Property listings remain some 25% higher within Australia’s capital cities than last year, and 29% higher across the country, according to RP Data.
The 50,854 new house and unit listings over the past month take the total for sale across Australia to 279,605. There were 217,442 listings across Australia this time last year.
“Less than 48% of total listings nationally are within the capital cities,” RP Data research director Tim Lawless said earlier this month. New listings saw 50,854 properties added over the past month, with the capital city new listing volumes 2.8% higher than the same period last year.
As the winter hibernation sets in the number of new properties advertised for sale increased by 1.8% across the country in the last four weeks, compared to the previous four weeks ending 26 June 2011.
Queensland has the highest number of total listings at 86,188, followed by 73,673 in NSW.
The number of new properties advertised for rent has fallen by 2.7% over the past four weeks.
Capital city new rental listings fell by 3.1%.
Despite the fall, new rental listings nationally are 14.3% higher than the same time last year, and in the combined capital cities they are 11.9% higher.
Rental listings remain at much higher levels than the same time last year, up 12.8% nationally and 10.7% in the capital cities, Lawless said.
This article first appeared on Property Obsever, Australia's top site for property investment news
Friday, July 8, 2011
Monday, June 27, 2011
what do low clearance rates mean?
Australia wide, the delinquency rate has climbed from around 1.4 per cent to 1.79 per cent. It may be low in comparison to Europe and America, but it’s a figure the Reserve Bank of Australia should be paying close attention to because it seems there are other distressed vendors flying under the radar and trying to bail out before they get to the delinquency stage.
According to RP Data the average time Australians stay in their homes is 7.5 years, although in the established suburbs of Melbourne – close to the water and city – it’s 9.1 years. However there seem to be increasing numbers of vendors selling prime real estate after only one or two years of residence (something I’m seeing more and more often when I research the sales history of homes). In many cases these homes are struggling to sell, with days on market stretching into months as vendors try to achieve their ‘wish price’ (a return on investment) in flat conditions. These are often people who purchased when interest rates were low and now rates have climbed they find themselves labouring to make the repayments.
Investment in real estate is a long-term game plan, so trying to get a return on price one or two years down the line is a gamble no one should take, or be forced to take. Therefore in a flat market, with the possibility of interest rate rises rising on the horizon, paying the right price and insuring that decision by purchasing the right property, is not only important, it’s crucial! Pay too much in the first place and you’ll get no short-term capital growth. Choose a ‘lemon’ and if you need to sell in a soft market reducing the price will be the only way to do so.
So how do you know you’re paying the right price? Just because the papers are screaming ‘buyers’ market’ and the agent is giving you a ‘discount’ on the asking price, it doesn’t equate to a ‘bargain’. Drawing comparables against the weekend results in the paper won’t always help as they only list exact addresses for auction sales and many of those are now ‘undisclosed’. In fact, sales results won’t help you much at all unless you’ve been monitoring the market closely and assessing the individual properties listed – and furthermore, how do you know someone else didn’t over pay on the property you’re comparing against? I was recently asked to help with a report into vendor discounting, which is the amount the vendor discounts throughout the sales campaign in order to sell. It wasn’t hard to find examples, however it was much easier to find examples of advertised prices (private sale) which had been exceeded!
There are three numbers in real estate – what the vendor wants, what the market (you) is willing to pay and what a property’s reasonable market value is against comparable sales. Unless you’ve got a handle on all three you can’t negotiate effectively. If you’re a current buyer who has little experience negotiating and find yourself judging a property’s value based on the quoted range, or ‘reserve’ price, rather than a solid base of knowledge, beware! Selling agents know all the tricks to con a buyer into paying more, from touting they have other offers on the table, to convincing them the ‘distressed’ vendor has ‘a very reasonable’ reserve.
And what about choosing the right property? Well, even in flat markets with well-publicised drops over any one year, there are those properties which buck the trend – the roses amongst the thorns – in locations with unique aspects that drive owner occupiers to stretch budgets. And these are the very properties investors need to target if they’re going to prosper during boom and bust cycles.
