Property unaffordable for first homebuyers
Property unaffordable for first homebuyers
Posted on Wednesday, March 05 2014 at 11:39 AM
The number of first homebuyers in the December quarter was at its lowest since the Australian Bureau of Statistics started to collect data, according to the Real Estate Institute of Australia (REIA).
President of the REIA, Peter Bushby, says the
figures reveal that first time buyers believe property is too expensive.
“The latest Adelaide Bank/REIA Housing
Affordability Report shows that first homebuyers
made up only 12.5 per cent of the owner-occupier market compared to 13.6 per
cent in the previous quarter,” he says.
“The report also shows the proportion of
income required to meet loan repayments increased one percentage point over the
quarter to 30.8 per cent.”
Bushby believes changes to state-run first
homebuyer grants are having a direct impact on the market sector.
He says in Victoria, for example, shifting grants
away from first homebuyer preferred existing dwellings has resulted in a fall
of 5.4 per cent for the year in new purchasers.
“There’s anecdotal evidence that younger Australians are opting
for living in rental accommodation or with their parents longer and investing
in property rather than becoming first homebuyers.”
Bushby says the drop in affordability has
been wide spread with all states and territories recording a downturn, apart
from the Northern Territory.
Adelaide Bank general manager, Damian Percy,
says more needs to be done for the sector.
“In spite of a benign interest rate
environment, a historically low number of Australians don’t feel they’re in a
position to step onto the first rung of the property ladder and this isn’t a
good thing,” he says.
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Are land tax reforms on the way?
Are land tax reforms on the way?
Posted on Monday, March 03 2014 at 3:06 PM
South Australian Liberal Leader Steven Marshall has announced a commitment to change the state’s land tax rules if he’s made Premier.
With the election scheduled for March 15, Marshall is confirming his
plan to reform the tax.
“The State Liberals understand that land tax is a huge cost burden on
families and businesses.”
The party’s pledge includes increasing the base land tax threshold to
$400,000 from the current $316,000 level, and reducing the top land tax rate to
three per cent from its present 3.7 per cent.
If elected as Premier later this month, Marshall says the changes will
come in as part of the 2016/17 budget at a cost of $53 million.
The Liberal party says under its policy, 16,000 land taxpayers will no
longer have to pay land tax in that budgetary year.
The party has analysed the annual savings for households and businesses under
the measures to be at least $420 for holders of more than $400,000 worth of
taxable land.
They also believe there will be a cost reduction of at least $7000 for
holders of more than $2 million worth of taxable land.
Marshall says land tax has flow on effects to most members of the
community.
“Land tax isn’t only paid directly by property owners, but is also
passed on to commercial and residential renters, which hurts self-funded
retirees, investors and low to middle income renters.
“Land tax reform is crucial if South Australia is to be a competitive
place to live and do business.”
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Housing industry to improve: HIA
Housing industry to improve: HIA
Posted on Friday, February 28 2014 at 2:16 PM
A gradual and steady improvement across the housing industry is expected to continue through 2014, according to the Summer 2014 edition of the Housing Industry Association’s (HIA) National Outlook.
The report highlights a growth in residential construction investment,
an increase in new dwelling commencements and an improvement in renovation
activity.
HIA senior economist Shane Garrett says while he expects the property
market across Australia to improve, states such as Tasmania and Victoria will
still face challenges.
“We believe the RBA will leave its interest rate unchanged for the
remainder of this year at least. This will underpin strengthening activity in
housing and arrest the deterioration in housing undersupply experienced over
the past decade,” Garrett says.
“Renovation activity has struggled over the past five years, but we see
light at the end of the tunnel here also.”
Garrett says an improvement in the housing industry will support
economic growth as reforms to planning, infrastructure charges and taxation
assist growth.
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Popularity of apartments sky high
Popularity of apartments sky high
Posted on Thursday, February 27 2014 at 9:52 AM
The approval of 2000 apartments in five high-rise Melbourne projects in just one day demonstrates a shift in market preferences, according to Urban Taskforce.
