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Italian village offers $1 homes to Americans upset by US election results

An Italian village in Sardinia, Italy is offering one-euro homes to Americans seeking a new start following the results of the 2024 U.S election that saw Donald Trump being re-elected as president. Ollolai has long been trying to persuade outsiders to move in to revive the community after decades of depopulation. Now, it's selling dilapidated houses for as little as one euro — just over a US dollar or $AU1.60 — to entice Americans to move abroad. Following the November 5 outcome, they have launched a website aimed at potential American expats, offering cheap homes in hopes that those disappointed by the result and seeking a fresh start will snap up one of their empty properties. "Are you worned (sic) out by global politics? Looking to embrace a more balanced lifestyle while securing new opportunities?" the website read. "It's time to start building your European escape in the stunning paradise of Sardinia." Mayor Francesco Columbu told CNN that the website was specifically created to attract American voters in the wake of the presidential elections. The mayor loves the United States and is convinced Americans would be the best people to revive the community. "We just really want, and will focus on, Americans above all," he said. "We can't of course ban people from other countries to apply, but Americans will have a fast-track procedure. We are betting on them to help us revive the village, they are our winning card." The village is offering three tiers of accommodation: Free temporary homes to certain digital nomads, ($1.6) homes in need of renovations, and ready-to-occupy houses for prices up to $160,000. The mayor also set up a special team to guide interested buyers through every step of the process including finding contractors, builders and navigating required paperwork. "Of course, we can't specifically mention the name of one US president who just got elected, but we all know that he's the one from whom many Americans want to get away from now and leave the country," Columbo added. "We have specifically created this website now to meet US post-elections relocation needs. The first edition of our digital nomad scheme which launched last year was already solely for Americans." Photos and plans of available empty properties will soon be uploaded to the website. The website has since received nearly 38,000 requests for information on houses, with most of them coming from the United States In the past century, Ollolai's population has shrunk from 2,250 to 1,300 with only a handful of babies born each year. Over the last few years, this has dropped 1,150 residents. Image: Shutterstock

International Travel

Four ways to tell the designer fashion items worth investing in from the ones that aren’t

<a href="https://theconversation.com/profiles/naomi-braithwaite-156824">Naomi Braithwaite</a>, <a href="https://theconversation.com/institutions/nottingham-trent-university-1338">Nottingham Trent University</a> Whether it’s aspiring to the “quiet luxury” or <a href="https://theconversation.com/new-clean-girl-and-old-money-aesthetics-on-tiktok-make-the-same-old-link-between-hygiene-and-class-208566">“old money” looks</a> taking over TikTok, or cringing at the “<a href="https://theconversation.com/far-from-the-ludicrously-capacious-what-the-fashion-of-succession-tells-us-about-the-show-and-about-society-202744">ludicrously capacious bag</a>” scene in the last season of Succession, designer clothes and accessories have been a hot topic in 2023. But with continued sales growth in <a href="https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion">designer fashion</a>, and concerns about shopping more <a href="https://fashionunited.uk/news/retail/consumers-want-to-shop-sustainably-what-are-the-opportunities-for-brands/2022102465829">sustainably</a>, it’s worth considering investing your money in products that will last longer. Sales in luxury fashion have increased significantly since the pandemic. <a href="https://www.just-style.com/features/covid-two-years-on-expert-analysis-of-top-10-global-apparel-companies/?cf-view">Louis Vuitton</a>, for example, has increased its sales from 2019. And British luxury brand, Burberry, reported sales growth to be <a href="https://www.theguardian.com/business/2021/jul/16/burberry-sales-return-to-pre-pandemic-levels-as-younger-shoppers-splash-out">86% higher</a> in the year following the pandemic (though there has been <a href="https://news.sky.com/story/burberry-shares-take-10-hit-on-warning-of-slump-in-luxury-demand-13009401">another dip in sales</a> more recently). The <a href="https://www.limitlessmanufacturinggroup.com/blog/the-rise-of-athleisure-how-activewear-became-mainstream-fashion">rise of athleisure</a> in fashion and designer collaborations such as <a href="https://www.manoloblahnik.com/gb/the-latest/post/manolo-blahnik-for-birkenstock">Manolo Blahnik for Birkenstock</a>, <a href="https://www.gucci.com/uk/en_gb/st/capsule/adidas-gucci">Gucci x Adidas</a> and <a href="https://uk.burberry.com/c/collaborations-supreme-burberry/">Burberry x Supreme</a> have made luxury more available. But prices are still high, so how can you know whether a purchase will stand the test of time and become an investment piece or a fashion flop? Here are four key factors to consider when making a designer purchase. <h2>1. Resale value</h2> An expensive purchase price may not guarantee that your product will hold its value. A key factor to consider is what the resale value of your purchase will be, as this will indicate the item’s investment potential. A fashion investment piece tends to be a luxury product with a higher price ticket. Prices of luxury fashion have increased over the last decade. Chanel bags, for example, have <a href="https://www.forbes.com/sites/walterloeb/2022/02/21/luxury-brand-prices-rise-sharply--will-it-cut-demand/">almost doubled</a> in price. Chanel’s iconic medium flap bag has increased from <a href="https://luxecollectivefashion.com/blogs/communique/your-expert-guide-to-the-chanel-price-increases-2023">£7,550 in 2022 to £8,530 in 2023</a> and is considered to be one of the most covetable designs in the <a href="https://www.whowhatwear.co.uk/best-luxury-handbags-resale-value/slide2">resale market</a>. Similarly, Hermès’ famous Birkin and Kelly bag designs, renowned for their quality, are <a href="https://www.sothebys.com/en/articles/hermes-bag-review-2022-birkin-bag-and-hermes-kelly-bag-remain-most-popular">undoubtedly investment pieces</a>. Despite the high price ticket, <a href="https://www.whowhatwear.co.uk/birkin-bag-prices/slide2">Birkin bags are in demand</a>. They are the most collectable and classic of designer bags, with an average retail price of USD$10,000 (£8,237), <a href="https://www.scmp.com/lifestyle/fashion-beauty/article/3211640/why-hermes-birkin-bag-such-good-investment-according-experts-other-luxury-handbags-might-not-be">which can double in the resale market</a>. Luxury fashion <a href="https://www.pursebop.com/new-app-calculates-the-resale-value-of-designer-handbags/">resaler Vestiaire</a>, along with online marketplaces like eBay, are useful sources for researching and calculating what the value of your purchase will be in the resale market. While designer bags can hold their value post-purchase, <a href="https://www.yourmoney.com/investing/can-clothing-ever-be-considered-an-investment/">clothes can be less straightforward</a> and will depend on the other following factors. <h2>2. Quality and style</h2> A <a href="https://www.voguebusiness.com/fashion/marketing-at-scale-explaining-luxurys-new-brand-identifiers">2023 report</a> has stated that the overt use of logos in recent years, from brands such as <a href="https://www.surefront.com/blog/is-logomania-really-over">Balenciaga and Louis Vuitton</a>, has been replaced by an interest in quiet luxury. Quiet luxury means <a href="https://www.businessinsider.com/quiet-luxury-explained-which-brands-will-benefit-2023-4?r=US&IR=T">more simplistic, classic and timeless styling</a>. The focus on exquisite fabrics and design gives a sense of fashion that is not disposable and durable. A cashmere sweater from <a href="https://uk.loropiana.com/en/c/woman/knitwear">Lorna Piana</a> may cost over £1,700 but its quality and classic styling will ensure it’s an investment piece that transcends fashion trend cycle. Consideration of fabrics, styling and design aesthetic are all key in ensuring your fashion investment has longevity. <h2>3. Brand authenticity</h2> <a href="https://www.researchgate.net/publication/303917660_The_Role_of_Heritage_and_Authenticity_in_the_Value_Creation_of_Fashion_Brand">Heritage and authenticity</a> can secure the value of fashion purchases. Brands that have a strong heritage – that have been around and respected for a long time – are better investment pieces, <a href="https://wwd.com/fashion-news/designer-luxury/luxury-fashion-heritage-chanel-dior1234792018-1234792018/">particularly in the categories of watches, jewellery and handbags</a>. Rolex watches are renowned as investment pieces, with models that are most rare commanding the higher appreciation values. In the realm of clothing, Burberry’s iconic trench coat – which has remained largely untouched in design terms for over 100 years – has been reported to be a good wardrobe investment by <a href="https://www.vogue.co.uk/fashion/article/burberry-trench-coats">Vogue</a>. The trench’s timeless design, alongside its long history, has secured its place as an investment product. However, when it comes to making the purchase it is important to go with <a href="https://www.gentlemansgazette.com/burberry-trench-coat/">Burberry’s original design</a>, rather than the fashion-led versions whose value may diminish as seasonal trends move on. <h2>4. Product endorsement</h2> Celebrity endorsement is a popular brand strategy for increasing the value of fashion products. While it may drive sales, it is important to consider what effect it will have on investment quality. A recent example was when the British pop star <a href="https://www.imdb.com/name/nm4089170/">Harry Styles</a> wore the <a href="https://harpersbazaar.com.au/adidas-gucci-collaboration-collection/">luxe Adidas x Gucci Gazelle trainers</a>, during his 2023 tour, resulting in a <a href="https://www.sneakerfreaker.com/news/harry-styles-gucci-adidas-gazelle-samba-statistics?page=0">reported 100%</a> increase in sales of the trainer. While sneakers have previously had a bouyant <a href="https://www.fashionbeans.com/article/sneaker-reselling-guide/">resale market</a>, that is now <a href="https://www.voguebusiness.com/fashion/has-the-sneaker-bubble-finally-burst">declining</a>, raising questions as to whether they will continue to be positive investment pieces. Celebrities may create hype – but their endorsement does not always ensure the longevity of a product’s value. In 1999, <a href="https://hypebae.com/2018/10/dior-saddle-bag-history-john-galliano">Dior’s saddle bag</a> was featured on US TV series <a href="https://www.hbo.com/sex-and-the-city">Sex and the City</a>, securing its place as an <a href="https://garage.vice.com/en_us/article/mbxjmn/dior-saddle-bag-sex-in-the-city">iconic designer bag</a>. While this increased its value and desirability at the time, the bag eventually faded from view, until 2018, when Maria Grazia Chiuri, Dior’s current design director, relaunched it. This resulted in a frenzy of interest <a href="https://www.harpersbazaar.com/uk/fashion/a42118540/dior-saddle-bag/">in the original Galliano designs</a>. Endorsement creates hype and desirability, but occasionally it can also create a classic too. But this takes time, and it’s best to consider other factors including brand authenticity, quality and style when planning an investment purchase. Also, value does not always have to have a price attributed to it. In the world of designer fashion, it is important not to overlook the significance of the <a href="https://www.theguardian.com/fashion/2023/oct/13/fashion-thats-begging-for-love-designers-want-to-create-meaningful-stuff">emotional durability</a> of our purchases and how that can ensure an enduring value and longevity. <a href="https://theconversation.com/profiles/naomi-braithwaite-156824">Naomi Braithwaite</a>, Associate Professor in Fashion Marketing and Branding, <a href="https://theconversation.com/institutions/nottingham-trent-university-1338">Nottingham Trent University</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/four-ways-to-tell-the-designer-fashion-items-worth-investing-in-from-the-ones-that-arent-215831">original article</a>.

