FASB eyes possible changes to US pensions accounting

first_imgThe US accounting rule maker, the Financial Accounting Standards Board (FASB), has voted to start research on possible changes to pensions accounting under US generally accepted accounting principles.Any new accounting requirements could affect either traditional defined benefit accounting or the accounting regime for cash-balance pension plans.Summing up the result of the board’s 29 January discussions, FASB chairman Russell Golden said: “There is no separate pension project at this time. We are going to put the presentation aspects within the [financial statement presentation] project, and we’re going to continue the research [into] cash-balance pension plans.”During the same meeting, FASB members voted to launch a financial statement presentation project. A statement issued by the board in the wake of that meeting said the FASB “would perform research” on pensions accounting and the FSP project.In relation to the accounting for cash-balance plans, Golden noted that the board was “deferring decision on what to do on cash-balance plans – measurement versus disclosure – until more analysis is done”.One board member in particular said he was troubled by the state of cash-balance-plan accounting.Marc Siegal told the meeting: “Another thing this has highlighted is that there is zero transparency about cash-balance pension plans out there for us or investors.“So, at a minimum, I would hope we get to a recommendation where there is increased disclosures about cash-balance pension plans so we all know what we’re talking about – because right now, we have no idea.”Finally, FASB members voiced little appetite for carrying out any work on discount rates under US pensions literature.The FASB chairman said the use of a current discount rate is what “gives investors what they need”.Golden added that he was “not willing to come off that at this point in time”.The US approach to DB pension accounting was set out in SFAS 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans”.The FASB codified these rules as ASC 715 in 2006.Both the FASB and its international counterpart, the International Accounting Standards Board (IASB), have struggled in recent years to arrive at a satisfactory accounting regime for cash-balance plans.FASB member Larry Smith said: “If we’re going to do it, let’s make sure we do it. We went through this 10 years ago – we spent a year researching this and went nowhere.”His colleague Tom Linsmeier added: “I have a problem just standing down with this right now.“This is the area in defined benefit pension plans that is growing most and having significant issues about recognition, measurement and perhaps other additional issues.“And my concern is the ideas that ‘it’s hard, so let’s step down’.”The IASB set out to tackle so-called contribution-based promises – a wider family of retirement plans than just cash-balance plans – in its 2008 discussion paper.That effort ran into the sand and led eventually in narrower-scope amendments to International Accounting Standard 19, Employee Benefits.More recently, the International Financial Reporting Standards Interpretations Committee called a halt to its work into contribution-based promises.Critics of pensions accounting under US GAAP have pointed to a number of deficiencies in financial reporting they say must be fixed.These include delayed recognition of gains and losses in profit or loss, presentation of net pension cost, accounting for cash-balance plans and discount rate assumptions.Despite a formal programme to converge US GAAP and international standards in recent years, the FASB did not explore the option of matching the IASB’s recent net-interest approach amendments to IAS19.last_img read more

Insurance language on contracts within EIOPA balance sheet ‘unfortunate’

first_imgThe inclusion of insurance industry language on contracts within the European Insurance and Occupational Pensions Authority’s (EIOPA) recent balance sheet consultation is “unfortunate” and fails to take account of a sponsor’s ability to terminate accrual, according to stakeholders advising the supervisor.In its recent consultation on the holistic balance sheet (HBS), EIOPA asked whether the term ‘contract’ could be applied to IORPs, echoing the term’s use to describe often fixed-term agreements between insurers and customers.However, the supervisor’s Occupational Stakeholder Group (OPSG) took issue with the use of ‘contract boundaries’ – which within the insurance industry requires reserves to be held against future benefits – as it argued a pension fund’s contract would only run in step with the accrual of future benefits.  Philip Shier, member of the OPSG and senior consultant at Aon Hewitt in Dublin, said the use of the terminology was “very unfortunate”. He said defined benefit (DB) funds in the UK and Ireland could see its sponsor decide to close the fund to future accrual.  “That throws a different light on the need to reserve for future accrual, which would be the way it would be done in insurance contracts.“For a pension where the employer or the IORP can, effectively, unilaterally cease the accrual of benefits at a point in time, then the contact boundaries should really be accrued benefits, because future service benefits aren’t necessarily going to be provided.“And if they are, they are going to be funded by future contributions.”The actuary said that any future contributions would be set by a scheme’s actuary to cover the future benefit accrual.In its preliminary response to the HBS consultation, the OPSG said that contract boundaries should be defined “on accrual of future benefit entitlements”.In the consultation, EIOPA appeared to accept that the terms ‘contract’ and ‘boundary’ were unsuitable for use within the pensions market, noting that the latter term referred to a fixed point in time when used by insurance companies.last_img read more