A suburb-by-suburb look through Melbourne highlights a few of these areas which are withstanding current conditions. Take, for example, Kew, located southeast of Melbourne’s CBD. Made up of roughly 70 per cent owner occupier, it’s already seen a 29 per cent jump during the first quarter in median value and a steady 74 per cent year to date clearance rate, according to the Real Estate Institute of Victoria. While this doesn’t guarantee every home in Kew will buck the downturn, you can be pretty sure that if you own a good well-positioned property that suits the buyer demographic of the area, it’s going to attract attention.
I would never advise someone to purchase a property unless they’re fully committed to a long term game plan, however what I would strongly advise is the essential need. C. Cashmore
According to RP Data the average time Australians stay in their homes is 7.5 years, although in the established suburbs of Melbourne – close to the water and city – it’s 9.1 years. However there seem to be increasing numbers of vendors selling prime real estate after only one or two years of residence (something I’m seeing more and more often when I research the sales history of homes). In many cases these homes are struggling to sell, with days on market stretching into months as vendors try to achieve their ‘wish price’ (a return on investment) in flat conditions. These are often people who purchased when interest rates were low and now rates have climbed they find themselves labouring to make the repayments.
Investment in real estate is a long-term game plan, so trying to get a return on price one or two years down the line is a gamble no one should take, or be forced to take. Therefore in a flat market, with the possibility of interest rate rises rising on the horizon, paying the right price and insuring that decision by purchasing the right property, is not only important, it’s crucial! Pay too much in the first place and you’ll get no short-term capital growth. Choose a ‘lemon’ and if you need to sell in a soft market reducing the price will be the only way to do so.
So how do you know you’re paying the right price? Just because the papers are screaming ‘buyers’ market’ and the agent is giving you a ‘discount’ on the asking price, it doesn’t equate to a ‘bargain’. Drawing comparables against the weekend results in the paper won’t always help as they only list exact addresses for auction sales and many of those are now ‘undisclosed’. In fact, sales results won’t help you much at all unless you’ve been monitoring the market closely and assessing the individual properties listed – and furthermore, how do you know someone else didn’t over pay on the property you’re comparing against? I was recently asked to help with a report into vendor discounting, which is the amount the vendor discounts throughout the sales campaign in order to sell. It wasn’t hard to find examples, however it was much easier to find examples of advertised prices (private sale) which had been exceeded!
There are three numbers in real estate – what the vendor wants, what the market (you) is willing to pay and what a property’s reasonable market value is against comparable sales. Unless you’ve got a handle on all three you can’t negotiate effectively. If you’re a current buyer who has little experience negotiating and find yourself judging a property’s value based on the quoted range, or ‘reserve’ price, rather than a solid base of knowledge, beware! Selling agents know all the tricks to con a buyer into paying more, from touting they have other offers on the table, to convincing them the ‘distressed’ vendor has ‘a very reasonable’ reserve.
And what about choosing the right property? Well, even in flat markets with well-publicised drops over any one year, there are those properties which buck the trend – the roses amongst the thorns – in locations with unique aspects that drive owner occupiers to stretch budgets. And these are the very properties investors need to target if they’re going to prosper during boom and bust cycles.
A suburb-by-suburb look through Melbourne highlights a few of these areas which are withstanding current conditions. Take, for example, Kew, located southeast of Melbourne’s CBD. Made up of roughly 70 per cent owner occupier, it’s already seen a 29 per cent jump during the first quarter in median value and a steady 74 per cent year to date clearance rate, according to the Real Estate Institute of Victoria. While this doesn’t guarantee every home in Kew will buck the downturn, you can be pretty sure that if you own a good well-positioned property that suits the buyer demographic of the area, it’s going to attract attention.
