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Seven positive signs for Australia’s property market

Yes, there is some good news out there.  It isn’t making the headlines, but it is out there nevertheless.

Here are seven positive points to help you make it through your real estate day.

  1. The vacancy rate is tight.  In most capitals and major regional markets it remains under 3% and is much lower in Brisbane, Sydney, Perth, Canberra and central Queensland.  Rents growth is starting to accelerate, and we know of numerous examples where more than 30 rental submissions are being received for vacant rental dwellings across Brisbane.
  2. Sales have improved since mid-year, and those vendors who meet the market are selling – and now, often quickly.  It is still a buyer’s market – with the high supply of stock for resale – ensuring that you need to realistically price and market your property well in order to make a sale.  Investors are starting to take their properties off the market and are renting them out again, as they are attracting good rental yields.
  3. Last year’s interest rate drop is having some impact – with the number of owner-occupier loans up 2% in December.  Housing investment loans rose 7.5% in December, after a 2.7% rise in November.  First-home buying activity is currently at a two-year high. Generic prices might be still falling, but there are signs that the housing sector is starting to turn the corner.  The latest housing finance data provides a degree of encouragement.  Home loans have now increased for nine consecutive months, and the investor market is doing the bulk of the heavy lifting.   We have been saying for some time that it is the investors who will get the housing market back on its feet.
  4. Hamilton Harbour – one of the first major Queensland apartment projects to face settlement since the GFC – is settling well.  No, that isn’t strong enough – it is going great guns!  I nearly said gangbusters, but that might be taking it a bit too far. At the time of writing, 89% of the 435 apartments sold since early 2009 have settled, with an overall 95% success rate likely by the end of this month.  We originally wrote about Hamilton Harbour in July last year, stating that it should be on the industry’s “must-watch” list; it was a litmus test for the Brisbane market – a beachhead, if you will.  Sadly, few seem to be watching, and the media are not writing about it. This is big news for Brisbane-town. Other, lesser projects (if you ask me), also appear to be settling well. The average price of a settled apartment in Hamilton Harbour is $526,000, with just over $200 million worth of property settled so far.  Over 220 apartments have been leased in both the towers since late November last year.  The average gross rental yield – based on evidence to date and being rented out for 50 weeks per annum – is 5.3% across the investment stock.  The one-bedroom and one-bedroom with study units are achieving the higher yields.
  5. The Melbourne Institute-Westpac confidence survey shows that late last year, price pessimists in Brisbane dominated (-10%) versus this month’s positive result of 27% (percentage of those expecting a rise minus percentage expecting a fall) – a 180-degree turn in just three months.  The Good Time to Buy a Dwelling Index is up in Queensland and also in Western Australia.  Queensland’s pending state and local elections will hopefully lift confidence higher.
  6. While we don’t need to build as many new homes as we once did, outside of Melbourne, Adelaide, Canberra, Cairns and the Gold Coast, the new housing markets aren’t oversupplied. There is a lot of nonsense written about supply – published often by young’uns who can count (well, sometimes just) but have little understanding about how the new housing market actually works.  At present, for example, there is a lot of commentary (and press) about a pending oversupply of new apartments across inner Brisbane.  Now, whilst there is lots of new mooted apartment development – approved in council – the fact remains that not enough new product is actually being built. Over the last five years for example, 13,000 new dwellings were required to accommodate the population growth, yet – based on the official statistics – just 8,017 new dwellings were approved.  Last year, just 1,902 new dwellings were approved, against an annual average demand for 2,650 new housing starts.  At present there is a serious short-fall.
  7. To finish, everything cycles, including the property market. The Brisbane market, for mine, is at six o’clock on the property clock or at the bottom of its cycle.  Many investors try to pick the bottom of the market.

Yet, the direction in which property values travel is only partially dependent on the broader market conditions.  Recent studies show that about 40% of growth (or otherwise) can be explained by trends in the overall market.  The all-important 60% comes down to more individual factors such as location, the style of housing, its design and inclusions, and the income/demographics of the area.

However, a 40% swing in your favour shouldn’t be sneezed at, especially after what the Brisbane market has been through of late.

Source:  Property Observer

Ready, Steady, GO!

That’s the general message we got from our recent online survey of residential property investors.

The survey confirmed the typical optimistic nature of investors, with most believing that the present market presents great buying opportunities, and in many cases, unrepeatable purchase prices.

