Australia holds its own

This week The Organisation for Economic Cooperation and Development (OECD) stated that despite the depressed international economic environment, the impact of the financial crisis and the fall in the terms of trade should be relatively contained within Australia. The OECD expects the Australian unemployment rate will increase to 6% from 4.3% by 2010 and that the Australian economy will avoid a recession, with GDP growth slowing to 1.7% next year. The forecast from the OECD is quite glowing for Australia when compared to the other major economies of the world. The Organisation predicts that 21 of the 30 member economies of the OECD will go through a protracted recession of a magnitude not seen since the early 1980s.The Reserve Bank of Australia meets next Tuesday to once again debate interest rate movements. The market is predicting a further rate cut of at least 75 basis points, with many economists suggesting the cut could be as high as 1.25 basis points, bringing the cash rate down to 4.0%.Over the most recent week new property listings have shown a substantial fall. This result is likely to be due to a culmination of many vendors who have been waiting to list their property having done so already and fewer listings due to the proximity of the Christmas period. The total number of properties listed for sale has also fallen over the most recent week with approximately 152,000 properties listed for sale across the country. Despite the fall, total stock on the market remains well above the 12 month average, sitting at approximately 134,000 properties.
Whilst the most recent week has seen total property listings fall significantly it is still too early to say that the reported increase in enquiry is resulting in increased sales activity. However, if total stock continues to fall for another few weeks it will indicate a return of buyer activity. With volumes of new listings likely to continue to fall over the Christmas period the market may move closer to an equilibrium in effective supply and demand.
Auction clearance rates remain below average with just 50% of Melbourne auctions clearing last week, 42% of Sydney auctions and 25% of Brisbane auctions, Brisbane and Sydney clearance rates improved slightly compared to the previous week.

To view some great buys go to www.nobullrealestate.com.au/properties.php

To view some great rentals go to www.nobullrealestate.com.au/rentals.php

Extract from RP Data Property Pulse www.rpdata.com

Australia holds its own

This week The Organisation for Economic Cooperation and Development (OECD) stated that despite the depressed international economic environment, the impact of the financial crisis and the fall in the terms of trade should be relatively contained within Australia. The OECD expects the Australian unemployment rate will increase to 6% from 4.3% by 2010 and that the Australian economy will avoid a recession, with GDP growth slowing to 1.7% next year. The forecast from the OECD is quite glowing for Australia when compared to the other major economies of the world. The Organisation predicts that 21 of the 30 member economies of the OECD will go through a protracted recession of a magnitude not seen since the early 1980s.The Reserve Bank of Australia meets next Tuesday to once again debate interest rate movements. The market is predicting a further rate cut of at least 75 basis points, with many economists suggesting the cut could be as high as 1.25 basis points, bringing the cash rate down to 4.0%.Over the most recent week new property listings have shown a substantial fall. This result is likely to be due to a culmination of many vendors who have been waiting to list their property having done so already and fewer listings due to the proximity of the Christmas period. The total number of properties listed for sale has also fallen over the most recent week with approximately 152,000 properties listed for sale across the country. Despite the fall, total stock on the market remains well above the 12 month average, sitting at approximately 134,000 properties.
Whilst the most recent week has seen total property listings fall significantly it is still too early to say that the reported increase in enquiry is resulting in increased sales activity. However, if total stock continues to fall for another few weeks it will indicate a return of buyer activity. With volumes of new listings likely to continue to fall over the Christmas period the market may move closer to an equilibrium in effective supply and demand.
Auction clearance rates remain below average with just 50% of Melbourne auctions clearing last week, 42% of Sydney auctions and 25% of Brisbane auctions, Brisbane and Sydney clearance rates improved slightly compared to the previous week.