Beauty & Style

Jessica Alba surprises dad by buying his childhood home

Jessica Alba has spent the past three years working towards buying her parents a house, but not just any house, she bought her father's childhood home. She took to Instagram to make the announcement, with a teaser video of her special home-renovation project. "Almost three years ago, I started the project of my dreams… I surprised my parents by buying them a house!!" she began. "Now, it wasn't just any house – it was extra sentimental as it was my grandparent's house that my father grew up in," she continued. "After my grandfather passed away, my parents were planning on selling the house in order to pay for my grandmother's medical bills. Well… I pretended like I was going to help them flip it before selling when in reality, I had planned to buy it for them all along." <blockquote class="instagram-media" style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" data-instgrm-captioned="" data-instgrm-permalink="https://www.instagram.com/reel/C_TWEyhPyy_/?utm_source=ig_embed&utm_campaign=loading" data-instgrm-version="14"> <div style="padding: 16px;"> <div style="display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"> </div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"> </div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"> </div> </div> </div> <div style="padding: 19% 0;"> </div> <div style="display: block; height: 50px; margin: 0 auto 12px; width: 50px;"> </div> <div style="padding-top: 8px;"> <div style="color: #3897f0; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: 550; line-height: 18px;">View this post on Instagram</div> </div> <div style="padding: 12.5% 0;"> </div> <div style="display: flex; flex-direction: row; margin-bottom: 14px; align-items: center;"> <div> <div style="background-color: #f4f4f4; border-radius: 50%; height: 12.5px; width: 12.5px; transform: translateX(0px) translateY(7px);"> </div> <div style="background-color: #f4f4f4; height: 12.5px; transform: rotate(-45deg) translateX(3px) translateY(1px); width: 12.5px; flex-grow: 0; margin-right: 14px; margin-left: 2px;"> </div> <div style="background-color: #f4f4f4; border-radius: 50%; height: 12.5px; width: 12.5px; transform: translateX(9px) translateY(-18px);"> </div> </div> <div style="margin-left: 8px;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 20px; width: 20px;"> </div> <div style="width: 0; height: 0; border-top: 2px solid transparent; border-left: 6px solid #f4f4f4; border-bottom: 2px solid transparent; transform: translateX(16px) translateY(-4px) rotate(30deg);"> </div> </div> <div style="margin-left: auto;"> <div style="width: 0px; border-top: 8px solid #F4F4F4; border-right: 8px solid transparent; transform: translateY(16px);"> </div> <div style="background-color: #f4f4f4; flex-grow: 0; height: 12px; width: 16px; transform: translateY(-4px);"> </div> <div style="width: 0; height: 0; border-top: 8px solid #F4F4F4; border-left: 8px solid transparent; transform: translateY(-4px) translateX(8px);"> </div> </div> </div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center; margin-bottom: 24px;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 224px;"> </div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 144px;"> </div> </div> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;"><a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none;" href="https://www.instagram.com/reel/C_TWEyhPyy_/?utm_source=ig_embed&utm_campaign=loading" target="_blank" rel="noopener">A post shared by Jessica Alba (@jessicaalba)</a> </div> </blockquote> She published the first part of her renovation series on YouTube and in it explained the sentimental value of the house and how it was a symbol for her father, who was an immigrant from Mexico, that "he had made it". Her family initially planned to sell it to ease some of their financial burden, as her grandmother required "24/7 care" but Alba wanted to keep the house in the family and so her plan began. "Instead of it giving to a stranger, I wanted to keep this home in our family," she said in the YouTube series. The moment Alba surprised her parents was also captured in the video, with her father brought to tears as he was overcome with emotion. "That's so sweet Jessica. That's a big surprise," he said while embracing his daughter. "I'm very proud of you." Images: Instagram

Money & Banking

Thinking of dabbling in investing? Expert’s 7 things to consider before investing a cent

Investing can be seen as both an art and a science, requiring a blend of patience, knowledge and strategy. It’s also crucial to understand the trade-off between risk and return, coupled with your time horizon. This means you do not invest in a vacuum, and each part of the investing world will impact another. Get your financial situation strong before you commit money to investing. This could be clearing consumer debt (credit cards, personal loans, buy-now-pay-later), funding your emergency fund or even setting up a spending plan so you know exactly how much you have free to invest. What else do you need to consider? <ol> <li>Your ‘why’</li> </ol> What is money to you? What do you believe about money? Why are you investing to start with? These questions must have an answer before you commit money to your investing account. If you’re unsure and want to build wealth with money you don’t need now, that’s also okay, but you need to have some conscious thought about your ‘why’ and your goals, as this is the basis of any strategy that you develop. <ol start="2"> <li>Your mindset</li> </ol> Do you have your own personal conviction about your investing, money and even life? Your mindset around investing and money needs to be rock solid, so when you hear someone tell you to do something because they do it, you don’t change a thing because your situation is set up correctly for you! This also helps if you’re part of online forums, listening to podcasts or reading investing books. Your mindset needs to be so firm that you can pick hype vs substance when it comes to investing and other opportunities. Just because everyone is doing it, does not mean it’s a good thing for you to do. <ol start="3"> <li>Setting your strategy</li> </ol> An effective investment strategy is personalised and aligned with your financial goals, risk tolerance and investment horizon. Whether you’re saving for retirement, a child’s education or building wealth, your strategy should dictate how you allocate your assets across different investment vehicles. It may be considered essential to have a balanced mix of shares (or ETFs), bonds (or fixed interest) and other assets to mitigate risk. Regularly reviewing and adjusting your portfolio to stay aligned with your goals is also a crucial part of your strategy. Your strategy will help you stay the course if things get rough out there and your emotions are tempted to take over! This goes hand-in-hand with having a sound mindset. <ol start="4"> <li>Ownership structure</li> </ol> Understanding the best ownership structure for your wealth building and investments can have significant implications for taxes, estate planning and asset protection. Options include individual or joint accounts, superannuation, investment bonds, trusts and companies. Each has its advantages and considerations, particularly concerning tax efficiency and control over the assets. Before you pull the trigger with significant wealth (for example, if you were to receive an inheritance), seek professional advice around the ownership of your investment vehicle. This will help you determine the most advantageous structure for your situation. <ol start="5"> <li>Broad-based index funds</li> </ol> Broad-based index funds are foundational to a well-rounded investment portfolio. These funds track the performance of a specific index, such as the ASX 200, S&P 500 or thematic indexes and provide investors with diversified exposure to a wide array of companies. The beauty of index funds lies in their simplicity and effectiveness. They offer a low-cost way to invest in the stock market, reducing the risk associated with picking individual companies. Over the long term, index funds have historically provided solid returns, making them an excellent choice for both novice and experienced investors. <ol start="6"> <li>Valuing and investing in individual companies</li> </ol> For those inclined to take a more hands-on approach with their investing or just to keep the interest alive, valuing single companies is a critical skill. This involves analysing a company's financial health, market position and growth prospects. Key metrics such as the price-to-earnings (P/E) ratio, earnings growth and dividend yield can provide valuable insights. However, it’s important to remember that ‘stock picking’ requires research, a deep understanding of market cycles and a higher tolerance for risk. Your goal may be to identify undervalued companies that have the potential for significant growth. A note to remember is to have your own guardrails in your life and make it part of your investment constitution that you will not have more than, say, 10 per cent of your portfolio allocated to individual companies. <ol start="7"> <li>Advanced concepts, trading and speculation</li> </ol> The key with advanced concepts, alternative/speculative asset classes, day trading and options trading is again to have solid guardrails in place. Be engaged and dialled in to your investing; however, you need to understand that the best thing you can do for your future wealth is buy and hold good, broad-based indexes for the long term. We love doing advanced strategies and some wild stuff, but we have strong guardrails because these strategies may flush you if you’re not careful, and you don’t want your whole portfolio allocated to such endeavours! Edited extract from The quick start guide to investing: Learn how to invest simpler, smarter & sooner by Glen James & Nick Bradley (Wiley $32.95), available at all leading retailers. Disclaimer: Any information here is general in nature and has been prepared without considering your personal goals, financial situation, or needs. Because of this, before acting on the general advice, you should consider its appropriateness, having regard to your unique situation. You should obtain and review the Product Disclosure Statement (PDS) and Target Market Determination (TMD) relevant to the product before making any financial product decisions. It's also strongly encouraged to seek the advice of a professional financial adviser. Image credits: Shutterstock

Money & Banking

Airbnb launches real-life "Up" house - and it actually floats!

Airbnb is taking its latest listing to the sky - literally. The accommodation provider has announced a partnership that will see the iconic house from Pixar's hit film Up being lifted into the air, balloons and all. In their ongoing quest to redefine hospitality, Airbnb has launched a permanent category called “Icons,” which features partnerships with brands and celebrities that promise unforgettable experiences. Suspended over the New Mexico desert with the aid of a crane, the property looks like an exact replica of the home and contains adorable easter eggs from the film - including the Adventure Book. “Icons take you inside worlds that only existed in your imagination — until now,” Airbnb CEO and co-founder Brian Chesky said in a statement. “As life becomes increasingly digital, we’re focused on bringing more magic into the real world … we’ve created the most extraordinary experiences on Earth." The house offers a stunning view of the desert, which you can enjoy while sitting on replica's of Ellie and Carl's chairs or have breakfast with a view in the kitchen. Alternatively, you could look at the stars while sitting on the front porch - but don't look down because the adventure is out there. Of course there are questions about the logistics of the stay, including plumbing and electricity, but the accommodation giant has assured that the house is “fully functional,” connected to generators and utilities that will be seamlessly managed before and after its flight. Other fantastical listings include a replica of the mansion from the “X-Men ’97” cartoon, a stay at the Ferrari Museum in Italy, and Prince's house that was featured in the legendary film Purple Rain. Check out the <a href="https://www.airbnb.com.au/rooms/1126185893236246260?_set_bev_on_new_domain=1715826165_M2NkZDdkODdhMjcy&source_impression_id=p3_1715826166_A20M4770EGAtl8AV&modal=PHOTO_TOUR_SCROLLABLE" target="_blank" rel="noopener">Up</a> listing here, be warned the sweet listing may make you shed a tear or two. Images: Airbnb

Real Estate

Becoming a landlord while still renting? ‘Rentvesting’ promises a foot on the property ladder, but watch your step

