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

ALMOST two out of three consumers expect a rise in house prices during the next 12 months, new data suggests.

But that’s fewer than the 80 per cent who thought likewise earlier in 2010.

The Westpac-Melbourne Institute consumer house price index dropped to 51.1 in October, compared to its previous reading of 58.8 in July, and well below a its January peak of 80.3.

Westpac senior economist Matthew Hassan said 63 per cent of consumers expect house prices to rise during the next year, down from 70 per cent in July and a peak of 84.4 per cent in both April and January.

"Consumers have continued to pare back their expectations for house prices despite interest rates staying on hold since May," Mr Hassan said, releasing the data on Friday.

That may be in response to recent softer sale results.

The spread of expectations in October points to an average expected price rise of 2.6 per cent during the next 12 months, down from 3.6 per cent in July and 5.7 per cent in April.

"The fact that most still expect prices to rise 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," Mr Hassan said.

Source: www.gympietimes.com.au

AUSTRALIAN capital city house price rises are set to remain weak, a survey suggests.

The September quarter survey conducted by National Australia Bank (NAB) found expected annual price rises averaged just 1.5 per cent.

That’s the same as in the June quarter survey, but well down from the 6.0 per cent average rise expected in the March quarter survey, the first in the new series.

Canberra was expected to post the strongest rise of 5.0 per cent, while Brisbane was at the back of the pack, with an anticipated increase of only 0.1 per cent.

Elsewhere, expected rises were 3.3 per cent in Adelaide, 2.7 per cent in Sydney, 1.6 per cent in Perth and 1.3 per cent in Melbourne.

The survey found properties selling for less than $500,000 were expected to post the biggest price gains, while the those going for more than $2,000,000 were expected to rise by the least.

Foreign buyers were expected to account for five per cent of existing property sales and seven per cent of purchases of new developments, down from nine per cent in both categories in the June quarter.

For existing residential properties, access to credit and rising interest rates were about equal at the top of the list of constraints on demand, although the existing level of prices and uncertainty about employment security were also seen as significant.

For new developments, tight credit was the most important constraint, but rising interest rates and housing affordability were also significant constraints.

Even so, the survey found residential property was the strongest-performing category, classed as "good".

All other property categories were seen as only "fair", with infrastructure and offices the best of the rest, and hotels, retail and industrial property the weakest.

The survey also found residential rents were expected to rise by "around 2.5 per cent" over the coming year on average across Australia.

Tighter rental markets in Sydney and Melbourne meant rent rises were expected to be larger in NSW and Victoria, at 3.3 per cent in both states.

In Western Australia and Queensland, rises were expected to be weaker, at 1.4 per cent in WA and and 1.7 per cent in Queensland.

The survey respondents represent a range of players in the commercial and residential real estate market – real estate agents and managers (48 per cent), property developers (18 per cent), owners and investors (15 per cent), asset and fund managers (12 per cent) and valuers (7 per cent).

Story Garry Shilson-Josling, AAP Economist

Investors in the real estate investment trust (REIT) sector are preparing for a bumpy last quarter of calendar 2010 caused by rising interest rates and the next round of office and retail property valuations.

Property trust analysts have predicted another round of consolidation among the trusts is not far away as predators look to take advantage of the continued low share prices for many of the listed trusts.

Deutsche Bank’s Matthew Bertram has earmarked Mirvac’s residential business as a prime target for any consolidation within the REIT sector.

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”In our view, Mirvac’s residential brand would be saleable, if REITs were to enter a consolidation phase,” he said.

”If Mirvac’s return on capital remains below its weighted average cost of capital in the medium term, on our estimates a sale of the residential division would be accretive to funds from operations, reduce debt and potentially facilitate a return of capital to shareholders.”

Other deals being worked on are the sale or internalisation of the management rights of the ING Group’s listed trusts, while Stockland is closer to securing the retirement group Aevum.

Investors are debating whether Stockland will launch a bid for FKP’s retirement assets.

Reflecting the fluctuating sentiment among REIT investors was the S&P/ASX 300 A-REIT Accumulation Index, which underperformed the broader equity market by 5.5 per cent, returning a negative 0.9 per cent for September. That compared with August, when the same index outperformed the broader market by 3.5 per cent, returning 3.5 per cent over the month.

The managing director of Maxim Asset Management, Winston Sammut, said over the past year to 18 months, Australian REITs had been concentrating on improving their balance sheets as well as refinancing their debt facilities.

Where possible, a number have been actively disposing of ”non-core assets”. As a result, most of the A-REITs have moved back to basics, becoming the traditional defensive asset class it should always have been.

