The Australian housing market has begun to slow as predicted by analysts last month. House prices reviewed across eight major cities increased by an average of 0.1 percent from July to September, the lowest increase per quarter since the start of 2009, the data, provided by the Australian Bureau of Statistics has said.

The Reserve Bank of Australia has indicated a review of interest rates in light of the apparent cooling of the housing market.

Paul Braddick, a senior economist at Australia and New Zealand Banking Group Ltd said “Rising interest rates have seen housing affordability deteriorate,” and that “Further rate hikes in 2010-11 will hurt affordability and maintain a cap on prices.”

Part of the influence on these statistics is the data in yesterday’s news story. With the four big banks in Australia controlling such a large percentage of the housing market there is little consumer choice and prices are being kept relatively high.

Following this trend the housing market in Tasmania is also suffering, sales fell by 11.7 percent across the board. However, despite this drop in sales the most expensive properties have not been affected with sales staying roughly on track.

he Real Estate of Tasmania has said that third quarter sales were down 23.2 percent on the same period last year. Despite the decline in sales the average house price has continued to rise over the last year, this is in part due to the demand for second homes.

The banking system needs reform to ensure that consumers have enough choice, that first time buyers are not shut out and that the housing market does not stall altogether.

Story by Robert Pearce www.embraceaustralia.com

View the original article here

The inclement weather Saturday did not affect demand at this weekends auctions with a clearance rate of 67 per cent recorded.

This is a good result in light of the fact that this weekend has a higher number of auctions than the comparable weekends in the past 5 years.

There was a total of 343 auctions reported of which 229 sold and 114 were passed in, 68 of those on a vendors bid.

This weekend last year saw 338 auctions reported and a clearance rate of 83 per cent.

Stock levels continue to be high with 2600 auctions expected in the next three weeks.

Enzo Raimondo
CEO REIV

TOTAL AUCTIONS

This week: 343
Last Weekend: 1051
This weekend last year: 333

S Sold at Auction: 196
SB Sold before Auction: 31
SA Sold after Auction: 2

Passed in: 114
Passed in on vendor’s bid: 68

Clearance rate: 67%

Postponed: 3
Withdrawn: 0
Auctions with no result: 90

PS Private Sales: 634

Total Volume (Auctions): $156.13mil
Total Volume (Private Sales): $316.97mil

Total Auctions Houses: 225
Clearance Rate: 68%
Median Price: $633,500
Total Value: $103,396,500

Total Auctions Flats/Apartments: 108
Clearance Rate: 68%
Median Price: $552,500
Total Value: $51,034,000

Total Auctions Vacant Land: 10
Clearance Rate: 30%
Median Price: $848,500
Total Value: $1,697,000

View the original article here

A chronic shortage in available rental properties is now a permanent fact of life in New South Wales three major metropolitan centres, the Real Estate Institute of NSW (REINSW) says.

A chronic shortage in available rental properties is now a permanent fact of life in New South Wales three major metropolitan centres, the Real Estate Institute of NSW (REINSW) says.

The latest rental data released by the REINSW show vacancies in September deteriorated across Sydney, Newcastle and Wollongong.

The overall rental vacancy rate in Sydney fell 0.3 per cent to 1.2 per cent percent in September.

Newcastle recorded the greatest fall of the three major urban centres in the state, dropping 0.5 per cent to 1.2 per cent. Wollongong also deteriorated, falling 0.2 per cent to 1.8 per cent.

“Unfortunately the rental market in our major metropolitan centres has worsened in

September and the prospects for renters no matter where they choose to live are grim indeed”, said REINSW President Wayne Stewart.

“And for those people coming from other parts of the state or Australia to live in Sydney, Newcastle and Wollongong the message is blunt – organise rental accommodation well in advance.

“As more and more people move to our urban centres, available property will not only become scarcer but more expensive.

“We need dramatic and urgent intervention by the state government to reduce property related taxes, simplify planning laws and better utilise our land resources to meet current and future demand.

“This is a fundamental issue for the 2011 State Election with voters looking for a long term solution to this crisis”, said Mr. Stewart.

Decreases in rental vacancies were recorded in the following areas of Sydney:

‘Outer’ suburbs (More than 25 km from CBD) fell 0.3 per cent to 1.1 per cent

‘Middle’ suburbs (10-25km from CBD) which fell 0.4 per cent to 1.4 per cent

Sydney’s ‘Inner suburbs’ (0 to 10km from CBD) remained unchanged at 1.3 per cent

View the original article here

The rise in residential property prices in Australia is expected to slow in the last three months of this year and into 2011, according to a new survey.  
Real estate price growth over the last year has ranged between 10% and 12% nationally, according to varying measures of the market. Only the major markets of Sydney and Melbourne have achieved double digit growth.

And while some people are still confident of further price increases, more are now expecting price falls, the survey by Westpac and the Melbourne Institute shows. Sentiment is consistent with recent data showing a slowdown in a broad range of housing indicators, with house prices falling over the last quarter.

The Westpac-Melbourne Institute Consumer House Price Expectations Index declined to 51.1 in October, from 58.8 in July. The index is now well below its peak of 80.3 in January.
In October, 63% of consumers expect price increases over the next year, down from 70% in July, the survey found. On average, consumers expect a rise over the next year of 2.6%, down from 3.6% in July and 5.7% in April.

Matthew Hassan, senior economist at Westpac, said consumers have continued to pare back their expectations for house prices despite interest rates staying on hold since May. The general consumer outlook still points to a soft landing for the housing sector in general.
‘The fact that most still expect prices to rise also suggests that those looking to sell properties will be more inclined to postpone selling until a later date than accept materially lower price offers now,’ explained Hassan.

Perth, Sydney and Adelaide are predicted to be the country’s strongest real estate markets in the next three years, according to a separate report. While a lack of economic confidence in Queensland is expected to prohibit capital gains in Brisbane.

According to the QBE LMI Australian Housing Outlook report researched and written by BIS Shrapnel, property price increases of about 20% on average are predicted in Sydney, Perth and Adelaide through to 2013.

More modest house price growth is expected in the three years to June 2013 in Brisbane, where prices will rise by 15%. Hobart prices are expected to increase 13%, Darwin and Canberra by 12% and Melbourne just 9%.

‘There is a greater degree of caution, but people continue to surprise me by what they are prepared to pay for properties, not just in the top but in the middle end,’ said BIS Shrapnel managing director Rob Mellor.

View the original article here

The rise in residential property prices in Australia is expected to slow in the last three months of this year and into 2011, according to a new survey.  
Real estate price growth over the last year has ranged between 10% and 12% nationally, according to varying measures of the market. Only the major markets of Sydney and Melbourne have achieved double digit growth.

And while some people are still confident of further price increases, more are now expecting price falls, the survey by Westpac and the Melbourne Institute shows. Sentiment is consistent with recent data showing a slowdown in a broad range of housing indicators, with house prices falling over the last quarter.

The Westpac-Melbourne Institute Consumer House Price Expectations Index declined to 51.1 in October, from 58.8 in July. The index is now well below its peak of 80.3 in January.
In October, 63% of consumers expect price increases over the next year, down from 70% in July, the survey found. On average, consumers expect a rise over the next year of 2.6%, down from 3.6% in July and 5.7% in April.

Matthew Hassan, senior economist at Westpac, said consumers have continued to pare back their expectations for house prices despite interest rates staying on hold since May. The general consumer outlook still points to a soft landing for the housing sector in general.
‘The fact that most still expect prices to rise also suggests that those looking to sell properties will be more inclined to postpone selling until a later date than accept materially lower price offers now,’ explained Hassan.

Perth, Sydney and Adelaide are predicted to be the country’s strongest real estate markets in the next three years, according to a separate report. While a lack of economic confidence in Queensland is expected to prohibit capital gains in Brisbane.

According to the QBE LMI Australian Housing Outlook report researched and written by BIS Shrapnel, property price increases of about 20% on average are predicted in Sydney, Perth and Adelaide through to 2013.

