Personal insurance chief executive Mark Milliner said digital mapping, improved infrastructure and smarter planning would provide more equity among the community and negate the need for future disaster relief levies.

“We’ve got the perfect opportunity with these inquiries going on to make changes to what we do going forward, so that when disasters occur again, there’s less damage. It is important because we can manage premiums better,” he said.

“If we keep trying to future-proof areas that are at risk from disasters by working together with governments at all levels, then I think you can keep premiums at an affordable level.

“If we’re not careful and we go to a more broad, natural-disaster-type pool, you get lots of averaging occurring and I don’t think it’s fair on people.

“More importantly, the reality if you’re not careful, you end up with the whole community being slugged with extra taxes to help fund all these natural disaster pools.”

Suncorp is one of the only insurers to provide automatic flood cover.

Mr Milliner acknowledged the industry as a whole also needed to make improvements.

“We don’t smell of roses across the industry … obviously there’s some dissatisfaction out there with disclosure and lack of riverine flood cover, so you can’t say the industry has come up perfectly in that sense,” he said.

Suncorp, which is handling more than 50,000 claims in Queensland worth in excess of $1 billion in the wake of the floods and Cyclone Yasi, said its premiums would increase by an average 10 per cent but those who received considerable flood damage would pay more.

“It does vary depending on where people live,” he said.

“The reality is we should be pricing specifically and people who want to live in high risk areas should pay more for insurance.”

The insurer, which covers 40 per cent of the market, has assessed close to 95 per cent of affected homes, but Mr Milliner said it would take up to 18 months to complete the rebuild.

“The reality is we can’t do everybody at once, I can’t promise everybody we can get everything done tomorrow,” he said.

Mr Milliner said he was confident that reinsurance costs wouldn’t be too steep, despite the spate of natural disasters in Australia, Japan and New Zealand.

“Reinsurers profitability has broadly been strong and therefore whilst we’re in the middle of it here and it feels really bad, globally it’s not quite so bad,” he said.

“The reality is, our premium is going to go up a bit, but I don’t see any issues with us getting reinsurance. It’s important that we do because it protects our balance sheet and we don’t hold as much capital.”

Mr Milliner warned against the over-regulation of the industry.

“We are managing as a group over $3 billion in claims – we’ve got about a $7 billion premium pool but a lot of that gets paid back into the community every year because we pay claims,” he said.

“If governments start to change too much, then it will affect the economy.”

Insurance advisory business Jardine Lloyd Thompson yesterday warned “reinsurance cost increases for Australian risks are now very likely”.

“The number of large (reinsurers) globally is rather finite and none have avoided the recent loss activity,” JLT said in a report.

In a report, JLT also said the wild weather could affect government directives about zoning and building codes.

“Already we have seen evidence that certain damaged property cannot be rebuilt on the same part of the existing site,” JLT said.

“Compounding this is the potential that more stringent building codes could be introduced to ‘harden’ sites against natural perils.”

This demonstrated the need to have adequate cover “in place to address the extra costs of reinstatement following damage”, JLT said.

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Coorparoo is on Brisbane’s south-eastern side and has easy access to the city along either the Southeast Freeway or the Story Bridge.

The number of units in Coorparoo has risen sharply in recent years, owing to its close proximity to the City.

A very small part of Coorparoo is designated semi-industrial and commercial; however, this is a defined and isolated area not impinging on the residential zones of the suburb.

Coorparoo benefits from a train station only a few stops from the CBD, as well as a frequent Brisbane City Council bus service.

The suburb has a high proportion of medium density unit complexes and a strong rental market.

Around the elevated parts of the suburb, million dollar house sales have occurred in recent years.

There are private and state schools in the suburb.

Coorparoo’s shopping district includes a Coles Supermarket, chemist, bank and restaurants.

There are extensive small businesses, banks and retail outlets that serve the surrounding suburbs as well as Coorparoo.

Westfield Carindale is the closest large shopping centre and the Stones Corner retail fashion outlets are nearby on Logan Road.

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According to lender Rams Home Loans, data shows that almost half the sole home loan applications now came from women.

