Thursday, December 17, 2009
The lowdown of the Christmas Slowdown
The Christmas period is often considered to be one of the slowest times of the year for property sales, however a week by week analysis shows the weeks leading up to Christmas can be some of the busiest of the year.
It has been widely reported how well the Australian property market has fared during 2009: based on the RP Data Rismark Monthly Home Value Index, most capital cities have seen property values rise well above their previous peaks. National property values are up 10 percent over the first ten months of the year.
From another perspective, looking at the number of property sales that have transacted from month to month, total property transactions have actually been relatively subdued. Over the year to October, the monthly number of properties sold has failed to break the ten year average mark of 61,400.
Even with transactions remaining low compared to the historical average, market activity has recorded a vast improvement from last year when the number of sales bottomed out at just over 43,000 sales in the month of August. Monthly volumes during 2009 have averaged 55,000 sales each month – a 27.5 percent improvement from the August ‘08 low.
The relatively low number of sales comes at a time when demand for property is growing, thanks to record population growth and improved confidence in the broader economy and property market… so the question must be asked, “why are sales volumes so low?”The reason largely comes down to the tight level of stock in the market rather than any lack of demand for real estate.
Despite the fact that new listings to the market have improved since June (up from about 44,000 new listings each month to about 50,000), the total stock levels have been consistently falling as actual demand outweighs supply.
On a slightly different note, the trend of sales volumes over the Christmas period will be interesting to watch. A finding that may come as a surprise to some is that many buyers remain active during the last weeks of December.
The 51st week (or second last week of the year) of the year typically sees a jump in the number of properties sold as buyers look to finalise contracts prior to the Christmas festivities. The same trend is evident in the weeks leading up to the end of the financial year.
January is a much more subdued month and is by far the quietest month in terms of the number of buyers and sellers actively involved in the market. Virtually no sales occur in the first week of the year and the second week of the year is not much better.
By the second half of January we should start to see some life return to the property market.The outlook for 2010 with regard to sales volumes is fairly upbeat. Even though interest rates are rising and much of the government stimulus will have been wound back, we expect investor and ‘upgrader’ numbers to continue improving which will provide some balance to the prospect of fewer first home buyers.
Consumer confidence remains high and there is already speculation that unemployment is peaking, which will continue to support interest in the property market. Additionally, the medium to long term growth prospects remain very healthy, providing further encouragement to those considering buying: housing remains in undersupply and population growth is projected to remain very high creating an ongoing imbalance between demand and supply and rental yields are at reasonable levels with the likelihood of yield improvements as rents once again start to grow.
Sunday, November 29, 2009
Australian House Prices Rise Strongly in October after Sluggish September
Australia’s growth in home values rebounded in the month of October increasing by 1.4 per cent after a relatively flat September.
Based on the rpdata.com residential property database, Australia’s housing market bounced back strongly in the month of October after little growth in September. According to the market-leading RP Data-Rismark National Capital City Hedonic Index—which is published by the RBA in the Statement on Monetary Policy—Australian home values rose by an indicative 1.4 per cent in the month of October after just 0.4 per cent growth in September.
Over the first ten months of 2009, Australian home values have now risen by 10 per cent following on from their 3.8 per cent peak-to-trough falls in 2008.
According to rpdata.com’s Senior Research Analyst, Cameron Kusher, “the strong growth figures throughout October after a slowdown during September show that the market is very resilient and that the 25 basis point interest rate increase during the month has not immediately impacted market.”
Rismark International Managing Director Christopher Joye said, “Although we forecast a resilient recovery in 2009, we have been surprised on the upside by the strength of conditions, which reflects Australia’s better-than-expected employment and growth outcomes. We project that as mortgage rates normalise capital growth rates will fall back to more subdued levels.”
Cameron Kusher said the likeliness of further interest rate rises over the next 12 to 18 months is likely to result in more normal growth conditions over 2010.“As interest rates rise over the next 12 to 18 months more normal rates of growth are likely. The removal of the First Home Buyers Grant Boost and higher loan costs are will also result in greater pressure on the rental market,” he said.
Christopher Joye commented, “According to our analysis of all home sales in Australia, which we have privately shared with the RBA, the median Australian home value is only four times average disposable household incomes. This is inconsistent with claims that Australian dwelling prices are 6-8 times household incomes.