<a href="https://theconversation.com/profiles/james-graham-1264059">James Graham</a>, <a href="https://theconversation.com/institutions/university-of-sydney-841">University of Sydney</a> As home ownership moves further out of reach for many Australians, “rentvesting” is being touted as a lifesaver. Rentvesting is the practice of renting one property to live in yourself, while simultaneously purchasing an investment property somewhere cheaper and leasing it out. Ideally, “rentvestors” get to enjoy the capital gains on an investment property while living where they actually want to live, allowing them to cash in and upsize to their dream home later. It might seem like a savvy way to game the property market. But what are the risks of such an investment strategy? And how might broad adoption of this behaviour affect housing affordability in Australia? <h2>A rising tide lifts all boats differently</h2> The aim of the rentvesting game is to buy cheap property now, ride the expected capital gains, and move into a more desirable home down the track. The hope is that by climbing the first rung of the property ladder early, the whole thing won’t be pulled up out of reach. The first problem with this strategy, however, is that capital gains on housing are not always and everywhere equal. Generally, the cheapest properties available to rentvestors will be houses in the regions or apartments in the city. But both regional housing and apartment properties <a href="https://www.abc.net.au/news/2024-02-20/house-apartment-price-gap-widens-record-high-property-market/103484076">tend to appreciate more slowly</a> than the inner-city houses rentvestors might hope to live in one day. They might get a foot on the property ladder, but the rungs themselves are slowly drifting apart. Would-be rentvestors should also be aware that investments by “out-of-town” buyers tend to generate <a href="https://academic.oup.com/rfs/article-abstract/29/2/486/1902789">much lower returns</a> – both capital gains and rental yields – than investments by locals. Out-of-towners don’t know the local market trends, don’t know which neighbourhoods to avoid, and aren’t able to monitor their investments as effectively from afar. Avoiding the regions by investing in city apartments presents its own difficulties. Large, unexpected maintenance bills and poor strata management are <a href="https://www.abc.net.au/news/2024-03-21/a-world-of-hidden-charges:-strata-company-insiders/103617944">common complaints</a>. <h2>Different costs lead to different returns</h2> Perhaps the potential rentvestor should invest in something more straightforward instead, like stocks. After all, the return on equities in Australia has <a href="https://academic.oup.com/qje/article/134/3/1225/5435538">outperformed housing</a> in recent decades. However, it is much easier to borrow to invest in property than it is to borrow to invest in the stock market. And leverage is the investor’s secret weapon. For example, if house prices were to appreciate at 10% per year, then using a mortgage and a A$100,000 deposit on a $1 million property would earn you a 100% return on equity before costs. But while both investors and homeowners would earn that same basic return, their costs could be very different. For starters, property investors face capital gains tax on the proceeds of property sales, <a href="https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/eligibility-for-main-residence-exemption">unlike those selling their primary residence</a>. Banks also typically charge <a href="https://www.rba.gov.au/chart-pack/interest-rates.html">higher interest rates</a> on mortgages to investors than to homeowners. At times, the Australian Prudential Regulation Authority has also imposed caps on bank lending against investment properties, making it more difficult to find mortgage financing in the first place. Highly leveraged properties require mortgage insurance, too. Investors may need to take out larger insurance policies against the properties themselves, reflecting the higher risks associated with investment properties. Then, you also have to throw in property management fees, council rates, strata management fees and regular and unexpected maintenance costs. <h2>Negative gearing offers little benefit</h2> What about negative gearing? Property investors that generate losses on their property can deduct these costs against the tax bill on their other income. But negative gearing disproportionately benefits high-income earners with large tax bills. The <a href="https://www.abs.gov.au/statistics/labour/earnings-and-working-conditions/personal-income-australia/latest-release">median Australian individual income</a> is around $55,00, which generates a tax bill of about $8,000 – not a lot from which investment property losses can be deducted. The bigger picture is that while negative gearing helps defray the regular costs of managing a property, it doesn’t do anything to change expected capital gains. At the end of the spreadsheet tally, an investment property could end up earning rentvestors significantly less than they could have gained by simply buying their first home. <h2>Effects on housing affordability</h2> Rentvesting is new enough that its prevalence and influence awaits formal academic study. But economists might speculate about its implications for the housing market more broadly. The simplest analysis suggests that a rentvestor occupies one rental property while supplying an additional rental property to the market. If, instead, they had bought a home, they would vacate a rental property while removing another property from the market. In this case, even rentvesting en masse would have zero net effect on the housing market. But a more nuanced perspective might consider where rentvestors are renting and where they are investing. Perhaps they are most likely to rent properties in the already-crowded inner city, but purchase investment properties in regional areas where other first home buyers would like to live. This would increase demand for rentals in the city and reduce the supply of owner-occupier properties in the regions, worsening the affordability of both. Of course, if these rentvestors all eventually move up the property ladder – selling in the region and purchasing in the city – this effect would be reversed. From that longer-term perspective, rentvestors would ultimately have little effect. <h2>We still need more houses</h2> Rentvesting is not a panacea for Australia’s housing market woes. Potential investors should weigh the benefits of property investment against its substantial costs and risks. Additionally, they need to carefully consider the obvious alternative: simply buying their first home up-front. We have good reason to be wary of yet another get-rich-quick scheme involving the housing market. But initial considerations suggest that for the market overall, rentvestor behaviour is no worse than someone simply buying their first home, which we would otherwise encourage. Rather than criticising those seeking a way though our housing market morass, we might instead redouble our efforts to increase the supply of housing.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/229116/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/james-graham-1264059">James Graham</a>, Lecturer in Economics, <a href="https://theconversation.com/institutions/university-of-sydney-841">University of Sydney</a> Image credits: Getty Images This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/becoming-a-landlord-while-still-renting-rentvesting-promises-a-foot-on-the-property-ladder-but-watch-your-step-229116">original article</a>.

Money & Banking

World's most expensive house up for sale

A French chateau, once owned by a member of the Rothschild family and, later on, the King of Morocco, has gone up for sale with a £363 million (AU$699) price tag. Chateau d’Armainvilliers located at Seine-et-Marne, 48km east of the Eiffel Tower, is the world's most expensive home. Built upon the foundations of a 12th century castle, the sprawling mansion boasts 1,000 hectares of land, 100 rooms across 2,500 square metres of living space, a private lake, and plenty of sequoia trees - the largest trees in the world. Ignace Meuwissen, a self-acclaimed "real estate advisor to the global elite" described the property as a display of "opulence and grandeur". "It is the most expensive castle in France and perhaps in the world. The price of €425million is justified by the property itself but also by the 1,000 hectare land which offers numerous possibilities," he told Paris Match magazine. "An investor could build thousands of apartments there if he wanted." The chateau was first bought by the Rothschild banking empird in the late 19th century, before King Hassan II of Morocco bought it in the 1980s. He then made the chateau more fit for a king, adding a hammam spa, a beauty and hairdressing salon, and a fully-equipped medical and dental facility. The Moroccan King also added a basement level, which has a network of tunnels, kitchens, cold rooms, storage spaces and staff quarters. The lucky owner will also find Moroccan mosaics and wall tiles decorating the home, and for any avid equestrians, the home also has a stable big enough for 50 horses. However, some luxury property agents have expressed their doubts on whether the property would sell with its nine-figure sum, with one saying it was an "unrealistic" price tag. "It doesn’t make sense, it’s absurd Properties of this type could sell for 20-25 million, or even 30 million if we really fall in love with them. I’m not even sure that Vaux-le-Vicomte (a Baroque French château), which has no marketing plans, would sell at this price," one agent told French real estate publication Le Figaro Immobilier. Others were unsure whether the changes made by the King in the 1980s would suit modern tastes. Images: Whisper Auctions

Real Estate

Property tycoon sentenced to death over $27 billion fraud

A Vietnamese billionaire was sentenced to death on Thursday in one of the biggest corruption cases in history, an estimated $27 billion in damages - a figure equivalent to six percent of the country’s 2023 GDP. Truong My Lan, chair of major developer Van Thinh Phat, was found guilty of embezzlement, after looting from one of the country's biggest banks, Saigon Commercial Bank (SCB) for over a decade. “The defendant’s actions... eroded people’s trust in the leadership of the (Communist) Party and state,” the verdict read at the trial in Ho Chi Minh City. After a five-week trial, 85 others were also charged for their involvement in the fraud, with charges ranging from from bribery and abuse of power to appropriation and violations of banking law. Four were given life imprisonment, while others received jail terms ranging between 20 years and three years suspended. Lan's husband was Hong Kong billionaire Eric Chu Nap Kee, was sentenced to nine years in prison. Lan and the others were arrested as part of a national corruption crackdown. Lan was initially believed to have embezzled $12.5 billion, but on Thursday prosecutors have said that the total damages caused by the fraud now amounted to $27 billion. The property tycoon was convicted of taking out $44bn in loans from the bank, according to the BBC, with prosecutors saying that $27 billion of this may never be recovered. The court ordered Lan to to pay almost the entire damages sum in compensation. It is also <a href="https://www.bbc.com/news/world-asia-68778636" target="_blank" rel="noopener">reported</a> that she is one of very few women in Vietnam to be sentenced to death for a white collar crime. “In my desperation, I thought of death,” Lan said in her final remarks to the court, according to state media. “I am so angry that I was stupid enough to get involved in this very fierce business environment -- the banking sector -- which I have little knowledge of.” Police have identified around 42,000 victims of the scam, and many of them were unhappy with the verdict. One 67-year-old Hanoi resident told the AFP that she had hoped Lan would receive a life sentence so she could fully witness the devastating impact of her actions. “Many people worked hard to deposit money into the bank, but now she’s received the death sentence and that’s it for her,” they said. “She can’t see the suffering of the people.” The resident has so far been unable to retrieve the $120,000 she invested with SCB. Police have said that many of the victims are SCB bondholders, who cannot withdraw their money and have not received interest or principal payments since Lan’s arrest. Authorities have also reportedly seized over 1000 properties belonging to Lan. Image: Twitter

Legal

Is Valentine’s Day worth the romantic investment? Here’s what we can learn from economics

