PFZW to stick with SRI policy that led to divestment of Israeli banks

first_imgThe €140bn healthcare pension fund PFZW plans to stick with its SRI policy in the wake of the furore caused by its divestment from five Israeli banks, but it said it would adjust its communication process in future.PFZW’s divestment decision led a demonstration in front of the offices of its asset manager PGGM, as well as emotional responses from a number of Jewish organisations. The Israeli government also called the Dutch ambassador to account.Explaining the outcome of an internal investigation into the divestment process, Peter Borgdorff, the scheme’s director, stressed that the pension fund would “keep involving judgements of the international community in its investment policy”.“This is not up for discussion,” he said. However, he said the scheme had concluded that its communication respecting the divestment could have been better.“We should have taken the initiative, rather than adopt a passive position, with questions and answers on the Internet,” he said. “A proactive approach would have enabled us to steer the developments.”He added: “In the event of another potentially sensitive exclusion, we will do more to gauge the opinion of our stakeholders and ask ourselves twice whether we have consulted everybody about the issue.“The outcome should guide us in how we communicate a decision. However, this will not make any difference to our policy.”He also referred to Jewish organisations that, unlike several pro-Palestinian lobbying groups, had not met with PFZW in the run-up to the decision to provide their views on the issue.Borgdorff said a more proactive approach by the healthcare scheme could possibly have prevented the divestment’s being seen as a boycott of Israel.“Our earlier exclusion of Walmart did not mean we also excluded the US from our investment universe,” he said.“After five years of fruitless engagement with the Israeli banks, we had to take a decision.”The fact that part of the communication process had been handled by PGGM further clouded the picture, he conceded.“In the specific case, the divestment was also the decision of the pension fund, and we should have emphasised this,” he said. Commenting on the role of the scheme’s advisory board on responsible investment, Borgdorff said the evaluation had shown that the whole committee had acted “extremely meticulously”.One of the members of the board is Cees Flinterman, also a member of the UN Human Rights Committee, who is known for his pro-Palestinian views.According to the director, as part of the internal investigation, the minutes of all committee meetings over the past five years were screened.“But next time, we will consult all our stakeholders even more thoroughly,” he said.PFZW said it also pinpointed the difference in its interpretation of the situation with that of the €300bn civil service scheme ABP.“We followed international law that countries should not export their citizens to territories they have occupied,” Borgdorff said.“As a consequence, we don’t want to profit from banks that facilitate these developments.”For its part, ABP concluded that the Israeli banks it has invested in did not violate international legislation, and that there were no judicial judgements that should lead to their exclusion.According to ABP, not even the clauses of the UN Global Compact cited by PFZW are reason to initiate an engagement process.last_img read more

Sweden’s Alecta, AP4 submit to VW’s Scania bid

first_imgSwedish pension fund AP4 and occupational pensions manager Alecta have finally accepted the bid by Germany’s Volkswagen for Swedish heavy vehicles company Scania, despite holding out against the takeover.VW yesterday declared its offer for Scania unconditional, saying all conditions for its completion had been met.In a statement, VW said: “The offer has been accepted to such extent that Volkswagen after completion of the offer will become the owner of 90.47% of all shares in Scania.”Alecta said yesterday it had decided to accept Volkswagen’s bid for Scania.  “After renewed talks with Volkswagen, it is our conclusion that a higher bid price cannot be achieved,” the company said. “Even though the bid still does not fully reflect Scania’s long-term value, we believe it is acceptable.”The Swedish pensions manager said it saw VW as a strong long-term owner that should be able offer good conditions for Scania that would allow it to continue to develop positively as a wholly owned subsidiary. Alecta currently holds 16.3m shares in Scania, which amounts to 2.04% of the auto firm’s capital.Alecta and other shareholders in Scania had previously rejected the offer by VW, which was part of its plan to merge the Swedish business with rival German truck manufacturer MAN.Scania’s independent committee had called for VW’s valuation to be rejected because it failed to take long-term prospects into account. Following VW’s announcement that it was completing the offer, AP4 said it had decided to hand in its shareholding in Scania, which corresponds to about 0.6% of Scania’s capital.It said the decision should be viewed in light of the fact Volkswagen had already passed the 90% limit, at which compulsory purchase could be requested.Mats Andersson, AP4’s chief executive, said: “It is unfortunate that more owners were not able to back the independent committee in Scania’s board of directors that so unequivocally recommended the owners decline Volkswagen’s offer.”But he said it was handing in its shares instead of facing an extended compulsory purchase process.“We are still of the opinion the offer does not reflect Scania’s long-term value, and that Scania would have developed best as an independent and listed company,” Andersson said.Martin Winterkorn, chairman of VW’s management board, said it would now take the next step in its strategy to “strengthen the operational integration between Scania, MAN and Volkswagen Commercial Vehicles to create a leading commercial vehicles group”.VW said it would now start the compulsory acquisition of the remaining shares in Scania and delist the company’s shares from NASDAQ OMX Stockholm.Before the offer was announced, VW held 62.6% of the shares of Scania and 89.2% of the voting rights.At the end of last month, however, Swedish buffer funds AP2 and AP3 accepted the controversial bid.AP2 owned 0.2% of the stock, and AP3 held 0.3%.last_img read more

