The devaluation of currencies will put further pressure on emerging market economies, Columbia Threadneedle Investments has warned.The asset manager said recent activity on China should not be overplayed compared with more structural issues in other emerging markets, particularly given the raft of policy options left for the world’s second-largest economy.Other emerging markets, however, do not enjoy the same options.They have become policy takers and are at further risk of deflation, warned Jim Cielinski, the asset manager’s global head of fixed income. Speaking at a media conference, Cielinski said external debt defaults were the system by which ailing emerging economies pegged to the US dollar were punished.But in a floating currency regime, he said, foreign exchange had become the “relief valve” for investors.“If you could look at the magnitude of the currency moves, the relief valve is what is going on,” he said.“Emerging markets outside of China are in trouble. China has enough policy options to hold growth where it is, but it is important to realise emerging economies are policy takers.”Cielinski said emerging markets were paralysed by weakening currencies, as it ruled out the option of quantitative easing to boost internal demand.He said this also meant pressure on costs, as weaker currencies translated into higher import costs.However, Cielinski said this would be a deflationary environment as higher import costs resulted in real incomes falling, rather than being inflationary.“Most of the stress on the other [than China] emerging market economics will be exerted through the currencies,” he said, suggesting currency movements would highlight opportunities over default rates.“Everything in emerging markets has been for sale, indiscriminately. And this is where a lot of opportunities arise.”Cielinski added that investors would punish emerging markets until more structural reforms were tackled.“There is a huge amount of correlation across the market, as they are heterogeneous economies,” he said.“When you see tight correlation, it is a sign you’re in the latter stages of a sell off.”
Month: September 2020
“What we will see is higher volatility, and this can happen even in the Bund market.”But while liquidity is about risk, Blanqué argued it is also about opportunities, such as liquidity-orientated strategies.Long-term investors must ask themselves whether they need liquidity.“My feeling is, generally, the fund industry underestimates the liquidity risk,” he said.Blanqué said there was huge confusion between what was listed and liquid, too much focus on daily liquidity in the long-term investment space and an under-appreciation of the illiquidity premium.Carsten Stendevad, chief executive of Danish supplementary labour market pension fund ATP, had earlier told the conference the dramatic drop in sovereign bond market liquidity since 2002 had contributed to a radically changed investment environment.“This has had a profound effect on us,” he said, adding that shrinking liquidity had been a huge challenge for ATP.Stendevad outlined a range of strategic changes the pension fund has made to adjust, centred around increasing its investment flexibility.Antoni Canals, president of La Caixa pension fund in Spain, told the panel discussing strategy priorities for 2016 and beyond that his pension fund was taking steps in its long-term policy to have ever fewer investment-grade bonds and more illiquid assets.It takes this approach, he said, because it is a full defined contribution pension scheme, and liquidity is not a special issue.But Canals acknowledged the controversial phenomenon facing pension funds such as ATP of diminished bond market liquidity combined with the regulatory need to cover liabilities.“When one needs to hedge the liabilities, and regulation puts pressure in that way, maybe the whole concept is wrong,” Canals said.Olivier Rousseau, executive director at French national pension reserve fund Fonds de réserve pour les retraites (FRR), said pension funds had to be careful about the concept of chasing illiquid assets. “If you do it because you no longer get the returns you expect from safe bond investments, and you are chasing very long-duration infrastructure debt or real estate debt, then that can be another aspect of moving outside the natural habitat, and that can be very risky,” he said.The danger, he said, could come when the low-yield situation of sovereign bonds reverses.But he qualified the remark, saying he was just being cautious.“It remains that there is something very interesting in the illiquid space and particularly as a result of regulatory changes after the crisis,” he said.Meanwhile, Poul Winslow, head of thematic investing and external market portfolio management at the Canada Pension Plan Investment Board, said he shared many of the concerns about the lack of liquidity in bond markets but that his institution was focusing even more on illiquid investments.“The key for us, particularly in the coming years, is that we are changing to become even more long-term focused, and that will mean we increase our focus on illiquid investments even more,” he said.He said the investment board had a very long-term horizon, with payments not set to exceed contributions in the pension system until 2023.“We spend a lot of time with the board debating what does that really mean and how do we express that,” he said.“We have concluded that our risk appetite is even bigger than it has been in the past.”The CPPIB will now increase its exposure even more to equity-like risk.While an increase in public equity exposure will be part of this, Winslow said, the board will focus very much on private equity infrastructure and other illiquid assets. Pensions watchdogs are likely to increase their focus on the issue of liquidity within pension fund investment, taking steps to force the funds to demonstrate they are considering the implications of moves to less liquid instruments, a conference has heard.Speaking at the IPE Conference & Awards in Barcelona, Pascal Blanqué, chief executive and head of institutional business at asset manager Amundi, said: “We will see regulators more and more asking for proper liquidity policies, including a proper definition of liquidity starting with liquidity indicators, pricing policies and new relationships with counterparties.”This move towards change in liquidity polices will result from the shift in market structure seen in recent years, as banks have retreated from the market making while investors simultaneously frantically seek yield, he said.“This liquidity problem we have got on the table – on the one hand, we have an excess of macro liquidity (quantitative easing) and, at the same time, a deterioration in micro liquidity,” Blanqué said.
