Australia the lucky country

Australia is at the forefront of recovery in the housing sector. The stimulise package provided by the Australian Government is paying dividends

Recently the International Monetary Fund (IMF) upgraded its growth forecasts for the Australian economy, stating “this is because of strong commodity exports, a flexible exchange rate, a healthy banking sector, and a timely and significant macro policy response”. The IMF expects Australia’s GDP to contract by a modest 0.5 per cent in 2009, before growing 1.5 per cent in 2010. The IMF has also suggested that Australian interest rates should remain low for some time considering the “fragile state of the global economy”.

The rosier outlook for economic conditions comes as other key market indicators are also showing an improvement. The average level of vendor discounting (the difference between the initial listing price of a property and the ultimate selling price) has been improving with most cities now averaging a discount level around 6% of the original asking price (7% mid last year) and the average time it takes to sell a property is now generally around 30 to 45 days.

Consumer sentiment, although somewhat volatile, has broken the 100 point mark for the first time in 17 months, housing finance approvals are trending up and market activity has improved. Additionally, the recovery in the auction market has certainly withstood the test of time, with every capital city market showing a substantial improvement in clearance rates over the last two months.

The two largest auction markets, Melbourne and Sydney, have averaged clearance rates of 79% and 73% respectively over the last two months. Compared to the same period last year these markets were averaging clearances of just 50% and 43%.

Locally stock levels are still at a very low rate. Everything is being looked at and bought by first home buyers. Agents are expressing to me that stock levels are at a low in all price ranges. The halving of stamp duty on new homes is certainly going to help with new stock, but leaves buyers without any more insentive to buy. There needs to be discounts on stamp duty for existing homes and for investors.

Follow me on Twitter : http://twitter.com/nobullbroker

www.nobullrealestate.com.au

RPData Property Pulse

 

 

 

26/06/09

Australia the lucky country

Australia is at the forefront of recovery in the housing sector. The stimulise package provided by the Australian Government is paying dividends

Recently the International Monetary Fund (IMF) upgraded its growth forecasts for the Australian economy, stating “this is because of strong commodity exports, a flexible exchange rate, a healthy banking sector, and a timely and significant macro policy response”. The IMF expects Australia’s GDP to contract by a modest 0.5 per cent in 2009, before growing 1.5 per cent in 2010. The IMF has also suggested that Australian interest rates should remain low for some time considering the “fragile state of the global economy”.

The rosier outlook for economic conditions comes as other key market indicators are also showing an improvement. The average level of vendor discounting (the difference between the initial listing price of a property and the ultimate selling price) has been improving with most cities now averaging a discount level around 6% of the original asking price (7% mid last year) and the average time it takes to sell a property is now generally around 30 to 45 days.

Consumer sentiment, although somewhat volatile, has broken the 100 point mark for the first time in 17 months, housing finance approvals are trending up and market activity has improved. Additionally, the recovery in the auction market has certainly withstood the test of time, with every capital city market showing a substantial improvement in clearance rates over the last two months.

The two largest auction markets, Melbourne and Sydney, have averaged clearance rates of 79% and 73% respectively over the last two months. Compared to the same period last year these markets were averaging clearances of just 50% and 43%.

Locally stock levels are still at a very low rate. Everything is being looked at and bought by first home buyers. Agents are expressing to me that stock levels are at a low in all price ranges. The halving of stamp duty on new homes is certainly going to help with new stock, but leaves buyers without any more insentive to buy. There needs to be discounts on stamp duty for existing homes and for investors.

Follow me on Twitter : http://twitter.com/nobullbroker

www.nobullrealestate.com.au

RPData Property Pulse

26/06/09

No wonder they call it the lucky country

With prices still falling internationally, it comes as a bit of a surprise that Australia is set for massive growth soon in residential real estate

This week’s biggest property related story was probably BIS Shrapnel’s release of their three year forecasts for property prices. Within the release they forecast that capital city price growth over the next three years would range from 11% in Darwin to 19% in Sydney, Melbourne and Adelaide. Their forecasts have come in for much criticism however the forecasts reported by the media did not take into consideration the fact that these figures include inflation.