Mercer enters agreement to acquire SCM Strategic Capital Management

first_imgStefan Hepp, founder and chief executive at SCM, said: “By maintaining SCM’s platform in Switzerland and its seasoned investment team, we will continue to partner with our clients to deliver superior returns and the high level of service that are hallmarks of our reputation.“The combination of SCM and Mercer will result in a truly global platform with a substantial increase in manager research and investment management capabilities and will allow us to integrate ESG ratings in the due diligence process.”The transaction is expected to close in the first quarter of 2015, subject to conditions in the purchase agreement and regulatory approvals.The intention is that the entire SCM investment team will join Mercer, with Hepp becoming global business leader for private markets at Mercer, and Ralph Aerni, CIO at SCM, becoming global co-CIO for private markets at Mercer alongside Mike Forestner, who is currently director of private markets at Mercer.It is also intended that Hepp and Aerni will join the alternatives investment committee of Mercer. Mercer has entered into a definitive agreement to acquire SCM Strategic Capital Management, the Switzerland-based specialist private markets adviser.Julio Portalatin, president and chief executive at the consultancy, said: “Mercer’s investment business has achieved excellent revenue growth, and SCM gives us an opportunity to build upon our outstanding global reputation.“We are prepared to invest in areas where we see an opportunity to anticipate client needs and to strengthen our advisory and investment management capability.”Phil de Cristo, president at Mercer Investments, said: “Increasingly, our investment clients are seeking advice regarding alternatives investment strategy, either through a custom portfolio or a delegated solution, and SCM is an excellent addition to Mercer’s already well-regarded alternatives capabilities.”last_img read more

Automation to facilitate buy-side empowerment, liquidity – Euronext

first_imgInstitutional investors will be able to work on a more level playing field with the so-called sell-side and have a “huge opportunity” – in light of the increase in automation and available market information – to “take more control” in future, according to Danielle Ballardie, head of cash markets at Euronext.“The push for pre and post-trade transparency that is going to become compulsory, under certain conditions, under MiFID II will certainly support the automation of the whole fixed income trading value chain, as compliance will be difficult to respect with manual processes,” she said.She said requirements surrounding credit ratings would also have a “major influence” on the assessment of which bonds to trade and how to trade them.She argued that this would end the traditional disparity in “sophistication” regarding access to market data and platforms, as the buy-side today holds a “significant majority of inventories and are launching or participating in initiatives aimed at giving them a more automated, electronic access to data and markets”. Further, investors are increasingly realising the “value of the information held in their own systems and trading interest – both actual and historical”.Additionally, more and more banks are offering agency brokerage services, which levels the playing field even further, she said.Ballardie added that, if a high number of buy-side companies were connected to the same large pool of liquidity, there would be more buy-side to buy-side trading, and this would “help deepen liquidity, which is increasingly important, as liquidity provision is drying up among the sell-side dealers”.According to her, the role of the market maker is changing “as the buy-side adapts and has the opportunity to take greater control over execution”.The major challenge remains the sourcing of block liquidity, but Ballardie predicted that ‘dark pools’ would become more effective for trading blocks.These ‘dark pools’ – i.e. banks’ own trading pools – are now often made available to investors in exchange for the buy-side’s own algorithms. “There is an increasing focus on innovation-seeking solutions to ensure there are good mechanics for large deals,” she added.last_img read more

UK promises review of Financial Reporting Council

first_imgThe UK’s business minister has promised an independent inquiry into the functioning of the accounting watchdog, the Financial Reporting Council.Speaking last week to a parliamentary inquiry into the collapse of Carillion, Greg Clark said: “There is a strong case for reviewing the operations of the FRC, and that is something that I intend to require.”Clark, the secretary of state for the Department of Business, Energy and Industrial Strategy (BEIS), also hit back at claims made by FRC chief executive Stephen Haddrill that the watchdog needed government to beef up its powers.Haddrill had told the inquiry at a hearing in late January that the FRC’s “powers in relation to enforcement should be looked at”. He argued that the trigger for misconduct was set too high and added that the FRC’s “ability to review the report and accounts ought to be expanded.”  However, Clark told MPs last week: “In the case of the FRC, I saw the evidence given to [the committee] that it needed a change to its powers in order to be, if I can put it this way, more vigorous. I do not agree with that.” Greg Clark, UK secretary of state, UK Department of Business, Energy and Industrial StrategyHe went on to say that he expected the FRC to work closely with both the Financial Conduct Authority and the Insolvency Service to hold individuals and firms to account “using the full suite of powers that are available”.A BEIS spokesperson said: “The UK is admired around the world for its corporate governance regime and it’s important to ensure all of our regulators continue to uphold those high standards.“We intend to commission a review of the Financial Reporting Council’s operations and will announce further details in due course.”Clark’s comments came amid mounting public disquiet over both the timeliness and vigour of the FRC’s audit investigations. Critics of the watchdog claim that it is too close to the audit firms that it regulates.The FRC was set up in 1990 and is responsible for overseeing the disciplinary scheme for both the accountancy and actuarial professions. It is also responsible for maintaining the UK Corporate Governance and Stewardship Codes.Carillion FDs under investigationMeanwhile, the FRC has announced a probe into the conduct of Carillion’s two former finance directors, Richard Adam and Zafar Khan.The audit watchdog said the inquiry would cover Carillion’s financial reports for the 2014, 2015 and 2016 year-ends, as well as the six months to the end of 30 June 2017 and other financial reports and information between 2014 and 2017.In January the FRC said it would scrutinise KPMG’s audit of Carillion’s accounts, promising to conduct the investigations “as quickly and thoroughly as possible”.last_img read more