Mr Sammut said that as a consequence of these changes, the longer-term outlook for A-REITs was positive.

”Over the short term, we expect the sector to trade around current levels before moving ahead as investors become more comfortable with the reformation of the A-REITs that has taken place over the last year or so,” Mr Sammut said.

He added the recently launched Maxim Income Fund benefited from the volatile financial markets, generating a return of 3.29 per cent from July 15 (the date of the last distribution) to September 30th.

Story by Carolyn Cummins COMMERCIAL PROPERTY EDITOR www.smh.com.au

India’s richest man, Mukesh Ambani, has moved into his new home — a 27-storey mansion worth $1 billion.

The enormous Mumbai palace has three helipads, a dance studio, a ball room, a 50-seat theatre and an underground car park for 160 cars, according to media reports.

The 37,000 square metre home is believed to be the world’s most expensive and took seven years to build.

Mr Ambani, 53, is a major shareholder at Reliance Industries — an oil, retail and biotechnology conglomerate.

Forbes magazine has ranked Mr Ambani the fourth-richest man in the world and values his net worth at $29 billion.

The tycoon’s mother, wife and three children will live with him inside the 173m tall monolith, alongside 600 staff members.

The building has been named Antila, after a mythical island, and has views over Mumbai and the Arabian Sea.

Shiny Varghese, an Indian design magazine editor, said Antilia was "obscenely lavish".

"But we are heading into the sort of culture where money is not a question when setting up a home," Mr Varghese told The Guardian.

But an associate of Mr Ambani told the newspaper there was nothing obscene about Antilia, and that the businessman had simply "built a house to his requirements".

"He can’t just walk into a cinema and watch a film like you or me," the unnamed associate said.

"So he has built a house to his requirements like anyone else would. It’s a question of convenience and requirements. It’s only a family home, just a big one.

"It’s just another home that someone is living in. It’s no big event."

Story from ninemsn staff reporters

The International Monetary Fund has warned that Australian real estate prices might be overvalued.

In its latest World Economic Outlook, cautions that a reversal in prices could hit consumers who have speculated on rising values.

"Given assessed mild overvaluation, a potential correction in house" prices "could hit household wealth and consumer confidence," the IMF has warned.

The cautionary language follows recent comments from the Reserve Bank that Australia’s property market shows "welcome signs" of cooling after earlier interest rate rises and the withdrawal of government stimulus.

Early fears of a property bubble have emerged after housing prices rose in the year to June.

The Reserve Bank’s head of financial stability, Luci Ellis, said yesterday that the Australian property market did not appear to be overheated.

However she said: "Buying an asset because you expect the price to rise in the future, well, that is actually the academic definition of a bubble. So that would be undesirable and seen as a problem."

In an earlier development, the Fitch ratings agency said it planned to "stress test" the impact of any downturn on banks and insurers.

Story by Peter Ryan Yahoo 7 Finance

IT’S no secret overseas investors have identified Australia as a growth region when it comes to buying property.

The funds are coming in not only to buy direct assets but also via investing in Australian real estate investment trusts, which are now more focused on the local property market than at any time in the past three years.

Jones Lang LaSalle research on global capital flows confirms Australia’s attraction to investors led it to be ranked seventh in the world as a destination for cross-border investment for the first half of 2010.

The report says cross-border investment in Australia increased more than five-fold, at $US1.8 billion, compared with $US319 million at the same time last year. The research reveals Britain has been the most popular destination for cross-border investment so far in 2010, with $US7 billion invested, while Germany replaces the US as the second most popular destination.

The US was in third place (from second in the first half of 2009), despite a doubling in transactions in the American market from $US2.2 billion to $US4.3 billion.

The director of international investments at Jones Lang LaSalle in Australia, Simon Storry, said the country’s ranking confirmed the view that Australia remained a destination of choice for foreign investment.

”We expect Australia to continue to be on the radar of foreign investors for the remainder of this year,” Mr Storry said.

”Commercial real estate in Australia has offered solid and stable returns and an attractive environment for investors seeking stability in their globally diverse portfolios.”

The Jones Lang LaSalle research reveals a near-doubling of global commercial real estate transactions in the first half of 2010, compared with the same period a year ago.

According to the report, total global commercial real estate investment was $US132 billion for the first half of 2010, compared with $US76 billion in the previous corresponding period and, after reaching a low of 31 per cent of total volumes in the first half of 2009, cross-border activity was back above 40 per cent, a trend set to continue.

Mr Storry said this reflected a general market pick-up, a return to the globalisation of real estate investment and a search for value by investors.

