Rental vacancies tighten in January
Rental vacancies tighten in January
Posted on Wednesday, February 20 2013 at 12:50 PM
Last year’s squeeze on rental accommodation has returned following a higher vacancy figure for December 2012, according to property analyst SQM Research.
Its
report indicates the January 2013 vacancy rate fell nationally by 0.4 per cent
to 1.9 per cent.
A
balanced rental market is generally accepted as having a vacancy rate of three
per cent.
Vacancies
have remained relatively flat for the past two years and a spike in December
2012 in available accommodation appears to have been a seasonal effect,
according to Louis Christopher, managing director of SQM Research.
“Taking
into account seasonality, vacancy rates have proven to be very steady over the
past two years now for the major capital cities.”
SQM
Research shows Melbourne as having the highest vacancy rate of all the capitals
at three per cent, with Perth having the tightest rate at 0.8 per cent.
Although
the January 2013 vacancy figure indicates rental availability is slightly
better compared to the same time last year, SQM still categorises the rental
situation as tight with all capital cities, except Melbourne, recording a
vacancy rate of less than three per cent.
SQM
Research believes potential first homebuyers may now choose to leave the rental
market and begin looking to purchase given the start of a general recovery in
housing prices across many markets.
Matthew
Gross, managing director of The National Property Research Company, is less
confident in the first homebuyer sector picking up.
“We
still see a significant gap between mortgage repayments and rental when
comparing like for like property.”
Gross
believes the rental market is reasonably balanced and that first homebuyer
reaction will be a function of other factors.
“Some
government policies in particular have not been as effective in stimulating
that market as would have been hoped.”
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Support for low-cost loans idea grows
Support for low-cost loans idea grows
Posted on Wednesday, February 20 2013 at 3:59 PM
A proposal for a program that’d provide $100 million in low-cost loans and grants for local councils in high growth areas is gaining support in the planning and development sectors.
Councils in Victoria joined forces to call
for the idea to be considered as part of the Commonwealth’s Budget this year.
The Urban Development Institute of
Australia backed the calls, saying lower interest rates present a good
opportunity to lock in funding to facilitate growth.
The group’s Victorian executive director
Tony De Domenico says such a policy would also tie in to the Federal
Government’s job creation strategy.
“While the development industry contributes
to infrastructure, the extra loan funds for councils would provide added flexibility
for councils to bring facilities forward, helping to stimulate the housing
market and create more employment and investment,” he says.
The implementation of a low-cost loan
program for identified growth area councils would be a “unique opportunity” to
create instant economic activity.
With the Federal Election just four months
after the next budget, more housing and construction sector lobby groups are
expected to begin rolling out their policy wish lists.
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Reserve Bank leaves room to move on interest rates
Reserve Bank leaves room to move on interest rates
Posted on Tuesday, February 19 2013 at 2:29 PM
The release of minutes from the Reserve Bank of Australia’s (RBA) meeting earlier this month point to a potential future rate drop.
“The
inflation outlook, as assessed at this meeting, would afford scope to ease
policy further, should it be necessary to support demand,” the minutes said.
The
bank’s decision to hold the cash rate at three per cent was decided in a
climate of mixed results with positive data for Australia’s economy and the
property industry tempered by a lack of confidence in employment and finance, according
to the RBA.
“Resource
exports had increased strongly up to December and a range of indicators pointed
to further gradual improvement in conditions in the housing market.
“On
the other hand, housing finance remained relatively subdued and indicators
suggested that non-mining business investment would continue to be weak in the
near term.”
The
RBA believes previous cuts to the cash rate are taking effect in housing.
“While conditions remained soft in the construction
industry, there were some signs that the housing market had firmed, partly due
to the series of interest rate reductions over 2012… and prices and rental
yields in the established housing market had also picked up.
“Improving
conditions in the housing market were expected to continue to provide support
to dwelling investment.”
Last
year’s inflation rate remained within the RBA’s target range of two to three
per cent and the underlying inflation rate was expected to be around the 2.5
per cent mark for the first few quarters of 2013.