More modest house price growth is expected in the three years to June 2013 in Brisbane, where prices will rise by 15%. Hobart prices are expected to increase 13%, Darwin and Canberra by 12% and Melbourne just 9%.

‘There is a greater degree of caution, but people continue to surprise me by what they are prepared to pay for properties, not just in the top but in the middle end,’ said BIS Shrapnel managing director Rob Mellor.

View the original article here

The auction market is still performing strongly but vendors of higher-end properties are opting for private sales instead of risking their home at auction, experts warn.

Real Estate Institute of Australia president David Airey warns that although the Melbourne market recorded a 68% clearance rate, the top-end is still struggling with discounts a common occurrence.

"The average price was only about $800,000. People at the top end have decided the best way for them to sell is through private sales, rather than risking through auctions. That’s the same across Australia, where the lower end is moving, but the higher end is more average."

Airey points to the sheer number of pass-ins occurring in Melbourne. The REIV figures suggest 325 properties were passed in, and Airey says more of these would have been likely in the top-end areas.

Christopher also believes the market in the top-end properties is moving slowly.

"It’s a very difficult market to read. I’d say the top end is quite patch. You could get some very good sales, but there are still records of properties that aren’t performing particularly well at all. It’s definitely a patchy market."

However, other markets have remained strong, these experts say. Melbourne managed record a 68% clearance rate out of 1,031 auctions, according to the REIV, with chief executive Enzo Raimondo pointing out that rate hasn’t changed during the past eight weeks.

"In light of the very high number of auctions this weekend the clearance rate of 68 that was achieved is a very healthy result and demonstrates that underlying demand is good," he said.

Some analysts predicted prices might drop due to the sheer number of listings. Auctions have backed up over the past few weeks due to the AFL Grand Final and the subsequent replay, while the upcoming Cup Weekend has brought forward some sales.

"Including this weekend’s activity, the REIV has seen average weekly auction listings increase by around 30% compared to winter; interestingly, the clearance rate for spring has not changed substantially, with around 68% of homes selling during the first eight weeks of spring."

Airey agrees, saying the result was "a particularly solid one".

But the rest of the country hasn’t performed so well. Christopher says Sydney’s result in the mid-50s reveals neither buyers nor vendors have negotiating control.

"That result represents a market equilibrium, where neither buyers nor sellers have control. However, that result does indicate that there could still be price rises occurring there."

"Outside Sydney and Melbourne, and putting Canberra aside, it’s a pretty weak market out there. I would argue prices are falling in southeast Queensland, and Adelaide is looking very slow as well."

Christopher also points out activity in the Northern Territory, which he says is becoming scarily bubble-like. "Darwin is a market that is looking very scary at the moment and very bubbly. When it turns, it’s going to be a steep ride down."

According to Australian Property Monitors, Sydney recorded a 56% clearance rate out of 501 auctions. Total sales came to $149 million.

Adelaide recorded a 63% clearance rate out of the 48 auctions on the market, with total sales coming to $9.9 million, while Brisbane recorded a rate of 30.4%, with 57 total auctions coming to a sales total of $4.8 million.

Story by Patrick Stafford www.smartcompany.com.au

The central bank says it’s aware of the difficulties property developers face obtaining credit, but it has questioned whether the sector is overly-reliant on debt.

Reserve Bank of Australia (RBA) Deputy Governor Ric Battellino expects an improvement in the economy over the next few years to be reflected in the commercial property market.

In a speech to the Property Council of Australia in Brisbane on Friday, Dr Battellino said it was difficult not to conclude that the financing of the property sector became "over-extended" during the boom years, and that a period of adjustment was "largely unavoidable".

"In saying this, I don’t want to downplay the difficulties that some firms are now experiencing as that adjustment takes place, or the impact it is having on property development," Dr Battellino said.

"But cycles like the one we are going through seem to be endemic to the property sector and raise the question of whether, over the longer term, the financing model of the sector should shift towards more equity and less debt."

However, he said the "adjustment process" had been under way for some time and substantial progress had been made.

He said a period of increasing arrears on property loans may be coming to an end, after equity raisings had made an important contribution to reduced gearing levels.

As well, the expected improvement in the economy over the next couple of years would be "reflected in the commercial property market", he said.

"There are already some signs of this," Dr Battellino said.

"That in turn should boost lender’s willingness to make loans to the sector, though I don’t think it would be in anybody’s interest to return to the free-flowing credit of a few years ago."

He said the property sector was vulnerable to changes in the availability of credit because it operates with a relatively high level of gearing and low holdings of cash.

Dr Battellino added that he was satisfied with the current moderate growth in household credit after an annual increase of seven per cent.

The moderate pickup was mostly due to housing loans, while other forms of household debt, such as credit card debt, margin loans and personal loans had been "relatively flat".

"All this is consistent with households taking a more cautious approach to their finances," he said.

"For households, therefore, the current picture is one where borrowing for housing is broadly growing in line with income, house prices are stable and there is little appetite for other forms of debt," he said.

"From the Reserve Bank’s perspective, this seems to be a satisfactory state of affairs."

He also said that small businesses currently had better access to credit than the large business sector.

Over the next few years, the RBA expects economic growth to pick up from its current rate of 3.75 per cent to closer to 4 per cent.

It was then likely that underlying inflation would pick up from the current 2.75 per cent to be around three per cent by the first half of 2012, Dr Battellino said.

"In the Australian economy, growth is around trend and underlying inflation is in the target range," Dr Battellino said.

He added that keeping growth around trend and inflation within the target range would be challenging given the economy was approaching full capacity and the resource boom was re-emerging.

"As noted in the statement issued after the board meeting earlier this week, if economic conditions evolve as currently expected, it will be likely that higher interest rates will be required at some point," he said.

Dr Battellino said that global economic growth, and Asian growth, was returning to around trend.

Story by Kim Christian Ipswich Advertiser

Real estate sales in Australia jumped by 11 per cent during August, official figures reveal.

The property market in the country received a boost as homebuyer confidence strengthened and first-time buyers returned to the market.

With the Reserve Bank keeping official interest rates on hold, property sales across the nation were 10.9 per cent higher than in July, the figures from the Australian Finance Group (AFG) show.

According to the figures, greater competition between lenders on price and policy combined with increasing loan-to-value ratios are also proving beneficial to property investors.

"With property prices in many areas having stabilised, and some lenders prepared to lend up to 95 per cent of the property’s value, property is becoming more accessible to first home buyers and more attractive to investors," he explained.

Indeed, investor activity varied across the states, with New South Wales and Victoria topping the market.

In New South Wales almost 37 per cent of all mortgages sold were to investors, while in Victoria they accounted for 36.4 per cent of the total sales volume.

However, investor confidence in Queensland and Western Australia remained low, largely due to the uncertainty over a possible mining super tax.

Source: www.ipinglobal.com

The Australian real estate market is experiencing a period of sluggish growth and activity, but property values are performing strongly when compared to our overseas counterparts.

The Global Property Guide’s latest survey of house prices, which uses price changes after inflation to gain a more realistic picture, reveals an uneven recovery in global housing markets during the 12 months to June 2010.

Over that period, 18 countries had house price increases and 18 countries had price declines.

Europe presented mixed results, with Finland (up 9%) defying the downward trend of decline experienced throughout Ireland, Bulgaria, Lithuania, Iceland, Russia, Croatia, Spain and Slovakia.

In the US, house prices fell 3.31% over the year, while Canadian house prices were up 1.47%.

Singapore performed best overall, with a 34% house price increase recorded between June 2009 and June 2010. House prices in Hong Kong, Taiwan and China also surged 21.4%, 11.51% and 5.78% respectively.

Strong economic growth, low interest rates and increases in foreign demand fuelled house prices in these four countries, raising fears of a property bubble. In June the International Monetary Fund warned that the booming Asian real estate markets “may pose risks to financial stability.”

In response, Singapore, Hong Kong, Taiwan and China all swiftly tightened credit supply by lowering the loan-to-value ratio. Singapore and Hong Kong have also increased land supplies, and China has increased the down payment requirement for second-home mortgages to 50%.

