Asbestos materials of various types were commonly used in Australian property construction between 1940 and 1990. Asbestos materials were embedded in wall cladding, roofs, gutters, drain pipes, vinyl flooring, electrical wiring thermal insulation, boilers, exhaust pipes, switchboards, thermal insulation and inside fire doors.

The new National Work Health and Safety Act of 2011 requires owners of buildings constructed before 2003 to conduct an asbestos survey. Where asbestos materials are identified, this triggers the mandatory requirement for an asbestos register and asbestos management plan (AMP). Some property owners appear to be unaware of this new obligation.

An asbestos register is necessary to track of asbestos materials remaining (or removed) in investment properties. Asbestos may also be located in inaccessible areas and unfortunately discovered during re-development with sometimes disastrous and costly results. Asbestos materials if disturbed can cross contaminate internal areas of the buildings, requiring evacuation, loss of rent and potential occupant litigation.

Asbestos removal is a legally notifiable project, which can result in extremely costly asbestos removal projects. Careful investigation during due diligence can forewarn investors, revealing the true cost of asbestos removal. Armed with detailed information and cost options, investors can then more accurately evaluate if they wish to proceed with the purchase or avoid the risk.

Australia’s economic growth is expected to pick up pace this year thanks to a lower exchange rate and stronger activity in the housing and retail sectors, according to the latest forecasts from the Reserve Bank of Australia. 

Investment in the mining and resources sector is forecast to peak some time this year and a pick up in the non-mining sectors of the economy is needed to maintain economic growth.

“Until recently, survey measure of current business conditions have been below average, consistent with subdued non-mining investment,” the RBA said in its quarterly statement on monetary policy.

“A number of indicators, however suggest a gradual increase in growth over time.”

“The depreciation of the exchange rate should provide some additional impetus to activity in the traded sectors of the economy,” the RBA said. 

The bank said that business conditions improved in the latter part of 2013.

“Retail sales and the Bank’s liaison point to a pick up in household consumption growth in the December quarter and measures of consumer sentiment remain a little above average levels,” the RBA said on Friday. 

While Sydney and Melbourne’s property markets may struggle to sustain their phenomenal recent growth rates, Brisbane is being tipped to benefit from its ample room for capital growth and rental yield potential.

Brisbane’s property market is showing signs of growth early this year, which is good news for buyers seeking a relatively affordable investment.

RP Data’s research director Tim Lawless suggested this week that while the “investment fundamentals” are waning in markets such as Sydney and Melbourne, investors might turn to Brisbane because it’s much earlier in the growth cycle. 

The stage that a property market is at in the growth cycle is influenced by the level of supply and demand. In Brisbane’s case, increasing demand could certainly see values climb above the current median of $462,000.

Throw in the city’s solid rental yields, which are hovering round the 5% mark and notably higher than averages in both Sydney and Melbourne, and there’s plenty of reasons for optimism.

The housing market is in the early stages of a solid cyclical upswing, buoyed by low interest rates, but it's not a bubble, ANZ Bank chief economist Warren Hogan says in a Committee for Economic Development of Australia report. "Our view is that prices remain largely explained by low interest rates, sharply improved affordability, the release of pent-up sales demand created over recent years and an unprecedented (and increasing) shortage of physical housing stock," Hogan writes. He says the majority of future price gains will be in Sydney, Perth and Melbourne, with investors driving the upturn in the market.

Leading agent John McGrath has forecasted that the strongest east coast market over the next three years was likely to be south-east Queensland.

If you have a capital loss it is carried forward until you make a capital gain. Other losses are treated differently. For example if your business or rental property loss pushes your current year income below zero, you are entitled to carry that loss forward into the next financial year, but first you must reduce it by any exempt income you have received, for example Centrelink family payments. Further, you cannot pick and choose when you offset the loss. It must be used up immediately. This can mean it is wasted. For example if you have a $10,000 carried forward loss but only have $15,000 in taxable income in the following year then the loss from the previous year must be used to reduce your taxable income down to $5,000. The loss is wasted because you would not have had to pay tax on the $15,000 anyway.

In interesting article I came across last week below.

Australian property prices in 2014 and beyond - a peek into the future

By Arek Drozda
Friday, 31 January 2014

In my previous article, 'Australian property prices explained', I presented a chart that provided very accurate narrative on what has happened in the Australian property market over the last three decades.  

It is safe to conclude that the same concept which allowed for the description of the past with such accuracy, should also be able to provide a reasonable guidance for the future.  

Of course, predicting exactly what will happen in 2014 and beyond is a tall order. Life is known to create such a variety of unanticipated scenarios that the reality will almost certainly play out differently to what everybody expects.  