Given
the extent of easing in interest rates over the 15 months, the RBA felt it was
prudent to keep the cash rate at three per cent in the wake of previous cuts.
“Interest
rate sensitive parts of the economy had shown some signs of responding to these
lower rates, which were well below their longer-run averages, and further
effects could be expected over time.”
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Northern Territory’s First Home Owner Grant in hot demand
Posted on Friday, February 15 2013 at 3:39 PM
More homebuyers are taking advantage of the Northern Territory’s First Home Owner Scheme, according to Northern Territory’s Treasurer Robyn Lambley.
She says since
the First Home Owner Grant increased in December from $7000 to $25,000 for
first homebuyers purchasing newly constructed homes, and up to $12,000 for
existing property in Darwin, more first homebuyers have been jumping into the
property market.
“Last month, 107
grants were paid, up from 84 the previous month, with 45 issued in Darwin, 34
in Palmerston and the rural area, 18 in Alice Springs and 10 in Katherine,” she
says.
“The government’s
reconfigured housing package reduced red tape by streamlining assistance into a
single grant with one application form.
“The grant is
more flexible than stamp duty assistance as it can be used at the discretion of
the first homebuyer.”
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Auction clearances support strengthening market
Auction clearances support strengthening market
Posted on Wednesday, February 13 2013 at 3:19 PM
Auction results from the first weekend of February this year should bolster optimism in some capital city markets.
Comparing
numbers from the first weekend of February with those from the same time last
year, both Sydney and Melbourne are showing signs of growing confidence.
In
Sydney, auction numbers were almost triple with clearance rates at 74 per cent,
which is 31 points higher than for the same time last year.
Andrew
Wilson, a senior economist with Australian Property Monitors, says the results
continue on from the strengthening sentiment telegraphed at the end of 2012.
“It’s
a signal, early days, that the market is still building momentum from last year.”
Wilson
notes that the clearance rate for Sydney’s inner west suburbs is the most
impressive with 86 per cent of the 21 properties auctioned selling under the
hammer.
“Certainly
the strengths of last year are still apparent and that is the inner-west (suburbs)
but no significant sign yet that the prestige market has started to gather in
confidence,” he says.
Melbourne’s
result was similarly impressive with more than twice the number of auctions and
an increase of 25 percentage points to show a 64 per cent clearance rate compared
to the same weekend last year.
Wilson
says while Melbourne’s sentiment is similar to Sydney’s, the drivers are
reversed.
“It
had a strong prestige market which kept the whole market afloat last year and it
looks like that’s continued in Melbourne last week”.
Brisbane’s
numbers were mixed with almost twice as many auctions occurring compared to
last year, however the clearance rate fell from 37 per cent to 27 per cent.
The
auction culture in Brisbane is less established than in other capitals
according to Wilson, however he believes that will change as the market improves.
“I
think the auction culture will grow in Brisbane and I think it will eventually
become a similar event to what happens in Sydney and Melbourne and it will base
itself on when the cycle does start to lift and prices do start to rise again.”
Wilson
predicts a good year ahead for Queensland’s capital city.
“There’s
a lot of investor activity in Brisbane… The yields are very good and it’s
actually quite a tight rental market.”
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$85m project boosts Tasmania’s property prospects
$85m project boosts Tasmania’s property prospects
Posted on Tuesday, February 12 2013 at 11:21 AM
Tasmanian property has some longed-for good news with the State Government approving a major residential project near the capital.
Premier Lara Giddings has
announced planning approval for a multi-million dollar development on the
Claremont Peninsula 11.5 kilometres north of the Hobart CBD.
“This is a very
exciting project and one of the most significant residential developments we
have seen in southern Tasmania in recent times” she says.
The proposal is set to
provide a lift to an economy that has had to contend with a recent bushfire
disaster and lacklustre property market performance.
“It will provide a
boost to our construction industry, create hundreds of construction jobs and
stimulate the property market.”
