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Sep 5, 2018
Buyers' Growing Confidence in Brisbane
Property Buyers have increasing confindence in the Brisbane housing market in time for peak spring selling season. Ninety-five properties were registered to go under the hammer on the first weekend of spring, among reports of record numbers of bidders at open homes due to an increase of perceived value and confidence within buyers. Brisbane’s auction clearance rated jumped up almost 20% above average. There’s an overall change in confidence in the Brisbane real estate market as people are investing in Brisbane and are confident making these purchases as reflected by the prices for the homes. As earlier reported, Brisbane is one of the best performing capital cities in the country as it is not seeing decreases in property value in the way Melbourne and Sydney have seen throughout the year. The buyer confidence is also supported by the slow and steady growth as there is less perceived risk of a boom and bust within the market.
Sep 5, 2018
Potentially Good News About House Prices for Australians
According to ANZ Bank’s housing credit impulse, a measure of the change in housing credit growth, there was an increase in July. This hints that the recent declines in house prices may moderate in the period ahead. ANZ said that the Reserve Bank of Australia’s (RBA) private sector credit report for July’s details show the most notable shift an improvement in credit for housing investors which rose 0.1% after decline in June. “[Despite] credit growth to owner-occupiers slowing to 0.5%, the lift in housing credit was sufficient to boost the housing credit impulse, which tends to lead changes in housing prices. “While only a single data point, it is a positive sign as a sustained improvement in the credit impulse would be a lead indicator of stabilisation in housing prices,” ANZ said. While this data is not yet pointing to a stabilisation in property prices, the modest increase suggests stabilisation may occur if the trend in the credit impulse continues in upcoming months. However, ANZ pointed out that one month’s data does not produce a trend. “The environment remains challenging with lending standards tighter in the past and one of the majors lifting its floating mortgage rate,” ANZ said. According to the RBA’s private sector credit report, housing credit saw the slowest increase since December 2013 as it grew by 5.5% in the year to July. Credit extended to owner-occupiers grew by 7.6% over the year, the slowest increase since August last year; and investor credit growth slowed to 1.5%, the weakest level on record. This deceleration reflects the impact of tougher home loan lending standards, especially for high loan-to-income and interest-only borrowers, along with the ongoing regulator-enforced switch to amortising mortgages and falling prices discouraging buyer demand. Australia’s median capital city house price has fallen 3.1% over the past year according to CoreLogic, which will release its more comprehensive monthly hedonic home value index for August on Monday. However, CoreLogic data specifically regarding Brisbane’s home value changes for the year to date has seen a 0.3% increase.
Sep 5, 2018
Australians' Search Activity Suggest House Prices Could Soon Stabilise
CoreLogic data reports that the Australian home prices have fallen for 11 months, resulting in a 2% decrease in values over the past year. While many suspect that these trends will continue in the future, Australians have demonstrated their passion for property as they love owning it, buying it, watching TV shows about it and particularly recently, keeping up-to-date on specific markets, specifically new listings. ANZ Bank’s Housing Search Index, an indicator that uses data from Google Trends to aggregate internet searches related to searches related to house buying, reports that search activity has begun to pick up from lows seen earlier this year. This suggests prices may begin to stabilise towards the end of the year; according to historic patterns and modest improvements in other housing indicators. “The index suggests that while there is still more pain to come over the coming months, house prices are set to stabilise towards the end of this year,” says David Plank and Giulia Lavinia Specchia, members of ANZ’s Australian economics team. CoreLogic data shows the bank’s Housing Search Index overlaid against quarterly movements in Australian home prices. Chief Australia and New Zealand Economist at Capital Economics Mr Paul Dales said, “After seasonally adjusting the 0.4% decline in house prices in August on the eight capital cities measure to take into account the normal improvement in price trends ahead of the spring selling season, prices fell by 0.6%." “As that was the same as the 0.6% decline in July, there has been no let-up in the pace at which prices are falling.” So even though prices fell at a slower pace in nominal terms last month, given seasonal trends seen in the past, the decline was still large when adjusted to historic patterns. Particularly in Sydney and Melbourne, as shown in a past blog post and explained further by Dales.
