SPRING fever hit Sydney’s real estate market yesterday with a near-record 650 properties listed for auction.

Thousands of buyers flocked to bid, taking advantage of steady interest rates and a slight softening of prices.

Anthony Ishac, general manager of research and valuations at Australian Property Monitors, said there had been a significant increase in the number of properties being listed compared with the same period last year.

Mr Ishac said sellers looking to upgrade were realising the benefit of solid price increases over the past 18 months. ”There has been strong market growth over the past 18 months but now prices have started to come off the boil a little bit,” he said. ”I think people are taking advantage of the capital gain they have made in their properties to sell and upgrade while interest rates are holding and before prices start to soften.”

At Leichhardt yesterday, 200 groups inspected a house at 64 Wetherill Street, which sold for $1.53 million. The four-bedroom, two-bathroom home on a 449 sq m block attracted plenty of interest due to its generous proportions. The successful bidders were Leichhardt locals.

Story by Rachel Browne and Anita Balalovski www.smh.com.au

Tags: buying, marketing, property, real estate, research, selling

Posted in News, Research

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But there’s a lot to consider before packing your bags, writes Carolyn Boyd.

Moving to the country might appeal to one-quarter of Sydneysiders but many don’t act on their desire unless a trigger arises.

A recent online survey by the state and federal government’s Evocities campaign – designed to encourage city residents to move to one of seven NSW regional towns – found that one in four of the 1000 Sydney residents questioned would consider a country move.

The chief executive of the Foundation for Regional Development, Peter Bailey, says many people toy with the idea of a big move but it often takes a catalyst for them to pack their bags.

That could be having children, losing a job or falling ill.

Bailey says when the global financial crisis was brewing, a large number of people attended the foundation’s Country & Regional Living Expo in Sydney.

‘‘We had a stack of people through who were fearful of the future and were beginning to put a plan B in place and were looking at options to get out,’’ Bailey says.

Now those fears have subsided, a major pressure point has become the cost of housing in Sydney. Bailey sees increasing interest from people under 35 who are finding it difficult to scrape together enough money to buy a house in the city and are attracted by lower country prices.

Bailey says the biggest barrier for people making a move is ignorance.

‘‘They don’t know where places are and that’s one of the things that we’ve tried to do is to educate people that the opportunities are on offer,’’ he says.

Another factor holding back many would-be country and coastal residents is the lower wages on offer and the difficulty in finding jobs.

Bailey urges people to crunch the numbers, though. ‘‘It’s not so much what your income is, it’s what you keep at the end of it, isn’t it?’’ he asks. ‘‘Isn’t it about what your net return is after all your costs?’’

Bailey says people should start their search by looking at job opportunities. Too often people do it the other way around and move to a place only to discover there is no suitable work.

‘‘You’ve almost got to find the job and then go and find the places you want to live,’’ he says.

After you think you’ve found a place, you need to visit for long weekends and a holiday or two. Bailey says it’s important to go ‘‘not just in the beautiful summertime but go in the winter, too’’.

There’s no need to rush, though. Bailey says it can take up to three years to make the decision and begin to plan a move.

An easily overlooked consideration is the availability of water. ‘‘Water is important for things like gardens and lots of people like gardens,’’Bailey says. ‘‘Although our water situation is great now, you’d also want to look at what it was like five years ago in centres you’re proposing to move to, or even two years ago.’’

When it comes to housing, Bailey says if people have a property in Sydney, it could be a good idea to hang on to it.

‘‘There are very few markets that have capital appreciation like Sydney,’’ he says. ‘‘If it’s not a forever decision, if you don’t like it, you can always go back. Or conversely, if you decide you do like it, you keep the house in Sydney, negative gear it and buy a place in the country [depending on your financial situation].’’

Bailey says once you’ve moved, it’s vital to get involved in the community.

‘‘Whatever it is, get involved and that way you’ll meet people and once you’ve developed a social network, it’s amazing how everything else will fall into place.’’

