Strata Title Insurance Relief in the Far North Rejected

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A 12-month moratorium on the stamp duty paid on body corporate insurance has been ruled out by the State Government.

The decision follows a call by a body corporate industry leader to commit to a recommendation from a federal inquiry into residential strata title insurance last year that the Federal Government liaise with the Queensland Government to implement a 12-month moratorium on stamp duty to give some relief to property owners facing soaring bills.

Archers Body Corporate Management director Colin Archer said the 12-month stamp duty moratorium would provide a rebate equivalent to additional tax paid by North Queensland home owners on top of extra insurance costs.

But a spokeswoman for the State Treasurer Tim Nicholls said a moratorium would “not address the underlying causes of rising insurance costs.”

“The Queensland Government has no legislative jurisdiction over general insurance matters and cannot intervene in the decisions made by private companies as to the level of premium payable,” she said.

“Providing an exemption to specific types of entities in specific regions of the state would be inequitable to others who have been similarly affected.

“Duty exemptions for body corporate insurances would establish a precedent with potentially significant revenue consequences for the state.”

The spokeswoman said Queensland has the lowest rate of duty on strata title insurance in Australia.

“Land tax in Queensland is 20 per cent lower than the national average and transfer duty (stamp duty) is 12 per cent below the national average,” she said.

Article printed by The Cairns Weekend Post - Saturday 9th February 2013

Peter Musso licensed real estate agent at Ray White Smithfield selling property in Cairns' beautiful northern beach suburbs including Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach, Caravonica, Kamerunga and surrounds.

The most important research resource for a property investor is the local council: Terry Ryder

ALL the successful investors I know have a common factor: commitment to research.

The best of them research continuously and copiously. They tune out media comment and tune into information. They end up making good choices about product and location.

But I suspect one factor many overlook is the most important research topic of all: the local council.

I would never buy in an area unless the local authority impressed me. The personality of the council leadership can be the difference between a region growing or stagnating.

I don’t mean pro-development. The Gold Coast has had a series of pro-developer regimes over the years, and it hasn’t done the real estate market a whole lot of good.

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I mean pro-community, pro-jobs and pro-prosperity. It’s not the same as being pro-development, nor does it mean being anti-heritage or anti-environment.

A council that’s forward-thinking and proactive in fostering a healthy business environment and a strong community ethic can do wonders for the local property market.

Cairns in north Queensland provides a current example. Twenty or so years ago Cairns was all the rage, driven by Japanese tourism and investment. When that waned, so did Cairns.

Townsville, once regarded as the poor relation of Cairns, overtook its northern rival and left it behind because it proactively and successfully generated a well-rounded economy with more than tourism in its arsenal.

Now Cairns is fighting back. The time is fast approaching when Cairns will be worthy of investor attention again.

Cairns Regional Council has offered to forego millions in revenue from developers to encourage business and local employment. The council is waiving fees and infrastructure charges, so long as developers use 80% local workers and suppliers, and finish their projects before the end of 2014.

It’s about generating economic activity and employment. That will translate, in time, to a stronger property market.

The councils that run the twin border cities of Albury (New South Wales) and Wodonga (Victoria) strike me as go-ahead as well. One current project is a plan to re-energise a rundown part of central Wodonga to create a new commercial heart. Around $26 million is being on infrastructure and renovation of features such as the railway station buildings, to attract businesses to invest in the area, with new retail, entertainment and commercial developments.

The general theme of Albury-Wodonga is one of growth and expansion.

The Goldfields town of Maryborough in Victoria has successfully re-invented and re-invigorated itself. Not so long ago the town was colloquially known as Scaryborough and had more than its share of issues. Local people with energy and good intentions decided to change it status and its image.

Much has changed. Maryborough has managed to combine a prosperous and expanding business community, particularly in manufacturing, with a particular emphasis on spotlighting the town’s many fine heritage buildings, including a railway station that put the legendary American author Mark Twain into raptures when he visited in 1895.

