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.
Tuesday, September 23, 2008
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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