Homebuyers’ optimism is being driven in creating a buyers’ market. Nowadays, increasing rents have led by the homebuyers to enter the property market. In balancing factors in everyday living are the cost of living, lower house and Interest Rate Cuts.  Are there really concerns in boosting homebuyers’ confidence? Is this really helps to stimulate growth?

According to the latest CBA/Mortgage and Finance Association of Australia Home Finance Index, “Buyers in Australia are more confident about buying a house or apartment now than they were six months ago.” Homebuyers believe now that it is a good time to buy a new home and renewed confidence is a positive indicator for the property market. Interest rate cuts plays a big role also in property market and if there will be interest rate cut ,it will serve as a boost for real estate and homebuyers are turning optimistic.


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According to Commonwealth Bank Executive General Manager of third-party Banking, Kathy Cummings, “About two-thirds of first homebuyers believe rentals are too expensive, and about 40% feel they are caught in a rental trap.” Rising rents is one of the factors that have homebuyers considering if it is time to take the plunge. Home buyers are entering the property market due to rising rents and dropping vacancy rates. Because of these factors, it is definitely driving home buyers to buy instead spending too much for rent every week. It is more feasible to purchase property. Based on the research of CBA/Mortgage and Finance Association of Australian, it found 17.2% of the home buyers were planning to enter the housing market and were holding back due to a fear of future job redundancies.


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Many are struggling to find somewhere to live because of the tough rental market that we experiencing now. Based on the new figures from Property Analysts RP Data, “In Churchlands, median rental asking prices leapt $290 from $700 to $990. The median price increases because owners want to have bigger rental profits and tenants struggling to obtain the property that they wanted because of the scarcity of houses.

 

According to “Independent Property Analyst Gavin Hegney, “People moving into the state have tended to move into rental accommodation hence the vacancy rate has very quickly dropped from 4.8% to its current level of 1.9%.” Rentals in some Perth suburbs are increasing because of panic in looking for a house. Some areas had a higher priced properties dropped in the market but rental market would ease and reach the balance equilibrium between supply and demand. Looking forward that property markets will become steady and balance to come up reasonable pace market.

 


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According to Urban Development Institute of Australia, released last May 16, 2012, “In the past six months the Rockingham suburb of Baldivis has been the standout location for the first homebuyers,” First homebuyers are returning now in the market and month of May, consumers’ confidence slightly lift. Most of the urban suburbs in Perth dominate sales and Baldivis has been the top among all the suburbs in Perth with 304 homes sold followed by Ellenbrook with 231 and the third was Canningvale with 210 homes were sold. Actually, low rental vacancies and increasing rent are driving to increased activity the housing market. Last March quarter housing financing commitments rose to 32.7, home sales increased to 4.4% and median price of dwelling bought by a first homebuyers in April was $420,000.


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Based on the statement of Reserve Bank of Australia Deputy Governor Philip Lowe in ADC Future Summit in Melbourne, “the central bank expects inflation to remain contained, but that the nation’s two-speed economy will continue with non-mining sectors logging behind the resources boom.” Actually, there are a lot of factors we need to consider in the stability of Australian Currency and one reason is the above-mentioned. Since December, this is the first time that Australian Dollar briefly fell. Australian dollar fell as low as 99.97US cents and this is the first lowest since December. The rate of inflation and the decision about the interest cash rate by 50 basis points are some factors to ease the monetary policy.


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According to National Australia Bank (NAB) Chief Executive Cameron Clyne, “House prices could decline further, but he expects the Reserve Bank of Australia (RBA) to cut interest rate by another 0.5% of a percentage point this year.” Last March quarter, national weighted average house prices fell 4.5% and Melbourne was the larger decline by 6.6%. Perth fell by 1.7% and Sydney, which is the largest property market dropped by 4.6%. Not passing rate cut in full by the four major banks also affects why house prices decline and does have an impact to consumers’ confidence. There are so many factors affects but I think the key factor was the unemployment because last month unemployment dropped by 4.9% and influenced the movement of house prices.


Tags: house prices, nab

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These past months, many potential buyers lacked the confidence to purchase a house because they were carefully watched the median price coming down. Nowadays, I think housing market has bottomed out and potential buyers are returning in the market. Is this possible recovery for housing market?

Real Estate Industry Association released figures last May 04, 2012, “Perth median house price over the March quarter rose for the second time in six months, up by $2,000 on December to $467,000. Perth’s housing sales recovery is firming.” Tightening of the vacancy rate is the reason why we have strong movement in rental market now. This picture indicates positive outlook of the market and have greater impact to the consumers’ confidence to play a major role on the pace of the market.


