Whether it’s Queensland or Western Australia, mining towns are digging out much more than coal and gas. Property values are also being lifted, according to RP Data.

Research director Tim
Lawless says with all the hype around the resources sector, mining towns are
showing strong growth.

“There is a real boom with
the housing markets around the resource-intensive regions benefiting from
strong demand,” he says.

“As a result, this is
driving up transaction numbers and home prices.”

RP Data says high levels of
demand, coupled with scarcity of quality housing in some mining regions, is
showing that median house prices are actually higher than many of the most
prestigious suburbs in capital cities.

Western Australia’s
Roebourne, Port Hedland and Broome council areas have recorded the highest
median house prices outside of a capital city at $950,000, $775,000 and
$660,000 respectively over the year to June 2011.

In Queensland, Isaac
($445,000) and Gladstone ($415,000) are showing the highest median house prices
of any council region in the state, outside southeast Queensland.

Rental yields in mining
towns are also well in excess of capital city averages.

The rental return in Port
Hedland is 12.7 per cent, while Cloncurry in Queensland has a yield of 11.4 per
cent.

“With the non-rural
commodities sector gathering pace, resource-driven regions should continue to
prosper,” he says.

However, investors should
also be aware that mining towns are reliant on a single commodity.

“Any weakness in the
resources sector is likely to be reflected within the housing market,” Lawless
warns.

Article source: http://feedproxy.google.com/~r/API_Property_News/~3/ehas3Rh0908/mining-towns-a-hot-investment

For the month of August, RP Data-Rismark’s Combined Capital Cities Index indicated a slowdown in capital city dwelling price declines, reporting a seasonally adjusted capital loss of only 0.4 per cent, the smallest decline since April.

Sydney and Melbourne were the exceptions across capital cities for the same period, demonstrating capital growth of 0.4 per cent and 0.2 per cent consecutively in raw terms. Most other capitals recorded a decline except for Darwin (one per cent increase) and Hobart (0.4 per cent increase).

Over the 12 months to August 2011 Australian capital city dwelling values have declined by 3.2 per cent while rents have lifted by 1.1 per cent in the same period.

In the first half of 2011 rental rates picked up even further with a 4.9 per cent annualised pace, well above the core inflation rate, according to the Australian Bureau of Statistics.

Rismark economist Christopher Joye said housing sentiment is likely to pick up as interest rate cuts are announced; he points to the Australian Finance Group’s recently released finance figures for August, indicating its largest number of new housing finance applications in 18 months.

Article source: http://feedproxy.google.com/~r/API_Property_News/~3/9LRtgTcgAZg/property-investment-returns-improve

It’s time for Australia to put the pedal to the metal and shake off the global economic flu as 170,000 new jobs are dangled on the horizon, according to THG senior economist Richard Katter.

Yesterday’s cash rate paralysis signalled Australia’s uncertainty of which way to move as the Aussie dollar drops, yet the nation experiences increasing terms of trade and rising new home building approvals, but perspective needs to be applied as the BHP job cards are dealt across the nation and housing needs to be delivered, said Katter.

The unchanged cash rate also demonstrates Australia’s stability, he said.

“One thing that hasn’t been stable though is Australia’s greatest excuse, the Australian Dollar,” said Katter.

“The problem is as our economy strengthens and the US continues its painful fall from grace the Aussie (dollar) becomes less exotic and will not be as responsive to changes in the global economic outlook. This will mean that the RBA (Reserve Bank of Australia) may need to be more responsive to changes in the global economy.”

In the background of yesterday’s cash rate announcement, the Australian Bureau of Statistics delivered its August new home approval figures, reporting an 11.4 per cent increase nationwide, and according to the Urban Taskforce’s Aaron Gadiel, New South Wales new home approvals accounted for 83 per cent of the national increase.

But Gadiel said the reality isn’t as crash hot as the data describes, as “these monthly figures are highly volatile and can be disproportionately influenced by small spikes in the number of multi-dwelling approvals issued in a single month”.

“Policy makers shouldn’t let the potentially one-off surge in higher density approvals in NSW blind them to the systemic housing supply problems in the state,” he said.