I would never advise someone to purchase a property unless they’re fully committed to a long term game plan, however what I would strongly advise is the essential need. C. Cashmore
Wednesday, May 18, 2011
Steady as she goes
According to ANZ Bank’s latest Pan-Regional Housing Outlook Australia’s home prices may well hover for the rest of this year without a “wholesale downward shift” in values.
The report argues Australia’s buoyant economy and tight housing market will continue to keep house prices steady.
The strong labour market and skills shortage will put upward pressure on wages and, as a result, “forced” selling of homes will remain at low levels, the report said.
“Nonetheless, rising interest rates and deteriorating affordability will cap price gains and we expect little movement in house prices over the year ahead,” the report said.
Paul Braddick ANZ head of property research said the local housing market was “delicately poised” but would avoid further price drops so long as there was not a rapid rise in interest rates or unemployment levels.
The on-going housing shortage would result in lower rental vacancy rates and higher rent, providing a “clear signal” to investors that the housing market was improving, Mr Braddick said.
In fact the latest results from the RP Data – Rismark Home Value Indices RP Data show that over the 12 months to March 2011 capital city rental rates have increased by 2.9% which is well below average. However, over the last quarter, capital city rents have increased by a much larger 4.8%.
The view that rents are starting to increase is supported by the most recent CPI data from the ABS which suggests that rents have increased by 1.3% during the first quarter of 2011.
The report argues Australia’s buoyant economy and tight housing market will continue to keep house prices steady.
The strong labour market and skills shortage will put upward pressure on wages and, as a result, “forced” selling of homes will remain at low levels, the report said.
“Nonetheless, rising interest rates and deteriorating affordability will cap price gains and we expect little movement in house prices over the year ahead,” the report said.
Paul Braddick ANZ head of property research said the local housing market was “delicately poised” but would avoid further price drops so long as there was not a rapid rise in interest rates or unemployment levels.
The on-going housing shortage would result in lower rental vacancy rates and higher rent, providing a “clear signal” to investors that the housing market was improving, Mr Braddick said.
In fact the latest results from the RP Data – Rismark Home Value Indices RP Data show that over the 12 months to March 2011 capital city rental rates have increased by 2.9% which is well below average. However, over the last quarter, capital city rents have increased by a much larger 4.8%.
The view that rents are starting to increase is supported by the most recent CPI data from the ABS which suggests that rents have increased by 1.3% during the first quarter of 2011.
Wednesday, April 27, 2011
Rental Market in Canberra
Canberra is a particularly bad black spot in Australia's very dark rental affordability picture, and prices are expected to show significant further growth this year, two new reports say.
Australian Property Monitors rental report said rents for Canberra houses rose at the second-fastest rate in the country so far this year.
At the same time Anglicare ACT general manager Jenny Kitchin said the charity's Rental Affordability Snapshot found Canberra and Queanbeyan was the only major population centre in Australia with no affordable housing for lower-income earners in the private rental market.
''In a very dark picture nationwide, Canberra stands out as particularly bad black spot,'' she said.
''It is clear that many low-income families will be falling into the gap between the private rentals and government-run social housing.''
Ms Kitchin said it would be almost impossible for someone on the minimum wage or government benefits to live in a private rental property in Canberra.
It comes as the latest Australian Property Monitors rental report said rents for Canberra houses rose at the second-fastest rate in the country so far this year.
They were up 2.2 per cent to a median $470 a week in the March quarter, taking annual growth to 6.8 per cent the fastest in the country.
The median rent for units rose 2.4 per cent to $430 in the quarter, and by 6.2 per cent over the year.
It compares with quarterly growth of 2.3per cent for units and 0.1 per cent for houses nationally.
Australian Property Monitors economist Andrew Wilson said Canberra's strong rental growth reflected ongoing high demand and a shortage of available properties.
Renters should prepare for significant growth in rental prices this year, driven by the improving economy and housing shortages.
''However, it is expected that rising rental yields will renew investor interest in the market and may provide some relief for renters in the longer-term,'' Dr Wilson said.
