People in Western Australia are very positive that in house sales will be continuing going strong. Perth transaction sales increased 6% over the last week to 1,026 and it maintained the strengthening trend that started last September. Despite of the high house sales, will house price sales fall or rise?

The Australia and New Zealand Bank (ANZ) with collaboration of Prophell house, “They overall see that prices are settling in most markets and remaining stable in 2012. They are still assuming that there will be no great change in Interest rate even though some markets are rising and others are falling. This view helps to suggests useful reductions in interest rate and lift prices. The ANZ said, “House prices will continue to drift lower over the New Year as increased caution about borrowing takes its toll on home sales.” The ANZ economist Dylan Eades said, “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.” Despite the shortage of housing, house prices unstable and Interest Rate will go up and down, we should something to bear in mind over the next decade, we will have good reason to changed the market.


Comments(0)



An interest rate cut is eagerly anticipated by business owners and investors as it will lower their borrowing costs. Is this the answer of all the problems that we're waiting for?

The Reserve Bank of
Australia could have cue cards on their hands about the interest rate cut with the inflation forecast. The RBA has an inflation target to 2-3% and consumer prices
rose 0.6% during the July-September period. According to CommSec economist, Craig James, “If
the European Summit is enable to provide a definite solution to the sovereign
debt crisis, then it looking likely that Reserve Bank will move to shore up confidence
and provide stimulus by cutting rates by 25 basis points on Melbourne Cup Day.”
The Melbourne Cup is stated on Nov. 1 and maybe this influenced RBA for looking
straight the interest rate cut and helped them decide. Apart of the statement
of Mr. Andrew Robb, an opposition Finance Spokesman, “Any reduction in Interest
rates next week would give some welcome relief to households feeling the strain
of mortgage stress and the many businesses struggling in a two-speed economy.”
Many investors, business groups and industry groups believe that there is an
interest cut rate next month and predicting to have continuous cut rate and Australian
dollar could lose yields for investors if interest rate will cut.


Comments(1)



Perth is very sensitive to property price rise and the Interest rate as well and WA property prices will rise and it’s getting better. QBE Leader’s Mortgage Insurance (QBE LMI), which supports lenders, last forecast price growth of up to 20% in Perth and Sydney as business and consumer confidence improves. Property prices in Perth reveals the biggest declines in Australia as an oversupply of homes and a “two-speed economy”. According to Paul Braddick, Senior Economist at ANZ, Western Australia’s “economy itself seems to be moving ahead very strongly, getting back towards the boom-type conditions in the resources sector.” ANZ and REIWA forecasted that Perth home values are likely to be little change for most of this year before bouncing back in 2012 with 20% price growth. According to a major mortgage insurer said, “Stable interest rates and improving economic will drive rising house prices in the next 3 years with Perth and Sydney. One of the reasons why house price has risen because of lack of supply of housing caused by mining boom. In contrast of the housing market, where it becomes a buyer’s market and price may have considerable price. According to the RP Data Rismark figures, Perth’s apartment rental yields of 4.3%, the second lowest in the nation after Melbourne. Perth expects to boom in draw resources and it remains the accommodation of the mining industry resources.





Commenting on the Perth CBD Rental market, according to MLG Realty Chief Executive Marcus Gilmore, “Mining companies now held at 56% of the CBD leasing market, up from 45% last month, with many properties rented within an hour of hitting the market”. The result for the multi-speed economy especially the mining sector is very influential in housing market. The resource driven markets makes to have high demand, improved demand for rental and capital gain which many investors wants to invest and attract them to start a business. The median house price of Pilbara’s Port Hedland is $775,000 and rentals yields to 13% which considered as top the list of percentage with the benchmark. Mr. Gilmore said, a two-bedroom furnished apartment would rent for between $700 and $750 per week and He’s forecasted for the similar increase in CBD rents to Karratha and Port Hedland. HouseSmart Real Estate suggests that Perth property investors should consider adding some inner-city apartments to their portfolio.