Experts question supply side’s ability to meet DC retirement needs

first_imgThis means, if a younger member expects earnings to increase, he could use human capital to replace his bond holdings and take greater risk with equities.As the member ages, the fund would take on more bonds and then exchange these for annuities as human capital continues to decrease.Blake also lamented the lack of matching assets to back U-shaped annuities and said this had significant implications on DC schemes’ ability to invest long term.U-shaped annuities provide a high level of income in initial retirement, before falling to match a dwindling lifestyle, and then increasing again to cover long-term care costs.This creates the need for pension plans and annuity-like products and cashflows to be provided outside of the insurance industry, Blake said.Commenting on the changes announced to the UK retirement system, which remove the need for single and compulsory annuitisation, he said there remained a risk providers would not seize the opportunity to provide the right products.“New fund managers coming into the UK that do not have experience of the decumulation market do not understand the risks and will treat this as a new opportunity to manage assets and maximise returns, without realising what the pension plan has to do,” Blake said.He warned that the UK might shift into a US-style 4% system, where DC plans annually drawdown 4% but run significant risk of not accounting for longevity.“With two groups of people [consumers and asset managers] not understanding the risks and not delivering products that deliver these cashflows, DC is the last thing in town, and it could be discredited,” he said. Lundbergh, meanwhile, said he personally did not believe the market was capable of delivering an adequate solution to DC requirements.“If you just leave it to the market, you will get an asset management product,” he said.He said any solution would require government intervention, particularly in markets lacking the “social partner” structure.“The little thing we need is the understanding from the regulators on how to fix the markets so it works,” he said. “You need to add something to get market to function better.“Investing is a means to an end. If you have a great design on your pension retirement product, then investment is the way to achieve that.“A lot of the new DC products are contract-based and a retail model, and it is very difficult to adjust this model to [David Blake’s model].”The National Employment Savings Trust (NEST), the DC master trust backed by the UK government, recently launched a consultation on its future investment and decumulation design given the Budget changes.As part of this, NEST said it would study the possibilities of combining annuities and income-drawdown products internally, as well as collective DC. Asset managers and private markets are ill equipped to provide the defined contribution (DC) products that match savers lifestyle and retirement needs, experts have warned.David Blake, professor at Cass Business School, and Stefan Lundbergh, non-executive director at AP4, said DC savers’ requirements were far off current offerings across Europe.Speaking at the OECD Roundtable on Long-term Investing in Paris, Blake, head of the Pensions Institute in London, said mathematical analysis showed the optimal decumulation for DC savers was phased annuitisation.This was based on the idea that a member’s human capital, their ability earn a greater salary, was classed as an asset in the fund.last_img read more