Largely as a result of the ‘slider’ reforms, net outflows from the funds to the state Social Insurance Institution (ZUS), exceed inflows. The slider was previously introduced as a payout phase reform to incrementally transfer the OFE savings of those with 10 or fewer years left before retirement to ZUS.According to the development ministry’s projections, this deficit is set to rise from PLN1.8bn (€406m) in 2016 to PLN4.6bn by 2025.According to the government’s timetable, of the PLN140bn accumulated in OFE schemes, PLN103bn would be transferred, as of 1 January 2018, to individual retirement accounts (IKEs), with each saver receiving the same amount, around PLN6,300, irrespective of how much they had saved thus far.Most Poles do not have an IKE, a vehicle offered by Polish pension fund companies, as well as insurance companies, banks, brokerages and investment fund companies.As of the end of 2015, just under 859,000 had been set up, compared with some 16.5m OFE accounts, including around 2.5m where members are continuing to contribute.The remaining PLN35bn that would subsequently move to FUS would consist of assets other than Polish equities, thus avoiding any charges of nationalisation.The third leg of the plan involves a new, employment savings system, Workers’ Capital Plans (PPKs), with employers and employees each contributing 2% of wages into the plans.If the participants add a further contribution, of 1% from employers and 2% from employees, a PPK would receive a “welcome sweetener” of PLN250,000.The development ministry estimates that the revised system would increase eventual pension payouts from an average third of the final salary to a half.Morawiecki did not explain how a transfer of funds from the second pillar to the third would improve the capital financing called for in his Responsible Development Plan announced in February.Morawiecki’s announcement followed on from a weekend beset by intensifying speculation over the future of the OFEs.On Saturday Jarosław Kaczyński, speaking after his unopposed re-election as leader of the ruling Law & Justice (PiS) party, said the government had to address the problem of OFE funds, which were losing value but could be used to fund projects that would benefit Polish households.Separately, Reuters reported that seven medium-sized WSE-listed companies in which OFEs held a high share were planning share buybacks as a defence against changes in the pensions system that could lead to their having the state as a significant stakeholder.Reuters named two companies, debt collector Kruk and property developer Robyg.Concern over a radical overhaul started in May following a report that the government planned to merge the OFEs into a single fund managed by state insurer PZU, a move that would have given the state significant voting rights in some of Poland’s major listed companies.In one of the first defensive responses, in June, the US fund Media Development Investment Fund bought an 8.3% voting share in Agora, the largest Polish listed publishing company.Agora’s flagship newspaper Gazeta Wyborcza is fiercely critical of the current government and has suffered the consequences with a loss of state institute advertising, as well as pressure on PZU’s pension fund to pull out. Poland’s pensions system is set for a dramatic overhaul that spells the end of the second-pillar (OFE) system.Mateusz Morawiecki, development minister and deputy premier, announced at a press conference today at the Warsaw Stock Exchange that the government plans to transfer three-quarters of the savings held in the OFEs to the third pillar, and the remainder to the Demographic Reserve Fund (FUS), the fund set up in 2002 to cover shortfalls in first-pillar payments.Morawiecki denied the plan represented a nationalisation of the system, describing it rather as a transfer of public funds to the Polish people themselves.The current OFE system, the government believes, is neither effective nor workable.
