WA: sales are stable but rents still falling
WA: sales are stable but rents still falling
Posted on Friday, June 05 2015 at 11:25 AM
Data released today by the Real Estate Institute of Western Australia (REIWA) shows Perth’s median house price steady at $547,000 for the three months to May but metropolitan rents falling.
Turnover with house sales experienced a seasonal lift of 13 per cent to
2,067 transactions in May, but this was down by 16 per cent on the same period
last year.
Stronger turnover was reported through the western suburbs (up 60 per
cent on April), City of Melville (up 52 per cent) and South Perth, Victoria
Park and Cockburn, all up 40 per cent.
City of Melville and the western suburbs performed best in terms of
improved sales numbers on the same time last year.
Top selling suburbs included Butler, Ellenbrook, Willetton, Baldivis and
Canning Vale.
REIWA president David Airey says the number of properties on the market
was still well above average with 14,363 listings reported during May, and
currently sitting at 14,293.
“There was a modest 1 per cent increase with listings in May, but there
are now 35 per cent more properties on the market compared with May last year,”
he adds.
With rentals, the vacancy rate in April was 4.5 per cent and expected to
rise as rental stock increases. Currently there are 7,616 properties looking
for tenants.
“There was a 7 per cent jump in rental listings during May, adding to 44
per cent more rental properties to the market than the same time in 2014,”
Airey says.
The biggest jump in rental listings, at 11 per cent, was recorded
through Perth’s southwest region incorporating Cockburn, Kwinana and
Rockingham.
Competition in the rental market saw Perth’s median rent come down to
$425 per week, which typically translated to $440 for a house (down $10) and
$400 for an apartment or villa (down $20).
Airey says Perth’s median rent is now down by 10 per cent, or $50, from
its peak of $475 per week in June 2013.
The City of Belmont saw the biggest individual drop, with its local
median falling from $450 per week to $425 per week between April and May.
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Calls for more investor education and less lending restrictions
Posted on Tuesday, June 02 2015 at 4:17 PM
The Property Investment Professionals of Australia (PIPA) believe moves to tighten lending to investors aren’t the most effective way to cool booming capital city markets.
“While we welcome and endorse a responsible approach to lending, we are concerned about APRA’s (Australian Prudential Regulation Authority) market intervention and don’t believe their lender-by-lender approach is the most effective means to control the property market,” Ben Kingsley, chair of PIPA, says.
Kingsley says the restrictions could also impact markets that are in recovery.
“We recognise that marketplaces like Sydney and Melbourne are posing concerns as new and existing investors are potentially speculating in trying to capitalise on boom conditions, and we have been active in warning consumers to be careful about this.
“However, there are plenty of other property markets in Australia and these measures are an unfair imposition on investors who want to invest in other parts of our country.”
Kingsley says there are two other measures PIPA believe would create a more sustainable property investment industry – consumer education and industry regulation.
“The government, APRA, ASIC, RBA and the state consumer affairs departments need to join forces and invest in a consumer education campaign to explain to Australian investors the truths about property investment,” he says.
Kingsley says by adding more regulation to the mix, consumers will be protected and well advised.
“The government needs to be proactive and make progress on putting a minimum standard of education or qualification in place for those providing property investment advice, so we can be sure that Australian investors, who are looking for support to make well-informed investment decisions, can receive the same level of appropriate guidance provided to anyone investing in other assets, such as equities.”
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New home sales show another lift
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New home sales show another lift
Posted on Monday, June 01 2015 at 12:00 PM
The latest result for the Housing Industry Association (HIA) New Home Sales Report, a survey of Australia’s largest volume builders, reveals a fourth consecutive monthly rise.
“New
homes sales have increased in each of the first four months of 2015,” HIA chief
economist Harley Dale says.
“While
the rise of 0.6 per cent in April was the slowest growth pace of the four
months, this is still a strong result off the back of a healthy March quarter.”
The
April result for total seasonally adjusted new home sales comprised two small
gains – 0.4 per cent for detached house sales and 0.9 per cent for multi-unit
sales.
“The
profile for new home sales in 2015 is consistent with a new home building cycle,
where further upward momentum resides largely in the ‘multi-unit’ sector and
where the eastern seaboard states are driving the further growth,” Dale says.
“In
terms of detached house sales, both NSW and Victoria posted monthly gains in
April (as did Western Australia), although Queensland recorded a disappointing
decline. Sales in South Australia continued to weaken and are at an 18-month
low.
“The
two states to post gains in detached house sales over the three months to April
2015 were NSW and Victoria,” Dale adds.
