Are Brisbane auctions going the way of Sydney?
Are Brisbane auctions going the way of Sydney?
Posted on Monday, August 24 2015 at 12:16 PM
A weekend auction in Brisbane’s Dutton Park points to Queensland’s capital pushing past reserves in much the same way Sydney and Melbourne have been doing for some time.
There’s been much talk – for at least two years now – of the Queensland
market taking over the mantle from Victoria and New South Wales, after those
markets reach boiling point. While that point has yet to be reached, it does
seem as though they’re slowing, and the evidence from the weekend would suggest
that the market in Brisbane is extremely hot.
The auction for 50 Deighton Road attracted a large amount of interest,
not only because of the site’s position just 2.5 kilometres from the CBD, but
also the tragic state of the building that still stands (just!) at the address.
The house itself is in such a state of disrepair that it’s uninhabitable
– indeed, it’s structurally unsafe to enter – but that didn’t stop it realising
$168,000 over its reserve, fetching an impressive $668,000.
That surprising price, however, is still considerably less than the
suburb’s median house price, currently $757,000.
The buyer is said to be an investor with intentions of building a dream
home on the plot where the dilapidated 1946 Queenslander currently stands.
According to Gunther Behrendt, of Ray White Stones Corner, who managed
the sale, there were 25 registered bidders for the auction, though many more
people turned up to view the spectacle.
The agent says he has seen definite evidence of an increasingly hot
market in Brisbane, with two of his recent sales advancing way over the
reserve. Added to this weekend’s success, Behrendt says, his recent sale of 32
Ross Street in Woolloongabba means his last two sales went $800,000 over
reserve.
“We could sell a whole street over with the amount of interest we have
at the moment,” he says, adding, “it might sound like a cheesy estate agent
line, but my advice to Brisbane homeowners thinking of selling is to make hay
while the sun shines.”
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Popularity of depreciation schedules rising
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Popularity of depreciation schedules rising
Posted on Wednesday, July 15 2015 at 2:39 PM
The number of investors relying on tax depreciation schedules to maximise investment property returns is increasing, according to one firm.
BMT quantity surveyors say they’ve had a 15 per
cent increase in depreciation schedule business in the 2014/15 financial year
compared to 2013/14.
Brad Beer, CEO of BMT, says the amount of time between a property
acquisition and the ordering of a schedule has dramatically decreased as well.
“The data suggests that an increasing number of investors are becoming
more sophisticated in terms of understanding the tactics available to them to
increase their yields.”
During the 2013/14 financial year, BMT found that it took investors an
average of 281 days to order a tax depreciation schedule after purchasing their
property.
By May 2015, this figure dropped nearly 13 per cent to 245 days.
Quantity surveyors are able to create schedules that detail the
depreciation deductions available for items in an investment property over
varying time frames.
The Australian Taxation Office (ATO) allows investors to claim this
depreciation as a tax deduction against income received from the property.
“If an investor has not claimed depreciation on an investment property
in the past they are able to claim for some of the years that they missed out
on and this might result in savings of up to tens of thousands of dollars,”
Beer says.
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Sydney median breaks $1m mark
Sydney median breaks $1m mark
Posted on Wednesday, July 22 2015 at 3:49 PM
The June House Price Report from Domain.com.au has today revealed that house prices in Sydney have surged 22.9 per cent over the last 12 months – double the national median house price growth of 11.7 per cent – to $1 million.
In doing so, the harbour city has emerged as a
significant player in the international property market. The median house price
has now surpassed that of London and is fast approaching New York, though it
remains well behind the property prices of Paris.
The key findings of the report show:
- Sydney
market reports remarkable growth over June quarter - Melbourne
market continues strong recent revival - Brisbane
price growth resumes but remains modest - Perth
house prices still falling as confidence wanes - Canberra
market clearly strengthening with buyer activity on the rise - National
median house price is up 4.3 per cent over the quarter and 11.7 per cent year on
year.
Commenting on the report, Domain senior economist Dr
Andrew Wilson says:
“The Sydney housing market has been the standout performer
of all the capitals over this quarter, recording a phenomenal 22.9 per cent
price growth year on year.
“Other capital cities reported steady growth, with the
Perth and Darwin property markets the only ones to see a drop in median house
price value over the quarter.