A shift had been seen in the past 18 months. Before then, about 70 per cent of home loan applications had been submitted by men, Rams said.

One woman entering the property market is Kate Beecroft, 24, who late last year purchased an older two-bedroom unit, which she has since renovated, in the south Sydney suburb of Cronulla for $330,000.

“I knew the longer I waited, the more prices would go up,” Ms Beecroft said. “I thought it would be a good opportunity to buy a unit as a starting point and use that to purchase a house further down the track.”

Ms Beecroft, who works for the Department of Families, Housing and Community Services, said she talked about buying a property with her boyfriend of two years, but he had not been ready to commit to a mortgage.

“It was something I wanted to do and that is why I decided to do it by myself,” she said.

Rams chief executive Melos Sulicich said those taking on the loans independently were not necessarily single, though some were newly single women involved in refinance deals.

Also, he said, the buying trend varied across states.

General manager of sales for McGrath Estate Agents Matt Lahood said inner city terraces and apartments with security parking, as well as beachside units, were popular with the female buyer.

“We have definitely seen in the last five years a segment in the marketplace of single career women,” he said.

Linda Fitzhardinge, who has run financial seminars for women called Prince Charming Isn’t Coming, said more women were now purchasing properties in their late 20s or early 30s whereas previously women had purchased after a divorce or when they thought it unlikely they would marry.

“There are a lot more women getting into investment property,” Ms Fitzhardinge said.

“They are now often making good money on their own and delaying that marriage thing, so getting into their own property is part of that cycle, and they feel very comfortable with property over shares.”

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The suburb contains many fine examples of renovated Queenslanders, colonials and post-war workers’ cottages.

Only eight kilometres from the Brisbane CBD, Camp Hill is elevated and overlooks the city.

It is conveniently located between the Carindale shopping centre and the Coorparoo retail precinct, providing residents with a variety of shopping choices.

A restaurant scene is also starting to emerge around Martha Street, which hosts some excellent suburban eateries.

For those commuters opting to leave the car at home, the north-western portion of Camp Hill is located in close proximity to the Norman Park railway station while the remainder is well-serviced by regular bus services to both the city and Carindale.

Once a working class area, Camp Hill has undergone considerable gentrification.

Source: REIQ

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Families make up the majority of residents and occupy a mix of residential acreage and some single unit dwellings on new estates.

More residential developments are planned for the future and it is expected that Burbank will continue to be one of Brisbane’s most expansive suburbs.

The spread-out nature of the suburb means that local amenities are accessed primarily by car.

Public transport in the area is difficult with no rail station and buses limited to the major arterial roads.

However, more frequent bus services to and from the city are available from nearby Capalaba Shopping Centre.

Burbank residents are also reasonably close to the Gateway Motorway, which makes the Gold and Sunshine Coasts readily accessible.

Capalaba Park Shopping Centre and Capalaba Central offer Burbank residents access to all the major supermarkets and retailers, as well as a cinema complex.

Although there are no schools in Burbank, families are well catered for with primary and secondary schools located in neighbouring suburbs.

Source: REIQ

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Borrowers unable to catch up on payments
Migrating into 90-plus days in arrears
Mortgage performance at record low
IF YOU have missed three monthly mortgage payments, expect a default notice in the mail any day now.

More people than ever are defaulting on their home loan repayments, according to credit ratings agency Fitch and the situation is expected to get even worse.

The agency has found borrowers who were behind late last year have been unable to catch up and are now reaching the critical three-month trigger point for defaults.

In its report The Dinkum Index Fitch found mortgage payments that were more than 90 days late increased a surprise 12.5 per cent in the past three months of 2010, compared with the previous quarter.

“Arrears unexpectedly increased, mainly as a result of more delinquent borrowers migrating into the 90-plus days arrears bucket,” says James Zanesi, associate director in Fitch’s structured finance team.

“Mortgage performance is also expected to have worsened in the first quarter of 2011, mainly because of the usual impact that the Christmas holiday spending has on first-quarter mortgage performance.

“The 25-basis-point interest rate rise in November and the Queensland floods and Cyclone Yasi might also have had an effect on the index.