Therefore, I prefer to think about the future in terms of a range of possible outcomes and likely probabilities of occurrence rather than as a single, definite result.  

The real benefit of such an approach is knowing how changes in economic conditions can potentially affect the outcome - not in picking the exact end result in advance.  

Since changes in some economic factors will have more profound effects than others, if you can identify in advance what are they, you can watch out for the tell-tale signs that a particular scenario is playing out – and act accordingly.  

You only need to be right about the direction property prices are heading to be able to benefit. Please consider what follows with caution - in the “what if” category, rather than a certainty.  

Based on the income capacity of working Australians, residential property in this country is not overpriced and prices are far from bubble territory.  The proof is in relative changes in the cost of buying over the last 27 years, which has been significantly below the relative changes in personal incomes over that time. Below is a slightly different representation of that information to highlight this point. 

By rearranging the data we can create a chart that shows how much more property prices could increase at present and still be considered affordable (in relation to current incomes and as benchmarked to 1986). 

The above chart indicates that current property prices are potentially undervalued by as much as 45%. Of course, this does not mean that prices will immediately move by this much but the potential for a substantial jump is there.  

Yet another perspective using the same underlying data reveals that conditions are now starting to resemble those in 2009. Although affordability in 2009 was not as extreme as in late 1990’s, it nevertheless led to a substantial price increase in 2010.

Therefore, as history shows, if interest rates remain mostly unchanged and incomes keep growing, we can anticipate a significant jump in property prices in coming years.  

The increase could either be a rapid advancement of 10-20%, or even 30%, in the next 12-24 months if the 'good times' perspective prevails or, if pessimism dominates, it could result in an even more substantial jump but in the more distant future.  

Of course, this scenario can only play out on the proviso that there are no unexpected shocks applied to the system, such as a major international conflict, another economic calamity in the region, another collapse of world financial system, or a major natural disaster – to mention a few obvious cases.  

In terms of further outlook, if the relationship between costs of buying, incomes, rents and prices hold in the future, and the current rate of income growth continues, then it can be estimated that from now to the end of 2023 property prices could grow by as much as 140% under a historically low interest rate scenario (i.e. 5% per annum), or as little as 20% under a high interest rate scenario (i.e. 10% per annum).  

Under a more probable scenario of slower growth in incomes and interest rates averaging 7% per annum over the next decade, prices can still be expected to grow by 60% in the next 10 years.  

A much gloomier future is also possible but the probability of this scenario is rather small at this point in time.  

That is, a 40% drop in property prices is possible in the next decade but it would take extreme economic conditions for this scenario to play out. In particular, mortgage rates would have to persist at close to 20% per annum for a good part of the decade and income growth would have to drop to 2% per annum to bring prices down by this much.  

In conclusion, the outlook for property prices in Australia is positive - unless of course the world encounters another economic disaster of a magnitude that is hard to even imagine.  

Some insist that the next big event is 'just around the corner' so, it would be wise to keep an eye for the tell-tale signs of possible troubles brewing somewhere in the world but there is no obvious reason to panic just yet.    

Arek Drozda is an independent analyst who has worked in the public and private sectors for over 20 years in business development, data analysis and in building geographic information systems.

The TD Securities – Melbourne Institute Monthly Inflation Gauge has risen 0.1% in January, in a significantly more benign result than the 0.7% rise in December.

In the 12 months to January the inflation gauge increased by 2.5%, following a 2.7% rise for the 12 months to December.

Seasonal adjustments leading to price rises in education, urban transport fares and utilities were offset by falls in the price of clothing and footwear, holiday travel and accommodation as well as books and stationery.

Prices for fuel, fruit and vegetables were relatively flat, according to the inflation measure.

Head of Asia-Pacific Research at TD Securities Annette Beacher said that the result is particularly noteworthy given January is traditionally a strong one for the gauge, which has risen on average by 0.4% for the month in the last seven years.  

The results come ahead of the Reserve Bank of Australia’s first board meeting for the year today, with Beacher predicting that the US Federal Reserve’s tapering schedule and recent emerging market concerns are likely to be significant talking points. 

Resources states Western Australia, Northern Territory and Queensland continue to lead the country. CommSec's quarterly State of the States report shows WA in front on retail spending but lagging on new housing construction. The Northern Territory is now the second strongest economy, backed by strong economic growth, construction work, retail trade, new housing and a substantial reduction in unemployment. Queensland led the way in terms of business investment and came in third strongest on economic growth, retail trade and construction, with a notable improvement in housing finance approvals.