Source: Canberra Times
Australian Property Monitors rental report said rents for Canberra houses rose at the second-fastest rate in the country so far this year.
At the same time Anglicare ACT general manager Jenny Kitchin said the charity's Rental Affordability Snapshot found Canberra and Queanbeyan was the only major population centre in Australia with no affordable housing for lower-income earners in the private rental market.
''In a very dark picture nationwide, Canberra stands out as particularly bad black spot,'' she said.
''It is clear that many low-income families will be falling into the gap between the private rentals and government-run social housing.''
Ms Kitchin said it would be almost impossible for someone on the minimum wage or government benefits to live in a private rental property in Canberra.
It comes as the latest Australian Property Monitors rental report said rents for Canberra houses rose at the second-fastest rate in the country so far this year.
They were up 2.2 per cent to a median $470 a week in the March quarter, taking annual growth to 6.8 per cent the fastest in the country.
The median rent for units rose 2.4 per cent to $430 in the quarter, and by 6.2 per cent over the year.
It compares with quarterly growth of 2.3per cent for units and 0.1 per cent for houses nationally.
Australian Property Monitors economist Andrew Wilson said Canberra's strong rental growth reflected ongoing high demand and a shortage of available properties.
Renters should prepare for significant growth in rental prices this year, driven by the improving economy and housing shortages.
''However, it is expected that rising rental yields will renew investor interest in the market and may provide some relief for renters in the longer-term,'' Dr Wilson said.
Source: Canberra Times
Monday, April 11, 2011
RBA
--But not the Big Four banks! In fact, we learned over the weekend that even though foreign banks accounted for 70% of the $110.7 billion in borrowing from the Fed's Primary Credit Dealer Facility (PCDF), Australia's banks were pretty circumspect with their emergency borrowing.
--Commonwealth Bank borrowed $75 million from the Fed on July 17th, 2008. It borrowed another $25 million on November 12th. But in public statements, the bank said it only borrowed the money to make sure it could. You know, sort of the way you test an emergency key to your front door, to make sure it works when you actually need it.
--Which brings us back to last week's subject: the Reserve Bank of Australia. It won't have to deal with any embarrassing revelations when it meets tomorrow. It can focus on fixing the price of money in Australia. In this respect, anyway, it functions the same way as the U.S. Federal Reserve.
the RBA didn't formally come into existence until 1959 as part of the Reserve Bank Act. Its mission is nominally similar (and unachievable): price stability, full employment, general economic prosperity and welfare. But its board is not, at least at first appearances, entirely beholden to the banking sector.
--In fact, section 17 of the Reserve Bank Act stipulates members of the RBA's board can't be employees, officers, or directors of an authorised deposit-taking institution. This would, again at a casual glance, appear to make the board more independent of the Big Four. The Fed is controlled by its member banks. The Reserve Bank appears to keep Australia's financial industry at an arm's distance.
--Is that really the case? Hmm. We'll see. You may have noticed last week that Donald McGauchie and Warwick McKibbin have not been invited back to serve on the Reserve Bank's board once their terms expire. Both men have been critics of the RBA at times. Jillian Broadbent's term will be extended five years. And later this month the Board will welcome Queensland-based Catherina Tanna, who is currently an executive vice president for BG Group and managing director of QGC.
--Commonwealth Bank borrowed $75 million from the Fed on July 17th, 2008. It borrowed another $25 million on November 12th. But in public statements, the bank said it only borrowed the money to make sure it could. You know, sort of the way you test an emergency key to your front door, to make sure it works when you actually need it.
--Which brings us back to last week's subject: the Reserve Bank of Australia. It won't have to deal with any embarrassing revelations when it meets tomorrow. It can focus on fixing the price of money in Australia. In this respect, anyway, it functions the same way as the U.S. Federal Reserve.
the RBA didn't formally come into existence until 1959 as part of the Reserve Bank Act. Its mission is nominally similar (and unachievable): price stability, full employment, general economic prosperity and welfare. But its board is not, at least at first appearances, entirely beholden to the banking sector.