To view some great buys go to www.nobullrealestate.com.au/properties.php

To view some great rentals go to www.nobullrealestate.com.au/rentals.php

Extract from RP Data Property Pulse www.rpdata.com

Australia holds its own

This week The Organisation for Economic Cooperation and Development (OECD) stated that despite the depressed international economic environment, the impact of the financial crisis and the fall in the terms of trade should be relatively contained within Australia. The OECD expects the Australian unemployment rate will increase to 6% from 4.3% by 2010 and that the Australian economy will avoid a recession, with GDP growth slowing to 1.7% next year. The forecast from the OECD is quite glowing for Australia when compared to the other major economies of the world. The Organisation predicts that 21 of the 30 member economies of the OECD will go through a protracted recession of a magnitude not seen since the early 1980s.The Reserve Bank of Australia meets next Tuesday to once again debate interest rate movements. The market is predicting a further rate cut of at least 75 basis points, with many economists suggesting the cut could be as high as 1.25 basis points, bringing the cash rate down to 4.0%.Over the most recent week new property listings have shown a substantial fall. This result is likely to be due to a culmination of many vendors who have been waiting to list their property having done so already and fewer listings due to the proximity of the Christmas period. The total number of properties listed for sale has also fallen over the most recent week with approximately 152,000 properties listed for sale across the country. Despite the fall, total stock on the market remains well above the 12 month average, sitting at approximately 134,000 properties.
Whilst the most recent week has seen total property listings fall significantly it is still too early to say that the reported increase in enquiry is resulting in increased sales activity. However, if total stock continues to fall for another few weeks it will indicate a return of buyer activity. With volumes of new listings likely to continue to fall over the Christmas period the market may move closer to an equilibrium in effective supply and demand.
Auction clearance rates remain below average with just 50% of Melbourne auctions clearing last week, 42% of Sydney auctions and 25% of Brisbane auctions, Brisbane and Sydney clearance rates improved slightly compared to the previous week.

To view some great buys go to www.nobullrealestate.com.au/properties.php

To view some great rentals go to www.nobullrealestate.com.au/rentals.php

Extract from RP Data Property Pulse www.rpdata.com

First home buyers on the increase?

As a proportion of total finance commitments, first home buyers currently account for a greater percentage than they have for many years. As at September this year, first home buyers accounted for 19.7% of all housing finance commitments nationwide. This result reflected the highest proportion of first home buyer commitments in the market since March 2002 when 20.4% of all finance commitments were for first home buyers. This result is encouraging, especially for the affordable end where pent up demand has been building for many years.

On a state-by-state basis during the month of September, New South Wales recorded the greatest percentage of first home buyer dwellings finance at 21.0%, closely followed by Victoria (20.9%) and Western Australia (20.6%). At the other end of the scale, the ACT had the lowest percentage of first home buyer dwellings financed with 15.5%, followed by South Australia (16.0%) and Tasmania (16.9%).

The performance of New South Wales and Western Australia having the greatest percentage of first home buyers is a little surprising given that Sydney and Perth are the two most expensive capital city property markets. In contrast, South Australia and Tasmania have fewer first home buyers, yet they are much more affordable markets.Looking at the month of September across the last 10 years, New South Wales, Victoria, South Australia, and Western Australia have the highest proportion of first home buyers recorded since Sep-2001. Queensland and the ACT had a greater proportion of first home buyers just two years ago, Tasmania currently has its greatest proportion since Sep-2002 and the Northern Territory had a greater proportion of first home buyers a year ago. This latest data highlights the significant opportunities in a falling or flat property market.Across Australia, the average first home buyer loan size has never been greater, sitting at $260,900. Given the average home loan size is $260,900, the government has a $14,000 first home buyers grant and purchasers will generally need a deposit of 10% the average first home buyer is in a position to purchase a property priced at $300,900. Although all capital cities have a median dwelling value which is above this figure, there are still many of opportunities to purchase at this price across individual suburbs in each capital.

