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First Home Buyer Numbers Are Above Average Across Every State And Territory

According to ABS housing finance data for August 2019, first home buyers comprised the largest proportion of national owner occupier mortgage activity since early 2012.  The data showed first home buyers comprised 29.8% of the national market for owner occupier home loans; almost five percentage points above the decade average of 25%.  A similar trend can be seen across every state, with first home buyers a larger proportion of the market relative to the decade average.

There are a variety of factors that have provided first time buyers with a leg up into the housing market.  Housing affordability has improved through the recent housing downturn, mortgage rates have come down, home loan servicing rules have been relaxed and some states have provided additional incentives for first home buyers in the form of stamp duty exemptions or discounts as well as existing first home buyer grants which generally apply to the purchase of new dwellings across most states.  

There’s also the fact that first home buyers haven’t had to compete as fiercely with investors, with investor activity generally trending lower since peaking in 2015 at 43% of mortgage demand.  The August update shows investors comprised only 26% of mortgage demand which is well below the decade average of 34%.

First home buyers are the most active across the Northern Territory and Western Australia where this segment of the market comprises 45% and 37% respectively of owner occupier mortgage demand.  These are also the two regions where housing values have fallen the most, providing a substantial improvement to housing affordability.  Dwelling values are down 27% since peaking across the Northern Territory and 23% lower since peaking across Western Australia.  

The regions where first home buyers are the least active are South Australia and Tasmania where first time buyers comprised 22% and 24% of owner occupier mortgage demand in August.  Despite being the lowest of any state, first home buyer participation remains above the decade average in these regions. 

Looking forward it’s likely first home buyer’s will reduce as a proportion of overall market activity.  Housing prices are once again rising across most regions of the country while growth in household incomes remain sluggish, which will create renewed housing affordability pressures in markets where home values are rising faster than incomes. 

Source: The Real Estate Conversation 4th November 2019 https://www.therealestateconversation.com.au/blog/tim-lawless/first-home-buyer-numbers-are-above-average-across-every-state-and-territory

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

 

spring property market

Spring has sprung | What’s happening to the property market?

Here’s what Australians can expect for the property market this spring.

As the weather heats up, so too does the property market.

spring property market
 
The market is warming up for spring with more properties being listed, good buyer enquiry for the lower price points and auctions being scheduled.
 
The higher-end price points are still a little soft and we’re not seeing much movement here, but if vendors are realistic they will get their properties sold.
 
During the winter months, we saw the rental market soften, as there is a lot more supply on the market due to the surge in duplex and unit builds over the past few years.
 
This ‘investor grade’ stock is now hitting the market in volume and renters can certainly get themselves a spring bargain if they negotiate a little.

We are seeing more and more incentives being offered to tenants than in years gone by, as landlords try to reduce vacancy on their properties.
 
It’s a good time to be shopping for a rental as there is rent-free periods, free iPads, water bills paid for 6 months and more rental incentives.
 
As for auctions, they are still not performing as well as they have in times gone by.
 
This is not so much a reflection of the time of year, but more a reflection of the changing lending landscape.

It’s harder for buyers to get finance so this keeps them wary of auctions.
 
This isn’t likely to change a whole lot between now and the end of the year.
 
Sellers do however have renewed confidence in the market, which will result in more stock becoming available.
 
Vendors will need to remain realistic with their pricing or they could find it hard to sell.

If they price right, they will attract a good amount of buyer interest.
 
Many sellers have been waiting for Spring to list their properties, so this is already starting to show through the listings.

I expect Adelaide, Brisbane, Canberra and Perth to experience the strongest price growth over the next three to five years compared to suburbs in once-booming Sydney and Melbourne.
 
The strong growth in Adelaide and Brisbane will come from strong job creation, infrastructure spend and high levels of buyer demand as well as the major public projects for Brisbane.
 
There’s also renewed confidence and great employment opportunities in Perth, leading the way for long-term property opportunities.
 
The key for anyone looking to get their head around a market is to look at vacancy rates, median price movements over the past 12 months and the median number of days on market alongside a whole lot of other statistics.
 