“Nationally, the median house price jumped 4.3 per
cent over the quarter – an increase of 11.7 per cent over the year.
“Sydney’s strong growth is expected to continue for
the foreseeable future, while solid buyer activity and interest is expected to
continue to drive steady growth in the Melbourne and Canberra markets.”
JUNE QUARTER PERFORMANCE
SUMMARY
Sydney
Median house price increased by 8.4 per cent to
$1,000,616, according to Domain data. Sydney unit prices also surged over the
quarter, by 6.6 per cent to $656,078 – again the strongest local growth rate of
the modern era.
The main catalyst is thought to have been low mortgage
rates – the lowest since the mid-1960s. It’s “a perfect storm of local supply
and demand factors generating price growth”.
Melbourne
The housing market continued its strong revival,
recording an increase of 3.5 per cent in the median house price to set a new
record at $668,030. Melbourne’s median unit price also increased strongly by
3.2 per cent over the quarter, to a new record $443,549. The median house
price in Melbourne increased by 10.3 per cent over the 2014-15 financial year
with the median unit price up by 4.5 per cent over the same period.
Strong price growth over the last 12 months is thought
to have been generated primarily by aspirational buyers, particularly in
Melbourne’s eastern suburban regions. Rising buyer activity in suburbs west and
north of the city also contributed to the house price growth.
Brisbane
While positive, the market continued to produce
results slightly below the predicted price growth for 2015. The median house
price increased by just 0.6 per cent over the June quarter to $490,855 with
unit prices up by 1.0 per cent to $371,508. House prices in Brisbane have
increased marginally by 1.9 per cent over the past year, while unit prices have
fallen by 3.2 per cent.
Underperformance by the local economy and fragile
buyer sentiment continues to impede buyer activity, according to Wilson.
Adelaide
The report reveals a modest increase in the Adelaide
housing market, with a slight increase in the median house price over the June
quarter. After a strong result over the March quarter, median house prices
increased by just 0.2 per cent to $479,285, while Adelaide unit prices fell by
2.7 per cent over the quarter to $292,399. The median house price for
Adelaide has increased by 3.3 per cent over the 2014-15 financial year, with
the median unit price up by just 0.6 per cent over the same period.
“Prospects of a solid recovery in buyer activity for
the Adelaide market have lessened with recent results,” Wilson says, adding
that remains the most affordable mainland capital city with relatively high
yields and low vacancy rates likely to attract increasing numbers of investors.
Perth
The median house price fell by 0.9 per cent to
$605,089, while Perth unit prices dropped 2.1 per cent to $405,417. Over the
last 12 months, Perth’s median house price has fallen by 1.4 per cent, while
unit prices are down by 2.1 per cent.
Modest buyer activity and weakening house price growth
is said to be expected for the remainder of 2015.
Hobart
Median house prices in Hobart were steady, after a
drop in the March quarter. Hobart’s median house price remained at $325,972, an
increase of just 0.6 per cent over the last financial year. Hobart unit prices
also recorded a flat result over the June quarter with a median of $272,932,
down by 1.6 per cent over the year.
Increased investor activity and higher numbers of
first homebuyers are set to support the market over the remainder of 2015.
Canberra
Strong growth in buyer activity over the June quarter,
continuing the significant momentum experienced over the last 12 months.
Canberra’s median house price increased by 1.5 per cent to $616,313, an
increase of 5.4 per cent over the 2014-15 financial year, which was second only
behind Sydney and Melbourne for annual prices growth.
While house prices are
performing well, unit prices did fall sharply over the quarter, down by 6.3 per
cent to $382,350 and down by 6.8 per cent year on year.
Recent high levels of apartment construction continue
to push supply ahead of demand with downward pressure on prices growth.
Darwin
House prices rebounded sharply, following a flat
result over the previous quarter. The Darwin median house price increased by
1.6 per cent to $654,270. Although this was an increase of 1.8 per cent
over the 2014-15 financial year, Darwin’s median house price still remains
below the peak $680,337 recorded over the December quarter 2013.
Unit prices fell by 3.4 per cent over the
June quarter to $471,789 but were up by 3.3 per cent over the year ending June.