Credit: Hans BraxmeierIs the QE wave retreating from the shores of financial marketsEmerging markets rallied in 2016 and 2017, but 2018 saw a pronounced setback. Does this mean that the analogy is no longer valid?Understanding what happened in 2018 to EMD is critical to deciding whether emerging markets will seeing another rally lasting for several more years as markets ‘normalise’ following the QE distortion, or whether EMD is just an unattractive asset class for investors.In 2018, Dehn argues, there was a short-term blip in the ongoing normalisation process between emerging markets and developed markets. This blip, he says, was essentially caused by three policy mistakes by the US that drove the dollar up.First, the US congress approved tax cuts in December 2017 equivalent to 7% of GDP, at a time of full employment. Economically it made no sense, but it did produce a 4.2% GDP growth figure for the next quarter, in time for elections.Jay Powell, the Federal Reserve chairman then made what Dehn describes as a rookie mistake by declaring his intention to push for a series of rate hikes from April 2018, combined with quantitative tightening – which further pushed dup the dollar.Finally, US president Donald Trump stepped up his rhetoric – and actions – regarding a trade war with China, leading to reduced purchases of Chinese goods and therefore a reduced outflow of US dollars.These three steps are not sustainable. The Federal Reserve is now looking more dovish, and Trump is looking for trade agreements with China before the US slides into a recession.The key insight Dehn makes is that the unwinding of QE and the normalisation of relative asset valuations across the globe can be likened to the waters of the tsunami being driven by gravity back to the oceans. That force will, he argues, prove to be a dominating long-term factor favouring emerging markets over developed markets.Even Ashmore’s own US institutional client base – who must be relatively comfortable with EMD – reduced exposures following the crisis, from 6% of their portfolios to 2%. Yet EMD represents 22% of the $109trn global fixed income market, according to Ashmore. Can institutional investors move away from the risk on/risk off paradigm that has characterised emerging market investment to a more objective recognition of relative attractions? Someday that may be the case but, in the meantime, if Dehn’s analysis holds true, the retreating tsunami of QE-induced mis-valuations can only favour emerging markets. During 2010 to 2015, that led to three trades dominating – US equities, the US dollar, and European fixed income – as yields on sovereign debt dropped to negative levels. It also led to investors selling out of emerging market debt (EMD), equities and currencies.In the US, the Federal Reserve stopped expanding its balance sheet through QE in 2014, and began to raise interest rates at the end of 2015. This, as the analogy suggests, allowed the equivalent of gravity to act once again, in the form of the force of converging relative valuations as EMD began to look cheaper than developed market bonds. Devastating tsunamis caused by earthquakes can wreak destruction for considerable distances inland – but the waters do not stay inland because the force of gravity will always pull the waters back to the oceans.Ashmore’s global head of research Jan Dehn declares that the impact of tsunamis and the subsequent retreat of the water is an apt analogy for financial markets.He sees the earthquake and tsunami as the global financial crisis followed by central banks engaging in sustained quantitative easing (QE), which was the largest and most distortionary intervention ever made in financial markets.It resulted in central banks purchasing an estimated $15trn (€13trn) worth of bonds. As central banks only bought predominantly their own countries’ sovereign debt, along with a limited amount of corporate debt, it caused massive distortions in global asset allocation, favouring developed markets and working against emerging markets.
Source: Mass GeneralThe Healey Center for ALS at Massachusetts General HospitalTo read the digital edition of IPE’s latest magazine click here. “For the past 27 years Sean was my friend, mentor, and an inimitable leader, always exhibiting an indefatigable entrepreneurial spirit and unwavering dedication to friends, colleagues, and Affiliate partners,” he added. Sean Healey, a founding principal of Affiliated Managers Group (AMG) who went on to become its chief executive officer and then executive chair, has died after a battle with amyotrophic lateral sclerosis (ALS).Healey joined AMG in 1995 as executive vice president, leading the company as CEO from 2005 to 2018, when, upon being diagnosed with ALS, he stepped down from this role to become executive chair of the board.Shortly after AMG’s foundation, Healey spearheaded its initial public offering in 1997, with the firm’s assets under management since then growing from nearly $40bn to over $600bn (€535bn), spanning traditional and alternative asset classes and dozens of affiliates, including brands such as AQR, Artemis, Winton Capital, ValueAct, Tweedie Browne, Systematica and Pantheon.Jay Horgen, president and current CEO of AMG, said: “Sean transformed AMG from a nascent start-up into a leading global asset manager with an innovative partnership approach and unmatched track record of partnerships, providing solutions for independent, partner-owned investment firms from growth capital, to strategic support initiatives such as marketing and distribution, to succession planning – all while preserving their entrepreneurial spirit and culture. Sean Healey“His deep intellectual curiosity and creativity, delivered with a penetrating wit, were inspiring and created tremendous value for AMG stakeholders over the decades.”In addition to his role at AMG, Healey held a number of non-profit board positions, and in 2006 he received a presidential appointment to serve on the US president’s export council, the country’s main advisory committee on international trade.A centre for ALS at the Massachusetts General Hospital bears Healey’s and AMG’s name after they established it in November 2018, a few months after Healey was diagnosed with ALS.Patrick Ryan, chair of AMG’s board of directors, said: “When he was diagnosed with ALS, Sean did not miss a beat, channeling his leadership and entrepreneurial spirit into establishing The Sean M. Healey and AMG Center for ALS at Massachusetts General Hospital, which, typical of all of Sean’s work, has become an innovative force in medical treatment and is transforming therapeutic approaches for people affected by ALS.”
