Rental vacancies rise as home buying improves
Rental vacancies rise as home buying improves
Posted on Wednesday, July 17 2013 at 12:41 PM
Figures released this week indicate residential property vacancies have increased in most capital cities throughout June, and new homebuyers are a factor.
SQM Research says the overall
vacancy rate rose by 0.1 per cent to 2.2 per cent nationally.
Melbourne has recorded the
highest vacancy rate of all the capital cities at 2.9 per cent.
Darwin has recorded the
tightest figure at 0.8 per cent and was the only capital city to see its rate
drop.
Louis Christopher, managing
director at SQM Research, says the figures are part of a trend showing a
gradual upswing in vacancy rates around Australia.
“As
stated with May’s result, it has become apparent that vacancy rates are now
rising.
Christopher
says the reasons are diverse, although improved first homebuyer activity could
be a factor.
“Causations
behind the rise vary from city to city. For example, the rises in Melbourne and
Canberra are as a direct result of rises in completions of new residential
dwellings throughout 2012 and early 2013. The rises in Perth appear to be more
demand related.
“While the general comment
has been the number of first homebuyers are at a record low as a proportion of
the overall market, the truth is that over the past five months, first homebuyers
have basically been increasing in the market and there are now more first homebuyers
in the market.
“First homebuyer activity
has picked up from a very low base and we expect it to further pick up. So,
yes, there have been renters turning themselves into first homebuyers over the
last three months.”
Christopher
cautions investors to factor the flatter rental market into their portfolio
decisions.
“This national housing
recovery that we’ve had has been largely driven by investors and I think many
of them have been jumping in with the view that they will get rental increases.
“A number of them are going to be disappointed as
to how much (rental) bargaining power they are going to have in the
marketplace.”
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Home loan numbers jump
Home loan numbers jump
Posted on Monday, July 15 2013 at 3:50 PM
Australian Bureau of Statistics (ABS) data indicates home loan approvals have increased in the past 12 months, signaling more positive news for Australian property markets.
Australia’s seasonally adjusted 49,636 home loan approvals for May 2013
are 10 per cent higher than for the same month last year, according to mortgage
broker Loan Market.
Mark De Martino, a director at Loan Market, said the improvement is most
likely due to lower interest rates and strong buying activity.
“The lower interest rate environment of 2013 has been particularly
beneficial for consumers looking to refinance or invest in property. The rate
cuts from the RBA and the subsequent drops by lenders have helped bring
momentum back into the market.”
Loan Market analysis of ABS data shows all states improving on their May
2012 figures, with South Australia and New South Wales both recording a 12 per
cent rise.
Tasmania had the lowest increase at three per cent, up since the same
time last year.
De Martino said Queensland was showing particularly strong home loan
activity with its highest total in 40 months, and Western Australia was a
standout performer with an Australian best of a 20 per cent improvement from May
2012.
“Our mining and resources states are continuing to show growth in the
face of a slowdown in the export industry. It’s important that these local
economies are still supported while the drivers in the economy shift.”
The ABS statistics indicate confidence with all buyer sectors as both
owner-occupiers and investors borrowed in larger numbers during May compared to
April this year.
The figures highlighted
an upswing in first homebuyer loan approvals for May to 8146, a 17 per cent
increase on the April 2013 figures and the best result since October 2012.
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Sale contracts to include bushfire clause
Sale contracts to include bushfire clause
Posted on Friday, July 12 2013 at 11:08 AM
Sellers in Victoria will need to disclose whether their land is in a bushfire-prone area when selling property after July 31.
Changes to
Victorian property law under the Sale of Land Act 1962 means buyers
will now be informed if land is in a bushfire-prone area. However, Minister for
Consumer Affairs Heidi Victoria says buyers should still ensure they undertake
proper due diligence.
“It’s important
to fully research any property you are planning to buy, including finding out
about its bushfire safety,” Victoria says.
The amendments were made following recommendations
by the Victorian Bushfire Royal Commission into the Black Saturday bushfires
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Are we swinging back to a sellers’ market?
Are we swinging back to a sellers’ market?
Posted on Wednesday, July 10 2013 at 11:04 AM
Figures released yesterday reveal residential property ‘for sale’ listings have dropped dramatically, signalling a swing back towards a sellers’ market.
SQM Research has released data showing available stock in June this year
was down 5.4 per cent nationally compared to the same time 12 months ago.
Sydney has had the most dramatic drop with listings down 23.1 per cent
compared to June 2012, including a prominent drop of 14.6 per cent since May
this year.