Closer to home, the July RP Data-Rismark Hedonic Home Value Index confirms that Australian property values are holding their own.

“In the period between end 2008 and March 2010, Australian home values rose by 16.3%,” says RP Data’s research director, Tim Lawless.

In the month of July Australian home values remained virtually unchanged, recording an increase in value of 0.1% for the month. Annually, house prices jumped 9.7% in the 12 months to June – and Lawless believes the outlook for the rest of the year remains positive.

“There is the possibility of modest gains,” he says, “if mortgage rates remain in check and economic conditions continue to improve.”

Source:www.yourmortgage.com.au

National city home prices fell for the first time in 18 months in June, as rising interest rates sent auction clearance rates lower.

Median national home prices fell by 0.8 per cent in June, in raw terms, from a 0.6 per cent increase in May, according to RP Data-Rismark figures. It was the largest monthly fall in home prices since April 2008, shaving the median national dwelling price by $3000 for the month to $465,000.
”As mortgage rates have normalised, participants in the housing market have cut their house price growth expectations, which explains the current change in conditions,” Rismark International managing director Christopher Joye said in a statement.

Official interest rates have risen six times since October to 4.5 per cent, lifting the average cost of mortgages by $300 a month. Since February, auction clearance rates – a key reading on the buoyancy of the market – have fallen from 80 per cent to around 60 per cent in Melbourne and Sydney.

While the RP-Data figures point to a retreat in house prices, a survey out yesterday indicated market players anticipate a slowing growth in house price gains in the coming year. Real estate agents, developers and other residential industry tip only 1.4 per cent of price growth over the next year, down from 5.4 per cent growth expected three months earlier, according to the National Australia Bank June quarter property survey.

Sydney and Melbourne
In the three months to June, Australian home values were basically flat, rising 0.1 per cent seasonally adjusted, RP Data-Rismark said.
For the same period, home prices in Sydney rose 0.5 per cent and by 0.2 per cent in Melbourne. Prices in Brisbane fell 1.3 per cent, and by 2.5 per cent in Perth. RP Data doesn’t release June-only figures on city price movements.

Canberra home prices fell 0.8 per cent, while in Darwin they fell 0.1 per cent.
Home prices outside capital cities rose by 0.3 per cent in June, after falling 0.9 per cent in May.
”It’s sobering to remember here that we have had 17 consecutive monthly increases in Australian capital city home values,” said Mr Joye.
”If the sharemarket rose for 17 months straight and then tapered, people would not think twice. It might be wise to apply the same logic to our housing market,” he said.
Despite the slowdown, national city home prices have risen 10.5 per cent over the year to June.

Quarterly drop
Prices fell the most in the June quarter for the top fifth of homes, RP Data-Rismark said.
”It’s likely that the top end has been adversely affected by the volatile share market and the uncertainty swirling around Europe and North America,” said RP Data national research director Tim Lawless.

”RP Data-Rismark’s results for the most expensive 20 per cent of suburbs show a real shift in the market dynamic," said Mr Lawless. "Through most of 2009 and the first quarter of 2010 it was the premium markets that experienced the strongest capital growth."
"In recent months, the middle 60 per cent of suburbs have outperformed," he said.

"Another variable impacting sentiment may be the federal election, with some people placing their purchase or sale plans on hold subject to seeing the full set of policy positions,” he said.
The trend of slowing or falling home prices was picked up in Australian Property Monitors quarterly data, released yesterday, which showed the median national house price rose 2.4 per cent in the June quarter, slowing from a 3.8 per cent rise in the March quarter.

However, Mr Lawless downplayed fears that Australia faced a housing bubble ready to pop.
”As the RBA has independently confirmed, arguments in favour of house price `bubbles’ remain, in my opinion, overstated,” Mr Lawless said.

”If we saw blow-outs in average time on market, re-listings, and vendor discounting, it would set off a few alarm bells," Mr Lawless said. "This, however, is not currently the case.”
The Reserve Bank will hold its monthly board meeting next week, with investors and economists expecting no change, following weaker-than-expected quarterly inflation this week.

