Queensland building boost extended

Posted on Friday, January 13 2012 at 4:12 PM

Investors and homebuyers in Queensland now have an extra reason to buy off-the-plan properties, after the Queensland $10,000 building boost grant was given a three-month extension. The boost was supposed to end at the end of January, but will now expire at the end of April.

Housing Industry Association Queensland executive director Warwick Temby says the extension will help the home building industry gather some momentum.

“The boost had played a part in rekindling interest in building a home,” he says.

“Combined with the lift in affordability from lower interest rates and fierce competition among builders, the boost has made it a great time for building a new home.

“HIA had been concerned that the Christmas and New Year break was making it difficult for builders to finalise contracts to meet the previous end January deadline. The three-month extension has removed this problem for the industry.”

The building boost is available to Queenslanders buying a new home worth less than $600,000.

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Sydney buyer demand shifts to affordability

Posted on Thursday, January 19 2012 at 11:45 AM

Affordability is the key this year as Sydney buyers shift attention to older, more affordable units in prime lifestyle locations along Sydney’s inner coastal areas and also to cheap housing on the metro city fringe, according to WBP Property Group New South Wales manager Chris Lackey.

Even though the NSW Government has been demanding developers to provide ‘affordable’ housing stock in new growth areas southwest and northwest of Sydney, the problem is that between $400,000 and $450,000 is as cheap as it comes, said Lackey.

“Land prices aren’t going down and building prices will continue going up – you can’t stop inflation.”

Lackey said the death of the NSW stamp duty concession for non-first homebuyers has tamed what the average buyer can afford now, leaving many with no option but to borrow less and look further out to even cheaper areas in the southwest such as the Campbelltown LGA (local government area) including suburbs such as Macquarie Fields, Ingleburn and Minto, all 40-something kilometres southwest of the Sydney CBD, said Lackey.

Other buyers chasing affordability are more likely to consider older units in prime coastal spots within 20 kilometres of the CBD, said Lackey.

The prime coastal spots Lackey refers to are predominantly those in the Sutherland Shire; beach favourites like Cronulla, and parts of the northern beaches.

A trend Lackey predicts will occur as a result of the stamp duty concession burial is that buyer demand will slow down more noticeably in established “areas on the edge” of where new growth centres are springing up, “because the new houses still attract the building grant and are suddenly closer in price to the five to 10-year-old established houses attracting no government incentives”.

He said suburbs like Hoxton Park and Prestons are examples of areas to potentially be affected by this buyer demand fallout.

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Evidence the property market could be bottoming

Posted on Tuesday, January 31 2012 at 4:54 PM

Signals of a bottoming market are evident as the December quarter reports the year’s smallest quarterly decline, according to RP Data director of research Tim Lawless

In RP
Data-Rismark’s December Hedonic Home Value Index results, Sydney and
Hobart took the lead in price growth for the December quarter, while Darwin
outperformed all capitals in gross rental yields.

This latest price growth
revision doesn’t come as a great surprise though, as December is typically a
month with lower sales volumes, reported RP Data-Rismark.

Following November’s confidence
boosting price growth, December results demonstrated a weakening in capital
city dwelling price growth of -0.2 per cent seasonally adjusted, compared to a
revised 0.4 per cent rise in November.

Sydney was the strongest
performer over the December quarter, seeing positive growth of 0.7 per cent
seasonally adjusted; Hobart also demonstrated positive signs with growth of one
per cent seasonally adjusted in the three months to November 2011.

Perth still sits at the bottom
of all capitals in growth terms, with values shifting downward to 2.1 per cent
seasonally adjusted for December.

In gross rental yields, Darwin
outperformed the nation with a gross rental yield of 5.6 per cent growth for
houses and six per cent for units; Melbourne demonstrated the lowest gross
rental yields with four per cent for houses and 4.3 per cent for units.

While a decline was reported
across capital city home values for December, Lawless said it was the year’s
smallest quarterly decline, a sign that the market could be hitting the bottom.

“According to our index, capital
city home values fell by 1.5 per cent seasonally adjusted in the March quarter,
and by a further -0.8 per cent seasonally adjusted in each of the June and
September quarters. This rate of decline had decelerated to -0.5 per cent by
the final quarter of 2011,” said Lawless.

Compared to the giant 14 to 15
per cent decline in shares, Australian capital city dwelling values saw a more
minimal loss of about 3.5 per cent, while regional house values only corrected
by around three per cent, said Lawless.

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The path for investment opportunities widens in South Australia

Posted on Tuesday, January 31 2012 at 5:53 PM

The proposed Olympic Dam expansion is becoming more and more certain, after plans were announced to expand the Stuart Highway from Olympic Dam to Port Augusta in South Australia.

Managing director
of CG Group and Leicester Management Services, Rick Treloar, says now is
the perfect time for investors to start looking – and buying – in South
Australia, before things really take off.