Varma warns of trade war tensions; Ilmarinen hails merger success

first_imgFinnish pension insurer Varma posted a 1.4% loss on its investments in the first quarter of this year, but said returns on alternative assets had guarded against deeper losses.Risto Murto, president and chief executive of Varma, warned of current risks in both local and global economies from trade disputes.“The next steps are decisive,” he said. “If the trade war escalates, it may have almost immediate effects on Finland too.”Companies’ global investments in particular would be quick to react if confidence in exports and imports were to waver, he said. “It is also desirable from Finland’s perspective that free global trade remains unscathed,” Murto added.Large Dutch pension schemes also suffered Q1 losses that were blamed largely on the effects of trade war rhetoric.Reima Rytsölä, Varma’s CIO, said the markets “woke up from hibernation” in early February and volatility returned.He said the market was now in “a muted phase”, but warned that the end of the cycle was “looming on the horizon”.Varma’s equity allocation lost 1.4% in the January-to-March period, while fixed income investments lost 0.3%. However, hedge funds returned 1.9% and property generated 1.2%.“Diversification into alternative investments helped in the challenging investment environment,” Murto said.The value of Varma’s investments stood at €45.7bn at the end of March, ranking it just below competitor Ilmarinen in terms of assets under management.Varma runs statutory earnings-related pensions for 885,000 people in the private sector.Ilmarinen records equity loss  Ilmarinen’s office in HelsinkiMeanwhile, rival pension insurer Ilmarinen reported a first quarter loss of 0.1% with fixed income investments and real estate making positive returns.Stefan Björkman, Ilmarinen’s acting president and chief executive, blamed the loss on key equity markets for depressing the Q1 result.Listed equities made a 1.6% loss in the quarter, but the equity portion of Ilmarinen’s portfolio as a whole – including private equity – made a narrower loss of 0.8%.Fixed income assets returned 0.4%, while property generated a 1.3% gain.Björkman said the first phase of the company’s merger with its smaller rival Etera had been a success since the deal became official at the beginning of the year.Investment portfolios, HR and financial administration were merged as planned and the employees moved to shared premises in Helsinki’s Ruoholahti district, he said.“However, the integration process still continues by, for example, gradually merging the IT systems related to insurance and pensions over the next two years,” Björkman added. Ilmarinen aimed to get the full benefit of integration by 2020.Ilmarinen’s total investments were worth €46.1bn at the end of March, and as a merged entity, the firm said it managed pensions for more than 1.1m Finns.last_img read more

£45bn LGPS pool appoints quartet of global equity fund managers [updated]

first_imgOne of the main reasons for the UK’s local government pension schemes (LGPS) forming asset pools is to save costs. Rachel Elwell, CEO of Border to Coast, said: “We are delighted that we will be launching our externally managed global equity fund with such a strong line up of investment managers.“It is a testament to the commitment of the asset management community to the LGPS that we received so many high-quality submissions.”As part of its original tender for global equity managers, launched in January, Border to Coast invited multi-manager pitches. However, the pool told IPE this month that it had abandoned plans for this part of the mandate.“We will not be making an appointment under the multi-manager procurement process,” a spokesperson for the pool said. “Although we received some good multi-manager submissions, we have concluded that the mix of high quality managers selected under the direct manager procurement provides the best route to meet the long-term performance and cost objectives of Global Equity Alpha at this stage.”Border to Coast’s 12 local authority partner funds have £45bn in assets between them. The asset pool currently manages around £9bn of this total, across an externally-managed UK equity fund and three equity funds managed by its internal investment team.The asset pool is planning to launch investment grade credit and multi-asset credit funds over the next 12 months. It recently gave asset managers the heads-up about these plans, with more information to be provided during a “fixed income manager day” later this month at the pool’s headquarters in Leeds.Border to Coast’s 12 partner funds are the local authority pension funds for Bedfordshire, Cumbria, Durham, East Riding, Lincolnshire, Northumberland, North Yorkshire, Surrey, South Yorkshire, Teesside, Tyne and Wear and Warwickshire.This article was updated on 10 June to add a statement from Border to Coast regarding a planned multi-manager mandate. Border to Coast Pensions Partnership, an asset pool for 12 UK local authority pension funds, has appointed four managers to a global equities portfolio.Harris Associates, Investec Asset Management, Lindsell Train, and Loomis Sayles & Company have been chosen to manage the partnership’s Global Equity Alpha Fund, its second externally run pooled fund. More than 90 asset management firms bid for the mandate. Subject to regulatory approval, the fund is scheduled to launch later this year with more than £4.5bn (€5.1bn) in assets.In a statement, Border to Coast said the fees it had agreed with the appointed managers were expected to be materially lower than the aggregate fees its 12 partner funds were paying on the assets being moved to the new vehicle.last_img read more