People forget that 40 per cent of the housing stock is not located in the capital cities.”“This data implies that Australian housing is not expensive by overseas standards, and also helps explain our internationally high rates of home ownership combined with very low mortgage default rates.”
“One question exercising people’s minds is the impact of higher interest rates. The RBA has pointed out that when they cut mortgage rates by 40 per cent in the second half of 2008 most borrowers did not actually reduce their repayments. The RBA suggested that this means that borrowers should be able to absorb future rate hikes as mortgage costs normalise,” he said.
When we divide the patented RP Data-Rismark Index up into the cheapest 20 per cent of suburbs ranked by price, the middle 60 per cent of suburbs, and the most expensive 20 per cent of suburbs (see chart), we see that contrary to popular belief the least expensive areas (+8.5 per cent) have significantly underperformed the luxury markets (+11.9 per cent) in the year-to-date.
This reverses out the trend in 2008, when the cheapest areas fared the best while the luxury markets performed worst. In the month of October homes values rose in every single mainland capital city except Darwin (-0.5 per cent), which is unsurprising given it has already experienced 12.7 per cent growth in the year-to-date.
Cameron Kusher commented, “Darwin has had a tremendous run over the last 18 to 24 months seemingly unaffected by the Global Financial Crisis. With values now similar to those recorded in Melbourne an eventual slowdown in growth was inevitable.
From an investment perspective the city remains extremely attractive due to the impressive yields. Any slowdown in value growth is likely to have a further positive impact on yields.”The biggest story of 2009 has been the strong recovery in the Melbourne and Sydney housing markets.
In the three months to end October, home values in Melbourne and Sydney have outperformed most other capitals rising by 4.5 per cent and 3.2 per cent, respectively. Over the year-to-date, Melbourne has been Australia’s best performing capital city, delivering capital gains of +14.9 per cent.
Sydney is up by nearly 1 per cent per month with cumulative growth of 9.9 per cent. In the first 10 months of 2009, most of the other capital cities have performed strongly with Darwin (+12.7 per cent) leading the way, followed by Canberra (+11.0 per cent), Brisbane (+6.9 per cent), Perth (+6.1 per cent) and Adelaide (+4.6 per cent).
The RP Data-Rismark National Home Value Index results show that in the month of October, detached houses (+1.5 per cent) have once again shaded units (+1.1 per cent).Over the three months to end October, house values (+3.3 per cent) have also outperformed units (+3.0 per cent). But in the year-to-date, units (+10.4 per cent) have generated slightly higher capital gains than houses (+9.8 per cent).
Mr. Joye said that the greater rate of growth for units over the year is likely due to the fact that in the first half of the year there was strong unit demand driven by first time buyers.
In the RBA’s October Board Minutes, the Bank noted:“[M]any households with home loans had not sought to lower their monthly payments when mortgage rates had fallen and had instead paid down their loan balances ahead of schedule. This would reduce the vulnerability of that part of the household sector to rising mortgage rates.”
In a speech last week, the RBA’s Deputy Governor reiterated concerns that we have previously raised about international interpretations of house-price-to-income ratios.
He commented:“International comparisons of the relativity between house prices and income have been the subject of considerable research over the years. One of the complications faced by people working on this topic is to ensure consistency in the data that underlie the comparisons. Do the figures relate to capital city prices, or the prices across the whole country? Do they cover all dwellings or just detached houses? Is income measured as average weekly earnings or average household income? It is not always possible to get entirely consistent data across countries, so we need to be careful in interpreting the results of these comparisons.”
Based on RP Data-Rismark estimates, Australia’s national dwelling price-to-income ratio of 4x is a bit higher than the US metric of 3x, which is lower than most developed economy peers.
Here the Deputy Governor of the RBA offered an explanation for the differences:“There are a couple of reasons why Australian households seem to be able to sustain a higher ratio of house prices to incomes.
First, Australians seem to spend less of their income on non-housing consumption than is the case for US households, with a significant part of this difference explained by lower health costs in Australia. Australian households therefore have greater capacity to service housing loans.
Second, the level of gearing in the United States housing market is noticeably higher than in Australia. This may reflect the fact that Australian households are more active in paying down their loans after buying a home, possibly because owner-occupied mortgage interest rates are not tax deductible here as they are in the United States.