This market appears set and ready to pounce.

Half of our respondents own between 2 and 5 investment properties and almost a third own just one.  Two-thirds have no intention of selling any of their properties for at least five years, and 76% plan to buy more residential properties in the future.

Now, let’s briefly recall the property clock, with 12 representing the market peak – a vendor’s market with strong price growth, rising sales and improving yields.  And six representing the market bottom – a buyer’s market with stagnant or falling prices; falling sales and uncompetitive yields.

From our survey, 72% believe that the market is poised at the bottom of that clock, between the 5 and the 7, with 25% believing we are approaching the bottom.

Reasons given for renewed interest and continued confidence in the market include:

The majority said they prefer to invest in detached houses, with only 14% leaning towards townhouses and 8% opting for apartments.

Investors like detached product because of the potential to add value; the high land component; the opportunity for higher rents (tenants can share); and the absence of body corporate or on site management fees.

The vast majority of our respondents are looking to invest in Brisbane, with just over half preferring the middle ring (5 – 10km from the CBD) and 35% opting for an inner city suburb.

Overall, our investors prefer to invest in capital cities.  Only 2% would consider a mining town.

We asked about the biggest issues facing the Australian residential market.  Here are the top responses:

All up, while investor sentiment appears positive, interest in residential property remains subdued.

What this survey confirms is that interest has been tweaked and while investors may be hesitant to act, they are most certainly watching and waiting in the wings.

No doubt, the recent sharemarket volatility has helped to shore up belief in the property market fundamentals.

What’s really needed now is a structural change to help restore confidence and entice investors to start buying again.  This change involves elections – local, state and federal.

As we have seen in the past, when the confidence tide does turn, investors can be quick to act.  Don’t be surprised if in the first half of next year, Queensland, at least, will see a surge in investment buying. 

This report is published with permission of Matusik Property Insights

The New Rules to Property Success

When it comes to gearing, less is more. ''It's not what you own but what you owe,'' Shane Oliver, of AMP Capital Investors, says.

Think affordability. The more expensive your property, the smaller the list of potential buyers or renters.

Buy well. What's the point of being in a weak market if you don't get to dictate terms? ''You make money in property when you buy, not when you sell,'' Ana Bennett, of Lachlan Partners, says.

Don't count on making a quick buck. ''If you think you're getting a bargain, you're usually not,'' Bennett says. She says property should be regarded as a long-term investment. ''Particularly for investors, you have to ask whether you can really afford it,'' she says. ''There's no point struggling and realising you have to sell in two to three years.''

If you're investing, think income. In the absence of strong capital growth, investment returns will increasingly depend on a decent, and growing, rental yield.

Do your homework. While average returns might not look promising, the property market is highly segmented and demand for the right properties will remain strong. Look for properties that are in undersupply, not a dime a dozen. ''I would be wary of locations that have recently experienced a large surge in home values or where rental yields are lower than average,'' RP Data's Tim Lawless says. ''Areas where housing can easily become oversupplied should also be treated with some caution.''

Understand that property prices can be volatile - especially in the short term. Just because your house price isn't quoted on the news each night doesn't mean it can't go up and down. ''If you put a large proportion of your money into a particular investment, it is a risky position, particularly if you're also leveraged,'' Michael Sherris, from the Australian School of Business, says. ''There may be half the volatility that you get with shares but people think there's no volatility at all.''

Look for areas with strong population growth, strong demand and good infrastructure that is improving.

Think outside the box. Will it be possible to add value to the property in the future? If residential property doesn't stack up, what about commercial?

Don't expect history to repeat itself.

Source: Annette Sampson, Brisbane Times

 

Australian Housing Market Set to Recover in 2012: Residex's John Edwards

Although the pace of house price declines increased over the last six months of 2011, Residex CEO John Edwards expects the overall housing market to recover in 2012 and “exit a period of negative adjustment”.

Edwards says the price adjustments in 2011 were necessary, because markets were overvalued and affordability remained a problem.

This correction, he says, should ensure “we avoid the speculated housing ‘bubble bust’”.

“Our housing markets ended 2011 in a better position to where they started and I am confident that the year ahead will be better for residential property owners compared to last year,” he says.

He bases this view on the fact that in December 2010 house prices declined by 1.10% while they only declined by 0.72% in December 2011.