Katter said the global volatility is unlikely to reduce the “strong medium and very strong long-term outlook” for Australia, particularly with big job promises like BHP’s 170,000-job forecast ahead.

Crude perspective needs to be applied when considering the potential job numbers and housing shortage to accommodate workers, said Katter.

“Let’s say of the 170,000 jobs needed in the resources sector, as predicted by BHP, Queensland gets 70,000. This could conservatively mean an increase in demand for housing in Queensland of around 30,000 houses in the next five years as our labour market is nearly at full capacity and if these jobs are going to be filled we will need to see a massive increase in migration to our state.” said Katter.

“If the demand for housing is split evenly between each of the five years, this will equate to 6000 additional houses per year. At the moment we’re seeing building approval numbers for the state at around 12,000 annually. If these conservative estimates come to fruition we could see an increase in development activity of 50 per cent. Does Queensland have our ducks lined up to ensure we can do this and to ensure we don’t miss our opportunity?”

Article source: http://feedproxy.google.com/~r/API_Property_News/~3/WMdSuOxYBa0/unchanged-cash-rate-demonstrates-australias-stability

Queensland homebuyer confidence is now three per cent higher than it was in 2008 and almost 60 per cent of homeowners who were affected by the January floods now say they’ve fully recovered, according to the Genworth Homebuyer Confidence Index.

Chief executive officer Ellie Comerford says first homebuyer sentiment continues to be optimistic and 36 per cent of borrowers think now is a good time to buy.

“We’re pleased to see Queensland recorded a 4.2 per cent rebound in overall homebuyer confidence since March, on the back of recovery from natural disasters and improving property prices,” she says.

In other parts of the country, Australians haven’t given up their dream of owning a home. Genworth’s survey revealed homebuyers are opting to cut spending across a wide range of expenses including cutting back on luxury goods and reducing their clothes budget in order to buy a home.

“Despite 40 per cent of recent first homebuyers putting more than half their monthly income towards servicing debt, we found just 15 per cent expect to have difficulties paying their mortgage in the year ahead and in fact 58 per cent project they’ll easily meet repayments,” she says.

 

Article source: http://feedproxy.google.com/~r/API_Property_News/~3/BkQHMCCyEok/sun-shines-on-queensland-homebuyer-confidence

Some mortgage holders may be breathing a sigh of relief. Others may now have to wait a little bit longer before they can buy that dress that want.

Whether you were expecting an interest rate rise or a cut this month, there was lots of speculation to support both possibilities. The booming mining sector and the strong Aussie dollar indicated rates could rise. But the struggling manufacturing sector and the volatile sharemarket could have seen rates dip.

However, the Reserve Bank of Australia (RBA) has kept the cash rate at 4.75 per cent, where it’s been since November 2010. Governor Glenn Stevens acknowledged that the economy is going through quite a confusing period.

“Conditions in global financial markets have been very unsettled over recent weeks, as participants have confronted uncertainty about both the resolution of sovereign debt problems and the prospects for economic growth in Europe and the United States,” Stevens says.

“Some temporary impediments that had contributed to a slowing in growth in some countries over recent months, such as the supply-chain disruptions from the Japanese earthquake and the dampening effects of rising commodity prices are lessening. But the uncertainty and financial volatility is reducing confidence and may result in more cautious behaviour by firms and households in major countries. A number of forecasters have scaled back their global growth estimates over the past couple of months.”

Mortgage Choice spokesperson Kristy Sheppard says the RBA’s decision is positive news for investors.

“I think sanity has prevailed, that’s for sure,” she says.

“The RBA knows times are challenging for many consumers, so the bank has reacted. The longer interest rates remain stable, the more positive flow-through there is, and that flows onto the housing market. Owners will see more return to growth and buyers don’t have the shadow of repayment increases, so there’s a positive there as well.”

However, she adds an interest rate cut is “quite unlikely” down the track, due to the continuing mid-term pressures of inflation and the mining boom.

Article source: http://feedproxy.google.com/~r/API_Property_News/~3/qvAgqbrnox4/interest-rates-kept-on-hold-again

Are you looking for a better home loan, or one that will at least help you with repayments? There are plenty of exciting options right now and just as it’s a buyers’ market in many parts of the country, investors can also take advantage of some current deals available.

