Quantifying the cost of all this is an involved exercise and varies enormously among properties. He believes it is a better deal to invest in a well-maintained regular home than to go with DHA and pay the higher management fee. But despite the criticism, DHA has many happy investors. It manages more than 13, properties on behalf of lessors and conducts an annual survey to see how satisfied they are.
Its latest survey had respondents, and more than nine out of 10 said they were satisfied with overall customer service. When asked if they would recommend investing with DHA to others within the next 12 months, nearly four out of five said they would. Consultancy BIS Shrapnel, in an independent report called Defence Housing Australia Service Fee Comparison , attempted to put a figure on the real cost of owning a house in an effort to determine whether the yearly expense of holding a DHA property was more or less than regular houses.
BIS Shrapnel found that even in the highest-rent and lowest-cost scenario they could simulate, when all costs were tallied up the regular investment equated to BIS added additional fees for things like advertising, reletting and preparation of a lease. BIS also looked at things like property maintenance, vacancies between tenancies and landlord insurance.
While acknowledging "considerable variation in costs" among properties, BIS provided three scenarios — low, medium, and high cost. This was equivalent to BIS also found the management fees of DHA properties compared favourably with other investment types such as retail master trusts and personal superannuation funds. If you want a hands-on investment you are unlikely to see value in a DHA home. Some landlords are quite happy to manage a property themselves without the help of a real estate agent, and even prefer to avoid paying tradespeople and do some of the maintenance themselves.
Is the fee still good value when you take these costs into consideration? For those who prefer short-term investments, DHA housing is not the best option. Although they can be sold during the lease, this limits buyers to those who want a DHA property. Since they are sold at market value, there is no scope for getting the max when selling — unless you wait until after the lease has expired. On the other hand, demand for DHA housing does seem to be prevalent. A ballot system is used for purchasers.
After registering with DHA and providing a loan pre-approval, purchasers can elect to purchase a property. A ballot is then run, and one lucky investor is chosen as the winner.
While not all properties are located on military bases, some of them are. This limits the way they can be used after the lease period. You may not be able to invest in an area of your choice because you are limited to what is available. While most people will see this as a benefit, savvy inventors will see it as a drawback. If the properties are sold at market value — there is no scope for negotiation.
It is impossible to buy a DHA property for less than market value. Successful property investors such as Nathan Birch say it is possible to build wealth through investing while also minimising risk. While many people favour DHA properties because of the low risk involved, the properties also offer no flexibility. The cost of property management is much lower — and if you choose good tenants who are in it for the long run, then you may not need to pay letting fees for several years.
While DHA properties come with many benefits, they also come at a cost to manage. This contract, awarded to the joint venture CarillionAmey Housing Prime Ltd, included provision for posting relocations, property allocation and furnishing. For example, the survey of Armed Forces personnel indicated that only 50 per cent were satisfied with the standard of SFA down from 57 per cent in , 32 per cent were satisfied with the response to maintenance requests down from 42 per cent in and 29 per cent were satisfied with the quality of maintenance down from 37 per cent in Another method Defence has used to provide housing is through the previously mentioned PFI process.
Further objectives are to cease allocations of housing based on rank and relationship status currently SFA is unavailable to de facto couples and instead provide offers based solely on need.
Additionally, the Director of MoD Service Personnel Policy, Gavin Barlow, has raised the prospect of adapting some military career paths to be made deliberately less mobile, or have less obligation to relocate. That is very definitely something that we are actively looking at. It looks on the face of it like a possible radical change that one could make We have a large number of personnel who do not take up their entitlements, particularly to Service Family Accommodation.
Essentially, they live on the market without any subsidy or support from us for their own private housing. Moving to a situation in which an allowance is made more generally available to personnel to enable a wider range of choice for the majority might be quite expensive and difficult to do, but it is certainly on the table.
There are different ways in which you could make such an allowance work—at least in theory. Fears that the FAM will push many Defence personnel into an unaffordable private rental market, and create subsequent retention issues were raised during a debate in the House of Commons in October Despite the differences in geography and resourcing in each jurisdiction, New Zealand, Canada and the UK share similar challenges to Australia when it comes to defence housing.
A consistent theme across all these case studies is the desire by governments to reduce their own expenditure on defence housing as much as possible. In New Zealand and the UK, this has resulted in their governments leasing the bulk of defence housing properties while Canada has continued to limit spending on maintaining and improving its defence housing stock.