“Most owners should see their assets hold value or increase and this year could in fact be a good time for investor activity provided the world economy doesn’t move into severe recession as a consequence of the problems in Europe.

According to Edwards, examining the monthly trend for house and unit prices in Australia over the past two years suggests markets are “exiting a period of negative adjustment”.

“However, in my view, we should not expect any rapid uplift in housing values because current economic conditions are not capable of supporting strong consumer activity. Retail activity during the Christmas period certainly suggests that consumers are cautious,” he says.

Looking at the monthly growth trends on a capital city basis shows that Melbourne, Hobart and Perth are improving while the Canberra, Darwin, Sydney and  Brisbane markets heading down.

The bottom line, according to Edwards, “is that we have achieved a good result, and it looks like an overall improving position may be the trend in the coming year.” 

“Overall, the outcome for the year ahead will depend on interest rates, the eurozone crisis, inflation, the employment level and the carbon tax,” he says. 

Edwards says even further housing price falls in 2012 would provide opportunity. 

“Australians are much better placed than many other people in the world, and the adjustment period we have recently seen, with a clear upswing in our markets in the last few months, means that there is a reasonable chance that our markets will advance positively, albeit by a relatively small amount, in the current year,” he says. 

“Additionally, in this situation there will be bargains for the astute house hunter along with quality growth in many suburbs,” he says.

Source: www.propertyobserver.com.au - Larry Schlesinger

 

Queensland Government to Extend Building Boost Until April

The Queensland government has listened to the pleas of the property industry and will extend the $10,000 Queensland building boost for a further three months.

Deputy premier and treasurer Andrew Fraser says the boost is beginning to make headway in the housing industry.

Figures put out by the Queensland government show a jump in applications received over the past three months, with application numbers now over 3,700 since the stimulus scheme kicked off on August 1 last year.

Date

Applications received

August 26,2011

100

September 30,2011

569

October 28,2011

1,174

November 25,2011

2,038

December 30,2011

3,221

January 11, 2012

3,728

The $10,000 grant is available to all home purchasers buying or building a new home worth less than $600,000.

A lobbying group made up of the Housing Industry Association, the Property Council of Australia, Master Builders Australia and the Urban Development Institute of Australia has been calling on the Queensland government to extend the boost, as has property developer Stockland.

Speaking to Property Observer, Kathy McDermott, executive director of the Queensland division of the Property Council of Australia, says while the state’s housing sector has shown some signs of improvement in lending approvals in October and November, it is “still in critical condition”. 

“The market is still very distressed and needs support,” she says. 

McDermott says the boost has taken time to gain momentum but the reduction in interest rates in November and December has helped. 

She points to the recent PCA/ANZ property industry sentiment survey, which showed that there has been a “nice improvement” in confidence in Queensland, with the state’s confidence index rising above the national average in December – it was below the national average in September. 

The extension has also been welcomed by HIA Queensland executive director Warwick Temby who says it will "help the home building industry to gather some momentum and build on the early signs of recovery late last year".

"The Boost had played a part in rekindling interest in building a home.  Combined with the lift in affordability from lower interest rates and fierce competition among builders, the Boost has made it a great time for building a new home," says Temby.

“This timely announcement will help to set the scene for a much needed lift in activity from the thirty year lows the industry experienced in 2011.

“HIA had been concerned that the Christmas and New Year break was making it difficult for builders to finalise contracts to meet the previous end January deadline.  The three month extension has removed this problem for the industry.

Treasurer Andrew Fraser acknowledges that industry representatives had come to him asking for an extension to the boost, “and that's what we'll provide”.

"They've said to me, and the recent application numbers show, that the boost is increasingly gaining traction with potential buyers.

"Official interest rates have been lowered in recent months, and with the possibility of even more cuts, this $10,000 grant for buying or building a new home means it's never been more attractive to sign on the dotted line and support the state's housing industry.

"A first-home owner also gets the $7,000 state-funded first-home owner's grant and zero stamp duty if the home is worth less than $500,000.

"An end date of April 30 will give developers and builders and extra three months to market the boost and give the housing industry the kick-start it needs."

Fraser says the initial budget allocation of $140 million will cater for the time extension.

"So far we've seen over 3,700 applications for the building boost. There is obviously room within the budget allocation to accommodate the uptake in interest we expect over the next three months.

"Every housing stimulus package always has a large increase in interest at the back end of the time period, with many applications coming in after the end date."