Chief executive
officer Chris Johnson says support for a 63-storey apartment tower as well as
two 55-storey towers shows there’s a growing interest in apartment living in
urban areas.
“The swing
towards apartment living in Australian cities seems to be part of a cultural
shift to favour location over dwelling size,” Johnson says.
“The boom in
apartment high-rise is partly supported by a growing interest in rental
properties, as many purchasers are investors. There does seem to be a swing
towards rental accommodation in cities as younger people put off home ownership
to give themselves more flexibility in where they live.”
He adds the
strong pro-growth attitude by the Victorian Minister for Planning Matthew Guy
sets a good example for other states.
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Investors hit record percentages
Investors hit record percentages
Posted on Monday, February 03 2014 at 2:56 PM
Australia’s largest mortgage broker has logged a record proportion of New South Wales investor loans in January 2014.
Australian Finance Group (AFG) says 53.4 per cent
of all home loans processed in NSW during the month were for investors.
This is the highest proportion of new mortgages in
the six years since the company started running its monthly Mortgage Index.
Mark Hewitt, the general manager of sales and operations
at AFG, says it’s an encouraging result.
“We’ve had a very strong start to the year, with
continuing trends of high investment activity in NSW and robust first homebuyer
activity in Western Australia.
“With most people expecting the historically low
rates to remain with us for much of the year, we’re preparing for even higher
levels of activity now that people are getting back to work from the summer
holidays.”
AFG also recorded an increase in the proportion of
first homebuyers with a rise from 10.2 per cent in December to 11.8 per cent in
January.
The company says this was on the back of resurgent
Victorian and Western Australian first homebuyer markets.
AFG also says their figure shows the removal of
grants in some states is having a direct impact on first-time buyer activity.
“Elsewhere, the division between states offering
grants versus those that don’t remains stark.
“In South Australia, first homebuyers comprise 15.5
per cent of all buyers, while in Queensland this proportion is 6.5 per cent,
and NSW 3.4 per cent.”
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Land supply under pressure
Land supply under pressure
Posted on Friday, February 07 2014 at 9:54 AM
Residential land supply may be coming under pressure with the volume of sales slipping in the September 2013 quarter, according to the HIA-RP Data Residential Land Report.
Despite the 2.8 per cent
drop, figures showed sales in the land market were up by
almost 40 per cent compared to 12 months earlier.
In addition, the value of
weighted median residential land had increased by 2.9 per cent over the
September quarter.
HIA senior economist Shane
Garrett says supply bottlenecks have affected the residential land market,
resulting in price pressure.
“We have long emphasised the
importance of ensuring that an adequate supply of affordable, shovel-ready land
will be crucial to any sustained recovery in new home building,” Garrett says.
Garrett has called on all levels
of government to reduce excessive taxes and charges on housing and reduce
delays on land releases.
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Attached housing demand hits record highs
Attached housing demand hits record highs
Posted on Wednesday, February 19 2014 at 8:22 AM
According to a recent study by financier Bankwest, Australia’s love of medium density housing is running hot.
Demand for units, townhouses and
semi-detached homes across Australia continued to rise over the past 12 months
reaching the highest level on record.
The Bankwest Housing Density Report revealed 43.4 per cent of total new home approvals were for medium
density dwellings, which is a rise of 3.6 per on the previous year.
Mark Reid, an executive general manager at
Bankwest, says there’s an ongoing trend towards medium density property at the
expense of standalone homes.
“Smaller housing options continue to increase
in popularity as the population grows and consolidates around Australia’s
capital cities.”
Bankwest’s analysis revealed medium density
approvals increased by 22.9 per cent on the previous year, which is
considerably higher than the 6.5 per cent increase in standalone home
approvals.
While data shows approvals for medium density
housing growing by a healthy 45.9 per cent over five years, approvals for standalone
homes fell by 8.5 per cent.
