September 2011 Newsletter
Welcome to our September Newsletter.
With the RBA holding interest rates again this month with seems that the prediction by economists that rates will drop is just about to happen.
The employment data is trending towards an increase in unemployment rather than a decrease and with Europe looking pretty shaky it may be harder for our exporters to sell in to a recessed market such as Europe.
All these points indicate it is just a matter of time before the RBA will drop the Cash Rate by another 25 basis points. Property sales are still slowing and lender valuations are continuing to come in under vendors’ expectations. This means that borrower affordability is on the rise and it is time to check your home loan rate and give us a call. We can work out the cost/benefit so you can decide if it is worthwhile.
We have a lender with 6.97% pa variable interest rate home loan with NO Application Fee.
Are you looking to buy an investment property?
Want Discounts between $30,000 - $50,000 off the property list prices?
Then give us a call on (02) 8060 0618 and ask for Richard.
We can put you in touch with a group that has exceptional opportunities to buy premium grade property investments at prices not available to the individual buyer.
Enjoy the read.
Richard
At its current pace of construction, Australia could face a housing shortfall of half a million homes by 2020, the HIA has claimed. 
The housing market is at a "crucial inflexion point", an economist has claimed.
Economist Steve Keen has predicted that a housing market price 'swan dive' is about six months away.
The NSW Budget will effectively price many first homebuyers out of the market, a top broker has said.
Oh sure, everyone wants to get their hands on a prime piece of riverfront real estate and soak up the envy from passing ferry passengers as they battle an off-colour coffee and three day old croissant. Why wouldn’t you? Big money property is a sure thing. You’ve bagged yourself a bullet proof investment that is certain to set capital growth hearts racing as it ever upward appreciates. You smart cookie!
Well… reasonably smart. There’s an old adage about cashflow being crowned a monarch.
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Australian property hunters want a detached house on a large parcel of land, 15km from the CBD, a new survey indicates.
I have said countless times in the many, many speeches and articles that I have presented in the past that Australia is different to many countries in that it is a nation of people who strive to own a home and these houses aren’t “shanty”, they are generally well constructed dwellings.
The Spring selling season has kicked off with signs of life in some capital city markets, figures from Australian Property Monitors indicate.
Master Builders has called for a forum to assess the impact of the carbon tax on home building after Prime Minister Julia Gillard introduced the legislation to Parliament yesterday.
Housing costs have jumped 55% over the past six years, a lobby group has claimed.
Source: Australian Broker News
At its current pace of construction, Australia could face a housing shortfall of half a million homes by 2020, the HIA has claimed.
In its Housing to 2020 report, the Housing Industry Association has claimed housing shortfalls could become increasingly critical in the years ahead.
"HIA estimates that Australia will require in the order of 1.6 million homes over the nine years to 2020, but if we build at the average rate of the last 20 years many areas of the country will have a critical housing shortage by 2020. Under such a scenario the cumulative national shortage could approach 500,900 dwellings," HIA senior economist Andrew Harvey said.
The organisation has forecast that NSW will see the greatest shortfall of dwellings, with a housing deficit of 155,700 by 2020. Tasmania was the only state or territory where the HIA projected a surplus by 2020.
In spite of the HIA claims of a housing shortage, recent data suggests an overhang of housing stock currently on the market. RP Data has indicated stock levels are 32% higher across capital cities than at the same time last year, and SQM Research has pointed to a 22% year-on-year increase in stock on market nationally.
Source: Australian Broker News
The housing market is at a "crucial inflexion point", an economist has claimed.
Rismark managing director Christopher Joye has said talk of RBA rate cuts could tip house prices back toward capital gain. Joye said borrowers had already seen "de facto rate cuts" as lenders moved to slash fixed rates.
"If rates do remain on hold or begin to fall, we would expect to see Australia's housing market find a base and begin to generate capital gains again," he commented.
However, Joye said rate cuts by the RBA would be "surprising" given high inflationary figures over the last six months.
The comments come after figures from RP Data and Rismark indicated a 2.4% decline in capital city median prices over the quarter, representing a 2.9% year-on-year fall.
RP Data research director Tim Lawless indicated the premium housing market has seen the largest decline in values.
"Dwelling values across the most expensive capital city suburbs are down 6.2% over the first seven months of the year. This compares with a much smaller 2.3% fall across middle priced suburbs and a 2.1% decline in the cheapest suburbs," he said.
Lawless attributed decline in the higher end of the market to weak business conditions outside the resources sector, and said financial market volatility was being more keenly felt in wealthier households.
Source: Australian Broker News
Economist Steve Keen has predicted that a housing market price 'swan dive' is about six months away. Speaking with Australian Broker News, Keen said a property bubble burst is unlike a stockmarket crash.
"In a stock market crash, you can lose 22% in one day, but in the property market what happens is that people who don’t get the reservation price they have got, hold the property on the market and don’t sell so you get an expansion in the unsold stock," he said.
However, Keen said that sellers will eventually be forced to drop their price expectations.
"At some point the sellers who are holding off on actually reducing their price, either are forced to reduce their price by personal circumstances, or they think that if they don’t reduce their price they are not going to sell, so they take it on the chin and reduce the price," he said.
The result wiil be a property price 'swan dive' in just six months, according to Keen.
"We are at that stage where you get the bounce around, where prices can sort of appear to go sideways with a slight downward trend for about a year or so, and then they’ll start precipitously falling."
"I think we are probably about six months from the swan dive here, but it is certainly on it’s way."
Source: Australian Broker News
The NSW Budget will effectively price many first homebuyers out of the market, a top broker has said.