“Everything has
been approved, they’re waiting on BHP Billiton to give the final go ahead,” he
says.

“I think Whyalla,
Port Augusta, the whole area will take off as far as property prices are
concerned and vacancies will become less and less.”

It comes after
Minister for Mineral Resources and Energy Tom Koutsantonis announced the Stuart
Highway would undergo the most extensive upgrade in decades, a signal that
something huge is just around the corner perhaps for South Australia.

“For those
looking for evidence that the mining boom in South Australia will lead to improvements
in our state’s infrastructure, here is an excellent example,” he says.

“Funded from $25
million to be provided by BHP Billiton following the approval of the proposed
Olympic Dam expansion, this infrastructure project will assist the mining industry
in our state’s far north and provide an upgraded highway.

“We anticipate
that the Olympic Dam expansion will lead to hundreds of trucks, creating
increased traffic movements as construction material is transferred from Port
Augusta to Roxby Downs.

“Long after that
work is completed, the upgraded highway will remain, providing better access to
regional South Australia and providing economic benefits to Whyalla, Port
Augusta and Port Pirie.”

The upgrade is
part of the $1.2 billion in preliminary works and equipment contracts announced
by BHP Billiton, ahead of approval for the expansion project, which is expected
to be considered at Easter this year.

Work on the Port
Augusta north section will be followed by the Pimba south section. 

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Red tape slashed in housing market paperwork

Posted on Monday, January 23 2012 at 4:26 PM

Homebuyers and sellers in Queensland will soon be using just one contract, under a plan to slash red tape in the housing market.

The move, expected to be finalised by the end of February, could decrease legal costs and reduce the number of forms, according to Queensland Premier Anna Bligh.

“Simplifying the paperwork involved in a residential property contract will not only help conveyance lawyers and real estate agents, but we believe the public will benefit from less paperwork and associated costs,” Bligh says.

The requirements in a house contract currently include the need for a sustainability declaration, a pool safety declaration, a warning statement, an information sheet, disclosure statement and the contract of sale.

“At the moment each one of these means a separate form, each with a fee, and often repeating the same type of information,” Bligh says.

“We intend to rid the industry of unnecessary complications making it easier to buy and sell a home in Queensland.”

The Queensland Government is also proposing to incorporate flood mapping data into the ‘one contract’, pending the recommendations of the Queensland Floods Commission of Inquiry.

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Investors find other avenues for capital growth

Posted on Friday, January 27 2012 at 9:45 AM

It’s natural for property prices to take a breather as they move through the property cycle, but that doesn’t mean investors can’t brainstorm ways to create their own growth in the meantime.

Knowing where the rezoning is happening might be the solution, according to Gavin Hegney of Hegney Property Group.

Suburbs proposed for rezoning to allow higher density dwellings is high on Hegney’s list when researching properties for investors.

In this current market the property investor needs to be more astute and more strategic, even as far as researching where the rezoning will be happening and when, Hegney said.

Buyers agent Damian Collins of Momentum Wealth said he’s a big believer in this strategy too and has bought many properties for investors in areas that saw seven to eight per cent growth when the rest of the market was sliding backwards, simply by buying and holding in areas before they were officially rezoned.

“In times like this the development site is where the money is more likely to be made,” he said.

Hot Property Specialists buyers agent Liz Wilcox said she often helps clients buy properties in the areas to be rezoned for higher density dwellings for the purpose of seeing faster growth once the rezoning occurs.

Wilcox said one of her projects next month, when the Toowoomba Regional Council’s new rezoning plans are released, is to study it carefully for the best buying opportunities for one particular client.

Wilcox’ colleague, Zoran Solano, also a buyers agent, said he’s also closely watching the Brisbane rezoning announcements, however he said the council is increasingly making it difficult to capture these opportunities.

“Council wants to preserve the tin and timber so it’s doing what it can to restrict the number of houses from being rezoned,” said Solano.

“However it doesn’t mean these opportunities no longer exist.”

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Proposed new rail line for Mackay

Posted on Tuesday, January 24 2012 at 9:45 AM

Investment properties in Mackay have just been given another boost, with BHP Billiton giving the Queensland Government notice of a proposed rail corridor alignment from the Bowen Basin to Mackay

The proposed line would be used to accommodate multiple rail lines, including a dedicated rail line for BHP Billiton, from the Goonyella Mine to a proposed coal export terminal at Abbot Point, 30 kilometres north of Mackay. It means an extra 60 million tonnes of coal could be exported from Mackay each year.

BHP Billiton metallurgical coal president, Hubie van Dalsen, says some landowners had previously expressed concerns about the effect of multiple proposed rail corridors on landholdings.

“We’ve listened to their concerns and acted on the advice of the Queensland Government in pursuing a common corridor which could be used by other proponents,” he says.

