Should we worry the Economy? Market conditions were to further house prices gains. Interest rate is on hold which is low. The current pace of growth is likely to hit.

 

According to Australian Bureau of Statistics (ABS), “gross Domestic Product (GDP) growth through 2013 is 2.8%, in seasonally adjusted terms.” It shows that Australia’s economy grew and expected to rise. Domestic final demand rise by 0.1% which is good to experience. Australia’s economy was about to embark on the mining investment boom which boost the Australian income. In order to have strongly rising income, we need to have strong employment growth.

http://www.perthnow.com.au/business/economy/australian-gdp-rose-08-in-the-december-2013-quarter/story-fnkjjouy-1226845769749


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Consumer confidence is one of economic indicators. It measures the optimism of the consumers to the economy. Housing market depends on the consumer confidence. When economy expands, typically consumer confidence increases. Will consumer confidence performs well to the market?

According to RP Data research Director Tim Lawless, “A drop in consumer confidence could put a dampener on the housing market, which had shown strong improvements since the start of the year.”For the previous month, consumer confidence had fallen and purchases decrease. The market is slightly pessimistic because of the unemployment. When consumer confidence is high, consumers will purchase/invest more houses that lead to have an optimistic market.

http://www.perthnow.com.au/realestate/lower-consumer-confidence-could-put-a-dampener-on-the-market/story-fnhlgp12-1226858156877


Tags: Confidence

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In just a glance, we see that housing might seem affordable because of the interest rate on hold. Will the home price growth continue in major cities?

 

According to CommSec Chief Economist Craig James, “Home prices are about four time’s household disposable income.”  It shown that Australian homes are still affordable and unchanged from a decade ago. It is very clear that the reason why housing is affordable is because of record low rates. It strengthening the weak wages and offset the higher repayments. And now we are benefiting the low interest rate.

http://www.perthnow.com.au/realestate/housing-is-still-as-affordable-as-it-was-a-decade-ago/story-fnhlgp12-1226860006595


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There are a lot of factors driven in house price growth. The economy, rising demand, scarcity and confidence are factors that influence the property market. Is the house price a good start to pause?

 

According to RP Data Head if Research Tim Lawless, “ The likelihood is that the weak reading for February is an adjustment from the strong readings in December & January, rather than the beginning of a flat to negative growth phase across the macro level housing market.” Pause in house price is not a bad thing; instead this is the adjustment of property market. All factors work together in reaching the market peak.

http://www.theaustralian.com.au/business/property/housing-price-rises-hit-a-pause/story-fn9656lz-1226844122410#


Tags: house prices

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According to the latest data from the Real Estate Institute of WA, “The vacancy rate for the Perth metropolitan area rose to 3.8% in November, December and January, up from 3.2% in the September quarter.” Renters are experiencing the benefits of the highest level of rental vacancy. Because of the high demand, rental property is rising. Even the rent is quite increasing; many potential tenants are fighting for rental property. The rent is more affordable at the moment. Properly confidence survey has a greater optimism and has economy growth.

http://www.perthnow.com.au/realestate/news/new-perth-vacancy-rate-a-win-for-renters/story-fnhlgriw-1226839705396


Tags: Rent Vacany

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Job growth makes the market become stable. It boosts the demand for housing sector and leads to improve the conditions in the housing market. Will it continue? Will the state creating more jobs?

 

According to the Central Bank, “With inflationary pressures building, there is a need to return interest rates to more normal levels.”  When the job created, it helps to have a healthy real estate market. Employment growth is driven by the largest infrastructure since Industrial leads the survey. Without employment, housing market weaken. But with the consistency of job growth, housing market would continue to flourish.

http://www.bbc.com/news/business-26555935


Tags: jobs

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Reserve Bank has decided to leave the interest rates on hold again this month. Through thus, lower interest rates influence the housing market to rise. But it provides positive indication of housing activity. It is a sign to have optimistic outlook of Australian Economy. Most of the 8 capital cities perform well and Sydney remains the best among all capital cities.

 

Perth housing market remains solid and still strong property market. Western Australia has a highest market of first home-buyers which really helps the activity. More houses in the market, regaining confidence and strong property market are signs of recovery.

http://news.apm.com.au/apm-news/march-national-housing-market-report-20121213-2bc7c.html


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On March meeting, Reserve Bank of Australia (RBA) released the cash rate on hold at 2.5%. This is a sign that economy shows good signs because construction sector performs well. Mining construction subdued but industrial sector like construction plays a big role to help sustain the recovery. As expected, performance of the construction industry is very strong for a long time, many expects that RBA will cut the cash rate by the end of the year.

 

According to Alan Oster, Chief Economist at National Australia Bank, “RBA may be forced to cut rates this year because of rising of unemployment and the continued unwinding of the mining investment boom.”

http://www.theguardian.com/world/2014/mar/04/reserve-bank-keeps-interest-rates-hold


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Perth market bounced back but last February returns the strength. We have more sales data last month and this result indicating the result to help provide a better market. The Interest Rate is one of the factors affect the market. RBA’s decision is to retain he cash rate at 2.5%. Is this strength for investors for the future investments?

According to RBA Governor Glenn Stevens, “The nation’s overall financial situation was accommodative, which has been stimulated by low long term interest rates and the reduced risk associated with people borrowing on products such as investment home loans.” I think retaining the cast rate at 2.5% somehow helps to gain more confidence. More sales last month that makes the Perth growth become steady. It strengthening also the property market because of the balance of supply and demand that we are experiencing. So, if you interested in investing property, this could be the time because property market is getting better.

http://waproperty.net/property-news/market-trends/retained-cash-rate-good-for-future-investment//


Tags: cash rate

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Australians are being priced out of the housing market and median prices have risen. Based on the survey, overall impact for property market is negative. But as long as we are open for business and optimistic, Australian economy will boost. Is this a good start for Australia’s property market?

According to RP Data Research director Tim Lawless, “The results showed that Australia’s combined capital cities has “taken a breather” during February recording zero month to month growth.” All eight capital cities perform well for the month of February. There is no price growth for the month. This is the adjusting period in coping the market and this is the beginning of having a better property market. Even the buyer demand is very strong, but still housing market condition is relatively affordable. Indeed, property market is seeing recovery and hoping to continue in order to have a positive outlook.

http://www.perthnow.com.au/realestate/property-market-takes-a-breather/story-fnhlgp12-1226843488470


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National Australia Bank’s (NAB) Commercial Property Survey released last February 26, 2014. It is stated that overall impact still overall negative. The retail property has positive outlook and it boasted opportunities. If the market could see increased activity in the coming months, definitely, this would be the driver to encourage more investors. But rental and capital expectations were generally lower in all. Indeed, overall sentiment, Industrial is now the strongest and predicted to continue for 1- 2 years. Industrials sector replaced the Hotel CBD last Commercial Survey.  This sector expects to continue to become stronger and have higher incentives.

Commercial Property Survey Summary _Dec 2013_ (1).pdf (356.77 kb)


Tags: nab survey

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