This has resulted in relatively poor satisfaction with defence accommodation in New Zealand, Canada and the UK, compared to that experienced in Australia. While recent surveys in New Zealand, Canada and the UK have failed to show more than 75 per cent satisfaction with service accommodation, tenant satisfaction with DHA-managed housing has averaged 88 per cent over the last five years. As the only country assessed in this research paper to have privatised its defence housing selling off the majority of properties to a single commercial entity , the UK example offers valuable and significant insights.
The most apparent is that the initial sale was almost certainly not the best deal achievable for the Government, because while the commercial returns on residential housing might not be especially attractive, the long-term value of such assets should not be underestimated. Further, by locking itself into contracts for the provision and maintenance of service accommodation without sufficient means of enforcing standards, the UK Government has been unable to alleviate subsequent criticism from defence personnel, their families, and advocacy groups.
The ADF, and by extension the Australian Government, has long sought the most effective means of accommodating its personnel. However, it has generally managed to harmonise both objectives, gaining a high degree of satisfaction from defence personnel and achieving consistent profit levels in a constrained property market.
The examples of New Zealand, Canada and the UK also offer valuable lessons, most notably regarding the trade-off between economic and operational risk and the impact this can have on defence personnel and their families.
Housing Agreement Act Cth , accessed 15 December Australian Government, Budget papers —62, pp. The Parliamentary Library, Australian parliamentary handbook , 19th edition, supplement no. By way of comparison, the —16 ADF separation rate was 8. Monaghan review , op. K Beazley Minister for Defence , Problems of service families , media release, 30 April , accessed 18 December ; S Hamilton, Supporting service families: a report on the main problems facing spouses of Australian Defence Force personnel and some recommended solutions Hamilton Review , Office of the Status of Women, April , pp.
S Hamilton, Supporting service families , op. K Beazley Minister for Defence , New deal for defence housing , media release, 30 January , accessed 18 December DHA, Annual report — , p. Defence Act Cth , paragraph 58B 1 e , accessed 7 June DHA, —15 Annual report , p.
DHA, — Annual report , p. K Rudd Prime Minister , 20, social and defence homes—nation building investment , media release, 3 February , accessed 17 June DHA, Annual report —11 , p. DHA, —16 Annual report, pp. DHA, —06 Annual report , p. DHA, —09 Annual report , p. DHA, —16 Annual report , p. DHA, —14 Annual report , p. DHA, Annual report —16 , p. DHA, Annual report —88 , p. DHA, Annual report —90 , p.
DHA, Annual report —91 , p. DHA , Annual report —07 , p. DHA, Annual report —08 , p. DHA, Annual report —94 , pp. DHA, Annual report — DHA, Annual report —15 , pp. Information supplied by DHA, 16 January DHA, Annual reports, various. DHA, Annual report —88 , pp. DHA, Annual report —96 , p. DHA, Annual report —02 , p. DHA, Annual report —03 , pp. DHA, Annual report —12 , p. Parliament of Australia, Financial terms and conditions of service for members of the regular armed forces—final report of the committee of inquiry Woodward Review , Canberra, , p.
W Smith, Shadow Minister for Privatisation , Privatisation—the state of play , media release, 20 December , accessed 28 September G Glenn, Serving Australia , op. The Treasury, Commonwealth competitive neutrality policy statement , June , p.
L Ferguson, Shadow Minister for Defence, Science and Personnel , 21, defence families not reassured on housing , media release, 13 June , accessed 10 May NCA, Towards responsible government , op.
M Cormann Minister for Finance , Next phase of asset recycling strategy , media release, 13 May , accessed 20 June M Cormann Minister for Finance , Smaller government—transforming the public sector , media release, 11 May , accessed 20 June The source inadvertently noted the date of decision as May G Brodtmann, Shadow Parliamentary Secretary for Defence , Government must guarantee housing security for defence families , media release, 12 May , accessed 17 June PA —, accessed 5 July Data supplied by DHA, 7 December J Uhrig, Review of corporate governance of statutory authorities and office holders Uhrig Review , 27 June , accessed 16 June Pacific Road Group, Value for money review , op.
New Zealand Defence Force, Defence white paper , op. DND Ombudsman, On the homefront , op. Office of the Auditor General of Canada, Canadian armed forces housing , op. Office of the Auditor General of Canada, Canadian armed forces housing , ibid. NAO, The sale of married quarters estate , op. UK Government, Military covenant to be enshrined in law , media release, 25 June , accessed 20 May Part 2: accommodation — second report of session —13 , 13 June , p. Ev 3, accessed 28 September Part 2 , op.
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