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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Property investors that are looking for good price growth need to buy in the inner city, a new report has found.

The latest property report by PRDnationwide found that seven out of the top ten New South Wales suburbs recording the most growth in sales activity are located within a 20 kilometre radius of Sydney CBD.

Oatlands, 23km north of Sydney, topped the list recording 160 per cent growth in property sales between 2009 and 2010.

Sylvania Waters came a close second recording 156.3 per cent growth in sales activity, with 41 houses sold over the year – up from 16 the year before.

“The areas experiencing the greatest growth in sales offer a high degree of amenity and are well serviced by transport corridors,” PRDnationwide managing director Jim Midgley said.

“The New South Wales suburbs experiencing the highest growth in sales activity are typically situated in areas with easy access to the Sydney CBD through major road networks or train lines,” he said.

“These areas have a propensity for strong price growth as demand increases for properties nestled along major transport corridors.”

Tags: home loan, Real Estate, real estate bubble australia
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Australia’s property price growth is the fifth best in the world, according to a new report.

The latest Knight Frank Global House Price Index found house prices rose by 18.4 per cent in Australia throughout the year to June 2010.

Singapore enjoyed the best property price growth – with prices surging 37.0 per cent in the year to June.

Knight Frank national director of research Matt Whitby said Australia’s significant price growth was driven by a number of factors including 40 year low interest rates, first time buyer concessions, strong population growth and a lagging supply response.

“With interest rates likely to rise from current levels in 2011, the government incentives winding back and the supply response picking up (albeit modestly), we expect house prices to track sideways over the next six to nine months,” he said.

Rounding out the top five positions were China in second place, followed by Hong Kong and then Latvia.

Tags: 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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Despite the RBA’s decision to keep rates on hold last month, 50 per cent of consumers are already sacrificing a range of everyday necessities to accommodate higher interest rates.

According to the latest Bankwest/MFAA Home Finance Index, 50 per cent of Australians are forgoing eating out to deal with the burden of higher rates, while 47 per cent are reducing costs at home or taking lunch to work and 42 per cent are going on cheaper holidays or not taking a break at all.

The Index found the number of borrowers feeling ‘worse off’ than 12 months ago has been steadily increasing since November 2009.

Those who are most concerned and affected by the state of the economy are the over 60s, unemployed, low income earners, students and those involved in home duties.

“With interest rates higher than last year, many mortgage holders seem to be holding back on their spending.  Home buyers are opting for practical strategies such as packed lunches, shopping during the sales, and buying in bulk to balance their household budgets. There is a clear move to more thrifty spending for many Australian households,” Bankwest retail chief executive Vittoria Shortt said.

Tags: home loan, interest rates
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