The Union, the alliance between the Christian Democratic Union CDU and the Bavarian Christian Social Union, CSU, proposes a standard product without a high burden of administrative costs, that can be finalised online, for example, and to simplify the structure of the system to receive the full contribution.“The ministry of finance evaluates these points, and we have also exchanged opinions with some providers that find the proposals essentially positive,” the MP added.He believes it is possible to build political support for a change, as different committees work in parliament to make the Riester-Rente more attractive, he said.The final report of the Rentenkommission, a panel with representatives of the governing parties CDU/CSU and SPD, and trade unions, conceded that the Riester-Rente supplementary system has stagnated in recent years.“There will be further discussions and hopefully improvements in the framework of the implementation of the points of the Rentenkommission,” he added.The pressure to review the Riester-Rente may rise following the latest data published by the Federal Ministry of Labour and Social Affairs.According to the ministry, the number of contracts of Riester pensions fell in Q1 2020 for all the products, a result never recorded since its introduction.Riester products saw an overall decline from 16.530m contracts last year to 16.478m in Q1 2020.Investment funds contracts also decreased from 3.313m in 2019 to 3.307m this year, and residential Riester contracts fell to 1.811m in Q1 2020 from 1.818m last year.“In this phase of low interest rates, that will last longer, the product is not fully attractive,” Brodesser said.“In this phase of low interest rates, that will last longer, the product is not fully attractive”Carsten Brodesser, member of the finance committee of the German Parliament and MP for the CDU/CSU groupA spokesperson of BVI, the German Investment Funds Association, told IPE that the Riester pension is a business that requires “intensive” advice.“One reason for the slight decline in the number of contracts of fund products in the first quarter of 2020 could be that many local bank branches were not open in the face of the coronavirus crisis and as a result it was not possible to conclude contracts for old-age provision,” he said.Another reason, the spokesperson added, could be that the public discussion on the further development of the Riester pension has unsettled some savers, who are currently waiting to sign a contract.Last November, the BVI submitted to the government a five-point plan to design a simple, standard product, available to everyone, including self-employed, with relaxed guarantees on total gross contributions, and a simplified procedure to grant bonuses.“There’s not much time left in this legislative period for a reform of subsidised pension provision,” the spokesperson said.For the BVI, the bureaucratic system of the Riester pension system has to be simplified, also to save product costs.“There are now discussions in politics about how the Riester pension can be improved. We are campaigning for a simplification of the Riester pension scheme – which offers special subsidies and tax incentives – and for significantly less complexity and bureaucracy,” he concluded.Looking for IPE’s latest magazine? Read the digital edition here. The German ministry of finance is working behind the scenes with insurance companies and banks to evaluate possible changes to the country’s the privately funded pension system, Riester-Rente, Carsten Brodesser, member of the finance committee of the German Parliament and member of parliament (MP) for the CDU/CSU group, told IPE.“The point is that the Riester-Rente stagnates for different reasons,” Brodesser said, adding that such stagnation creates the condition for the coalition parties to review the model’s weak points.To reform the third-pillar Riester private pension, introduced in 2002, state-subsidised with tax privileges, different approaches are on the table.“There are thoughts in the finance ministry to change it, but it is not clear which models are taken into consideration. We think that after the summer break discussions will pick up again,” he said.