Is this Brisbane’s best reno yet?

first_imgThe downstairs living area opening out to the backyard.The finished product contains five bedrooms and four bathrooms, with features such as timber flooring, frameless sash windows and original woodwork blended with stone, marble and rendered brick.“I swear I say this every time I finish a house, but this is definitely my favourite project,” Mr Gray said.But Mr Gray admitted the renovation cost more than they expected.“We definitely blew our budget!” he said.“We’re normally pretty good, but not with this one.” One of the bathrooms in the property at 29 Rockbourne Tce, Paddington, after the renovation.Mr Gray said the scale of the project and the calibre of the home had put a lot of pressure on him.“I think we had in our head that we wanted to fetch the biggest sale price we’ve fetched on a house before,” he said.“In our head, this is the biggest and best one, so we have to get this right.”At least he has the tick of approval from the property’s previous owners, who now live next door and regularly popped over during the renovation process to see how it was progressing.“They absolutely love it — they’re our biggest advocates.” The kitchen in the home at 29 Rockbourne Tce, Paddington, before the renovation.More from newsParks and wildlife the new lust-haves post coronavirus17 hours agoNoosa’s best beachfront penthouse is about to hit the market17 hours ago The front veranda of the property at 29 Rockbourne Tce, Paddington, after the renovation.But he knew the maroon tiles had to go.“It was very, very old fashioned!”The property was also attractive because the block itself was square.“With square blocks, you’re able to have a bit more fun with the floor plan and make it more family friendly,” Mr Gray said.“And who wouldn’t want to live in that spot in Paddington.”The rebuild and renovation process was significant to say the least.First, Rhondda was entirely gutted underneath, while retaining the upper level of the majority of the house. LIVE WITH THE QUEEN FOR FREE The kitchen and dining area from a different angle.They kept as much of the original house as possible and added a new extension at the back.“I think the person who wants to buy the house will appreciate having that wraparound deck and the character of the existing house — it’s part of the appeal,” Mr Gray said.“We did move a few walls but made sure we left the VJ walls with the decorative mouldings.“We had to chop off the existing back extension, so we lost an old fireplace, which was devastating, but we had to do it for the move.”The upper level of the new extension has become the master bedroom quarters — a spacious main bedroom with walk-in wardrobe and ensuite, looking down at the pool. BRISBANE’S CHEAPEST RENTAL SUBURBS The house at 29 Rockbourne Tce, Paddington, before the renovation. The living room in the home at 29 Rockbourne Tce, Paddington, after the renovation.She was then shifted sideways about eight metres, which was challenging for a house of that size.“The whole block was just under 1200 sqm, but the block (the house) was sitting on was 700 sqm,” Mr Gray said.