Nobel Finance Sydney – Money Matters Newsfeed

Affordability has improved considerably since the beginning of the year, a new report has found.

According to Rismark and RP data’s Hedonic Home Value Index, Australia’s housing market flat lined in second half of 2010 – improving affordability issues.

Since the market started turning at the end of May, Australia’s capital city home values have declined by a total of 1.0 per cent seasonally-adjusted.

Over the September quarter, Australian capital city home values declined by just 0.4 per cent seasonally-adjusted.

RP Data’s senior research analyst, Cameron Kusher commented that with market conditions expected to be flat for the remainder of 2010, astute investors should now look for opportunities to enter into the market.

“Early signs suggest that rental rates are once again improving, listings are at above average levels, and leading indicators such as time on market and vendor discounting are creeping up,” Mr Kusher said.

“For those active in the market there is increasing scope for price negotiation and less competition amongst buyers with an above average number of properties for sale. These conditions are likely to afford opportunities to purchase property at more competitive prices.”

Tags: home values rise, Real Estate, real estate bubble australia
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Australia’s housing market exhibits different fundamentals from those hurting overseas, and is unlikely to see a significant dive in property prices, according to Advantedge general manager of broker platforms Steve Weston.

“I do get a bit sceptical when you here experts, or supposed experts come in from overseas, and they are saying fundamentally because property prices fell in the US or Europe well they’ll have to fall in Australia,” he told Broker News TV, in an exclusive interview.

Weston argues the US exhibits a much higher unemployment rate than Australia – at close to 15% when compared on an “apples with apples” basis. It is also dominated predominantly by fixed rate home loans, in contrast to Australia’s variable rate fixation, giving the Reserve Bank a lever to use if the local economy does enter more challenging territory.

Weston adds that compared with the US, Australian lending standards are high. “If we look at the US in those few years leading up to the GFC, about 30% of their lending was credit impaired, and all of it was done on a non-recourse basis, which means if customers do get into hot water, they can simply hand their keys back and it’s the lender’s problem,” Weston said.

Local market fundamentals are also strong, Weston argues, with interest rates still at normal levels, unemployment very low, a continued strong migration intake, and a “floor” under housing prices due to lack of supply.”So when we are hearing from these overseas pundits that properties are overvalued, I’m just a little sceptical,” he said.

Tags: home values rise, interest rates, Real Estate, real estate bubble australia
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House prices are expected to soar 20 per cent over the next three years, a new report has found.

According to QBE LMI’s Australian Housing Outlook report, improving economic conditions are expected to facilitate further house price growth in Sydney, Adelaide and Perth.

More moderate growth is expected in Brisbane and Hobart, where affordability is not as strained and there is no sustainable dwelling deficiency.

QBE LMI chief executive officer Ian Graham said the Australian property market gained momentum in 2009 on the back of the First Home Owner’s Grant Boost Scheme (FHOGBS) and record low interest rates.

However, the expiry of the FHOGBS at the end of 2009 and several interest rate rises between October 2009 and May 2010 effectively moderated house price growth in the first half of 2010.

“The decline in first home buyer demand in the first half of 2010 is primarily due to first home buyer activity being pulled forward into 2009 because of the FHOGBS. However, demand is forecast to return to more normal levels, believed to be around 130,000 to 140,000 loans approved, in 2011” Mr Graham said.

“Future median house price rises will be underpinned by a deficiency of dwelling stock across most capital cities, which in turn will lead to tight vacancy rates and solid rental growth, flowing through to investor demand.”

Tags: home values rise, Real Estate, real estate bubble australia
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The latest property and housing finance figures suggest the recent slump in property price growth may soon be over

Despite Another fall in housing finance in the month of June, low property growth in

most capital cities and a low number of building approvals, a recovery of the property market is on the horizon, based on a broad analysis of the latest figures.

In June, owner occupied finance fell 3.9 per cent from the month prior, according to the ABS.

Building approvals were down in June by 3.3 per cent overall, according to the ABS, with private housing development hit the hardest.

But these factors do not mean that market growth will continue to slide in the months to come. In fact, there are a few positive signs that indicate that some areas will be on a steady growth path in the 12 months to come.

Westpac senior economist Andrew Hanlan said the latest slump in price growth has been “expected” in the wake of the RBA’s interest rate normalisation strategy and the recent dip in consumer confidence.

Westpac’s consumer sentiment index in August showed renewed consumer  confidence, with a reading of 119.2 compared to 113.1 in July. Further, the RBA’s decision to hold the cash rate since May, strong population growth and strong employment growth are sure to continue to boost consumer confidence and borrowing over the months to follow.

While lending figures dropped off in the upgrade and investor sectors in June, overall there’s been an aggregate increase over the past months, indicating a steady upswing.

Investor numbers fell in June by 3.6 per cent, but since January 2009 lending to investors has actually risen by 29 per cent.

And further gains can be expected in response to strong rental income growth, particularly in the unit sector.

Units have continued to eclipse house growth by an average of 0.3 per cent over the last five years and gross rental yields have remained remain strong at 4.8 per cent (4.0 percent for houses). By Belinda Luc

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Interest rates are unlikely to change until November at the earliest, according to RP Data.

Tim Lawless, senior research analyst at RP Data, said that an extended period of interest rate stability is in store.

“All the fundamentals apart from inflation are looking subdued,” he said. “There may be some increase in consumer goods over the next few months, which could spur the RBA to act after the next CPI data is released in October. However, that means there’s very little chance of an increase before the Monetary Policy Board’s November meeting.”

This will provide some welcome certainty to the housing market, Lawless added, particularly for owner-occupiers.

“The renewed certainty over rates may even translate to a small bounce in first homebuyers,” he said. “However, price growth is still likely to be relatively flat for the next six months at least, and we’re likely to see the balance of the market swing back towards buyers.”

Mortgage Choice spokesperson Kristy Sheppard agreed an extended period of rate stability would be good news for borrowers.

“This will be a great relief for anyone repaying a variable interest loan or approaching the end

of their fixed-rate term, just as it will be for those who are looking forward to jumping into the market during spring. A rate rise would

surely have discouraged many people from acting on their property plans, be that selling up or purchasing. Now there is another reason to move ahead with confidence.”

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