Comments(0)



Investment
group Questus will build 920 Pilbara homes under the National Affordability Rental
Scheme. The Pilbara is still moving forward with major investment to increase
production. The crashed up companies, tighter vacancy rates and an undersupply
would push rents up to Pilbara levels.This is the first time that Pilbara set
up the record every week, with rentals being leased $950 per work and almost
1000 “affordable” homes will be built in Pilbara. Pilbara has at least 20%
below market cost compared other states with high-rent mining towns. In
apartment in Pilbara has $1000 a week was a cheaper compared to hold
accommodation. According to former Questus Manager MP Alannah MacTiernnan, the
company’s housing designs made the scheme effective in the Pilbara for the
first time”. Because of this scheme in which investment group Questus will
build 920 Pilbara homes under the National Affordability Rental Scheme. The
homes are rented in reduced rate in returned for annual tax-free subsidy of
$10,000 to the landlord. In this case, the employee will still be better off
than if they were paid a higher salary and tenants must be on a low or moderate
income.

 


Comments(0)



According to the
latest quarterly report by CommSec, “Western Australia leads the nation in
overall economic growth and is strong in retail spending, construction work and
population growth. WA is clearly the nation’s strongest economy, underpinned by
Asian demand for mining resources”. Because of the rapid expansion in the
resources sector has put WA “head and shoulders above” and WA has the lowest
unemployment rate.

Western Australian’s
Economy is judged as the strongest in the nation because of the continued
strength in the mining and engineering sectors, soft job market, and WA has
done everything to secure the best-performing state. There is still hope with
the state should grow and more developed, more benefited in coming months
particularly in high population and firm home lending. It is the start that all
business will grow and more people will visit and stay in WA to make the Property
market rise.


Comments(2)



In the world of
challenging economic times, capital value and rental expectations for office
s were
back down in all states. According to National Australia Bank
(NAB), rental incentive are still seen as key feature of the office property
leasing market in all states bar WA. Rental incentives
are now identified as “significant” in all commercial property markets. NAB
forecast, by September 2013, all commercial property sectors are expected to
record positive rental growth. September 2011 was reported as the weaker
condition in the market and industrial property was the only sector that
reported strong condition. “Positive growth is set to resume   next
year with expectations for capital values and rents over the next 1-2 years
strongest in WA and Victoria, NAB said. There is a hope for the local retail
sector; WA will lead the nations in terms of rental expectations.

In the residential sector, even though the property market
moved back, many are eager to become reliant on public housing. However,
according to Professor Gavin Wood, Director of the RMIT Research Centre of the
Australia Housing and Urban Research Institute “Australia has a healthy private
rental market. The relative ease to renting in Australia might also be a factor in
the low mortgage default rates. People sell up before it gets to that point. In
housing house prices, we may establishing an income-tested housing allowance
that could go to struggling home owners as well as renters, and abolishing
subsidies for first-home buyers.

 


Tags: nab survey, rent

Comments(3)



The National Australia Bank (NAB) survey for September 2011
period provides very interesting milieu. NAB “Quarterly Australian Commercial
Property Survey” reveals that retail property vacancy rates rose to 5.5% in the
September 2011 quarter. Vacancy rates for office and industrial assets fell to
6.9% and 5.8% respectively. Hotel property was the best commercial property sector
during the quarter. According to a leading property survey, Victoria
is now a powerhouse of the nation’s commercial property sector within two years
and it is expected to be overtaken by Victoria
as the strongest market by September 2013.

Despite a softening in the pace of recovery, there are signs
that vacancy rates will fall over the coming two years. The industrial market
is expected to have strong recovery in 2012 and NAB Industrial Property forecast
to increase +38 by September 2012 and +53 by September 2013 which sees it as one
of the strongest performers. The report said “Western Australia continues to be identified
as the strongest market. WA is expected to significantly out perform the other states and the national average, with prices rising by 3.4%, while Victoria is the  only state expected to record negative price grow (-2.1%)." House prices in WA have rising slightly with improving conditions expected to lift the local values.The report is optimistic with strong impact on global
markets.