--In fact, section 17 of the Reserve Bank Act stipulates members of the RBA's board can't be employees, officers, or directors of an authorised deposit-taking institution. This would, again at a casual glance, appear to make the board more independent of the Big Four. The Fed is controlled by its member banks. The Reserve Bank appears to keep Australia's financial industry at an arm's distance.
--Is that really the case? Hmm. We'll see. You may have noticed last week that Donald McGauchie and Warwick McKibbin have not been invited back to serve on the Reserve Bank's board once their terms expire. Both men have been critics of the RBA at times. Jillian Broadbent's term will be extended five years. And later this month the Board will welcome Queensland-based Catherina Tanna, who is currently an executive vice president for BG Group and managing director of QGC.
Tuesday, March 8, 2011
what didn't happen 2010 to happen 2011
- A major government will go broke in Europe. Ireland came close. Portugal avoided it (so far). But for Spain or Italy, 2011 could be a fatal year. Expect higher bond yields, a falling Euro, and trouble in the streets. In my newsletter I've been exploring what this means for the Aussie dollar and your investments.
- A U.S. Debt Reckoning. The U.S. government is rapidly nearing its statutory "debt ceiling." The Tea-Party Congress may compromise with the President to cut taxes and some spending. But the real crisis may come as U.S. cities and States (Illinois, California, and New York) approach bankruptcy and need their own bailout. Will your portfolio be positioned to profit when that day comes?
- China will tighten up. One of the main recipients of the inflation being exported by the Fed is China. It's desperately trying to contain that inflation (in food, housing, and stock prices) before it leads to social and political instability. But if it "tightens" monetary policy too fast, it could produce a crash - leading to much lower commodity demand. If you don't know what that means for your Australian investments, you're not prepared.
In truth, most of these things should have happened last year. But the central banks won 2010. There's a much smaller chance they will stave off a huge market crash in 2011.
Even if they do... it's coming eventually. And you need create a portfolio of investments that withstands this crash when it happens.
Friday, February 25, 2011
what is till to come...
Mr. Prechter, based in Gainesville, Ga., is a social theorist and technical market analyst with a very unconventional approach. It is based on his own version of the Elliott Wave Theory, which originated in the writings of Ralph Nelson Elliott, an accountant who found repetitive patterns, or “fractals,” in the stock market of the 1930s and 40s. The market still moves in cycles, large and small, Mr. Prechter says, based mainly on “social mood,” which, in turn, influences the economy.
The current cycle will lead the unwary to ruin, he says, “We are in a long-term bear market that started in 2000.” He says the rally that has been so enjoyable for stock investors is just a mini-cycle in that longer swoon.
“I think the bear market will end when most debtors default and the media change from calling it a great recession that’s over to calling it a great depression that isn’t,” he says.
Part of his argument will be familiar to anyone who follows the financial news. We are living “in a world saturated with debt,” he says. “Newly conservative regulatory policies have been clamping down on bank credit,” he adds. “State and local governments will soon cut spending and borrowing, and when the federal government finally cuts spending and borrowing and the Fed — either from within or without — is forced to stop” its quantitative easing program, the game will be up.
The current cycle will lead the unwary to ruin, he says, “We are in a long-term bear market that started in 2000.” He says the rally that has been so enjoyable for stock investors is just a mini-cycle in that longer swoon.
“I think the bear market will end when most debtors default and the media change from calling it a great recession that’s over to calling it a great depression that isn’t,” he says.
Part of his argument will be familiar to anyone who follows the financial news. We are living “in a world saturated with debt,” he says. “Newly conservative regulatory policies have been clamping down on bank credit,” he adds. “State and local governments will soon cut spending and borrowing, and when the federal government finally cuts spending and borrowing and the Fed — either from within or without — is forced to stop” its quantitative easing program, the game will be up.
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