One of the Big Four banks has
guaranteed to beat any advertised interest rate from its three major
competitors.

However, Jane Slack-Smith of
Your Property Success warns investors should always read the terms and
conditions before signing any new deal.

“They say they’ll beat any
advertised rate but many of my clients have actually been able to negotiate
better than what’s advertised at the moment,” she says.

Kristy Sheppard of Mortgage
Choice says smaller banks shouldn’t be forgotten either.

“Often they’re fighting even
harder for market share and sometimes they’re more likely to offer affordable
deals or better specials within their deals,” she says.

“If you already have a home
loan and you’re looking to switch, there are a range of switching options,
where you can have up to $1000 paid by the lender you’re looking to switch to.”

So how do you make sure
you’re getting the best possible deal? Mortgage Choice suggests the following
top tips, which could save you thousands of dollars over the life of the loan.

• Approach lenders
  with the feeling that there are plenty of lenders and loan products out there.
  If one lender isn’t going to give you the discount you want, simply move on.
• Meet the lending
  manager and negotiate with them face to face. Ask how they can match other
  deals. If they can’t, move on.
• Do your research
  and know what different rates are available with different banks.
• Check the fees
  and features of loans, as well as rates.
• Be aware of
  upfront fees, annual package fees and redraw fees.
• Create a
  spreadsheet or checklist, allowing you to compare different loans available.

Sheppard advises to always
approach a lender with your head held high.

“Because the housing market
is so subdued and housing finance commitments are at a 30-year low, lenders are
really jostling to retain loans,” she says.

“It’s a terrific market to
be in, if you’re looking for a new home loan.”

Slack-Smith agrees but warns
even though some rates are very attractive right now, investors shouldn’t rush
in to fix their rates. She says some markets are factoring in a 1.25 per cent
rate reduction.

“All the fixed rates now may
not be cheap in 12 months’ time,” she says.

Article source: http://feedproxy.google.com/~r/API_Property_News/~3/SBKl37QTCTY/how-to-find-the-right-home-loan

First homeowners in New South Wales might be busy saving for a home deposit –  but they now only have until January 1, 2012, to be exempt from stamp duty for homes up to $600,000.

The shock move to abolish stamp duty cuts for first homebuyers was the centrepiece of the NSW State Budget, handed down today, and it’s expected the measure will save more than $1 billion over four years.

While first homebuyers won’t be happy about the move, builders and developers have welcomed it, due to the fact that stamp duty concessions will still apply to newly built homes.

Urban Taskforce chief executive Aaron Gadiel says the measure will help boost the state’s supply of new housing.

“This reform will remove the current scheme’s inflationary impact on home prices and will make more housing available to more people,” he says.

“In our supply constrained home market, the existing first homebuyer stamp duty concessions inflate home prices across the board. But this hasn’t addressed the high cost of supplying newly built homes to the market.

“By tying stamp duty concessions exclusively to new housing, the inflationary impact on existing housing will be removed and brand new homes will be more attractive to homebuyers. This improves the financial viability of NSW home development and will make it easier to secure capital for new residential projects.”

Article source: http://feedproxy.google.com/~r/API_Property_News/~3/yd7AHB9Xkdg/first-homeowners-stamp-duty-cuts-to-be-abolished-in-new-south-wales

Almost half of Australian properties are worth at least double their original purchase price, according to RP Data.

National research director Tim Lawless says 45 per cent of Australian homes are now worth twice what the homeowner paid.

Capital city home values have also increased by around 30 per cent over the past five years to June 2011 and provided a significant wealth boost to most homeowners during this period.

However, Lawless says the highest proportion of homes which have doubled in value are actually located in regional markets, where values have moved from a low base.

“Strong value growth in property over recent years has been the catalyst for most regions enjoying quite strong levels of equity,” he says.

“The Melbourne market is the exception; it’s the only capital city to fall within the top 10 list of regions enjoying the largest proportion of homes with more than 100 per cent equity accumulation.”

Australia’s residential housing market is now worth an estimated $4.56 trillion, which is almost four times the value of the Australian equities market ($1.3 trillion).