The faster pay-down of mortgage debt in Australia reduces the risk of borrowers subsequently getting into financial difficulty. Overall, the experience of the last few years suggests that the Australian household sector as a whole appears to have the financial capacity to sustain a relatively high ratio of housing prices to income.”
On the subject of whether Australian housing is unduly expensive, the IMF commented in its October 2009 World Economic Outlook Report: “In the case of Australia, if the impact of long-term migration on housing demand is taken into account, the results do not produce evidence of a significant overvaluation of house prices.” The IMF also concludes that: “If past is prologue, these estimates suggest that…the [housing market] corrections in Australia and the United States are close to complete…”
In a recent presentation to the Melbourne Institute Rismark’s CEO examined IMF’s estimates of changes in real house price-to-income ratios from 13 OECD countries including Australia over the period 1997 to end 2008. It is noteworthy that the more recent period arguably disadvantages Australia since home values here fell only modestly in 2008 whereas they suffered precipitous falls elsewhere.
On the basis of this benchmark, changes in Australian housing costs over time have been demonstrably ‘middle-of-the-road’. More precisely, between 1997 and 2008 Australia’s house price-to-income growth was lower than the following peers:
The UK;
France;
Sweden;
Spain;
The Netherlands; and
Ireland.
Australia’s house price-to-income growth between 1997 and 2008 was only slightly higher than that which was realised in Italy, New Zealand and Norway. (The two clear international laggards were Canada and the US.)
Based on the rpdata.com residential property database, Australia’s housing market bounced back strongly in the month of October after little growth in September. According to the market-leading RP Data-Rismark National Capital City Hedonic Index—which is published by the RBA in the Statement on Monetary Policy—Australian home values rose by an indicative 1.4 per cent in the month of October after just 0.4 per cent growth in September.
Over the first ten months of 2009, Australian home values have now risen by 10 per cent following on from their 3.8 per cent peak-to-trough falls in 2008.
According to rpdata.com’s Senior Research Analyst, Cameron Kusher, “the strong growth figures throughout October after a slowdown during September show that the market is very resilient and that the 25 basis point interest rate increase during the month has not immediately impacted market.”
Rismark International Managing Director Christopher Joye said, “Although we forecast a resilient recovery in 2009, we have been surprised on the upside by the strength of conditions, which reflects Australia’s better-than-expected employment and growth outcomes. We project that as mortgage rates normalise capital growth rates will fall back to more subdued levels.”
Cameron Kusher said the likeliness of further interest rate rises over the next 12 to 18 months is likely to result in more normal growth conditions over 2010.“As interest rates rise over the next 12 to 18 months more normal rates of growth are likely. The removal of the First Home Buyers Grant Boost and higher loan costs are will also result in greater pressure on the rental market,” he said.
Christopher Joye commented, “According to our analysis of all home sales in Australia, which we have privately shared with the RBA, the median Australian home value is only four times average disposable household incomes. This is inconsistent with claims that Australian dwelling prices are 6-8 times household incomes.
People forget that 40 per cent of the housing stock is not located in the capital cities.”“This data implies that Australian housing is not expensive by overseas standards, and also helps explain our internationally high rates of home ownership combined with very low mortgage default rates.”
“One question exercising people’s minds is the impact of higher interest rates. The RBA has pointed out that when they cut mortgage rates by 40 per cent in the second half of 2008 most borrowers did not actually reduce their repayments. The RBA suggested that this means that borrowers should be able to absorb future rate hikes as mortgage costs normalise,” he said.
When we divide the patented RP Data-Rismark Index up into the cheapest 20 per cent of suburbs ranked by price, the middle 60 per cent of suburbs, and the most expensive 20 per cent of suburbs (see chart), we see that contrary to popular belief the least expensive areas (+8.5 per cent) have significantly underperformed the luxury markets (+11.9 per cent) in the year-to-date.
This reverses out the trend in 2008, when the cheapest areas fared the best while the luxury markets performed worst. In the month of October homes values rose in every single mainland capital city except Darwin (-0.5 per cent), which is unsurprising given it has already experienced 12.7 per cent growth in the year-to-date.
Cameron Kusher commented, “Darwin has had a tremendous run over the last 18 to 24 months seemingly unaffected by the Global Financial Crisis. With values now similar to those recorded in Melbourne an eventual slowdown in growth was inevitable.
From an investment perspective the city remains extremely attractive due to the impressive yields. Any slowdown in value growth is likely to have a further positive impact on yields.”The biggest story of 2009 has been the strong recovery in the Melbourne and Sydney housing markets.
In the three months to end October, home values in Melbourne and Sydney have outperformed most other capitals rising by 4.5 per cent and 3.2 per cent, respectively. Over the year-to-date, Melbourne has been Australia’s best performing capital city, delivering capital gains of +14.9 per cent.
Sydney is up by nearly 1 per cent per month with cumulative growth of 9.9 per cent. In the first 10 months of 2009, most of the other capital cities have performed strongly with Darwin (+12.7 per cent) leading the way, followed by Canberra (+11.0 per cent), Brisbane (+6.9 per cent), Perth (+6.1 per cent) and Adelaide (+4.6 per cent).
The RP Data-Rismark National Home Value Index results show that in the month of October, detached houses (+1.5 per cent) have once again shaded units (+1.1 per cent).Over the three months to end October, house values (+3.3 per cent) have also outperformed units (+3.0 per cent). But in the year-to-date, units (+10.4 per cent) have generated slightly higher capital gains than houses (+9.8 per cent).
Mr. Joye said that the greater rate of growth for units over the year is likely due to the fact that in the first half of the year there was strong unit demand driven by first time buyers.
In the RBA’s October Board Minutes, the Bank noted:“[M]any households with home loans had not sought to lower their monthly payments when mortgage rates had fallen and had instead paid down their loan balances ahead of schedule. This would reduce the vulnerability of that part of the household sector to rising mortgage rates.”
In a speech last week, the RBA’s Deputy Governor reiterated concerns that we have previously raised about international interpretations of house-price-to-income ratios.
He commented:“International comparisons of the relativity between house prices and income have been the subject of considerable research over the years. One of the complications faced by people working on this topic is to ensure consistency in the data that underlie the comparisons. Do the figures relate to capital city prices, or the prices across the whole country? Do they cover all dwellings or just detached houses? Is income measured as average weekly earnings or average household income? It is not always possible to get entirely consistent data across countries, so we need to be careful in interpreting the results of these comparisons.”
Based on RP Data-Rismark estimates, Australia’s national dwelling price-to-income ratio of 4x is a bit higher than the US metric of 3x, which is lower than most developed economy peers.
Here the Deputy Governor of the RBA offered an explanation for the differences:“There are a couple of reasons why Australian households seem to be able to sustain a higher ratio of house prices to incomes.
First, Australians seem to spend less of their income on non-housing consumption than is the case for US households, with a significant part of this difference explained by lower health costs in Australia. Australian households therefore have greater capacity to service housing loans.
Second, the level of gearing in the United States housing market is noticeably higher than in Australia. This may reflect the fact that Australian households are more active in paying down their loans after buying a home, possibly because owner-occupied mortgage interest rates are not tax deductible here as they are in the United States.
The faster pay-down of mortgage debt in Australia reduces the risk of borrowers subsequently getting into financial difficulty. Overall, the experience of the last few years suggests that the Australian household sector as a whole appears to have the financial capacity to sustain a relatively high ratio of housing prices to income.”
On the subject of whether Australian housing is unduly expensive, the IMF commented in its October 2009 World Economic Outlook Report: “In the case of Australia, if the impact of long-term migration on housing demand is taken into account, the results do not produce evidence of a significant overvaluation of house prices.” The IMF also concludes that: “If past is prologue, these estimates suggest that…the [housing market] corrections in Australia and the United States are close to complete…”
In a recent presentation to the Melbourne Institute Rismark’s CEO examined IMF’s estimates of changes in real house price-to-income ratios from 13 OECD countries including Australia over the period 1997 to end 2008. It is noteworthy that the more recent period arguably disadvantages Australia since home values here fell only modestly in 2008 whereas they suffered precipitous falls elsewhere.
