Friday, April 29, 2011

Worst in 12 years, March Quarter Perth Prices Drop 3.4%

Along with Brisbane, Perth has recorded the biggest drop in house prices in the March quarter with a 3.4% drop.Capital cities in Australia suffered the biggest drop in 12 years bringing city medial dwelling prices to $455,000 in March. According to another  Australian Property Monitors, the fall in March was 1.1% in Perth, contributing to a 4.1% fall since the beginning of the year. Unit prices in Perth dropped 4.9% in the same period.

Houses continue to come on the market with many buyers holding on to their savings accounts which are enjoying 6% returns. Comparing that with a slumping house market and prospect of paying rather than earning interest, many buyers are holding back from entering the market. A senior APM economist said the slump is due to high levels of stock, decline in first homebuyers and investor activity.

With inflation rate up and the strong Aussie dollar, there is a likelihood that interest rates are about to head back down. This will certainly be something that the housing lobby would like to push for as Australia continues to prosper on everything but property. Commodities, overseas trips and wages are all up and perhaps the new generation is a little more smart about buying in to the "Australian dream" of owning your own home whatever the cost.

If you are wondering how much you can bargain, sellers are selling properties at around 6.5% lower than the original asking price on average, compared with about 5.2% the same time last year.

Wednesday, April 6, 2011

Meanwhile rents have gone up

In every capital city except for Sydney, Melbourne and Darwin, house rentals have gone up according to RP Data. Rents increased by 1.4% across Australia and almost 3% in capital cities. The lack of development in 2011 and buyers holding out from buying a new property due to property prices, rental pressure upwards has been the inevitable result.
House rents in Sydney, Melbourne and Darwin were flat in the March quarter but rose 1.4 per cent in Brisbane, 1.3 per cent in Perth and 1.5 per cent in Adelaide over the same three months, RP Data said. In Canberra house rents increased 2 per cent in the quarter, while in Hobart they rose 3 per cent.

Home Loans Lowest in 10 Years!

Home loans dropped for a second consecutive month in February with New South Wales posting its biggest monthly decline in 14 years. The share of first-home buyers shrank further.
The number of home loans fell 5.6 per cent to 45,393 in February, following a revised 6.3 per cent fall in January, according to the Australian Bureau of Statistics. Economists polled by Bloomberg tipped a 2 per cent fall.
The total was lowest number of home loans approved in a month since February 2001.
Home loans in New South Wales plummeted 10.1 per cent in seasonally adjusted terms, the most since February 1997, the ABS reported. Victoria did better than the national average but still saw a drop.
“What’s a little worrying is that there are such big drops in the early part of this year," said RBC Capital markets senior economist Su-Lin Ong. The drop ''has more than wiped the out gains in the second half of last year when we saw a string of modest increases and what looked to be a little bit of resilience in households and housing in general,” she said.
Demand for home loans has sagged in 2011, after flooding in Queensland and parts of Victoria interrupted the sales cycle in those markets. Also, auction clearance rates have slumped to about 60 per cent in recent weeks in some capitals - well down from the 80 per cent levels seen a year ago - as high prices, rising interest rates and economic uncertainty deter buyers.
"Home loan demand clearly struggled amid intense flooding across the eastern states in the early part of 2011, keeping homebuyers, investors and builders on the sidelines," said Moody's analyst Matthew Circosta. "Prior to January, home loan demand had been recovering on the back of falling unemployment and rising incomes, even amid higher borrowing costs."
In raw terms, the share of first-home buyers as a percentage of the total dropped to 14.9 per cent in February, the lowest ratio since June 2004. The share fell from 15.2 per cent in January, and is barely half the peak of 28.5 per cent in May 2009 when the federal government offered incentives to draw in first-time buyers.
The average loan size for first-home buyers rose $2,700 to $277,000 in the month, while the average loan size for all home buyers dropped $2,200 to $281,500 in the same period, the ABS said.
Read the rest of the article here

Tuesday, April 5, 2011

Rates Unchanged for 5 months straight

Statement by Glenn Stevens, Governor: Monetary Policy Decision

At its meeting today, the Board decided to leave the cash rate unchanged at 4.75 per cent.
The global economy is continuing its expansion, led by very strong growth in the Asian region. The recent disaster in Japan will have a noticeable effect on Japanese production in the near term, although the impact on the broader Asian region is expected to be limited. Commodity prices, including oil prices, have risen over recent months, pushing up measures of consumer price inflation in many countries. A number of countries have been moving to tighten their monetary policy settings. Overall, though, financial conditions for the global economy remain accommodative.
Australia's terms of trade are at their highest level since the early 1950s and national income is growing strongly. Private investment is picking up, mainly in the resources sector, in response to high levels of commodity prices. In the household sector thus far, in contrast, there continues to be caution in spending and borrowing, and a higher rate of saving out of current income. The natural disasters over the summer have reduced output and the resumption of coal production in flooded mines is taking longer than initially expected. Production levels should, however, recover over the months ahead, and there will be a mild boost to demand from the rebuilding efforts as they get under way.
Asset values have generally been little changed over recent months and overall credit growth remains quite subdued, notwithstanding evidence of some greater willingness to lend. Business balance sheets generally are being strengthened, and the run‑up in household leverage has abated.
Growth in employment has moderated over recent months and the unemployment rate has held steady at 5 per cent. Most leading indicators suggest further growth in employment, though most likely at a slower pace than in 2010. Reports of skills shortages remain confined, at this point, to the resources and related sectors. After the significant decline in 2009, growth in wages has returned to rates seen prior to the downturn.
Inflation is consistent with the medium-term objective of monetary policy, having declined significantly from its peak in 2008. These moderate outcomes are being assisted by the high level of the exchange rate, the earlier decline in wages growth and strong competition in some key markets, which have worked to offset large rises in utilities prices. Production losses due to weather are temporarily raising prices for some agricultural produce, which will boost the March quarter CPI, but these prices should fall back later in the year. Overall, looking through these temporary effects, the Bank expects that inflation over the year ahead will continue to be consistent with the2–3 per cent target.
At today's meeting, the Board judged that the current mildly restrictive stance of monetary policy remained appropriate in view of the general macroeconomic outlook.

Monday, April 4, 2011

Perhaps GetUp is not the right mechanism for Buyer's strike

As mentioned recently by the advocate organisation GetUp, they have not yet decided to develop the Buyer's Strike beyond the idea stage. This is understandable as there are people who fund GetUp assuming that the organisation will support their particular interests. The "suggestion box" from which the Buyer's Strike emerged is, after all, GetUp's suggestion box. Whilst many people have supported this and joined GetUp to vote for the idea, they have their constituents to look after.

So what does that mean? 
It would seem that many first homebuyers hoping that GetUp would be the vehicle for their protests are feeling a little disappointed. For HomeInPerth, we continue to keep first homebuyers informed of the developments in the Real Estate market in Perth (and consequently around Australia as well). The best action we can take is:

Share information The problem that has been highlighted by the Buyers Strike campaign is the lack of information that people have when making decisions. If you know of tips, warnings or advice, feel free to leave comments here for others to benefit from.

Don't Rush The oldest trick in the book for sales people is to rush you into a decision. Its when we rush that we make stupid decisions. Remember, buying a house or dwelling is a decision that will affect your bank account for the next 30 years so it is a decision worth taking your time to think it through.

Increase Awareness Get to know your MPs and most likely this will be the first time that you email or write to them but it's definitely worth the time to do it. Also, pass on websites and blogs such as ours to your friends and other homebuyers to increase people's awareness about the issue of Housing. It's time we raised the stakes.

What will you do?

Most Read Posts