Only 3.7 per cent of homes are currently valued at a lower amount than the price they were purchased for. RP Data says properties in far north Queensland and southeastern Western Australia currently hold the largest proportion of negative equity at 13.5 per cent and 11.2 per cent of all dwellings respectively.

Article source: http://feedproxy.google.com/~r/API_Property_News/~3/oZvaBgiS7Eo/australian-homes-worth-double-their-purchase-price

There’s always been the great debate between capital growth and rental yield. It’s often been argued that the higher the capital growth, the lower the yield, and the lower the capital growth, the higher the yield. But given the current economic climate, it’s difficult to know which one investors should be focusing on.

While capital cities haven’t delivered great gains of late, rents are likely to increase across the board, even for those who still prefer to buy in a capital city, according to Jane Slack-Smith of Investors Choice.

“Affordability is going to be the key driver,” she says.

“That will mean we’re going to see a move from capital growth being a fundamental of property investors’ purchasing criteria to seeing more of an importance on yield. We’ll see an increase in yield, mainly on the fact that people can’t afford to buy their own property. They’ll need to rent so there will be an increase in demand.”

Slack-Smith also believes it’s becoming more common for people to buy investment properties in cheaper areas, while they continue to rent in capital cities.

On the other hand, author and property millionaire Jan Somers says rental yields in capital cities are actually falling over time, but investors should do their research before they buy a property with a higher rental yield.

“In general, they won’t have a very good capital growth,” she says.

“When you have high yield it’s usually high maintenance and high turnover.”

Still confused?

Terry Ryder of hotspotting.com.au argues plenty of areas around Australia are increasing in value – the problem is that investors are looking in the wrong spots.

“The general media line is that prices are flat or falling, but they’re talking about capital cities,” he says.

“They’re ignoring the regions where prices are growing quite strongly.”

He lists Gladstone, the Surat Basin, Newcastle and Hunter Valley as the strong performers and says these areas will have both growth and increasing rental yield, as more people move into the areas. He also likes Bendigo and Ballarat in Victoria and Port Augusta and Whyalla in South Australia.

“People should always look for good returns,” he says.

“If you can get beyond the fixation of a capital city and buy in the right region, you’ll get strong capital growth over the medium to long term and the rent at least pays for the property.”

Article source: http://feedproxy.google.com/~r/API_Property_News/~3/QE_sU4yi9oE/why-rents-are-likely-to-increase

European debt, American recession and a looming second global financial crisis (GFC). Sounds familiar, doesn’t it? Well, according to Understand Property, another economic slump around the world is potentially a good thing for your investment property.

This is because
another GFC could actually send investors scurrying to the relative safety of
housing, which is nowhere near as volatile as other forms of investment.

Another reason
that many people haven’t yet considered as to why Australia stands to benefit
is because of debt in Europe.

“People have an
option not available to governments to solve a crisis – they can leave,”
Understand Property says.

“It’s happened
before and it will happen again and if the situation deteriorates in Europe, as
it probably will, we may once again throw open our nation’s doors to a new wave
of European migration.

“Thousands of
disgruntled Spaniards, Irish, Portuguese, Italians and Greeks will seek their
fortunes here. Not only is our economy insulated from Eurozone woes by being
increasingly reliant on Asian economic fortunes, the arrival of a new wave of
migrants will generate economic growth and just as our history shows, the
housing market will boom for investors in the areas where they choose to
settle.”

The obvious
choices would be capital cities, but perhaps they could also find employment in
our regional areas. And the mass migration could occur sooner, rather than
later.

Understand
Property says the US is printing more money to inflate itself out of debt, but
Europe doesn’t have the same choice, because of the Euro. So if another GFC
occurs, it will hit Europe much harder.

“When the smaller
countries joined the Eurozone, they traded in their Drachmas, Escudos and Pesetas
for Euros. They lost the ability to print money they now need to buy their way
out of trouble.

“The only option
left for the debt ridden nations of the Eurozone is extreme belt tightening. It
will get worse before it gets better and could result in the break-up of the
entire EU system, with political turmoil, severe depression and high
unemployment in the worst hit countries.”

Article source: http://feedproxy.google.com/~r/API_Property_News/~3/xjpP4uYFwz4/why-a-second-gfc-could-be-good-for-your-investment-property