Outlining the plans during a visit to Glasgow today, Thérèse Coffey, work and pensions secretary of state said the proposals were “one of the most significant steps to date in the UK’s progress on tackling climate change”.“We were the first major economy to commit to reaching net zero by 2050 – to deliver this we must start now, working with investors and others to achieve this ambitious target,” she added. The UK government has launched a consultation on proposals for mandatory climate risk-related governance and risk management by larger occupational pension schemes and certain other pension providers, and for this activity to be disclosed in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).The Department for Work and Pensions (DWP) said the proposals would ensure trustees were legally required to assess and report on the financial risks of climate change within their portfolios.Among the activities required would be calculating a carbon footprint and assessing how the value of the schemes’ assets or liabilities would be affected by different temperature rise scenarios.The DWP also said the consultation would “signal an intent” that schemes report on the extent to which their portfolios are aligned with the Paris Agreement, although it was holding off on including such a requirement in the current consultation in anticipation of better methodologies emerging to measure and report a portfolio’s so-called implied temperature rise. Thérèse Coffey, secretary of state for work and pensions“These measures will ensure pension schemes are in an ideal position to drive change to a sustainable, low carbon economy which will benefit everyone.”Mark Carney, UN special envoy for climate action and finance and the prime minister’s finance adviser for COP26, said: “By requiring pension schemes to report against the Taskforce’s recommendations, the occupational pensions of over 24 million UK citizens, representing over £1.3trn of investments, can be managed to mitigate the risks from climate change and seize the opportunities from an economy-wide transition to net zero.”About actionAt consultancy LCP, Claire Jones, partner and head of responsible investment, said trustees “shouldn’t be fooled by the words ‘governance’ and ‘reporting’ in this consultation”.“This consultation is about action. […] Fundamentally, it means that climate change can no longer be seen as a bolt-on to ESG considerations; it has to be a consideration that is integrated across all aspects of pension scheme management.” Simon Jones, head of responsible Investment at Hymans Robertson, made a similar point: “This continued focus on climate risk is welcome and we are particularly encouraged that this consultation looks beyond just disclosure to the underlying actions that trustees are expected to take in developing their approach,” he said. DWP’s plan is to use the largest UK workplace pension schemes – those with £5bn (€5.5bn) or more in assets and including all authorised master trusts – to set an industry standard by requiring these to publish climate risk disclosures by the end of 2022.Around 250 more schemes with £1bn in assets would then have to meet the same requirements in 2023, the DWP said.The move to require mandatory TCFD reporting by pension schemes has arguably been well-trailed.In July 2019 the government said it expected all listed companies and large asset owners to disclose in line with the TCFD recommendations by 2022, and the Pension Schemes Bill, which is before the House of Commons, includes powers to enact the measures outlined in the consultation. Meanwhile, an industry group has developed TCFD guidance for trustees of pension schemes, although this was on a non-statutory basis.Paris-alignment reporting tantalisesLCP’s Jones said the proposals would require a “a step-change” for many schemes.“Those expected to be within scope should review their climate approach against the proposed requirements and start addressing any gaps, particularly in relation to scenario analysis, metrics and targets,” she said.Carolyn Saunders, head of pensions and long-term savings at Pinsent Masons, said the the detailed regulations and statutory guidance being proposed would help trustees “by providing real focus and support that will empower them to drive the development of the data and tools needed for effective decision-making”.“Trustees can take confidence from the strong message that they should be addressing climate risk, even though climate risk analysis is not a perfect science,” she said. “In addition, the promise of a future consultation on Paris-alignment reporting and measuring the warming potential of a scheme’s portfolio raises the genuinely exciting prospect of identifying an easily-understood and consistent measure which will drive best-practice.”The consultation closes on 7 October. The proposals As outlined by the DWP, the proposals outlined in its consultation include:Schemes embedding the TCFD recommendations into their organisation, including on governance, strategy, risk management, metrics and targetsScheme scenario modelling to analyse the implications of a range of temperature scenarios for a scheme’s assets, to prompt strategic thinking about climate risks and opportunitiesA requirement to report the greenhouse gas emissions associated with portfoliosCompelling schemes to publish their report on a website and to notify pension scheme members via their annual benefit statement that the information has been published and where they can locate itSchemes providing The Pensions Regulator (TPR) with the web address of where they have published their TCFD report via the annual scheme return formAny complete failure to publish any TCFD report to be subject to a mandatory penalty imposed by TPR