Stage one of the project
comprises the construction of 50 three-bedroom and 25 two-bedroom apartments in
five residential towers.
The venture will
incorporate a major expansion of the existing golf club as well as a hotel and
a marina.
“This will transform
the area into a fantastic residential, tourism and sporting precinct,” she
says.
Tasmanian Deputy Premier Bryan
Green says the project had been approved by the Glenorchy City Council but was
subject to approval by the Tasmanian Planning Commission to rezone the land
from recreational to residential and this has now occurred.
“The government has
already delivered a statewide planning template, new residential building code
and regional land use strategies. We are now also working on a new statewide
code for construction of villa units and townhouses.
“This reform is a
huge step forward and is being achieved in cooperation with local councils and
their communities.”
The news should bring some
relief to property market participants who have seen softer median prices and a
lack of buyer confidence over the past year.
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House prices on the rise
House prices on the rise
Posted on Thursday, January 31 2013 at 2:40 PM
The Australian property market had a better year in 2012 than 2011, with prices in most states increasing and achieving their best performance results in the past 18 months.
Weekly rents also
grew, especially in the unit market, according to Residex.
“What’s
interesting from the sales figures is the fact that the unit market has now
become almost as important and significant as the house and land market,”
Residex founder John Edwards says.
“Market share of
unit sales is now in the order of 44 per cent. In Sydney, unit sales are now
almost equal in importance with the difference between volumes only being about
4000 dwellings for the full year.
“For the
investor, the year ahead should be one of developing future quality rental
streams. This is probably best done by looking for well-suited renovation
opportunities.”
Rents in Darwin
increased by 16 per cent for houses over the past 12 months, while rental
prices for houses in Perth =also skyrocketed by 17 per cent.
In the unit
market, rents have increased in all capital cities except Canberra and Hobart.
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Analyst’s report forecasts property recovery
Analyst’s report forecasts property recovery
Posted on Thursday, February 07 2013 at 10:42 AM
The property market has strong fundamentals in place for an upswing, according to PRDnationwide’s first Quarterly Economic and Property Report for 2013.
The
company’s initial quarterly release for the year indicates confidence is rising
in the property sector with its Time to Buy a Dwelling Index showing a significant
increase in New South Wales and Victoria and a marginal increase in Queensland.
The
index measures changes in consumer sentiment regarding whether it’s a good time
to buy a dwelling.
Aaron
Maskrey, national research manager for PRDnationwide, says the index is
reversing a long-held trend.
“Over the past decade or so that
index has been falling.”
Although
having only a marginal increase, Queensland has the highest overall index score
indicating it’s the state where most buyers believe the time is right for an
acquisition.
There
are more qualitative reasons for Queensland property buyers to be bullish too,
according to Maskrey.
“I was talking
to some colleagues from Sydney and Melbourne. They believe the recovery is
going to be led by southeast Queensland because it’s more affordable compared
to other states.”
The
report is optimistic about a stronger second half of the year in 2013 for the Australian
economy as a whole.
“Combined
with the resurgence in China and a slowly stabilising US, if Australian
unemployment can remain in check for 2013 and interest rates remain low, then
rebuilding on Australia’s fragile confidence can continue,” it says.
“I think it’ll
be gradual. It won’t be an overnight snapshot back to where we were over the boom
times,” Maskrey says.
Tom Edwards,
regional director for CBRE Residential Valuations agrees that property prices
in 2013 are set to be stronger.
“We are seeing
a bit more confidence in the market. I think January 2013 has started off with more
confidence than January 2012. We are seeing a bit more activity out there,” he
says.
Edwards believes
interest rate falls are having an impact.
“I think that
the compounding effect of the interest rate reductions have had an effect.
There’s still talk about another one. I do think that (the market) is finally
starting to see confidence because of the interest rate levels being very, very
low.”
Although the
future is difficult to predict, all the current signals point towards a better
market, says Edwards.