Looming Brexit magnifies lower-for-longer outlook, fund managers say

first_imgEvents following the UK vote to leave the EU have made it more likely that interest rates and bond yields will stay low for a longer period of time than previously thought, as economies around the world operate in an environment of low growth and increased market volatility, according to Newton Investment Management.Nick Clay, who manages the Newton Global Income and BNY Mellon Global Equity Income funds, said: “The world economy faces a backdrop of low growth, with increased levels of volatility in both economies and asset markets.”The weak recovery that has been seen, namely in the US economy, is now late in its cycle, he said, and not about to accelerate, as the consensus believed.Because of this, interest rates and bond yields will remain lower for longer, he predicted.  “The latest events of Brexit simply serve to further the likelihood of this view persisting,” he said.The best way to invest in this environment is to focus on business models with haven-like qualities, he said — companies unexposed to the economic cycle, with strong balance sheets and robust and predictable cash flows. Meanwhile, strategists at Russell Investments said political and economic uncertainty following the outcome of the UK referendum had made a recession in the country much more likely.Wouter Sturkenboom, senior investment strategist for the EMEA at Russell, said: “In the UK, the fallout from Brexit has pulled our growth expectation for 2016 down from 1.5% to 1%, and for 2017 from 1.5% to 0-0.5%.”He cited Brexit’s direct impact on trade and foreign investment, as well as its indirect effect on consumer and producer confidence.“We expect the Bank of England to cut interest rates to support the economy at the margin,” he said.“Volatility, however, often creates opportunity, although the shakeout so far has not been large enough for our process to recommend taking on more risk.”Because of this, Russell had kept a broadly neutral allocation between equities and bonds since the equity rebound.At Hermes, group chief economist Neil Williams said the UK’s vote to leave the EU had global implications, and that markets now had to assess the path a new political line-up in the UK would eventually choose to take. Even if the UK takes the ‘soft exit’ path of becoming an associate member of the EU – similar to Norway, Switzerland or Greenland – this could still take many years, he said.He noted that large-cap stocks had found a floor since initial falls following the surprise referendum result, and that global market volatility was still relatively low. “This early stabilisation is encouraging but could yet be premature without further support from central banks,” he said.“Once the dust settles, the UK economy will, of course, survive, given its entrepreneurial flair, increasing focus on non-EU trade and likely policy loosening by the Bank of England and the UK Treasury,” Williams said.He said comparisons between Brexit and the 2008 start to the global financial crisis were diluted by several factors.“US and UK real GDP are each 8-10% up on their pre-crisis peaks, bank supervision looks tighter, and central banks, after a slow start in 2008-09, now have a proven track record of policy coordination,” he said. Separately, MSCI said Brexit had highlighted the “risk of capitalism without inclusiveness”, making the point that the referendum’s surprise result had shown how social dissatisfaction could affect government policies.MSCI ESG Research downgraded the outlook for the UK’s ‘A’ ESG rating to ‘negative’ from ‘neutral’ following the UK referendum result.Linda Eling-Lee, head of ESG research at MSCI, said: “While it is difficult to predict extreme political and social events, it is possible to build models to test a portfolio against potential shocks.“Some investors have indicated to us the importance of considering the consequences of inequality and popular discontent into their view of risk. “Their next logical step could be to incorporate those views into a structured programme of scenario testing.”last_img read more

Mandate roundup: Lothian, Hermes EOS, SEB, Compenswiss

first_imgThe local authority pension funds for Edinburgh and Falkirk Council in Scotland have tendered a mandate for investment performance measurement and risk analysis services.The joint procurement is being led by the City of Edinburgh council on behalf of the £5.4bn (€6.9bn) Lothian Pension Fund, with the contract open for use by the pension fund for neighbouring Falkirk council.The contract, valued at £2m, is for five years.In Sweden, the asset management arm of corporate bank SEB has appointed Hermes EOS to provide engagement and screening services. The engagement arm of Hermes Investment Management will advise on SEB Investment Management’s €33.15bn of global holdings outside the Nordic region.Hans Ek, head of ESG and corporate governance at SEB Investment Management, said: “By joining forces with Hermes EOS, we are strengthening our sustainability dialogues with companies outside Scandinavia.”The asset manager estimates it will be able to double the number of dialogues with these companies, to 360, thereby “creating value both for the companies and our clients”, he added.In Switzerland, first-pillar buffer fund Compenswiss has added a global real estate mandate to its three-pronged tender of regional value-added real estate mandates.Last Thursday, 15 September, the CHF34bn (€31bn) buffer fund announced three requests for proposal, for value-add or opportunistic fund strategies in Europe, Asia and the US.In response to requests from asset managers that do not have regional products to pitch, Compenswiss has since expanded the procurement process to include a global mandate, also value-added or opportunistic.Submissions will be analysed in conjunction with the regional tenders, with a spokesman telling IPE “the goal remains the same” – namely, the creation of a global portfolio of indirect real estate assets.last_img read more