However, Opteon property director Paul Krause believes there’s already so much happening in Mackay that the new rail line won’t have much impact anyway.

“The REIQ (Real Estate Institute of Queensland) says there’s a vacancy of less than 0.7 per cent but from where we’re heading, it’s less than that,” he says.

“This would be another massive coal loading facility but there are already many mines opening up. There will be spin-offs in every available offshoot and it’s just one of the many projects we have on our plate at the moment.”

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Land sales on the increase

Posted on Thursday, January 19 2012 at 1:30 PM

Land sales have increased by 1.3 per cent in the September quarter, according to the Housing Industry Association (HIA)-RP Data Residential Land Report. It’s the third quarter where the volume of land sales has increased.

“It’s a long climb back, but at least we have now seen three consecutive quarters in which land sales volumes have increased, although there’s no avoiding the fact that overall levels remain low,” HIA senior economist Andrew Harvey says.

“Land sales are an early leading indicator, so an upturn in trajectory is essential to the prospect for an eventual recovery in new home building activity.”

Land sales are still 16.8 per cent lower than in the September 2010 quarter. RP Data’s senior research analyst, Cameron Kusher, agrees that the result is encouraging but says the market still has a long way to go.

“It’s also important to remember that the improvement commenced at a time when many expected that official interest rates would climb higher,” Kusher says.

“With successive 25 basis point cuts to interest rates in November and again in December 2011, we would expect that a steady improvement in sales activity which commenced in the December 2010 quarter is likely to continue and perhaps gain further pace.”

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Rents increase across Australia

Posted on Thursday, January 19 2012 at 1:53 PM

The soft homebuyer market has put increased pressure on the rental market, resulting in higher rents across the entire country, according to Australian Property Monitors’ Rental Price Series quarterly report.

Median weekly asking rents for houses increased by 1.1 per cent in the December quarter, while rents for units increased by 1.4 per cent.

Canberra experienced the biggest increase of all capital cities, rising 6.4 per cent in the quarter from $470 to $500 per week. Brisbane and Perth also had healthy jumps, increasing by 2.7 per cent and 2.6 per cent respectively, (from $370 to $380 in Brisbane and from $390 to $400 in Perth).

“Increasing competition for properties, particularly from homebuyers unable or unwilling to enter the property market has resulted in rising rental prices over the December quarter for both houses and units,” Australian Property Monitors senior economist Andrew Wilson says.

“After flat results over the previous two quarters, landlords have capitalised on the high competition in the marketplace and are charging a premium for their properties.

“It’s expected that as the housing price cycle bottoms out and confidence returns, we’ll see increased buyer activity in Sydney, Perth, Brisbane and Canberra through 2012 that will take some pressure off the rental markets in these capitals.”

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Inpex approval puts gas back into Darwin’s property market

Posted on Tuesday, January 17 2012 at 12:27 PM

The Inpex project means “very exciting times are ahead” for Darwin, according to the Real Estate Institute of the Northern Territory (REINT).

The $34 billion Ichthys liquefied natural gas (LNG) project has been officially approved by Inpex, giving the Darwin property market a much-needed boost.

The project will produce 8.4 million tonnes of LNG a year from 2016, 1.6 million tonnes of liquid petroleum gas a year and 100,000 barrels of condensate a day.

An estimated 3000 jobs also will be needed during the peak of construction, with a further 1000 offshore. Once the project is in operation in 2017, 700 permanent positions will be required.

REINT’s chief executive officer Quentin Kilian says the announcement is the turning point for Darwin’s struggling market.

“This announcement will lead to fairly radical changes to the makeup of Darwin,” Kilian says.

“It’s already installed business confidence and that sentiment is really filtering through. In the last quarter, the median price has stayed stable but what we’ve seen is an increase in sales activity. That’s partly because people are realising perhaps this is the bottom (of the property market) and things will move upwards.”

Although there won’t be a major impact on sales or rentals at first, Kilian predicts property will be soaked up in the long term as more gas projects are announced.

Director of Herron Todd White, Terry Roth, predicts there will be more activity in the market over the next 12 months and vacancy rates are likely to decrease. But he believes Darwin is still a while away from another boom.

“I don’t see any huge jumps, due to affordability more than anything else,” he says.

“People won’t come here if they can’t afford to live here. But we might see more interstate investment.”

Inpex chairman Naoki Kuroda says the Inpex project will be one of the world’s largest LNG facilities, based on an estimated 40 years of gas and condensate reserves from the Browse Basin.

“In delivering this important project into production we’ll be securing vital long-term energy supply to Japan and our other customers while delivering sustainable economic and social benefits across Australia,” he says.

“Ichthys will contribute significantly to the growth of the Australian economy while strengthening friendly ties between Japan and Australia.”

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