Under the newly-released budget, the NSW Government's stamp duty exemption will only apply to first-time buyers purchasing a newly constructed home. The change, set to come into effect from January 1, will see buyers looking to purchase an established dwelling slapped with more than $20,000 in stamp duty for a home valued at $600,000.
MPA Top 100 Broker Justin Doobov has told Australian BrokerNews the move will knock many potential buyers out of the market.
"It's definitely going to price first home buyers out of the market as they now need to save another 5% to cover stamp duty. This is going to cause a large hole in the market as there will be a lag as new buyers will have to save the extra money needed," Doobov commented.
Raine & Horne chief executive Angus Raine agrees, and commented that many young buyers looking for inner city units will now have to defer their purchases, and will subsequently put additional strain on infrastructure in Sydney's outer suburbs.
"I'd really urge the NSW Government to reconsider this budget measure as it will mean first timers will need to find tens of thousands of additional dollars to buy into the housing dream," Raine said.
The residential construction industry, however, has praised the move, with HIA executive director for NSW David Bare calling it a "positive step" to stimulate the home building sector.
Regardless of how the policy impacts first homebuyers, Doobov said investors could find a window of opportunity in the changes.
"There will be a good opportunity for investors to jump in the market once the exemption is removed as there will be a lag in the market pricing while the buyers adjust to the new requirements," he said.
Source: Australian Broker News
Australian property hunters want a detached house on a large parcel of land, 15km from the CBD, a new survey indicates.
The research from PRDnationwide shows the most desireable type of property for potential homebuyers is a detached house on a 600sqm block, situated within 15km of a CBD. Surveying by the company saw 37% of respondents tip this type of property as the most preferable.
While detached home sales and capital growth have lagged behind units, respondents to the poll showed an overwhelming preference for standalone properties. A further 33% of respondents said a coastal or regional home was their desired property. Eighteen per cent said they preferred a townhouse within 6kms of the CBD, while only 12% favoured an apartment within 3kms of the CBD.
PRDnationwide researcher Josh Brown said, while units and townhouses had seen growth in popularity, the survey results proved "the house is still king".
"Certainly a growing number of purchasers are drawn to the low maintenance lifestyle that comes with living in a unit or townhouse, but Australians have always loved their own space and a backyard is still one of the most requested attributes of a property," he commented.
However, Brown stated that the 30% of respondents who favoured a multi-unit dwelling presented a significant shift.
"This figure is much greater than it would have been 10 years ago, and is proof of the changing paradigm of the great Australian dream to lower maintenance properties in the capital cities," he said.
Source: Australian Broker News
The Spring selling season has kicked off with signs of life in some capital city markets, figures from Australian Property Monitors indicate.
Sydney saw its auction clearance rate creep above 60% at the weekend, after languising in the mid-50s over the past several months. The median sales price for the city was $760,000, with 179 of the 265 properties on offer sold.
The upper end of the Sydney market also experienced renewed activity, as 32 of the properties either sold at or prior to auction were above the $1m mark. The most expensive property sold on the weekend was a $2.325m home at MacMasters Beach.
Melbourne has also seen a surge in auction activity at the weekend. The auction clearance rate reached 57%, as 110 of the 188 properties found buyers. A $2m house in Brighton was the most expensive property sold at the weekend.
The Brisbane market, meanwhile, continued to struggle, posting a 30% clearance rate. Only six of the 19 properties on auction sold at the weekend. Once again, however, the city saw activity in the premium price bracket, with two of the six sales above the $1m mark.
Source: Australian Broker News
Master Builders has called for a forum to assess the impact of the carbon tax on home building after Prime Minister Julia Gillard introduced the legislation to Parliament yesterday.
Master Builders CEO Wilhelm Harnisch has argued for the establishment of a panel of government and industry stakeholders to examine the impact the proposed tax will have on the building and construction industry. Harnisch has claimed building will take a hit under the tax plan.
"The proposed carbon tax will have a substantial adverse impact on the building and construction sector. According to the Treasury's own forecasts, the carbon tax will reduce output in the construction sector by some 5.6% by 2050, much more than the 4.3% predicted for mining and the 2.8% expected for manufacturing," Harnisch claimed.
Harnisch suggested that the hypothetical panel undertake detailed modelling and forecasting of the impact of the tax on housing affordability, commercial building and SMEs.
While Harnisch has argued the tax will significantly hinder housing affordability and building, BIS Shrapnel chief economist Frank Gelber told Australian BrokerNews the impact of the tax would be minimal.
"The carbon tax isn't the main game. It's been swamped by the effect of the dollar. Not only has it had an impact on the dollar, but the prospect of a stronger Australian economy means we're seeing higher interest rates already. That's what's hurting the housing industry,” Gelber said.
Source: Australian Broker News
Housing costs have jumped 55% over the past six years, a lobby group has claimed.
The newly-launched Australians for Affordable Housing is lobbying the government to address housing affordability, and has called the Australian housing system "broken". The group's spokesperson, Sarah Toohey, said housing has risen out of line with incomes, making it difficult for consumers to secure affordable housing.
"In the last ten years house prices have risen by 147% while incomes have risen by only 57%, and in the last five years rents have risen at twice the rate of inflation," she commented.
Toohey claimed a large proportion of Australians are experiencing "significant financial stress" due to rising housing costs. She argued that, despite significant investment, there was now less public housing than in 2003.
"Housing stress affects renters, first time buyers and home-owners. The Australian housing system is failing too many people and successive government policy settings have contributed to this failure. We need strong leadership from the Federal Government to drive the necessary changes at the federal, state and local government levels. It’s time for a new approach, to develop a concrete plan to fix the housing crisis," Toohey said.
