Have just come back from 4 days in Darwin, a city which I admit I don’t know too much about.

Had a look at properties in Gunn and Durack (about 20km from Darwin CBD) in the $250k-$300k range (from 6 to 8 years old on smaller land 300m2 to 450m2). There was a lot of new land being opened up in the Gunn/Rosebery/Bakewell area and the newly constructed/partially constructed houses were mostly larger/flasher than the earlier built ones.

I also had a look at vacant waterfront land (950m2) with pontoon for yacht at Bayview. Owner asking 495k. Large houses being contructed on these lots. Only 10 minutes drive to Darwin CBD. Reminded me of the residential land I saw at Cullen Bay in 1996-a few houses/a lot of vacant waterfront. Cullen Bay is now completely developed and Darwin’s premier suburb.The Bayview and Cullen Bay waterfronts sits within a system of locks that minimises the effects of tides (which can be up to 8m).

Ajax

Michael,

where I live (near Bondi) and for my immigration business I get to read a lot of magazines aimed at Backpackers. TNT magazine comes to mind. One backpackers in Sydney city advertises “We know what you want” and contains an excerpt from a girl’s diary…Tuesday date with cool hairdresser (Steve) I met at bar something…., Weds…surfing lesson with Paul at Bondi …Thursday drinks with Mitch then…?

Then there is a magazine that’s pitched to British backpackers…British Balls (reports on soccer back home and has pictures of bikini clad backpackers and humorous captions-quite blatant “we’re here for a good time not a long time” theme and pegged at a fairly basic level). I don’t really like this magazine…nothing remotely sophisticated about it at all.

I think a sexual theme (and a slightly crude/basic theme at that) will sell….I also think it would ruffle some conservative Kiwi feathers which is also not necessarily a bad thing.

Ajax

Sydney Morning Herald 29 November 2004

http://www.smh.com.au/news/Redfern-plan/Revealed-how-Redfern-will-be-reborn/2004/11/28/1101577357198.html?oneclick=true

“The State Government has a $5 billion plan to redevelop Redfern and the surrounding suburbs that involves seizing control of Aboriginal housing on the Block and letting private developers take over two-thirds of the area’s public housing estates.

Under the 10-year plan, the Government will tear down the residential towers in Waterloo and privatise $540 million worth of public assets in a bid to double the area’s population to 40,000, create 20,000 new jobs and give the central business district room to expand.

In a major piece of social engineering, 20,000 new private renters and owners will be brought in to balance out the 7000 public housing tenants in the area, many of whom are poor, old and disabled.

The Herald’s investigations team has sighted details of the plans in cabinet documents dated October 2004.

The southerly expansion of the CBD into 340 hectares of Redfern, Eveleigh, Darlington and Waterloo will be overseen by the Redfern-Waterloo Authority, the establishment of which the Premier, Bob Carr, announced last month.

According to the papers, consultants have told the Government, which owns almost one- third of land in the area, that the redevelopment of the notorious Block would increase certain property values by 30 per cent.

“The NSW Government is the largest landholder in the … area. The estimated market value of developments in the area is approximately $5 billion,” the papers say.

“In order to maximise social and economic returns, the Government must be able to offer planning certainty to the market within a strategic planning framework.”

The papers contain masses of comprehensive costings from government departments advising on specific aspects of the project, right down to details on the possible political and legal risks. The papers describe the plan as a “a radical departure” from previous initiatives.

The Government rushed legislation to set up the Redfern-Waterloo Authority through the lower house 10 days ago and, according to the papers, expects the authority will be in place by January 1.

The authority will have powers to override local councils and heritage laws, to grant concessions to private developers, including the $34.5 million makeover of Redfern railway station, and to acquire land compulsorily.

Some of the sites earmarked for sale are Redfern police station, Redfern Public School and the Rachel Forster Hospital site.

Residents who now have only half the open space of other inner-city suburbs will have only a quarter of the space once the population is doubled, the papers reveal. The Government has been advised to provide additional transport to take these overcrowded residents to places like Bondi Beach.

The minister responsible for the authority, Frank Sartor, told Parliament this month he would “consult widely with the community and all levels of government when developing the plan” for the authority.

However, the public is still in the dark.

For instance, the Government has not revealed that the authority will take effective control of the Aboriginal Housing Company, which owns the Block and other homes in the area, and that help to refurbish the Block will come at a price.

According to the papers, the Aboriginal Housing Company, a registered charity, will be required to give the Government a 10-year lease over its land and impose stricter rent agreements. Tenants could be required, for instance, to be drug free. The papers warn that some members of the Aboriginal Housing Company may challenge the plan as “inequitable and oppressive”.