The town and the Central Goldfields Shire is going places and its median house saw double-digit growth in the past 12 months, while Melbourne down the road has been going backwards.

This factor, the energy and attitude of the local council, is one investors should not overlook. When I’m researching a location, I often call the mayor (the mobile phone number is usually on the council website). Most are happy to chat about their town or region and it’s helps to provide a feel about whether the location is moving forward or not.

Article written by Terry Ryder for PropertyObserver.com.au 

Thursday, 22 November 2012

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Peter Musso licensed real estate agent at Ray White Smithfield selling property in Cairns' beautiful northern beach suburbs including Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach, Caravonica, Kamerunga and surrounds.

Cairns Post - 'North fights for a fair go'

STRATA title insurance holders have stepped up their campaign against premiums in the residential market, highlighting insurance price hikes by companies across the board.

Property Ladder Realty director Linda Tuck claims insurance companies are now setting their sights on non-strata owners.

On the Beach Holiday Apartments - Trinity Beach

Mrs Tuck gave one example of a Cairns landlord who was forced to pay an extra $1150 to insure three units after the cost skyrocketed from $ 450 in 2011 to $1600 in 2012.

“Duplex insurance has doubled, house insurance has gone up, contents insurance has gone up, every bit of insurance everywhere in north Queensland has gone up,” she said.

“I think the only solution is a government insurance office, whether it be federal or state.

“It’s not just affecting Cairns, it’s affecting everywhere north of Rockhampton.” Federal member for Leichhardt Warren Entsch echoed Mrs Tuck’s concerns and said he would introduce a private member’s Bill into parliament demanding that companies that cannot offer affordable insurance in the Far North be banned from insuring anywhere else in Australia.

“The insurance market in northern Australia has failed absolutely, it’s gone way beyond strata title insurance,” Mr Entsch said.

“It is an absolute disgrace at the moment and insurers are doing nothing whatsoever to make it any easier.” Mr Entsch said while some aspects of commercial insurance were not “too grossly affected” by the price hikes, residential, B&B, landlord and rural insurance were not so lucky.

“I’m now getting examples where people can’t even get any strata insurance when, by law, they’re required to have it,” he said.

Mr Entsch dismissed excuses given by insurance providers that the Far North was a risky area to invest in given its recent history of natural disasters.

“We’ve had two events in bloody six years, it’s all bull, quite frankly,” he said.

“They’re still making record profits and in my view, they’re cherry picking.”

It is understood CGU subsidiary Strata Unit Underwriters is the only major strata title insurance provider left in the Far North.

Mrs Tuck said she held “no confidence” in a recent Federal Government inquiry into strata title insurance premiums, labelling the recommendations put forward, including the removal of stamp duty, as “nothing of any real significance”.

Article printed in The Cairns Post - 13th July 2012

Writer: Michael Serenc

Peter Musso licensed real estate agent at Ray White Cairns Beaches selling property in Cairns' beautiful northern beach suburbs including Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach, Caravonica and surrounds.

Solution Demanded to Stop Soaring Strata Insurance

The following article was posted in the Australian Property Investor addressing what has proved to be a real sticking point for buyers and sellers of strata-titled properties in North Queensland lately.

With only two (2) insurers remaining willing to cover the vast majority of apartment complexes in the Far North it is clear that the market for strata-titled insurance has failed and measures need to be taken in order to restore competitiveness to reduce costs to rate payers.

THE Queensland Government has until December 1 to announce how it will bring affordable insurance back to the north and far north Queensland region, according to Federal Member for Leichhardt Warren Entsch.

Thousands of unit owners in north and far north Queensland are becoming crippled by hiking strata insurance costs, as insurers blanket ban strata insurance coverage simply to minimise their exposure to cyclone-prone coastal areas, in many cases north of Mackay.