“Nevertheless, arrears are still relatively low and while increasing mortgage rates normally translate into an increase in arrears, Australian borrowers have shown a strong capability to cope with higher mortgage payments in 2010.”

Resi Home Loans chief executive Lisa Montgomery says if the writing is on the wall for stressed-out borrowers, they should immediately speak with their lender and not wait until it’s too late.

“There is usually a really easy fix to mortgage stress,” Ms Montgomery says.

“You can look at going interest-only for a while to reduce the repayment, or consolidate other loans.

“But these strategies should only be used in the short term to prevent financial hardship.”

Ms Montgomery says there is no sign of increasing mortgage arrears at Resi. If anything, people are saving more than ever.

Personal finance expert and MyBudget founder Tammy May says many people fail to acknowledge if they are in financial stress.

“We are definitely seeing a lot of arrears. There’s no slowdown in our business but the mortgage is generally the highest priority, or whichever collector is harassing them the most,” Ms May says.

“Do a budget and work out what you can afford in terms of basic mortgage repayments.

“You don’t have to pay it in a lump sum but you don’t want a default notice after 90 days.

“If you continue to ignore the issue, you’ll get a letter of eviction, which is different for every lender and circumstance.

“I know it’s embarrassing to talk about getting into this situation. No one expects it.

“It throws people off balance but bite the bullet and be honest, ask for help, even if it is a friend or family member.”

Non-conforming low-doc loans usually have delinquency levels more than three times the rate of regular loans.

Loan Market chief operating officer Dean Rushton says self-employed people often apply for low-doc loans, which often have higher interest rates than full document loans and larger minimum deposits.

But he says low-doc loans have been harder to obtain since the global financial crisis and as a result of the new National Consumer Credit Protection laws.

“These people have felt the impact of interest rate rises last year, so they are hit with a double whammy if they also have a struggle to obtain finance,” Mr Rushton says.

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Young families buying new, brick veneer homes with double garages are driving property price growth in some of Brisbane’s best performing suburbs.

There is also no shortage of demand for properties in the city’s blue-chip suburbs, with Ascot and St Lucia topping the list of best performing areas in 2010, according to the Real Estate Institute of Queensland.

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List: The top 10

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The state’s property market was last year marred by the end of the boost to the first home buyer’s grant and a marked fall in interstate and overseas migration.

However young couples preparing to start a family discovered the arguably “forgotten” suburb of Doolandella, 17 kilometres south-west of the CBD.

Doolandella ranked fourth, behind Ascot, St Lucia and Pullenvale, in the top 10 best performing suburbs in 2010, as a result of its affordability and value for money.

The median house in the suburb increased more than 20 per cent from $357,000 to $431,000.

Doolandella was once characterised by acreage properties of untouched bushland, but Coulson Real Estate principal agent Brian MacDiarmid said the rural area had fast become home to new housing developments.

“The acreage properties are increasingly being bought up and replaced with housing developments,” he said.

Doolandella is nestled between the suburb of Inala and the master-planned estates of Forest Lake.

Brand new, four-bedroom, two-bathroom homes complete with a double lock-up garage are within reach of first home buyers with a young family, Mr MacDiarmid said.

“It’s really been a forgotten suburb,” he said. “But I believe it will really surprise people in the years to come. I believe it will perform over and above Forest Lake in the future.

“This is the place young couples can afford a brand new house with the room needed to raise a family.”

Mr MacDiarmid said Doolandella was in a sense an extension of Forest Lake without the uniformity of a master-planned community.

While there are no services such as schools or shopping centres in Doolandella itself, all amenities are a short distance away in Forest Lake.

On the opposite side of the Ipswich Motorway, Seventeen Mile Rocks was also among the best performers in 2010.

The median house price increased 16.7 per cent from $472,000 to $550,750, largely due to new developments in the Edenbrook and Verandah estates.

Bette McGuane, principal agent of Belle Property Centenary at Mount Ommaney, said first home buyers were attracted to the “sense of community” in the leafy location.

Like in Doolandella, housing developments were replacing acreage properties, Ms McGuane said.

“The three main housing estates here are attracting young families wanting a new, modern home on a decent size block with a pool, or room for a pool, as well as retirees wanting a low-set home,” she said.

More than 54 per cent of households in the area, located 14 kilometres from Brisbane CBD, are couples with young children, according to REIQ.

Brisbane’s traditional blue-chip suburb of Ascot topped the list of best performers in 2010, despite flunking in the previous year.

The median house price growth of 30.6 per cent – from $980,000 to $1.28 million – surprised prestige real estate agent Gail Havig.

She said her main clientele, mining executives, had delayed their property purchases since the announcement of the possible mining tax last year.

“Price growth in Ascot has been less than what is has been historically,” she said. “We had a wonderful resurgence in confidence in the high end of the market in the early part of 2010, until the announcement of the mining tax in May.”

She said elevated suburbs always see greater price growth than suburbs without either river or city views.

“It was the well-heeled southerners [from Sydney and Melbourne] moving to Brisbane in the early 1980s, who began investing in river and city views in Ascot and Hamilton,” she said.

“And that trend will never change.”

Ascot out-performed its neighbour Hamilton, although the two suburbs share a postcode. But Ms Havig said more expensive properties on Hamilton Hill had not come on the market in the past year, as in the previous one.

Hill-top houses in the suburbs of Camp Hill, in Brisbane’s inner-south, and Paddington, in the inner-west, also drove price growth last year.

The booming inner-city suburb of Woolloongabba and the bayside suburb of Manly completed the list of best performing suburbs.

Property analyst Michael Matusik told brisbanetimes.com.au that outside Brisbane’s exclusive riverfront areas, leafy, elevated suburbs would experience the greatest price growth.

Mr Matusik said potential buyers were looking to “future proof” their new home, “meaning that most don’t think prices will rise anytime soon, but they want to make sure that they won’t lose money if things go down the toilet”.

“For some this means being close to infrastructure, to others is means having three or more bedrooms, all with ensuites or having a large allotment,” he said.

“For those buying an apartment it might mean buying in a smaller complex, where there is less resale competition in the future.”

In Brisbane at the moment, he said, “the only common thread at present, is that [buyers] don’t want to buy in a floodable area”.

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The western side of Petrie Terrace was one of the first residential areas developed after Brisbane was settled. Approximately 300 houses, typically built on small lots, are located in this area. These properties have undergone significant renovation and the value of property in the Petrie Terrace precinct has grown substantially over the last few years.

To ensure this neighbourhood loses none of its historic character, the Brisbane City Council has a special control plan to ensure future developments are in accordance with existing residential and historic built environments.

While the older style housing is still attracting some buyers, it is the refurbishment of older buildings into apartments that has been attracting the most attention.

Inner city residential high-rise complexes were first developed during the late 1970s in the area bounded by Alice and Margaret Streets and included Club Lodge and The Gardens complex.

The catalyst for Brisbane City’s residential surge was the conversion of two previous commercial buildings into residential apartments during the mid 1990s. Newspaper House was transformed into the Manor Apartments and Perry House into the Royal Albert Apartments. Several other former commercial buildings have since been converted to residential use with most conversions taking place along Ann and Edwards Streets.

The demand for inner-city living has been reflected in the update, introduction and redesign of the Queen Street Mall, new supermarket facilities in the Myer Centre, and the opening of the new Roma Street Parklands.

Living in Brisbane City means residents are in walking distance to major retailers, business offices, churches, parklands and gardens, the Queensland University of Technology and all forms of public transport. Roma Street Rail Station also acts as a hub for intrastate and interstate coach and rail services.

Residents also have easy access to the Riverside Expressway leading onto the Southeast Motorway and the Gold Coast, the Victoria Bridge and Goodwill Pedestrian Bridge leading into South Brisbane and the Story Bridge leading into Kangaroo Point.

According to the 2001 Census there were 7,351 people living in the suburb with an average age of 37. Of all occupied private dwellings an average of 29% were either fully owned or being purchased; on average 55% were being rented.

Source: REIQ

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