Page 2748 - Week 08 - Tuesday, 23 June 2009
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .
It appears that there is a direct relationship to property values by the reliance on the rates notice. Caps are in place to control rent issues which may arise in a “go-go” market where house price appreciation quickens. However, there is a direct link to affordability should a new owner acquire the property.
No mention of the global financial crisis. The third arrow point is:
Timing of revaluation would possibly detract from purchase or sale.
No mention of the global financial crisis. The fourth arrow point is:
Concentration risk may impair values within the subdivision. There may eventually be a propensity for a valuation firm to eventually base its valuation on the rates notice within the subdivision rather than fair value. This could ultimately distort fair value-normal market forces.
Not the global financial crisis. The fifth arrow point is:
Whilst we have not sought legal counsel there may be some issues concerning the ability for a funder to exercise their right should mortgagee in possession occur. It appears at first glance that initial recourse to mitigate losses may in fact lie with the land owner. This may then impact the funder’s severity. Furthermore subrogation may be effected in the right of recourse.
Not global financial crisis. The sixth arrow point is:
Saleability is untested.
Not global financial crisis. And the last arrow point is:
The cost of construction may not equal the value of the dwelling. Without the land component balancing out any negative equity issues realised in the value of the dwelling it is possible from the outset that the borrower may, in fact, have negative equity.
Not global financial crisis, as maintained by the Chief Minister and his office. So there we have the reasons why the country’s largest mortgage insurer would not back the land rent scheme. They said they would do it for OwnPlace but they would not do it for the land rent scheme.
It is interesting that, after almost four pages of text, there are two recommendations from the estimates committee, recommendation 39 and recommendation 40. When one goes to the government’s response, one should remember that at lunchtime, after the Treasurer had come down and tabled this report, the Chief Minister went out and did his own thing anyway. Let me read recommendation 39 and the response:
The Committee recommends that the Chief Minister prepare and table a full briefing for the Assembly, in the next sitting, on the progress of the Land Rent scheme, a timeline of what advice his office and department received, and a cross reference to information provided to the public, and to reveal the identity of lending institutions, if any, who have officially offered support for the scheme.
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .