Perth’s suffering market is
ready for a long-overdue recovery and the big news coming of Perth is the much
awaited 20 year transport plan. Easy means of transportation is he major factor
in the minds of tenants and buyers when they sell or buy a house. Because of
this news, Perth property investing community will be keenly eyeing up the plan’s
progress for tomorrow’s hot spots. The Public Transport Plan 2013 report, it
will encourage housing development along the route. The sense of permanence of
light rail provides certainty and encouragement for developers to move towards
more consolidated higher density along the route”.

According to Michael
Veletti, Director of CB Richard Ellis, “The market has certainty softened, but
we suspect lot of that is related to buyers staying out of the market due to
uncertainty about a number of issues: a “double rip’ global recession, interest
rates, he election and the ructions over the mining tax.” Because of this, there
is pent-up demand and the buyers will start coming out to invest.  The law of supply and demand plays big role in the main market and the volatility of house price in market appears soft. It really helps to attracts the cash flow investor.


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According to Property
Investment Specialist, Rick Otton, “such growth
in our mining sector has lifted work opportunities across the board for
Australians willing to relocate and the associated demand for housing in many
areas has become unprecedented. Australia is expected to experience a mining
boom which brings out huge opportunities for the property investors and Perth
identified as the home base and put pressure in both purchase and rental market
however it attracts opportunities in Australians Property Investment. Mining
boosts construction in Australia driven by a lift in engineering work in the
mining and energy sectors.

According to RP Data
figures, “Mining outposts dominate the nation’s list of most expensive rentals,
with remote rural dust bowl on par with Sydney’s elite suburbs.”  Housing demand has affected rental prices in
mining towns to such a degree that it cost almost five times and the outrageous
housing costs in mining towns are widespread. Mining companies boost the
economy of Australia and makes opportunities for property investors but the
house prices and rents are going to rise and renters or home buyers are not
able to afford the rent. Mining in Australia gives a clear indication that the
Australia is expected to experience a mining boom creating huge opportunities
for the property investors to take advantage of the property rents and house
price.




The Perth Property market is set to rebound in 2011 and its recovery is coming on its way with Interest rates flattening now, buyers inquiries are increasing while rental vacancies falling, rents are increasing and investors are coming back because holiday season is approaching. According to Australian Property Monitors said, “The prospects for a return to price growth through 2011 however are excellent with Western expected to experience one of the largest resources boom in its history.” Good news for homeowners that Perth Property Market pick up strongly in 2011 as the latest mining boom and Perth is likely to see a strong price growth increase. Perth now is experiencing the highest growth in median house prices of all Australian capitals in 2011 and was forecasted that Perth having and increase 7% growth. Now is the time to look between the property and the one we wish to purchase will start to widen again to make also the market grow again.


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According to survey released
last Wednesday, November 16, 2011, “The Australian economy is growing at an
annual pace close to the projected long-term trend. The survey was by Westpac Banking
Corporation and the Melbourne Institute. CommSec’s State Report believed that
Western Australian have the strongest performing economy within Australia. Despite
growth slowing due to the global financial crisis, Australia was one of the few
advanced economics to escape recession. Australia can fully benefit from improved
terms of trade because of the mining boom. Tax reform also plays a key role in stepping
the right direction to reduce the company tax rate.

The NSW Treasurer, the Hon.
Mike Baird MP, went on to state; “Conditions in some NSW industries exposed to
the high Australian dollar are subdued, particularly in tourism and
manufacturing. The NSW retail sector is also soft reflecting increased
household caution as evidenced by the rising saving ratio and recently
declining consumer confidence. There is a significant divergence between
sectors, though, with strong conditions currently in the NSW mining, farm,
business services and household services sectors.” They are expected to remain
at a high level over the next two years as a result of elevated export prices
and subdued import prices. Mining boom also could permanently raise household
incomes in Australia.




Based on an annual property report, house prices in Perth are expected to rise to 20% this year. According to PMI Residential Property Overview found, “The cities of Perth has experienced solid price growth as residential prices continue to be underpinned by stronger demand generated by a booming resources driven economy”. To make the economy improves, many are predicting that home-buyers will start to re-enter the marks and turn encourage to others to return as demand for the properties improves. Due to strong economic position in Perth, because of the booming resources especially mining, it is predicted that growth would continue and the first home-buyers are starting to come back and invest more into the market. The underlying strength of the Australian Economy, stable interest rates in the short term, high immigration demand and price growth, these will be the main drivers to make the economy will grow and competitive.


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“Rent in Perth has increased
by as much as 18% in just three months in some areas”, according to some real estate industry. Many renters will not move out of home because rent is overpriced and
unaffordable. The minimal supply of houses in Perth CBD led to the average rent
climbing and most renters give an offer to $20-30 above the asking price to
secure a property. According to WA today.com.au readers claim they are being
forced to live in suboptimal properties, and pay for the privilege. Readers claim it is a house renter’s
market, can charge overpriced with any mediocre made to their properties and
people will pay it.

According to REIWA President
David Airey said, “Prices would only get higher as more people flooded into the
city because new homes were being built at a far slower pace”. The vacancy rate
was critically fallen to 3% and a shortfall of available rental properties. Right
now, strong demand for rental properties is increasing and the pressure is
coming from new arrivals in WA for employment. But still, Perth Rent will
remain soft for coming months because WA needs more opportunity and a price
decrease for sure. However, a window of opportunity was opening now and it
would last over the Christmas period before the most competitive time of year.


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According to RBA Assistant
Governor Guy Debelle, “If people mean lower Interest Rates-which I think is
mostly what some people have in mind, then the mortgage rates are about where
we want them to be otherwise we’d do something that.” Many people concerned
about Interest rates because reduction of Interest will have a positive effect
for homeowners and the competitive community. Most of the Australians spend
their money in their mortgage payable, so this scenario demand for money fall
and unemployment begins to rise. A Senior Reserve Bank of Australia official
has signalled that the central bank is comfortable with the current level of Interest
and Mr. Debelle also stated that central bank does see the need for greater competition
if the goal is to lower Interest Rates. Despite of the unstable rates, we still
continue to moving in the right direction and having commitment to provide
competitive market in order to keep our economy growing strongly.


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According to a press release
from the Mortgage and Finance Association of Australia, “First time home buyers
have little confidence in the Australian Economy, as they baulk at property purchases
and hoard their cash.”  We all know that
house prices in Australia continue to fall and Reserve Bank of Australia has
conceded the Australian Economy is no longer as robust because the official
cash rate is 4.5%. There are several possible reasons why housing market strikes; 72.1%
worried about the level of debt home ownership would require, 44% cited were delaying
purchasing a first home due to economic conditions and lastly 20.5% of first
time buyers believe property prices are too high. The RBA has confirmed last
November 1, 2011 the economy is weak. The QLD building boost isn’t working,
lowering interest rate isn't going to work and support for the housing market in a major property. Some home buyers are returning to the market in droves. Investors and businessmen hope that first homebuyers will change their mind to enter and to
invest the market to boost the economy.


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Australian Interest Rates are monitored by the Reserve Bank of Australia (RBA) with no cash rate changes. Interest in many International Property Markets have slowed and declined because of credit of " down under" is bucking the trend. Based on the latest search research shows that Australia has improved their market share and recovering. According to Robin Wilson, Head of Overseas of Rightmove, " We're  seeing their first signs that prospects are improving with four of the top 20 countries registering positive growth on last year's equivalent monthly performance". Australia is one of the only four countries hitting higher monthly business and recovering positive growth. Business Spectator analysis that Interest rate will change from Australia and around the world. Overall, the latest search shows 45% indexed locations saw increases in the last month, 40% recorded decrease and 15% saw no changes.


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The Reserve Bank of Australia (RBA) reveals to everybody that they don’t give any direct hint on the future about Interest rate cut which everybody projects and expects that there will be another rate cut next month. The minutes touched on keeping rates on hold and the fixed income market is still fully pricing in a rate cut this coming months. According to Westpac Economist Bill Evans, “Given the huge emphasis which the Bank has placed on downside risks to the global economy as justifying the cut in November, the decision in December will hinge on those global developments”. Based on the minutes, we still remain comfortable with the original projected view which might bring to positive decision about cut rates forward from February to December.


