Based on the Property Council of Australia reported last February 2012, a surge in demand in Perth and Brisbane helped push Australian office vacancies to a three year low. Vacancies in Perth’s center more than halved to 3.3% while in Brisbane fell to 6.2% from 7.4%.

According to Sydney-based Regional Director for office services at property broker CBRE Inc, James Patterson said, “Perth and Brisbane outperformed expectations with the resources sector continuing to expand strongly in both cities.” Brisbane and Perth are tenant demand in which the two cities are given strong mining employment growth and re-assured that there will continue benefited on the flow-on to domestic economy.


Tags: Brisbane, perth

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According to the latest Reserve Bank of Australia (RBA) monetary policy meeting showed, “Growth in the Australian economy was not as strong in 2011 as experts had predicted. Last December quarter, inflation stood at 0.5%, which was broadly in line with the expectations. The main source of growth in 2011/12 is expected to be a 16%/year surge in private business investment and 3.5%/year growth in household consumption. A number of factors contributed to the less-than-expected 2.75% growth seen and different industries adjusted to high trading terms and exchange rate.


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According to REIWA quarterly figures, the median house price at December 2011 was $462,000 up from $450,000 in September. REIWA reported that the average number of selling days peaked in September at 79, falling slightly to 77 in December, this report showed down sharply on the market.

Although, this past year, there was a decline in residential prices but based on the survey, the Perth median price has stabilized and started to record growth in the past quarter, but the rent may increase because of the tight rental market and oversupplied of house that put pressure on rental levels. Median house rents showed $425 a week as at December, up from $380 a week the previous year. It showed that median house rents continue to increase and expected to continue increasing.


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RBA announced that Interest Rate still on hold in which Investors and Analysts were disappointed. The RBA’s decision to not reduce rates this month was surprising to everyone because Analysts predicted Interest rate cut this month. The RBA’s explanation for its decision shows that it is making a rosy call of both the current data and the direction in which at the Australian Economy is headed. The Australian Economy continues to suggest growth close to trend. Unemployment rate increased and inflations is around 2.5% and Banks expects inflation to be in 2.3%. Economists and Analysts still expecting that RBA must drop interest rates by at least 0.5% and probably more.


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According to HSBC Chief Economist Paul Bloxham, Australia (RBA) will make further readjustments to interest rates and even if these are not passed on to the Aussie on the street by the major banks, the RBA will keep the cast rate on hole at 3.75%. The Australian economy is in a strong position and the expected interest rate cuts to the following months will help to boost the retail and housing sectors. One of the sectors that make Australian economy become strong is the ongoing mining boom that helps to stand the country in a good stead. Analysts had predicted that RBA would be influence by all sectors and the economy in which RBA has the firepower to use monetary policy. Because of the boost economy, the country will get ready for the future.


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Analysts stated that Australian Property trusts are likely to deliver a total return of 12-15% this year, outperforming local equities and other Asia-Pacific markets. Although Australian equity markets remained weak but Australian benefited the A-REIT sector for the next 6-12 months because Australian REITs performs better than the broad market because any local and foreign investor have more confidence to invest and focus to gain income than the capital gains.

According to Simon Garing, Analyst of Bank of America Merrill Lynch, “We expect they (ASIAN REITs) will continue to underperform for the first half of the calendar year. Australian REIT’s have been sort of a safe haven.” A-REIT sector currently offers a dividend yield of 6.6% and Australian Central bank was expected to cut rates to stimulate the economy.


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Australian and New Zealand Bank announced last 10th February 2012 that it will increase interest rates for variable rate mortgages and small business lending by 0.065. We remember that last December, ANZ was the only bank who passed Interest rate Cuts and unfortunately the Interest rate cut didn’t happen. ANZ’s decision regarding this review, really increased competition among banks for consumers and business deposits. Effective last 17th of February 2012, ANZ’s new standard variable mortgage rate was 7.36%pa. The intense pressure on retail and business margins are one of the considerations why ANZ came up this decision and also because of the increased competition among banks for consumer and depositors.


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National Australian Bank (NAB), February 15, 2012 released its Quarterly Australian Property Survey and it showed WA remained the strongest state now and over the next 2 years. Commercial Property Index still negative territory with (-6 points), but it was a slight improvement from (-13 points). WA led the entire commercial property sector including office, retail and industry segments and it’s proven by the survey that Australia’s CBD hotels and office was currently strongest in today’s conditions. According to the survey, conditions were strongest in WA but a biggest turnaround is expected in Queensland. Victoria is the weakest state as identified the very weak retail property market. WA particularly Perth are home to major international companies in which one of the factors why the state is remained strong.