Neil Doorley during his time on the road as a news reporter. Picture: Glenn Barnes.NEIL Doorley has spent a large chunk of his career as a television news reporter, most prominently for Channel 9, where he broke the disappearance of murdered Sunshine Coast schoolboy Daniel Morcombe.He lives in Brisbane with his wife, Kerry, and two of his three children.1. Where was your first home (that you bought)? How much was it? My first property was in Banyo — a three-bedroom, brick, low-set house, which I paid $117,000 for, but at the time interest rates were about 17 per cent!I picked that house because it was low maintenance, and I’d grown up in Wavell Heights and was close to my family and I was familiar with Brisbane’s northside.2. Where is your current home? Why did you pick that house/unit?Ashgrove. My wife and I chose this house for a number of factors. Firstly, it was close to Mt Coot-tha where I was working at the time; we’d initially wanted to send our son to Marist College, which is just around the corner; and it backs on to a park, which was — and remains — handy for the kids and pets.3. Describe your dream home and location in Queensland?More from newsParks and wildlife the new lust-haves post coronavirus13 hours agoNoosa’s best beachfront penthouse is about to hit the market13 hours agoThe North Coast, probably Caloundra … close to the water. My late grandmother lived at Caloundra, and I have great childhood memories of going to her place, and then to the beach. I’m still a frequent visitor, and just being there brings lovely thoughts flooding back.4. If money was no option, what would be your fantasy home and where? Villa in Capri? Chalet in the Swiss Alps?Zermatt in Switzerland. It’s a mountain resort, renowned for skiing and hiking — and for the fact it’s car-free! I travelled there in 1995 with my first wife, who at the time was pregnant with our daughter, and it was just wonderful. I remember getting off the train and being overwhelmed by its natural beauty. The town sits below the Matterhorn peak, and is filled with great shops and restaurants.
Yukari and Peter Clifford with their daughter Sasha, 8, in front of their house in Victoria St, Parramatta Park which is up for auction. PICTURE: STEWART MCLEANA FAMILY home is a long-term investment where a lifetime of memories are created.Finding a property with the right features, within a suitable Cairns suburb, can be worth the research in the long run.However it shouldn’t be left to the last minute, according to RE/MAX Real Estate Services Cairns senior sales associate, Ray Murphy.Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 1:08Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -1:08 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD540p540p360p360p270p270pAutoA, selectedAudio Trackdefault, selectedFullscreenThis is a modal window.Beginning of dialog window. Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenWhy spring is the selling season!01:09“There are suitable properties (for families) but there is a lot of competition because they’re not the only family looking to purchase that similar property,” Mr Murphy said.He said there was added competition in the Cairns market from southern families looking to relocate north.Yukari and Peter Clifford with their daughter Sasha, 8, in front of their house in Victoria St, Parramatta Park which is up for auction. PICTURE: STEWART MCLEAN“They want to try and be settled and have everything in place before Christmas because they’ve got work early January and school starts in January … so there’s a lot of activity happening right now.“People looking at moving to Cairns will be looking at the property market right now.”Mr Murphy said the psychology of spring made it a desirable period for homeowners to list their properties on the market.“A lot of people are thinking about selling because they’re doing their spring cleaning and tidying up the house anyway.REMAX real estate agent Ray Murphy in front of a Parramatta Park property that is going to auction PICTURE: ANNA ROGERSMore from newsCairns home ticks popular internet search terms2 days agoTen auction results from ‘active’ weekend in Cairns2 days ago“So people start thinking about moving and upgrading at this time as well.“It’s important when you’re selling your family home that you take all your family pictures down.“Other families are going to be looking at your family home and want to be able to envision their own personal life in that home,” he said.In the Cairns region the most in-demand “hubs” for family homes was either the northern beaches or the southside, according to REIQ Cairns zone chairman Tom Quaid.“If you’ve got a stronger budget you tend to be on the north.“So anywhere from Kanimbla, Brinsmead to Redlynch are probably your best suburbs in that you’ve got good proximity to schools and good proximity to shopping in the city and you’re not too far out, it’s a reasonable commute to the city.“With the northern beaches you either like them or you don’t with regards to the commute.”He said families on a tighter budget were aiming at settling down in suburbs such as Mount Sheridan, Bentley Park, Edmonton and Gordonvale.Mr Quaid said another factor for families to consider was school catchment zones.“If you can get into Freshwater, Edge Hill or Whitfield state schools, they’re all very popular.“Brinsmead and Redlynch have a lot of demand from a public and private school perspective.”
