WA is known for mining in the world. Would it be the reason for having a good economy? Is mining boom helps economy to rise?

According to the Structural Change and the Rise of Asia Conference in Canberra, RBA Assistant Governor Christopher Kent, “the boom had been generally advantageous in Australia.” We all know that mining boom helps the economy to rise. Mining also is one of so many resources that have been progress for so many years. WA has increase it’s immigration growth because of this resources. Many investors invested property because of mining boom.

http://www.perthnow.com.au/business/mining-boom-has-years-to-run-says-rba/story-fn7kjv7y-1226477175675


Tags: australia, Mining

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According to Angie Zigomanis, Senior Manager at BIs Shrapnel, “WA and Queensland are expected to see the biggest improvement as their economies post some of the strongest growth and also attract strong numbers of interstate migration.” We all know that WA and Queensland are more affordable capital city housing markets and tightening rental markets.  WA and Queensland are states in which supported by mining sectors. These states have many migrants because of the strong demand of mining jobs. They lead the housing market because of the stronger population growth that dwells residential building up. Based on the ABS figures, WA overseas arrivals increase with 20% and it shows population growth.

http://www.propertyobserver.com.au/trends


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These past months, Australian Market soften because of unstable house prices and tightening in rental market. Despite of, Australian residential property coped up and consumer confidence slightly comes back on the market. House prices increased by 1.6% in all Australian’s state capital cities. Are mentioned-above considered as signs of having stable housing market?

According to Research Director at RP Data Tim Lawless, “One of the reasons why Australian Property has climbed in value is that it has become more affordable.” Many migrants in Australia and investors build houses or buildings so there will be an increase of supply and it put the house price become affordable. I think investors will never stop to invest and expand their investment in the market because they already seen that there is a big growth and development in Australian Market.

http://www.propertyshowrooms.com/australia/property/news/positive-signs-for-australian-housing-market_312355.html


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According to Australian and New Zealand (ANZ), “The Australian housing market is showing signs of stabilization after a period of softens and barring a global economic calamity, house prices should rise by around 4% to 5% per annum over the next two and a half years.” Low Interest Rates and the possibility of further rate cuts are some factors to encourage first-home buyers back into the market. The volatility house prices in 2012 drives to high end of the market.




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 the Reserve Bank of Australia Luci Ellis said, “we know that the key to maintaining a healthy weight is to have a healthy diet and to exercise regularly, Yet we find it hard to avoid temptation. And so it is with maintaining a healthy mortgage market. As responding to the competition in the market, giving the customers a better deal and a better service, customers want to borrow just to purchase a house. We need to have a stake in maintaining stability because financial stability in the collective interest of Australians.


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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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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.




Australian Property Monitors (APM) is predicting growth in 2012, citing anticipated economic growth and rising demand for residential properties and a new report showed that Property Markets in Australia are expected to recover this year. New homes in Australia climbed in November 2011 compared the previous months and new build- properties bought in Australia increased by 6.8%. These are first start indication that real estate may rise and recover this year and expected the reserve Bank of Australia (RBA) will have interest rate cut before first half of the year because interest rate cuts helped to boost Australia Real estate sector. Australia Property Monitors (APM) expects more interest from investors this year and asserted that house prices will climb by between 3%-5%. Because of all these predictions and expectations, fewer buyers have confidence to enter the Australia Real Estate Market in which really help to boost and rise of the said sector.

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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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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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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 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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