Carolyn Cummins Sydney Morning Herald

Sydney’s yo-yoing auction clearance rate slipped to 57 per cent amid the bumper 588 weekend listings. There had been a 61 per cent success rate the previous weekend.

Clearance rates have averaged 67 per cent so far this year, the weakest weekend result being 51 per cent in early July.

The easing success rates, combined with the high number of properties on the market, has prompted suggestions that better buying conditions were on the way.

”It’s moving towards a buyers’ market, but I wouldn’t say it was there quite yet,” said John Edwards, chief executive of the real estate monitor Residex. ”Clearance rates consistently below 60 per cent is a buyer’s market.”

It was the second busiest Saturday this year – falling short of the super Saturday in March when 70 per cent of the 680 vendors sold their houses and units at auction.

Given school holidays and the grand final, there are just 170 auctions scheduled next weekend.

The weekend’s highest sale was a three-level, cliff-top Vaucluse house which sold pre-auction for $4.3 million. The six-bedroom house last traded at $4.1 million in 2007, reflecting a subdued 1.3 per cent annual growth.

Another Vaucluse house, a modernist house designed by Tobias Partners, was passed in at $6.7 million. It was initially listed early last year with $8.5 million-plus hopes. The three-bedroom, four-bathroom house was built in 2007 after the 696 square metre block cost $2.75 million in 2005.

In 2007 a neighbouring residence sold for $8.5 million, and although that house was new at the time, keen observers of Vaucluse real estate thought the latest offering was superior in design and finish.

Figures from Residex show Sydney’s price growth fell last month by 1.45 per cent to a $658,500 median house price.

Sydney unit prices also fell 1.16 per cent in the month to a $468,000 median. However, country NSW’s median house price rose 1.88 per cent to $342,500, according to the Residex data.

The Labor government’s agreement with independent MPs could help with property values in regional Australia, Mr Edwards said.

The government’s pledge to invest in building affordable homes in regional cities and to spend on infrastructure could be one of the most significant policy shifts of modern times, he said.

”Just the development of 15,000 new homes in regional Australia suggests a capital outlay in the order of $3.7 billion. I have for a long time suggested that the only way to solve the unaffordability crisis in our capital cities is to create growth in our regional areas and in turn encourage a good percentage of our city dwellers to relocate to a better lifestyle. This process will by its very nature reduce the capital growth rate in our most unaffordable capital cities but it will in the longer term be beneficial for society and ensure there is no housing bust that is so often suggested by many.

”It will cause a better balance between capital growth and rental returns in the future.

”This is because cities will have tighter rental markets with higher rental costs due to lower investor activity because of dwelling cost and expected lower capital growth rates.”

Story by Jonathan Chancellor Sydney Morning Herald

An article from Terry Ryder says “MISSING: Authorities are seeking the public’s help in locating 190,000 families who have mysteriously disappeared from Australia.”

REWARD: $60 billion, for any developer or builder who can find them.

These are the 190,000 households that, according to the construction industry, are desperately seeking new homes but can’t get them.

I’ve been looking for them, but can’t find them.

I know many builders have been having the same problem. I’m beginning to think they don’t exist.

The Housing Industry Association keeps telling us we have a chronic housing shortage, with a shortfall of 190,000 homes. Personally, I think this is fiction — something the HIA is so good at it’s in line for a Pulitzer Prize.

Its finest work of fiction is the Affordability Index, which claims the average first-home buyer in Australia pays $535,000 for the typical first home.

If you’re looking for a copy of this publication, you’re likely to find it in libraries in the “fantasy” section, because the ABS tells us that the average first-home buyer in Australia borrows $292,000.

The report that claims unsatisfied demand for 190,000 new homes should be found in the “science fiction” section, alongside books that depict time travel and interaction with aliens from worlds a thousand light years from earth.

The HIA has written a publication that looks deep into the future, foreseeing a 466,000 shortfall in 2020. George Orwell’s 1984 was a nursery rhyme compared to this.

The odd thing about this persistent complaint that we’re not building enough houses is that the loudest whingers are the people whose job it is to build houses.

There are large tracts of zoned residential land in our cities (owned by major developers) waiting for houses to be built on them.

If we’ve got a 190,000 shortfall, why aren’t they frantically building?

If the HIA figures were true, we’d have tens of thousands of families living in tents or under bridges.

I’ve visited most of our state and territory capitals this year, but I haven’t seen any of these desperately homeless.

I’ve taken a look at city vacancy rates, expecting them to be zero everywhere.

That would be a reasonable expectation, if supply had fallen so far behind demand.

But, according to RP Data, all our cities have vacancies above 3 per cent, except Canberra and Adelaide.