Tags: perth

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The Australian and New Zealand Bank or commonly known as ANZ Bank is one of the four largest banks in Australia. ANZ was the last bank to passed interest rate. What are the reasons why? What was the sagacity behind this decision?

According to Financial Economist and Director of Yellow Brick Road Funds Management, Christopher Joye, “ANZ has copped flack for its attempts to decouple from the RBA and it will likely be the last bank not to pass on the full 50-basis-point cut.” ANZ unilaterally jacked up rates in February and April 2012 and only increased 6 basis points. ANZ stands out in terms of cost and price margin of products. ANZ decided to delay the rate cut maybe because it can chisel back a few points of margin it needs to over the coming months.

 


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Based from the Real Estate Institute of WA (REIWA), Perth rental listings fell by 500 in just a week last month. The rental vacancy rate is now 2.3% compared to 2.8% last December 2011. However, despite the falling number of rental properties, the median rental price is still the same at $380 per week for a unit and $240 per week for a house.

According to REIWA President David Airey, “January was traditionally the busiest period for tenancy changes because more people moved in between school years and university students sought new accommodation.” Because of the unnaturally busier period of high demand, it really puts a lot of pressure in the rental market. It is a just a lack of rental properties and next few months, we still believe and anticipating a normalized market and rent price will be flattened.

 


Tags: perth, reiwa, rent

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Last April 18, 2012, International Monetary Fund officials in Washington (IMF) announced that “Australia has the strongest economy in the developed world and it expected to outperform all comers for at least the next two years.” The financial stability of Australia is gradually improving. IMF forecasts with the global economy expected to grow by 3.5 in 2012 and Australia’s unemployment rate remained low at 5.2%.

According to Treasurer, Wayne Swan, “With solid growth, low unemployment, contained inflation, strong public finances and a record pipeline of business investment, the Australia Economy is the standout performer of the developed world. Cutting Interest Rates really helps in budget surplus of the country, Cutting rates, solid growth and low unemployment are the factors of a strong economic fundamentals of a country. Therefore, IMF’s confirmed Australia leads the world because of strong economic fundamentals and Australia Economy is the standout performer because of these factors.

 


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Real Estate Institute of WA (REIWA) released for the March quarter shows sales were up across the state. The median house price in Perth is around $467,000 which REIWA said was staying steady, indicating house prices, have stopped sliding. Because of the sales activity in WA property market has strong increase, consumer confidence is returning now in property market.

Australian Property Monitors released data last April 27, 2012, Perth house prices had raised by 0.1% over the past three months and the city’s property market, along with Sydney and Brisbane, remain the last prospects for growth this year. Sales is increasing, rent is accumulating, is this one of the indications that the market is growing? Is consumer confidence really returning the property market?

 


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Yesterday, May 01, 2012, industries bodies were holding their breath as they wait for the country’s official cut rate announced by Reserve Bank of Australia (RBA). The four consecutives months keeping the interest rate on hold at 4.25% but RBA released yesterday that country’s official cash rate by 50 basis points to 3.75%. The big four banks namely Westpac, ANZ, NAB and Commonwealth are remained silent with the official cut rate. Only ANZ spokewoman said, “the bank would not make decision until May 11,” while the three banks remained quiet.

Dana Masson, Senior Economist with the Chamber of Commerce and Industry WA said, it was good news for WA employers who are struggling due to sluggish trade.

Australian Retailers Association President Roger Gillespie said, members were “rejoicing” over the decision, but were now waiting for the big banks to follow through.

ABN Group Managing Director Dale Alock said the news would provide a welcome boost to consumer confidence and help West Australians get out of the “rental trap”.

These are the views and opinions from different sectors in the industry. Would the released interest rate cut really helps to bring back the confidence of the home buyers? Is this the perfect timing to support the recovery of the Western Australian Property Sector? Well, we really don’t know because we still depending on the big four banks to pass on the full reduction. After the first cut rate for five motnhs, still industry leaders don’t lose hope and still believing that this is not the first and the last cut rate this year.


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Basically, rents are expected to increased because of the high demand and low supply. The vacancy rates remains low but the demand is too high and tenants increased competition for houses, villas and townhouses. in this scenario, it really affects the rents of the properties? is median  rents increased?

According to the Real Estate Institute of Western Australia (REIWA), Perth median rents have increased to $420 a week during the March quarter, up yo 10% from the same time last year.” It shows the level of rental accommodation has improved and vacancy rate does not dropping. The strong demand for accommodation in Perth is one of the factors why rent in Perth increased.


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