 

Commercial Property Survey Summary (Dec-2011) (2).pdf (200.94 kb)


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According to Rismark’s Christopher Joye, “We are counting almost 300,000 homes advertised for sale across Australia, which is more than 30% higher than the same time last year.” The large of number of properties available for sale implies buyers will continue to hold the balance-of-power at the negotiation table. Australia’s housing market may be starting soft and turn the corner. Nowadays, vacancy is tight and rents growth is now accelerating. Because of the trade and home buyers entered into the market, sales volume improved with reasonable price. Consumers’ confidence is more optimistic now compared last year and consumer still hoping that there will be interest rate cut. Indeed, property market looks positively competitive and strong that makes extreme volatility.


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David Airey, REIWA President said, ‘the media price for both houses and units in Perth while only point prices increase in the regions. Sales were also up and the number of selling days came down.” Last December 2011, REIWA result released that this first indicators of housing recovery and the market are more encouraging. Because of the home-buyers and up-grade buyers who entered the market, there were modest increases in Perth’s median price with the price range of $500,000 to $700,000 and he land price in Perth costing $240,000. These are indications that buyers and sellers are more confident and aggressive to obtain home.

Based on REIWA, smaller unit and apartment market increased by almost 4%, and the selling days have fallen by 4 to 77%. The rental of vacancy rate in Perth has tightened to 2.3% and house rents increased by $20. First home b-buyers remain active in WA market, so it means that market will become stronger and of cause with the influence of mining and resources sector.


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According to RUN Property CEO Rob Farmer said 24 suburbs in Sydney and 18 in Melbourne saw rent increases of more than 6% for tenants in January, compared with the same time last year.” Rent in Australia’s suburbs have increased by up to 13% in the last year with the biggest hike at Edge cliff in the eastern suburbs. Based on the latest report from Run Property shows that tenants are paying about $60 more a week compared last year and showed that there was still value in investment properties. The popular suburbs close to beaches, major shopping centers or train stations continue to go from strength to strength for investment property, Mr. Farmer said. This means that it starting to flow back into investment property, sales market is starting penetrating the market and buying opportunities are there.


Tags: Home Rent

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The Reserve Bank of Australia (RBA) reduced its interest rate by 25 basis points or its 4.5% last November and this was followed during December in 0.25 basis point at standing rate of 4.25%. The said two consecutive interest rate cuts have helped boost Australia’s Real Estate sector. A survey shows that after the interest rate cut new home sales received a welcome boost in November.

According to the HIA Chief Economist, Dr. Harley Dale, “a long way to go to restore new home sales volumes to acceptable levels, nothing that the number of such transactions is currently running at least 20% below what you could conservatively call healthy.” This means that the real estate market is not in the clear yet because this month, supposedly there is expected interest rate cut unfortunately it didn’t happen and it will remain on hold. Interest rate cut really affects the Real Estate Market sector.




Last Tuesday, The Reserve Bank of Australia announced that there is no interest rate cut and rates will remain on hold. Australia is most fortunate because Australian banks are the top performing in the world-as too the property market marks and the Australian Economy is building momentum. Its better you have your own weapon loaded so when the crisis comes, you can hit it will full force, Warwick McKibbin said.

According an article in the China Daily last week, “Real estate down under proving to be very attractive; Chinese investors are showing an increasing high level of interest in the Australian property market.” 9% of 30% share foreign developers are Chinese developers took in Australian apartment market last year. The biggest market sits along in the east coast in Australia’s two largest cities: Melbourne and Sydney. Most foreign developers are proposed in about 80% of the total number of apartment located in these two cities. 2012 will be a tough year, money will be tight but it allows property niche markets to consolidate.




Last December 2011, Australian Bureau of Statistics (ABS) released their capital city house prices, and the weighted average of price house index decreased -1.0% in the December quarter.

According to Louis Christopher, Managing Director of SQM Research, predicts that by June 2012 home prices in Melbourne, Brisbane and Perth will be as much as 15% below their 2010 peaks, assuming no rate change from the reserve Bank. Sydney’s outlook is more positive. Brisbane and Perth house prices had dropped about 6% so far this year and Canberra’s house prices were essentially flat. Analysts will get a clearer picture of the overall health of the economy and predicting a rebound of 1 % in gross domestic product.

 


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The Reserve Bank of Australia (RBA) announced that there will no interest rate cut this February as analysts forecasted last month that there will have twice Interest rate cut this year. February and August are those prospected months but RBA announced already that he official cash rate steady at 4.25% and the Aussie dollar standing still strong.