The South Australian capital has a vacancy rate of 2.9 per cent, which leaves Canberra as the only capital city with tight supply (a vacancy rate of 1.7 per cent).

Melbourne and Brisbane have vacancies above 5 per cent, Perth is 4.2 per cent and the average across the eight capital cities is 4.1 per cent.

We’re talking true vacancies here, not the “lies, damned lies and statistics” published by the real estate institutes.

This explains why rental growth has been so subdued.

Figures from Australian Property Monitors suggest Melbourne, Brisbane, Perth and Hobart all had less than 3 per cent growth in median house rentals in the year ending June.

Sydney and Adelaide rents grew little more than 4 per cent.

Darwin and Canberra were the standout performers with rental growth of about 8 per cent.

Apart from Darwin (up 12.5 per cent), none of the capital cities managed 5 per cent growth in apartment rentals.

In the June quarter, four of the eight capital cities had a decline in rentals, according to the APM Rental Report.

Something doesn’t add up here.

If we really did have a chronic housing shortage, rents would be going through the roof.

Clearly, they are not.

Seasoned property market analyst Michael Matusik (of Matusik Property Insights) says we are actually heading into oversupply.

He says those who cry “undersupply” are miscalculating the impact of recent population growth.

Much of the nation’s population growth has come from overseas migrants, most of whom are “family reunion” migrants, students attending our universities or business people on temporary visas.

They don’t generate significant demand for new housing.

Matusik further argues that our households are starting to increase in size again, partly as a result of the migrant factor.

When you factor these matters into the supply-demand equation, he says, we’re actually over-building.

This runs contrary to the incessant campaigning of the developer lobby, whose members have motives that prevent them from giving the public accurate information.

Matusik says: “Disbelieve anyone whose sales pitch is based around how much the market is under-supplied.”

All of this is sober reading for property investors.

My interactions with property consumers suggest many are keen to exploit the much-publicised shortage by buying rental property with prospects of strong growth. They need to check the non-fiction sections of their local library.

They won’t find any publications there authored by the HIA, Master Builders Association, Urban Development Institute of Australia and Property Council of Australia.

  Historically, houses have enjoyed a much more rapid appreciation in value than the growth recorded by units. There are a number of reasons for this more rapid level of growth: greater demand for houses, diminishing availability of development land, higher quality of stock and design available for houses rather than units and the greater Australian dream to own a house rather than a unit, among a number of other reasons.

Despite these factors, over the last five years units have recorded average annual value growth of 7.4% compared to 7.1% for houses. However, the results suggest that the superior performance of units compared to houses is quite a new phenomenon as over the last 10 years the average annual value growth of houses (9.9%) has well and truly outperformed units (8.0%).

The improvement in the capital growth performance of units in recent times is most likely due to affordability issues. Based on current capital city median prices, unit prices are recorded at $420,000 compared to houses at $495,000. Accordingly, units offer a much more affordable alternative housing option than houses.

Many unit developments, particularly newer units, are also in strategic locations and are where a large proportion of the market aspires to live but cannot afford to buy a detached home. In many cases, apartments provide a viable and relatively affordable option to buy into these markets. A good example of this is Bellevue Hill in Sydney. Bellevue Hill is one of the country’s most expensive housing markets with a median house price of $3.85 million, unit prices in the suburb are recorded at $620,000, -84% more affordable than a house.

The inner city and well established residential areas enjoy high demand for units because in most instances they are: well catered to by local amenity including shops and restaurants, well located close to working nodes and are serviced by existing public transport amenity which is often not available in outer suburbs of the capital cities.

Over the 12 months to June 2010, unit values have increased by 11.4% compared to growth of 10.2% for houses. On a month-to-month basis, annual value growth for units has been outstripping that of houses fairly consistently since April 2008.

Throughout the individual capital city markets, the growth in the value of units has outperformed houses within Sydney, Brisbane, Perth and Darwin over the last 12 months.

Throughout the capital city markets Hobart has the most affordable units with a median price of $254,250 and Sydney the most expensive with a median of $450,000.

When the differential between median house prices and unit prices is analysed you gain a greater insight into the performance of the market.

Darwin has the greatest differential between house and unit prices at $142,176 and the smallest differential is recorded in Adelaide ($67,252). Sydney, Brisbane and Darwin each recorded a differential in median price of at least $90,000 and these three cities each recorded a greater level of annual value growth for units rather than houses over the last 12 months. Perth also recorded a superior performance for units over the last year however, the price differential in that city is $75,000.

