Australia is not in the middle of a housing bubble according to the Real Estate Institute of Australia (REIA), contrary to recent comments by global investment management firm GMO’s chief strategist Jeremy Grantham.
REIA president. David Airey said: “What we are experiencing in the housing market is normal growth for house prices. If Australia was in the midst of a so-called housing bubble, then we have been there for some time. REIA’s data highlights that historically, median prices, compared to income, have been relatively stable for the past 10 years, taking into account normal fluctuations.”
According to the REIA over the period December 1996 to December 2009, median house prices increased from around $160.000 to around $500,000, a trebling in 13 years. But within this period there were four phases.
From December 1996 to September 2000. median house prices in Australia showed a moderate average growth of 2.1% per quarter. From December 2000 to December 2003. house prices appreciated at 3.9% per quarter on average. Then from March 2004 to December ?008, the average growth slowed to 0.8% per quarter. During 2009, growth of median house )rites picked up pace to 2.9% per quarter.

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The number of dwelling commencements rose slightly in the March 2010 quarter, the Housing Industry Association (HIA) has revealed. HIA chief economist Harley Dale said that total housing starts increased by 4.3% in the first quarter of 2010 to an annualised level of nearly 170,000. HIA’s forecast was for a 4% rise. He added: “There was a strong burst in ‘other dwelling’ starts in the March 2010 quarter… The strong run up in building approvals through to early 2010 is not translating into new home starts as quickly as is desirable.”
Harley cited “unjustifiably tight credit conditions”, uncertainty about the magnitude of rate rises in 2010 and some approvals simply being reissued with no firm plan for commencement as reasons for a soft first quarter update for new home building.
The HIA continues to expect a relatively healthy rise in housing starts in the 2009/10 financial year, but claimed a positive outlook for 2010/11 and beyond is far from assured amid supply-side obstacles.

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Sydney may be the most expensive capital city in Australia, but there are still bargains to be had, a report from RP Data has revealed. Its findings show that Sydney actually had the greatest proportion of total sales priced below the determined level of borrowing power. Almost. 22% of all Sydney house sales were priced below $350,444, although most of these were situated in the outer rims of the city. The next best performer was Canberra, which had 15.3% of house sales below $301.556. The hardest place to find affordable housing was in Perth, which recorded only 11.8% of sales under $324.444. Research analyst Cameron Kusher said: “These results show just how important it is for buyers to do their homework. It can be very valuable for buyers to actually dig a little deeper into data. For an average income earner looking to buy property. more than ever location is becoming the most important attribute. The best prospects for growth in property value and the most desirable locations in which to live are those suburbs which enjoy close proximity
to public transport, retail and social amenity, schools, working nodes, healthcare, public open spaces and major roads.”

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Consistently high clearance rates and positive data from the Australian Bureau of Statistics (ABS) are pointing towards a consolidation in the housing market.
ABS figures released last week show that finance commitments, excluding refinancing, were at their highest level for the past 18 months.
Real Estate Institute of Australia (REIA) President David Airey the ABS figures were a strong sign of a healthy property market ahead.
“Other positive signs are the increasing level of investors in the market and the first signs that the influence of the first home owner grant boost is beginning to abate,” he said.

The value of investment housing commitments rose again in June, following increases in each of the previous three months, the number of first home buyer commitments as a percentage of the total also declined, according to the ABS.
Now could be the time to put more value into your property.

According to local real estates agents, the most common renovation that gives the most value to a property is the kitchen and bathroom. A few dollars spent in these areas can really make a difference in valuation for lending purposes or for re-sale value. Most buy – reno – sell investors also focus on giving the home extra features like built-in cupboards.

Some trade businesses , like Emporio Kitchens, have caught onto this trend and offer a one stop shop to take care of the electical, plaster & plumbing if required, for inquiries made on their website. Take advantage of their no obligation free quote service, what have you got to lose ? You might be surprised what a few dollars spent on key areas can do to the value of your home or investment property.

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By Cory Boatright

I was reading more about deficiency questions with short sales and I thought I would elaborate a little on the subject. When you get a lender to accept a short sale the amount of debt forgiven becomes a taxable event.

Example: Homeowner owes $250,000 on a house. The lender accepts $170,000 for it. The homeowner is responsible for paying taxes on the $80,000 forgiven amount.

First thing that is important to realize is this.

Not ALL states have the option to file/collect on a deficiency judgment You may want to do some studying or contact a Real Estate attorney to find out which states have the ability to file/collect on a deficiency judgment.

Second is this. The homeowner is typically facing this REGARDLESS of your involvement. For a better understanding of a deficiency judgment let’s define it.  {continued}

(more…)

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