In
April 2015, private detached house sales increased by 7.2 per cent in NSW, by
2.7 per cent in Victoria, and by 0.9 per cent in Western Australia. Private
detached house sales dropped by 9.0 per cent in Queensland and were down by 1.9
per cent in South Australia.
In
the April 2015 ‘quarter’, detached house sales increased in NSW (+0.5 per cent)
and Victoria (+7.4 per cent), but declined in SA (-4.7 per cent), Queensland
(-4.4 per cent) and WA (-1.6 per cent).
That
profile is broadly consistent with HIA’s forecasts for detached house
commencements, with the exception of Queensland, which is looking weaker than anyone
was expecting.
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First timers grant changes cause confusion
First timers grant changes cause confusion
Posted on Friday, May 29 2015 at 11:25 AM
Calls have been made for the Western Australia Parliament to provide first homebuyers with more certainty following the recent budget announcement that the $3000 First Home Owners Grant (FHOG) will be terminated.
“We aren’t entirely thrilled that the WA Government
has seen fit to axe the $3000 FHOG for established properties,” Raine
Horne’s Larry Gallagher says.
“There’s the added complication that the FHOG
can’t be halted until the obligatory legislation passes through the WA Parliament and this is creating some confusion in the marketplace.
“Until there’s a deadline, we don’t expect much
urgency from first homebuyers, which will leave the road clear for savvy
investors to continue to cherry-pick the entry level market.
“However, once the legislation passes, whether
it’s next week or next month, we expect there will be a spike in demand for
affordable real estate in Perth and even higher prices as first homebuyers
jostle with investors in a bid to beat the FHOG deadline,” Gallagher says.
Paul
Curran, of Raine Horne Rockingham Beach, agrees that the decision to
terminate the FHOG is disappointing.
“The
first homebuyer market in Rockingham is already negligible, and the decision to
cut the $3000 grant will do little to encourage them back.
“In
addition to keeping the $3000 FHOG, I’d like to see first homebuyers under 35
given the opportunity to access their superannuation to help fund a deposit,”
Curran adds.
“The
caveat here is that the homeowners need to pay back this amount into
superannuation when they sell the property down the track.
“Accessing
superannuation to buy a house is a sensible move because paying off a mortgage
is arguably the best wealth creation tool.
“Shaving
$25,000 off your home loan via a deposit generated from superannuation is like
giving someone a four per cent interest tax-free investment, which is
competitive against the yields produced by cash and shares.
“In
addition, a quality, well-located, owner-occupied property will also generate
decent long-term capital growth, which is a capital gains tax-free return.”
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Data confirms Qld is growing
Data confirms Qld is growing
Posted on Monday, May 25 2015 at 1:58 PM
The Sunshine State is establishing its growth potential according to data released by the Real Estate Institute of Queensland (REIQ).
“This report supports the REIQ’s long-held view that those areas of
Queensland that have been doing well are continuing to do well,” according to
Antonia Mercorella, CEO of the REIQ.
Brisbane is the fastest-selling area in the state with average days on
market at 57 – a drop of eight days compared to a year ago.
Brisbane median house values have also risen 1.6 per cent over the March
quarter, which along with Toowoomba reflects the state’s the highest quarterly
increase.
The capital city’s proportion of profit-making sales increased three per
cent in the year to reflect 96 per cent.
Toowoomba holds the state’s record, however, with 98 per cent of all
houses sold recording a profit for the vendor.
Mercorella says Queensland is in the grip of steady, sustainable growth,
although some regionals are in a recovery phase.
“Those areas that are struggling to recover from the resources downturn
are still trying to stabilize,” she says.
“But what we don’t have is the start of another boom and bust cycle,
which as we all know by now, doesn’t really benefit anyone in the long-term.”
Five of the major regions throughout Queensland are experiencing steady
improvements in median house values.
Brisbane, the Gold and Sunshine coasts, Toowoomba and Cairns, all showed
rising annual median house values of approximately 1.5 to 1.9 per cent on average each quarter over the past year.
Gladstone’s median house values rose by 0.8 per cent, which is the
city’s first positive move in five quarters.
The rate of decline in Mackay’s median values appears to be slowing with
a drop of one per cent to its annual median value in the March quarter.
In addition, Townsville’s median house values rose 0.7 per cent, and its
proportion of profit-making sales has remained stable at 74 per cent since August last year.
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WA first homebuyers can still access grant
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WA first homebuyers can still access grant
Posted on Friday, May 22 2015 at 2:14 PM
The president of the Real Estate Institute of Western Australia (REIWA), David Airey, is reminding first homebuyers that the $3000 grant for established homes is still in place for a short time and hasn’t been abolished yet.