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We all know that Reserve
Bank cut Interest Rates this past month. The minutes of the Reserve Bank board meeting
confirms that they are concerned and focused about the strength of the global
economy. The Reserve Bank was focused on getting interest rates back to a more
normal setting. It is clear now that the Reserve Bank Board members have
certainly become more concerned about the global economic outlook, focusing on
heightened “risks to the global economy”, and Reserve Bank is focused on a
shift to more “normal” financial conditions. The mortgage rate is still above “normal”
and central; banks expected mining investment to increase and non-mining sector
was expected to grow below trend. The Reserve Bank Board seems focused on
shifting to a more neutral setting, the rate will further cut and variable mortgage
rate is still above neutral. We do hope that Reserve Bank will come up a good
decision to make investors invest and would have fairly decision in Interest
Rate.


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A statement attributed to the
Committee for Perth said, “ with predictions of $300 billion being invested
into WA’s resources sectors in coming years and acknowledgement that the
metropolitan population is likely to grow to 3.5 million by the middle of this
century, Perth will be the  national
testing ground for how it tackles the issue of providing adequate and
affordable housing”. The fact that Perth is “boom town Perth” promises a good
life for many and the research shows that 90% of real estate was currently out
of reach for key and essential workers providers of everyday services such as
retail and trade people like hairdressers and butchers. Perth is now clearly
above the threshold of severe housing unaffordability. Despite of this report, a
lot of people still want to live in Australia and to have their own block. Providing
adequate and affordable housing is one of the biggest challenges of Australian Government
in order that Perth housing market will have unlimited availability.


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Despite the stability of
Western Australian property market, some buyers indicates that they have developed caution
a bad case and are nervous in buying a property. But this bad news would overcome
and needs to be balanced for all factors in economic realism because in WA still
things are pretty recovering. There WA economy is still healthy and is being driven
by a resources boom because WA has continuing low unemployment and good job
security, inflation is under control and lastly the low interest rates that
indicates the economic growth is still continuing increasing. Nowadays,
Australia has strong employment and continued strong population growth will
also maintain a steady demand for homes. The Housing Industry forecasting Group
Estimates that Western Australia had an underlying housing shortage of 7,900 in
June 2011, a figure that’s predicted to almost double in 2011/12. Most property
analysts think we can expect to see some modest price rises in 2012.


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Property Analysis RP
Data-Rismark report that overall property prices in Australia’s capital cities
has fallen 3.6% for the year ending in October, beating economists’
predictions. All eight cities experienced price falls in third quarter  alone with 1.2% drops. We all know that many
factors really affect the drops, including the high cost of living, unfavorable
currency performance and unpredictable weather. According to the Housing
Industry Association, new-home sales are also sinking, falling 3.3% to markets’
lowest level since 2000. The biggest declines were in Brisbane at 2.5% and the
lowest is Sydney 0.2%. The latest index report from property analysts RP Data
Rismark shows price falling, at a seasonally adjusted 0.2% in October compared
with September. Its means that Australia’s economy performs better compared
last month. It shows economy going better and house prices and interest rate
might come better and better for the following months.


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The following are banks joined to reduce interest rate namely Australian and New Zealand Bank (ANZ), National Australian Bank (NAB), Westpac, Commonwealth Bank and lastly is the Ubank. These are the banks has interest rates dropped out last Tuesday. ANZ has dropped their standard variable rate by 0.25% to 7.55%, NAB has dropped by 0.20% to 7.47%, and Commonwealth Bank has dropped by 0.25% to 7.66%(or 6.86% depending on the product). The Ubank updated their Interest Rate last November 4, 2011, the said bank has dropped their Uhomeloan by 0.20% to 6.59% in line with NAB. They also offered new sign ups a loyalty bonus of 0.20% off their rate taking the rate to 6.39%. These are the big banks dropped interest rate and hoping that interest rate will probably declined before Christmas. Because of reducing Interest rate, the dollar exchange rate its been quite good, investors attracted to invests form of the markets and seeing a slight recovery of financial stability of Australia's Economy.


