The methodology significantly reduces the new index’s debt-to-equity ratio relative to that of the market capitalisation-weighted Merrill Lynch Global Corporate Bond index benchmark, from 0.83 to 0.73.The debt-to-cash flow ratio is reduced from 9.78 to 6.47.Rob Arnott, chief executive at Research Affiliates, said: “Traditional bond indices, which give the largest weights to the biggest debtors, are great tools for benchmarking performance but they are suboptimal as the basis for investment funds. There is a better way to construct bond indices for investment purposes.”The firm’s research suggests that, between 1997 and 2013, issuers with higher leverage did trade with higher average spreads, but the relationship was far from linear.Moreover, volatility of annualised total returns increased with higher leverage but annualised total returns did not, suggesting investors are not compensated for the extra risk.Similar results were returned when the firm looked at levels of debt coverage.Looking at the ratios of working capital, cash flow, sales and leverage to assets – which academic research indicate are predictive of downgrade risk – Research Affiliates found that the 3% of issuers excluded from the index on the basis of these ratios returned 4.1% with 9.4% volatility, versus 6.4% with 6.2% volatility from the rest of the universe.Shane Shepherd, senior vice-president and head of fixed income research for Research Affiliates, said: “Our research reveals that investors’ reach for yield is often not properly compensated.“This new index offers lower credit risk, lower volatility and better risk-adjusted returns over full market cycles than traditional market value-weighted indices.”The Citi RAFI index’s excess risk-adjusted return does not appear to result from exchanging credit risk for duration or currency risk.Currency exposures are almost identical with the market portfolio’s, and the index is only slightly overweight in the 3-10 year part of the curve, and underweight at both the short and the very long end.Most of the active weight in credit rating is located in the AA and single-A part of the spectrum: the RAFI index is about 3 percentage points overweight in AA paper, 1.8 percentage points underweight single-A and 1.5 percentage points underweight BBB.There are some meaningful sector active weights: 9.5 percentage points overweight industrials, 3.2 percentage points underweight utilities and 5.3 percentage points underweight financials.Research Affiliates acknowledges that its methodology of measuring average annual cash flow smoothed over five years does not capture the relative stability of those cash flows, which might affect the relative riskiness of similar levels of balance-sheet debt held by companies in different sectors.The Citi RAFI index has a turnover of 43%, versus that of 26% from the Merrill Lynch index, while the weighted average bid/ask spread is 1 basis point higher than the cap-weighted index’s, at 0.28%.That would result in a 4-5 basis point excess cost, before other fees associated with investable products built on the index.More than $118bn (€86bn) is managed against Research Affiliates’ fundamental indexing equity indices.This new product joins fundamental indices for sovereign developed markets and sovereign emerging markets local currency debt in the Citi RAFI Bonds Index Series.Helge Kostka, a vice-president in European business development for Research Affiliates, said: “In some respects, one might expect that the smart-beta ideas would be best-suited to fixed income, but while there have been some index products launched in sovereign bonds, very little seems to have been done in credit.”Speaking to IPE recently for a forthcoming special supplement on smart beta, the CIO of the UK’s Environment Agency Pension Fund, Mark Mansley, noted the lack of product development in fixed income.“The anomalies in bond and credit markets are even greater than in equities,” he said.“We would like to see more products and ideas out there for us to harvest.“Perhaps we are still in the early days of this: the bond market has had things its own way for 20 or 30 years, and, now that the tide is turning, perhaps more innovative thinking will come to the fore.”The Environment Agency’s Active Pension Fund uses Legal & General Investment Management to implement a global equity mandate that passively tracks a FTSE RAFI benchmark. Investment bank Citi and fundamental indexing specialist Research Affiliates have launched a global investment-grade corporate bond index in a pioneering move to extend the smart-beta concept further into the fixed income world.The Citi RAFI World Corporate Investment-Grade Bond index uses two factors in weighting bonds in the portfolio: long-term assets, which represents the portion of assets that long-term bondholders have a claim on, and cash flow, which reflects debt service capacity.In addition, financial ratios are used to reduce exposure to companies that are more susceptible to downgrades.The index values are calculated and published by Citi using this fundamental indexing methodology developed by Research Affiliates.