Sep 5, 2018
Brisbane Unit Market Starting to Receive Interest Again
In the past year, the Brisbane apartments market was overwhelmed by new units resulting in demand being strongly outweighed by supply. This would often leave the auction room with plenty of room to move, but recent interest in the unit market is seeing this trend to slowly backflip. Behind this increase in interest is the good value one can get in Brisbane. As buyers left the Queensland market, sellers have become motivated to adjust their prices to attract the decreasing buying pool to consider their property and the race to the bottom followed - hence the prices being corrected over recent years. Brisbane Auctioneer Mr Haesley Cush said it seems to be that Brisbane is beginning to pick back up. “It seems we have hit that bottom and we have just started to bounce. “The apartment market still represents strong value and I am yet to see any evidence of prices moving. One of the sales last weekend was for a two-bedroom, two-bathroom unit in O’Keefe St, Woolloongabba selling for $330,000. “It was only a few kilometres from the CBD so it is easy to see why the interest is starting to build,” Mr Cush said. Lending restrictions are still the main concern for this segment of the market as this week some institutions have slightly increased their rates and others have applied new lending criteria to borrowers. “These little adjustments will likely temper any growth in the apartment market to a low heat at best.” Mr Cush said.
Aug 30, 2018
Side Hustles Could Help You Enter Housing Market
First home buyers struggling to enter the property ladder may have the second-hand economy to thank when saving for their deposits. With Australia’s national slow wage growth, an increasingly underemployed workforce and high entry prices for desirable real estate markets, first-home buyers facing significant challenges when overcoming the deposit hurdle. A side hustle could produce some extra earnings outside of full-time work which could in turn be what a hopeful home buyer needs to grow their savings. “The whole point of the side hustle is to make more money,” technology commentator Trevor Long said. “They’re either in a job and they’re not earning enough or they’re in the freelance world where you don’t have a single job, you just find income wherever you can. Selling stuff is just another form of income to some people.” Financial planner and SugarMamma.TV founder Canna Campbell said a side hustle was “almost like a secondary business” and earning extra money was a great first step towards financial freedom. “If you proactively put it into a bank account with a goal, whether it’s a home or an investment property, you start making that money really count.” Side hustles don’t need to be limited to freelancing or Etsy stores either. She recently held a competition to discover the most creative side hustle. “You’d be amazed what people come up with,” she said. “One person was growing bonsai trees and selling them and making $400 a month in cash. Other people were growing food and making jams.” The Second-hand economy According to Gumtree’s 2018 Second Hand Economy report, on average Australians have 25 unwanted items in their homes. The report states that the average worth of these accumulated items is the sweet total of $4200 per household. While the prices of properties will continue to make property ownership unattainable for many millennials, selling unwanted items could turn out to be a lucrative “side hustle” needed to grow savings. According to the Gumtree Report, it is millennials who are best placed to take advantage of the $34 billion second-hand economy and most likely to contribute the proceeds to a home deposit. This demographic group is also made up of those most at the mercy of pricey real estate markets in Australian capitals. This unique position of millennials is as the generation own more valuable unwanted items than other generations. The report stating that they are hoarding an average of $5040 worth of stuff per household. Gumtree Australia’s managing director Martin Herbert stated that due to their digital literacy, the group are also earning more money when they sell their items. “With greater savviness comes the ability to sell things at a higher price and the confidence that they can actually get more value of out those things,” Mr Herbert said. Which items are best to sell? According to the Gumtree report, items such as clothing, shoes and accessories are the most popular items to sell. Followed by homewares, furniture and electronic goods. “The thing in your pocket is worth money to someone who doesn’t want to sign a contract or doesn’t have the money to spend $1500 on a phone, but would certainly spend a few hundred.” Mobile phones are one of the easiest to sell due to the technology frequently being updated and ease of valuing the items. Tips to sell unwanted stuff online According to Domain.com. 1. Declutter – Sort through your stuff and decide what is worth keeping and what you can get rid of. 2. Research – Search online for similar items for their estimated value. Keep in mind certain items may be worth more in different areas. 3. Photos – Take several photos of each item from different angles and in good lighting. Take photos of any marks or damage to the item so that the buyer knows what they’re getting. 4. List it – Post your ad on all relevant sites including Gumtree, eBay and Marketplace. Forums and message boards may be effective for attracting specialist items that appeal to enthusiasts. 5. Pick up – Once you’ve agreed on a price, arrange for the buyer to pick up the item at a convenient time. Offering pickup both at home and at work can help sell an item quicker.