In last week’s WA Budget, the Treasurer announced that the $3000 First
Home Owners Grant (FHOG) would be axed from established homes, but this
announcement has confused potential buyers.
“While the $3000 FHOG will be abolished, this won’t happen until the
necessary legislation passes through the parliament,” Airey says.
The government cannot give a specific time but has indicated it will be
in the second half of this year.
“Eligible first homebuyers who purchase an established home prior to the
legislation receiving Royal Ascent will be able to receive the grant even if
settlement is after this date,” Airey says.
“This means that potential first homebuyers who are keen to buy an
established home and enter the market over the next few weeks will still be
able to access the grant for a while longer, and they should talk to their
selling agent about this.”
Airey says it’s also important to note that the stamp duty exemption for
first homebuyers will remain in place regardless of other changes.
“Despite the changes to the FHOG, entry-level buyers still don’t have to
pay any stamp duty for homes up to $430,000. This helps greatly with affordability
and saves many first homebuyers around $14,000.”
Airey also reminds first homebuyers about the Department of Commerce’s
Home Buyers Assistance Account (HBAA).
“Many first homebuyers on modest and fixed incomes may find they’re eligible
for the HBAA. This means if they buy an established home through a licensed
real estate agent they can receive up to $2000 to help with incidental
expenses.
“This can include such things as a building inspection, termite
inspection, the settlement agent’s fee and mortgage insurance,” Airey says.
The $10,000 FHOG for new constructions will remain. Only established
homes will lose access to the FHOG.
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Home building levels still falling short
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Home building levels still falling short
Posted on Monday, May 18 2015 at 12:25 PM
The latest Housing Industry Association National Outlook reveals a record level of home building activity that still falls short of the current demand for new dwellings.
“The
HIA Autumn 2015 National Outlook shows new housing construction is at
record levels and is single-handedly propping up Australia’s domestic economy,”
HIA chief economist Dr Harley Dale says.
“Ongoing
momentum in 2015 is narrowly driven compared to last year, in terms of both
geographical area and dwelling type – it’s far from a universally strong story.
“It’s
disappointing that despite record new housing supply, many Australians are
being priced out of the market due to the excessive and inefficient taxation
and regulation governments impose on the new housing sector.
“Super
low interest rates are doing their job, but there’s a lack of complimentary
policy reform,” Dale adds.
“The
detached house construction cycle had peaked well below its potential because
households can’t pay the cost of waiting up to 14 months for titled land, or
multiple months for a simple building approval, or borrow the additional amount
required to cover government-imposed gold-plating of user pays infrastructure.
“A
lack of focus on housing policy reform is shutting Australians out of their new
home at a time when they could borrow responsibly at attractive interest rates
and be part of the great Australian dream,” Dale concludes.
Key
points from the report include:
- New home building is the star of the Australian domestic economy.
- Outside new residential construction, both business investment and
public sector investment are weak. Domestic demand has been hit by the
reduction in earnings growth – to its slowest pace in almost two decades. - New dwelling commencements are projected to see a third consecutive year
of growth in 2014/15. An increase of 12.9 per cent is forecast to bring
commencements to an all-time high of 205,490. The ultra-low interest rate
environment means that there is some upside risk to this forecast. - HIA’s latest projections indicate that dwelling commencements will fall
by 10.6 per cent in 2015/16, with a further reduction of 4.7 per cent in
2016/17. The bulk of the decline will be concentrated in the multi-unit market
segment. - The further upward momentum to new home building in 2015 is confined to
two states – New South Wales and Queensland. - Detached house commencements have peaked for the cycle at a level of
112,232. There is unrealised demand for detached housing due to a lack of
shovel-ready land and a plethora of other supply side obstacles. - Detached house commencements would have increased further in 2015
without these barriers to supply. - Across the distinct types of new dwellings constructed, the upward
momentum in 2015 is most evident for units of four or more storeys. - There is some upward momentum evident for semi-detached/townhouse
product. - Housing renovations continue to struggle, increasing by just 0.8 per
cent during 2014. For 2014/15 as a whole, it’s expected that the volume of
renovations will fall by 4.1 per cent to $27.4 billion, which will be the
lowest value since 2001/02. - Continued low interest rates and an economic recovery will eventually
start to lift the renovations market. During 2015/16 growth of 2.3 per cent is forecast, followed by a slight increase of 0.5 per cent
during 2016/17. A further rise of 2.5 per cent in 2017/18 is projected to bring
the value of renovations activity to $28.8 billion.
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Softer rental numbers continue
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Softer rental numbers continue
Posted on Monday, May 18 2015 at 4:15 PM
Market analysts SQM Research have released figures showing residential vacancies climbed nationally in April 2015.