In Brisbane, we like Wynnum in the East and Nundah in the Inner North.
 
For Canberra, some of the areas we like are suburbs in and around Gungahlin. Firstly, you’ve got a lot of good services and amenities and secondly, you’ve got the new trams that pass through.
 
The little undiscovered areas 25 minutes south of the Adelaide CBD are also projected for growth. Suburbs around Morphett Vale, Woodcroft and even as far as Edwardstown are all affordable, have a good rental demand, good infrastructure and facilities and plenty of jobs.

Source: The Real Estate Conversation 18th September 2019 https://www.therealestateconversation.com.au/blog/anna-porter/spring-has-sprung-whats-happening-the-property-market/anna-porter-economist/anna

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

 

market

Why there is never a market equilibrium

The market is currently in a sweet spot between market feast and famine.

market

When it comes to property markets, there is usually never a perfect equilibrium. 

What I mean is there is usually an oversupply or undersupply stock situation, such as too many new units being built. 

In the finance sector, the same goes, with lending either constricted or overflowing. 

Both of these factors have an impact on buyer and investor sentiment, but also the sentiment of vendors and selling agents, too. 

Plus, there are seasonal factors to consider such as winter, which is usually a period of slower market conditions. 

Of course, this is purely psychological because the time of year should have no impact on market activity. 

Also, there is the tax season when investors in particular are waiting on insights from their accountants to better understand their numbers, and whether they can afford to buy another property for their portfolio.

Changing times

So, it stands to reason, that July is usually a lower listings month because it’s the dead of winter, and not many people want to buy or sell. 

However, new SQM Research has highlighted that the number of listings, while still seasonally low, have reduced significantly from the same period last year in some locations. 

In fact, according to the research, year-on-year Sydney’s listings declined by 10.5 per cent, Darwin declined by 4.8 per cent and Perth by 2.6 per cent.

One of the reasons why this could be happening is that some vendors still have their heads in the property clouds, and aren’t prepared to list their properties until prices mystically go back to the levels that they were a few years ago.

Also, because of lower interest rates, more people are able to hold on to their properties, rather than selling because of cash flow problems. 

Going back to my original statement, though, currently there is an imbalance of buyers in my opinion.

That’s because many were stuck on the sidelines as they couldn’t secure finance until the serviceability calculations were reduced recently. 

Some of them now have the “fever” and are just buying any old thing, while the smart ones are being strategic with their property purchases.

The first state of play is where bidding wars take place, which is starting to happen more and more at auctions. 

Another sign of the market changing can be evidenced through my regular attendance at housing commission auctions in a suburb of Sydney. 

Over the past four months, attendance has gone from being half-full to standing room only. 

Plus, the sale prices of those properties have skyrocketed from about $388,000 to $476,000 in the space of a few short months. 

Another sign of market change is that the volume of listings with no price guides or advertised as “offers over” are also on the rise, because sellers and agents recognise the equilibrium is starting to swing back in their favour.

However, it’s not there yet. 

In fact, I believe we are now in a unique position that will see, by years’ end, the pendulum swing significantly back towards sellers.    

Many fundamentals are pointing towards stronger market conditions next year due to higher government spending on infrastructure, lower interest rates as well as incentives such as the first home buyer deposit scheme, which are all aimed at stimulating our economy.

That’s why the equilibrium is still on the side of buyers, even though listings aren’t exactly flush. 

Within six months, though, the number of buyers will have supercharged, and they will be competing against each other to purchase property – regardless of its quality. 

The smartest investors won’t delay before making their move. 

Source: The Real Estate Conversation 21st August 2019 https://www.therealestateconversation.com.au/blog/victor-kumar/why-there-never-market-equilibrium/victor-kumar-blog/victor-kumar-why-there-never

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

 

first home buyer

Housing Minister Says Now Is Right Time To Buy

Housing Minister Michael Sukkar urged first-home buyers to try and grab a property now before the introduction of the First Home Loan Deposit Scheme in 2020.

“If you’ve got an opportunity to get a foot in the market before then, you should take it, given I think the market is starting to improve. People who buy now, I don’t think, will regret it at all,” Sukkar told The Australian.