Aug 29, 2018
Australian Cities See Decline in Median House Price
Australian home prices have continued to slide last week with modest declines reported across the majority of the state capitals. CoreLogic reports that the median home price has fallen by 0.1% in average weighted terms, resulting in the decline over the past weeks to be 0.4%. Sydney, Melbourne and Brisbane all saw prices fall by 0.1% apiece over the past week, while Perth’s median value fell at a larger amount of 0.3%. Meanwhile, Adelaide managed to see an increase of 0.2%. The past month has seen prices in Adelaide rise by 0.3%, a comparatively strong performance given values in Australia’s other capitals have fallen by between 0.1% and 0.7% over the same time. Adelaide’s prices have now risen by 0.7% over this past year. Despite this week’s decrease, Brisbane has also seen an increase of median house prices by 0.3% for the year. These increases contrast with Perth, Sydney and Melbourne, which are all seeing a fall by 2.2% or more over the same period. The median price in Australian capitals combined has seen a fall by 2.7% so far this year in average weighted terms. The same divergence in the year-to-date performance is also evident in price movements over the past 12 months with modest gains in Adelaide and Brisbane offset by declines in Sydney, Perth and Melbourne. One cause for the difference in direction seen by Adelaide and Brisbane’s median house prices to Perth, Sydney and Melbourne are thought to have been due to their modest gains in the past 12 months. Perth has seen a decline of 2.2%, Sydney by 5.6% and Melbourne a more modest decline of 1.6% over the past year. These results have resulted in the national decline of 3.1%. The national median reflects that Sydney and Melbourne contain approximately 40% of all Australian homes and accounts of approximately 60% of the nations’ entire housing wealth. Tighter lending standards, still-acute affordability constraints and reduced local and offshore investor activity, along with other factors are all reasons behind the reversal in house prices. Another is that Australia’s largest and most expensive cities have seen an increase in properties being put up for sale. CoreLogic reported that there are currently 22.3% more homes up for sale in Sydney than there was a year ago, and 12.2% in Melbourne, contributing to a 7.6% national increase over the same period. Brisbane has also seen an increase in total listing levels which has offset declines in all other capital cities. However, while total listings have risen sharply in Sydney and Melbourne, new listings — defined by CoreLogic as properties that have not been put up for sale within the last six months— have actually fallen by 7.2% in Sydney, and 6.5% in Melbourne, in comparison to 12 months ago. That suggests softer market conditions are dissuading some vendors in these cities from putting their property up for sale. Like Sydney and Melbourne, new listings have also fallen in all other capitals except for Hobart and Canberra compared to the levels seen a year ago. “While a reduction in new listings across the capitals may, at the margin, helped to limit price declines over winter, it will be interesting to see whether that will remain the case in the months ahead as listing levels inevitably increase during spring”, Business Insider journalist David Scutt states in an article. “Will demand also improve to match the increase in supply during what is usually the busiest season for activity in Australia’s housing market?” Mr Scutt asks. With spring nearing fast, we’re about to find out. Information for article was sourced from https://www.businessinsider.com.au/australia-property-market-house-prices-corelogic-listing-levels-spring-2018-8
Aug 29, 2018
Australian Clearance Rates Rebounded Last Week
Australian auction clearance rates rebounded last week despite an increased number of properties going under the hammer. CoreLogic reported that a preliminary combined capitals clearance rate of 57.9% was achieved, up from the 56.7% preliminary estimate offered one week earlier. This increase occurring despite an increase in properties hitting the market, from 1,692 to 1,909 week-on-week. CoreLogic received results of 1,440 of the 1,909 auctions held. Within that figure, 837 properties sold either before, at or after auction while 603 failed to clear, including 112 which were withdrawn prior to being taken to market. The 469 unreported auction results point to the likelihood that the final clearance rate for the week will be revised lower when released on Thursday, according to Business Insider. The preliminary rate was revised down in the prior week to show a final clearance level of 53.3%. A year ago, the combined capitals clearance rate stood at 68.3% despite a significantly higher number of auctions occurring. “Auction volumes have slowly started to increase over the last couple of weeks however current volumes remain lower than this time last year when 2,270 auctions were held,” CoreLogic said. “Through winter, the number of homes taken to auction has been tracking roughly 20% lower than a year ago, highlighting a substantial weakening in vendor confidence driven by the softer housing market conditions and consistently lower clearance rates.” CoreLogic said that last week’s performance shows clearance rates for units continued to outperform those for houses, continuing the trend seen in prior months. “Looking at results by property type, units outperformed houses once again this week with 60.9% of units selling at auction, while 56.7% of houses sold across the combined capital cities,” the CoreLogic report said. Sydney and Melbourne, Australia’s largest auction markets, both individually recorded preliminary readings below 60%. “There were 717 auctions held in Sydney this week returning a preliminary clearance rate of 59.1 per cent,” CoreLogic said. “In comparison, there were 572 auctions held over the previous week and the final auction clearance rate was 51.9%.” In the prior week, Sydney’s preliminary clearance rate stood at 56.5%. Melbourne’s preliminary clearance rate also improved from 55.7% to 58.6% week-on-week, albeit it remained below the level recorded in Sydney. “In Melbourne a preliminary auction clearance rate of 58.6% was recorded across 898 auctions this week, while last week there were 860 auctions returning a final clearance rate of 54.0%,” CoreLogic said. Despite the improvement recorded in both markets last week, both figures remained well below the 67.4% and 72.3% levels respectively seen in the same corresponding week a year ago. Across the smaller capitals, Canberra’s preliminary clearance rate rose while those in Brisbane, Adelaide and Perth all softened. Despite the modest rebound recorded in the national figure last week, current levels continue to point to further price declines in the period ahead. Last week, CoreLogic reported that home prices across Sydney, Melbourne, Brisbane, Adelaide and Perth fell by 0.1% in average weighted terms, leaving the decline over the past month at 0.6%. Over the past year, the median home price in these capitals slipped by 3%, led by declines of 5.6%, 2.1% and 1.4% respectively in Sydney, Perth and Melbourne.