On the basis of this benchmark, changes in Australian housing costs over time have been demonstrably ‘middle-of-the-road’. More precisely, between 1997 and 2008 Australia’s house price-to-income growth was lower than the following peers:
The UK;
France;
Sweden;
Spain;
The Netherlands; and
Ireland.
Australia’s house price-to-income growth between 1997 and 2008 was only slightly higher than that which was realised in Italy, New Zealand and Norway. (The two clear international laggards were Canada and the US.)
Thursday, September 10, 2009
Finding The Right Area To Live In
It is an important decision and not one to be taken lightly - choosing the area you want to live. Take your time and carefully consider what is it you are after from your desired location.
Deciding which area to look in for your first home is not necessarily as simple and obvious as it seems. You possibly have a firm idea of the location you wish to buy a property. However, there are rafts of subsequent and compounding decisions which may confound on your initial thought processes.
Ask yourself:
What stage of life are you in?
Are you single – and happy to remain so?
Are you in a relationship and not contemplating children?
Are you in a relationship and undecided about children, or maybe totally committed to having children?
This is only the start of many aspects that may ultimately make you change direction numerous times before deciding on your final area to investigate.
Some general considerations are constant when thinking about the location to look in for your first home – and generally involve a ranking in importance to narrow down location searches.
What is important to you?
How important is the lack of a commute to work?
Conversely, what are you prepared to trade off in commuting time for finding the ideal home?
Related to this consideration is assessing your proximity to public transport. In these times of increasing petrol prices and chaotic travelling costs, does the area you are looking at have reliable train lines, bus or tram routes or any other kind of public transport? The increasing demand for public transport is witnessing increasing premiums on real estate prices as well.
How important is it for you to be located near family and friends? Neighbourhood networks and enclaves are very important for many prospective property purchasers and may well be important for you too.
Convenience to other amenities such as:
retail outlets
medical and other service facilities
is a given for most young families; however, the trade-off for lifestyle and the wider open spaces may be more important for you.
Those of you with young families – or who are in the family planning stage – will find the availability of educational facilities of paramount importance. A word of advice – think long term. This means thinking across the whole educational spectrum:
early childcare
preschool
primary school facilities
the availability – or potential availability – of secondary schools
Further down the track, tertiary educational facilities are likely to be an issue as well, so the availability of universities, TAFEs and technical colleges should not be out of your thought processes.
Proximity to recreational facilities is also an important consideration when deciding where to buy. There will always be times you would rather be in an open tree-lined park rather than the centre of trendy, inner city living.
You could do worse than think what your favourite activities are away from work. Is living near the beach a greater priority for you, or would you be happier living nearer a decent library or possibly arts or cultural centre? It could be that a location handy to your gym or maybe tennis courts, swimming pools or sports stadiums are what is most important to you.
You should never forget thinking about your environment.
What does the rest of the street that the property you desire is in, look like?
Do you feel the suburban surrounds are pleasant for you as well?
Is the property you’ve discovered on the main flight path into the city?
Is the property near loud or undesirable industrial activity?
Or, what many prospective purchasers forget to investigate, is loud or industrial activity planned for the area? You should ascertain this with the local council.
These are the very real considerations when you are deciding where you would like to purchase a property. Driving around those areas you would like to live is also a good tactic. You will be amazed at how many properties for sale you can spot when you're on the lookout. Write down the property and real estate agent's details and follow up any promising finds with the agents concerned.
By Geoffrey Rush-www.realestate.com.au
Deciding which area to look in for your first home is not necessarily as simple and obvious as it seems. You possibly have a firm idea of the location you wish to buy a property. However, there are rafts of subsequent and compounding decisions which may confound on your initial thought processes.
Ask yourself:
What stage of life are you in?
Are you single – and happy to remain so?
Are you in a relationship and not contemplating children?
Are you in a relationship and undecided about children, or maybe totally committed to having children?
This is only the start of many aspects that may ultimately make you change direction numerous times before deciding on your final area to investigate.
Some general considerations are constant when thinking about the location to look in for your first home – and generally involve a ranking in importance to narrow down location searches.
What is important to you?
How important is the lack of a commute to work?
Conversely, what are you prepared to trade off in commuting time for finding the ideal home?