Nestlé’s Dutch scheme sacks in-house funds, drops inflation hedge

first_imgAlliance, the €622m Dutch pension fund of Nestlé, has divested from three of its in-house hedge funds.In its annual report for 2016, the scheme said it had also ceased hedging its inflation risk. Alliance, which has 3,380 participants, had a 12.5% stake in hedge funds at the end of last year.Although several Dutch pension funds have divested from hedge funds during the past few years, Alliance’s decision is remarkable as its holdings were part of Ireland-based Robusta, the umbrella fund through which pension assets of Nestlé’s international schemes are pooled.The Dutch pension fund divested almost €71m from three funds-of-funds managed by Robusta. In its annual report, Alliance said it had sold its stake because of high risk and costs as well as decreasing returns. Last year, its hedge funds allocation delivered 2.3%, an underperformance of 0.6% percentage points compared to its benchmark.The pension fund said it had reduced its asset management costs from 0.94% to 0.56% as a result of the divestment. It also said the move had led to slightly higher expected returns.The sale of its hedge funds came in favour of investment grade and high yield credit, alternative fixed income as well as listed property.The annual report revealed that the pension fund also withdrew a €20m allocation to European small caps from Robusta. At the end of 2016 the scheme had a €13m allocation to private equity run by Robusta.Earlier this year Nestlé sacked its internal asset manager, Nestlé Capital Management, from several Robusta mandates, replacing it with external providers including BlackRock and Grosvenor.Alliance still receives investment advice from Swiss-based Nestlé Capital Management.In its annual report, Alliance also said it had decided to gradually reduce its 20% inflation hedge through swaps, after an asset-liability management study had shown that the cover only had a marginal effect on the scheme’s results.In 2015, it had seven swap contracts with a combined negative value of €25m, with several merchant banks.At the end of 2016, it had terminated three contracts, leaving a remaining contract value of €17m.During last June’s congress of IPE’s sister Dutch publication Pensioen Pro, asset manager AXA urged pension funds to pay more attention to inflation hedging, for example through inflation-linked bonds.Alliance declined to clarify its decision to divest from Robusta’s hedge funds and to cease its inflation cover.last_img read more

ESG roundup: GPIF, World Bank report on fixed income ‘constraints’

first_imgThere were no standard definitions of ESG and data – in particular in emerging markets – was still wanting.Other issues, according to the report, included: how to pursue engagement with debt issuers, especially sovereigns; the role ESG played in credit ratings; and a “dearth” of ESG-focused products for fixed income investors.Principles and metrics to allow for customised approaches by investors should be refined, they said, and innovative products to accommodate growing demand for fixed income “sustainable investments” should be developed as demand for green bonds and other ESG-labelled bonds was outstripping supply.They also recommended that conceptual work on ESG and fixed income go beyond the relationship between ESG factors and credit risk to also consider that between ESG issues and liquidity and other market risks.Hiro Mizuno, chief investment officer of GPIF, said: “Our research collaboration with the World Bank Group will help encourage greater awareness and wider adoption of ESG integration in fixed income.“We especially value the World Bank Group’s unique convening power and expertise to improve breadth and depth of ESG data, especially of social criteria such as human capital and healthcare, and to refine pricing and cost mechanisms for the green and other labeled bonds so that such products can become mainstream investment products.”The pension fund was committed to working with its external fixed income managers to integrate ESG, he added.The report was written by Georg Inderst, an independent consultant specialising in green finance and infrastructure investment, and Fiona Stewart, a lead finance sector specialist at the World Bank.NN IP joining forces with Chinese manager NN Investment Partners and China Asset Management (ChinaAMC) are looking to form a strategic partnership with a particular focus on ESG products and services.On Friday the two asset managers signed a memorandum of understanding that they said would allow them “to explore joint product development opportunities and consequently leverage on each other’s capabilities in European and Chinese capital markets respectively”.The €246bn Dutch asset manager will be an advisor to ChinaAMC and help it develop and adapt international best practices in integrating ESG factors into its investment processes, according to a statement.Tang Xiaodong, CEO of ChinaAMC, said: “ChinaAMC hopes to bring more sophisticated investment strategies into China through cooperation with globally renowned asset management organisations like NN IP.”The company recently struck a partnership with TOBAM to launch a Chinese equity smart beta strategy.“At the same time,” he added, “ChinaAMC also hopes to increase the international institutions’ understanding of the Chinese capital markets and the Chinese asset management industry, so that these investors will also have more opportunities to participate in China’s economic development.”The two managers also intend to work together on opportunities under China’s One Belt One Road programme.Awareness about responsible investment is increasing in China. The Principles for Responsible Investment (PRI), an advocacy organisation, appointed its first head of China in September and recently published a report with recommendations for developing sustainable investment in the country.ChinaAMC was the first full service asset manager to have joined the PRI, it said.China’s assets under management will grow sixfold in 10 years, according to a recent report from a Shanghai-based financial consultancy. UK consultant reports growth in client ESG assetsConsultancy firm Cambridge Associates said the value of ESG-related investments among its client base has more than doubled over the past five years.Investments had increased from $4bn (€3.3bn) in 2012 to $9.5bn in 2017, it said. Almost a quarter of its clients made a serious enquiry about ESG investments in that same period.“Of those already with active ESG investments in their portfolios, over 10% are fully committed to ESG, with most or all investment decisions considered through an ESG lens,” Cambridge said.There was a “clear economic basis” inluencing the recent uptick in interest for many ESG themes, in particular environmental, government policy announcements, and good returns from and increased choice of ESG-related funds.Recent guidance from the UK’s Pensions Regulator could fuel more demand from UK pension schemes, added the company.It is one of 16 investment consultancies who recently pledged to help UK pension funds take account of climate change and other responsible investment issues. The pledge was co-ordinated by the Association of Member-Nominated Trustees. There are significant constraints limiting the wider adoption of environmental, social and governance (ESG) considerations in fixed income investing, according to a report produced for Japan’s Government Pension Investment Fund (GPIF) and the World Bank Group.The report was the result of a research collaboration between the two entities aimed at advancing adoption of ESG integration in fixed income to help achieve sustainable development.According to the authors, ESG integration in fixed income was catching up quickly with the practice in equity markets and leading investors were “going further and viewing ESG not just as an aspect of risk and return, but merging ESG and ‘impact’ investing”.  However, many investors found implementing ESG in practice a challenge, and this could be exacerbated when it came to their fixed income portfolios, they wrote. last_img read more