Although many have suggested these forecasts are quite bullish, in real terms we are talking about increases of between 5% and 9%. The media headlines also don’t mention when in that three year period the growth will happen. I don’t think anyone would believe the next year to year and a half will see strong price growth given the economic climate but given the undersupply of dwellings in Australia and the cyclical nature of our market it may be the case that property prices will rebound in the second half of the three year period.

Dwelling commencements data was also released during this week with the statistics showing that the trend estimate dwelling commencements for the March 2009 quarter fell by 8.5, following an 8.4% fall in the previous quarter. Many economic commentators as well as Government Departments have highlighted Australia’s ongoing shortage of housing estimated to be somewhere between 40,000 and 80,000 too few dwellings. In order to cater for our booming population it is imperative that dwelling commencements improve to provide housing for those in need and to minimise affordability issues that arise due to this shortage. Given this result it is unsurprising to see Government incentives for purchases of new houses however, it may be more effective to slash the restrictive charges on new development and inject money into the timely deployment of critical infrastructure in and around these new housing areas on the outskirts of our capital cities.

Locally there is a great need for more stock. There are few homes available under $300,000 and some agents are starting to get up to old tricks. Poaching listings from other agents is one tactic that some agents employ. Although illegal, it doesn’t stop some of the unscrupulous agents doing it anyway. The problem with the governing Act is it is not enforced. many consumers are unaware of their rights, and the Department enforcing the law is a toothless tiger.

Follow me on twitter: http://twitter.com/nobullbroker

www.nobullrealestate.com.au

RP Data Property Pulse

19/06/2009

No wonder they call it the lucky country

With prices still falling internationally, it comes as a bit of a surprise that Australia is set for massive growth soon in residential real estate

This week’s biggest property related story was probably BIS Shrapnel’s release of their three year forecasts for property prices. Within the release they forecast that capital city price growth over the next three years would range from 11% in Darwin to 19% in Sydney, Melbourne and Adelaide. Their forecasts have come in for much criticism however the forecasts reported by the media did not take into consideration the fact that these figures include inflation.

Although many have suggested these forecasts are quite bullish, in real terms we are talking about increases of between 5% and 9%. The media headlines also don’t mention when in that three year period the growth will happen. I don’t think anyone would believe the next year to year and a half will see strong price growth given the economic climate but given the undersupply of dwellings in Australia and the cyclical nature of our market it may be the case that property prices will rebound in the second half of the three year period.

Dwelling commencements data was also released during this week with the statistics showing that the trend estimate dwelling commencements for the March 2009 quarter fell by 8.5, following an 8.4% fall in the previous quarter. Many economic commentators as well as Government Departments have highlighted Australia’s ongoing shortage of housing estimated to be somewhere between 40,000 and 80,000 too few dwellings. In order to cater for our booming population it is imperative that dwelling commencements improve to provide housing for those in need and to minimise affordability issues that arise due to this shortage. Given this result it is unsurprising to see Government incentives for purchases of new houses however, it may be more effective to slash the restrictive charges on new development and inject money into the timely deployment of critical infrastructure in and around these new housing areas on the outskirts of our capital cities.

Locally there is a great need for more stock. There are few homes available under $300,000 and some agents are starting to get up to old tricks. Poaching listings from other agents is one tactic that some agents employ. Although illegal, it doesn’t stop some of the unscrupulous agents doing it anyway. The problem with the governing Act is it is not enforced. many consumers are unaware of their rights, and the Department enforcing the law is a toothless tiger.
 
 

Follow me on twitter: http://twitter.com/nobullbroker

 

www.nobullrealestate.com.au

 

 

 

RP Data Property Pulse

 

 

19/06/2009

Slow road to returning confidence

There is talk of confidence returning to the market place, but figures just released show past months not travelling so well

The ANZ Banks survey of job advertisements which was released this week showed a fall for the 13th consecutive month. The result now indicates a reduction across those jobs advertised on the internet and newspapers of 49.9% during the last 12 months.