“ We saw value in evening up the block sizes, so we had to move the house across to achieve that and split the blocks evenly.” QLD RICHLISTER’S $20M RENOVATION The outdoor area of the property at 29 Rockbourne Tce, Paddington, after the renovation.The property is being offered for sale via an expressions of interest campaign closing September 21 through Matt Lancashire and Josh Brown of Ray White — New Farm.RENO FACT CHECKTime taken: 12 monthsTotal spend: Between $1.5m and $2mApproximate end valuation: Between $3.5m and $4m The kitchen and dining area in the home at 29 Rockbourne Tce, Paddington, before the renovation. One of the bedrooms in the home at 29 Rockbourne Tce, Paddington, before the renovation. The back of the property at 29 Rockbourne Tce, Paddington, after the renovation. The entrance to the home at 29 Rockbourne Tce, Paddington, before the renovation.center_img The back of the home at 29 Rockbourne Tce, Paddington, before the renovation. The living room in the home at 29 Rockbourne Tce, Paddington, before the renovation. Brothers Rob (left) and Andrew Gray outside the home at 29 Rockbourne Tce, Paddington, when they started the renovation. Picture: AAP/David Clark. The front of the home at 29 Rockbourne Tce, Paddington, after the renovation.The downstairs section is predominantly the living area, plus a guest bedroom with an ensuite.Mr Gray said all the children’s bedrooms were in the original house, which provided an element of privacy for parents’ retreat/master bedroom in the new extension.The end result is a home that retains its old-world charm, but has been reinvented to accommodate all the comforts and conveniences of modern living. The property at 29 Rockbourne Tce, Paddington, after the renovation.Rob and Andrew Gray picked up Rhondda at 29 Rockbourne Tce, Paddington in May, 2017.She’d only been on the market for about a month, but they immediately saw her potential.Sitting on a 1147 sqm block in the heart of Paddington and oozing character and charm, the Gray brothers knew she was something special.“It was in really good condition,” Rob Gray said.“The owners had kept it immaculate.“For that reason, we were able to keep those front windows and french doors because they were so well retained.” UNIT OWNERS PROFIT AFTER SELLING ENTIRE BUILDING The kitchen in the home at 29 Rockbourne Tce, Paddington, after the renovation. Inside the home at 29 Rockbourne Tce, Paddington, before the renovation. One of the bedrooms in the property at 29 Rockbourne Tce, Paddington, after the renovation.Mr Gray said he envisaged a young family buying the home.“I always pictured all the kids’ bedrooms being upstairs and having access to that wraparound deck and seeing them running around playing,” he said.The materials used in the build are also family-friendly.“The concrete floors downstairs — you can’t really wreck them,” Mr Gray said. One of the bathrooms in the home at 29 Rockbourne Tce, Paddington, before the renovation. Rob and Andrew Gray at the home they have renovated at 29 Rockbourne Tce, Paddington. AAP Image: Claudia BaxterHER name was Rhondda.She was beautiful — a little old fashioned, but immaculately groomed with a good bone structure, and willing to undergo a total makeover.Rob Gray was in love.“She ticked all of my boxes,” he said.Mr Gray, who is one half of arguably Brisbane’s hottest young building duo, knew this was going to be his best relationship yet. After a year of serious courting, Rhondda’s transformation is, quite simply, breathtaking. GET THE LATEST REAL ESTATE NEWS DIRECT TO YOUR INBOX HERE She started as a barely touched 1920s Queenslander in shades of yellow, green and maroon and has blossomed into a bigger, better version of the lady she always was.Under the guidance of Rob and his brother, Andrew, and the team behind Graya Construction, Rhondda has become the talk of the town — business at the front and party at the back.“It is party at the back, but in previous years, a lot of architects have gone with dark box extensions,” Mr Gray said. “Yes, this is modern, but we still kept it white and light, which gives it that really clean look.”last_img read more