People moves: M&G Prudential names chair ahead of demerger

first_imgM&G Prudential, State Street, Mercer, Barnett Waddingham, Avida, BNY Mellon IM, eVestment, Aviva Investors, HSBC GAM, PGIM Real EstateM&G Prudential – Mike Evans has been appointed chair of M&G Prudential ahead of its planned demerger from UK insurance group Prudential. Evans currently chairs the board of Just Eat, a mobile app company, and previously served as chairman of the boards of UK fund broker Hargreaves Lansdown and property company Zoopla.Prudential said further board appointments would be announced “in due course”. It has not yet set a date for the demerger as it is subject to the completion of other changes within the Prudential group.Evans said: “This is an exciting time to be joining M&G Prudential, which is a strong business with lots of opportunities for growth in the UK and international savings and investment markets. I look forward to working with John and his team as we become an independent business.”  M&G Prudential runs €395.4bn worldwide, according to IPE’s latest Top 400 Asset Managers guide.PGIM – PGIM Real Estate, part of the US financial services giant Prudential Financial, plans to expand its defined contribution (DC) offering into Europe and Asia and has promoted David Skinner to lead its global operations. Skinner has led the US DC operation for PGIM Real Estate for seven years and manages two daily-priced property portfolios. The firm has also hired Sara Shean as an executive director – she was previously head of institutional DC at Cohen & Steers.State Street – The US financial services giant has poached Angela Summonte from BNP Paribas Securities Services to lead its institutional business in Europe, the Middle East, and Africa (EMEA).As head of asset owner and official institutions sector solutions, Summonte will be responsible for the group’s institutional sales strategy and business and product development. Summonte worked at BNP Paribas for 14 years in various sales roles across banking, global custody, and fund administration.Aviva Investors – The UK-based asset management arm of insurance firm Aviva is setting up a US equities team, to be led by new recruit Susan Schmidt. She joins from Westwood Holdings Group, an investment management company based in Texas, where she was a senior portfolio manager focused on small and mid-cap companies.The creation of a US equities team follows the appointment of eight equities staff from Aberdeen Standard Investments in July. Aviva Investors also hired David Cumming as equities CIO in January.Cumming said the firm would add more staff to Schmidt’s team, based in Chicago, in the coming months. Tom Meyers, the company’s head of client solutions for the Americas, added: “The US equities team will compliment our growing global equities platform and our expanding North American fixed income capabilities, allowing us to better serve clients regionally and around the globe.”Mercer Germany – Rita Pfahls joined the German arm of consultant Mercer on 1 October to support institutional clients on the construction and implementation of investment strategies. She was previously at German asset manager Universal Investment, where she oversaw corporate and pension fund clients. Prior to joining Universal in 2013, Pfahls worked at Allianz Global Investors and Deka Bank.Barnett Waddingham – The UK actuarial, administration and consultancy services provider has hired Barry McKay to its public sector consulting team. He joins from rival consultancy group Hymans Robertson where he worked for 22 years and led the firm’s actuarial practice for local government pension schemes (LGPS).In his new role, based in Glasgow, McKay will provide advice and risk management solutions to the company’s LGPS clients as well as developing Barnett Waddingham’s strategy for this client group. Barnett Waddingham is one of the leading service providers to the 100 LGPS funds across the UK.Avida International – Pascal Hogenboom, the former CEO of Aon Hewitt in the Netherlands, has joined investment advisory firm Avida International as an associate partner. He left Aon on 1 April after five years as chief executive. Hogenboom will also work with Strategia Worldwide, a London-based consultancy that provides a variety of risk management services, including financial, political and security.Paul Boerboom, founding partner of Avida International, said Hogenboom would help the company “improve our services for clients in an age where the industry is subject to rapid changes, such as the need for new value propositions, fee pressures, digitalisation, and sustainable investing”.Hogenboom, who served in the Dutch military for eight years, said the two roles meant he could use this experience along with his time in financial services “to help clients with the challenges they face”.IIRC – Dominic Barton has been appointed chair of the International Integrated Reporting Council (IIRC), a global body pushing reform in company reporting. Barton is senior partner and former global managing partner at McKinsey & Company, and joins IIRC as it enters a new strategic phase. Barton takes over from Mervyn King, former governor of the Bank of England, although King will stay on as chair emeritus.BNY Mellon Investment Management – Sarah Jarrett has been promoted to head of institutional liquidity distribution for Europe, responsible for the company’s cash and liquidity management products. She has worked for BNY Mellon IM for 11 years, and was “instrumental in establishing and developing the institutional liquidity distribution business”, the company said in a statement.In addition, the asset manager has appointed Luke Newman as institutional liquidity sales manager for Europe. He was previously director of EMEA trading at Institutional Cash Distributors.eVestment – The institutional data and analytics firm has appointed Ashish Aryal as head of strategy for EMEA, tasked with growing eVestment’s presence across the region. He was previously at BlackRock, where he worked for seven years as vice president of global market intelligence and corporate strategy. He has also held positions with investment banks Jefferies International and Société Générale.HSBC Global Asset Management – HSBC GAM has hired two new staff to its London-based fixed income team. Oliver Boulind joins from Aberdeen Asset Management where he developed an asset allocation process for global bond portfolios, and will perform a similar role at HSBC GAM. He has previously worked for AllianceBernstein, Invesco and JPMorgan.Richard Balfour joins from Barings, where he was an investment manager on the firm’s multi-sector fixed income team. In his new role he will run global and UK bond portfolios. He has previously run money at Credit Suisse Asset Management.last_img read more