Related to this consideration is assessing your proximity to public transport. In these times of increasing petrol prices and chaotic travelling costs, does the area you are looking at have reliable train lines, bus or tram routes or any other kind of public transport? The increasing demand for public transport is witnessing increasing premiums on real estate prices as well.
How important is it for you to be located near family and friends? Neighbourhood networks and enclaves are very important for many prospective property purchasers and may well be important for you too.
Convenience to other amenities such as:
retail outlets
medical and other service facilities
is a given for most young families; however, the trade-off for lifestyle and the wider open spaces may be more important for you.
Those of you with young families – or who are in the family planning stage – will find the availability of educational facilities of paramount importance. A word of advice – think long term. This means thinking across the whole educational spectrum:
early childcare
preschool
primary school facilities
the availability – or potential availability – of secondary schools
Further down the track, tertiary educational facilities are likely to be an issue as well, so the availability of universities, TAFEs and technical colleges should not be out of your thought processes.
Proximity to recreational facilities is also an important consideration when deciding where to buy. There will always be times you would rather be in an open tree-lined park rather than the centre of trendy, inner city living.
You could do worse than think what your favourite activities are away from work. Is living near the beach a greater priority for you, or would you be happier living nearer a decent library or possibly arts or cultural centre? It could be that a location handy to your gym or maybe tennis courts, swimming pools or sports stadiums are what is most important to you.
You should never forget thinking about your environment.
What does the rest of the street that the property you desire is in, look like?
Do you feel the suburban surrounds are pleasant for you as well?
Is the property you’ve discovered on the main flight path into the city?
Is the property near loud or undesirable industrial activity?
Or, what many prospective purchasers forget to investigate, is loud or industrial activity planned for the area? You should ascertain this with the local council.
These are the very real considerations when you are deciding where you would like to purchase a property. Driving around those areas you would like to live is also a good tactic. You will be amazed at how many properties for sale you can spot when you're on the lookout. Write down the property and real estate agent's details and follow up any promising finds with the agents concerned.
By Geoffrey Rush-www.realestate.com.au
Sunday, August 2, 2009
First Home Buyers - Useful Information
The first Home Buyers Grant BOOST runs out at the end of September.
Establshed Homes: $14,000
Building: $21,000
To ensure you don't miss out you need to have either a
Establshed Homes: $14,000
Building: $21,000
To ensure you don't miss out you need to have either a
- Contract of Sale - established homes
- Fixed Price Contract - Construction
This means you don't need to have finance approved before September 30, just one of the above.
If you are building and needing to have the fixed price contract, you need to keep this in mind
- Some builders can take up to 3 to 4 weeks to have a fixed price contract put together (REMEMBER: This needs to be signed before the 30th of September).
- If your approval date on your land is before you have a fixed price contract, then you may find your self having to pay Stamp Duty on the land.
- Most banks will not finance Owner Builder so it would be a lot less head aches through a registered builder.
Usually when you sign a contract of sale for an established home it will be subject to finance. Which means if you were declined then you get your deposit back.
However, when you sign a fixed price contract most builders won't give you your deposit back if you are declined because it costs them money to produce the contract (usually more than what you paid as a deposit).
To avoid losing your deposit it is a good idea to get a pre approval before you sign a fixed price contract.
Sunday, July 26, 2009
Industry Market Wrap-RP DATA
The Reserve Bank this week released the minutes from their most recent board meeting which revealed an upbeat assessment of the national economy. The RBA have speculated that Australia’s economy will start to improve later in the year and that downside risks to a recovery have diminished. The minutes from the RBA suggests that, if necessary, there is scope to cut the official cash rate if there is a further need to stimulate demand.The release of CPI figures on Wednesday, the lowest in ten years, are likely to reinforce the Reserve Bank’s assessment of the economy. Based on the headline figures, consumer prices increased by just 1.5 percent over the year which is well below the Reserve’s target range of between 2 and 3 percent. The RBA’s preferred measure of inflation is underlying inflation, which removes volatile items such as fuel, fruit and vegetables, is much more stubborn, remaining outside the target range at 3.9 percent. Based on the high underlying inflation figure, it is unlikely that official interest rates will fall any further until the core inflation numbers fall within the target range.There are currently 113,000 residential homes for sale across Australia with an estimated market value of just over $40 billion. The total number of properties being advertised for sale around Australia has moderated over the last year, with current market stock about 13 percent lower than the same time last year. Auction clearance rates last week remained robust with Sydney and Melbourne both recording clearances above 80 percent. This week’s feature article provides an overview of auction markets around Australia over the last year, highlighting the improvement in clearance rates particularly in the key auction markets of Sydney and Melbourne. In other news, the Australian Competition and Consumer Commission (ACCC) are proposing new national regulations that will impose heavy fines on real estate agents and vendors who consciously mislead buyers. The proposal from the ACCC is largely aimed at stamping out under quoting practices in the industry. RP Data has long been an advocate of transparency in the industry and supports a national framework that will assist in boosting the credibility and consistency of the real estate industry as a whole. Real estate agencies need to be transparent and adopt best practice models such as using Comparative Market Analysis (CMA) reports when setting the listing or reserve price with a vendor. More than 60,000 CMA reports are produced on rpdata.com every month, highlighting the fact that most agents are already engaged in best practice processes.
