As the first Home Buyers Grant
is heading towards a wind back,
many buyers in the market are
second and third home buyers
as opposed to first home buyers.
Non-first home buyer loan commitments increased over the month of August this year as upgraders stepped up their activity. Consumer confidence and business confidence hit new highs this week with both of these key indicators increasing over the last month.
In data released this week, housing finance commitments fell over July as first home buyer showed the first evidence of pulling back on purchases. Interestingly, despite total housing finance volumes declining, the value of both owner occupier finance and investor finance increased for the sixth consecutive month; reinforcing the idea that buyer activity is rippling through into the middle and upper end of the price line.
The improvement is likely to have a positive effect on both the residential and commercial property markets as there is strong correlation between confidence and market activity. Rental rates across the country increased by 36% over the last three years up to March 2009. Since this time weekly rents have peaked, with every capital city apart from Darwin recording declines in weekly rental rates over the last three months.
The recent fall in rental rates can be attributed to a decrease in demand as more renters looked to buy, taking advantage of low interest rates and the boost to the First Home Buyer Grant. Such low vacancies as well as the low supply of dwellings across the nation will continue to place upwards pressure on rents over the longer term. With vacancy rates across the nation’s capital cities generally below 5%, it is highly likely the recent fall in weekly rents will be short lived.
Locally we are finding there are still many applications on vacant rentals, but are seeing the quality of those applications are poor. Many applicants are listed on tenant databases and are not showing affordability for the property they are applying for. It is becoming more difficult for landlords to find good tenants that can demonstrate that they can pay the rent and look after the property.
11/09/2009
