According to the Eight Annual Demographic International Housing Affordability Survey, “A median-priced house in Australia’s major cities was an average of 6.7 times the median household income.” Australia has bigger population in coastal areas and lack of new build ensures and this one of so many reasons why Australian housing continues to be one of the world’s most expensive. Sydney is the first retained city in Australia as the most unaffordable city with median price of 9.2 times median household income. It happens in a country with a shortage of anything like houses or land that driven the country as the most expensive country to live.


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According to RP Data-Rismark Daily Home Value Index, “Melbourne led a rebound in capital dwellings prices in February, with the Victorian capital recording 1.8% growth for the month. Based on the report Melbourne house prices received a boost on the last day of February rising 0.67%, but overall capital city dwelling values increased 0.8% in February 2012. Sydney increase with dwelling prices rising 0.8%m while Brisbane values were flat 0.1%. Perth dwelling prices continued to fall by 1.8%. The most impressive with dwelling prices up to 5% during February was Darwin and was the strongest-performing capital city market for the part-month to February. Despite of the weak monthly result last February, Perth dwelling values were up 0.8% over the last 3 months. Perth housing demand being driven by strong population growth corroborated because of so many resources investment.

 


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According to UDIA Chief Executive Debra Goustrey, ‘Tight rental conditions combined with decreasing housing stock coming on the market are driving increased residential land sales, strong first home buyer activity, and increasing new home sales. The Urban Development Institute of Australia says, there’s a light of the tunnels for WA’s property market. All of the leading data Perth was one of the stronger markets in Australia because median price is accumulating and most of the developments are on Perth. The housing finance commitments increased to 1.3% during December level. We anticipate that residential prices to rise by 2%-4% per annum and Western Australia is likely to lift higher than Australian average.


Tags: UDIA, WA

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According to the new daily house price index launched by RP Data and the Rismark through to the March 27, “Australian house prices are not falling, which makes a change from the deflating conditions that prevailed during much of 2011.”  The health of the market is the fact of first homebuyers and historically high 20% in January, as proportion of all loans approved and this was well above the 17.5% average in 2011 and better than long-run average since the ABS began collecting this data. It shows that homebuyers would start to act on the improvement in the purchasing power. Last January, home values declined but recovered these losses in February and March and the eight biggest Australia cities including Perth are, on average, unchanged. But despite all the factors that threatened the economy,  we are still the reasons to be optimistic because total returns real investors has probably changed due to more income and less capital growth..


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According the study conducted by Lloyds TSB for their International Global Housing Market Review, it shows that Australia is on the top 10 list with highest house price increase. Australia had the ninth fastest growing house prices, with increase of 76% between 2001 and 2011.Here are the top list countries in which house prices increase over the past decade.

          Country                                    Real house Price changes % 10year pa.

  1. India                                        14.4%
  2. Russia                                      12.0%
  3. South Africa                               10.1%
  4. Lituania                                     9.3%
  5. Hongkong                                  8.4%
  6. Bulgaria                                     7.5%
  7. France                                       6.2%
  8. New Zealand                               6.0%
  9. Australia                                    5.8%
  10. Norway                                       5.5%

Even Australia are over inflated and house prices slumped for almost 6% last year but Australia are on the top 10 worldwide that house prices increase. It means Australian Economy is growing because housing market has risen fastest in countries with higher GDP and has boost economy.


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Based on the REIWA figures released last March 14, 2012, Tenants in Perth are facing higher rents because of the plunging vacancy rate for rental accommodation. Perth recorded a vacancy rate of 1.6% and it showed variation across the city volatility. The vacancies rate along Perth ranged from Scarborough at 1.2% and probably increase at 1.5% for the three months of February while the Western Perth suburbs have a steady rate at 2.3%.

According to REIWA President David Airey, “The fall in the vacancy rate is not surprising as we have seen the volume of property listed for rental fall 24%, from 2900 homes to 2200 at the end of February.” In this case, March quarter is the strong seasonal demand for rental property. Rental accommodation vacancy rate is sinking because of the pressure was coming from the people to rent rather than to buy. One factor also for growing rental demand is from the new migrants arriving in Perth.

 


Tags: perth, reiwa, rent

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According to Genworth Homebuyer Confidence Index, “this polls sentiments about buying as well as mortgage stress, found a recent drop in people struggling to make repayments and an increasing comfort with debt.” Consumers’ confidence is on the rise despite all the household bills in which households bills are a major stress on the budget. Cost of living really pressures to households but nowadays, this negative factors are being offset to positive factors like wage growth and interest rate cut.