The
month’s vacancy rate of 2.3 per cent is up from the 2.1 per cent result in in
February
SQM
says rises were recorded in all capital cities, excluding Hobart where the
vacancy rate remained unchanged.
“The
rental market remains in its slow down phase and I believe the rental market overall
is going to remain soft for some time to come,” says SQM Research managing
director, Louis Christopher.
Their
research shows the biggest rise in vacancy numbers for April occurred in
Canberra with a monthly change of 0.4 percentage points from March.
Modest
climbs were also posted in Sydney and Adelaide.
Darwin
has posted the biggest yearly rise in its vacancy rate to 3.5 per cent from 2.1
per cent, reflecting the continued impact of the commodities downturn.
Perth
has also recorded ongoing yearly rises with vacancy rates rising from 2.4 per
cent to three per cent in April.
Christopher
says while current results show generally falling tenant demand, future
performance will be inconsistent across localities.
“Some regions may beat this outlook such as South
East Queensland, parts of Melbourne and Hobart where tenancy demand is
accelerating.
“Darwin
and Perth will continue to display weakness as the mining downturn continues to
bite hard.”
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Auction numbers for the coming weekend
Auction numbers for the coming weekend
Posted on Friday, May 15 2015 at 3:06 PM
According to CoreLogic RP Data there are just 1934 auctions scheduled across the nation’s capital cities this week, down from the 2426 held last week, when for the fourth week in a row, the combined capital city clearance rate was recorded above 78 per cent, at 78.2 per cent.
One year ago, over the comparable week, there
were 2194 homes taken to auction, which is higher than the current scheduled
number, though it’s likely that this will revise upwards as additional auction
results are reported over the weekend.
In Melbourne, 903 auctions are expected this
week, lower than the 1072 last week, when 79 per cent of reported auctions
sold. So far this year, Melbourne’s clearance rate has been trending higher,
with the rise likely to be attributed to growing consumer confidence borne
through recent interest rate cuts.
Sydney’s auction market is currently
performing at record levels. So far this year, it’s estimated that of the
12,074 homes taken to auction there have been 10,227 sales, which equates to
more than eight in every 10 properties taken to auction recording a successful
result. This week, it’s expected that 720 residential properties across Sydney
will be taken to auction, less than the 955 last week and also lower than the
796 at the same time last year.
There are 119 Brisbane homes set for auction
this week, lower than both last week (176) and last year (133). Brisbane’s
final auction clearance rate was recorded at 54.5 per cent last week,
strengthening from 47.3 per cent the previous week.
There are expected to be 101 residential
auctions across Adelaide this week, up from 92 last week, when the final
auction clearance rate was recorded at 59.5 per cent. One year ago, 121
auctions were held.
In Canberra, 43 auctions are scheduled for
this week, after 78 last week and 29 one year ago. Last week, Canbeeet rra’s
final auction clearance rate was 65.7 per cent.
Perth is expecting 35 auctions this week, which
is a similar number to a year ago, when there were 39 auctions. Last week,
there were 42 Perth auction results and the clearance rate was low – 21.4 per
cent – the second week in a row in which Perth’s clearance rate was recorded
below the 30 per cent mark.
There will be 15 auctions held in Reservoir
(Vic) and Preston (Vic) this week, both of which have the highest volume of
auctions for any individual Australian suburb.
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New home sales hit a four-year high
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New home sales hit a four-year high
Posted on Wednesday, May 06 2015 at 4:18 PM
A survey by industry group Housing Industry Australia (HIA) shows strong new home sales growth in March 2015 has taken sales volumes to their highest level since early 2010.
Diwa Hopkins, an economist with HIA, says the
New Home Sales Report shows the residential construction sector continues to be a bright
spot in the broader domestic economy.
“Following Monday’s positive
update to ABS residential building approvals, today’s results show total
seasonally adjusted new home sales increased by 4.4 per cent in the month of
March.”
The March result for total new home sales
consists of an 11.3 per cent rise in multi-unit sales and a 2.6 per cent rise
in detached house sales.
“The monthly rise in both the detached and
multi-unit segments of the market is an encouraging result.
“However, the broader trend is that growth
over the past year has been driven by multi-unit sales, while detached house
sales have tracked sideways.”
In
March 2015 private detached house sales increased by 5.9 per cent in Victoria,
4.2 per cent in New South Wales and 4.2 per cent in Western Australia.
The HIA says yesterday’s interest rate cut is
also a welcome boost for the industry.
“Lower lending rates will provide added
support to residential construction activity, which is emerging as a key area
of growth mitigating the effects of the downturn in mining investment and
construction.”
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