Why Sydneysiders move:

36 per cent — change of lifestyle and freedom to pursue a dream, slower pace of life, more leisure time and flexibility 24 per cent — less stress, improve relationships (more time with family and to raise children), self esteem and personal satisfaction 7 per cent — make a new start, move away from family and friends 6 per cent — less financial stress, lower cost of living, lower mortgage

And why they’re hesitant:

34 per cent — difficulty in finding work 17 per cent — fear of not having enough money or not making ends meet financially 13 per cent — worry about what family and friends will say or moving away from family 11 per cent — unsure about how to find the right location and somewhere to live

Source: Possibility to Reality.

Steve Innis and Libby Clark bought land in Milton on the south coast thinking it would be where they would retire.

But when Clark was diagnosed with breast cancer nine years ago, the couple decided to move their plans forward and shift from Sydney as soon as they could build a home.

A hiccup with an architect who designed a building costing twice their budget slowed their plans but then they engaged a local designer-builder,Tony Marshall of True North Design.

He proposed a two-storey house with a huge deck that appears to reach into the surrounding trees of the steep east-facing 1.2-hectare block.

Building started last June and the couple, who own a business that arranges physiotherapists for private hospitals in Sydney, moved from Concord to the coast at Easter.

‘‘It’s really all about the outdoors here,’’ says Clark, 44. ‘‘It’s wonderful. We have lyrebirds and wallabies and it’s just magic.’’

The couple’s home was built with visitors in mind, including Innis’s four adult daughters. ‘‘It creates different time with your family,’’ Clark says.

‘‘In Sydney we would have had dinner with [the girls] every couple of weeks or Sunday lunches but when they come down here and stay … it’s a different kind of quality time that you have with people.’’

The couple spent $480,000 building their three-bedroom home, which also has an office. It is brick downstairs and has fire-resistant cladding on the second level.

Eco features including tankwater, sustainable hardwood decks and low emissivity glass.

Innis and Clark did not have the hurdle of finding work — they simply took their business with them. Clark works from home while Innis, 55, commutes to Sydney for a few days a week, staying in a rented flat.

Clark’s cancer returned this year and, despite stays in a Sydney hospital, she doesn’t wish sh were living back in the city.

‘‘I’ve been cancer-free until I was  diagnosed with secondary cancer in August,’’ says Clark, who is undergoing treatment and says the future looks positive.

‘‘I’m so bloody glad I’m down here and not in Sydney. Just the lack of traffic, the lack of people, the beautiful fresh air. The house is just fabulous; it’s very soul-restoring
down here.’’

Decide what your skills are Explore what you want to do in your next stage of life — continue in the career you are in or seek a change?  Look at your CV and make sure it’s up to date Find a town or city that has opportunities for work or business ownership Visit in different seasons and spend some long weekends and holidays deciding if the town is for you Ask locals what they like and dislike about the town Research schools and services Once you arrive, get involved in the community

Story by Carolyn Boyd www.domain.com.au

Tags: economy, interest rates, marketing, news, prices, property, real estate, research

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SYDNEY and Melbourne house prices have gone through the roof over the past year.

Adelaide and Darwin lead other capital cities in recording strong growth in the real estate market.

But analysts warn that the rate of growth is slowing rapidly across the nation and could flatline by year’s end.

Preliminary estimates from the Australian Bureau of Statistics show the average price of established housing in the eight capital cities rose an average 3.1 per cent in the March quarter.

Sydney and Melbourne led the way with sharp rises of 4.9 per cent and 3.6 per cent respectively. It was the fifth consecutive rise in the eight capital cities index.

For the full year to June, overall average house prices rose 18.4 per cent, and the ABS said the average price rise of 21.4 per cent in Sydney was the largest rise since it began recording these figures in 2002.

Adelaide and Darwin recorded quarterly growth rates of 3.2 per cent and 2.8 per cent respectively, Perth 0.4 per cent and Brisbane just 0.3 per cent.

