CHINA's third largest steel company, Wuhan Iron & Steel based in Hubei province has an annual capacity of 30 million tonnes of steel, announced today (18/12/08) it will invest up to $180 million in South Australian iron ore projects the deal would allow it to fund mining and exploration developments in the Eyre Peninsula.
Under the agreement, Wuhan Iron & Steel will participate in the development of five projects in the southern part of Eyre Peninsula in the Port Lincoln - Tumby Bay region. They will involve the companies forming an equally held joint venture to develop several new iron ore mines and a deep water export port at Sheep Hill, near Tumby Bay on the Eyre Peninsula as SA currently has no port that can handle large Cape-sized vessels, required for bulk mineral commodities.
If the government approvals are formalised by March 2009, this will flow on to job security and the financial security of those investing in Adelaide and South Australia.
http://www.news.com.au/adelaidenow/story/0,22606,24817696-913,00.html
Wednesday, December 17, 2008
Sunday, December 14, 2008
Is the South Australian economy doomed? Should I dump my real estate and cash up?
I recently read a disturbing “confidential” memo from a leading South Australia real estate agent advising his vendors to sell at what ever price the could as the market would be getting worse. Last time he scared his Vendors I bought a property through his agency for $50,000 below what it to be worth, the market flatted for a while then strengthened, so I made a substantial benefit from ignoring his advise.
Before taking anyone’s advising think stop and ask the question will they make a profit if you follow their advice. If the answer is yes, before you act please seek and listed to alternative advisers who are not going to profit from your choices.
The credit crisis and United States economy will effect us however we also have to look at what our number one trading partner, China is doing with their 1.4 billion potential consumers and economy and ask will it create any protection from what is happening?
As Australians we are fortunate that the economic packages announced by our Federal Government are mainly aimed at new infrastructure with a small portion to bale out failing parts of our economy, unlike America where the packages are designed to fill a huge a debt-ridden hole created by an excess of greed. Unlike the Americans the Chinese in their controlled economy have aimed their $US786 billion package totally at infrastructure program airports, roads, railways, and electricity networks. These are all designed to bring their products to the markets in an efficient manner once the global crisis is over and if history teaches us anything, one day it will be.
The crisis is a great opportunity for China as falling world commodity prices has slashed the cost of these projects, for instance Copper a last year ago was $US9,000 a tonne now it is $US3,000 a tonne. The same is happening to steel and the other commodity prices required for these great infrastructure projects. With all large infrastructure projects it takes a number of months top get up and running before the base products need to ordered e.g. extra iron ore for steel. In 2007 China imported over $12 billion worth of iron ore and concentrates from Australia and around $5 billion of other metal related products. As China starts its infrastructure growth it will need all the same core commodities it has traditionally purchased from Australia plus new products. This alone should soften the effect of the global fallout on Australia.
Back to Real Estate and day to day life.
If you have the resources behind you like the Chinese Government and are willing to look 5 years plus, with falling interest rates it is a good time to invest in your future.
If you don’t have the financial resources and are concerned about keeping your home, review your spending, set a budget and reduce your debt levels, clear those credit cards – build equity in your home.
Regardless if you have finance or not, you can still prosper, live your life to the full, work hard, invest, stay strong as a family, educate your self and family, find your purpose in life. As your prosper, your employer or company will prospers, our towns and cities will prosper, our State and Australia will prosper.
Chinese Australian trade figures are at http://www.dfat.gov.au/geo/fs/chin.pdf
Before taking anyone’s advising think stop and ask the question will they make a profit if you follow their advice. If the answer is yes, before you act please seek and listed to alternative advisers who are not going to profit from your choices.
The credit crisis and United States economy will effect us however we also have to look at what our number one trading partner, China is doing with their 1.4 billion potential consumers and economy and ask will it create any protection from what is happening?
As Australians we are fortunate that the economic packages announced by our Federal Government are mainly aimed at new infrastructure with a small portion to bale out failing parts of our economy, unlike America where the packages are designed to fill a huge a debt-ridden hole created by an excess of greed. Unlike the Americans the Chinese in their controlled economy have aimed their $US786 billion package totally at infrastructure program airports, roads, railways, and electricity networks. These are all designed to bring their products to the markets in an efficient manner once the global crisis is over and if history teaches us anything, one day it will be.