Research Affiliates, Citi launch corporate bond fundamental index
September 29, 2020
Swiss defined benefit pension funds are struggling to stay on an even keel in today’s low-interest-rate environment, a survey of key assumptions used by 92 Swiss pension foundations by advisers KPMG has found. The firms under scrutiny were reporting under either IFRS or US GAAP at the 2014 year-end.Among the 92 sponsors, many saw their pension balance sheet positions worsen significantly over the course of 2014.The main cause of this was a dramatic slump in discount rates, with this year’s median being 110 basis points lower than last year’s. Graham Middleton, a Switzerland-based partner at KPMG, said: “The root problem here is that the Swiss pension system will struggle if this low-interest environment continues for a period. People are looking at every lever that exists.“But, addressing the underlying impact of continual low yields and longevity improvements, through legislative changes, is something that will need to be taken up first at a federal government level.”The effect of the lower discount rate was, however, offset, at least partially, by strong asset performance.According to the Credit Suisse Schweizer Pensionskassen Index, assets held by autonomous foundations on average returned approximately 7-8% – some 5 percentage points above discount-rate averages.The KMPG experts behind the report also warn that the next wave of annual reports from Swiss companies could contain yet more bad news.Middleton said: “Most companies take the calendar year-end for annual reporting purposes. This means we will have very few companies reporting the effects of the January currency event before the New Year.“Nonetheless, during July and August, we can expect to see some companies posting results based on the June position.“What is significant here is that we will potentially be seeing companies using discount rates of less than 1% outside Japan for the first time. If that continues into next year, our survey will make for interesting reading.”One of the main drivers behind the depressed yields is the decision by the Swiss national bank to scrap its cap on the Swiss franc’s exchange rate against the euro.The move prompted a collapse in the single currency against the franc and a fall in Swiss equities, and helped to depress European sovereign debt yields further.Aon Hewitt partner Olivier Vaccaro told IPE he agreed with the KPMG findings.“At the end of the year, depending on duration, we had discount rates of 10-year duration of 0.87%, for 15 years we had 1.12% and for 20 years we had 1.25%,” he said.Vaccaro said the range at year-end among Aon Hewitt clients was 1.1-1.2%, depending on duration.He added: “So far this year, we have seen further falls since the start of the year, and so we are currently looking at 0.54% over 10 years, 0.69% over 15 years and 0.76% over 20 years.“That adds up to a fall in the range of between 35 and 50bps since the end of last year. We are looking at something like a 7-8% increase in DB liabilities. This will have an impact on the P&L position, mainly due to the increase in the service cost.”KPMG also noted that companies have taken a number of steps to mitigate the impact of falling bond yields by:discounting on the basis of AA-rated bonds only, instead of a mix of AA and AAAusing synthetic bond yields – specifically those reached using currency swaps – in place of real-world yieldslooking to non-CHF denominated bond marketsThe auditor said that, by its understanding of acceptable practice under IAS 19, the use of synthetic yields is “not appropriate” and that relying on non-Swiss franc yields is “generally not appropriate”.Alongside these developments, Swiss preparers have also explored the use of different discount rates to value pensioner liabilities and employee liabilities – and also to determine service cost under IAS 19.KPMG manager Daniel Tonks said: “There are one or two companies in the Swiss market that have introduced split discount rates under IFRS, and this follows the adoption of such in the UK in recent years.“The audit judgment is that this is generally acceptable, and the audit considerations in Switzerland follows the same thought process.“We are talking about a relatively few number of cases where this is happening, but it is worth pointing out that it would be considered a change in methodology and has to be adopted consistently in future years. “If discount rates stay at their current levels, I would expect more people to be considering this and other options. The fact discount rates are so low is focusing people’s minds.”Olivier Vaccaro said the outcome of any such move would depend on the structure of the pension fund because “there is a lower sensitivity to discount rate changes among inactive members than active members”.KPMG supports this approach as auditors and notes that, although it has little impact on a sponsor’s balance sheet position, it will help to reduce future service cost.