"The HIA Home Sales report shows that Queensland is the only state that has increased the number of new home sales each month from August to November (the most recent month data has been collated for).

"I expect that momentum to swing through December and January and into the next few months as well.

"Building approvals data this week also showed growth for houses.”

Source: www.propertyobserver.com.au - Larry Schlesinger

Brisbane Property Market Beginning to Heal

The Real Estate Institute of Queensland (REIQ) believes the local property market has made strong progress in its attempted fight back over the second half of 2011.

Declaring that sales activity strengthened across the state over the September quarter, institute chair Pamela Bennett added that compared to the first six months of the year the signs pointed to a feeling of cautious optimism.

The REIQ September quarter median price report released Saturday November 19 found that the preliminary number of house sales rose a solid 17 per cent from the June quarter in the sunshine state.

Some regions in particular recorded substantial jumps, with Brisbane one of those performing well above average.

Bennett asserted: "What these figures show is that it appears it took about six months for our property market to begin to heal from the natural disasters earlier this year.

While the median house price in the capital fell two per cent to $500,000, the number of preliminary house sales experienced a 13 per cent jump in an indication that Brisbane property investment buyers may be returning to confidence.

"While global conditions remain concerning, more sales activity locally shows that buyers have a little more confidence and are much more prepared to sign on the dotted line now than they were earlier this year," asserted REIQ managing director Dan Molloy.

Source: www.homeportproperty.com.au

 

Experts Predict House Price Rises in 2012

THE current property landscape is a buyers market that could historically prove to be one of the best times to purchase in more than a decade for those confident enough to dare, according to analysts.

While most of the economic news has focused on flat or negative price movements or at the very best soft growth, economists and researchers believe the market has now bottomed and that investors with an eye on the long game can benefit.

There have been significant price reductions of more than 6.2 per cent nationally in prestige markets, and rental yields are growing as vacancy rates drop and rents rise.

This combines with vendors who are tired of long sales periods and are discounting their homes in an effort to meet the market.

The Commonwealth Bank Home Buyers Index and Report reveals a nationwide buyers market, due to a drop in the number of houses being purchased and an increase in the number of houses for sale.


The lack of buyers in the market overall means that those serious about buying are being offered a good selection of properties and the ability to negotiate good prices.

``We are currently seeing a noticeable reduction in people purchasing properties and an increase in homes for sale,'' said Michael Cant, executive general manager of retail products and customers at the Commonwealth Bank.

``In fact, the number of houses sold in 2010 was the lowest of any year in more than a decade.'' 
The outlook for house prices is hardly dire, however.

Economists at CommSec Economic Research have predicted that while prices will remain flat  this year, they will grow by about  5 per cent in 2012, although conditions will vary from region to region.

Cameron Kusher, senior analyst at RP Data, said while there were few investors in the market currently, there was no doubt investment opportunities were improving.

This was because the ending of the first-home buyers grant meant there were more people looking to rent again.
``Over the seven months to July 2011, rental rates have increased by 3.7 per cent across the combined capital cities and it looks as though upwards pressure will gather pace due to low vacancy rates across the capital cities,'' Mr Kusher said.

``In all likelihood, we will see rental growth move back around the historical average of between 6 and 8 per cent year-on-year. That's great news for investors.

``We are also now seeing yield improvement which is likely to provide a further incentive for investors  to strategically position themselves in the market.''

Bargains can be found in the premium housing market where comparatively larger declines in value were presenting patient investors with attractive opportunities during the next six months.

``Dwelling values across the most expensive capital city suburbs are down 6.2 per cent over the first seven months of the year,'' Mr Kusher said. ``This compares with a much smaller 2.3 per cent fall across middle priced suburbs and a 2.1 per cent decline in the cheapest suburbs.''

Christopher Joye, economist at Rismark International which created the methodology behind the RP Data-Rismark Hedonic Index each month, said the housing market could be at a crucial inflexion point.

``If the RBA has really come to the end of its tightening cycle, 2011 to 2012 will likely be judged one of the best buying windows seen in quite some time,'' he said.

The turning point will arrive when conservative and worried consumers accept the notion that interest rates are not going to inexorably increase.

``If rates do remain on hold, or begin to fall, we would expect to see Australia's housing market find a base and begin to generate capital gains again,'' Mr Joye said.