He said enquiries spiked 70 per cent during the seven days to Sunday compared to the previous week and were 130 per cent higher than the week before that.Nicola and Owain George were among Queensland families who were thrilled with HomeBuilder, having signed off on land at Stockland’s Baringa development, north of Brisbane.“We built our first home in Aura to get on the property ladder and get the foot in the door with the $20,000 souped up FHB three years ago,” she said. “This time we were just forging ahead and then this came out. It’s perfect timing. Our building contract comes out in a few weeks.” MORE: Why this Gold Coast home is going viral One of the nation’s largest residential developers, Stockland, was already seeing enquiries spike, with the firm’s GM Communities David Laner saying the stimulus was a trigger for locals especially.“The Scheme complements the Queensland Government’s First Home Owner’s Grant, meaning an eligible purchaser could save up to $40,000. At our Aura community on the Sunshine Coast, for example, this could see a $380,000, three bed, two bath, one car freestanding home cost the customer approximately $340,000, with the potential for further concessions for those eligible. We are expecting local enquiry to increase following the government’s announcement.” This Aura $380,000 three-bedroom, two-bathroom, single car garage home could now cost $340,000 with the HomeBuilder and First Home Owner grants.- with the potential for further concessions for those eligible.Among those on the hunt were previous buyers who had delayed purchases during COVID-19 and buyers spurred on purely by the HomeBuilder grant and other incentives, according to Oliver Hume chief operating officer Julian Coppini.“Regardless of where you live it is a great time to be a first homebuyer with a range of incentives that can save tens of thousands of dollars on the purchase of a new house and land package.” Mum with ‘ugliest house on the street’ reveals stunning renovation Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 0:45Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:45 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels540p540p360p360p270p270pAutoA, selectedAudio Tracken (Main), selectedFullscreenThis is a modal window.Beginning of dialog window. 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This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenWhat is the new HomeBuilder scheme?00:46The $25,000 HomeBuilder stimulus for anyone signing off on construction of a new property has sparked a land rush, with developers reporting a 70 per cent rise in enquiries.Developers are reporting a surge in interest in house and land packages off the back of last week’s announcement, with Queensland’s affordability a key driver. MORE: HomeBuilder grant a boost for Townsville’s building industry Owain and Nicola Parry-George with their daughters Evie 6, and Ffion 4 on their block at Nirimba where they will build their new house with a $25000 boost from the federal government thanks to the HomeBuilder Grant scheme. Picture: Lachie MillardShe said they had been paying extra on their first mortgage to build up equity for their dream home in Aura when the HomeBuilder grant was announced.“It’s a huge amount of difference, $25,000 means less lenders mortgage insurance if at all. It means we will be better off financially. We’re going from everything being a bit tight to a breath of fresh air really. We ‘re absolutely stoked, we’re so happy.”Oliver Hume took 156 reservations for land across Queensland and Victorian projects over the seven days to Sunday.“Enquiry also continues to grow with more than 1,500 people enquiring about property last week compared to 1,117 two weeks ago.”More from newsParks and wildlife the new lust-haves post coronavirus9 hours agoNoosa’s best beachfront penthouse is about to hit the market9 hours ago“The lifting of restrictions around visitors to display suites two weeks ago really kicked things off and the level of enquiry across all our projects has continued to grow since.”But he said the real test would be in the next few months “as buyers seek to finalise their finance”. The Freedom Caba project is the latest from Sherpa Property Group and included 17 approved residential lots just 700m from the famed Cabarita Beach, north of Byron Bay.The mood for land is strong even with more expensive plots, with a 17-lot residential estate at Cabarita, north of Byron Bay. selling out in one day when it went to market on Friday.It was a great sign for the market, according to Christie Leet, managing director of Sherpa Property Group who developed the Freedom Caba project that sold out.Prices started at $550,000 for the blocks.“We anticipated there would be strong demand, but to put every lot under contract in a single day is a phenomenal result,” Mr Leet said. “It gives us the confidence and momentum to push ahead with our other projects.”Civil works start later this year, with final completion and settlement of first lots in the first quarter of 2021, and first residents set to have completed homes by this time next year. FOLLOW SOPHIE FOSTER ON FACEBOOK