Latest market update
Latest Property Reports
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| From the Editor
Housing affordability increase. Lending data from the Commonwealth Bank of Australia has shown that The Housing Industry Association-Commonwealth Bank housing affordability index rose by 0.8 per cent in the quarter ending June 2011. Unemployment levels remain low, at just above 5 per cent, and commercial banks have recently been trimming their fixed-term mortgage rates. Improved affordability is good news for residential property purchasers as affordability is reported to be at a level not seen since 2006. Meanwhile, a recent report from RP Data has stated that conditions in the property market, are also keeping Australians in the same home longer. According to the RP Data information, in 2001 the average holding period for a property between sales was 6.8 years. This has now grown to 8.6 years, with Melbourne residents remaining in their homes the longest. In Melbourne, the average holding time between property sales is currently 10 years. This has risen from 8.3 years a decade ago. In Sydney the average hold period has risen to 9.5 years from 6.3 years a decade ago. Property prices are down and rents are stable. Theoretically it should be the perfect time for investors to enter the market. ‘Long time’ investors have seen it all before and know that we are in an advantageous phase of the property cycle. Smart investors don’t wait for the next property boom to invest, the horse has already bolted at that stage! There is never a perfect time to start investing but you must start sometime. The best time to start is when you can comfortably afford to do so (talk to a qualified finance person to confirm this). Shrewd investors buy for the long term, investing at the bottom of the cycle and selling at the top and if Australia’s population grows to 35 million over the next 30 years, as many forecasters predict, the additional people are going to need somewhere to live! Bruce Watt Australian Residential Property Planners |
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| First home buyers slowly getting back into the market.One of Australia’s biggest independent mortgage brokers, Mortgage Choice, reported that home loan approvals from first-home buyers accounted for 35 per cent of all loan approvals in June of this year. First-home buyers usually average about 27 per cent.“What I’m starting to see is a return of first-home buyers to the market as housing prices are going through a mild correction, and as longer-term interest rates look like coming down,” said chief executive Michael Russell.This had come as banks slashed interest rates on fixed-rate mortgages to an average of 6.39 per cent for one- and three-year loans, almost 1.5 per cent lower than most lenders’ standard variable rates, he said. | ||
| Interstate investment on the rise.Landlord insurance provider, Terri Scheer Insurance, says 20 per cent of its insured landlords now own rental property outside their own state – and Queensland is their preferred destination with 51 per cent of interstate investors owning a property in the sunshine state.No other state came close to Queensland for interstate investor popularity, with Victoria the next best at 14 per cent, NSW at 12 per cent and South Australia at 11 per cent.The ACT and Tasmania have the highest proportion of investors who own property interstate, at 57 per cent and 50 per cent respectively. | ||
| Melbourne housing market resilient.Residential property prices in Melbourne have remained stable during the first half of 2011 although slightly lower than at this time last year.This is a very encouraging statistic for market stability considering that Melbourne house prices rose by nearly 30 per cent between January 2009 and June 2010.Although latest figures from the Australian Bureau of Statistics showed a decline in Victorian housing loans of 4.8 per cent over the month of June, this was a reasonable result following the strong 22 per cent rise in May.June-quarter housing loans are up by 7.3 per cent compared with the June quarter last year.Victoria’s economy remains robust and indicates confidence in the underlying strength of the Australian economy.
Good news for the stability of housing markets.
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| Moderate recovery in building commencements expected from 2011/12BIS Shrapnel, a leading industry analyst and economic forecaster, expects that national building commencements should show a moderate recovery of eight per cent in 2011/12. This is following an estimated 12 per cent decline in 2010/11.According to the company’s ‘Building in Australia 2011’ report, it is the recovery in commercial and industrial building which will help to underpin the growth in 2011/12.Tips for investors.
When it comes to choosing an investment property, location is particularly important because it will have to appeal to a range of potential tenants. For new house and land investors the design and layout of your property is an important consideration in increasing the appeal to potential tenants.Be sure to leave your emotions at the door and only buy in an area that is showing consistent population growth. The demographics of this growth is also important. Transport, schools and shopping centres are just some of the infrastructure that will contribute to capital growth potential. Remember, it is not a get-rich-quick scheme. “Chance is always powerful. Let your hook be always cast; in the pool where you least expect it, there will be a fish.”
Ovid Roman poet (43 BC – 17 AD)
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The process of property investment in Australia has been made easier by ARPP which offers a range of services free of charge including :-
Our group is popular because we represent the buyer, and offers support throughout the purchasing process and ongoing service long after the property has settled. Best of all our services are FREE to the investor! Contact our office if you would like to find out more about investing in property. Email: info@arpp.com.au Freecall: 1800 889 755 |
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| *Information in this newsletter should not be regarded as a substitute for professional, legal or financial guidance. Because every investors needs and financial situations are different, the ideas in this newsletter are intended as a guide only. |