Although the popularity of units is increasing, since the onset of the Global Financial Crisis (GFC) many developers have found it much more difficult to obtain finance for higher density developments. This is due to the fact that the banks are becoming more risk adverse and the fact that a number of high profile higher density projects have either been cancelled or delayed. The latest building approvals data showed that over the year to June 2010 the number of approvals for private sector units has rebounded very strongly (57.7%) however, the monthly volume of approvals is still well below levels consistently recorded prior to the onset of the GFC, highlighting that finance for higher density product is difficult to obtain.

It’s undoubted that units have significant appeal for price sensitive purchasers due to the fact they can own in a popular location at a far lesser price compared with a detached home. For investors, units are appealing because in most instances the rental yields are much higher than they are for houses. Across the capital cities, the average gross rental yield for a unit is currently recorded at 4.8% and for houses yields are recorded at 4.0%. The superior rental return achieved by units can be attributed to the fact that units are typically located in areas that have high demand: close to major transport networks, employment nodes or retail centres.

Tim Lawless is the Director of Property Research at RP Data.

Residential property prices in major Australian cities have increased by almost 20% in the last 12 months, according to the latest figures to be released.  
The data from the Australian Bureau of Statistics shows average quarterly growth to June of 3.1% and an annual increase of 18.4%.

The data shows growth of almost double that of the private sector RP Data/Rismark index released last week which showed national city dwelling values up 10.5% in the same period.
In Melbourne house prices increased more than 24% in the last year while in Sydney they rose 21%, according to the ABC figures.

Canberra saw a 19.6% price increase, Darwin 14.6%, Perth 13%, Adelaide 11.l6%, Hobart 10.8% and Brisbane 8.5%.

The data reveals that the rate of growth in capital cities peaked at 5.5% in the December quarter last year, after rising from negative territory during the economic downturn, and is now steadily falling.

In the second quarter of the year prices increases slowed considerably. In Sydney they increased by 4.9%, by 3.6% in Melbourne and by 3.2% in Adelaide.  Darwin saw a 2.8% increase, Canberra was up 2.1%, Perth 0.4%, Brisbane 0.3% and Hobart 0.1%.

Last week’s RP Data index showed average house prices had fallen slightly after 17 months of consecutive gains, as economists agreed the market was at a turning point. In a note ANZ economists said while growth was expected to slow further this year, prices would be supported by the underlying housing shortage and a buoyant outlook for the Australian economy.

It comes as analysts warn that Australia is facing a housing crisis and that the national shortfall of 190,000 dwellings will widen to 466,000 by 2020, amid expectations of a rapidly growing population.

Developers claim that a shortage of land and a lengthy planning process is hampering construction. HIA chief economist Harvey Dale said it takes an average of seven to eight years for a greenfield site to reach completion, an unnecessarily long period that pushes up costs and reduces supply.

‘At the end of the day, the lack of adequate, affordable land supply is at the heart of the problem. The number of processes a development must go through is higher now than was the case 10 years ago. We are regressing rather than progressing in terms of the bureaucracy involved in building a new home,’ he said.

Story source www.propertywire.com

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

Homes will be where the easy access is, says new building code to promote mobility.

A minimalist step-free shower; a corridor wide enough for a sofa; and a front entry you don’t have to wrestle the pram up.

These features are part of a voluntary building code to be released today by the Parliamentary Secretary for Disabilities, Bill Shorten. The code would improve a home’s value and also make life easier for Australians with mobility issues, advocates said.

An ageing population of baby boomers who dislike stairs and young parents wanting better safety for toddlers are key targets for the Liveable Housing Design, the consumer-facing brand of the code developed with the property industry.

The national convener of the advocacy group Australian Network for Universal Housing Design, Amelia Starr, said the fashionable step-free shower was already standard in homemaker magazines, while wider corridors were useful to anyone moving furniture.

US research showed 90 per cent of newly built homes would at some point have someone with a mobility issue residing there. Too many Australian homes were unable to adapt to a family’s evolving needs, let alone wheelchair use, Ms Starr said.

”We hope people will say I want that brand in my home because then it can be sold off to the widest range of people possible,” she said.

The Property Council of Australia chief executive, Peter Verwer, said: ”It makes good sense to design homes so they evolve with their users. It works as well for mums to be as it does for senior Australians.”

The new standards grew from several meetings between Mr Shorten and Therese Rein with industry groups including the Master Builders, Australian Institute of Architects, the Property Council and the Herald journalist Cynthia Banham. The last meeting was held two days before Kevin Rudd stepped down as prime minister.

The code will be launched today by Mr Shorten at a Penrith housing development that already adopts its features.

The Master Builders chief executive, Wilhelm Harnisch, said: ”Improving the safety of kitchens and other areas means people can stay longer in the home instead of going to an aged care facility.”

Story by Kirsty Needham 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/

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