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

Next week’s Federal Government Budget should address the recommendations of the Henry tax review to improve housing affordability and assist low-income private renters, according to the Australian Council of Social Service (ACOSS).

"Rising housing costs are putting increasing pressures on low-income Australians who are struggling to make ends meet in a tight rental market," says ACOSS chief executive officer Clare Martin.

"The Henry Review identified what low-income renters have known for years – rent assistance is too low for many people to secure adequate housing."

"ACOSS is urging government to take up the Henry Review proposal to increase rent assistance and link maximum rates to market rents."

"We have asked for a 30 per cent increase in rent assistance for low-income households which is about $15 per week."

Martin says rent assistance levels have fallen behind market rates – the Henry Review noted that over the past three years annual rents have risen at an annual rate of 10 per cent, while rent assistance has increased by only 2.7 per cent.

"The Henry Review notes that a single unemployed person spends about half of their payments on rent, leaving them with little left for other living expenses," she says.

Story from API Magazine

Property prices in Australia have surged 20% in the last 12 months raising further fears about a real estate bubble and making it almost certain that interest rates will rise.

   The annual rise in house prices was the fastest ever recorded by the Australian Bureau of Statistics data series which began in 2002. A rise of 4.8% in the fourth quarter of 2009 was the second biggest quarterly increase.

House prices rose 4.8% in the first quarter of 2010 from the previous three months when they gained 5.2%, according to the government figures. Property prices surged in the major capital cities in the first three months of 2010 and much of the turnover was at the top end of the market. Melbourne saw the steepest quarterly rise at 6.7% followed by 5.4% increase in Canberra and in Sydney there was an increase of 5.3%.

Demand for homes surged in 2009 after the government tripled its late 2008 payments to first time buyers of new homes to A$21,000 and doubled the grant to A$14,000 for existing homes. Those payments were reduced in January to their original A$7,000 but that has not hampered the price growth in the sector.

The Australian government last month announced drastic measures to tighten rules on foreign investment in real estate and introduced penalties to enforce the changes to ensure pressure isn’t placed on housing availability for citizens.

Temporary residents, including students, will require approval from the Foreign Investment Review Board to buy property and will have to sell when leaving the country.

The rising property prices make it almost certain that interest rates will be increased tomorrow.  Rob Henderson, head of Australian economics at National Australia Bank said that the Reserve Bank of Australia now needed to get more aggressive and acknowledge the need for a restrictive policy stance.

‘This is a shocker. The RBA needs to up their rhetoric and acknowledge that the economy is now growing at above average rates, requiring above average interest rates,’ Henderson said.
‘A 20% increase in house prices is very difficult to ignore. This latest piece of news may well be the log that broke the camel’s back. Until now, I had thought that the RBA would take a month off tomorrow. It may no longer be able to afford that luxury,’ said Chris Caton, chief economist at BT.

The RBA has raised interest rates five times since October 2009, increasing its cash rate target to 4.25% from 3%. House price increases have lately been key to the RBA’s rationale for rapidly removing loose policy settings.

Source: www.propertywire.com

The housing industry has lashed out at the Reserve Bank’s rate rise today, claiming it will discourage the construction needed to relieve the nation’s housing affordability crisis.
One developer went further, claiming future rate hikes threatened to trigger a collapse of Melbourne’s housing market.
The RBA lifted interest rates to 4.5 per cent from 4.25 per cent today, pushing up the monthly cost on an average $300,000 mortgage over 25 years by $46. It’s the sixth increase since October, which together have added an estimated $300 in monthly repayments to borrowers.
Housing Industry Association senior economist Ben Phillips predicted housing affordability will sink to new lows in the coming year as interest rates rise and the nationwide shortage swells to 200,000 homes.
”Negative signs are already appearing in the new homes market with both building approvals and home lending figures down over 2010,” he said.
Rising costs for loans shrinks the number of would-be purchasers of homes. That in turn saps the demand for the new construction of homes, although substantial numbers of would-be buyers are estimated to be avoiding the supercharged market in which prices jumped 20 per cent in the year to March.
Mr Phillips said higher interest rates wouldn’t help the increase the supply of housing stock called for in the Henry Tax Review released this week. The government either shelved or rejected recommendations including the introduction of a land tax and reductions to negative gearing deductions.

