The key issue facing foreign purchasers – the credit market

Emma Elsworth and Yuan (Nathan) Xu of Nevett Ford Lawyers Melbourne recently returned from Beijing, China after meeting with various parties involved in Australian real estate.  In their numerous discussions with various stakeholders, the key issue was not:

• the Victorian Government's increase on 1 July 2016 of the foreign purchaser stamp duty surcharge from 3% to 7% on the purchase price of a property,

but

• the lack of tier 1 lenders in the marketplace advancing funds to foreign purchasers of Australian real estate.

The lack of financiers is the number one concern for foreign purchasers, selling agents, brokers, developers and other stakeholders involved in new Australian residential property.  At present, the National Australia Bank (NAB) is the only tier 1 lender loaning monies to foreign purchasers, and its lending requirements have been tightened.  If the NAB exit the market, then foreign purchasers will need to source funds from tier 2 lenders.  The concern is the strain this will place on tier 2 lenders and the current lack of such lenders in the marketplace for foreign purchasers.

Nevett Ford Lawyers Melbourne acts for numerous foreign purchasers and small developers.   The changes in the credit market currently occurring are likely to impact new developments not yet constructed, or under construction. 

If you would like to know more, please contact Peter Lumb, Emma Elsworth, Yuan (Nathan) Xu, Yao (Chloe) Chen or Jianwen Hu of our China Conveyancing and Property Development Team. 

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Owners Corporation - the importance of proxies

If you are a member of an owners’ corporation, it’s important to check that the parties who speak and vote at an annual general meeting, special general meeting or committee meeting are legally entitled to do so.  A lot owner must be “financial” (i.e. their owners corporation fees must have been paid in full) to vote at an owners corporation meeting. This is required by the law governing owners corporations in Victoria, being the Owners Corporation Act 2006 (Vic).

If a lot owner cannot attend a meeting (in person or by telephone) then they can appoint a proxy or representative to attend and vote on their behalf.  A proxy form must be completed by the lot owner naming the person appointed as proxy, and state what matters the proxy can speak on and how they must vote.  Often a lot owner will appoint the owners corporation manager or another lot owner to vote on their behalf.

However, a proxy form does not operate indefinitely.  It lasts for 12 months only and must be renewed annually to be valid.  A proxy granted to one person cannot be transferred to another person as a substitute proxy.

A prudent owners corporation manager or secretary will always check the proxy forms held by an owners corporation are current before allowing a proxy to vote.  This is important when a vote is required to pass a resolution (i.e. make a decision) at an owners corporation meeting.

Speak to us today is you need to know more about how appointing a proxy works.

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Buying real estate? Do your research first

 

Buying real estate? Do your research first

 

When considering the purchase of residential or commercial property, it’s critical you do your market research so you don’t pay too much.  We often suggest to prospective purchasers to subscribe to a property market research service, such as CoreLogic RP Data (www.corelogic.com.au) or Australian Property Monitors (www.apm.com.au) on a month to month basis, for a fee.

Knowing the market is important when bidding at an auction or making an offer to purchase in a private sale campaign.  A market research service can provide you with:


1.  comparative sales information;


2.  how long a property has been marketed (i.e. number of days on the market);


3.  details of the marketing campaign, including changes made to the campaign such as changes made to the price listed, etc.; and


4.  historical sales and rental prices.

Some mortgage brokers can provide you with a report for a particular property without you needing to pay a monthly subscription cost to access this information from a market research provider. Talk to our property team today if you would like to know more.

 

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