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Sydney vacancy rates fall
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Sydney vacancy rates fall
Posted on Tuesday, August 18 2015 at 2:30 PM
A tightening in Sydney’s vacancy rate shows supply is meeting demand, according to the Real estate Institute of New South Wales (REINSW).
The July 2015 REINSW Vacancy Rate Survey reveals the
number of properties for rent across Sydney fell 0.2 per cent to 1.9 per cent.
Malcolm Gunning, president of the REINSW, says the
supply of available rentals is strong, and is being taken up by tenants.
“Vacancy rates remain close to 2.0 per cent which
shows that supply is starting to meet demand.
“Despite the 0.2 per cent decline month on month we
still we think it is a good result and shows a strong
stream of property on the market starting to feed the migration into Sydney.”
Inner Sydney tightened by 0.5 per cent to 2.1 per
cent, while Middle Sydney saw falls in availability of 0.2 per cent at 1.7 per
cent.
“Outer Sydney has hit levels last seen in December
2014,” Gunning says.
Hi comments are based on a drop in the vacancy figure
of 0.1 per cent to 1.6 per cent Outer Sydney.
In locations further afield, the Hunter region saw
availability rise 0.2 per cent to 3.7 per cent.
The region with greatest availability was New England,
which jumped 1.2 per cent at 4.6 per cent.
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Another big lender makes investor loan changes
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Another big lender makes investor loan changes
Posted on Wednesday, July 29 2015 at 1:17 PM
AMP Bank will not be accepting new or assessing existing investor property lending applications from today, it has announced. This is expected to last until later in 2015, depending on market conditions.
The
lender is also set to increase variable rates on all existing investor property
loans by 0.47 per cent per annum from September 7, 2015, in response to
regulator guidelines to limit growth in investor property lending across the
market to 10 per cent,.
All
investor property loan applications that have been approved will be subject to
the 0.47 per cent increase on settlement.
“We
appreciate the position this puts our customers in and will be working with our
distribution network to actively communicate with them,” AMP Bank managing director
Michael Lawrence says, adding that the lending facility remains committed to
helping Australians own their homes.
“Australia’s
property market is experiencing high levels of investor property lending growth
and we are supportive of the regulator’s intention to slow this growth to
appropriate levels,” he says.
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Renovations rule, not holidays or weddings
Renovations rule, not holidays or weddings
Posted on Friday, August 14 2015 at 12:01 PM
Aussies are more likely to take out a loan for home improvements than they are to borrow money for an exotic overseas holiday or wedding, according to new data from customer-owned lender CUA.
More than one in 10 personal loans issued by CUA
during the 12 months to June 30, 2015, were for home improvements or household
goods, the company says. Home renovators borrowed a little more than $15,000 on
average, while personal loans taken out to purchase household goods averaged
around $8,900.
“Customers see any money they put into their home –
including renovations and home improvements – as being an investment in their
future,” CUA head of customer insights Chris Malcolm says.
“Improvements to the family home, like an extension
or a new entertaining area, can create extra space or comfort for the family to
enjoy today, as well as potentially adding value to what is, for most people,
their biggest asset.”
Comparatively, just over five per cent of personal
loans taken out by CUA customers were for holidays, with people borrowing an
average $10,000. Weddings accounted for less than one per cent of new personal
loans issued during the past year, with soon-to-be-newlyweds or their families
borrowing an average of nearly $15,000 to help pay for their big day.
Boats, caravans/campers, motorcycles and scooters
were also well down the list when it came to personal lending.
“The figures reinforce the findings of our recent
CUA National Mortgage Survey, which showed
homeowners are more likely to put extra cash towards paying off their home loan
than they are to splurge on luxuries and holidays,” Malcolm says.
Personal loans remained popular with customers
wanting to consolidate their personal finances or debts, while around one in
three CUA personal loans during the year were for new or second-hand cars.
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Property investment body calls for balanced approach
Property investment body calls for balanced approach
Posted on Monday, August 03 2015 at 11:03 AM
The Property Investment Professionals of Australia (PIPA) has questioned the move by lenders to increase interest rates to both new and existing property investors, urging regulators and government to take a more balanced approach in working to encourage a sustainable and flourishing property market.
PIPA chair Ben Kingsley
says increasing interest rates for existing investors appears to be an
opportunistic move by banks that could have potentially harmful flow-on effects
to the broader property market.
