt), rising by over US$ 100 billion every month at a time when President Obama wants to introduce free healthcare to those who can’t afford to pay while still fighting wars in Iraq & Afghanistan. On the other hand the capacity of industry and the well-off to pay higher taxes has reduced, if anything. How is the deficit going to reduce? I can’t see it happening unless the US$ falls dramatically to make their exports much more competitive so that incomes  rise again, tax receipts rise and deficits start to fall.

In short, I think US interest rates will rise before ours do. Let’s see if I’m right. If I am, the Cronulla property market will be perfectly placed, new quality developments such as Sammut developers Drift apartments on Gerrale St, Cronulla (Central) will come on the market as a luxury finished product at the end of 2009, while interest rates are low and the Australian economy strengthens…

Henk Emans, B. Comm, MBA, LREA