Results for May suggest that each state and territory except Tasmania and Western Australia recorded a decline during the month. These results were to be expected given that consumer and business confidence remained at very low levels through the month of May.

Housing finance commitments data released this week found that first home buyers as a percentage of all owner occupied finance commitments increased to 28%, the highest on record. The interesting detail to note within the statistics is that in each state and territory the actual number of finance commitments for first home buyers fell, except in Victoria where they recorded an increase of 0.9%.

The greatest fall in first home buyer finance commitments was witnessed in Tasmania where they fell 26.1% in April compared to the previous month. These results lend credence to a number of reports that suggest first home buyer demand may have peaked. In saying this, first home buyer finance commitments have still witnessed an exceptional increase on an annual basis in each state and territory varying between a 50.3% increase in Western Australia and a 123.4% increase in the Australian Capital Territory.

This same data also shows that during April 2009 commitments for investment property accounted for 25.5% of all finance commitments. Although this figure remains low on a historical basis, it represents a marked increase on the March 2009 figures when investor finance accounted for just 24.1% of all commitments.

A great deal of first home buyers are now struggling to get a pre approval on finance let alone getting formal approval. There is such a backlog of loan applications many are going to find that time is going to run out before they get formal approval on their finance and have the opportunity to buy, and thus receive the grant. keep in ming the grant will begint o wind back in October

www.nobullrealestate.com.au

Follow me on Twitter http://twitter.com/nobullbroker

RP Data Property Pulse

11/06/09

Slow road to returning confidence

There is talk of confidence returning to the market place, but figures just released show past months not travelling so well

The ANZ Banks survey of job advertisements which was released this week showed a fall for the 13th consecutive month. The result now indicates a reduction across those jobs advertised on the internet and newspapers of 49.9% during the last 12 months.

Results for May suggest that each state and territory except Tasmania and Western Australia recorded a decline during the month. These results were to be expected given that consumer and business confidence remained at very low levels through the month of May.

Housing finance commitments data released this week found that first home buyers as a percentage of all owner occupied finance commitments increased to 28%, the highest on record. The interesting detail to note within the statistics is that in each state and territory the actual number of finance commitments for first home buyers fell, except in Victoria where they recorded an increase of 0.9%.

The greatest fall in first home buyer finance commitments was witnessed in Tasmania where they fell 26.1% in April compared to the previous month. These results lend credence to a number of reports that suggest first home buyer demand may have peaked. In saying this, first home buyer finance commitments have still witnessed an exceptional increase on an annual basis in each state and territory varying between a 50.3% increase in Western Australia and a 123.4% increase in the Australian Capital Territory.

This same data also shows that during April 2009 commitments for investment property accounted for 25.5% of all finance commitments. Although this figure remains low on a historical basis, it represents a marked increase on the March 2009 figures when investor finance accounted for just 24.1% of all commitments.

A great deal of first home buyers are now struggling to get a pre approval on finance let alone getting formal approval. There is such a backlog of loan applications many are going to find that time is going to run out before they get formal approval on their finance and have the opportunity to buy, and thus receive the grant. keep in ming the grant will begint o wind back in October

www.nobullrealestate.com.au

Follow me on Twitter http://twitter.com/nobullbroker

RP Data Property Pulse

11/06/09

Australia leads the way

Encouraging figures for Australia as the rest of the world still sits with negative GDP, growth and prosperity for Australia reigns

Following the RBA’s Board meeting this week it was announced as expected, that the cash rate would remain on hold at 3.0%. This was a predictable outcome given a number of positive data releases over recent weeks.

In the RBA Governor’s statement he noted that, “The prospect of inflation declining over the medium term suggests that scope remains for some further easing of monetary policy, if needed.“No doubt the RBA took into consideration the improving conditions in Australia’s real estate market.