The Minister spoke as the government polishes the loan scheme, which will enable first-time buyers to purchase a house with as little as a 5% deposit.

The market conditions were possibly the “best ever” for first-home buyers, according to independent property economist Andrew Wilson.

“It’s a very good scenario for first-home buyers. They’ve still got those stamp duty concessions in NSW and Victoria, where they don’t have to pay stamp duty on a house worth $600,000 in Victoria, and $650,000 in NSW,” Wilson said.

Markets, especially in Sydney and Melbourne, were “feeling the bottom” but would soon rise up, according to Wilson.

The Morrison government also put more “confidence” in the market, according to Sukkar.

“We’re seeing green shoots in Melbourne and Sydney in the last quarter and I think with low-interest rates, with APRA reducing serviceability buffers, all those factors combined to confirm that optimism,” Sukkar said.

Ninety-one percent of first-home buyers believed owning a property is now within reach, compared to only 80% the same time last year, according to The Commonwealth Bank (CommBank).

Source: Your Investment Property 22nd July 2019 https://www.yourinvestmentpropertymag.com.au/news/housing-minister-says-now-is-right-time-to-buy-264647.aspx?utm_source=GA&utm_medium=20190721&utm_campaign=YIP-Newsletter-Opener&utm_content=FB30EBA4-A343-4537-A961-B966FABA4B8F&tu=FB30EBA4-A343-4537-A961-B966FABA4B8F

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

propertyt growth

Adelaide Lures In More Investors

Adelaide is starting to attract more investors because of the city’s “great value dollar-for-dollar,” according to a report by news.com.au.

CoreLogic’s first Quarterly Rental Review for 2019 showed that rental prices in  South Australia’s capital are rising slowly but surely— up 0.8% over the March quarter and up 1.2% over the past year.

The median weekly rent for a property in Adelaide is $386, making it the second cheapest rental city in Australia.

Gross rental yields, meanwhile, have been unchanged over the year at 4.4%.

News.com.au defined gross rental yield as a calculation designed to indicate rental return over a 12-month period by dividing annualised rent by median sales prices.

Across the nation, Darwin had the highest rental yield at 6%. Hobart held the second spot at 5.1%, while Sydney and Melbourne recorded the lowest figures at 3.5% and 3.6%, respectively.

The report also revealed that while Sydney and Melbourne have usually been the cities that pulled in the highest number of investors in the country, that would likely change.

“With gross yields at such low levels in these two cities, we may start to see investors turn their attention to other cities, where housing is more affordable, capital gain opportunities are potentially better, and rental returns are superior,” CoreLogic said.

The forecast coincided with a report from Real Estate Institute of South Australia (REISA) that property agents in the state have already started noticing higher investor interest in Adelaide.

“The secret is out. We are travelling well at the minute in comparison to the east, so more and more investors see Adelaide as an untouched opportunity for great investment returns,” REISA CEO Greg Troughton said.

Troughton warned that the difficulty in getting loans and uncertainty surrounding the federal election and the future of negative gearing could moderate investor interest moving forward.

Currently, though, real estate agents are still able to market the city’s relative affordability.

“The value for money and returns has been a feature that REISA members have been mentioning for some time now and it looks to continue, Troughton said.

 

 

Source:  Your Investment Property 8th April 2019 https://www.yourinvestmentpropertymag.com.au/news/adelaide-lures-in-more-investors-261960.aspx?utm_source=GA&utm_medium=20190407&utm_campaign=YIP-Newsletter-Opener&utm_content=FB30EBA4-A343-4537-A961-B966FABA4B8F&tu=FB30EBA4-A343-4537-A961-B966FABA4B8F

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

suburb

Hobart and Adelaide resist downward property price trend

While property prices fall across Australia, Adelaide and Hobart are the two cities bucking the trend according to data from the Real Estate Institute of Australia (REIA).

suburb

Property prices have fallen across Australia with houses declining 2.3 per cent and other dwellings 2.4 per cent, according to the latest research from the REIA.