<a href="https://theconversation.com/profiles/selma-wather-1510222">Selma Wather</a>, <a href="https://theconversation.com/institutions/university-of-sussex-1218">University of Sussex</a> Expressing affection can be expensive. Spending on heart-shaped gifts, romantic cards, chocolates and flowers (other gifts are available) to celebrate Valentine’s Day has reached <a href="https://www.statista.com/statistics/510981/valentines-day-total-spending-great-britain/#:%7E:text=In%20the%20United%20Kingdom%20%28UK%29%20alone%2C%20Valentine%E2%80%99s%20Day,increased%20by%20just%20over%20300%20million%20British%20pounds.">close to £1 billion</a> in the UK. So the value of Valentine’s to retailers seems clear enough. But just how valuable is the annual ritual to consumers? What return can you expect for the money you invest in that bouquet of roses or candle lit meal? Broadly speaking, and depending on your relationship status, buying into Valentine’s Day traditions suggests two possible scenarios. You might be sending a card or gift to a potential partner to inform them of your interest; or you might be giving something to your current partner to remind them of your continuing love. Research suggests that both options have intrinsic economic value. For those seeking to express interest, sending a card is like dipping your toe into what economists might refer to as the “marriage market” – the search for someone you like, who likes what you have to offer in return. This search can happen smoothly, with plenty of information about your potential match, or it can be paved with obstacles, where you may not know much about who is available, and <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1703310">learning about potential partners</a> takes time. So suppose you are searching for a partner, and comprehensive information about potential matches is not freely available. What do you do? One option might be to put all your hopes into meeting someone on your daily journey to work. You pray that one day, just like in the movies, you will simply bump into “the one”. A second option might be to focus your search on single work colleagues, or people you know socially, and send Valentine’s Day cards to those you are attracted to. The option with the highest chance of success is the second one. You are using reliable information – knowledge of who is single. And sending a card to them can provide them with important information about you – that you’re also single, and that you’re interested. This is why research suggests that sending a Valentine’s Day card can be a <a href="https://www.jstor.org/stable/2938374?origin=crossref">logical investment</a> of time and money. <h2>‘Match quality’</h2> Fast forward five years or so and imagine you are happily married to the recipient of one of those cards. Is it worth repeating the gesture now that you’re settled down together? Economists think of marriages or partnerships as having an inherent “<a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1468-2354.2006.00385.x">match quality</a>”, which reflects how good (or bad) your relationship is – and the likelihood of you breaking up. If match quality falls below the level of happiness you might expect to have if you were to leave, a <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2759255">separation may well follow</a>. But many studies also show that <a href="https://www.jstor.org/stable/2535409">match quality is malleable</a> – that it can change, for better and indeed for worse, over time. You can invest in trying to improve match quality in various ways. It might be starting a family, sharing hobbies and interests, or gestures such as cooking a special meal or exchanging gifts on the 14th day of February. Improving your match quality <a href="https://www.researchgate.net/publication/228431914_How_Does_the_Change_of_Marriage_Quality_Affect_Divorce_Decisions">directly reduces the probability</a> of a separation. Then there’s the question of commitment – the willingness to stay in a relationship rather than walking away. And again, gestures can make a difference. Imagine you have just started a new job, and your employer asks you to complete an intensive training session in your free time, for a skill that would only be useful for that particular role. If you expect to hold the job for a long period, you might happily invest your time. But if your employer is struggling financially and redundancy is on the cards, you are much less likely to agree to perform the task. Relationships work in a similar way. People are more prepared to invest in things like having children or buying a house together if they expect the relationship to last. Given that commitment is not guaranteed by a marriage certificate, people <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=950688">need to find other ways</a> to signal their continued devotion. Celebrating Valentine’s Day is one way of making such a signal. It can show faith in your shared commitment, signify that you wish to continue investing in the relationship and improve match quality, further stabilising the partnership. So even if deep down you think that Valentine’s Day has become over commercialised and meaningless, research suggests it makes good economic sense to send that card.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/223128/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/selma-wather-1510222">Selma Wather</a>, Senior Lecturer in Economics, <a href="https://theconversation.com/institutions/university-of-sussex-1218">University of Sussex</a> Image credits: Getty Images This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/is-valentines-day-worth-the-romantic-investment-heres-what-we-can-learn-from-economics-223128">original article</a>.

Money & Banking

Outrage after renters confronted with cleaning “scoring system”

An Australian real estate agent has come under fire for their “demoralising” scoring system for tenants during routine inspections. One fired up renter said they were shocked to receive a scorecard from the agent after they complied with an inspection, and shared their feedback on Reddit. The scorecard rated the tenant’s efforts cleaning the property in 17 different rooms and areas, marking them on cleanliness, and if the areas were damaged or required maintenance. The renter was then also given an overall rating out of five stars, based on the upkeep of their rental home. The Reddit user showed that they received just three and half stars, despite being marked down in only one area due to a light globe not working. In their post, the tenant said they had made every effort to clean the home, adding that the rating was “demoralising”. “I’ve been renting a long time, and my deep cleaning routine is based around inspections,” they explained. “I go all out - every room in my little 3x2 villa is given a spring clean, every surface is washed including walls, doors, lights, windows, carpets etc.” “Had my latest inspection a few weeks ago and just received the report. Despite the agent commenting once again that she never sees houses as clean as mine, and taking 112 (!) photos of every single thing that shows how great the condition of the house is - having one light globe not working is so terrible that I’m scored three and a half out of five.” The renter went on to say that they had only recently discovered that the broken light globe was the real estate’s responsibility to replace, and does not warrant such a severe marking down in their “score”. “The globe in question is a downlight fitting. We have so many downlights that I don’t even use this particular one,” they continued. “I can’t replace the globe itself, I need to get into the roof to replace the whole unit. Thanks to people here I’ve learned this isn’t even my responsibility to fix!” The renter’s post sparked a huge outrage online, with many up in arms over the current state of the rental market and unrealistic expectations of estate agents. One person said, “I fully believe that the average renter keeps a home to a higher standard than an owner, and it seems deliberately demoralising that someone could be marked down for having a light out.” Another added, “This is ridiculously petty, and more importantly, totally irrelevant to the purpose of a periodic inspection. Which is to identify whether any maintenance is needed.” A third person took their anger out on the entire system, summing it up by writing, “I sort of wonder what little lightbulb clicks in your mind and you wake up one day and ask yourself, ‘How can I be a massive c*** who offers no value to society? I know! I will get into real estate.’” Image credits: Getty Images / Reddit

Real Estate

Man living in a tent after partner “gave up” on Covid restrictions

A hyper-vigilant man has resorted to living in a “pressurised” tent in a garage to avoid contracting Covid, after his girlfriend relaxed about restrictions. The Aussie man named Jason, who is a self-proclaimed “Covid education activist” caused a stir online after he posted a photo of his unusual sleeping arrangements. The now-viral post shared by Jason featured a picture of the peculiar tent he claims to be sleeping in, with an air purifier sticking out of the door, igniting a firestorm of reactions on Twitter, ranging from agreeance, to humour, to concern. Despite the media storm, Jason defended his decision to maintain strict pandemic precautions, despite never having contracted Covid-19. “This is my bed in the garage because my partner has dropped precautions. I take precautions 100 per cent of the time. Don’t tell me that this hasn’t upended every f**king second of my life,” Jason declared in his original post, which included the image of his extraordinary sleeping arrangement. Taking his precautions to the next level, Jason also revealed that he has experimented with sleeping in a face mask, but he admitted that he found it uncomfortable and could not sleep properly with it. “I’ve tried to sleep in a mask, and I can’t. I know people sleep in CPAP masks all the time, so it’s possible, but I can’t do it,” he shared on Twitter. Despite the flurry of reactions to Jason’s living arrangement, he did receive some support for his precautionary measures, while some even suggested Jason leave his partner, to which he admitted the thought “had occurred to me”. Another Twitter user commended the tent and air filter idea, considering it a cost-effective and potentially effective solution to avoid contracting Covid. “I like the tent+filter idea. It’s cheap and should be effective,” another agreed. A few people shared that they empathised with Jason, and are also maintaining strict pandemic precautions. One person wrote, “Initially didn’t think much of the pic, but this is infuriating. I spend all my salary in-flo mask, enovid (antiviral nasal spray), no social life, so yes, I take precautions 100 per cent of the time.” “I’m sorry you have to live like this. I no longer see my family since they stopped masking,” another added. However, not everyone empathised with Jason’s living arrangements, saying he was being unrealistic about the future of Covid. “I work in senior living, and in the two years we’ve been open, we’ve lost zero to Covid. Even the (85-year-olds) getting it now are mild cases. Why? They’re boosted, so they don’t panic or sleep in a garage,” one commenter explained. “The vaccine is meant to enable you to live normally without worrying. Covid is endemic, so you will be in the tent for the rest of your life, lol.” posted another. In response to the viral post, one Twitter user humorously remarked, “We’re a few years away from a really good documentary on how this virus broke people’s brains.” Image credits: Getty Images / Twitter

Real Estate

$35,000 home comes with a catch

Etsy is an online marketplace best known for its handmade trinkets and creative wares, but now, the site has decided to broaden its horizons and try its hand at selling houses too. A new listing from the ‘store’ Modular Home Direct is offering eager homeowners and passionate crafters the chance to own a 432-square-foot tiny house for just $35,306.09 ($22,896 USD). However, the property comes with a catch: its loving owner must construct it by themselves. The listing’s description declares it to be a “beautiful modern low cost home” that comes with “doors, windows, insulated wall panels, flooring, baseboard trims, drywall, insulated roof, plumbing and electrical hook ups”. Furniture, however, was not included. According to the American real-estate company Zillow, the home’s asking price of $22,896 USD is less than one tenth of the average cost of a home in the United States (~$346,270 USD). The flatpack property is manufactured by Modular Home Direct, the same company behind the listing, and features all the key necessities in a tiny home as well as a few bonuses - a bedroom, a bathroom, a kitchen, a living room, loft, and even front and rear porches. And for anyone looking to take on the challenge - though the offering is limited to the United States due to shipping logistics - there are a few things to consider. For as well as the base construction, the home will also require the installation of electricity and plumbing. According to the Daily Mail, the US-based property site Home Advisor has estimated that these costs would see potential owners forking out anywhere between $550 to $2,3000 USD on just the property’s electrical wiring, while plumbing could start at around $360 and could reach up to $2,000. Modular Home Direct aren’t the first to try and capitalise on the growing tiny house movement, as people all over the world seek alternative housing options as real estate prices continue to soar. And while some online weren’t thrilled with the idea, others were onboard, though most seemed to agree that the price was too good to be true, and likely would increase as more costs came to light. “The cost of materials in a house is much less than the ground it sits on,” a Daily Mail reader said. “By the time you buy the land, go through the permitting process, bring utilities in.. the cost gets closer to an established home.” “They have an interesting website, if you're handy it could be a diy project. My brother in law has a diy log cabin, family pitched in to build it, it's very nice,” one shared. “I think my husband and I could build this. We both know electrical and plumbing... only bump would be the heat pump”. “You have to buy the land, buy the house, put the house together (or pay someone to put it together), and pay someone to hook up the electricity and water. You'd probably have to pay for building permits and inspections,” someone said, before noting that “so once you've done all that, it would probably be easier just to buy a move-in ready house.” And as another wrote, “like everything else meant to be affordable, it will soon cost $109K when it catches on.” Images: Etsy

Real Estate

Living large in a tiny home!