“Increasing
borrowing costs for investors, and in some cases owner-occupiers, who bought
into the market some time ago seems unfair and detracts from what should be the
common goal of creating a balanced property market,” Kingsley says.
PIPA believes more
targeted measures to slow new investor lending, such as decreasing and
restricting borrowing power for new investors in locations where the market is
particularly heated, could be a better approach.
“Above all, the
industry needs to be united in slowing investor activity in some markets. While
PIPA fully supports responsible lending, we believe going forward APRA [the
Australian Prudential Regulation Authority] should take a more transparent
approach, rather than continue its current closed-door tactics.”
According to
Kingsley, APRA’s pressure tactics to force individual lenders to lock out
investors, or increase interest rates, have raised both concerns and question
marks for the industry.
“While real estate
can absolutely be a powerful investment class, people must recognise that not
every property in every market will deliver appropriate returns, and in a
heated market, the odds are really against you.
“PIPA is urging the
government and regulators to join forces and open this debate to the broader
industry. Let us all contribute to this discussion and invest in measures that
will create a more balanced property market for the long-term, and strengthen
this invaluable component of our economy,” he says.
As the peak body for
the property investment industry, PIPA has long campaigned for greater
education around property investment as well as regulation of property
investment advice.
“PIPA remains dedicated to supporting a healthy, sustainable property
investment industry, where education and appropriate regulation come together
to support good outcomes for all stakeholders involved,” Kingsley concludes.
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Home reno costs are down in Queensland
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Home reno costs are down in Queensland
Posted on Monday, August 10 2015 at 4:05 PM
The cost of renovating your home in Queensland has dropped one per cent so that it’s now the most affordable state in which to renovate, according to a new report.
The Renovation
Consumer Price Index (RCPI) is a quarterly report released by
ServiceSeeking.com.au analysing 52,000 quotes submitted by tradesmen on the
website. The latest RCPI compares the cost of renovating in the fourth quarter
of FY15 versus the previous year.
To support the release, ServiceSeeking.com.au has
created an interactive map that plots price changes across 10 popular
renovation services in Queensland year on year.
“The interactive map shows the cost of renovating a
home in the sunny state has dropped by one per cent quarter-on-quarter,” CEO
Jeremy Levitt says, while the national average has risen 3.9 per cent.
“In the past, Queensland’s been Australia’s most
expensive state to renovate so the news comes as a pleasant surprise for many
homeowners,” he adds.
Prices in Queensland were overwhelmingly cheaper than
those around the rest of the country, particularly in Western Australia and
Victoria, where costs skyrocketed by more than 6 per cent.
Tiling and paving (up 8.9 per cent) and plastering (up
4.5 per cent) were the only industries that saw significant price increases,
with all other renovation sectors affording great value.
The findings suggest that demand is finally being
matched by strong local supply of skilled tradesmen. However, homeowners are
warned to take advantage of the savings ahead of the state government’s recent
stimulus package, which is set to boost Queensland’s infrastructure and perhaps
put another strain on supply.
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Better news from the West, with Albany on top
Better news from the West, with Albany on top
Posted on Friday, August 07 2015 at 12:16 PM
The area of Albany has emerged as the best performing regional centre for West Australian property over the last financial year, according to the Real Estate Institute of Western Australia (REIWA).
Data released this week by REIWA shows the Albany Urban Area had 5.3 per
cent growth in median house price over the last year, lifting it to $389,750.
The regional city saw 456 house sales, 42 unit sales and 200 land sales
over the last year.
Better performing suburbs included Bayonet Head, up 8.8 per cent to a
median of $397,000, Mount Melville, up 5 per cent to $380,000 and Spencer Park,
up 4.9 per cent to $350,000.
The suburb with the greatest number of house sales was Yakamia, where 52
properties changed hands at a median price of $388,750, but which was a drop of
almost 6 per cent in price on the previous year.
REIWA’s branch chairman for Albany, Barry Panizza, says that while any
growth is good it must be seen in context.
“The lift in median price over the last year really only brings us back
to where we were five years ago because the market has been weak for that long,”
he says.
“However, it’s encouraging to think that we might now be returning to a
better position of forward growth and it gives buyers and sellers a bit more
confidence.
“Turnover, however, was down 10 per cent on last year, which could be
attributed to fewer properties on the market and this also helped with price
growth.”