But the data also revealed the rate of growth in capital cities peaked at 5.5 per cent in the December quarter last year, after rising from negative territory during the economic downturn, and was now steadily falling.

Senior Westpac economist Matthew Hassan said a clear pattern of moderation across all measures had emerged over the past six months. "There are clearer and clearer signs that price momentum has softened quite significantly over the first half of this year," Mr Hassan said. "The auction clearance rates tell it; the finance approvals tell it; the sentiment is pretty clear as well."

He said the incremental impact of interest rates returning to normal levels had squeezed affordability and slowed demand as the market tilted in favour of buyers.

"It doesn’t necessarily mean we’re rushing headlong into price declines," he said. "I think with rates still around neutral and clearly quite a lot of pent-up demand for housing in many markets, . . . you’ve got a pretty good case for a soft landing."

But RP Data national research director Tim Lawless was less optimistic, pointing out the ABS data had not picked up a deterioration in June.

The RP Data-Rismark home index shows home values fell 0.7 per cent in June. Mr Lawless said that was accompanied by clearance rates of 55 to 60 per cent, down from 70 per cent rates late last year. Housing finance approvals also remained low.

"The next six months is likely to see flat market conditions at best, perhaps further month to month modest declines," he said.

Story by Nicolas Perpitch The Australian

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

More Generation X parents are rejecting the suburban dream to raise their family closer to the city, fueling steep housing price rises.

The trading-up market is already seen as one of the strongest in Sydney’s property market, particularly among four-bedroom houses in inner-ring suburbs, according to the Australian Property Monitors economist Matthew Bell. "Most of those housing upgrades have been selling into what has been a strong first-home buyers market in previous years and the ripple effect of that is flowing upwards."

That market has also been boosted by a lack of stock.

APM figures show the median price for four-bedroom houses in inner-ring suburbs has increased 12.4 per cent in the year to June (to $1,595,000), compared with only 6.3 per cent (to $520,000) for similarly sized houses in the outer ring.

Inner suburbs well stocked with four-bedroom properties showed among the best median price growth in the past year, such as Longueville (up 43.75 per cent), Lane Cove (35.3 per cent), Randwick (31.25 per cent), Queens Park (21.2 per cent), South Coogee (36.9 per cent), Haberfield (10.9 per cent) and Marrickville (19.2 per cent).

The figures reflect comments by the demographer Bernard Salt about Generation X, aged in their 30s and early 40s, forming a "critical mass" of parents choosing to remain close to the city rather than move to fringes.

"Gen X are very lifestyle driven,” research director of RP Data, Tim Lawless said. ”They tend to want to work and play in the same area … the city usually. Gen X don’t want a yard to maintain. They want a short commute, with friends and retail nearby."

Believe it or not, whilst housing affordability remains a huge issue in Australia, there are still options for the price sensitive purchaser. It’s no surprise they just need to target areas further away from the CBD.

Housing finance data released last week showed that across the country non first time buyers in New South Wales had the greatest average loan size at $315,400 and Tasmanian’s were taking out the smallest average loans at $194,000.  It is extremely rare that anyone would be receiving a 100% loan so for the purposes of the following analysis we have assumed that borrowers have a 10% deposit, therefore they are borrowing 90% of the total value of the loan.  Based on this assumption we can determine their borrowing power which indicates how much the purchaser could have potentially purchased a property for.

On average, purchasers in New South Wales demonstrated the greatest buying power, spending on average $350,444 and Tasmania purchasers had the least amount of buying power at $216,556.  This outcome is to be expected and reflects the characteristics of these markets with New South Wales having the most expensive property market and Tasmania the most affordable.

Looking at capital cities we are all aware that affordability is an issue however it is interesting to note that across all house sales within capital cities, Sydney, the nation’s most expensive housing market, actually had the greatest proportion of total sales priced below the determined level of borrowing power.  21.8% of all Sydney house sales were priced below $350,444.  Obviously most of these are situated in the outer more affordable areas of the city however, it shows that affordable property is still available.  The next best performer was Canberra where 15.3% of house sales were priced below $301,556.

