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Aug 21, 2023

Solar Power Lifestyle: From Sunlight to Savings

Solar power is becoming an increasingly popular choice for homeowners in Australia and New Zealand. According to the Clean Energy Regulator, Australia has the highest uptake of solar globally, with more than 2.68 million rooftop solar power systems installed as of December 31, 2020. This means that one in four homes in Australia has solar panels on their roof, and this number is growing rapidly. How much can it save? The benefits of adopting solar power are significant, including potential savings of up to $2,500 per year on energy bills. Additionally, solar power offers environmental benefits such as the reduction of greenhouse gas emissions and conservation of natural resources. Homeowners should consider factors such as location and shading when deciding whether solar power is suitable for their household. With the increasing market size of the solar panel installation industry in Australia and the growing solar energy market in New Zealand, solar power presents an attractive option for those looking to contribute to a sustainable future. The cost of installing solar panels is negligible when considering the long-term savings and environmental benefits. On average, solar panel installation can cost anywhere from $3,000 to $12,000. However, households can save up to $4,000 off the average solar system with the Government’s Small-scale Renewable Energy Scheme, which allows users to get paid for the electricity they produce. This scheme also helps households recover their system cost in around three years, add value to their home or investment property, and insulate themselves from rising energy costs. How does it work? A residential solar system works by directly converting sunlight into electricity, providing a cost-effective, low-maintenance, long-lasting and compact option for homeowners. Australia and New Zealand are leading the way in adopting solar power, with Australia having the highest adoption rate globally. According to the latest data from the Clean Energy Regulator, as of December 2021, over 3.5 million rooftop solar power systems have been installed in Australia, which equates to one in every three homes having solar panels on their roof. New Zealand is also seeing significant growth in solar power, with a 78% increase in installed solar capacity in 2020. The Clean Energy Regulator notes that Australia and New Zealand have some of the sunniest locations globally, making it an ideal location for solar power. Australia also leads the world in per capita photovoltaic capacity, with 591 watts per person, which is almost eight times the worldwide average. Advancements in science have made renewable energy cost-competitive with traditional power, allowing for a global transition to lower emissions and a cleaner future. Many Australian households are already achieving net-zero emissions, meaning they generate more energy than they consume annually. With the numerous benefits of solar power, it presents an excellent opportunity for homeowners in Australia and New Zealand to contribute to a sustainable future while also saving money on energy bills.

Why you should arrange a strata inspection report

Carrying out a due diligence on an apartment before you purchase, especially if you are choosing to use it for investment purposes is a wise expense to ensure that you are aware of any building concerns prior to making the final acquisition. A strata inspection report is useful. A strata inspection report will detail the history and the current state of the building including any information relating to both the residential and commercial aspects of the scheme. This report will outline the effectiveness of the management of the building. What exactly should a strata report contain? The financial status of the body corporate and building As an apartment owner, there are requirements to contribute toward strata levies which are allocated to maintain the building and common areas of the property. These levies will usually be allocated to items such as cleaning and gardening, any maintenance items and minor repairs that may need to be done. Should there be larger repairs and expenses, you may be asked to pay a special levy to contribute toward capital works if there are insufficient funds in savings to cover the costs. A healthy bank balance for a Body Corporate will mean that there is wiggle room should any capital works need to be carried out. It is also important to check that there is a Capital Works Fund included in the balance sheet and that this has a plan and funds for future work. Future building work and defects Check the report and ask questions around any defect work both historically and planned future events so that you are aware of the implications on future costs relating to capital work and on your future living conditions or those of tenants renting your investment. Should the tenant lose facilities during major renovations or defect work, this may also impact your income as you may be required to compensate the tenant or release them from lease obligations depending on the work to be done. Check off the by-laws A strata complex will have by-laws, which are a set of rules that are provided to all owners and tenants in relation to expectations of the building and common areas. The rules may include items like air conditioner use, washing on balconies, pets, noise, use of common areas, parking, visitors, smoking, renovations and short-term letting. Before you purchase, check these laws as they could impact your living expectations should one or more of the laws require a change to your lifestyle or needs. Outstanding disputes Disputes may have occurred between owner-occupiers or tenants and some may be ongoing. Minutes from committee meetings will outline any disputes and resolutions as well as upcoming tribunal matters should they progress. A good strata manager should be able to manage most disputes with the Body Corporate, any Property Managers and Tenants and be proactive around repairs and communication to resolve disputes before they escalate. When you are purchasing, ask our sales team for feedback on strata and they can provide you with further information on the key questions to ask or if you prefer, ask the questions for you. What to expect when buying an established apartment >>

Research: Australia and NZ industry comparison

Research into Australian and New Zealand investment themes for 2022 has unearthed several key findings. The study, conducted by real estate services provider JLL, summarises six major areas of interest for investors in both countries. These include a strong recovery in real estate volumes; investors preparing for higher interest rates; acquisitions should be viewed through an ESG (environmental, social, governance) lens. In this regard, Australia and New Zealand are world leaders in the design, construction and management of a real estate with strong environmental credentials. Social aspects should also be assessed in the acquisition process with greater consideration to stakeholders’ perceptions of the covenant, how real estate integrates with its neighbourhood and the requirements of a diverse workforce. Growth potential in healthcare assets, capital sources exploring opportunities in COVID-affected industries and the role urban logistics assets play in the supply chain were also under the spotlight in terms of major investment appeal. Research indicates the future looks bright Furthermore, the research found that the long-term economic and population growth outlook for Australia and New Zealand is positive. On the assessment of these macro variables, Australia and New Zealand are attractive relative to other mature economies. Furthermore, Australia (number 3) and New Zealand (number 6) are also ranked as two of the most transparent real estate markets in the world. The main limitation for offshore capital sources seeking to build a diversified portfolio of scale in Australia and New Zealand is the limited size of the investable universe. Gross domestic product disparity The research report emphasises that Australia’s GDP growth rate is expected to accelerate in 2022 (3.8 per cent) and 2023 (4.2 per cent) as the reactivation of overseas migration programs leads to stronger population growth as the economy and real estate markets benefit from the population-multiplier effect. These projections are at the lower end of analyst expectations with the Reserve Bank of Australia projecting the Australian economy could grow by five per cent in 2022. New Zealand did not experience the same short-term economic impacts of lockdowns over 2021 and the economy is projected to grow by 2.2 per cent per annum between 2021 and 2024. Key findings: investment trends and capital potential Several investors have extended their investment mandate to include exposure to real estate alternatives. JLL research saw strong investor interest in self-storage, child-care centres and health-related assets. One of the benchmark transactions in the self-storage sector was Blackstone acquiring the Fort Knox business (11 Melbourne-based self-storage assets) for $AU400 million. The report also found that several active investment mandates for data centres, life sciences and build-to-rent were unable to be satisfied due to limited product availability. Strong occupier demand for data centres in New Zealand has led to CDC developing two data centres – one in Hobsonville and another to the north of Auckland in Silverdale. Regional Infrastructure Report 2022 (Australia)

Real insights to assist your property knowledge

Solar Power Lifestyle: From Sunlight to Savings

Why you should arrange a strata inspection report

Research: Australia and NZ industry comparison