He said borrowers were already benefiting from de facto rate cuts, with some lending institutions offering fix rate loans of just 6.35 per cent, well below the standard variable rate benchmark of 7.80 per cent.

But Mr Kusher said the key factor in the property market currently was confidence.

``Renewed speculation about mortgage rates coming down is certainly a positive development for the housing market,'' he said.

``However, any improvements to consumer confidence that an interest rate cut would provide would be balanced by the ongoing global economic uncertainty.''

But he said Australians had few reasons to feel a lack of confidence with our rate of unemployment remaining low, economic growth likely to improve on the back of the resources sector and household incomes growing at a faster rate than inflation.

Source: Quest Newspapers - Kylie Davis

 

 

Latest Data Shows Economic Growth In Queensland

 Falling unemployment rates and benefits from project investments may be set to provide Queensland industries - including the property sector - with a timely boost.

The Australian economy added just over 10,000 workers in October, according to Australian Bureau of Statistics (ABS) data released this week (November 10) that also showed the unemployment rate declined to 5.2 per cent during the same month.

Employment levels are generally considered an important indicator of economic health, with these latest figures likely to please the reserve bank after it cut interest rates by 25 basis points last Tuesday (November 1).

Positive job growth is averaging around 17,000 over the previous two months.

Queensland added 17,900 jobs during October with mining, natural gas and transportation project expansion leading to fresh jobs, according to BG Group data.

By late 2012 a further 25,000 jobs are expected in the state as a result of the growth in these sectors.

Higher employment and strong economic growth has the potential to boost the region's property sector as well, meaning Brisbane property investment owners of the future may notice house values rising.

Source:  Home Port Property - Posted by Tyler Wyndham

 

Brighter outlook for home building activity in 2012

New house and land activity should increase over the coming 12 months in Sydney, south-east Queensland and Perth, BIS Shrapnel has claimed.

According to BIS Shrapnel’s Outlook for Residential Land, 2011 to 2016 report series, new house and land activity softened or fell in all major markets in 2010/11, due to the expiry of the First Home Owner’s Grant Boost Scheme, sharp interest rate rises in 2009/10 and slowing economic growth through the year.

However, this decline is creating a rising undersupply in a number of markets, and with an improved interest rate outlook and strengthening economic conditions expected over 2011/12, new house and land activity will begin to recover in those markets where the deficiency will be most pronounced.

Senior project manager and report series author, Angie Zigomanis, said the expiry of the First Home Owner’s Grant Boost Scheme had a significant impact on new lot production during 2010/11 – not only directly through the decline in demand from first-home purchasers themselves, but also indirectly as weaker demand for entry level dwellings prevented upgraders from selling their dwellings to purchase a new house.

“Following the expiry of the Boost Scheme, first-home buyer demand in 2010/11 was around half that of the stimulus-induced peak of calendar 2009, reflecting the pulling forward of demand to take advantage of the incentive,” Mr Zigomanis said.

The report series found that, with the exception of Sydney and Perth – where activity is still modest – all capital city and south-east Queensland markets reported a fall in lot production in 2010/11.

After record lot production in Melbourne and new record levels in Adelaide in 2009/10, any pent up demand pressures have now well and truly eased, and activity is slowing. Lot production in the south-east Queensland markets of Brisbane, the Gold Coast and Sunshine Coast has collapsed to long term lows, reflecting the underlying oversupply of dwellings across the region.

“However, there is light at the end of the tunnel,” Mr Zigomanis said.

“A rising deficiency is developing in a number of markets, while a benign interest rate outlook will see purchaser confidence begin to return, particularly with the flow on effects from rising resource investment forecast to permeate through the rest of the economy from 2012.

“First home buyer demand also appears to have bottomed out, with the ‘pull forward’ effect created by the First Home Owner’s Grant Boost Scheme having been largely worked through. We expect a slow recovery in first-home buyer demand through 2012, which will help to underpin upgrader demand for new houses and land.”

Source:  Jessica Darnbrough – Smart Property Investment

 

Inner Brisbane Vacancy Rates Under Pressure

Population increases and a shortage of new housing supply is seeing the number of available rental properties in inner Brisbane dwindle, according to property researcher Michael Matusik.

He said the tight vacancy rates could be attributed to a relative lack of new development in inner Brisbane, which is experiencing a resurgence in its popularity with new residents.