Affordable property is much harder to come by in Perth.  Only 11.8% of all Perth house sales during the last 12 months were at prices below $324,444.  As is the case in most instances the areas where these properties are available are generally the outer more affordable regions of the city.

The Campbelltown Local Government Area (LGA) on the southern outskirt of Sydney has a current median house price of $317,500 which is well below the average borrowing power for the city.  As a result, Campbelltown has had the greatest proportion of affordable sales of any capital city council area in the country over the last year.  71.1% of Campbelltown’s house sales were priced below $350,444 during the last year.

Across the list of LGA’s / Districts detailed, Sydney LGA’s led the way providing nine of the 20 capital city LGA’s with the greatest proportion of sales being affordable for non first time buyers.  All of the Sydney LGA’s detailed are situated some way from the CBD area and all have a median price below $400,000.

Darwin LGA’s were the only regions which had no representation on the list however, Brisbane, Adelaide and Canberra each had only one LGA.

The result of the analysis shows just how important it is to dig a little deeper with data.  The housing finance numbers show us how much people are borrowing and with a few assumptions we can determine where these buyers can afford to live.

Clearly if you are an average income earner and want to own a house it’s pretty unlikely you are going to be able to live in the blue chip inner city suburbs (although there are some examples, very few, within these areas).  If you are an average income earner looking to buy property, more than ever location is becoming the most important attribute.  The best prospects for growth in property value and the most desirable locations in which to live are those suburbs which enjoy proximity to: public transport, retail and social amenity, schools, working nodes, health care, public open spaces and major roads.

Whilst the locations where the affordable properties tend to be located may not have all of these attributes certainly many of them have a number of the desirable features and purchasing in those areas will likely make for a more enjoyable place to live as well as greater potential for future price growth.

Story by JoeyJ realestate.com.au

Rates are on hold but the housing fire could already be out.

The Reserve Bank decided to keep interest rates on hold during the week, much to the relief of many a home owner, citing concerns about European economies along with satisfaction with current inflation levels.

"Consistent with that outlook, and as a result of actions at previous meetings, interest rates to borrowers are around their average levels of the past decade, which is a significant adjustment from the very expansionary settings reached a year ago," Governor Glenn Stevens said.

But the damage to the housing market could already have been done, with some signs of moderation already emerging.

The RP Data Rismark Hedonic Home Value Index released last week showed signs of softening in April, rising by just 0.2 per cent over the month, after 16 months of strong gains.

A graph of the index’s rolling quarterly capital gains highlights a distinct pull-back in April after a peak in December.

Interest rates have jumped from 3 per cent to 4.5 per cent in as little as eight months. Unsurprisingly, that has had an impact on the number of loans approved, with housing finance falling for six consecutive months.

After dropping a cumulative 14 per cent from October to March, housing finance is now at its lowest level since February 2009.

The majority of this fall is due to owner-occupiers pulling out of the market – down by 24 per cent – as the first home owner’s grant was reduced, while investors rose 9 per cent.

The argument for why Australia didn’t experience the collapse in property prices seen in the US and other parts of the world has always been that the supply of accommodation here was limited while the demand continued to grow.

The stronger lending practices of our banks are another factor. We didn’t have as many loans going to property buyers who obviously couldn’t afford to pay them back.

The NINJA loan (no income, no job and no assets) was non-existent here.

But international commentators rightly point out that it is rare for bubbles in any kind of market not to burst.

The renowned value investor and founder of global investment management company GMO, Jeremy Grantham, says both the British and Australian housing markets should decline by about 40 per cent.

If they don’t, he says, it will be the first time in history that a bubble has not behaved in such a way.

We should be fortunate enough to avoid a property crash of the magnitude of that in the US but prices in any market rarely go only in one direction. They do fall, so don’t be surprised if property values start to soften.

Source: Domain.com.au