Commercial Property Survey _September 2011_.pdf (475.03 kb)


Tags: nab survey

Comments(4)



Despite of the Property prices dropping recently the figure sales volume has increased 1% in September which is good inflow for property market. A new report reveals WA’s property recession has caused a spike in the number of homes falling onto negative equity with about one in 20 now worth less than their purchase price. The RP Data annual equity Report shows, Perth has the second highest number of homes with negative equity (4.9%) all over Australia and is home to five of the 10 regions with the highest rates in the country.

However, based on the official Landgate figures, Perth Property market recorded its first positive sign that things were moving up in August with 28% increase in sales compared to the month before. Even though Perth has negative equity but still it is a good sign for the Perth property market because there is still plenty of equity out there. This is a reminder to invest for a long term because in the long run with negative equity will fade out as the market improves.




WA rental also increased the most in the nation but based by RP Data. Perth was also the best performer in the June with 2.6% in the median rental price. According to RP Data Senior Research Analyst Cameron Kusher, “He was anticipating stronger levels of rental growth in the short-term and with sales volumes depressed and first-home buyers inactive, there was likely to be an increased competition for rental stock in the near future.” “This activity may be beneficial to investors who could see a boost in rental rates as vacancies tighten and fewer dwelling continues to commence construction,” he added. The prospects for strong growth in rents are much more limited and tourism market remains dilapidated for limited significant competition for rental stock.

Perth rental prices have increased by $15 per week, 6% of people signing rental agreement had increased, and the median rent in Perth is $400 per week. The house sales in Perth rising by 1% for the September quarter and sales of units, apartments, villas and townhouses falling by 1%. “According to Western Australian Council of Social Services Chief Irina Cattalini, “We are down to less than 3% of available housing, which is less than 3000 properties in the market.” The rental activity has concerned the already-sluggish housing market and few of those properties are available for people on low income so it also puts pressure on and increased demand for social housing and affordable housing across WA. According to REIWA’s latest report properties available for lease in Perth have fallen by 20%, from 3,600 at the end of June to 2,800 at the end of September. Minister for Housing Troy Buswell announced an additional 2,300 houses to be built across WA under the National Rental Affordability Scheme.




According to Westpac Chief Economist Bill Evans, “Inflation
pressures are weak, labor markets are soft, and investment and export plants
have softened.” However, the softness in the labor force may have been overdone
ad maybe we started to see the signs toward better employment conditions.  Due to the weak business conditions, Australia’s
Central Bank decides to cut interest rate. Westpac strongly predicted that
Reserve Bank of Australia
will cut official rates in December.

Interest rates may cut next few months after employment rose
last September. One factors of the interest cut is the employment rose because Economists
had expected the jobless rate to stay at 5.3% which is very satisfying for the
booming economy. According to Normura Chief Economist Stephen Roberts, “The better
than expected figures means there is “very little likelihood” of the RBA
changing the cash rate from its 4.75% at November. Expectedly, if the interest
rate will cut, we will have stable home loan rates in which both the tenants
and landlords benefited on it and in business investment will rose and have a
more positions economic outlook.


Comments(1)



National Australia Bank (NAB) and Economist believes that interest will stay on hold
because Reserve Bank has kept the cash rate at 4.75%. They believe it will stay for
another 14 months where the cash rate will freeze which has already been on hold for 10
moths. NAB also anticipates a long period of inaction by the RBA, before
increasing rates to 5% in November 2012.

According to NAB Chief Economist Alan Oster, JP Morgan
economist Stephen Walters and TD Securities strategist Roland Randall, they
believes the Reserve Bank, content that inflationary pressures are now under
control, will stay on the sidelines for another 14 months. They are tipping
the cash rate will stay on hold for more than a year. The central bank is under
pressure from retailers and the property sector which holds it next interest
rate. NAB were previously forecast a rate rise in next May, is still tipping an
increase of 25 basis points. NAB said that they expected core inflation to
remain between 2.5% and 2.75% within the RBA’s target range of 2%-3% until
2013.