The crisis is a great opportunity for China as falling world commodity prices has slashed the cost of these projects, for instance Copper a last year ago was $US9,000 a tonne now it is $US3,000 a tonne. The same is happening to steel and the other commodity prices required for these great infrastructure projects. With all large infrastructure projects it takes a number of months top get up and running before the base products need to ordered e.g. extra iron ore for steel. In 2007 China imported over $12 billion worth of iron ore and concentrates from Australia and around $5 billion of other metal related products. As China starts its infrastructure growth it will need all the same core commodities it has traditionally purchased from Australia plus new products. This alone should soften the effect of the global fallout on Australia.
Back to Real Estate and day to day life.
If you have the resources behind you like the Chinese Government and are willing to look 5 years plus, with falling interest rates it is a good time to invest in your future.
If you don’t have the financial resources and are concerned about keeping your home, review your spending, set a budget and reduce your debt levels, clear those credit cards – build equity in your home.
Regardless if you have finance or not, you can still prosper, live your life to the full, work hard, invest, stay strong as a family, educate your self and family, find your purpose in life. As your prosper, your employer or company will prospers, our towns and cities will prosper, our State and Australia will prosper.
Chinese Australian trade figures are at http://www.dfat.gov.au/geo/fs/chin.pdf
Tuesday, September 23, 2008
Adelaide a good place to invest!
A number of factors are affecting the continual demand for Adelaide city properties and have ensured city residential property prices have continued to climb.
1) The international Western trend of people to move into City centers.
According to the current Adelaide City Council's annual report almost 20,000 people now live in the city of Adelaide; this is an increase of 42 per cent since 2001. With the medium age slightly lower than the state average, the biggest increase was in residents comes over aged 55, this shows it is not only a young person trend.
2) Lifestyle: The ability to work and socialize close to home.
Adelaide City Council's website more than 4 million people attended events such as the Fringe and the Tour Down Under, in the past year, this an increase over 2.4 million people from the previous financial year.
3) Savings time and money.
Petrol Prices: As petrol prices remain over US$100 a barrel, property values close to an in the city move up as central city workers save on travel costs and travel time. Why commute for 45 minutes when you can walk for 10-20 minutes.
Of course these benefits need to be offset against the increased costs of purchasing the city and higher noise levels. As a city resident I will not be moving back to the suburbs.
1) The international Western trend of people to move into City centers.
According to the current Adelaide City Council's annual report almost 20,000 people now live in the city of Adelaide; this is an increase of 42 per cent since 2001. With the medium age slightly lower than the state average, the biggest increase was in residents comes over aged 55, this shows it is not only a young person trend.
2) Lifestyle: The ability to work and socialize close to home.
Adelaide City Council's website more than 4 million people attended events such as the Fringe and the Tour Down Under, in the past year, this an increase over 2.4 million people from the previous financial year.
3) Savings time and money.
Petrol Prices: As petrol prices remain over US$100 a barrel, property values close to an in the city move up as central city workers save on travel costs and travel time. Why commute for 45 minutes when you can walk for 10-20 minutes.
Of course these benefits need to be offset against the increased costs of purchasing the city and higher noise levels. As a city resident I will not be moving back to the suburbs.
Monday, September 15, 2008
Why Council Rates keep going up and up?
The common misundertanding is that property prices go up and this drives the council rates up, this is incorrect our rates are based on council spending and waste not on property prices.
If your property increased in value in line with the rest of the properties in your council area,e.g. every property doubled in value and your council kept its budget the same your rate would stay the same, if the council reduced its expenditure then your rates would fall by the same percentage.
The council sets a budget then takes the total council area property value set by the valuer general and divides the area value into the council budget to set a rate figure. Eg. Council area value M$3,000 Council budget M$12, the rate would be 12/3000 = .004 So a $300,000 property would pay $1200
If the total area property valuation increased by 10% and the council increased their budget by 5% rates would increase by 5% e.g. M$3000 becomes M$3300 and M12 becomes M12.6 so 12.6/3300 = .0038181 if your property is now worth $330,000 the new rate would be $1260. Same thing applies if property prices dropped by 10% and council spends 5% more your rates will still go up.