RBA ‘out of its depth’

Leanne Pilkington, general manager of Sydney real estate agency network Laing+Simmons, said the rising interest rates confirmed that ”the RBA is out of its depth when it comes to devising measures to control an overheated housing market.”
Blaming the imbalance between housing supply and demand, Ms Pilkington said, ”Interest rate increases are clearly having no impact on dampening inflated residential property prices, particularly in New South Wales.”
Victorian property developer Villawood Properties labelled the RBA’s rate move ”impetuous” saying the demand in the Melbourne market is already slowing and further rate rises could trigger a housing collapse.
”With much of the demand in the current market fuelled by foreign investment, the Federal Government’s recent proposed restrictions will assist to ease demand on its own – without the need for today’s rate increase,” said Villawood Properties executive director, Rory Costelloe.
”Should the RBA continue to push rates skyward Melbourne’s strong property market is likely to experience a housing collapse.”
Melbourne led home price rises in the past year among capital cities, rising almost 28 per cent in the year to March, the Australian Bureau of Statistics reported yesterday.
The government has tightened requirements on foreign buyers last month in response to anecdotal reports of a flood of overseas money coming into the local real estate market.

Impact felt

Australasia’s largest real estate and property group, Ray White, said the central bank’s interest rate strategy was finally having an effect on residential sales.
The Ray White Group’s Australian business grew by 8 per cent in April, compared with a year earlier.
”This was the slowest increase on (the) previous year’s results since the economic downturn of late 2008,” said Ray White Joint Chairman Brian White.
”Judging by our April results, it looks as if the interest rate increases are having an impact on activity in the Australian residential market,” the company said in a statement.

czappone@fairfax.com.au

Australian mortgage holders are a third time unlucky this year, after the Reserve Bank board today lifted interest rates by 0.25 per cent. It is the third rate rise in as many months.
Mortgage holders will be disappointed with the increase. After being told by the Reserve Bank Governor, Glenn Stevens, that rates were getting close to normal levels, borrowers would have been hoping the pace of rate rises had slowed. Today’s 25 basis point rise takes the official rate to 4.50 per cent.
It is the sixth increase since September and means mortgage holders are now paying about $300 a month extra for their mortgages than they were in the middle of last year, says Domain.com.au blogger and property author Carolyn Boyd. "There were a lot of mixed signals this month that may have had mortgage holders thinking they were in for a break. While inflation last week came in higher than expected, consumers have been spending less at the shops."
Until today’s decision, mortgage holders on variable interest rates were paying about 7 per cent to their lenders. The rates that borrowers pay to their financial institutions are expected to normalize at about 7.5 per cent to 7.75 per cent by year’s end. That could signal there are still one or two more rate rises to come before Christmas.

The man who predicted the global credit collapse of 2007 has warned that Australia’s housing bubble is ripe to burst at any time.

US investment banker Edward Chancellor has told the Australian newspaper our economy is yet to emerge from the global financial crisis.

Mr Chancellor, who works for GMO, estimates Australian house prices are more than 50 per cent above their fair value.

He says house prices would have to fall ‘quite considerably’ to revert to their average price in relation to average income.

He also warned first home buyers were among the most vulnerable, saying the ratio of their mortgage repayments to their income would rise to ‘very high levels’ as interest rates continues to rise.

A potential trigger for economic trouble and the collapse of the housing market would come if China’s demand for iron ore and liquefied natural gas slowed, he said.

Original Story taken from www.bigpond.com

Lois Buckett Negotiating with a Phone Bidder

A recent article in The Age stated

“Real Estate is no longer a man’s world as more women forge successful careers for themselves in this lucrative industry.

To say that women are a force in real estate is a glaring understatement; they have grown in numbers and are increasingly excelling in every area of the industry from property management to sales, auctioneering and investment advising.
Perhaps one reason for their success is the fact that women are also an increasing power in terms of home buying and property investment in their own right.  Studies show that 18 per cent of women buy property by themselves in Australia.”

This article was particularly interesting to me as an independent Real Estate Agent of the fairer sex and having jumped many a hurdle to attain the level of success and recognition that Lois Buckett Real Estate now represents.

Over the past 6-7 years the office in Lennox Head has been predominantly supported by female co-workers whilst expanding and growing rapidly.  Although the rental, sales and auction markets have fluctuated constantly over the years coastal and hinterland real estate has experienced huge growth over the past decade.

With a sister office opened in Bangalow and a majority of female staff at Lois Buckett Real Estate we have the area well and truly covered.

I personally feel that having women on the team is tremendous.