Panizza believes the growth should hold as the available land in some
areas is being taken up quickly with no new subdivisions on the horizon in some
residential suburbs.
“I also think there may have been some renewed interest in Albany
following the hugely attended ANZAC commemorations over the last 12 months.
Thousands of people from all over Australia got to see and experience Albany
last October and again in April this year, and it wouldn’t surprise me if that
resulted in a few people relocating here or acquiring an investment holiday
home for the future,” he says.
The second best performing regional centre was the Busselton Urban Area,
which experienced 3.4 per cent growth over the financial year, following on
from positive growth in previous years. Its best performing suburb was Abbey
with a median price of $625,000, up by 15.7 per cent over the year and
averaging almost 4 per cent growth each year over the last five years.
In third place was Goldfields/Esperance with 3.1 per cent growth,
although the suburb of Esperance itself did well with 4.3 per cent growth based
on 25 sales and a median price of $365.000.
The suburb of Kalgoorlie enjoyed 7.6 per cent growth to $317,500, while
Piccadilly had very good growth of 20.2 per cent to $375,000.
Several regional centres had zero growth or very modest fluctuations,
such as Mandurah and Bunbury, while many others went backwards.
Hardest hit was the Pilbara region, still suffering from the downturn in
the mining-construction sector.
Karratha dropped by an exceptional 32.3 per cent to a median price of
$440,000. Port Hedland dropped 12 per cent but still had a significant median
price of $880,000, while South Hedland had a modest drop of 4.6 per cent to
$711,000.
Around the state several smaller towns and villages had some reasonable
stand-alone results, including Pinjarra with 19 per cent growth to $362,500,
Harvey up 11 per cent to $310,000, Margaret River up 8.1 per cent to $465,000,
Merredin up 10.6 per cent to $177,000, Narrogin up 9.6 per cent to $216,000 and
Wagin up 39.2 per cent to $181,000.
Across the regions as a whole, price growth was just under one per cent,
lifting the country median house price to $383,000.
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Renters could feel APRA backlash
Renters could feel APRA backlash
Posted on Wednesday, August 05 2015 at 10:53 AM
While it had been fully expected that the Reserve Bank of Australia (RBA) would keep the cash rate on hold at yesterday’s board meeting, all eyes are on investment lending as new research by comparison website finder.com.au shows rents are expected to rise by 2.8 per cent.
The finder.com.au
monthly Reserve Bank Survey found all 31 leading
economists and experts unanimously predicted the cash rate would hold at 2.00
per cent, with many saying they felt the last two cash rate cuts in February
and May need more time to filter through the economy.
The survey also found that almost one in
five of the experts are forecasting another cash rate cut this year. Despite
this, the majority surveyed are expecting property prices will keep rising this
year.
Michelle Hutchison, money expert at finder.com.au, says
renters won’t be immune to higher housing costs.
“For the
majority of households who don’t have a mortgage (about five million households
or about two in three – two million of which are renters), it’s not looking
good for many of them either as new research by finder.com.au suggests monthly
rents could be set to increase by nearly 3 per cent nationally as Australian
banks increase rates on some of their investment loans.
“The big four
banks announced increases to some of their investment home loans following new
APRA guidelines.
“ANZ, Commonwealth
Bank and Westpac all announced 0.27 percentage point increases to their
investment standard variable rates while NAB is increasing its investment line
of credit and interest-only loans.
“With the big
four banks holding the majority of the market, national monthly rents could be
set to increase by 2.80 per cent or $59 in higher rent per month if landlords
pass on the full cost of the new interest rates on investor loans (based on the
average home loan of $343,000 over 30 years),”
she says.
“For low income
households with one person on the minimum wage, this increase could account for
2 per cent of annual income (based on the national minimum annual salary of
$34,158.80/$656.90 per week).”
Melbourne renters are
expected to be hit the hardest, Hutchison adds, with a 3.19 per cent increase
($62 per month), followed by Adelaide with a 2.98 per cent increase ($48 per
month). Sydney will see the biggest jump in cost of $71 per month.
“Whether you’re a mortgage holder, renter or prospective first
homebuyer, watch out for higher costs on the way and make sure you’re prepared
by keeping some savings aside before it’s too late,” Hutchison says.
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