According to Governor Glenn Stevens, “with growth expected to be close to trend and inflation close to target, the Board judged that the setting of monetary policy was appropriate for the moment”. Last January 2012, ANZ made no interest changes because last December 2011, ANZ announced that they would make interest rate announcements independent from RBA. Analysts expected to another interest rate these coming months and official rates will expected to fall by 50 basis points.


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At the end of 2011, Perth house prices jumped by 0.5% in the month of November leading the first seasonally adjusted increase in capital city house prices since December 2010. Modest median price increase around 0.5% and the slightly movement represents the first lift median price since March 2010.

According to RP-Data article released last December, Perth Residential property Market ended with positive outlook. Perth’s house price increased by 0.5% and home values rising by 0.1%.The two Reserve Bank’s two Interest Rate Cuts appeared to be having a positive effect in Property Market and its will drive into more demand in homes and property prices increased. Because of this report, CommSec expects Australian Property prices to grow around 5% in 2012. RP Data also observed about the rental markets continued to strengthen this coming month.


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The Reserve Bank is tipped that there is an official cut rate to 4% today and it should supposedly the 3rd reduction in Interest rate since last year. The Big four Banks namely ANZ, Commonwealth Bank, Nab and Westpac are played a big role in Interest rate cut but the four banks pass on only a fraction of Interest rate Cut. The NAB’s head of personal banking, Lisa Gray explained that the bank was “committed to having the lowest standard home loan rate of the major banks’ throughout 2012.

According to Federal Treasurer Wayne Swan, “There was no excuse for the banks not to pass on the full rate cut as government reforms had made it easier for customers to switch lenders.” We all know that the November and December interest rate cuts really helped and give families a relief especially their mortgages. Mr. Swan said that the official interest rate of 4.25% compared favorably to the 6.75% rate at the end of the Howard Government. Most economists forecasted that the big four banks will pass on only 0.25% rate this month and they are expecting the Interest Rate cut will pass on or before Valentine’s Day.


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According to the latest survey by National Australia Bank (NAB), House prices in Australia are expected to decline moderately. The NAB’s Residential Property Survey, December survey showed a notable drop off but adds weight to expectations that house prices may flattened. First home buyers are suspected to have stronger demand to have interest rate cut and softer house prices. National house prices are forecast to increase by 1.2% by December and WA are expected to out-perform with 3.2% growth.

Survey respondents showed positive report in rental growth, house rents increased by 1.2% and house prices are expected to grow by 1.2% by December 2013. The survey is now forecasted to rise over the next 12 months led by a strong pick up in WA and NSW where income growth are expected to rise and the two states are the next strongest states among all states. Housing markets conditions are expected to weaken but still trends are expected to unchanged.


Tags: house prices, nab

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According to National Australia Bank (NAB) Residential Property Index, consistent confidence in Property market still strengthening a little last December. Even though house prices declines and stronger rental growth, but still business conditions remain consistent with the market growing. The two consecutive interest rate cut had a great impact in the December quarter. National house price continued to fall but rental growth is accelerating. Among the conditions in all capital cities, WA is the strongest mainland conditions recovered but Queensland and Victoria were the poor conditions recovered. First home-buyers and investors are notable increase in the market in which the property remains strong because of the higher demand; therefore there were the best prospects for capital and rental growth.

NAB forecasts that there will have bigger increase in the house price and rental growth in which really helps the market and the economy as well to perform well. Some indications showed in this survey like labor market, shortage of housing, and unemployment rate is low. Although we now expect that there will be interest rate cut this year particularly February and August. Trends will continue because of the first home buyer by slightly stronger investment dema

 

Residential Property Survey _December 2011_.pdf (194.86 kb)


Tags: nab survey

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Based to RP Data-Rismark showed Australia’s house prices fell in very quarter last year but they may have hit the bottom. Last December was the year’s smallest quarterly decline. The housing market continued to soften in the last few months of 2011.

According to Dr. Andrew Wilson, Senior Economist of Fairfax Media- owned Australian Property Monitors, “although the rise in the national median price was modest, ti was nevertheless the first increase recorded since December 2010 and provides some hope that the national housing market is bottoming out after a generally subdued 2011.” A stable house price in Sydney and Melbourne Median house price rose were the main contributors to a small rise house price. The harbor City’s steady house performance over the December quarter was result of prices growth and makes most of the capital cities will continue performing better to hit the bottom.


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