Property stylist and new tiny homeowner Justine Wilson has shared her top tips and tricks for making the most of a tiny space, all without sacrificing an inch of style. Director of Vault Interiors, Justine Wilson has just moved for the 19th time and also made a dramatic tree change from a large four bedroom, three living room inner city terrace to a studio sized 40-foot container home in the country. The self-confessed maximalist who loves to decorate shares her top tips on how to get the most impact and function, while also overcoming the limitations of small living spaces without compromising on style. Justine says, “As an interior designer and stylist, I love to decorate and change things up each season, so this move has certainly been the most challenging! However, I feel that I can prove that with a well thought out design you really can achieve the life and home you want, no matter what the size. “There are so many benefits to going tiny such as financial, less maintenance and thus more life. Plus, it encourages living outside which is great for your physical and mental health. I promise it’s life-changing and worth the cull of everything you don’t really need!” said Justine. Tip 1: Go vertical: Justine has collected many trinkets and book mementos from her travels and loves to display them. She suggests the best way to display these in a small space is to use as much of the vertical space in your home as you can. In her tiny home she has used multiple Ikea bookshelves that allow for ample display, especially as books and clusters of items can be stacked for maximum impact. The trick is to group like items together, such as a group of candles, or crystals, and try to alternate larger items like sculptures and vases in between. Tip 2: Dual function furniture: The container home is only 2.3m wide and about 12m long - so it really is tiny, and every inch counts! To get the most functional out of the home, but still have it feel styled and cosy all furniture items need to serve a purpose. Justine has custom-made a kitchen island so there was an additional workspace for meal prepping, but it also has shelves that mean she can display her cookbooks, bowls and collection of platters. She has storage ottomans that work as both a seating area but also store excess linen. The bed also has storage underneath, and in a tiny home using wall hooks is a great way to tidy up bags and coats. Tip 3: It’s all about scale: Ensure each furniture item is low profile and compact. Most importantly, make sure you measure all items before purchasing to ensure everything fits snuggly and no areas are wasted. If you make smart furniture choices you will be able to fit in a small living area, a bedroom and a kitchen, all in one open room and keep it functional. Also, by selecting mainly white furniture it has meant the overall space feels light and airy and open. Tip 4: Consider a colour scheme overall: In this Tiny home, Justine has chosen a monochromatic look with whites, greys, blacks and some pops of wood to warm it up. The way to make it feel less cluttered is to opt for tonal items, so try to group the same colours together with your personal displays and if you can stick to one general colour accent overall for linen and cushions and main décor - the home will feel more cohesive. Justine installed white vinyl flooring and painted the ceiling white, and used many mirrors, which all help enhance the feeling of space and reflect the light. Tip 5: Make use of outdoor living: This tiny home is truly liveable as it has an attached decking area that doubles Justine’s living space and is fairly all weather. This is crucial for entertaining, something Justine didn’t want to give up! So, she has a large outdoor dining table, an outdoor lounge area and also an outdoor fire pit area that is fantastic for cooler months. You can also consider extending your internal space by creating external zones also with decks, pavers or pergolas. “Also, remember you don’t have to sacrifice creature comforts to go tiny. My new home was cleverly designed and built by a good friend of mine who is also a designer, and it has all the mod cons such as a washer dryer, air con and a dishwasher. It truly is possible to go tiny!” said Justine. For more styling tips go to: <a href="https://www.vaultinteriors.com.au/" target="_blank" rel="noopener">www.vaultinteriors.com.au</a> Images: Vault Interiors [supplied]

Home Hints & Tips

When your house has a (disturbing) history, what should buyers be told about its ‘past’?

<a href="https://theconversation.com/profiles/eileen-webb-95332">Eileen Webb</a>, <a href="https://theconversation.com/institutions/university-of-south-australia-1180">University of South Australia</a> Imagine you have just bought a home. You have moved in and, during a friendly chat with the neighbours, you find out the property had been the <a href="https://www.abc.net.au/news/2018-07-07/what-is-stigmatised-property-and-what-are-your-rights/9911608">scene of a serious crime</a> or <a href="https://www.aicnsw.com.au/our-dream-house-was-a-meth-lab/">used to manufacture</a> methamphetamine. How would you react? Is this something you would want to have known prior to the sale? If you had known, would this have affected you decision to buy the property? And was the real estate agent or vendor <a href="https://www.domain.com.au/news/what-do-agents-have-to-reveal-about-a-home8217s-history-20170810-gxcm5k/">under any obligation</a> to let you know? In most cases, the answer is (somewhat surprisingly to buyers) “no”. However, amendments to Victoria’s Sale of Land Act 1962 <a href="https://www.consumer.vic.gov.au/latest-news/sale-of-land-changes-in-effect-legislation-update">have now broadened the matters</a> that must be disclosed to buyers prior to a sale, including where a serious crime has occurred. Renters who find they have entered into a stigmatised property must resort to the consumer protection laws discussed below. <h2>Why were the laws required?</h2> The ancient doctrine of caveat emptor (let the buyer beware) still impacts on real estate transactions. It means the buyer bears the responsibility of making their own enquiries about the property. Property inspections are usually confined to the physical condition of the property. While it would be possible, at least theoretically, to arrange for a person to investigate its “background”, this can be a difficult process, especially if such information is concealed or hard to come by. As a result, each state and territory has introduced laws that provide for some level of disclosure to the buyer during the conveyancing process. The extent of disclosure required and the nature of matters that must be disclosed varies from jurisdiction to jurisdiction. Furthermore, section 18 of the Australian Consumer Law <a href="http://classic.austlii.edu.au/au/legis/cth/consol_act/caca2010265/sch2.html#_Toc32223214">considers conduct</a> as misleading or deceptive where a matter is not disclosed but, in the circumstances, there is a reasonable expectation it would be. The problem is that while disclosure may be required in matters involving, for example, a structural fault or a road-widening proposal, such information is confined to physical issues affecting the property. However, what happens when the matter involves not a physical defect but a psychological or stigmatising one, such as a murder, for example? Such information may be of considerable importance to potential buyers who, for personal or religious reasons, would find living in a property where such an event occurred intolerable. On a more mercenary note, the impact on resale value of the property <a href="http://journalarticle.ukm.my/7237/1/115-293-1-PB.pdf">could be significant</a>. <h2>The nature of ‘stigmatised’ property</h2> Concern about the effect of stigma on property is not a recent phenomenon. Courts in several jurisdictions, including Australia, <a href="https://api.research-repository.uwa.edu.au/portalfiles/portal/1218611/3632_3632.pdf">have had to grapple</a> with buyers who had discovered, after purchase, that the property had been the scene of a serious crime or criminal activity, a suicide had occurred, persons had been suffering from certain illnesses, or a sex offender lived nearby. In one case a young man had murdered his parents and sister in their Sydney home. The property was later sold to a young couple. After discovering the tragic events that had occurred in the home, they sought to withdraw from the sale on religious grounds. There was a <a href="https://www.theage.com.au/national/estate-agents-fined-over-triple-murder-house-20041220-gdz86g.html">significant amount of criticism</a> of the real estate agent for not informing the buyers about what had occurred there. After considerable public pressure and an investigation by the NSW Office of Fair Trading, the contract was set aside. On a more ethereal note, there have been a series of cases in the United States where buyers have sought, in some cases successfully, to have a sale rescinded <a href="http://zillow.mediaroom.com/2019-10-29-Selling-a-Haunted-House-Heres-What-You-Need-to-Know">because the house</a> was (allegedly) haunted or the subject of <a href="https://casetext.com/case/stambovsky-v-ackley">paranormal activity</a>. <h2>Disclosure laws regarding stigma</h2> The Victorian legislation clarifies obligations for estate agents and vendors regarding <a href="https://www.consumer.vic.gov.au/latest-news/sale-of-land-changes-in-effect-legislation-update">the disclosure of “material facts”</a>. In summary, an estate agent or vendor cannot knowingly conceal any material facts about a property when selling land. The legislation is supported by guidelines that clarify the nature of a material fact. This includes circumstances where, during the current or previous occupation, the property was the scene of a serious crime or an event that may create long-term potential risks to the health and safety of occupiers of the land. Specific examples include extreme violence such as a homicide, the use of the property for the manufacture of substances such as methylamphetamine, or a defence or fire brigade training site involving the use of hazardous materials. Relevant factors can include the reaction of other potential buyers to the fact, including their willingness to buy in light of the revelation. Significant penalties and even imprisonment await vendors and real estate agents who do not comply. <h2>Will the laws work?</h2> As with any new legislation, we will have to wait and see how this plays out. However, some preliminary comments can be made. First, it will be interesting to see how the term “knowingly” is interpreted. Could an agent or vendor avoid the provisions if they merely suspect an issue but do not look further into it? The term “wilful blindness” comes to mind. Second, a fact can be material in either a general or a specific sense. The general sense seems straightforward, as it refers to information most people would consider when deciding whether to buy a property. However, how serious must a crime be to be material? What if the situation involves cultivation of marijuana rather than a more egregious substance? More complex is where a material fact may be of importance to a specific buyer but not buyers generally. For example, in the case discussed above, the buyers’ religion made it impossible for them to live in a home where a violent murder had occurred. In this case, the onus seems to be on the prospective buyer to ask questions about matters of concern to them. <h2>What now?</h2> Although one suspects that buyers of an allegedly haunted house might not succeed under this legislation, the laws address a significant gap regarding disclosure of psychological considerations in the purchase of a property rather than the traditional physical ones.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/132766/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/eileen-webb-95332">Eileen Webb</a>, Professor of Law and Ageing, School of Law, <a href="https://theconversation.com/institutions/university-of-south-australia-1180">University of South Australia</a> Image credits: Getty Images This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/when-your-house-has-a-disturbing-history-what-should-buyers-be-told-about-its-past-132766">original article</a>.

Real Estate

Pirates of the Caribbean island up for sale

A Bahamian island, which was the backdrop for two iconic blockbuster films, is now up for sale for the eye-watering price of $150m. The island, known as Little Pipe Cay, was used as a backdrop for two Hollywood films: Pirates of the Caribbean: The Curse of the Black Pearl and Casino Royale, a film in the James Bond franchise. Spanning across over 40 acres of land, the island boasts stunning white-sand beaches and what locals refer to as “Bombay-Sapphire Blue” waters. The main property has 11 bedrooms, 12 bathrooms and four cottages, it’s basically like having a private mini resort. The property also has a deepwater dock that’s big enough for a superyacht, so you can host boat parties or simply cruise around with your peers. The lucky buyer will feel like they are on a never-ending getaway, as they can escape into the gardens or take a dip into the Olympic-sized infinity pool, the perfect place to appreciate the stunning tropical scenery. For those looking for some indoor activities, the island also offers a gym and spa, in the fully staffed island so that you will never need to lift a finger. The island is also home to many exotic plants and animals, including dolphins and sea turtles, so for those nature lovers it’s the perfect place to reconnect with mother nature. Alternatively, if you decide you’re bored of the same views, you can hop on a helicopter and fly off to another island or country, as the island also has a helipad for your travelling needs. Images: realestate.com.au/ Engel & Völkers Bahamas/ Getty

Real Estate

Breaking the mould: why rental properties are more likely to be mouldy and what’s needed to stop people getting sick