On a state by state basis, first home buyers in Queensland have the largest average loan size currently at $275,500 whilst Tasmania has the smallest average first home loan size at $186,300. The fact that Tasmania has relatively small first home loans is unsurprising given the relative affordability however, Queensland having the most expensive is a little surprising especially given that dwelling values across Sydney, Canberra and Perth are much greater than those in Brisbane. On the flipside, recent REIA data suggests that Queensland is the most unaffordable state in which to purchase property and this lends support to the fact that Queensland has the greatest average first home buyer loan size.


Across each state, the average first home buyer loan size is much greater during September 2008 than it was at the same time last year. South Australia has recorded the greatest increase in average first home buyer loan size, jumping 12.6%, closely followed by Queensland (12.4%) and Victoria (10.7%). By contrast, the ACT recorded the smallest increase (2.1%) followed by Tasmania (5.7%).
Whilst these results indicate that first home buyer confidence is building, it is important to remember that across Australia total housing finance commitments are down and first home buyers are having to borrow more money to purchase their home. The results also highlight that affordability constraints are forcing first home buyers to purchase affordable property, which is generally found in the outer lying areas of our capital cities where infrastructure provision is poor. Alternatively, many first home buyers are choosing to purchase higher density dwellings located closer to the city instead of houses as these properties are well located, with an abundance of amenity and close to working nodes.

It is encouraging to see these figure showing movement, but we are not experiencing the same results in Newcastle. Although there seems to be more enquiry from first home buyers, there is no commitment to move forward to purchasing.

Some information provided by RP Data Property pulse

First home buyers on the increase?

As a proportion of total finance commitments, first home buyers currently account for a greater percentage than they have for many years. As at September this year, first home buyers accounted for 19.7% of all housing finance commitments nationwide. This result reflected the highest proportion of first home buyer commitments in the market since March 2002 when 20.4% of all finance commitments were for first home buyers. This result is encouraging, especially for the affordable end where pent up demand has been building for many years.

On a state-by-state basis during the month of September, New South Wales recorded the greatest percentage of first home buyer dwellings finance at 21.0%, closely followed by Victoria (20.9%) and Western Australia (20.6%). At the other end of the scale, the ACT had the lowest percentage of first home buyer dwellings financed with 15.5%, followed by South Australia (16.0%) and Tasmania (16.9%).

The performance of New South Wales and Western Australia having the greatest percentage of first home buyers is a little surprising given that Sydney and Perth are the two most expensive capital city property markets. In contrast, South Australia and Tasmania have fewer first home buyers, yet they are much more affordable markets.Looking at the month of September across the last 10 years, New South Wales, Victoria, South Australia, and Western Australia have the highest proportion of first home buyers recorded since Sep-2001. Queensland and the ACT had a greater proportion of first home buyers just two years ago, Tasmania currently has its greatest proportion since Sep-2002 and the Northern Territory had a greater proportion of first home buyers a year ago. This latest data highlights the significant opportunities in a falling or flat property market.Across Australia, the average first home buyer loan size has never been greater, sitting at $260,900. Given the average home loan size is $260,900, the government has a $14,000 first home buyers grant and purchasers will generally need a deposit of 10% the average first home buyer is in a position to purchase a property priced at $300,900. Although all capital cities have a median dwelling value which is above this figure, there are still many of opportunities to purchase at this price across individual suburbs in each capital.

On a state by state basis, first home buyers in Queensland have the largest average loan size currently at $275,500 whilst Tasmania has the smallest average first home loan size at $186,300. The fact that Tasmania has relatively small first home loans is unsurprising given the relative affordability however, Queensland having the most expensive is a little surprising especially given that dwelling values across Sydney, Canberra and Perth are much greater than those in Brisbane. On the flipside, recent REIA data suggests that Queensland is the most unaffordable state in which to purchase property and this lends support to the fact that Queensland has the greatest average first home buyer loan size.