All capital cities recorded falls with Darwin showing the lowest annual
drop at 0.8 per cent, and Melbourne coming second highest with 8.7 per cent.
SQM’s report notes there have been strong falls for June
across all capitals and although this could be an anomaly, Sydney has exceeded
expectations.
“Whilst the majority of capital city monthly decreases
can be attributed to seasonal influences and the fact that we came through five
weekends in May to four weekends during June, Sydney’s monthly decline of negative
14.6 per cent in stock appears to have gone beyond these attributes, as we
begin to witness stock levels for this capital city that match those seen in
2009,” the report says.
The Sydney market is approaching a point of shortage in
listings, it adds.
Jacque Parker, a director at buyers’ agency House
Search Australia, says the lack of stock is being felt at the market’s ground
level.
“It does vary from suburb to suburb, but in the areas where there’s most
demand at the moment I would say it’s probably lower than those figures.
“I was talking to a Castle Hill agent the other day and she was saying
they have 61 listings of houses whereas this time last year it was close to the
400 mark.”
Parker believes demand is outstripping supply in Sydney.
“We’re finding consumer sentiment is much more positive than it was last
year, interest rates obviously contribute to that because they’re a lot lower,
there’s a lot of overseas buying too,
“Also there’s affordability ceilings – once they’re reached in certain
suburbs, I think people search areas further out and that’s affecting supply as
well.”
Parker sights Baulkham Hills and its surrounds having limited housing in
the $500,000 to $800,000 price bracket, as well as Sydney’s North Shore.
“Up to the $650,000 to $700,000 mark, good quality stock is scarce. Even
Blacktown which is a huge local government area, is struggling with stock for houses
under $450,000.”
Parker says price growth is already taking hold but published numbers
are yet to reflect the true state of the market.
“The stats that we’re looking at now aren’t reliable. There will be
positive growth in most of the suburbs that we work in (in Sydney) in figures
that should be released in the next two quarters. It will be playing catch up.”
Louis Christopher, managing director of SQM Research,
says Sydney is in front of other property markets.
“I believe that overall, the national housing market
still remains well supplied with current listings, however Sydney is turning
out to be a clear exception.
“When you consider the long-term chart,
Sydney is approaching the 2009 lows and this fits with other measurements
indicating a strengthening housing market for that capital city.”
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Buyers go bonkers over South Australia
Buyers go bonkers over South Australia
Posted on Monday, July 08 2013 at 10:35 AM
Property buyers are flocking to South Australia, according to new research, with the state proving to be the most popular among visitors to a major real estate sales website.
Analysis of the search habits of users of
realestate.com.au has revealed the top 10 sellers’ markets across the country,
or those areas where interest in sales listings is strongest.
The results were collated by comparing the
average number of sales listings in each suburb over the three months to June
and the total clicks by users. Suburbs are then ranked by the extent to which
demand outstrips supply.
Five of the 10 most in-demand areas in the
June quarter were in South Australia, with the cosmopolitan suburb of Parkside
taking out the top spot.
Anthony Toop from ToopToop Real Estate
isn’t surprised Parkside is hot among potential buyers and believes the state’s
property market more broadly is in the midst of a recovery.
“South Australians are traditionally
conservative when it comes to purchasing property,” Toop says. “We’re currently
seeing the flow-on effect of thorough market research and it’s translating into
increased buyer activity.”
The data puts the leafy Victorian suburb of
Surrey Hills in second spot, followed by Walkerville, Norwood, Aldgate and
Kensington in SA, rounding out the top five.
“The South Australian suburbs listed in the
top 10 are historically popular, cosmopolitan suburbs,” Toop explains. “They
offer properties that cater to a wide buyer market and amenities like restaurants
and schools within walking distance. There have been some exceptional
properties sold in these suburbs in the past (few) months.”
Other entries in the top 10 included
Fitzroy North and Wantirna in Victoria, as well as Oyster Bay and Bondi in New
South Wales.
While it’s a traditionally quiet time of
the year for property, experts say historically low interest rates and renewed
consumer confidence means most markets are bucking that trend.
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Call for lower interest rates
Call for lower interest rates
Posted on Wednesday, July 03 2013 at 3:56 PM
There’s an expectation of further interest rate cuts after the Reserve Bank’s decision yesterday to hold the cash rate steady.
Reserve Bank Governor Glenn Stevens says the judgement reflects an
outlook of modest future growth.
“At today’s
meeting the Board judged that the easier financial conditions now in place will
contribute to a strengthening of growth over time, consistent with achieving
the inflation target.”