"Inner Brisbane is attracting an average of around 5000 new permanent residents per annum and that's expected to continue over the next decade, whereas in the 1990's it was losing permanent residents," said Matusik.

"The change can be credited to a shift in demographics, with an increase in lone person households and couples without children in the precinct, who are looking for a lifestyle of convenience close to amenities and transport to the CBD."

Matusik also points out that the undersupply of new stock is set to continue, so coupled with an increasing population, dwindling vacancy rates aren't expected to improve in the short term.

The inner Brisbane suburbs of Milton, Paddington and Rosalie are leading the charge, with figures from the Residential Tenancies Authority showing rents in these areas have risen by about 5.6 per cent over the past 24 months.

Matusik said Milton was a prime example, with vacancy rates having plunged to just 0.7 per cent,and with a vacancy rate of three per cent indicating a balanced market, Milton could therefore be described as undersupplied.The suburbhas recorded the second highest population growth in inner Brisban, said Matusik, at 4.4 per cent per annum over the past five years, just behind Kelvin Grove, which has led to its extremely low vacancy rate. "It's part of the inner west precinct, which is one of the most undersupplied markets in Brisbane, he said.

Comfidence in the Brisbane market was growing, said Matusik, as investors realised the opportunities to secure new properties in the city were limited. "Our research is showing an increasing number of people looking to Brisbane as their next investment opportunity, with many believing the market in the city has hit bottom," he said. "At the same time, Queensland remains a powerhouse economy, driven by the resources boom and its strong population growth, which is predicted to continue outstripping both Melbourne and Sydney for at least the next decade.

"The area covered by Brisbane City Council is the fastest growing municipality in Australia, growing by between 15,000 and 21,000 new permanent residents each year for the past decade.

 

You are always going to have those people who believe that prices are going to go up and those who think prices are going down. The reality of the market is that if you are buying and selling in the same market, it’s not going to make a great deal of difference when you sell, it will all balance out.

ANZ predicts house prices to keep dropping

House prices will continue to drift lower over the next year, said ANZ Bank, as increased caution about borrowing takes its toll on home sales.

 "Amongst a turbulent global economic environment, the national housing market continues to soften," said ANZ economics in their latest Australian Housing Snapshot, released today.

"The housing market has also been hit with a behavioural shift towards increased household caution."

"Weak sentiment will see house prices continue to drift sideways to lower over the coming 6-12 months," the report said.

Following a sharp run-up in prices over the past five years, home values have begun to slump in Australia. Capital city prices are down 3.2 per cent in the year to July, to a median of $450,000, according to RP Data-Rismark.

Despite the shortage of housing, which has crippled affordability, local borrowers watching the debt troubles in the US and Europe have grown wary of the type of excessive borrowing needed to keep prices climbing.

The bank projected that a shortage of available houses and a tight rental market would keep dramatic price falls in check.

The same structural shortage of houses will put pressure on the rental market, improving rental yields in a trend that will eventually induce more investors and first home buyers into the market "after" they have tracked sideways and lower for at least a year, ANZ economist Dylan Eades told BusinessDay.

RBA deputy governor Ric Battellino said yesterday, "In recent years there has been a structural change in household spending and financing in Australia."

"After a 10–15 year period during which households increased their gearing and reduced their rate of saving, they have returned to a more conservative, and traditional, pattern of financial behavior," he said in a speech in Sydney.

He noted that household credit growth has slowed to a rate in keeping with, or slightly below, the growth in household incomes while the savings rate has returned to historical levels.

Housing credit rose by 0.4 per cent in August, while over the year to August it increased by 5.8 per cent, on RBA numbers.

Source:  fairfax.com.au

Its Not All Doom & Gloom In The Real Estate Market!!

While there is no doubt in my mind that this is still a buyer's market, there are signs that the negotiation power base is beginning to shift from the buyer to the seller – in some price ranges at least.

I talk to agents all over Australia and I am continually hearing mixed feedback about buyer activity, so I did some homework and found there was a common thread.

It appears that if you are looking for a property and you fit the demographic of the area, there is every chance you will be in competition with other buyers, so you may not be able to negotiate too hard. 

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That signals a shift.

Competition between buyers on a property may just translate into you having to pay the full asking price.

Just a month ago, agents were telling me the typical negotiation level (that is, the difference between the asking price and the selling price) was up to 10 per cent and in some areas 15 per cent.  