Each week RP Data collects the most comprehensive set of auction results available in Australia. Thank you to our vast network of real estate professionals who assist us with aggregating these results. The statistics show how many auctions were reported by RP Data as well as the total number of auctions that were scheduled over the last week (due to the large number of auctions we are unable to report 100 percent of the results). ‘Sold‘ properties indicate those properties that were either successfully auctioned on the day, sold before the auction or sold after the auction. Properties ‘Not Sold’ were either passed in at auction or withdrawn.
RP Data monitors advertised properties closely. Each week we update our databases with new properties that have been added to the market. Of course we also update the current stock listed for sale: what is the marketing history, have there been changes to the price or selling method, how long has a particular property been advertised for sale and who is selling it. Want to know what is happening in your local patch? Check out RP Data’s ‘On the Market’ service.Click here or phone 1300 789 303 for a free 2 week trial to find out how you can see what listings are available in your area with On the Market®.
RP DATA
Each week RP Data collects the most comprehensive set of auction results available in Australia. Thank you to our vast network of real estate professionals who assist us with aggregating these results. The statistics show how many auctions were reported by RP Data as well as the total number of auctions that were scheduled over the last week (due to the large number of auctions we are unable to report 100 percent of the results). ‘Sold‘ properties indicate those properties that were either successfully auctioned on the day, sold before the auction or sold after the auction. Properties ‘Not Sold’ were either passed in at auction or withdrawn.
RP Data monitors advertised properties closely. Each week we update our databases with new properties that have been added to the market. Of course we also update the current stock listed for sale: what is the marketing history, have there been changes to the price or selling method, how long has a particular property been advertised for sale and who is selling it. Want to know what is happening in your local patch? Check out RP Data’s ‘On the Market’ service.Click here or phone 1300 789 303 for a free 2 week trial to find out how you can see what listings are available in your area with On the Market®.
RP DATA
Monday, July 20, 2009
Save Now, Fix Later
FinanceNick Gardner630 Words20 July 2009Daily Telegraph1 -
State31EnglishCopyright 2009 News Ltd. All Rights Reserved
MORTGAGE borrowers are being urged to stick with variable loans, despite warnings that interest rates could start rising early next year.
Experts say fixed rates have become so expensive they make little sense for all but the most conservative borrowers.
Three-year fixes now cost about 1.5 percentage points more than the average variable rate a margin equivalent to six, quarter-point rate rises.
Aussie Home Loans executive chairman John Symond says it does not make sense to lock into such a high rate today, ``given it will take six rate increases before a variable rate loan would be more expensive''.
``You are better off taking the savings today,'' he says.
Money markets where banks raise funds for lending are pricing in rate increases starting in early 2010, with the cash rate tipped to hit 3.4per cent in 12 months, 0.4percentage points up from today.
But, given that the rate on most variable mortgages is only about 5.5 per cent once you factor in the 0.7 percentage point discount on most loans there is plenty of room to absorb a few rate hikes and still be ahead.
Every economist Your Money contacted thinks the money markets have it wrong, and that rates will stay flat or fall in the next year.
AMP Capital Investors chief economist Shane Oliver says Australia's economy will contract in the June and September quarters, putting it in a technical recession. ``With unemployment still rising and inflation so low, the RBA will find it very difficult not to cut rates when that news comes through,'' he says.
