Residential Settlements » Market

Sigh of relief as interest rates stay on hold

Peter Fletcher — Wed, 08 Sep 2010 03:04:20 +0000

Jay Wood

Home owners across Western Australia breathed a collective sigh of relief when the RBA announced their decision to keep the cash rate at 4.5 percent yesterday.

It’s a much needed boost for the local market.

With over 14 500 property listings for sale in Perth any upward movement in rates is felt immediately in the number of buyer inquiries and therefore on prices. According to many agents the market is finely balanced with sellers being forced to reduce prices to attract offers.

Jay Wood, from pfr.com.au in Victoria Park says that the market is trying hard to move forward. He’s noticed an increase in buyer inquiry and home open activity levels but believes that buyers are making low offers thanks to the number of options available.

“It’s a numbers game”, says Jay. “Whereas previously it would take 20 buyer inquiries to generate a sale it now takes 30.”

Jay believes interest rates will remain on hold for the rest of the year, but they’re not the only factor in play. He suggests that the resurgence of mining industry activity and the low level of new residential construction starts will take time to filter through to increased real estate prices, he suggests.

In other words it’s a waiting game.

His advice to sellers is simple; think carefully about your first offer.

“In this market there’s only one buyer for a property and many sellers are now wishing they had accepted their first offer. The first offer is often the best”, he says.

“The market is all about sentiment. At the moment it’s dragging a bit”, he concluded.

My question is when will it start to move? What will change it? What are your thoughts?

Jay Wood is a real estate agent in Victoria Park and has an interest in Residential Settlements.

Perth property tops hit list – report

Peter Fletcher — Tue, 23 Feb 2010 03:52:21 +0000

Perth property holds the best future growth prospects according to a Wakelin Property Advisory report. The report, Outlook for residential property market, claims that Perth, along with Melbourne, is set to lead the way in investment returns over the coming year.

Perth is in the midst of a resources boom led by “…China’s stockpiling of commodities and…the Gorgon LNG project” the report claimed. And although Perth’s rental vacancy factor is higher than other capital cities there are signs that it is “tightening”. That’s good news for investors.

Driven by buoyant job prospects the population in WA is expected to surge. As it does, demand for accommodation will put upward pressure on rents making investment in the West more attractive.

The report went on to recommend that the best property types to buy in Perth was “middle-ring beachside suburbs, and the inner south and west adjacent to the CBD.” Just why Wakelin’s chose these property types was not made clear.

Where’s the property market heading in 2010?

Peter Fletcher — Tue, 16 Feb 2010 07:05:05 +0000

2008 was a tough year in real estate. In those last few months it appeared there was little to expect but an almighty crash. In some instances property values took a sharp dive. Stories of people slashing prices to achieve a quick sale were rife. Few were willing to predict even a flat market.

But how times have changed. Less than 18 months later the market has once again surged.

It’s back in the black with plenty predicting more good news to come.

Compared to the rest of Australia – and despite a massive resources boom – WA is an under-performer. That’s if you can call an annual growth of 14.3% under-performing. Some expect the combination of higher interest rates and lower first home buyer grants to slow the market.

But others are more upbeat pointing to strong population growth and improving employment prospects as potential market drivers.

What are are your thoughts? Which way is the Western Australian property market heading in 2010?

Property prices peak but still no boom – REIWA

Peter Fletcher — Fri, 05 Feb 2010 08:13:58 +0000

Despite record property prices we’re still not in a boom says REIWA President, Alan Bourke. Speaking to Perth Now, Mr Bourke claimed that the current surge in property prices is part of “…an enormous…correction that has to happen…in order to get back to the 2007 prices.”

REIWA’s preliminary data for the December quarter shows median house prices up 14.3 per cent from December 08 to $480,000.

Mr Bourke attributed strong property growth to a change in the market from first-home buyers to trade-up buyers.

“2009, as a result of the First Home Owner Boost, saw 42 per cent of all sales being first-home buyers and of course they buy in the under $500,000 market so the median price moved down.

“As they’ve slowly left the market and the next wave of buyers, the trade up buyers, have moved in, buying in the segment between $600,000 and $1 million, the median price has moved up to reflect that they are now the most predominant buyer in the market.

“2010 is going to be the year of the trade-up buyer.”

Mr Bourke claimed that one of the key drivers of price growth has been the ongoing shortage of land, which increases demand for existing accommodation.