“I think we can
only go by what’s happening at the moment and there is more confidence out
there early in the year so I hope that’s going to get some legs.”
PRDnationwide’s
Monthly Wrap for January 2013 goes further.
“One thing is certain, the current buying conditions in
property have never been as favourable as they are now, with low interest
rates, more affordable prices and plenty of stock to choose from in most
markets.”
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Rates stay on hold – for now
Rates stay on hold – for now
Posted on Tuesday, February 05 2013 at 1:51 PM
The official cash rate remains unchanged at three per cent following a meeting of the Reserve Bank of Australia (RBA) today.
Contained
inflation, more optimistic economic news out of the United States, Europe and
China and a more robust housing market here at home are likely to have
contributed to the RBA Board’s decision.
The
majority of economists had tipped today’s decision but remain confident of
further interest rate reductions throughout the rest of the year.
Some
commentators are predicting total cuts of up to 100 basis points in 2013.
Loan
Market corporate spokesman Paul Smith says despite today’s decision, some
lenders may toy with the idea of making their own movements.
“With the cost of
funds pressure easing for many lenders, there’s an opportunity for them to make
adjustments to their variable rates in attempts to attract new customers,”
Smith says.
“The action or
inaction from lenders in the following weeks could be indicative of what’s in
store for interest rate movements over the next several months.”
Raine
and Horne chief executive officer Angus Raine says the RBA’s year-long focus on
whipping up consumer sentiment might be starting to bear fruit.
“Already
(this year) there’s evidence that buyer demand is collecting speed as the two
rate cuts in October and December continue to flow through,” Raine says.
“At
the same time, our offices are reporting a shortage of homes for sale, which
should help push up prices by as much as seven per cent in some markets in
2013.”
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Record-breaking January for mortgage sales
Record-breaking January for mortgage sales
Posted on Monday, February 04 2013 at 3:19 PM
Investors are coming out in force again, with mortgage broker company Australian Finance Group (AFG) processing more home loans last month than any January before.
The AFG mortgage
index shows the company processed $2.2 billion of home loans, a massive 24 per
cent more than in January 2012.
Not surprisingly,
the strongest demand was from two of the strongest states at the moment, Western
Australia ($583 million) and New South Wales ($569 million).
General manager
of sales and operations Mark Hewitt says loans are being established for first
homebuyers, upgraders and investors.
“Borrowers seem
to be responding to the combination of a more positive, global economic
outlook, lower rates and enhanced affordability,” he says.
Fixed rate loans
fell to their lowest level since August 2011, comprising 16.3 per cent of all
new home loans.
General manager
of products and marketing for CUA, Jason Murray, says CUA also had a great
month in January, with about 80 per cent of borrowers choosing variable loans.
“We’ve had a
better month than any proceeding January,” he says.
“Those who are
lending for residential mortgages as opposed to investment purposes, that still
hasn’t changed,” he says.
“It’s the
investment space that has seen the biggest impact. If interest rates continue
to come down, it does become a very desirable place to start going back into
that investment space. The press coming out of Sydney reflects prices are now
going up, and Brisbane has now probably reached the bottom. The housing market
is starting to show signs of recovery.”
EPS Property
Search buyers’ agent Patrick Bright says November, December and January were
all strong months and he’s definitely fielding more enquiries.
He adds some
clients have been sitting on the sidelines for months but have finally decided
2013 is the year they’d like to buy.
“It does appear
the market (in Sydney) has bottomed out,” he says.
“It seems it’s
not going to get any more affordable. It’s a combination of vendors becoming more
realistic about their asking price and buyers getting on with it.”
Bright says many
clients ask him whether or not the market could drop further.
While no one has
a crystal ball, Bright warns if it has bottomed out, those who wait will
probably be forced to pay more in 12 months.
“If it hasn’t
bottomed out, in six to 12 months, they’ll just pay the same, so investors need
to make a decision. I don’t tell clients when they must or must not invest.
They have to come to that conclusion. But now the feeling is that the market is
on the improve.”
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