It is double that of 15 months ago, according to the analysis.The figure breaks down into 688 institutions and 58,399 individuals across 76 countries.The types of institutions divesting are “more diverse than ever”, according to the report, with no single sector representing more than one-quarter of commitments.“The sectors that initially propelled the movement – universities, foundations and faith-based organisations –continue steady growth, accounting for 54% of new commitments made,” it said. “However, as large private and institutional asset holders recognise the reputational, financial and legal risks of remaining invested in fossil fuels, divestment has spread to new sectors, including large insurers, pension funds and banking institutions.”According to a breakdown by type of investor, faith-based organisations and philanthropic foundations account for the largest share of commitments, with 23% each, followed by local government (17%), educational institutions (14%), pension funds (12%), non-governmental organisations (6%), for-profit asset managers (3%) and healthcare institutions (2%).Different types of institutions will have been involved in different “waves” of divestment and for different reasons, according to the analysis by Arabella Advisors.“The divestment movement was sparked by mission-driven institutions acting out of a moral imperative to confront the climate crisis,” it said.“This initial phase was followed by a second wave of divestment driven by financial concerns about economic risk from stranded fossil fuel assets.”The Paris Agreement “bolstered the economic arguments underpinning divestment” and “reinforced the movement’s moral argument”, it said.Fiduciary duty ‘compels’A changing interpretation of the implications of fiduciary duty for investors’ fossil fuel exposure could ignite a third wave of divestment given the growing recognition of the risk of (further) impairment of fossil fuel assets, according to the report.“The emerging view that fiduciary duty may actively compel divestment of fossil fuels has the potential to pressure financial managers and institutions that once argued their fiduciary roles acted as a barrier to consideration of climate risk,” it said.The point about fiduciary duty was also made by Helena Morrissey, chair of the UK’s Investment Association and chair of Newton Investment Management, who spoke at the report’s London launch event – which was connected with a press conference in New York at the same time.Morrissey said the interpretation of fiduciary duty as an obstacle to considering climate risks had been “completely turned on its head” and that the new view emerging was that fiduciary duty “may actually compel or at the very least encourage divestment in fossil fuels”. Pension funds have formed part of a “second wave” of divestment from fossil fuels, to which investors representing some $5trn (€4.7trn) of assets under management have committed, according to a report.Released on the occasion of the one-year anniversary of the international climate change agreement reached at a UN conference in Paris last year, the report takes stock of the state of play and trends as concerns divestment from fossil fuels and what the future may hold.Produced by Arabella Advisors, which advises on philanthropy and impact investing, the report said the scope of global fossil fuel divestment had doubled over the past 15 months, with institutions and individuals controlling nearly $5.2trn in assets pledging to divest.The $5trn figure does not represent sums divested or pledged for divestment but assets held by the institutions making the commitment.
Data could be stored at different locations, for example at current pension providers. As the data continuously synchronises and is encrypted, the storage is safe and doesn’t depend on one single player, according to KPMG.Dennis de Vries, head of the consultant’s digital ledger services, said employers could automatically link their salary administration to the network.Pension funds and insurers could build a “smart contract” into the sponsor’s system, which would automatically calculate and upload pensions accrual. All adjustments would carry a time stamp, providing full insight into past changes.Currently, several providers are investing millions in updating their administration systems. A data transfer to another provider is often very complicated, as every system stores information in a different way.In contrast, the blockchain concept would be universal and not owned by an single player, KPMG argued.De Vries said: “This would enable the pensions sector to focus on its core tasks again, such as asset management and designing pension arrangements.”He indicated that the database could be extended with third-pillar products as well as information from banks, which must share their payment data with an increased number of parties following the EU’s Revised Payment Service Directive.De Vries said this would open the way to a universal financial passport, comprising real-time information rather than the relatively old data held in the Netherlands’ national pensions register.According to Pieter Kiveron, KPMG’s head of pension advice, the white paper was meant as an invitation to the pensions sector to contemplate who was best placed to set up and manage such a project.De Vries suggested that a foundation could be set up to manage and further develop the universal administration blockchain.Blockchain was first applied by the developers of Bitcoin in 2009, with the decentralised database registering the balance of all holders of the digital currency. A universal and decentralised ‘blockchain’ database would be a more reliable and easier alternative to current administration systems, according to KPMG.In a white paper, the consultant said that the technology behind the digital currency Bitcoin could help create a “true financial passport”.KPMG has developed a blockchain concept in co-operation with Dutch IT firm Cegeka, using ‘distributed ledger’ technology to automate administration tasks.It explained that the database the two firms had created – aimed at providing an overall view of somebody’s pensions income and assets – could be checked or adjusted by anybody with the correct access details.