Aug 29, 2018
Why the Majority of Owners Use Property Managers
Domain.com report that 1 in 4 landlords do not have a property manager. This can make a large difference in how repair issues such as a blocked toilet is resolved. The 75% who do use property managers won’t need to lift a finger as the property manager arranged an emergency plumber to fix an issue. However, the remaining 25% who take on the DIY approach would be organising tenants, tradies and bills. A property manager does more than just advertise to attract tenants to a property. Here we list some of the ways they can make a landlord’s life much easier. 1. Making maintenance simple The above scenario occurs every week in real estate agencies across the country. REIA president Malcom Gunning said that when the blockage in the toilet is found to be foreign matters, then it becomes the tenant’s problem and cost for repair is theirs to front. Gunning speculates that if you were managing the property yourself, you would likely be in for a one-on-one confrontation with your tenant. “Instead, your property manager becomes the adjudicator and they can have those difficult conversations,” he says. “They can navigate the expectations of both the landlord and the tenant and apply the lease conditions fairly.” 2. Controlling tricky conversations According to Carolyn Parrella, executive manager for landlord insurance specialist Terri Scheer Insurance, it is advantageous to have a buffer between landlords and tenants. “It means you’ve got someone who’s there to take calls when your hot water service breaks down at 8pm,” she says. “It’s less personal, and keeps you at arm’s length. It’s also a time issue – it can be quite time-consuming to arrange maintenance and inspections. If you want to manage your property well, it makes sense to appoint a manager to do it for you.” 3. Hiring quality tradies For smooth and timely repairs, relationships with good tradies is also key. “We’ve got a group of tradies that have worked with us for many years,” says Gunning. “We know they’re reliable and will do a good job and won’t need to be called back. The property manager is aiming for quality service for a reasonable cost.” “We’ve got tradies who we’ve used for some time now” says Cathy Elliot from First National Metro. “We know they are reliable and will provide quality service at a reasonable cost." Instead of paying premium landlord prices, director of Property Alchemy Penelope Valentine says good property managers will always get at least two quotes. “The policy should be to work with the best professionals, making sure everyone is licensed and insured.” 4. Keeping to rights and regulations Valentine believes that trying to manage an investment property yourself is a false economy. “Let’s say your tenant damages your property. If you don’t have the expertise to manage those issues, they can escalate unnecessarily and landlords will find themselves at the tribunal,” she says. “A property manager can save an investor time and money.” Parrella says a professional manager knows the fine details of the regulations that govern tenancy agreements and are also continuously keep up with regulation changes via newsletters, advice bulletins and training as a requirement. “The average investor is not going to know the ins and outs of the law,” she says. “It’s better to leave it to someone who is familiar with the processes and understands what’s involved.” Gunning agrees that navigating the tenancy act when problems arise is where the value of a professional’s skills are most visible. 5. Choosing tenants that fit Valentine says that choosing the right tenant in the first place is a vital part in setting up the tenancy for success. “It’s more involved than investors think. You can go on a gut feeling but there’s so much due diligence that needs to go around that.” Access to tenancy databases allow property managers to avoid tenants with a bad rental history that might include breaking a lease, failing to pay rent or damaging a property. It’s also likely that they’ll keep their own database of prospective tenants for the area they service. “Each Saturday, if you’ve got a reasonably large portfolio, you’re doing open homes and you’ve got a list of people that come through looking to rent,” says Gunning. “So when you get a new listing you can make a call and lease it quickly – you may not even need to do marketing.” 6. Understanding market movements A property manager can also give you a strong and up-to-date understanding of position of the market. “They’re exposed to the whole of the market in their district, so they’ve got a pretty clear indication of rates and can advise when rents should hold, go up or go down,” Gunning says. “In this current market where you’ve got vacancies above 2 per cent, you need a good gauge on what will lease your property. Your property manager can help you set the right rent and show you how to present your property well.”