The comments did, however, leave open the option for further cuts.
“The Board also
judged that the inflation outlook, as currently assessed, may provide some
scope for further easing, should that be required to support demand.”
Tim McKibbin, chief executive officer of the Real Estate Institute of
New South Wales, is disappointed with the decision, stating further falls will
be needed to avoid a stagnating property market.
“It was time to act again. We really need to see further cuts from the
RBA to support the interest rate reduction in May.
“There are people hurting at the moment and another interest rate cut is
necessary to support the property market.”
SQM Research property analyst Louis Christopher believes conditions are
already favourable under the current interest rate level,
but says the Reserve Bank Governor is telegraphing possible future falls.
“I think rates are already at a point where they’re stimulating the
economy and stimulating the housing market.
“Glenn Stevens just spoke at a lunch where he talked about the fact that
growth is still below trend and inflation is well contained. So there’s
certainly scope to cut rates down the track.
“I think the Reserve Bank will be waiting to see what the actual effects
will be on the fall in the Australian dollar before they cut further.”
Belinda Williamson, spokesperson for mortgage brokers Mortgage Choice,
says while the RBA is holding tight this month, the current environment doesn’t
rule out the prospect of future rate cuts.
“The Reserve Bank stated in its last meeting that there’s still room to
move the cash rate should the need arise. At the same time, there’s a common
view that the Reserve Bank will make at least one further cut this year, with
the odds on an August cash rate cut.” Williamson says.
Business research company BIS Shrapnel is noting lower interest rates
are driving improvement in residential markets, but the outlook is uneven.
Angie Zigomanis, a senior manager at BIS Shrapnel, says the current
interest rate environment is at historically low levels.
“Also, outside of 2009, home loan affordability in all capital cities is
at its best level since the first half of the 2000s.
“As a result, we’re seeing some improvement in some residential market
indicators.”
BIS Shrapnel goes on to say, however, that it expects only a modest
improvement in residential market conditions in 2013/14, assisted by the
potential for further cuts to interest rates.
“The residential market should become more buoyant over 2014/15 as the
non-resource sectors of the economy improve and take over as the main drivers
of economic growth.”
The RBA is due to meet again on Tuesday, August 6.
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House approvals lift to best levels in two years
House approvals lift to best levels in two years
Posted on Thursday, July 04 2013 at 3:07 PM
The number of new house approvals increased by 2.8 per cent in May – the best level in more than two years.
Around 13,541 new homes were given the go ahead, in a clear sign the
market is turning a corner, according to CommSec. This number is also above the
decade average of 13,362. House approvals are also up by 13.1 per cent over the
past year, while apartments are down 20.5 per cent.
“Over the past few months, there
have been clear signs of an improvement in housing activity,” CommSec economist
Savanth Sebastian says.
“Low interest rates, strong population growth, healthy employment and
pent-up housing demand is starting to see the housing sector shake off the
shackles and begin a much-needed resurgence.”
CommSec adds the lift in housing construction is also good news for the
Reserve Bank of Australia and leads to greater activity across depressed
housing and retail sectors.
“An ongoing lift in approvals would be beneficial for the broader
economy, given it’s a key forward looking indicator. More approvals lead to
more homes being built over the medium term and will provide additional support
to the overall economic growth.”
In fact, after years of flat growth and low levels of housing approvals,
it seems the market is now rapidly turning a corner.
“The key is ensuring that there’s enough new stock coming onto the
market to prevent an upward surge in prices,” Sebastian says.
“At present it does seem like demand for housing is matching supply and
there’s no reason for concern.”
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Reserve Bank holds steady on rates
Reserve Bank holds steady on rates
Posted on Tuesday, July 02 2013 at 3:41 PM
The official cash rate remains on hold at 2.75 per cent following today’s meeting of the Reserve Bank of Australia (RBA).
A yo-yoing Australian dollar, uncertainty surrounding
commodity prices and the relatively steady performance of our major trading
partner, China, are all tipped to have contributed to the decision.
Rates are at their lowest level on record, following a 25
basis point cut in May. However this time around, almost all economists
expected interest rates to stay steady for the second consecutive month.
Observers say the bank is likely taking each month as it
comes, observing economic data to judge whether its current downward course of
action is proving effective.
RP Data national research director Tim Lawless says the
continuing recovery in the housing market is also likely to have given the RBA
Board some cause for relief.
“Dwelling values are up three per cent over the first half
of the year and over the June quarter dwelling values by just 0.2 per cent,”
Lawless says.