Across each state, the average first home buyer loan size is much greater during September 2008 than it was at the same time last year. South Australia has recorded the greatest increase in average first home buyer loan size, jumping 12.6%, closely followed by Queensland (12.4%) and Victoria (10.7%). By contrast, the ACT recorded the smallest increase (2.1%) followed by Tasmania (5.7%).
Whilst these results indicate that first home buyer confidence is building, it is important to remember that across Australia total housing finance commitments are down and first home buyers are having to borrow more money to purchase their home. The results also highlight that affordability constraints are forcing first home buyers to purchase affordable property, which is generally found in the outer lying areas of our capital cities where infrastructure provision is poor. Alternatively, many first home buyers are choosing to purchase higher density dwellings located closer to the city instead of houses as these properties are well located, with an abundance of amenity and close to working nodes.

It is encouraging to see these figure showing movement, but we are not experiencing the same results in Newcastle. Although there seems to be more enquiry from first home buyers, there is no commitment to move forward to purchasing.

Some information provided by RP Data Property pulse

First home buyers on the increase?

As a proportion of total finance commitments, first home buyers currently account for a greater percentage than they have for many years. As at September this year, first home buyers accounted for 19.7% of all housing finance commitments nationwide. This result reflected the highest proportion of first home buyer commitments in the market since March 2002 when 20.4% of all finance commitments were for first home buyers. This result is encouraging, especially for the affordable end where pent up demand has been building for many years.

On a state-by-state basis during the month of September, New South Wales recorded the greatest percentage of first home buyer dwellings finance at 21.0%, closely followed by Victoria (20.9%) and Western Australia (20.6%). At the other end of the scale, the ACT had the lowest percentage of first home buyer dwellings financed with 15.5%, followed by South Australia (16.0%) and Tasmania (16.9%).

The performance of New South Wales and Western Australia having the greatest percentage of first home buyers is a little surprising given that Sydney and Perth are the two most expensive capital city property markets. In contrast, South Australia and Tasmania have fewer first home buyers, yet they are much more affordable markets.Looking at the month of September across the last 10 years, New South Wales, Victoria, South Australia, and Western Australia have the highest proportion of first home buyers recorded since Sep-2001. Queensland and the ACT had a greater proportion of first home buyers just two years ago, Tasmania currently has its greatest proportion since Sep-2002 and the Northern Territory had a greater proportion of first home buyers a year ago. This latest data highlights the significant opportunities in a falling or flat property market.Across Australia, the average first home buyer loan size has never been greater, sitting at $260,900. Given the average home loan size is $260,900, the government has a $14,000 first home buyers grant and purchasers will generally need a deposit of 10% the average first home buyer is in a position to purchase a property priced at $300,900. Although all capital cities have a median dwelling value which is above this figure, there are still many of opportunities to purchase at this price across individual suburbs in each capital.

On a state by state basis, first home buyers in Queensland have the largest average loan size currently at $275,500 whilst Tasmania has the smallest average first home loan size at $186,300. The fact that Tasmania has relatively small first home loans is unsurprising given the relative affordability however, Queensland having the most expensive is a little surprising especially given that dwelling values across Sydney, Canberra and Perth are much greater than those in Brisbane. On the flipside, recent REIA data suggests that Queensland is the most unaffordable state in which to purchase property and this lends support to the fact that Queensland has the greatest average first home buyer loan size.


Across each state, the average first home buyer loan size is much greater during September 2008 than it was at the same time last year. South Australia has recorded the greatest increase in average first home buyer loan size, jumping 12.6%, closely followed by Queensland (12.4%) and Victoria (10.7%). By contrast, the ACT recorded the smallest increase (2.1%) followed by Tasmania (5.7%).
Whilst these results indicate that first home buyer confidence is building, it is important to remember that across Australia total housing finance commitments are down and first home buyers are having to borrow more money to purchase their home. The results also highlight that affordability constraints are forcing first home buyers to purchase affordable property, which is generally found in the outer lying areas of our capital cities where infrastructure provision is poor. Alternatively, many first home buyers are choosing to purchase higher density dwellings located closer to the city instead of houses as these properties are well located, with an abundance of amenity and close to working nodes.