Oliver predicts the cash rate will fall 0.75 percentage points to just 2.25 per cent by the end of this year, to be back near 3per cent in 12 months.
Macquarie interest rate strategist Rory Robertson is less bearish, but does not foresee interest rate rises in the next year.
``The recent economic data has been so good that there is no evidence households need helping right now,'' he says.
National Australia Bank chief economist Alan Oster says it's ``about 50-50 whether rates will stay flat or fall within the next few months''.
Economists and mortgage brokers say if borrowers are too stretched to afford future rate rises or can't sleep because of the uncertainty, fixing part of the loan is a good idea. But they say it is important to have some of the loan on a variable rate to maintain flexibility.
Commsec chief equities economist Craig James says rates may rise next year, ``but it will be a slow journey upwards and probably will only rise by 2per cent from today's
levels by 2012''.
Online Video
How interest rates work: We explain why the Reserve Bank does what it does dailytelegraph.com.au/yourmoney
THE EXPERTS FORECAST...
THE RESERVE BANK'S NEXT MOVE
* Craig James: Cash rate flat for next year and hitting 4 per cent in 2011.
* Shane Oliver: Rate to drop to 2.25 per cent by end of this year and be back to 3 per cent in a year's time, rising very slowly from then on.
* Rory Robertson: Flat for next year, and it won't rise until unemployment starts falling, likely to be in 2011.
* Alan Oster: 50/50 on whether rates will be the same or lower by the end of the year.
State31EnglishCopyright 2009 News Ltd. All Rights Reserved
MORTGAGE borrowers are being urged to stick with variable loans, despite warnings that interest rates could start rising early next year.
Experts say fixed rates have become so expensive they make little sense for all but the most conservative borrowers.
Three-year fixes now cost about 1.5 percentage points more than the average variable rate a margin equivalent to six, quarter-point rate rises.
Aussie Home Loans executive chairman John Symond says it does not make sense to lock into such a high rate today, ``given it will take six rate increases before a variable rate loan would be more expensive''.
``You are better off taking the savings today,'' he says.
Money markets where banks raise funds for lending are pricing in rate increases starting in early 2010, with the cash rate tipped to hit 3.4per cent in 12 months, 0.4percentage points up from today.
But, given that the rate on most variable mortgages is only about 5.5 per cent once you factor in the 0.7 percentage point discount on most loans there is plenty of room to absorb a few rate hikes and still be ahead.
Every economist Your Money contacted thinks the money markets have it wrong, and that rates will stay flat or fall in the next year.
AMP Capital Investors chief economist Shane Oliver says Australia's economy will contract in the June and September quarters, putting it in a technical recession. ``With unemployment still rising and inflation so low, the RBA will find it very difficult not to cut rates when that news comes through,'' he says.
Oliver predicts the cash rate will fall 0.75 percentage points to just 2.25 per cent by the end of this year, to be back near 3per cent in 12 months.
Macquarie interest rate strategist Rory Robertson is less bearish, but does not foresee interest rate rises in the next year.
``The recent economic data has been so good that there is no evidence households need helping right now,'' he says.
National Australia Bank chief economist Alan Oster says it's ``about 50-50 whether rates will stay flat or fall within the next few months''.
Economists and mortgage brokers say if borrowers are too stretched to afford future rate rises or can't sleep because of the uncertainty, fixing part of the loan is a good idea. But they say it is important to have some of the loan on a variable rate to maintain flexibility.
Commsec chief equities economist Craig James says rates may rise next year, ``but it will be a slow journey upwards and probably will only rise by 2per cent from today's
levels by 2012''.
Online Video
How interest rates work: We explain why the Reserve Bank does what it does dailytelegraph.com.au/yourmoney
THE EXPERTS FORECAST...
THE RESERVE BANK'S NEXT MOVE
* Craig James: Cash rate flat for next year and hitting 4 per cent in 2011.
* Shane Oliver: Rate to drop to 2.25 per cent by end of this year and be back to 3 per cent in a year's time, rising very slowly from then on.
* Rory Robertson: Flat for next year, and it won't rise until unemployment starts falling, likely to be in 2011.
* Alan Oster: 50/50 on whether rates will be the same or lower by the end of the year.
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