QLD Cairns

Yeah I should do that

 

Who did you change to? To Elders, or from?

 

sorry Changed 'TO' Elders

 

Oops. I was supposed to call them back today.

None of QBE, youi, real, and maybe more will insure me. Apparent risk of 'inundation'.

I never looked into this when I bought it (young and naive).

Would you guys sell solely due to a ridiculous $5000/year premium? Yield otherwise about 4.5% (400 pw/350K owing/worth maybe 450K max). (Im on 47% tax bracket, so that helps, I guess).

 

Risk of inundation from where exactly in Edgehill? Has it suffered flooding previously? I'm suprised you can't get a better premium. I would try a broker or Elders or consider raising your excess. It would be a shame to sell due to excessive premiums but I can see that would impact your cash flow.
Do council maps indicate its at risk?
Hope you can find a way to work this out.

 

"Risk of inundation" in Edge Hill???

I'm on forefront of Yorkey's Knob Beach and still have insurance.... talk about inundation risk...!

 

Have you tried RACQ? I am in a red flood zone and the insurers you mentioned wouldn't even look at me. I have coverage with RACQ which has flood cover for ~$2600 p/a. Recently did a ring around too and that was cheapest by far with a decent policy.

 

Thanks guys.

No previous flooding, not on the flood map.

I presumed it was inundation from the sky.

Kinnon - thankyou, I will try RACQ. $5000/year is theft. I've made one claim in a decade, the house was trashed and I got a measly $1700.

 

Hi Everyone

I have 3 bits of news on the North Queensland market which I think you might like.

Firstly, Suncorp have introduced a radical new building insurance policy for the unit market! I was on the phone with them for almost 2 hours last week, getting quotes for investors on numerous properties, and am absolutely thrilled with the outcome. I ended up getting quotes on an existing strata property of mine and was blown away by the pricing difference.

Basically, the new policy is tailored at unit owners in North Queensland, whether the block is strata titled or not. My understanding is that the complex can be valued up to $5M and be up to 40 years old (if older it needs a structural engineer to make sure it is structurally sound). The policy no longer uses location to assess risk. Please read that line again. It's a breakthrough. Plus, you can go directly to Suncorp without needing to go through a broker. I was also advised that if you can get the body corp to agree, you can change a policy halfway through, and the existing insurer will reimburse the unused portion of the fee.

All these things are major changes. Previously we have had only Vero Longitude offering Strata insurance in North Queensland for buildings older than 1985, and insurance risk and premiums based heavily on post code. This was only available via brokers, who add their own commission, and if obtained by the body corp managers another commission was sometimes added on top. Most other insurers pulled out of the Strata market altogether after cyclone Yasi in 2011. As a result we saw insurances and associated body corp fees go through the roof, in some instances increasing by up to 1000%. For example, my unit in a complex of 5, built in Dec 1984, and not in a flood zone, went from under $2000 per annum for the building to its current $12000 per annum in a period of a year. This, sustained over the period of time since Yasi, has caused many owners to go broke.

This insurance crisis has had a huge impact on the unit market in North Queensland. If you look at the difference in growth rates of houses vs units it is quite obvious. Most investors have seen the unit market as a 'no go' zone, based on the huge associated body corp fees. Personally, I have been steering well clear of Strata.

Happily, this new policy is a game changer. My own new quote has now come in at under $2,000, down from $12,000, which turns a very negatively geared investment into a decent proposition. For the individual unit owners, this means a difference of over $2k each per annum.

The implications for the NQ unit market are far-reaching. In my view, units are now back on the agenda after being quite suppressed for several years, and I'm expecting to see prices move accordingly.

I don't think it will happen quickly though, as many people are not yet aware of these changes. When I spoke to the Body Corp appointed managers, they were completely unaware of any new policy, or even that you could potentially change a policy half way through an existing one. My conversation with a key sales agent in Cairns came up with the same result. There has also been very little in the media about it, so how are unit owners to know what options they have? Even though this policy was apparently released in April, only around 200 have signed up so far. The change in the market is likely to be more of a trickle effect as unit owners and body corps become aware of their options. For individual unit owners, you would need to get quotes, put it to your body corp and vote on it.

Also, some news on the housing insurance market. The federal government have released their promised website for the North Queensland market (aptly named http://nqhomeinsurance.gov.au) which gives a comparison of all insurance providers, policies and fees. I strongly suggest all NQ property owners check it out and make sure you are getting the best policy that suits your needs. I know that price isn't everything, but personally, I believe that if you are still paying over $3k for a standard 3 or 4 bedroom house (not located in a flood zone) you are probably paying too much.

The third bit of news was in the paper today: $8.15bn Aquis project back on agenda for Cairns after Fung signs deal: http://www.cairnspost.com.au/busine...-fung-signs-deal/story-fnjpusdv-1227533788224.

I don't know what others think, but I'm only seeing good news for Cairns (rose coloured glasses?).

Cheers

Jen
(p.s. The above is based entirely on my own observations, and not to be taken as specific advice. Always seek professional advice before making an investment decision)

 

Interesting. Would be good to see it go ahead.
"State Government officials and the Aquis development team will meet in about two weeks to finalise an IRD deadline timetable."

On a couple of other sites as well:
http://www.theaustralian.com.au/bus...ort-back-in-play/story-e6frg8zx-1227511688917
http://www.sbs.com.au/news/article/2015/09/19/8bn-cairns-casino-project-revived

 

I was with RACQ who 'were' the cheapest with flood cover and then i went to Elders for even cheaper.

 

Great post i know a lot of people will be interested to investigate this!

 

Thanks for that. Have sent a request to Elders this morning for a quote. Haven't had a proper read of the PDS yet, but they've got flood cover which is my number 1 need in insurance cover.

 

Jen: I passed on your information to our Strata Managers and have received the following reply:
Whilst Suncorp will insure up to $5M replacement cost, they work this out by including the catastrophe loading onto the replacement cost which in our case takes our Body Corp above the $5M. Also they will not insure buildings of more than 10 lots

Thanks anyway, it was certainly worth a try

 

Hi Chrispy
Are there more than 10 lots? If so, what a shame. But thanks for sharing for future reference for others.
Cheers
Jen

 

Jen. There are 20 units.

 

Also, worth noting that as of this year Cairns now has two universities, CQU and JCU, marketed towards international students and an expanding local population. Students have got to live somewhere.

 

http://www.cairnspost.com.au/busine...-start-next-year/story-fnjpusdv-1227562622316

Good to see. This place was a white elephant.

 

Off to Cairns today via Ingham and Innisfail, doing the tourist thing, getting some eats and checking out some op shops.
Will be interesting to see what's happening on the ground, seems to have been some more movement in certain areas recently.

 

You can't spell innisfail without FAIL!
The only good thing about that place is the road side banana stall next to the info centre! Can you post me some??