Lap of luxury: Downsizers getting more bang for their buck with Brisbane’s prestige apartments

first_imgJenny Peacock, with her daughter, has bought an apartment in Gallery House in Hamilton. Picture supplied.Brookfield Residential Properties’ managing director Lee Butterworth said more than $28 million worth of apartments had sold in the project in recent months — many to downsizers.“Buying off-the-plan has benefits for a range of buyers … particularly for downsizers who often plan their move well in advance, giving them the luxury of waiting for the perfect apartment, at the right price,” Mr Butterworth said.“With recent Core Logic figures reporting Brisbane’s property market is in a growth phase, buyers recognise the advantage of buying now.” Mr White said the average price per square metre for a luxury apartment in Sydney or Melbourne would be double that of the same apartment in Brisbane. “When it comes to the high end, prestige market, there is exceptional value for money here,” Mr White said.He recently marketed an apartment at 3401/483 Adelaide Street in the CBD that he believes would cost double in Melbourne and even more in Sydney. This apartment at 2808/127 Kent St, Sydney, sold for about $43,000/sqm.Clayfield resident Jenny Peacock has just bought a luxury, riverfront apartment in the Gallery House residential project, which is under construction in Hamilton.Ms Peacock, who is downsizing from the family home, bought the ‘sky home’ off-the-plan after searching for six months for a place that offered a low-maintenance lifestyle without compromising on space.“Our apartment is on the 14th level of the second tower with spectacular views of the river and city skyline,” Ms Peacock said.“It has three bedrooms and huge balconies, so we won’t be sacrificing space for lifestyle, which was a real drawcard for us.” This apartment at 10/170 Bowen Tce, New Farm, sold for $9180/sqm.In Sydney, an apartment half that size (292 sqm) at 2808/127 Kent Street sold for a staggering $11 million, which is about $43,000/sqm. This apartment at 4102/140 Alice St, Brisbane, sold for $13,034/sqm.Compare this to a 367 sqm apartment in Sydney’s CBD and the price is almost double.This apartment at 1301/185 Macquarie Street is on the market for $8.9 million, or $24,250/sqm. Inside the apartment at 2401/132 Alice St, Brisbane.More from newsParks and wildlife the new lust-haves post coronavirus16 hours agoNoosa’s best beachfront penthouse is about to hit the market16 hours agoThe property is being marketed by Simon and Courtney Caulfield of Place — Kangaroo Point, and is scheduled to go to auction, so a price guide cannot be given.“Quay West as a building is extremely tightly held, with only one sale of a similar property in the last 10 years,” Mr Caulfield said. He said there was a clear trend emerging in Brisbane of downsizers favouring security and low maintenance luxury.Mr Caulfield is also marketing another luxury, riverfront apartment in Kangaroo Point at 701/21 Pixley Street.The five-bedroom, four-bathroom ‘sky house’ spans a massive 686 sqm and boasts some of the best views of the city.It’s for sale with a price guide of about $4 million, which is equivalent to $5830/sqm. Courtney and Simon Caulfield at 701/21 Pixley St, Kangaroo Point. Image: AAP/Josh Woning. Former Brisbane lord mayor Bryan Walsh and his wife, Eugenia, are selling their sub-penthouse in the Quay West building in the CBD. Picture: Tara Croser.THE golden generation of retirees has created a new housing market in Brisbane — downsizers who want anything but the simple life.With time on their side and money to burn, Baby Boomers are flocking to the inner city to swap their high-maintenance, multimillion-dollar homes for luxury, house-size apartments. And property pundits say there has never been a better time to buy a prestige apartment in Brisbane, with prices almost half that of Sydney and Melbourne’s sky homes.Agent Ben White of Place said the Queensland capital’s prestige unit market was “unbelievable” value for money compared to the city’s southern cousins. GET THE LATEST REAL ESTATE NEWS DIRECT TO YOUR INBOX HERE This apartment at 1301/185 Macquarie St, Sydney, is on the market for $24,250/sqm.In New Farm, a 670 sqm apartment at 10/170 Bowen Tce sold for $6.15 million, or $9180/sqm. The view from the apartment at 2401/132 Alice St, Brisbane, which is for sale.The apartment at 2401/132 Alice Street is in the tightly-held Quay West building, where they also own another investment unit.“All things being equal, we would have stayed there forever,” Mr Walsh said.“We bought there because we’d reached the age where we wanted apartment living, and that was the best that we could find in Brisbane.“We moved in at the age of 65 and it’s the perfect place for people moving out of the family home, but we’ve just got to that age.” The view from the balcony of the apartment at 3401/483 Adelaide St, Brisbane City.“Brisbane has been well insulated from the booms that have happened in Melbourne and Sydney, and traditionally, the cycle of the market here in Brisbane is that there’s an elasticity effect between Brisbane and the other capital cities,” he said.“Couple that with the major projects and redevelopments that are occurring in Brisbane over the next ten years and you’ll have an international city on the global stage seeing exponential growth in population and demand for luxury property soar.“So this is the time to buy — right now.”Some of the projects tipped to support the appetite for luxury apartments in the inner Brisbane market include the new Brisbane Airport runway and expansion, the multi-billion dollar Queens Wharf Casino precinct and the Howard Smith Wharves precinct. BIG SPENDERS LOOK TO QUEENSLAND The views from the apartment at 702/21 Pixley St, Kangaroo Point, which is for sale. Inside the apartment at 701/21 Pixley St, Kangaroo Point.Earlier this year, a 323 sqm penthouse at 4102/140 Alice St, Brisbane fetched $4.21 million, which is equivalent to $13,034/sqm. The Queens Wharf development under construction in Brisbane’s CBD.The downsizing trend is only set to continue as a result of new measures introduced by the federal government in July allowing individuals who sell their current or former family home after the age of 65 to make ‘downsizer contributions’ of up to $300,000 into their superannuation.Bryan Walsh, who served as lord mayor of Brisbane from 1975 to 1976, is selling his sub-penthouse in the CBD after nearly 20 years to downsize again. HOW TO OWN 20 HOMES BEFORE YOU’RE 30 The view from the bathroom of one of the apartments in Gallery House. Picture supplied.last_img read more