According to NAB Chief Economist Alan Oster, “While there
remain some downside risks to the near-term inflation outlook, reflecting both
global and domestic factors, we still anticipate that inflation will rise above
the target band in mid-2013 as the labor market tightens and underlying growth
in the economy strengthens.” Westpac is the only major bank leaning the next
move for interest rate will be down and hoping and looking forward to the
future market will continue to rate cut of this coming Christmas.


Comments(0)



Most Australia Capital City Property markets decreased in the past months. Perth was the weakest housing market with negative growth recorded in all time periods however a change is expected soon. According to the QBE, Leaders’ Mortgage Insurance housing outlook report researched by BIS Shrapnel, “Price growth of 20% forecast for Perth and price growth of 19.4% is forecast for Sydney by 2014. Property prices are set to grow over the next few years, as consumer confidence rises in tune with a growing demand from Asia for Australian resources, QMI added.

This report also predicts that residential property investment is set to increased and rise up after all the crisis we are facing now and dissatisfy this past years. Due to the growth of mining and resources, Perth and Sydney are set to record the largest growth over the next few years. Because of the substantial investment in the resources and the mining sectors, many are expected that it will lead to accelerating economic growth, to have greater employment and income growth. Despite the unstable economy, but still investors, businessmen, lenders, banks are very optimistic about the outlook of housing property market and economic growth.

The QMI report states that despite the current weak economic environment, delaying the recovery in first home buying, the outlook is positive with the group confident prices have reached their bottom.


Comments(2)



According to Cameron Kusher, RP Data Senior Research Analyst, “Rent are growing in certain areas despite the fact that (Capital) values are falling, so potentially things aren’t quite as bad over all for somebody who owns a property and just focusing on capital gains.”

Investors looking to a secure a property with strong rental yields and REIWA are not expecting to see demand for properties or the premium price, to ease over the coming months. There are some states remains stable their rental prices but Perth is one of the states has rent increased. According to REIWA, for the first in 3 years, Perth experiencing a mid-year rental hikes. Some people who have low income cannot afford for those high rental properties and across WA there is increase demand for social and affordable housing.

REIWA President David Airey said that the increase in demand for rentals has put upward pressure on rents, which had not seen a rent supply”. In economics, there is a saying that, when the demand is high, and the supply is low, then the price is high and when the demand is low and the supply is high, then the price is low. This is happening now in WA, there is rental growth happening because the demand is very high and the supply is low. However, still Perth’s property market is expected to pick up by the end if the year.


Comments(0)



Interest Rates hang on knife-edge and still have expectations to begin to shape the housing market. The RBA has for the 10 consecutive meeting kept the cash rate steady at 4.75%. One of the factors why RBA decided to maintain the Cash rates is that European and US recession concerns and the slowing Chinese growth. Despite of the decrease of Australian dollars, housing market decrease, and the increase of the employment rate, many economists still believe and still predicting that in the future Interest Rate may cut. According to a survey of economists, RBA might cut rates as November by 25 basis points. Even there are strong predictions that Interest Rate cuts off this November, RBA is still faced with global uncertainty that makes Australia Economy weakened and Australia has one of the highest Interest Rates among the developed nations at 4.75%.

 

A survey by the Australian and New Zealand Banking Group (ANZ) revealed that the total number of jobs as in newspapers and online dipped by 2.1% in September compared to preceding month. According to Craig James, Commsec’s Chief Economist told the publication: “The odds of a rate cut in November continue to improve another fall in job advertisement.


Comments(0)



Perth rents have showed upward movement and has been a  huge demand for rental properties resulting in higher rates for houses and apartments, according to recent REIWA statistics.Perth Real Estate market continues to show with house prices dropping. The Reserve Bank lifted official Interest Rents in November, 2010 a move made close costing for borrowers. Cost Interest Rates really affects the Australia’s certainty of which way to move as the Aussie dollar drops. According to the REIWA, “As Perth houses sales rise by only percent for the September quarter, and villas and townhouses experience a 7% drop, more individuals are turning to renting which means rising rent for landlords”. Rising of Rent makes the individual to choose a rent which makes Perth rental market strengthened rental demand however some areas in Perth have performed better.