REIA Real Estate Market Facts for the December quarter 2018 saw the weighted average median prices fall the most since December 2011 for houses.

REIA President Adrian Kelly said the median price for houses for the eight capital cities decreased to $733,438 over the quarter, with prices falling in all capital cities except for Hobart and Adelaide, and remaining stable in Perth.

“The weighted average median price for other dwellings decreased to $570,905 over the quarter, with prices decreasing in all capital cities except for Adelaide and Perth,” Mr Kelly said.

Pictured: 22 Gurney Road, Dulwich. For sale by Graham Bowie and Grant Giordano of South Australia Sotheby’s International Realty as seen on Luxury List

“Melbourne had the largest fall in house prices and Perth had the largest fall in other dwellings. Adelaide has the lowest median price for houses at $475,000 and Darwin the lowest median price for other dwellings at $350,000.

“Interestingly, in New South Wales median prices for both houses and other dwellings prices have declined in both regional and urban areas. In Victoria, however, they have declined only in Melbourne with the regional areas of Geelong, Bendigo and Ballarat still recording strong price growth.”

The median rent for three-bedroom houses increased in all capital cities except for Sydney, Melbourne and Hobart where they remained steady.

Pictured: 17 Cambridge Terrace, Unley. For sale by Stephanie and John Williams of Harcourts Williams as seen on Luxury List.

“The median rent for two-bedroom other dwellings increased in Canberra and Hobart, remained steady in Brisbane, Adelaide and Perth and decreased in Sydney, Melbourne and Darwin. Hobart had the largest increase while Sydney had the largest decrease,” Mr Kelly said.

“The weighted average vacancy rate for the eight capital cities remained steady at 2.6 per cent during the December quarter, a decrease of 0.1 percentage points for the year. The markets of all capital cities except Darwin have vacancy rates at or below the 3.0 per cent benchmark indicating strong demand for rental accommodation.

“Darwin had the highest vacancy rate of 8.2 per cent which is 1.9 percentage points higher than the same time as last year, an indication of low demand,” Mr Kelly said.

Source:  The Economy 14 March 2019 https://www.therealestateconversation.com.au/news/2019/03/14/hobart-and-adelaide-resist-downward-property-price-trend/1552528390

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

52% Of Investors Say Now Is The Time To Buy

It may be difficult to get finance in the current environment, and consumer sentiment about property price growth is in the doldrums – but that won’t stand in the way of investors who are keen to build wealth through property.

More than half of respondents in a recent survey reported that they believe now is a good time to invest, despite the fact that the vast majority of respondents (84%) believe that property prices will fall or remain flat over the next year.

Over 1,800 Australians took part in this year’s Property Investor Sentiment Survey, run by Your Investment Property magazine in conjunction with Michael Yardney’s Property Update and onthehouse.com.au.

When asked, “Do you believe now is good time to invest in residential property?”, 52.6% said “yes”, 24.6% said “no”, and 22.8% responded that they were “unsure”.

“It’s encouraging to see that despite the current uncertain economic environment, which includes the trifecta of limited property price growth, negative gearing changes on the table, and mortgages becoming harder to get, that people are still positive about the potential of property as a whole,” said Sarah Megginson, editor, Your Investment Property magazine.

“The majority of respondents to the survey are existing property investors – more than 82% of them are already in the market – so there’s a good chance that these investors have lived through challenging market conditions before. We rebounded after the GFC, and after the mining bust; we’ll rebound again.”

Around 51.5% of respondents confirmed that they invest for long-term capital growth, adopting a long-term view of property as a high growth asset, rather than expecting cash flow from their properties.

Just 14.3% said they invested for positive cashflow in the current market.

As Australia’s longest-running and largest survey of Australian property investor sentiment, the Property Investor Sentiment Survey showcases insights from property investors and would-be investors across the country. Running since 2011, it offers rich and vibrant insights into how property consumer trends and sentiments have changed over time.

Source:  Your Investment Property 27 December 2017 https://www.yourinvestmentpropertymag.com.au/news/52-of-investors-say-now-is-the-time-to-buy-258886.aspx

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.