Unit owners are angry because on buildings valued at $5 million-plus they’re left with the choice of only two insurers – a duopoly – translating to escalating costs on what is a mandatory insurance obligation for body corporates.

The other insurers who’ve dropped like flies from the region have not considered each suburb and area on a case-by-case basis or even the structural integrity of a building and its ability to withstand a cyclone; or if a building has ever been damaged by a cyclone.

Entsch said since a public inquiry took place in late January, he’s heard many stories of insurance quotes that have skyrocketed.

“One letting agent in Cairns, Linda Tuck, reported that last year the cost of insurance for a two-bedroom, one‐bathroom duplex with a value of around $350,000 was $941,” said Entsch.

Federal Member for Leichhardt
Warren Entsch 

“This year, she was told that the insurer… had withdrawn from domestic property insurance for all locations above Mackay.

“With only two insurers willing to quote, the prices jumped to the ridiculous level of $4803… and $4439 with (the other two insurers).”

In his speech to parliament recently, Entsch made it clear the market had “clearly and totally failed”.

The Federal Government has until October 1 to complete the reviews recommended by the Standing Committee on Social Policy and Legal Affairs as tabled in its second In the Wake of Disasters report in March.

The government then has until December 1 to outline its solution on how to reduce the insurance costs for unit owners and make policies more competitive again.

View article source HERE

Peter Musso licensed real estate agent at Ray White Cairns Beaches selling property in Cairns' beautiful northern beach suburbs including Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach, Caravonica and surrounds.

2012 Valuer-General's Snapshot Report for QLD

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The Queensland State Department of Environment and Resource Management has published its 2012 land valuation report including commentary on key findings. A full copy of the 'Snapshot of the 2012 Valuation' can be found at the departments website HERE.

If anything the Cairns region has faired well in contrast to surrounding regions and proves that local markets continue to "bounce along the bottom of the overall market cycle". A summary of the Cairns region valuation statistics within the Snapshot report follows:

"The weak economy in the Cairns local government area continues to affect the property market. The key industries of tourism and construction are negatively impacted by the strong Australian dollar, a decline in employment, low levels of building activity and 

the severe weather conditions in 2011.

The residential and rural homesite market within the area has experienced historically low levels of sales activity.

Despite this, residential land values overall have 

reduced by just one per cent.

The exception to this trend is higher valued beachfront properties in the area extending from Port Douglas south to the Northern Beaches of Cairns and through to Brampton Beach where reductions in land values of 10 to 15 per cent have been common. Land values in the Gordonvale locality have also been reduced due to the high number of distressed vendor sales influencing the market. Residential land values within Port Douglas have generally stabilised following the declines of previous years.

Distressed sales are also prevalent in the commercial and multi-unit market sectors. The industrial market has softened, driven by decreasing financial returns. Land values in all three sectors have been reduced within the Cairns region."

Peter Musso licensed real estate agent at Ray White Cairns Beaches selling property in Cairns' beautiful northern beach suburbs including Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach, Caravonica and surrounds.

Keeping Momentum on Strata-Title Insurance Inquiry

A formal parliamentary report on insurance costs was recently submitted to the government detailing a series of recommendations in response to the inquiry meetings held throughout Far North Queensland. Very interesting was the final recommendation which calls for the government to "outline the plan of reforms it will undertake with the Queensland Government to establish a competitive and affordable insurance market for residential strata title insurance, with a focus on North Queensland..."

Insurers Face Fresh Scrutiny

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The Cairns Post - March 23rd 2012

THE pressure must stay on insurance companies and government if recommendations to address the spiralling costs of body corporate insurance are to have any chance of success, Far Northerners say.

Late Wednesday, the Federal Government’s Social Policy and Legal Affairs Committee released a series of recommendations in response to the inquiry that visited Cairns and Port Douglas in January.

Yesterday, chairman Grah-am Perrett said the committee had heard stories of "heartache, stress and despair".