Generally speaking women have an ability to work methodically, are able to multi-task and easily build relationships with people in all facets of the industry.

From the female perspective, a profession in real estate can offer flexibility and opportunity and a chance to meet people and develop good communication skills in a positive environment.

Having said all this, a few of the male species have now infiltrated the office and this adds a new dimension to the equation!  What I look for in an employee is someone who is passionate about real estate, is truthful and forthright and enjoys working in a team environment.

I’m happy to say that gender is not a governing factor.

The Australian Real Estate Conference (AREC) is scheduled for 16-18 May 2010 at the Sydney Convention and Exhibition Centre.
“Over 2,000 industry professionals attend AREC each year – no other real estate event in the world attracts such a large percentage of the total industry population.  Now in its 13th year, AREC is THE biggest independent real estate conference and trade exhibition in our region.”

This is an excerpt from the AREC guide and I thought it prudent to post this blog.
I have personally attended the past 10 Conferences and am always impressed with the level of information and updates constantly available.
The ability to net-work within the industry is an added bonus to an already worthwhile event.

Peter Kakos in Action

Auction 1st May

Our previous mega auction held in February proved a huge success and resulted in property sales in excess of $13,000,000.

The next MEGA AUCTION date is set for Saturday 1 May 2010 at 9am with registration for bidders starting at 8.30am.

With so much activity in the property and real estate market place and predictions of huge growth factors in our beautiful area we are, once again, anticipating a successful auction across the board.

We are thrilled to have Peter Kakos as our on-site auctioneer as we all are aware of his amazing talent and dedication to the real estate industry.  The event will be held at the Ballina Beach Resort, Compton Drive, Ballina.

This auction is proudly marketed by Lois Buckett Real Estate.

We are offering a huge range of property, land, homes, units and rural acreage in sought after areas of Lennox Head, Ballina, Bangalow, Cumbalum, Clunes and Knockrow.

Our Autumn Edition of the Coastal & Hinterland Property Guide has just hit the streets. 

This is jam-packed with details on all our auction properties and a whole lot more.

Look out for this up to the minute publication in your letterbox or in this week’s issue of the Byron Bay Echo.   For More Information Visit Any One of These Properties on our Website Lois Buckett real Estate.

Hope to see you there!!

RESULTS:

It was a very successful day with 2 properties selling under the hammer and 1 sold prior to auction day.

Our sales staff are busy negotiating with several other interested parties and are close to finalising the sale of 5 excellent properties off our Auction List.

Watch out for the next Mega Auction in June 2010!!!!!!

RP Data and the Bureau of Statistics have recently released results from surveys indicating that people upgrading remain the largest buyer group.

Although there have been minor increases in investor and downsizer activity the “upgraders” are leading the field.

According to the ABS Housing Mobility survey a huge 45% of Australian home owners consider their homes to be too small.  This survey was conducted when interest rates were almost double what they are today.  At that time, the thought of upgrading came with significant financial drawbacks.  However, with interest rates sitting so low, it’s not surprising to see this trend.

With news headlines in December heralding that Australia now leads the world for the largest properties per capita it seems that we all want so much more.

New housing estates boast enormous homes with “parent’s retreats”, several living areas, outdoor living space and a whole lot more – do we really need it ALL?

My advice to prospective purchasers looking for the right real estate solution is:
• prepare a checklist of your requirements
• prioritise the most important points
• mark items that you are not prepared to negotiate on
• consider options that may be negotiable
• set yourself a realistic price maximum
• research – research –research – the best way to find out what’s on the market is to keep in touch with the local agent

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?

Let us let you in on a few secrets.

1. We aim for a great result, not just a fast one

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?”

2. We don’t rely on reputation to sell your property

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.

3. We offer true auction expertise

Many agents make claims about their auction success, yet few come close to matching the results achieved by Lois Buckett Real Estate. Come the big day our experience can mean a big difference in the price achieved.

4. We are working to be even better

A great performer always looks to improve. As part of the Real Estate Results Network, we are working to further develop the skills of our team and implement strategies to deliver you the very best in service and results.

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.

Lois Buckett

Hello everyone, this is the new blog for Lois Buckett Real Estate in Lennox Head. On this blog you’ll find lots of interesting information about real estate, houses for sale and rental properties available in the area.

We hope you find the information helpful to you in your search, please feel free to ask us any question about the area and what it has to offer, we look forward to working with you in the near future.