The hottest price range right now appears to be property between $500,000 and $700,000 and that narrows it down to the family style suburbs of Aspley, Kedron, Boondall and Nundah on the northside; Capalaba, Wynnum, Birkdale and Cleveland in the east; Annerley, Sunnybank, Rochedale and Springwood on the southside; and in the west, you would look in Bardon, The Gap, Toowong and Jindalee.

It wasn’t so long ago that the headlines were screaming “Exclusive waterfront properties tumbled 30 per cent” and while property experts are still not predicting that the market is increasing, the signs are there that it is improving.

Don’t overlook the Gold Coast right now. We have seen some massive drops in the asking price of units there in the last year and now that the Aussie dollar is taking a bit of a hit, it is likely that these areas will improve over the next six to 12 months because of an increase in tourism and that will herald an improvement in real estate prices. 

My tip is that the big improvers in the next few years will be those units on the Gold Coast that have been hit so hard.

Do you believe we have hit the bottom? Is this a good time to buy?

Source:  Kevin Turner; www.brisbanetimes.com.au

 

The Pre Stamp Duty Surge

RP Data has just updated our month to month models for transaction volumes and the results for Queensland are certainly interesting.  Most Queenslanders would be aware of the stamp duty changes that were brought in with the latest Budget announcement earlier in the year:  from the first of August owner occupiers would no longer benefit from stamp duty concessions, resulting in an additional purchase cost of around $6,575 in stamp duty payments (see our blog that outlined changes around the country here).

We estimate that Queensland sales volumes jumped by 33% over the month of July as owner occupier buyers surged into the market to avoid the additional stamp duty expense.

The surge in buyer numbers suggests that buyer confidence may not be as low as many thought.  A saving of around $6,500 is a substantial incentive particularly when coupled with the First Home Owners Grant of $7,000.  However the surge came at a time when the threat of higher interest rates was still quite real; it was only mid July when Bill Evans broke ranks and predicted rates were set for a fall (and at the time his comments weren’t widely accepted!).

Other factors are providing a better outlook for the Brisbane housing market.

The magnitude of declines across the Brisbane housing market has eased.  In fact, the latest RP Data-Rismark Home Value Indices for Brisbane showed the quarterly change over the three months to August was the second highest of any capital city.  The result was still negative, at -1.3%, however it was a substantial improvement from the falls being recorded earlier in the year, the worst of which was seen over the March quarter when values were down 3.0%.

We have also been seeing the ‘value gap’ between Brisbane and the other major capitals expanding.   Brisbane house prices are now 21.2% more affordable than Sydney’s and 11.2% more affordable than Melbourne prices.   The gap hasn’t been that wide between Brisbane and Sydney since mid 2007 and the current price gap between Brisbane and Melbourne hasn’t been this wide since late 2003.  This renewed affordability proposition may be attractive enough to entice more interstate migrants across the border (interstate migration into Queensland over the March quarter of 2011 was at the lowest level since 1981).

While Brisbane home values have been falling (dwelling values are down 7.4% from the March 2010 peak), rental rates have been showing modest improvements.  The result is now that rental yields are well above the combined capital city average at 4.7% and 5.3% respectively for houses and units (the highest yields of any capital city outside of Darwin and Canberra).  The higher yields and low vacancy rates (2.2% across the inner city and 2.6% across the remainder of Brisbane according to the OESR rental vacancy report ).

While capital gains are likely to be a long way off, the foundations of the Brisbane property market are looking quite firm.  In all likelihood we will see transaction volumes fall away in August when the updated figures are available early next month, however with interest rates potentially on their way down as early as Melbourne Cup day, the potential for a more sustained improvement in buyer numbers across the Queensland market may be close to hand.

Source:  RP Data Property Pulse

 

 

 

 

 

 

 

How can I purchase my first home  

 

when I haven’t got the deposit?

 

If you have been thinking !! - How can I purchase my first home when I haven’t got the deposit? Or how can I buy an investment property whenI can't affordit. You should come along and listen to the lastest possibilities of purchasing property through your superannuation.

 If you already own your own home thenwhy not see how using your super now, can put you in the right position for your retirement needs later.  Jensen Property have brought together some ofthe best minds with many years experience and knowledge in the field of financial planning and accounting. We invite you to attend the seminar to find out the facts, and help you secure your future today. Time and date to come. This invaluable financial advice is free for you to find out what options are available to you.  Start to take control of your own future now.

 

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