Property Adviser Margaret Lohan said, “We are at a time when housing is the most affordable it has been for a decade.” It’s the first time that consumers’ confidence is on the rise since 2009. Autumn was the time for the new property listings to attract prospective buyers. The realestate.com.au shows that the real estate listings increased and the market continues to boost.




According to Westpac Senior Economist Matthew Hassan, “the growth towards the end of 2011 particularly in November was the weakest seen in more than 10 years.” The Westpac-Melbourne Institute posted an annualized growth rate of 2.6% in January in which the report shows the Australian Economy will continue to grow at a below-trend pace.

 

The report indicates the situation had improved slightly but growth still remains weak. No interest rate cut, manufacturing prices and increase in unemployment are the components driven to slowdown the economy growth. With our expectation to deteriorate all of those, rate cut these coming months is the best expectation because the market will more comfortable and the cut may assist the economy to grow.


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According to RESIDEX, Perth is exhibiting an increase in sales activity, but only at 15% of the sales activity occurring in Sydney and Brisbane. The housing market remained in neutral in February, with Perth the standout market.” Perth house prices appreciated by February and Melbourne house prices have depreciated and the weakest performing capital. Please refer the data below for the February Houses result of RESIDEX:

Median Price                    Change Over Feb.

  • Sydney          $657,000                        +1.35%
  • Melbourne     $ 558,500                        -1.02%
  • Perth             $ 468,500                       +2.32%
  • Brisbane        $ 422,500                        -1.12%
  • Adelaide        $ 387,500                        -1.22%

According to CEO John Edwards, “does not share this gloomy outlook, predicting that housing market is about three plus months away from any Australia-wide pick-up.” Australians are surely likely to pay the debt rather than to borrow funds for home purchasing. Australia’s major banks have been forced to pass RBA to increase mortgage rates because last January, new home sales drop 7.3% in capital city.

 


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Last March 7, 2012, Real estate Institute of Australia’s (REIA) December quarter, Deposit Power Housing Affordability Report has recorded improvement in housing affordability in 2011. Homebuyers are entered in the market but nowadays potential homebuyers are dropping because of the economic uncertainty and interest rate rise. Is the Interest rates affects housing affordability? Is the key factor why buyers are scared off to purchase?

According to Deposit Power’s National Manager, Keith Levy, “Interest rates have a big impact on affordability for existing homeowners and can also be major deterrent for those looking to enter for the first time.”  In a positive side of the picture, first home buyers have experienced a small  increase and are returning to the market in which consumers’ confidence will be back and hoping that there will be changes to improved affordability. Interest rate cuts really help in growing confidence in property market.


Tags: Homebuyers, REIA

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We all know that tightening in the market makes median rent increase likely, particularly in villas, apartments, villas by $10 to $390 a week while rent for houses remained steady at $420 a week. Did affordable house provider really ease the burden in property market?

According to Foundation Housing chief Executive Kathleen Gregory said, “While the housing affordability crisis was severe there were many positive developments in WA aimed at increasing affordable housing for those most in need.” The said foundation released of 15 refurbished apartments in which they will give some comfort for those who have low income earners. This non-profit Group facilitated an increase of 522 tenancies across WA and have 250 dwellings in development across Perth and regional WA.


Tags: perth, Rental

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The tightening in the market today has been seen in the median rent for units, apartment, villas and townhouses increase by $10 to $390 a week. Based on the Real Estate Institute of Western Australia (REIWA) data, Perth’s rental crisis continues to worsen and vacancy rate falling as median rents rise. Along Perth’s North coasted market from Scarborough, vacancies upward was at just 1.25% for February and 1.5% for the three months to February.

According to REIWA President David Airey, “rents for multi-residential dwellings had goes up, rents for houses remained steady at $420 a week. The vacancy rate has tightened in Perth in which growing demand for accommodation from migrants goes up in WA. The long-term equilibrium vacancy in Perth is 3% in which property market is now positive and moving upwards.


Tags: perth, reiwa, rent

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Based on the National Australia Bank (NAB) monthly business survey dated March 13, 2012 revealed that WA business conditions and confidence levels are bucking the national trend and are the highest in Australia despite conditions weakening the mining sector. These trend marked WA remained the strongest state for all overall business conditions and confidence. Although there are more indications that mining investment is a track and based on the survey, business conditions were strongest in transport and utilities. Despite of the RBA’s decision to keep rate on hold last February, the overall confidence remained positive and Australian dollar persistently strengthening which business confidence remained far.