The top 10 movers and shakers in Australia’s housing industry

first_imgMr Christopher admitted Mr Morrison had had little time as prime minister to influence the housing market, but said his role in capacity as federal treasurer early this year and last year did have an influence. “Last year, Morrison signed off on cutting some of the negative gearing benefits such as travel cost deductions and plant and equipment depreciation,” he said.“Arguably this was a double whammy for the investor market as it was also dealing with new lending restrictions.”6. Donald Trump, US PresidentMore from newsParks and wildlife the new lust-haves post coronavirus16 hours agoNoosa’s best beachfront penthouse is about to hit the market16 hours ago RBA governor Philip Lowe speaking at an ASIC forum.Dr Philip Lowe takes the top spot because he is the most significant individual setting interest rates, according to SQM Research head Louis Christopher. “No other economic variable has more impact on the level of property demand than interestrates, and Dr Lowe chairs the RBA board meetings that set the crucial cash rate attheir monthly meetings,” Mr Christopher said.“He’s well connected with those in government and financial markets, and since he is head of the central bank, everyone listens to what he has to say. “It’s fair to argue that he has more power over the property market than anyone else in Australia, and his power comes without any of the rhetoric that comes with thepoliticians who feature further down our list.”Mr Christopher said he believed Dr Lowe had also influenced APRA’s clamp down on investor lending.Looking ahead, Mr Christopher expects Dr Lowe to have a significant influence over home prices in 2019. “Will he cut rates to stop a potential housing crash?” he said. “Will he lean on APRA to loosen lending once again? “Would he introduce quantitative easing in a worse-case scenario? “Will he warn the Prime Minister of impending recession? “Or will he do nothing and let market forces take their course?“Overall, there are multiple scenarios that could play out next year and Dr Philip Lowe will be very much a main conductor to the events that will unfold.”2. Wayne Byres, APRA Chairman Federal Opposition Leader Bill Shorten speaks to the media during a news conference. Image: AAP/Paul Braven.Negative gearing is proving to be one of one of the key election issues for 2019. If Bill Shorten wins the election next year, his threat to disallow negative gearing and reduce capital gains tax concessions has property investors worried. Mr Christopher said any change to the negative gearing rules would significantly cut demand for investment properties and, therefore, dent property prices. “One of the reasons property prices are so high in Australia is because investors underpin about one-third of all residential property purchases,” he said. “Reduce that demand and Shorten would chip away at the floor under property prices. “Indeed, it is possible that as the downturn has deteriorated in late 2018, investors may well be eyeing the ramifications of the next election now.”10. Mark Steinert, Stockland CEO US President Donald Trump points to the media as he speaks during a campaign rally in Charlotte, North Carolina. Photo: AP/Chuck Burton.As arguably the most powerful man in the world, Donald Trump is on the list for goodreason, according to Mr Christopher.“He is responsible for the US Government’s economic policies and therefore hasa big influence on the growth of the global economy and the level of global marketinterest rates,” he said.“Trump’s big spending and revenue economic policies in the world’s largest economy, such as the massive company tax cuts introduced at the beginning of 2018, have put upward pressure on US Bond yields and therefore interest rates globally. “This, in turn, has forced some of Australia’s big banks to raise mortgage lending rates outside of the RBA because their funding costs have increased.”In September, all major banks except for NAB lifted mortgage rates by 15 to 18 basis points, citing overseas lending cost increases.Mr Christopher said he believed the direction of the US economy also set global economic sentiment. “Any US economic growth boom boosts global growth because the US is simply so large,” he said. “This influences demand for Australian exports, which can directly influence the fortunes of some of our cities, such as Perth, Darwin and Hobart, in particular.” There is also an inflationary impact, according to Mr Christopher.“Higher inflation can pressure interest rates higher and therefore reduce demand for property,” he said.“We see this as the key risk in 2019 — the banks being forced again to lift interest rates based on higher international lending costs and the RBA staying put despite the probable rise in inflationary pressures, which would most certainly happen if our currency were to fall.”7. Gladys Berejiklian, Premier of NSW Victorian Premier Daniel Andrews addresses the media at the Wangaratta Hospital in North East Victoria. Image: AAP/James Ross.Daniel Andrews has a major influence on the release of land for housing and urban planning and development. Mr Christopher said the release of more land for housing would boost supply and therefore help to reduce Victorian property prices. He also believes tax policy has had a big impact in Victoria. “In 2017, Andrews introduced a stamp duty exemption for first-home buyers who purchase properties valued up to $600,000, plus stamp duty concessions for homes worth up to $150,000 more,” Mr Christopher said. “This move has given a big boost to first-home buyer demand and supported the value of properties in Melbourne through to the end of 2017.”Figures from Victoria’s State Revenue Office have been interpreted as showing that the exemption helped underpin 17,090 home purchases between July 1, 2017, and February 28, 2018. In the same period a year earlier, there were just 9834 first-home buyers.Mr Christopher said the Andrews government had also clamped down on foreign buyers by lifting a stamp duty surcharge on foreign buyers to 7 per cent from 3 per cent in 2016 and introducing a tax on vacant homes last year. 9. Bill Shorten, Federal Opposition Leader Stockland managing director Mark Steinert. Photo: Hollie Adams/The Australian.Stockland is one of the country’s largest residential developers with a long track record of creating some of the best masterplanned communities across the nation. The company has a combined development pipeline of more than 82,000 residential lots and 3000 retirement units in key growth corridors.Steinert has real connections inside governments at all levels, both federal and state, and strong views on housing and taxation policy, according to Mr Christopher. “Last year, Steinert argued for curbs to negative gearing, in de facto support of Labor’s policy to curb concessions,” he said.