The Gold Coast’s famous floating house was built without proper approval

first_imgRose Naumoski sold the Burleigh Heads property last week. Picture Glenn Hampson“It does not appear that the private certifier deliberately approved the development permit for building works knowing there was a noncompliance relating to the number of storeys.”Storey and Castle Planning director Jake Storey maintained the private certifier correctly determined the house’s height.“From my investigations and experience, no other council in southeast Queensland interprets building height in this way, even though we all rely on the same State definition.”He said the interpretation could prove a big issue for the Gold Coast if the council enforced it on homes that had already been built.“If these were policed, housing on the Coast could shut down, as many ordinary two-storey homes end up being considered three storeys if they have a different floor level for the garage or are of stepped design,” he said.The Burleigh home first hit the market in November, at one stage with a listing price of $2.7 million, and sold for an undisclosed price last week.After it sold, Ms Naumoski took to Instagram to vent her frustration at the approval process.“This project has tested my ability to keep my head together at so many points over the past 10 months … and building it was actually the easy part,” she said.Ms Naumoski declined to comment while the private certifier directed all questions to Storey and Castle Planning. The application to change the site’s zoning was approved last month.More from news02:37International architect Desmond Brooks selling luxury beach villa16 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag2 days agoAs a result, Ms Naumoski was told a development permit to change the zoning was required.An application was lodged in March this year and approved only last month.Two residents made submissions to the council during the public consultation process.Miranda and Kerem Kozan, who live nearby, said it was “alarming” that the house had been built without public consultation and argued it failed to comply with setback conditions on the eastern and western boundaries.Another resident, Linda Diana said the proposed fifth storey, a guest bedroom beneath the lower level of the existing house, would compromise their privacy.“The development of the proposed guest room will significantly impact the privacy and amenity of our property … as it will be within approximately 2.5m of a habitable room of our house,” she said.A council document states that while the development failed to comply with building rules, neighbouring properties weren’t “adversely impacted” so it could justify approving it.As a condition of the approval, the proposed fifth storey can’t be built on.“It appears that there was confusion at the time of the building works application in relation to determining the number of storeys of the dwelling due to the change in the definition of storey,” a spokeswoman said. The design is stepped to follow the slope of the land.They argued the plans showed five storeys, which exceeded the area’s height limit.The private certifier made an application to the council months before it approved the development requesting advice only in relation to the house’s setbacks and site coverage.It is in a low-density residential zone, which states a building’s height must not exceed two storeys with a maximum height of 9m.Despite its illegal construction, the council will not force the owner to tear it down or take action against the private certifier who approved it.“An investigation revealed that the dwelling, in relation to the definition of storey under the city plan, was potentially a five-storey dwelling,” the spokeswoman said.However, Storey and Castle Planning Consultants argued on behalf of Ms Naumoski and the private certifier that it was only two levels at any one point.“The design of the development is stepped so as to follow the slope of the land and contains no more than two storeys in any single vertical plane inclusive of the additions,” the report stated.center_img The floating house on Hill Ave, Burleigh Heads.THIS multimillion-dollar Gold Coast home gained fanfare nation wide for its unique floating design. But Burleigh Heads’ most talked-about house was built illegally, failing to meet the site’s zoning requirements.The blunder only came to light when a neighbour complained about the home’s height to the Gold Coast City Council.According to council documents, plans for the “two-storey” residence, known as the floating house, were approved by private certifier Coastline Building Certification Group in 2016.Almost a year after it was approved, the council issued a compliance notice to the owner, Rozetta Naumoski, and the private certifier.last_img read more