Australia Real Estate Sees Double-Digit Growth In 2009

Peter Fletcher — Tue, 02 Feb 2010 00:59:36 +0000

‘This top end recovery has been completed in most capitals, with median house prices surpassing pre-global financial crisis highs for the first time in the December quarter in Sydney, Brisbane, Adelaide and Perth,’ he added.Bell said the extent of last year’’ median house price growth had come as a surprise as no one foresaw the economic recovery being so strong and that fueled the top end of the market. The fact that the December quarter was as strong as the three months earlier was also surprising. ‘The December quarter was a surprise. There is an indication that not only was there a general price rise, but the more expensive properties were selling as well,’ he said.

via nuwireinvestor.com

These figures should come as no surprise. With historically low interest rates and improving job prospects the market was always set to rebound quickly.

The question now is what impact sharply rising interest rates will have on the market.

RBA on housing: told you so | House prices | Interest rates

Peter Fletcher — Mon, 01 Feb 2010 11:25:39 +0000

Today’s ABS score of the average established house in the state capitals jumping 5.2 per cent in the December quarter and 13.6 per cent over 2009 will do as an illustration. And remember that the best of the first-home buyer incentives were already washing out of the market in the December period. Annualise that December quarter figure if you dare.

Perversely, it’s the promise of a housing bubble that is sucking investors back into the market as well as panicking would-be owner-occupiers into taking the plunge. And it’s the reality of a housing bubble that will help force up interest rates.

via smh.com.au

It’s not only Crikey that’s claiming a looming housing bubble. Here Michael Pascoe argues that the three major property monitors all show an over-heated market. And that will lead to interest rate increases.

The question is, what advice are you giving to buyers and sellers?

Posted via web from Residential Settlements

Are we experiencing a housing bubble?

Peter Fletcher — Mon, 01 Feb 2010 08:55:16 +0000

Here’s something I just found on Crikey.

The report says that, despite a slow down in first home buyer activity, Australia’s property prices are too high. The author wants a 0.5% increase in interest rates tomorrow.

Australia is in the middle of an emerging bubble in housing. There should be no quibbling about a percent here or a decimal point there or trying to excuse the sharp rise by arguing that it followed a fall in the first half of last year. The reality is that they exploded across Australia in the past six months of 2009 and finished the year on a surge.

Figures from the Australian Bureau of Statistics confirm today that showed house prices jumped a huge 13.6% in the year to December, with a rise of 5.2% happening in the December quarter alone. The September quarter’s increase was boosted to 4.4%.

via crikey.com.au

What’s happening with the market in your patch? What would your advice be to the RBA?

Posted via web from Residential Settlements

Trade-up buyers active but West still lags

Peter Fletcher — Sat, 30 Jan 2010 08:48:29 +0000

According to a report in The Australian, Perth is in the midst of a resurgence of activity in the top end of the market.

PERTH is a city with increased optimism about the resources industry and is following the general trend across the country with residential buyers upgrading to higher price brackets.

New data from the Real Estate Institute of Western Australia shows a continued swing away from first-home buyer activity towards a stronger trade-up market.

REIWA deputy president David Airey said in a statement in mid-January that while first-home buyers had remained strong, Perth’s median house price had held up and was increasing due to renewed activity by trade-up buyers.

“REIWA data shows that for the last six months it was sales of homes valued at between $500,000 and $600,000 which dominated the market.

“But for the December quarter alone we saw sales in the $600,000 to $750,000 range jump significantly from about 10 per cent in September to just over 14 per cent in December,” Mr Airey said.

The renewed market activity has seen days on market drop from 64 to 54.

Despite this optimism the West still lags most of the nation in growth. According to RP Data year-to-date growth in Perth is the second lowest of all the capital cities at just 6.5%.

First home buyer fade leads December home price dip

Peter Fletcher — Fri, 29 Jan 2010 07:20:01 +0000

According to a report on the ABC economic factors pushed the Australian property market lower in December despite a positive year-to-date performance.

Australian capital city home values slipped 0.3 per cent in December, but still recorded 11.5 per cent growth over the year.

The data from real estate analysts RP Data and funds manager Rismark shows that the median Australian dwelling (including houses and apartments) was worth $451,000.

RP Data’s research director, Tim Lawless, says the typical summer slow-down, as well as changes to monetary policy and the reduction of Federal Government grants saw the residential property market soften at the end of last year.

“We have seen interest rates of course going up which has dampened demand somewhat,” he said.

The report went on to claim that Perth had the lowest rental yield of all the capital cities.

Read the full story on abc.net.au

Posted via web from peterfletcher’s posterous