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Based on the REIWA real fact report that the number of properties on the Perth property market has increased slightly. On the first week of November, the Perth sales 1,179 sales per week compared to 900 sales per week from the month of October. The strength of demand in properties available for lease falls by 20% despite of the additional stock flowing into the rental market. According to REIWA President David Airey, "Both the overall median house and multi-residential rents increased by $10 per week for the quarter taking the median houe rent to $400 per week and the median unit rent to $380 per week." I think that predictions of an increase in Perth rent looks to be coming for increasing in buyer demand and it would help the interest rate and economy stay stable. Investors expect a significant increase on Property market next year with price growth.

 




The report showed that
conditions in Australia’s job market continued to deteriorate in October giving
the country’s central bank more scope to cut interest rates over coming months.
Analysts expect that the Australia’s unemployment rate will keep rising in coming
months. Economists surveyed by AAP finds that they are expected to have an
increase in  the number unemployed by 10,000 in October and the unemployment rate having risen to 5.3%.
According to CommSec Chief Economist Craig James, “Probably the safest course
in the current environment is to maintain your existing workforce, take on temp
staff if you need to and work people more intensively.” Mining boom condition created
enough jobs to compensate but firms are very wide open range indicators for the
further in terms of investment, outside of mining and labor hiring. Australian
and New Zealand Banking Group released their monthly job market survey, total
job advertisement in newspapers and on the internet fell 0.7% in October from
September. ANZ’s head of Australian Economics and Property Research Ivan
Colhoun said “the job ads data is consistent with a rise in the unemployment
rate to 5.5% by mid-2012, levels not seen last 2001 when the economy was
pulling clear of the global financial crisis.” When unemployment rate have
risen, wages and inflation will have moderate movement.


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Without housing, Productivity
would collapse because humans still congregating in caves. Housing is for
shelter and could be considered certainly as necessary for everyday
living.  Housing is very important and to
have some extensions. If that so, many houses will build and become productive
place of work. Residential house is productive in providing accommodation the
same with hotel accommodation. Only 1.7% of the population works directly in
real estate. Let’s think what if life without housing, people spends their
money to bad things or for their pleasure. Because of this people motivates to
have their own house rather spending money with nothing. Investors may build
some more houses; people realized to spend their money in housing, if that will
happen interest will become fair for both tenants and investors. When we have
productivity housing, it is affordable housing (both rent and for sale).
Productivity housing is not only for residential, and it’s for commercial and industrial
zones. Through this, it will add for the growth capacity of economy.


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According to Westpac Banking
Corporation Chief Executive Officer Gail Kelly, “Australian consumers are more
likely to save than spend any extra money available to them following the
central bank’s decision to cut interest rates for the first time in more than
two years.” The RBA’s decision to drop the cash rate has a very big impact to
the business and Australian economy. It is a first time in two and a half years
to lower the debt repayments of many households. Last November 1, RBA cut the
benchmark a quarter of a percent to 4.5%, illustrate slowing inflation and weaker global
growth. The central bank last week lowered its forecasts for economic growth
and mining-related parts of the economy are growing strongly.

Chief Executive Officer Gail
Kelly stated, “Ultimately what we need for the economy to grow is for people and
businesses to regain confidence and to decide now is the time to spend more and
indeed to invest more.” Plenty of Australians spend time shopping, travelling
and spend time shopping, travelling and spend luxurious things. Is this the
time to save more rather than to spend more? If the RBA believes that we’ve got
room to go to be able to provide support to the economy and central bank is
able to lower interest rates. Lenders are doing their best possible position to
attract new customers and dropping of home loan’s rate might be able to save
dollars in interest.


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An Australian Property
Monitors Economist said "Property prices in Perth, the center of Australia’s
mining boom, may fall further this year after slumping the most out of any state
capital.” The resources sector in Western Australia is extraordinary strong.
The Perth’s property market is already the highest in the country and it will rise
because the supply has been limited. Australian retail prices have consumer
confidence and WA remains the heavyweight of Australian investment and no
shortage of major investment projects in planning. The WA’s  mining 
and other sectors are booming but there are sectors are not and real
estate is one of the sectors that still struggling. Property market in Perth
are now moving because the mining is booming and the state has slow growth
moving towards boom states. The market now in Perth is recovering because when
prices jump in value, when the rent will raise then many investors buying in
the market because of the big returns on investment for investors.


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