Luxe homes with Boxing Day-style discounts

first_imgThis house at Black Mount is on the market for $2.7 million Up north, The (W)right House in Port Douglas, one of Queensland’s most luxurious resort towns, is “for sale at an aggressive selling price” of $3.7 million. Property data shows that is a $1 million discount on the asking price back in 2016. The unique four bedroom house is located within the ‘Beachfront Mirage’ gated estate, and is packed full of cool features including views of the water gardens from each room, polished concrete flooring, soaring ceilings, walls of folding glass panels, timber decks and lush tropical gardens. The (W)right House in Port DouglasAt Airlie Beach, a stunning eight bedroom house on a 3.8 hectare blockwith views across the Whitsundays is listed for $4.4 million — a $400,000 discount on its original listing price. There is also a two bedroom guesthouse with an additional lower level apartment, a spectacular three sided water’s edge heated swimming pool with built-in jacuzzi, an outdoor deck with gazebo, a sports arena suitable for tennis or basketball, a cleared area for helicopter access and the option to but a 30m marina berth at the Port of Airlie. “Modena” is on the market for $4.5 million THEY are the luxury homes that have been given Boxing Day-style discounts.And with prices slashed by more than $1 million in one case, cashed-up buyers could buy a prestigious pad and two modest houses to rent out with the cash leftover.On the Gold Coast, a six bedroom mansion called “Modena” is on the market for $4.5 million after the owner dropped the price by $1.195 million from an initial listing of $5.695 million. The median house sales price in Brisbane is $532,000, according to CoreLogic. The tri-level house sits on a 1501sq m double block at 18-20 The Sovereign Mile, Sovereign Islands, with water views. Key features include a porte-cochere and entry with a water feature, a 22m lap pool with a beach area, a media room, a dual access basement for up to 20 vehicles plus a separate, professional-style automotive workshop with a hoist and a pontoon for mooring two large vessels. Modena is a whole lot of house!Ray White Sovereign Islands agent Edin Kara said the house was listed unsuccessfully two years ago for $7.95 million, but the new price was getting offers.”It is definitely a very good buy,” he said. “We now have a few offers and are negotiating with those potential buyers.“They are all local families looking to get in to Sovereign Islands, which is an exclusive area and home to a lot of wealthy people.”More from newsCairns home ticks popular internet search terms2 days agoTen auction results from ‘active’ weekend in Cairns2 days agoAnd at Black Mountain, west of Noosa, you can get a main residence plus three cottages on 38.9 hectares for $2.7 million — a $500,000 reduction on its original listing price. 1/188 Mandalay Rd, Airlie Beach Ray White Whitsundays agent Adam Webster said the property would suit a family, and offered “great value”.“The inquiries have been out of places like Sydney and Melbourne, with many of those looking for a retreat away from the city,” he said.last_img read more