Tags: nab, WA

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Based on the CBRE’s latest Market View report, “some key infrastructure projects might improve the languishing market, such as the under construction Fima Stanley Hospital in Madurah, which is expected to help the near South Residential markets as employment opportunities improve. This sector really helps the picture to improve even Perth’s Residential Property is still struggling now. Nowadays, property prices are falling but because of the massive mining and resources industry, WA is still considered as the strong economic outlook.

Even Perth Property Market continues to be very soft, long –term expectations for the market are strong to population growth relating to mining and resources sector. These sectors really help to driven up demand for residential property and Western Australia has provided the large supply of large-scale projects in which WA remains stable economic outlook.


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According to Treasurer Wayne Swan, “a grim global backdrop, particularly the major slumps in European economies which lowered demand for Australian good and Investment.” The Government wants to announce in May that there is sluggish economic growth and this announcement will be raising a chance to interest cut. The Australian Bureau of Statistics reported that the economy grew by just 0.4% in the last three months of 2011 and growth was 2.3% which was well below forecasts. Government budget has the great impact of all factors on the economy and household’s savings fell to 0.6%.


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Reserve Bank of Australia Governor Glenn Stevens’ statement last March 06, 2012 cash rate decision, “Recent information is consistent with the expectation that the world economy will grow at a below-trend pace this year, but does not suggest that a deep downturn is occurring.” The board was decided to leave the cash rate unchanged to 4.25%. The following are the possible reasons why cash rate unchanged:

  • Commodity prices declined for some months.
  • Financial pressured on banks in Europe in which Europe is a potential source of shocks for some ttime yet.
  • Financial market sentiments continued to improve in recent weeks.
  • Labour market conditions softened and unemployment rate increased slightly.
  • Interest rates for borrowers have slightly risen.

The RBA board still judged that setting of monetary policy remained appropriate for the moment with growth expected to the close. The board will continue to monitor the following conditions, and hoping the board will adjust the cash rate to foster sustainable growth and competitive market.

 

 

 

 

 

 

 


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Last March 06, 2012, the Reserve Bank is expected to keep the official rate on hold by 4.25% still. Based on the survey of AAP, 13 Economists found there was unanimous expectation that rate would still remain by 4.25%. Four major banks raised rates independently in which consumers will become cautious and property market may get off. Anyhow central bank remains comfortable with both inflation and unemployment.

According to RBA Gov. Glenn Stevens said, “With growth expected to be close to trend and inflation close to target, the board judged that setting of monetary policy remained appropriate for the moment.” Some strategists don’t loss their hopes and still believe that Interest Rates will eventually come down in which Australian Economy struggling to have high Interest rates and strong currency.


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According to RP-Data Rismark, “After a fall of -1.0% in January but remains down last year, National Residential Prices were up to 0.8% in February. The new five cities who are really increased are Sydney, Melbourne, Brisbane, Adelaide and Perth. These five cities had changes in median price last February over January:

                                Sydney                              $472,750

                                Melbourne                         $465,000

                                Brisbane                            $410,000

                                Adelaide                            $375,000

                                Perth                                 $446,000

Sydney and Melbourne are edging upwards but Brisbane and Adelaide are subject to fluctuations in prices, among five cities, Perth is showing some price reductions after a strong recovery in price in January 2012. Sydney prices may reduce in coming months. I think the general outlook shows stability of prices in 2012 because housing finance is up and homebuyers and trade-buyers are return in the market.

 


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According to the new figures released last March 1, 2012 by RP Data-Rismark, “Perth’s weakened housing market is now showing signs of promise.” We all know that prior to this year, the market indicated bottomed out since October 2011 but it improved dwelling values rising 2%. It showed that home value index had risen by 0.8% even the median values in Perth fell by 1.8%.

According to RP Data’s Tim Lawless, “Perth had been one of the softer housing markets since 2008 but was now “staging a turn-around.” We are also seeing Perth housing demand being driven by strong population growth underpinned by the resources investment,” he added. Nowadays, opportunity is starting to worry and maybe take bets on house price and get boost with home value index in which designed to trade. Exchanging-traded products would allow investors to return on the housing market because it develops the optimism and the ability to obtain residential property and there is the potential to influence the volatility of other markets.


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The Reserve Bank of Australia (RBA) kept the official interest rate on hold last February by 4.25%. All 13 economists surveyed by AAP believed that there will be no Interest Rate Cut this March and cash rate would remain steady.

According to RBC Economist Michael Turner said further cuts would be influenced more by domestic factors than events offshore.

CommSec chief Economist Craig James said the Central Bank, its rates decision, would have to consider increased costs for the major banks.

To motivate RBA to cut the rate, the labour market will need to ease, inflation will need to reduce and hopefully most of all the Major Banks would follow through with the full cut.


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