<a href="https://theconversation.com/profiles/rebecca-bentley-173502">Rebecca Bentley</a>, <a href="https://theconversation.com/institutions/the-university-of-melbourne-722">The University of Melbourne</a>; <a href="https://theconversation.com/profiles/nicola-willand-441807">Nicola Willand</a>, <a href="https://theconversation.com/institutions/rmit-university-1063">RMIT University</a>, and <a href="https://theconversation.com/profiles/tim-law-1438482">Tim Law</a> Rental properties are more <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8835129/">likely be mouldy</a> than other homes. This is a concern as excessive mould growth is known to <a href="https://www.who.int/publications/i/item/9789289041683">harm human health</a>. Once buildings are infested with mould, the difficult and costly issue of remediation arises. Landlords and tenants are caught in the middle of a tussle over who is responsible for fixing the problem. As one Melbourne renter and research participant told our colleague Maria Gatto, during a study validating mould reporting: <blockquote> The landlord came around [and] walked [into] every room where there’s black mould on the ceiling – like it’s freaking [something out of the TV series] Stranger Things – and she’s like, ‘Oh, a little bit of mould in winter, it’s very normal, it’s fine […] this happens every winter, it’s not a big deal’. </blockquote> Heading into winter, after <a href="https://theconversation.com/la-nina-3-years-in-a-row-a-climate-scientist-on-what-flood-weary-australians-can-expect-this-summer-190542">three consecutive La Niñas</a>, <a href="https://theconversation.com/sudden-mould-outbreak-after-all-this-rain-youre-not-alone-but-you-are-at-risk-177820">conditions are ripe</a> for a mega-mould season. Combining our expertise in health, law, building and construction, we examine the problem of mould in homes and offer guidance for both renters and landlords. <h2>Ideal conditions for growth</h2> Mould is a <a href="https://www.cdc.gov/niosh/topics/indoorenv/whatismold.html">fungal growth</a> that reproduces via tiny airborne particles called spores. When these spores settle on moist, plant-based construction materials such as wood, wallpaper or plasterboard, they can form a new colony. Growth is more likely when homes are cold, humid, lack air flow, or suffer from water damage. Outbreaks have been reported in flooded parts of southeastern Australia. <figure><iframe src="https://www.youtube.com/embed/sD2Ij_QlzwA?wmode=transparent&start=0" width="440" height="260" frameborder="0" allowfullscreen="allowfullscreen"></iframe><figcaption>Black mould an invisible threat growing behind walls of flood-affected homes (ABC News)</figcaption></figure> So why is the problem of household mould worse in rentals? <a href="https://www.ahuri.edu.au/research/final-reports/338">Weak regulation of tenancy legislation</a> is just one of many factors. Rental properties tend to be poorly maintained, with <a href="https://www.ahuri.edu.au/research/final-reports/338">structural problems</a> such as leaks. Given this, they can be expensive to heat. <figure class="align-center zoomable"><a href="https://images.theconversation.com/files/526246/original/file-20230515-19465-odirz2.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/526246/original/file-20230515-19465-odirz2.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/526246/original/file-20230515-19465-odirz2.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=422&fit=crop&dpr=1 600w, https://images.theconversation.com/files/526246/original/file-20230515-19465-odirz2.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=422&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/526246/original/file-20230515-19465-odirz2.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=422&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/526246/original/file-20230515-19465-odirz2.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=531&fit=crop&dpr=1 754w, https://images.theconversation.com/files/526246/original/file-20230515-19465-odirz2.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=531&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/526246/original/file-20230515-19465-odirz2.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=531&fit=crop&dpr=3 2262w" alt="A chart showing the percentage of homes with structural defects in each category" /></a><figcaption>Rental homes have more structural defects than owner-occupied homes. <a class="source" href="https://www.ahuri.edu.au/research/final-reports/338">Nicola Willand, using data from Moore et. al., (2020), Warm, cool and energy-affordable housing policy solutions for low-income renters, AHURI Final Report, vol. no. 338. Appendix 2</a>, Author provided</figcaption></figure> <h2>How mould makes people sick</h2> The <a href="https://www.who.int/publications/i/item/9789289041683">World Health Organization</a> recognises mould can be harmful. A 2022 Asthma Australia <a href="https://asthma.org.au/what-we-do/advocacy/housing/">report</a> revealed people living in mouldy homes were more likely to have asthma and allergies. A systematic review of peer-reviewed research found <a href="https://erj.ersjournals.com/content/38/4/812">children living in mouldy homes</a> were more likely to experience asthma, wheeze and allergic irritation of the eyes, nose, throat and mouth (allergic rhinitis). Living with mould is a source of stress. People worry about the consequences for their health and there is a growing body of evidence describing the <a href="https://jech.bmj.com/content/50/1/56">negative mental health effects</a> of mouldy, damp homes. <h2>Problems with managing mould in the rental sector</h2> There is a gap between building and residential tenancies legislation. A building deemed to meet the minimum standards of the construction code with respect to mould may not meet the minimum standards for rental. That’s because there’s ambiguity in the <a href="https://ncc.abcb.gov.au/">National Construction Code</a> around “minimum standards of health”. For example the Victorian <a href="https://www.legislation.vic.gov.au/in-force/acts/building-act-1993/136">Building Act 1993</a> contains some provisions for the relevant surveyor to serve a notice on the basis of a health circumstance affecting a user. However, there is no guidance on how to assess the health of the indoor environment, or to deliver a building direction that will address the root cause for mould. This varies by state and territory. Mould remediation can be costly. A <a href="https://www.vba.vic.gov.au/about/research/examining-indoor-mould-and-moisture-damage-in-victorian-residential-buildings">study</a> by Victoria University found half the defects causing mould were water-related. These were more expensive to fix than other problems, by an average of A$7,000. Each winter, <a href="https://tenantsvic.org.au/advice/common-problems/mould-and-damp/">Tenants Victoria</a> deals with a spike in renters seeking legal help to resolve their mould problems. This led to the service launching an annual winter Mould Clinic in 2021. Despite increased legal protections, renters are still struggling to get mould fixed. For these reasons, many renters find the legal process doesn’t offer a solution to their problem, and instead move to a new property, with all its attendant costs and stresses. Others can’t afford to leave, or live in social housing with limited transfer options. <h2>Charting mould in homes across Australia</h2> <figure class="align-center zoomable"><a href="https://images.theconversation.com/files/525848/original/file-20230512-21-xb83ft.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/525848/original/file-20230512-21-xb83ft.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/525848/original/file-20230512-21-xb83ft.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/525848/original/file-20230512-21-xb83ft.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/525848/original/file-20230512-21-xb83ft.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/525848/original/file-20230512-21-xb83ft.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/525848/original/file-20230512-21-xb83ft.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/525848/original/file-20230512-21-xb83ft.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" alt="A bar chart comparing the prevalence of mould in homes across Australian states and territories" /></a><figcaption>Mould is more prevalent in rentals compared to owner-occupied dwellings. Mould is most commonly reported in New South Wales. The difference between owners and renters is greatest in the ACT. Australian Housing Conditions Dataset 2022 doi:10.26193/SLCU9J, Author provided</figcaption></figure> <h2>Where does the responsibility lie?</h2> Tenancy legislation varies by state and territory. Renters should familiarise themselves with the regulations in their jurisdiction. In Victoria, <a href="https://www.legislation.vic.gov.au/in-force/acts/residential-tenancies-act-1997/101">residential tenancies legislation</a> has set the criteria that “each room in the rented premises must be free from mould and damp caused by or related to the building structure”. Landlords now must disclose if they have treated mould in the past three years. Similarly, <a href="https://www.rta.qld.gov.au/rental-law-changes">new legislation in Queensland</a> (coming into effect in September) states rental properties should be free from vermin, damp and mould where this is caused by issues with the structural soundness of the property. In New South Wales, the landlord needs to <a href="https://www.fairtrading.nsw.gov.au/housing-and-property/renting/during-a-tenancy/health,-safety-and-security">disclose signs of mould</a> and dampness in the condition report (but not necessarily have fixed it). Mould is not mentioned in the <a href="https://www.legislation.act.gov.au/a/1997-84/">ACT residential tenancies legislation</a>. For the most part, the responsibility for mould in rental properties lies with landlords if the cause is structural –- for example, if a broken or faulty window frame has let rainwater inside. Requests for urgent repairs can be accompanied by an assessment report by an occupational hygienist, environmental health professional or expert from the local council. People with an existing health condition such as asthma can include a doctor’s report. <h2>What next?</h2> To achieve change across all relevant domains of regulation, construction, natural disaster response and government policy, we need a sustainable, broad healthy <a href="https://www.healthyhousing-cre.org">housing agenda in Australia</a>. We also need to consider options for immediate action. As one Victorian renter noted: <blockquote> When we buy a car for the purpose of driving on the roads, we’re required to get a roadworthy certificate to make sure it’s safe, because of the risk to other people […] Ideally it would be great if there was [some] kind of ‘rentworthy’ certificate […] to demonstrate that the property has been inspected, to identify any structural issues that might affect the tenant’s health and wellbeing. And that that be available to tenants […] before they enter into a lease or before (the property is) even able to be advertised. </blockquote> Quotes in this article were collected by Maria Gatto as part of her Masters of Public Health, conducted at the Melbourne School of Population and Global Health in 2022.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/205472/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/rebecca-bentley-173502">Rebecca Bentley</a>, Professor of Social Epidemiology and Director of the Centre of Research Excellence in Healthy Housing at the Melbourne School of Population and Global Health, <a href="https://theconversation.com/institutions/the-university-of-melbourne-722">The University of Melbourne</a>; <a href="https://theconversation.com/profiles/nicola-willand-441807">Nicola Willand</a>, Senior Lecturer, School of Property, Construction and Project Management, <a href="https://theconversation.com/institutions/rmit-university-1063">RMIT University</a>, and <a href="https://theconversation.com/profiles/tim-law-1438482">Tim Law</a>, Guest lecturer and Practice Lead — Building Sciences, at Restoration Industry Consultants Image credits: Getty Images This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/breaking-the-mould-why-rental-properties-are-more-likely-to-be-mouldy-and-whats-needed-to-stop-people-getting-sick-205472">original article</a>.

Real Estate

How to downsize without leaving the suburb you love

If you find yourself rattling around in a home that now has too many rooms to clean, and you’d prefer to spend more time doing things you love rather than household chores, it might be time to downsize. Not only can downsizing your property simplify your lifestyle, it has the potential to free up some funds as well. If you manage your ‘empty nester’ status well, it can become a profitable nest egg! But downsizing to a smaller home can be a daunting process. You may not be ready for the close proximity of a retirement village, nor are you keen to leave the neighbourhood you love. You have great neighbours, you’re close to family, and you have all the amenities you want nearby, but your house just doesn’t suit your lifestyle anymore. So, what are your options? There are in fact a couple of great alternatives to packing up and leaving everything you’ve known behind: building a dual occupancy home or a knockdown rebuild on your existing block of land. What is a dual occupancy development? A dual occupancy home design, also known as a ‘duplex’ or ‘multi-dwelling’, can come in a variety of layouts: either two attached dwellings side by side, where both properties have street frontage, or one behind the other, where there’s a driveway down one side of the property. A dual occupancy home is a great consideration for those who: <ul> <li>Want to remain in the same area but don’t need as big a house.</li> <li>Want a low maintenance lifestyle.</li> <li>Have a large block in an area where land prices are increasing.</li> <li>Want to realise some of the equity in the land.</li> <li>Want to create an ongoing income stream through an investment property.</li> </ul> Unlocking wealth with a dual occupancy home design The Australian property boom has made many people many millions. But the fact is that the wealth lies in the land not in the dwellings themselves. Many people who have owned a slice of the Aussie Dream for more than 10-15 years are sitting on potential gold, however all their equity is tied up in the land beneath their house. For empty nesters that are ready to downsize, this offers enormous opportunity. It’s no surprise that dual occupancy house designs are increasing in popularity. There are a number of ways you can capitalise on this opportunity: <ul> <li>Live in one house and sell the other.</li> <li>Live in one house, then rent the other one. This provides a potential income stream and is particularly great if your property is in an area where rental supply is low.</li> <li>Sell both houses and live somewhere else. This option works well in areas where housing stock is low and demand is high – and when you’re prepared to find somewhere else to live!</li> </ul> There are some design limitations when it comes to building a dual occupancy home due to the somewhat restricted footprint, and a number of things to consider such as the size of your block, street frontage, driveways and council approvals. Thankfully however, experienced homebuilders such as Metricon have the expertise and know-how to provide you the guidance you need to make the most of your asset. Knockdown rebuild – build a brand-new home, wherever suits your lifestyle “Don’t move your life, improve your life!” is a fitting motto for those looking to take advantage of their great location by building a more suitable home for their life stage. If you really love where you live but your home just isn’t right for you any more, then there are two likely options: a renovation or a knockdown rebuild. A knockdown rebuild is especially a great option when you are looking to downsize – such as replacing your double storey home with a more suitable single storey option. Perhaps you are weighing up the option of moving but also hoping to build new. Let’s explore your options. To renovate or rebuild? Before jumping on the renovation bandwagon, assuming it is an easier option, there are a few factors to consider that may ultimately influence your decision. These can include: the extent of your renovation, the comparable costs between renovating and rebuilding, and the expected increase in value of your property. Other factors such as the condition of your home (some old homes can’t cope with structural changes), and ongoing expense (a new home is typically cheaper to maintain than an older home), may preclude you from renovating. Renovating can often result in unforeseen cost blowouts and uncover previously hidden or undiscovered faults. There’s also the hassle of shifting furniture, isolating rooms, living in only part of your home or moving out completely during the renovation. A knockdown rebuild however, may be easier and deliver a more satisfying result than you think: a brand-new home where everything is clean and reliable, in a floorplan that matches your desired lifestyle perfectly. Re-locating and building new If you’re looking for a complete lifestyle change when downsizing, perhaps weighing up the options of a sea or tree change, you can have the best of both worlds and build your dream home to perfectly suit your new location. Images: Getty