Its board said that it had asked for quotes from three insurers, including Aegon, which has already insured 86% of the scheme’s liabilities.The pension fund said it preferred a buyout with a focus on consumer price index (CPI) inflation, as it used this measure to grant uplifts to its deferred participants and 3,000 pensioners.Benefits for VNU’s 227 active participants, however, are linked to wage inflation.If the Pensioenfonds VNU could not afford the insurance buyout, it would continue as an independent scheme for the time being, it said.Nielsen, the sponsoring employer, is assessing the possibility of shifting future pensions accrual elsewhere, probably under a defined contribution plan, in line with the parent company’s worldwide pensions arrangements.In its annual report for 2017, the scheme indicated that continuing as a closed pension fund would be another option.The VNU scheme has 5,300 participants in total.Private credit specialist targets Benelux expansionUK asset manager Pemberton has opened an office in Amsterdam, citing “increased investment opportunities in the Benelux”.The company, which specialises in private credit, said it wanted to enforce its relationship with local clients as well as private equity and other financial firms.At the same time, Pemberton has appointed Boris Harmsen as managing director and head of Benelux.Harmsen joins from IKB Deutsche Industriebank, where he was head of leverage finance and sponsor coverage for Benelux.Prior to this, Harmsen had positions at Dutch asset manager Egeria, Deutsche Bank and ABN Amro Bank.London-based Pemberton has also offices in Frankfurt, Madrid, Milan, Luxembourg and Paris, and is 40% owned by Legal & General. The €450m pension fund of Dutch publisher VNU is considering an insurance buyout in order to safeguard its inflation-linked benefits.In a newsletter, it said the transfer to an insurer would only go ahead if the scheme itself could fund a significant part of future inflation compensation.Although most of its liabilities have already been insured with Aegon, the pension fund still pays indexation from its own assets. This includes the risk that the scheme is unable to achieve its indexation target.During the past few months Pensioenfonds VNU has reduced its risk exposure by lowering its equity allocation from 50% to 20%.
John CaseyIn 2002, he co-founded Casey Quirk and in 2015 he retired as chair. The firm, acquired by Deloitte in 2016, continues today as a well-known and reputable strategy practice to asset and wealth managers worldwide. The firm has advised eight of the 10 largest investment managers globally.During his career, Casey was an advisor to traditional and alternative asset managers, including Angelo Gordon, Goldman Sachs Asset Management, and Hellman & Friedman.Casey played a critical role in the formation of Brinson Partners – now part of UBS – and Artisan Partners. He was a longtime advisor to the leadership team of Barclays Global Investors (BGI), sponsor of the iShares exchange traded funds business, which in 2009 was sold to BlackRock, creating the world’s largest asset manager.Casey leaves behind his wife of 54 years, Bridget Sullivan Casey, three adult daughters and eight grandchildren.Donations in Casey’s memory may be made to Stamford Hospital Foundation.To read the digital edition of IPE’s latest magazine click here. In 1976, he co-founded Rogers, Casey & Barksdale in Stamford, Conn., which later became RogersCasey. The firm would become one of the industry’s leading pension consulting firms.In 1996, RogersCasey was acquired by Barra Inc., an investment analytics company. Casey continued to lead many of the firm’s largest client relationships in his roles as vice chair and board member following the sale. John Casey, a visionary in asset management since the early 1970s and founder of several consulting firms, died on 25 April – he was 77.Casey started his career in finance at Paine Webber in 1969, where he was among the group forming Evaluation Associates, a consulting firm that helped select and monitor managers to invest assets for pension and profit-sharing plans, the precursor of today’s 401(k) plans in the US.His impact on the asset management industry was substantial. In the early 1970s, Casey was among a small pioneering group of pension advisors that began to steer their clients away from banks and insurance companies and toward smaller, dedicated firms.His clients, including General Electric, Kodak, and Gannett, began to invest with asset management firms that would later come to dominate the industry.