It is encouraging to see these figure showing movement, but we are not experiencing the same results in Newcastle. Although there seems to be more enquiry from first home buyers, there is no commitment to move forward to purchasing.

Some information provided by RP Data Property pulse

A softening market or recession?

The Reserve Bank governor Glenn Stevens spoke last night about the current economic climate in Australia. He has conceeded that it is possible that we could also slip into recession like many other countries. He went on to say that we need to talk the market up and not talk ourselves into recession. He beleives that there will be a softening of house prices and not a great crash.

We are in a good position if people only stop talking the market down.

Currently in the property market there is still very little committment from buyers and those that are committing are having difficulty securing the money.

The increase on the first home buyers grant has flushed some buyers out, but are very nervous when it comes time to signing on the dotted line. Any slight defect coming up in building reports are scaring the buyers away. The current supply of properties for sale is at the average, but the demand for housing to buy is very low. There needs to be some relief for investors to buy. Land tax in NSW is a killer for a lot of investors.

Glenn Stevens stated that there needs to be more new homes built, but who is going to build homes that the average family cannot afford to buy. Developers are putting projects on hold because they cannot acheive the dollars they need to turn a profit.

The current rental vacancy rate in Newcastle is at 1.6%. There is still a huge demand for rental accomodation. Only yesterday in our office a lady came in crying and desperate to find accomodation. She has had to book into the local hotel. She is caring for a special needs child and has to try to maintain a family whilst living in a hotel. Is this the sort of environment a family should have to put up with, especially when caring for a child with a disability.

With Christmas just a round the corner, and the expense of giving the kids a good Christmas, there doesnt seem to be any hurry for people to buy homes this side of Christmas. I beleive that there will be a rush of first home buyers starting at the end of the first quarter of 2009, just before the expiry date in June.

To see some great properties for sale at great prices go to www.nobullrealestate.com.au/properties.php

A softening market or recession?

The Reserve Bank governor Glenn Stevens spoke last night about the current economic climate in Australia. He has conceeded that it is possible that we could also slip into recession like many other countries. He went on to say that we need to talk the market up and not talk ourselves into recession. He beleives that there will be a softening of house prices and not a great crash.

We are in a good position if people only stop talking the market down.

Currently in the property market there is still very little committment from buyers and those that are committing are having difficulty securing the money.

The increase on the first home buyers grant has flushed some buyers out, but are very nervous when it comes time to signing on the dotted line. Any slight defect coming up in building reports are scaring the buyers away. The current supply of properties for sale is at the average, but the demand for housing to buy is very low. There needs to be some relief for investors to buy. Land tax in NSW is a killer for a lot of investors.

Glenn Stevens stated that there needs to be more new homes built, but who is going to build homes that the average family cannot afford to buy. Developers are putting projects on hold because they cannot acheive the dollars they need to turn a profit.

The current rental vacancy rate in Newcastle is at 1.6%. There is still a huge demand for rental accomodation. Only yesterday in our office a lady came in crying and desperate to find accomodation. She has had to book into the local hotel. She is caring for a special needs child and has to try to maintain a family whilst living in a hotel. Is this the sort of environment a family should have to put up with, especially when caring for a child with a disability.

With Christmas just a round the corner, and the expense of giving the kids a good Christmas, there doesnt seem to be any hurry for people to buy homes this side of Christmas. I beleive that there will be a rush of first home buyers starting at the end of the first quarter of 2009, just before the expiry date in June.

To see some great properties for sale at great prices go to www.nobullrealestate.com.au/properties.php

A softening market or recession?

The Reserve Bank governor Glenn Stevens spoke last night about the current economic climate in Australia. He has conceeded that it is possible that we could also slip into recession like many other countries. He went on to say that we need to talk the market up and not talk ourselves into recession. He beleives that there will be a softening of house prices and not a great crash.

We are in a good position if people only stop talking the market down.

Currently in the property market there is still very little committment from buyers and those that are committing are having difficulty securing the money.