“The increasing popularity of medium density
housing is possibly being driven by Australia’s first-time homebuyers who are
finding it difficult to afford a standalone house.”
There was an increase in medium density
approvals across all capital cities, except Perth, according to the study.
Reid says this is probably due to the
relatively small price gap between houses and units in the Western Australian
capital.
“It only takes six months longer to save for
a house in Perth than it does to save for a unit.
“It’s possible that buyers are simply holding
out for the additional six months in order to save for a standalone home
instead of a medium density property.”
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Review under way into property law
Review under way into property law
Posted on Thursday, February 13 2014 at 9:18 AM
Two issue papers looking at seller disclosure requirements and body corporate lot entitlements have been released by Queensland’s Attorney-General as part of a review of property law in the state.
The review will be conducted in conjunction with
Queensland University of Technology (QUT) with the general public also being
asked to provide feedback.
Attorney-General Jarrod Bleijie says QUT will
initially focus on the effectiveness of the current seller disclosure obligations
and whether the current body corporate lot entitlement needed reform.
“We are proud to partner with the Commercial and
Property Law Research Centre at the Queensland University of Technology (QUT)
who are experts in the field of property law,” Bleijie says.
“We want all consumers to be properly informed when
it comes to buying property.
“This is about getting the balance right and having a
system that promotes the future of the property sector.”
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Could a further two interest rate cuts be on the cards for 2014?
Posted on Thursday, February 13 2014 at 9:19 AM
One of the country’s leading economists is predicting a drop in the cash rate to two per cent before the end of this year.
Bill Evans, chief economist at Westpac, says he expects a further two
cuts in rates between June and December 2014.
“I think rates are going to continue to come down.”
Speaking at the Australian Property Institute’s annual Economic
Indicators lunch in Brisbane last week, Evans conceded his outlook wasn’t in line
with other commentators.
“I’m probably the last drowning man who thinks that’s possible… but my view is that the dynamics that the
Reserve Bank described today describing why interest rates are on hold and why
they’re likely to rise – I think they’re a little too optimistic around a
flaccid world economy.”
Evans has been one of the industry’s most accurate predictors of
interest rate movements over the past few years.
His bearish view of the Australian economy includes an unemployment rate
drifting up to 6.5 per cent.
He says a weak world economy is likely to weigh on business confidence
and consumers through “job insecurity”, and the election hasn’t been a “circuit
breaker” for the nation.
It wasn’t all bad news for the local crowd, however, with Evans
predicting Brisbane’s property market will have good growth in the coming 12
months.
“I really do believe that the housing story is starting to stir in
Queensland, and in Brisbane in particular of course.”
Evans says a strong property market performance in both Melbourne and
Sydney has created relative affordability in Brisbane, which should translate
into population growth.
“There’s a huge catch-up effect which I believe is extremely likely to
happen in the Brisbane market.”
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API circulation numbers continue to climb
API circulation numbers continue to climb
Posted on Friday, February 14 2014 at 3:56 PM
Australian Property Investor magazine has had one of the highest jumps in circulation in the latest independent audit report, released today.
The Audit Bureau
of Circulation figures to December 2013 show API’s circulation increased by
11.5 per cent year-on-year. This means API had the third highest increase in circulation
numbers out of any monthly magazine, only behind Family Circle and Women’s Fitness,
and outstripped other business titles by a healthy margin.
API editor Eynas
Brodie says the magazine’s commitment to readers and non-biased reporting on
property is why more investors rely on API each month.
“This is
fantastic news and a credit to the hardworking API team, which is passionate
about delivering accurate property reports and inspiring stories,” Brodie says.
“Our magazine has
helped many homeowners make their move on the property ladder and assisted
thousands of investors to work towards their goal of financial freedom.”
API was just one
of a few publications to show growth.
According to the
audit, API’s circulation rose from 23,845 to 26,582, with new data out from Roy
Morgan revealing its readership was 109,000-strong over the 2013 calendar year.
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