Downsizing

A brief history of the mortgage, from its roots in ancient Rome to the English ‘dead pledge’ and its rebirth in America

The average interest rate for a new U.S. <a href="https://www.cbsnews.com/news/home-loan-mortgage-interest-rate-7-percent-highest-since-2001/">30-year fixed-rate mortgage topped 7% in late October 2022</a> for the first time in more than two decades. It’s a sharp increase from one year earlier, when <a href="https://www.valuepenguin.com/mortgages/historical-mortgage-rates">lenders were charging homebuyers only 3.09%</a> for the same kind of loan. Several factors, including <a href="https://www.nerdwallet.com/article/mortgages/fed-mortgage-rates">inflation rates and the general economic outlook</a>, influence mortgage rates. A primary driver of the ongoing upward spiral is the <a href="https://abc7chicago.com/fed-interest-rate-decision-today-hike-federal-reserve-meeting-november/12408055/">Federal Reserve’s series of interest rate hikes</a> intended to tame inflation. Its decision to increase the benchmark rate by <a href="https://www.federalreserve.gov/newsevents/pressreleases/monetary20221102a.htm">0.75 percentage points on Nov. 2, 2022</a>, to as much as 4% will propel the cost of mortgage borrowing even higher. Even if you have had mortgage debt for years, you might be unfamiliar with the history of these loans – a subject I cover <a href="https://scholar.google.com/citations?user=KVv47noAAAAJ&hl=en&oi=ao">in my mortgage financing course</a> for undergraduate business students at Mississippi State University. The term dates back to <a href="https://www.english-heritage.org.uk/learn/story-of-england/medieval/">medieval England</a>. But the roots of these legal contracts, in which land is pledged for a debt and will become the property of the lender if the loan is not repaid, go back thousands of years. <h2>Ancient roots</h2> Historians trace the <a href="https://www.kingjamesbibleonline.org/Nehemiah-5-3/">origins of mortgage contracts</a> to the reign of King Artaxerxes of Persia, who ruled modern-day Iran in the fifth century B.C. The Roman Empire formalized and documented the legal process of pledging collateral for a loan. Often using the <a href="https://www.biblegateway.com/passage/?search=John%202%3A13-16&version=NIV">forum and temples as their base of operations</a>, mensarii, which is derived from the word mensa or “bank” in Latin, would set up loans and charge <a href="https://www.biblegateway.com/passage/?search=John%202%3A13-16&version=NIV">borrowers interest</a>. These government-appointed public bankers required the borrower to put up collateral, whether real estate or personal property, and their agreement regarding the use of the collateral would be handled in one of three ways. First, the <a href="https://www.merriam-webster.com/dictionary/fiducia">Fiducia</a>, Latin for “trust” or “confidence,” required the transfer of both ownership and possession to lenders until the debt was repaid in full. Ironically, this arrangement involved no trust at all. Second, the <a href="https://www.merriam-webster.com/dictionary/pignus">Pignus</a>, Latin for “pawn,” allowed borrowers to retain ownership while <a href="https://scholarship.law.upenn.edu/cgi/viewcontent.cgi?referer=https://www.google.com/&httpsredir=1&article=1684&context=penn_law_review">sacrificing possession and use</a> until they repaid their debts. Finally, the <a href="https://legaldictionary.lawin.org/hypotheca/">Hypotheca</a>, Latin for “pledge,” let borrowers retain both ownership and possession while repaying debts. <h2>The living-versus-dead pledge</h2> <a href="https://www.britannica.com/biography/Claudius-Roman-emperor">Emperor Claudius</a> brought Roman law and customs to Britain in A.D. 43. Over the next <a href="https://www.english-heritage.org.uk/learn/story-of-england/romans/">four centuries of Roman rule</a> and the <a href="https://www.english-heritage.org.uk/learn/story-of-england/early-medieval/">subsequent 600 years known as the Dark Ages</a>, the British adopted another Latin term for a pledge of security or collateral for loans: <a href="https://worldofdictionary.com/dict/latin-english/meaning/vadium">Vadium</a>. If given as collateral for a loan, real estate could be offered as “<a href="https://www.merriam-webster.com/dictionary/vadium%20vivum">Vivum Vadium</a>.” The literal translation of this term is “living pledge.” Land would be temporarily pledged to the lender who used it to generate income to pay off the debt. Once the lender had collected enough income to cover the debt and some interest, the land would revert back to the borrower. With the alternative, the “<a href="https://www.merriam-webster.com/dictionary/mortuum%20vadium">Mortuum Vadium</a>” or “dead pledge,” land was pledged to the lender until the borrower could fully repay the debt. It was, essentially, an interest-only loan with full principal payment from the borrower required at a future date. When the lender demanded repayment, the borrower had to pay off the loan or lose the land. Lenders would keep proceeds from the land, be it income from farming, selling timber or renting the property for housing. In effect, the land was <a href="https://www.jstor.org/stable/pdf/1321129.pdf">dead to the debtor</a> during the term of the loan because it provided no benefit to the borrower. Following <a href="https://www.royal.uk/william-the-conqueror">William the Conqueror’s victory</a> at the Battle of Hastings in 1066, the English language was heavily influenced by <a href="https://blocs.mesvilaweb.cat/subirats/the-norman-conquest-the-influence-of-french-on-the-english-language-loans-and-calques/">Norman French</a> – William’s language. That is how the Latin term “Mortuum Vadium” morphed into “Mort Gage,” Norman French for “dead” and “pledge.” “<a href="https://www.etymonline.com/word/mortgage">Mortgage</a>,” a <a href="https://ia600201.us.archive.org/1/items/cu31924021674399/cu31924021674399.pdf">mashup of the two words</a>, then entered the English vocabulary. <h2>Establishing rights of borrowers</h2> Unlike today’s mortgages, which are usually due within 15 or 30 years, English loans in the 11th-16th centuries were unpredictable. <a href="https://www.jstor.org/stable/pdf/1323192.pdf">Lenders could demand repayment</a> at any time. If borrowers couldn’t comply, lenders could seek a court order, and the land would be forfeited by the borrower to the lender. Unhappy borrowers could <a href="https://www.law.cornell.edu/wex/chancery">petition the king</a> regarding their predicament. He could refer the case to the lord chancellor, who could <a href="https://www.britannica.com/topic/Chancery-Division">rule as he saw fit</a>. <a href="https://www.britannica.com/biography/Francis-Bacon-Viscount-Saint-Alban">Sir Francis Bacon</a>, England’s lord chancellor from 1618 to 1621, <a href="https://www.jstor.org/stable/752041">established</a> the <a href="https://www.law.cornell.edu/wex/equity_of_redemption">Equitable Right of Redemption</a>. This new right allowed borrowers to pay off debts, even after default. The official end of the period to redeem the property was called <a href="https://www.law.cornell.edu/wex/foreclosure">foreclosure</a>, which is derived from an Old French word that means “<a href="https://www.etymonline.com/word/foreclose">to shut out</a>.” Today, foreclosure is a legal process in which lenders to take possession of property used as collateral for a loan. <h2>Early US housing history</h2> The <a href="https://www.loc.gov/classroom-materials/united-states-history-primary-source-timeline/colonial-settlement-1600-1763/overview/">English colonization</a> of what’s now <a href="https://themayflowersociety.org/history/the-mayflower-compact/">the United States</a> didn’t immediately transplant mortgages across the pond. But eventually, U.S. financial institutions were offering mortgages. <a href="https://www.huduser.gov/publications/pdf/us_evolution.pdf">Before 1930, they were small</a> – generally amounting to at most half of a home’s market value. These loans were generally short-term, maturing in under 10 years, with payments due only twice a year. Borrowers either paid nothing toward the principal at all or made a few such payments before maturity. Borrowers would have to refinance loans if they couldn’t pay them off. <h2>Rescuing the housing market</h2> Once America fell into the <a href="https://www.history.com/topics/great-depression">Great Depression</a>, the <a href="https://www.stlouisfed.org/news-releases/2008/05/02/does-the-great-depression-hold-the-answers-for-the-current-mortgage-distress">banking system collapsed</a>. With most homeowners unable to pay off or refinance their mortgages, the <a href="https://www.federalreservehistory.org/essays/great-depression">housing market crumbled</a>. The number of <a href="https://www.encyclopedia.com/education/news-and-education-magazines/housing-1929-1941">foreclosures grew to over 1,000 per day by 1933</a>, and housing prices fell precipitously. The <a href="https://www.fhfaoig.gov/Content/Files/History%20of%20the%20Government%20Sponsored%20Enterprises.pdf">federal government responded by establishing</a> new agencies to stabilize the housing market. They included the <a href="https://www.hud.gov/program_offices/housing/fhahistory">Federal Housing Administration</a>. It provides <a href="https://www.consumerfinance.gov/ask-cfpb/what-is-mortgage-insurance-and-how-does-it-work-en-1953/">mortgage insurance</a> – borrowers pay a small fee to protect lenders in the case of default. Another new agency, the <a href="https://sf.freddiemac.com/articles/insights/why-americas-homebuyers-communities-rely-on-the-30-year-fixed-rate-mortgage">Home Owners’ Loan Corp.</a>, established in 1933, bought defaulted short-term, semiannual, interest-only mortgages and transformed them into new long-term loans lasting 15 years. Payments were monthly and self-amortizing – covering both principal and interest. They were also fixed-rate, remaining steady for the life of the mortgage. Initially they skewed more heavily toward interest and later defrayed more principal. The corporation made new loans for three years, tending to them until it <a href="https://content.time.com/time/subscriber/article/0,33009,858135,00.html">closed in 1951</a>. It pioneered long-term mortgages in the U.S. In 1938 Congress established the Federal National Mortgage Association, better known as <a href="https://www.fanniemae.com/about-us/who-we-are/history">Fannie Mae</a>. This <a href="https://www.financial-dictionary.info/terms/government-sponsored-enterprise/">government-sponsored enterprise</a> made fixed-rate long-term mortgage loans viable <a href="https://www.investopedia.com/terms/s/securitization.asp">through a process called securitization</a> – selling debt to investors and using the proceeds to purchase these long-term mortgage loans from banks. This process reduced risks for banks and encouraged long-term mortgage lending. <h2>Fixed- versus adjustable-rate mortgages</h2> After World War II, Congress authorized the Federal Housing Administration to insure <a href="https://www.govinfo.gov/content/pkg/CPRT-108HPRT92629/html/CPRT-108HPRT92629.htm">30-year loans on new construction</a> and, a few years later, purchases of existing homes. But then, the <a href="https://files.stlouisfed.org/files/htdocs/publications/review/69/09/Historical_Sep1969.pdf">credit crunch of 1966</a> and the years of high inflation that followed made adjustable-rate mortgages more popular. Known as ARMs, these mortgages have stable rates for only a few years. Typically, the initial rate is significantly lower than it would be for 15- or 30-year fixed-rate mortgages. Once that initial period ends, <a href="https://www.investopedia.com/terms/a/arm.asp">interest rates on ARMs</a> get adjusted up or down annually – along with monthly payments to lenders. Unlike the rest of the world, where ARMs prevail, Americans still prefer the <a href="https://sf.freddiemac.com/articles/insights/why-americas-homebuyers-communities-rely-on-the-30-year-fixed-rate-mortgage">30-year fixed-rate mortgage</a>. About <a href="https://data.census.gov/cedsci/table?q=DP04&t=Housing">61% of American homeowners</a> have mortgages today – with <a href="https://doi.org/10.1080/15214842.2020.1757357">fixed rates the dominant type</a>. But as interest rates rise, demand for <a href="https://www.corelogic.com/intelligence/interest-rates-are-up-but-arm-backed-home-purchases-are-way-up/">ARMs is growing</a> again. If the Federal Reserve fails to slow inflation and interest rates continue to climb, unfortunately for some ARM borrowers, the term “dead pledge” may live up to its name. Image credits: Getty Images This article originally appeared on <a href="https://theconversation.com/a-brief-history-of-the-mortgage-from-its-roots-in-ancient-rome-to-the-english-dead-pledge-and-its-rebirth-in-america-193005" target="_blank" rel="noopener">The Conversation</a>.