The increase on the first home buyers grant has flushed some buyers out, but are very nervous when it comes time to signing on the dotted line. Any slight defect coming up in building reports are scaring the buyers away. The current supply of properties for sale is at the average, but the demand for housing to buy is very low. There needs to be some relief for investors to buy. Land tax in NSW is a killer for a lot of investors.

Glenn Stevens stated that there needs to be more new homes built, but who is going to build homes that the average family cannot afford to buy. Developers are putting projects on hold because they cannot acheive the dollars they need to turn a profit.

The current rental vacancy rate in Newcastle is at 1.6%. There is still a huge demand for rental accomodation. Only yesterday in our office a lady came in crying and desperate to find accomodation. She has had to book into the local hotel. She is caring for a special needs child and has to try to maintain a family whilst living in a hotel. Is this the sort of environment a family should have to put up with, especially when caring for a child with a disability.

With Christmas just a round the corner, and the expense of giving the kids a good Christmas, there doesnt seem to be any hurry for people to buy homes this side of Christmas. I beleive that there will be a rush of first home buyers starting at the end of the first quarter of 2009, just before the expiry date in June.

To see some great properties for sale at great prices go to www.nobullrealestate.com.au/properties.php

Rates decrease as positive cash flow properties increase

A cash flow positive property is one which enjoys a net gain based on the rental income being greater than costs associated with owning the property. These costs may include the expenses associated with purchase, land tax, management fees, rates, electricity and upkeep of the property. A cash flow positive property is often what many investors aspire towards, with their investment property actually generating a profit rather than recording a loss.The current conditions are creating a market where positive cash flow properties are now becoming more common. Property values have fallen in many regions while at the same time rental rates are increasing at a rapid pace and interest rates are falling. The combined effect is that rental yields are trending upwards.

During 2007 rental yields were eroded due to house and unit values increasing at a faster pace than rental rates. Since late 2007, when weekly rents started to increase at a faster rate than dwelling values, yields have been improving. On a gross basis (without taking account of expenses) rental yields across Australia are averaging 4.4% for houses and 5.3% for units.

Across the capital cities, yields are highest in Darwin and Canberra where houses are returning an average gross rental yield of 6.4% and 5.1% respectively. For units it is a slightly different story, with Darwin maintaining the best gross yield at 6.6% and Sydney recording the second best yield at 5.7%. The lowest yielding city is Perth where, despite value declines of 6.2% over the 12 months to September, the average gross yield is just 3.9% for houses and 4.5% for units.
On a net basis across Australia, RP Data estimates that there are now 45 suburbs which are averaging a cash flow positive return according to our assumptions and definition. Across the individual states, Queensland recorded the greatest number of cash flow positive suburbs, accounting for 38 percent of the suburbs detailed. New South Wales came in a close second with 31 percent. No cash flow positive suburbs were found within Tasmania, whilst the Australian Capital Territory only recorded one suburb on the list.

The geographic distribution of positive cash flow properties is now starting to change. In the past these properties were almost exclusively found in the regional mining and agricultural centres of Australia. These regions still feature predominantly on the list, however marked increases in the rental rates of inner city units within Sydney and Darwin have caused some key suburbs to record, on average, a positive cash flow for investors.Interest rates are widely anticipated to fall by at least another 100 basis points over the next six months. At the same time it is likely that rental rates will continue to rise due to low vacancies and strong demand. Over the next six months property values are likely to show further modest declines or flatten; setting the scene for an improving ratio of prices to rental rates. For those investors who are seeking properties where the rental income will cover all the costs associated with owning the property, now is a good time to be positioning yourself in the market.The most important thing is to know when seeking a property based on a positive cash flow strategy is how much income is required to offset the expenses associated with owning the property – this will vary from buyer to buyer depending on their own financial situation. It is also important to ensure you research the rental market and get a firm understanding of what the expenses associated with the property will be and pay the best price possible for the property.