The Government has secretly audited the company and found it is in financial trouble, with debts of more than $1 million.

So sensitive is this audit that the October 2004 papers state it should be withheld from the parliamentary committee that investigated the death of the Redfern Aboriginal teenager Thomas “T. J.” Hickey, which caused riots in the suburb in February.

The papers say that in the absolute worst case, the Redfern-Waterloo Authority could compulsorily buy the Aboriginal Housing Company’s land and “then implement the long-term arrangements on that land for affordable housing for Aboriginal people”.

The papers even include a draft memorandum of understanding to be signed by Mr Carr and the chief executive officer of the Aboriginal Housing Company, Michael Mundine – although it is not known whether he is aware of all the details.

A spokeswoman for Mr Sartor said yesterday that there was no plan. She said a plan would be worked out once the authority was in place.”

Ajax

To write off Redfern as a good place to invest would be a big mistake.

I bought here (East Redfern) in 1993 for $165k now worth $500k+. NSW govt. to spend $5bn in next 10 years on this area demolishing old housing commission towers/joint venturing with private developers to build mixed public/private housing and constructing road tunnels. The Redfern-Waterloo authority headed by Frank Sartor (similar to Darling Harbour authority) has been established by Act of NSW parliament.The authority will have wide ranging powers and can circumvents local govt regulations and Heritage Act provisions.

I firmly believe Redfern will be the next Paddington, it will just take time.

Some peolpe don’t know the area very well and are blinded by stereotypes such as crime/social problems in certain areas).

Redfern runs from South Dowling Street in the east to close to Abercrombie street in the west. This is a huge area-not all houses are like what you can find in Everleigh Street. Have a drive down Kepos or Baptist Streets in East Redfern or Pitt Street or Great Buckingham Street and you’ll see what I mean. I wouldn’t drive down Everleigh Street though (unless you had a Humvee).

Ajax

Nervous Sheep Backpackers-NZ where the men are men and the sheep are nervous.

sis,

I’m also a little confused by your comment “but for many share traders/investors hedging is a great way of increasing your capital.”

If you hedge a position you give away some of the profit by paying a person a premium for their willingness to limit your losses. I can’t how this is necessarily a great way of increasing your capital.

Being on the other side of the transaction may be-i.e. writing the option. Bit like being an insurance company receiving premium income which is essentially earnt for each day that passes till expiry without a claim being made. Can all go horribly wrong too-as with GIO’s London office.

Ajax

Techa,

I’m interested if you’re willing to put the time into it. Am already using LOC funds to write put options for income but wish to mix my strategies.

Currently looking at a franked dividend strategy. I am not using margined funds (yet) though the potential leverage could be very large given LOC funds of say 200k and possible margin loans on a stock such as BHP of up to 75% (making total purchase of $800k in stock possible).

I also see that its possible to write call options using margined stock.

Cheers Ajax

Hi Greg,

in relation to your point 1

I can not see too many listed commercial trusts in Fin Review paying 12%. Deutsche Office Trust pays 7.56% (seems to be unfranked) Leveraged Equites permit 65% margin, Macquarie Office trust pays 8.4% (unfranked) Leveraged equities permit 70% margin. Commonwealth Property Office fund pays 7.73% (unfranked) Leveraged equities permits 70% margin.

The problem with this strategy is that dividends are only paid once or twice a year whereas you are incurring interest on the LOC and margin loan every day. Also the interest rates on margin loans (at least for Leveraged equities margin loans) are high at 8.15% pa variable. Not too sure why Peter Spann thinks this is a good strategy. Perhaps it was at one point in time when property trust div.yields were higher.

diwilson,

I have been in Forbes during a large flood (when I was a kid).Some areas of the town were under water (though not the main streets which are higher up). Where the swimming pool and park is was a raging torrent of water which had moved 2 residential blocks up Battey Street flooding some houses.

I walked out on the railway line from where the train station is. The water was about a foot below the train tracks (the tracks are raised above the surrounding low lying land by about 6-8 feet). A guy was rowing a boat across to the roof of his house. He beached the boat on the roof and collected the chickens that were stranded there. Will always remember that.

I see houses are quite cheap here. The town would be heavily affected by the fortunes of the surrounding farming community (whether there had been good rain for crops in recent seasons etc). It’s a big wheat area. Also sheep and cattle. The town has other drivers (I think it still benefits from Victoria to Queensland travellers on the Newell highway who stay overnight). Its got a heap of old pubs (22 or 23).It used to be a gold mining area, and there are still companies exploring for gold in surrounding areas.

Ajax