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.
Tags: real estate bubble australia
Posted in General, Home Loan, Real Estate | |
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.
Tags: home values rise
Posted in General, Real Estate | |
First homebuyers and self-employed borrowers are at risk of falling into mortgage arrears, according to research by Standard & Poor’s (S&P). Figures from the ratings agency revealed that a growing number of borrowers are missing their mortgage payments as a result of rising interest rates. The report found that the number of borrowers who had missed repayment. deadlines climbed 0.19% up to 1.44% in the March quarter. Arrears rates for sub-prime borrowers,
which account. for about 10% of home loans. rose to 12.24%. S&P predicted first homebuyers, who entered the property market when interest rates were historically low, and self-employed borrowers. who are more sensitive to economic conditions, will be the most sensitive to rising rates. The Reserve Bank of Australia (RBA) left the cash rate at 4.3% in its June meeting, as it paused to gauge the global recovery. However, economists are predicting rates will increase to
5% by the end of 2010.
Tags: home loan, interest rates
Posted in Home Loan | |
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.”
Tags: Real Estate
Posted in Buying property, Real Estate | |
Australian banks could survive an economic contraction the size of the 1990s recession, the Australian Prudential Regulation Authority (APRA) has revealed. According to reports, APRA chairman John Laker ordered a stress test to be conducted to determine what would happen if there was a three? year deterioration in global economic conditions. The
Reserve Bank of Australia and New Zealand’s central bank also took part in the examination. Laker told The Australian Financial Review the results showed Australian banks had the capital resources to weather such a contraction. In fact, none of the 20 banks tested would have failed or even fallen below the minimum amount of top?rated assets on their balance sheets. However, he warned banks not to get complacent and take part in the high-risk activities that caused the economic downturn overseas.
Tags: australian banks safe
Posted in Credit, General | |
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