 

According to Mr. David Airey, REIWA President, “Both the overall median and multi-residential rents increased by $10 per week for the quarter, taking the median house rent to $400 per week and the median unit rent to $380 per week”. The market conditions certainly fall over for the landlords and still Perth performed better compared to other cities and which has the highest-recorded average rent increase. Perth has lower rent increase and still coping the market stability and ensures to have good outcome for both landlords and tenants.


Comments(0)



Despite the Interest Rates Stability at 4.75% and some negative equity in houses, is there still a chance of an Australian Property crash? There is no doubt residential real estate prices are on the slide even if the economy falls and unemployment rises, they will continued to lower but still it doesn’t count on a crash.

Real Estate Institute of Western Australia (REIWA) figures shows residential property prices fall between 11-15% in the inner suburbs of East, West Perth and Northbridge in the year. Westpac Senior Economist Matthew Hassan said the high prices achieved during the first mining boom in WA had priced many people out of the market. “Since then, Perth’s really struggled to gain any traction in terms of price performance and a common theme of slowing property prices was elevated interest rates, “Mr. Hassan said.

Investors, businesswomen, we still believe and expected a full recovery of the housing  market in WA next year, also we are expecting also that the interest rate cut would be the key to establishing house prices. In addition, we are balancing rental income in return for capital gains in the future.


Comments(1)



Western Australia  is Australia’s largest
state and the 2nd largest sub national entity in the world. Today WA’s
economy mainly relies on mining, agriculture, tourism and it’s the 3rd
largest iron-ore producer in the world (source Wikipedia). However, Western Australia’s
property turned down because of number of houses falling into negative equity.
According to the RP Data Annual Equity Report, The national average of WA is
3.7% and in all over Australia,
WA is the second state that has second highest number of home with negative
equity (4.9%). The home price in Perth
fell 7.1% over the last year and WA’s recent property price decline is one of
the reasons of the state’s high level of negative and low equity. Due to his
effect, 30% of WA home owners have less than 25% equity in their property. WA
Supreme Court Statistics shows that more 3 houses are being repossessed
everyday, totaling 1,242 last financial year- a 2% increase on the year before. Although this trend is bad for current home owners, it represents an opportunity for investors looking to expand their property portfolios buy buying at current prices.


Comments(0)



In September, we have seen that the RBA had the official interest rate unchanged at 4.75%, lots of factors really affects the Interest Rate and its monitored and RBA announces the cash rate change. Many of us, ask in our mind, Are Interest Rates Stable?

The RBA chose to keep rates on hold despite speculation that rising of inflation could stir an increase. The official interest rate is still at 4.75%. A poll of 21 economists by Bloomberg shows those surveyed believed interest rates will again stay on hold. Inflation is one factor in why interest rates being kept on hold because due to seasonal prices gains in alcoholic drinks, tobacco, and automotive fuel, consumer prices rose slightly and it shows great impact for inflation.

ANZ’s head of Australian economics, Katie Dean, says risks to growth in the global economy have intensified. “Those increasing downside risks are suggesting that interest rates here should actually be cut some time over the next couple of months”, she added.


Comments(0)



Perth the capital of WA has easy care lifestyle and known as the “City of Lights”. You will be able to find property in Perth to rent because Perth is beautiful city and worlds most liveable city. In certain areas, Perth is one of the most likely cities to find an apartment to rent. The majority of rental houses are unfurnished and the lease will normally minimum for six months. The latest figures and data from REIWA, rental are fairly stable, REIWA data shows that the rent for a house in Perth is $380 per week, while apartments, villas and townhouse was $350 per week, despite Perth’s rental has no movement in overall median rent and still the same sub-regions did experience rises and falls. According to Mr. Alan Bourke, REIWA President said, “The current vacancy rate is therefore about 36% higher than Perth’s long term average, but this can change quickly if jobs pick up strongly on the back of a resurgent resources sector.


Comments(5)