Real Estate

1 in 4 households struggle to pay power bills. Here are 5 ways to tackle hidden energy poverty

<a href="https://energyconsumersaustralia.com.au/news/how-increases-in-energy-prices-are-impacting-consumers#:%7E:text=Energy%2520affordability%2520is%2520not%2520just,in%2520the%2520past%252012%2520months.">One in four Australian households</a> are finding it hard to pay their gas and electricity bills. As winter looms, <a href="https://www.aer.gov.au/news-release/default-market-offer-2023%25E2%2580%259324-draft-determination">energy price rises</a> will make it even harder. Cold homes and disconnections resulting from energy poverty threaten people’s health and wellbeing. <a href="https://www.acoss.org.au/wp-content/uploads/2023/03/ACOSS-cost-of-living-report2-March-2023_web_FINAL.pdf">Income support for welfare recipients</a> and retrofitting homes to make them more thermally efficient – by adding insulation, for example – can ease the burden. And when homes are not too cold or hot, <a href="https://theconversation.com/fuel-poverty-makes-you-sick-so-why-has-nothing-changed-since-i-was-a-child-living-in-a-cold-home-201787">people’s health benefits</a>. This in turn <a href="https://apo.org.au/node/319556">eases pressure on the public health system</a>. However, many people are missing out on assistance as programs often do not recognise their difficulties. Their energy vulnerability is hidden. <h2>What forms does hidden energy poverty take?</h2> <a href="https://www.sciencedirect.com/science/article/pii/S2214629623000737">Our newly published study</a> has revealed six aspects of hidden energy vulnerability. These are: <ol> <li> underconsumption – households limit or turn off cooling, heating and/or lights to avoid disconnections </li> <li> incidental masking – other welfare support, such as rent relief, masks difficulties in paying energy bills </li> <li> some households disguise energy poverty by using public facilities such as showers or pooling money for bills between families </li> <li> some people conceal their hardship due to pride or fear of legal consequences, such as losing custody of children if food cannot be refrigerated because the power has been cut off </li> <li> poor understanding of energy efficiency and the health risks of cold or hot homes adds to the problem </li> <li> eligibility criteria for energy assistance programs may exclude some vulnerable households. For example, people with income just above the welfare threshold are missing out on energy concessions. Energy retailer hardship programs also ignore people who have voluntarily disconnected due to financial hardship. </li> </ol> <h2>5 ways to help these households</h2> Our studies suggest trusted intermediaries such as people working in health, energy and social services can play a vital role in identifying and supporting such households. First, energy efficiency and hardship initiatives may be <a href="https://www.rmit.edu.au/about/schools-colleges/property-construction-and-project-management/research/research-centres-and-groups/sustainable-building-innovation-laboratory/projects/care-at-home-system-improvements">integrated into the My Aged Care in-home care system</a>. Energy poverty risk identification, response and referral could be built into the national service’s assessment form. This could leverage existing client screening processes. The system’s front-line staff could connect at-risk householders with energy counsellors. These counsellors could help people access better energy contracts, concessions, home retrofits and appliance upgrade programs. A new Commonwealth “energy supplement” could help pay for essential energy-related home modifications. This would help avoid My Aged Care funds being diverted from immediate healthcare needs. Second, general practitioners and other health professionals could help identify energy vulnerability among patients with medical conditions of concern. They could also provide letters of support emphasising renters’ health-based need for air conditioners or heaters. Third, energy providers could use household energy data to identify those that seem to be under-consuming or are often disconnected. They could also identify those that are not on “best offer” deals. They could be proactive in checking struggling householders’ eligibility for ongoing energy concessions and one-off debt relief grants offered by states and territories. Energy providers could also make it easier for social housing providers to ensure concessions for tenants renew automatically. Fourth, local councils could use their data to identify at-risk householders. They might include those with a disability parking permit, discounted council rates or in arrears, on the social housing waiting list, Meals on Wheels clients and social housing tenants. Maternal and child health nurses and home and community care workers making home visits could call attention to cold or hot homes. Councils could employ in-house energy counsellors to provide assistance and energy literacy training. Council home maintenance teams could develop bulk-buying, insulation and neighbourhood retrofit programs. Strategies to reduce vulnerability to energy poverty should be part of municipal public health and wellbeing plans. Under these strategies, net-zero-carbon funds set up by states and local councils to reduce emissions could finance targeted housing retrofits. We also suggest setting up a central helpline to improve access to energy assistance via local referrals. Fifth, residential energy-efficiency programs could become more person-centric. For example, we already have <a href="https://www.homescorecard.gov.au/">Residential Efficiency Scorecard</a> audits to assess the thermal quality of a home. These audits could also explore whether concessions and better energy deals are available to the household. <h2>Building capacity at all levels</h2> <a href="https://cur.org.au/cms/wp-content/uploads/2021/08/tackling-hidden-energy-final.pdf">Capacity-building strategies</a> are needed at all levels – individual, community and government – to overcome the <a href="https://www.sciencedirect.com/science/article/pii/S2214629623000737">challenges</a> of reducing energy poverty. Current obstacles include the competing priorities of service providers, lack of time and resources, and <a href="https://www.sciencedirect.com/science/article/abs/pii/S2214629622003553">poor co-ordination between siloed</a> programs and services. Access to essential energy services should be part of state and local governments’ strategic health plans. Housing, energy and health departments could work together to include housing retrofits in preventive health programs. A comprehensive approach is needed to overcome hidden energy poverty. It must include public education, integrated services and well-funded energy-efficiency programs. Regulatory reforms and ongoing funding are both needed to improve the availability of energy-efficient, affordable homes for tenants. Our suggested strategies start with improving the skills and knowledge of trusted intermediaries. Doctors, social workers, housing officers, community nurses and volunteers can play a central role. Using these front-line professionals to help identify and act on energy poverty offers a novel, cost-effective and targeted solution. This article originally appeared on <a href="https://theconversation.com/1-in-4-households-struggle-to-pay-power-bills-here-are-5-ways-to-tackle-hidden-energy-poverty-204672" target="_blank" rel="noopener">The Conversation</a>. Images: Getty

Home Hints & Tips

How to set up your room to help you fall asleep

Getting a good night’s rest is essential for your health and quality of life. Sometimes sleep can be disturbed due to coffee or stress but sometimes it can be caused by the state of a bedroom. If you are having trouble falling asleep at night then your bedroom environment might be part of the problem. If your bedroom isn’t the sleep-friendly environment it should be, try these tips today. 1. Remove night lights and electronics If you have a bright light shining from a radio or alarm clock, it might be a good idea to cover it at night or turn it around so the light isn’t facing you as you sleep. Our brains can misinterpret dim lights and be aroused to wake up. It is also important to not be on your electronic devices right before you go to sleep due to the light that radiates from the screen. 2. Shut your curtains Even though the light from the moon, car headlights or streetlights might be outside your window, they still could be a factor in keeping you up. Drapes will help you fall asleep at night time and stop the morning sun waking you up as well. 3. Lower the temperature Just a small drop in temperature can help induce sleep. Experts recommend cooling down your room by a few degrees to aid your brain in drifting asleep peacefully. Studies have also found that wearing socks can help you fall asleep. It is believed that if your feet are warm, it helps the internal body temperature drop. 4. Get a comfy mattress A painful mattress will not only disturb your sleep but it will also leave you with aches and pains in the morning. Make sure you shop around and research carefully before buying a mattress so you can get one that allows you to have the most natural and deep sleep. Mattress protectors and mattress toppers are also a worthwhile investment for extra softness and comfort as you sleep. 5. Choose the right colour scheme Colours can speak volumes to your subconscious so it is important to paint and decorate your room with calming colours. Colours such as blue, purple and light pink can help calm your thoughts. Select colours that are the right shade to help you feel tranquil before you fall asleep at night. 6. Declutter your bedroom The impact of a cluttered room is far greater than you might initially think. If you are tossing and turning in the night make sure that before you go to bed, your bedroom is cleared of unnecessary clutter. Once your bedroom is clean, it will make you feel like you have more space and that you aren’t restricted. 7. Choose the right bedding The right sheets, the right pillows and the perfect number of pillows are all factors in helping you fall asleep. Whether you want cotton or flannelette bed sheets, make sure you are maintaining their quality as you use them. Image credits: Getty Images

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1 in 4 households struggle to pay power bills. Here are 5 ways to tackle hidden energy poverty

How to set up your room to help you fall asleep