Mr Perrett said a number of factors did not add up when looking at the increases, from the insurance industry’s claim reinsurance was to blame, to body corporate manager commissions, to the fact building codes had improved in the past 30 years yet a massive leap in premiums had taken place.

Leichhardt MP Warren Entsch, who pushed for the inquiry along with Cairns-based Queensland Senator Jan McLucas, said the recommendations "were not a silver bullet".

"I have been dealing with property owners who are struggling to keep their homes after being hit with strata title insurance increases of up to 1000 per cent," he said.

"Some people have had to borrow just to pay their insurance and if they’re faced with the same premiums next year, it’ll tip them over the edge."

Cairns Chamber of Commerce president Anthony Mirotsos said it was encouraging that the committee had put forward a substantive action plan with "tangible outcomes and deliverables".

"It puts insurance companies on notice that this is being investigated and we’re not just going to continue handing out cheques," he said.

Sue Chapman, manager of Verandahs Boutique Apartments at Port Douglas, said it was important to keep the pressure on.

"They’ve gone out and sourced information from a huge area, they’ve come to us, they’ve actioned it very quickly so now it’s absolutely vital that we keep the momentum going," she said.

Cairns unit owner Ian Jamieson saw nothing to alleviate the hardship people were facing.

"I can’t see the insurance companies reducing their prices so the crisis remains, it’s just bad news for investment in Cairns for people on fixed incomes."

Peter Musso licensed real estate agent at Ray White Cairns Beaches selling property in Cairns' beautiful northern beach suburbs including Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach, Caravonica and surrounds.

Strata Title Insurance Under Parliamentary Review

Cairns Post Article - January 13, 2012
'Call to Action in Cairns Over Strata Insurance'

THE chairman of a parliamentary committee looking into the increasing costs of strata title insurance in Far North Queensland is urging the industry to make as many submissions as possible before the deadline on Monday.

The committee is investigating reports that insurance costs for units and apartments have risen by up to 800 per cent after cyclone Yasi.

It will examine if the Federal Government should intervene.

Committee chairman Graham Perrett said he encouraged input from more people.

"We’re particularly interested in hearing from any law firms or people who run body corporate enterprises and there is the capacity because I know it’s a small market in Cairns, Townsville, Mackay, Port Douglas for people to put an inquiry in and we can make it as confidential as possible," he said.

Mr Perrett’s office said there had been 40 submissions but it was important to have more.

A spokesman said some of the industry groups and associations had yet to file submissions.

"It is important there are as many as possible so everyone is heard and that an impact is made," he said.

A spokeswoman for Archers Body Corporate Management said there was concern that if there were not enough submissions, the inquiry would not get an accurate picture of the situation.

After community forums in November, the Federal Government announced the Natural Disaster Insurance Review would be expanded to incorporate the issue of rising strata insurance premiums in the region.

Archers director Andrew Staehr said the inquiry was broad-ranging and asked for submissions from the public. "It is essential that unit owners have their say to ensure that the outcomes of the inquiry reflect the current price situation," he said.

Submissions in Word or PDF format can be sent to spla.reps@aph.gov.au and must include full contact details.

Public hearings are scheduled for Port Douglas on January 30 at the Community Hall, Mowbray St, from 9am-noon and in Cairns at the Sebel Hotel, 17 Abbott St, from 2.30pm-5.30pm.


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Peter Musso - Ray White Cairns Beaches - Real estate agent selling property in Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach

Major Town Centre at Cairns Beaches to Go Ahead

The State Government has approved plans to develop a new town centre at Smithfield, central to the northern beaches of Cairns.

The $500 million dollar plan will ultimately create 2,500 jobs with further jobs created from flow-on effects and provide a timely economic boost to the region.

Developer Steve Pellegrino said that the decision would be a catalyst for further growth along the northern beaches, including expansion of the James Cook University campus and major road and infrastructure upgrades.

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