Property valuation is the most common way councils spread their rate burden, they can use a different rating methods including property uses/location, separate rate for a particular purpose, have a service rate or charge for a specific service like septic tank effluent disposal and having a fixed (flat) charge as part of the general/single rate, they can alsi include rebates for residents and pensioners.
The bottom line is rates make up around to 60% of the council income, and councils do not control there spending we all pay more regardless if property prices go up or down.
The only way to achieve lower rates is to support new growth in the area while keeping council spending in check – a dream, more than a reality.
If your property increased in value in line with the rest of the properties in your council area,e.g. every property doubled in value and your council kept its budget the same your rate would stay the same, if the council reduced its expenditure then your rates would fall by the same percentage.
The council sets a budget then takes the total council area property value set by the valuer general and divides the area value into the council budget to set a rate figure. Eg. Council area value M$3,000 Council budget M$12, the rate would be 12/3000 = .004 So a $300,000 property would pay $1200
If the total area property valuation increased by 10% and the council increased their budget by 5% rates would increase by 5% e.g. M$3000 becomes M$3300 and M12 becomes M12.6 so 12.6/3300 = .0038181 if your property is now worth $330,000 the new rate would be $1260. Same thing applies if property prices dropped by 10% and council spends 5% more your rates will still go up.
Property valuation is the most common way councils spread their rate burden, they can use a different rating methods including property uses/location, separate rate for a particular purpose, have a service rate or charge for a specific service like septic tank effluent disposal and having a fixed (flat) charge as part of the general/single rate, they can alsi include rebates for residents and pensioners.
The bottom line is rates make up around to 60% of the council income, and councils do not control there spending we all pay more regardless if property prices go up or down.
The only way to achieve lower rates is to support new growth in the area while keeping council spending in check – a dream, more than a reality.
Wednesday, September 10, 2008
New Landlord wants the Tenant out.
Hi
This week I had discussion with a Commercial Tenant whose new landlord wants them out. The Commercial property had been sold and the new owner gave the Tenant 30 days notice.
Opps.. The landlord needs to check his lease – with a Commercial Lease, if the Tenant pays on time and does not breach any conditions of the lease; the landlord has to treat them as if they owned the property until the lease expires. In this case they have another 4 years. In this case they have no right to renew so the owner could advise the tenant of the plan not to renew in writing and in a number of cases (check the lease) this is required 3-6 months before expiry of the lease. If the lease did allow for an extension of the lease term, sale of the property would not extinguish this.
What option does the Tenant have?
A) They should take Legal advice to enforce their rights.
What option does the new landlord have?
A) Sit back and wait for the end of the lease
B) Compensate the tenants to cancel the lease e.g. moving costs, extra lease expenses and bonus to leave.
C) If the landlord purchased the property believing it was only under a monthly tenancy and the tenants would leave at settlement, then the landlord needs to check the contract of purchase and form 1. If this was incorrect, they could seek legal advice on compensation from the seller.
The above is not a legal opinion and is just given as a discussion point on Commercial property in South Australia for current legislation in SA refer to http://www.legislation.sa.gov.au
This week I had discussion with a Commercial Tenant whose new landlord wants them out. The Commercial property had been sold and the new owner gave the Tenant 30 days notice.
Opps.. The landlord needs to check his lease – with a Commercial Lease, if the Tenant pays on time and does not breach any conditions of the lease; the landlord has to treat them as if they owned the property until the lease expires. In this case they have another 4 years. In this case they have no right to renew so the owner could advise the tenant of the plan not to renew in writing and in a number of cases (check the lease) this is required 3-6 months before expiry of the lease. If the lease did allow for an extension of the lease term, sale of the property would not extinguish this.
What option does the Tenant have?
A) They should take Legal advice to enforce their rights.
What option does the new landlord have?
A) Sit back and wait for the end of the lease
B) Compensate the tenants to cancel the lease e.g. moving costs, extra lease expenses and bonus to leave.
C) If the landlord purchased the property believing it was only under a monthly tenancy and the tenants would leave at settlement, then the landlord needs to check the contract of purchase and form 1. If this was incorrect, they could seek legal advice on compensation from the seller.
The above is not a legal opinion and is just given as a discussion point on Commercial property in South Australia for current legislation in SA refer to http://www.legislation.sa.gov.au
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