Story by Chris Zappone www.smh.com.au

In the latest Demographia International Housing Affordability Survey, there’s little surprise or change in the most unaffordable markets.

Once again, Australia is the most over-priced, and thus least affordable country in the study, with five of the top six cities surveyed also being Australian.

The survey, which covers 272 markets in Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States, is now in its 6th year, and determines affordability by the “Median Multiple”, which is quite simply the median house price divided by gross annual median household income.

LEAST UNAFFORDABLE
There were 61 severely unaffordable markets this year, down from 64 found in the previous survey. The least affordable markets were concentrated in Australia (22) the United Kingdom (19) and the United States (11).

As for cities, the top six are Vancouver being the least affordable, followed by Sydney, Sunshine Coast, Darwin, Gold Coast and Honolulu.

click the tables to enlarge

MOST AFFORDABLE
There were 103 affordable markets, 98 located in the United States and 5 located in Canada.

6th Annual Demographia International Housing Affordability Survey - read here

The results of this latest edition are very much in line with a recent and broader index compiled by The Economist which showed Australia to be in excess of 50 times over-priced/valued.

Story from http://marquetteturner.com/

Property prices in Australia could start to fall as a result of interest rate cuts and a cut back in mortgage lending, it is claimed. Despite prices increasing by up to 20% in the last year, a six interest rate rises in the last eight months could put the brakes on and there is evidence of a slowdown, experts believe.

REAL estate experts are bracing for the housing market to finally slow down, as the effects of the latest interest rate rise filters through to buyers.

According to Australia’s largest real estate group Ray White, turnover in the first three months of the year is sluggish compared with last year, up only 8%, the smallest increase since the global financial crisis.

The reduced activity has continued in to April, said Brian White, joint chairman. ‘Judging by our April results, it looks as if the interest rate increases are having an impact on activity. With the additional interest rate hike, it would be the first time that the Australian market has not shrugged off the pattern of increases in the past. At last, it would appear that the ambition of the Reserve Bank to slow down the residential activity has been achieved,’ he explained.

Another outcome of soaring prices is an increased in those struggling to make mortgage payments. According to independent interest rate monitor RateCity about 27,000 households have already missed mortgage repayments and thousands more are expected to fall behind after the latest interest rate rise.

The number of securitised home loans more than 90 days in arrears has rapidly increased from 0.05% in January to a current rate of 0.6% it said.

The worsening financial crisis in Europe could also affect the Australian market. Some analysts even believe there might be a rate decrease later in the year, although most are predicting they are likely to remain on hold.

‘There will be a slower housing market in Sydney in the second half of this year, even with a normal economy,’ said SQM Research managing director Louis Christopher. But he added that if the euro zone woes worsen there would be the potential for quarter on quarter falls at the end of the year.

Residex chief executive John Edwards believes price growth will moderate and he forecasts 5 to 8% overall. The top end of the market would do best, while some cheaper areas of south western Sydney were already going backwards.

According to Australian Property Monitors economist Matthew Bell prices in the most expensive half of the property market would rise at twice the rate of the bottom half.

Story from PropertyWire.com

Lois Buckett

Lois Buckett Real Estate based in Lennox Head and Bangalow specialises in meeting your real estate needs throughout the region.

With every real estate agent claiming to be the best it can be hard to judge just who to choose. Scratch the surface however and you’ll discover dramatic differences in the way agencies operate and the results they achieve. So how is Lois Buckett Real Estate any different?

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At Lois Buckett Real Estate our focus is always to deliver the best possible sales price. We will never leave you wondering, “Could I have done better?”

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If you want great results you need an agent dedicated to achieving them. Lois Buckett Real Estate’s experienced sales agents are backed of a dedicated marketing and support team, all working together to bring you more buyers and a bigger sales price.

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For an optimum experience in Real Estate in Lennox Head, Bangalow, Ballina, Byron Bay and the Hinterland why not call on one of the experienced staff at Lois Buckett Real Estate.