Low mortgage interest rates are having their desired effect,
he believes. Transaction numbers are rising, with national home sales almost 13
per cent higher over the past three months compared to the same period in 2012.
“This scenario of rising demand but contained value growth
is likely to be exactly what the RBA are seeking from the national housing
market.”
Raine Horne chief operating officer Brian Reid says
he’s not surprised by the RBA’s “watch and wait” approach.
“However a rate cut would’ve helped to reinforce improving
buyer confidence in many property markets across Australia over the cooler
months,” he says.
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Sydney auction clearance rates at near-record levels
Sydney auction clearance rates at near-record levels
Posted on Thursday, June 27 2013 at 8:49 AM
If you’ve got the cash to get on board the next Sydney housing boom, now appears to be the time to jump.
Australian Property Monitors
(APM) reports the auction clearance rates for Sydney units was 74.9 per cent in
May – second only to the 76.3 per cent recorded in May 2002, making the result
a near-record level.
Auction rates for houses were
also encouraging at 65.3 per cent – the fourth highest figure recorded in May
over the past 23 years, only behind 2001, 2002 and 2003, according to the APM Capital City
Market Report.
“Sydney is now clearly the
best performing local economy, with an unemployment rate of 4.9 per cent in
April, the lowest of all major cities,” APM senior economist Andrew Wilson
says.
“Other leading indicators of
the economic activity such as retail sales also position Sydney as a leading
economic performer.”
He adds investors and
mid-range upgraders are currently highly active in Sydney, with both the first
homebuyer market and the prestige market remaining relatively subdued.
Sydney’s inner west region
and upper north shore remain particularly popular with buyers.
It’s not the only city doing
well.
The Perth housing market
should achieve median prices at record levels “sooner rather than later”,
according to Wilson.
“First homebuyers remain
active in the market, motivated by the tight rental market and steeply rising
rents,” he says.
Melbourne’s housing market
has also risen since the Easter holiday period, with auction clearance rates on
the rise over April and May.
“The local Melbourne economy
does, however, remain under a cloud, with the announcement of job cuts,
particularly in the manufacturing industry contributing to the highest
unemployment rate of the mainland capitals, which was at 6.2 per cent in
April,” Wilson says.
On the other hand, the
Brisbane economy appears to be back on track, with a sharp fall in the local
unemployment rate from 6.3 per cent to 5.1 per cent.
“First homebuyers remain
subdued, however investors are increasingly recognising the potential of
Brisbane, with its high yields and plenty of upside for capital growth.”
Adelaide is also faring
better after some tough years, with the number of owner-occupied loan approvals
up by 3.5 per cent for the first three months of this year.
However, Canberra continues
to tread water, weighed down by concerns about the local job sector.
“Price growth is expected to
remain subdued as a consequence, with the April unemployment rate at 4.7 per
cent, the highest April rate recorded in the ABS (Australian Bureau of
Statistics) series for the city and well ahead of the 2.9 per cent recorded
over April the year before.”
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Population growth creates housing demand
Population growth creates housing demand
Posted on Thursday, June 27 2013 at 3:12 PM
Australia’s increasing population is resulting in housing demand, according to RP Data.
National
research director Tim Lawless says the Australian Bureau of Statistics recorded
22.9 million residents at the end of last year, but that figure has since
increased to 23.094 million. The growth was driven by strong net overseas
migration, which accounts for 60 per cent of the total population growth. A
record number of births also added to the overall tally.
Victoria
had the highest levels of population growth, with an additional 99,548
residents at the end of 2012, either through natural increase or interstate
migration.
Queensland
recorded the second largest number of new residents at 92,453, followed by New
South Wales, where there were 90,441 more residents.
“While
both states are sourcing the majority of their population growth via overseas
migrants, Queensland has historically recorded a substantial net interstate
migrant inflow,” Lawless says.
“Last
year 11,354 net new residents moved to Queensland from other Australian states,
while New South Wales lost a net 17,761 residents to other states.”
Western
Australia’s population is growing at almost twice the pace of the national
average. Its population increased by 3.5 per cent over the 2012 calendar year
and has attracted the third largest number of net overseas migrants, with
52,306 new, permanent or long-term residents moving to Western Australia.
“In
raw numbers, Western Australia recorded the fourth largest number of new
residents but was the state to record the fastest rate of population growth by
quite a wide margin,” Lawless says.
The
Australian Capital Territory also recorded a rapid rate of population growth,
up 2.3 per cent in 2012. However, Tasmania and South Australia recorded the
least amount of population growth, up by 0.9 per cent and 0.1 per cent
respectively.
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