Released last week the RP Data-Rismark Monthly Indices Release reported that home values in all mainland capital cities except Perth have recorded growth during the first four months of 2009. Darwin (5.3%), Melbourne (4.4%) and Sydney (3.9%) lead the way in terms of value growth and nationally, property values have risen by 2.8% during the first four months of 2009.

There was a variety of other data releases relevant to the property market this week whilst the share market appears to have also turned a corner with the S&P/ASX 200recording its highest value of the year during the week.

Meanwhile, the Australian dollar has rebounded strongly against the US dollar and now sits above the 80 US cents barrier.Building Approvals data to April 2009 released by the ABS this week showed that the most recent month saw a strong rebound in new dwelling approvals. Comparing March 2009 to April 2009 saw an increase in building approvals of 7.5% with monthly approvals sitting at their highest level since October 2008.

Data released by Fitch Ratings this week found that mortgage arrears have fallen during the first quarter of 2009 and this was the first time in 10 years that the first quarter of a year had witnessed a fall compared to the final quarter of the previous year. According to their index, delinquencies of more than 30 days decreased to 1.52% during the first quarter of 2009, compared to a rate of 1.75% in the final three months of 2008.

Locally there is still an under supply of good homes for sale under $300,000. It is interesting to see home prices locally also, are growing at a rate of around 2% whilst prices overseas still falling, some by as much as 20%. It gives faith in the Australian system, and might encourage employees seeking employment to look to local employers, because I do believe that a lot of Aussie jobs have been lost not to local employers, but large overseas companies employing locally. These are the reasons Australia is suffering some of the backlash of this global recession.

www.nobullrealestate.com.au

RP Data Sourced

Australia leads the way

Encouraging figures for Australia as the rest of the world still sits with negative GDP, growth and prosperity for Australia reigns

Following the RBA’s Board meeting this week it was announced as expected, that the cash rate would remain on hold at 3.0%. This was a predictable outcome given a number of positive data releases over recent weeks.

In the RBA Governor’s statement he noted that, “The prospect of inflation declining over the medium term suggests that scope remains for some further easing of monetary policy, if needed.“No doubt the RBA took into consideration the improving conditions in Australia’s real estate market.

Released last week the RP Data-Rismark Monthly Indices Release reported that home values in all mainland capital cities except Perth have recorded growth during the first four months of 2009. Darwin (5.3%), Melbourne (4.4%) and Sydney (3.9%) lead the way in terms of value growth and nationally, property values have risen by 2.8% during the first four months of 2009.

There was a variety of other data releases relevant to the property market this week whilst the share market appears to have also turned a corner with the S&P/ASX 200recording its highest value of the year during the week.

Meanwhile, the Australian dollar has rebounded strongly against the US dollar and now sits above the 80 US cents barrier.Building Approvals data to April 2009 released by the ABS this week showed that the most recent month saw a strong rebound in new dwelling approvals. Comparing March 2009 to April 2009 saw an increase in building approvals of 7.5% with monthly approvals sitting at their highest level since October 2008.

Data released by Fitch Ratings this week found that mortgage arrears have fallen during the first quarter of 2009 and this was the first time in 10 years that the first quarter of a year had witnessed a fall compared to the final quarter of the previous year. According to their index, delinquencies of more than 30 days decreased to 1.52% during the first quarter of 2009, compared to a rate of 1.75% in the final three months of 2008.

Locally there is still an under supply of good homes for sale under $300,000. It is interesting to see home prices locally also, are growing at a rate of around 2% whilst prices overseas still falling, some by as much as 20%. It gives faith in the Australian system, and might encourage employees seeking employment to look to local employers, because I do believe that a lot of Aussie jobs have been lost not to local employers, but large overseas companies employing locally. These are the reasons Australia is suffering some of the backlash of this global recession.

www.nobullrealestate.com.au

RP Data Sourced