The house at 34-38 Lakefield Court, Chambers Flat, attracted both local and interstate buyers.LOCAL families and interstate buyers alike competed for the title of this Chambers Flat property.The lowset house at 34-38 Lakefield Court, which was on a 1ha block, sold for $969,000 earlier this month — $276,500 more than the suburb median house sale price.According to CoreLogic data, the suburb median house sale price for Chambers Flat was $692,500. The kitchen and dining was open plan.More from newsDigital inspection tool proves a property boon for REA website3 Apr 2020The Camira homestead where kids roamed free28 May 2019The median had risen by 5.7 per cent to that figure in the 12 months to November 2018.Harcourts Drews Real Estate agent Kellie Brown, who was marketing the property, said about 50 groups had inspected the property and four written offers were received.“People were attracted to the size and space it offered, the way it was presented and even right down to the build,” Ms Brown said.“Everything was immaculate.” The entry was quite grand.The house had four bedrooms and an inground pool. There was also a second self contained unit. Ms Brown said she had experienced a rise in interstate interest as skyrocketing prices in the southern states sent buyers looking for more affordable options.“They’re definitely getting more bang for their buck up here.”Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 6:04Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -6:04 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD576p576p432p432p270p270pAutoA, selectedAudio Tracken (Main), selectedFullscreenThis is a modal window.Beginning of dialog window. Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenFebruary: Brisbane CoreLogic RP Data market update06:05
You can walk through this property at 61 Daintree Place, Riverhills on Wednesday, April 25, from 5.30pm-6pm.LET the trees be your curtain and the moon your night light in this private retreat on the Brisbane River bordered by bushland.The architect-designed house at 61 Daintree Place, Riverhills, has been built by husband and wife team Jenny and Gary Millar to capitalise on its secluded setting at the end of the street. The five-bedroom house is being taken to market by Trent Powles of Harcourts Property Centre, Coorparoo.More from newsParks and wildlife the new lust-haves post coronavirus13 hours agoNoosa’s best beachfront penthouse is about to hit the market13 hours ago“There are views from so many rooms in this house, and the patio is purpose built to capture every angle, Mrs Millar said. MORE REAL ESTATE STORIES SEE WHAT ELSE IS FOR SALE IN RIVERHILLS The outside patio area overlooks the Brisbane River. The kitchen has a self-cleaning oven and stone benchtops.The property has hosted two weddings and plenty of pool nights, with the dining room set up two steps higher than the billiard room so games can be observed from the dining level. The pathway down to a lower garden area which has hosted two wedding ceremonies on the 831sq m property.‘Twisted angular’ rooms give the residence a point of interest while convenient features include an outside toilet and ice fridge near the patio and billiard room. >>>FOLLOW THE COURIER-MAIL REAL ESTATE TEAM ON FACEBOOK<<< “You can be sitting in the gazebo with the moonlight lighting up the trees.“There’s no houses, no curtains downstairs, we don’t need them. Nobody looks at us. It’s a lovely spot.”