“Abolishing negative gearing on established homes could be a boon for developers of new properties, which would put Mark and his company in a box seat. “So as the election gets closer to the day, we expect Mark to be advocating with force.” Gladys Berejiklian speaks on stage during the Invictus Games opening ceremony in Sydney. Image: AAP/Brendon Thorne.Gladys Berejiklian has the power to set the rate of stamp duty, to applyexemptions or concessions and to control the release of land which affects property supply and demand.“While the threat of a new smoke stack from an underground road may kill demand for property in a certain area, the promise of better roads or public transport can give it new life,” Mr Christopher said.“Just consider the light rail project in Sydney’s CBD and eastern suburbs. “While construction of the rail line has been delayed by a year — greatly inconveniencing millions of people — eventually that transport connection will boost demand for homes located near it. “Property owners just need to be patient to realise those gains and hope that in the meantime they won’t get caught in one of the traffic jams that are now a feature of life in the eastern suburbs near the route.”Last financial year, NSW reportedly netted more than $7.3 billion in stamp duty. Mr Christopher said that while stamp duty was a big revenue winner for the state, it was also a big killer of property demand in Sydney.“With the downturn, it is very likely stamp duty revenues for FY19 could be cut by up to one-third, potentially putting the state budget heavily back into deficit,” he said.“This will no doubt be felt on Macquarie Street, and with an election looming, could Gladys attempt to stimulate the market next year?”8. Daniel Andrews, Premier of Victoria Prime Minister Scott Morrison. Picture: Kym Smith.Prime Minister Scott Morrison has power over many economic variables, includinggovernment spending, immigration and the taxation laws that allow negative gearing. Mr Christopher said all of those factors affected property prices one way or another.“Morrison also has the final say over government spending,” he said.“This can influence property prices directly, through infrastructure projects such as airports, and indirectly through expansionary government policies that can boost employment, putting money into people’s pockets to buy homes.” MORE: Beach house sells for $14m US President Donald Trump and First Lady Melania Trump. Photo: Mandel Ngan/AFP.HE doesn’t even live here and has no property developments here, but Donald Trump has been named one of the top 10 movers and shakers in the Australian housing market.The US president comes in at number 6 on a list put together by independent property researcher SQM Research, identifying the top individuals they believe have moved housing prices in 2018 — and may move them again in 2019 — with just the stroke of a pen or a spoken word.One thing they have in common is that they are all trying to make their mark, or make money, from one of the most talked about assets — property. RELATED: Brisbane house prices to rise 11pc Westpac CEO Brian Hartzer speaking during a hearing of the House Economics Committee at Parliament House in Canberra. Image: AAP/Lukas Coch.Westpac is Australia’s second largest residential mortgage lender behind the CBAand it too has been raising interest rates outside of the RBA’s moves. “Not only have the decisions by the big bank CEOs to raise home mortgage rates impactedtheir own customers, but they have also set an example for many smaller lenders,which have also raised their own rates independently of RBA moves,” Mr Christopher said.“Westpac, in September, gave some of its riskier property investor customers less than a month to find another lender amid growing concerns about loan defaults. “The bank reportedly sent letters to property investors warning it can ‘no longer support our commercial relationship with you’.”If you curb demand for property from investors, then you are taking away a significant support for house prices, Mr Christopher said.5. Scott Morrison, Australian Prime Minister TOP 10 MOVERS AND SHAKERS IN AUSTRALIAN PROPERTY IN 20181. Philip Lowe, Reserve Bank of Australia Governor Commonwealth Bank CEO Matt Comyn speaking during a hearing of the House Economics Committee at Parliament House in Canberra. Image: AAP/Lukas Coch.The big banks’ influence on mortgage lending, and therefore property demand, hasincreased significantly since they started to raise interest rates independently of thecentral bank, according to Mr Christopher.“The RBA controls the cash rate, which sets a floor under the whole interest rate structure of the Australian economy,” he said. “The cash rate used to be the sole factor that could influence rates, but the big bank heads have now taken that power to themselves by raising rates even when the cash rate has not moved.”Mr Christopher said Matt Comyn led the list of influential bank CEOs because the Commonwealth Bank was the nation’s biggest residential mortgage lender. “Overall, we see there is still risk of further credit restrictions adopted by the banks in 2019, such as the additional cross check on loan applicants stated expenses.”4. Brian Hartzer, Westpac Bank CEO APRA chairman Wayne Byres speaking at Finsia event. Photographer: Adam Yip.Wayne Byres was appointed chairman of the Australian Prudential Regulation Authority (APRA) in 2014 for a five-year term. He has overseen the setting of tighter controls on bank lending to residential property investors.By raising lending standards on investment loans, Mr Christopher believes APRA has had a big impact on investor demand for property. “Its power as a regulator gives it huge influence on the demand for property loans and as a result, on the demand for property,” he said.“The trigger to this current downturn can be placed back to the point in March 2017 when APRA announced that there was going to be a major crack down on interest only lending. “At the time, interest only lending represented 40 per cent of all new loans written. “Wayne wanted the number to come down to 30 per cent. “That effectively created an ‘embargo’ on most investment lending, which subsequently smashed housing demand.”Mr Christopher said Mr Byres might have a quiet year in 2019 because APRA had recently stated it believed its actions had improved lending standards in the banking sector.3. Matt Comyn, Commonwealth Bank Australia CEOlast_img read more