Bargain first-home buyer houses within 20km’s of the CBD Ms Atzori said when she was looking to take on a new client, she would interview them to make sure they understood the responsibilities of a landlord and warned they needed to have a contingency fund if they were to be successful in their endeavour.“Landlords need to understand that they need to have money aside for surprise maintenance such as hot water systems, which could cost more than $1000, roof leaks, major electrical issues et cetera,” Ms Atzori said. Mum’s $55 plan to make $680 Landlords are charged with supplying compliant smoke alarms, while renters are responsible for testing, cleaning and replacing the batteries.According to the Residential Tenancy Authority (RTA), maintenance such as damage to the property by a tenant or their guest; light gardening; mould caused by the tenant; changing everyday light bulbs; and testing, cleaning and replacing the batteries in the fire alarm were generally the responsibility of the tenant, although could differ in each rental agreement.Emergency repairs, like a burst water service, blocked toilet, or a broken hot water system or oven should be carried out as soon as possible and paid for by the landlord. The responsibility of changing the light bulb usually falls on the tenant, but there are exceptions for more complicated bulb changes.Should the landlord not be contactable, a tenant can arrange a qualified person to carry out the repairs to a maximum value of two weeks rent, and the landlord would either be contacted to pay the bill, or if the tenant pays, the landlord would need to reimburse them within seven days of receiving the receipt.REIQ CEO Antonia Mercorella said one of the most common reasons people moved from their rental was a poor relationship with their landlord, so being proactive was key to maintaining a positive relationship.Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 0:30Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:30 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD360p360pAutoA, selectedAudio Tracken (Main), selectedFullscreenThis is a modal window.Beginning of dialog window. Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenWho is the average Aussie renter?00:30 Who is responsible for the maintenance of your investment?Pesky maintenance issues can be a headache for landlords and tenants, especially if neither want to fork out the cash to fix the problem.Sash and Gable Properties business development manager Nikki Atzori said there was often confusion about who should swipe their credit card and that landlords needed to understand maintenance needs to be done before, during and after tenancies. MORE: Inside Sex and the City star’s LA home Pest control is a “grey zone” so landlords are encouraged to get on the front foot. Copyright: Thinkstock.More from newsParks and wildlife the new lust-haves post coronavirus13 hours agoNoosa’s best beachfront penthouse is about to hit the market13 hours agoMs Atzori said the responsibility of pest control was a “grey zone”, but encouraged landlords to get on the front foot and take care of it themselves.“I always advise my clients do annual pest control on their property,” she said.“That way, if tenants are not keeping the property clean, for example, there are crumbs everywhere, then you know that the issue is caused by the tenant and is not an issue for the landlord to take care of.”
Where property prices have fallen the most in Queensland READ MORE Ms Veneman said anything built off the ground can be moved, however circumstances will vary depending on the size of the house as to wether it can be lifted as one load. “We can basically move anything that’s built off the ground because we have the machinery and technology.”“Typically we only move things within a 200km radius but we have moved it further but it just depends on the circumstance.” A house being Transported from 116 Tippet Street in Gulliver to 4 Latchford Street in Pimlico.THE idea of demolishing a family home can be hard to come to terms with, especially if there’s nothing wrong with it.When you want to build a new house without giving up the location, It can seem like there’s no other option. READ MORE Unique home with a cricket pitch in the front yard More from news01:21Buyer demand explodes in Townsville’s 2019 flood-affected suburbs12 Sep 202001:21‘Giant surge’ in new home sales lifts Townsville property market10 Sep 2020Inside the home which is now located at 4 Latchford St in Pimlico“We also clear the site for them for free.“It’s a solution to housing affordability, it’s not looked at enough as a solution for first homeowners and retirees.”Ms Veneman said she recently relocated a house from Gulliver to Pimlico, which was headed to landfill providing an affordable option for both the owner and new buyer. A house being Transported from 116 Tippet Street in Gulliver to 4 Latchford Street in Pimlico.But there is a solution that can save you thousands and in some cases make you a quick profit. Owner and director of Townsville’s Renewable Homes, Jo Veneman, said transporting a house is not an option most people think of first.“It costs the owners nothing, we basically offer them money for the house,” Ms Veneman said. “Gulliver is a boom suburb, there’s a lot of people who are renovating or building new homes there,” Ms Veneman said.“The owners offered us the house for free because they wanted to build a new one.“We relocated the home for $43,000 in total for the buyer and they didn’t have to pay anything more for the house.”The house which was located at 116 Tippet St in Gulliver, now sits at 4 Latchford St in Pimlico. 