Builder confidence rides high
Builder confidence rides high
Posted on Wednesday, January 22 2014 at 4:28 PM
A survey by Master Builders Australia shows a strong rise in builder confidence during the December quarter.
Peter
Jones, chief economist at Master Builders Australia, says the results telegraph
good news for the industry this year.
“Building
activity looks set to rebound in 2014 on the back of a revival in sentiment
that comes after an extended downturn.”
Jones
says the building industry is set to take up the slack from any mining downturn
in the coming year.
“The
turnaround in the industry outlook, particularly for residential building, is
encouraging for a wider economy grappling with below trend growth, a soft
labour market and concern over the gap left behind as resources investment
unwinds.”
He
says the results support recent Australian Bureau of Statistics data indicating
housing is in recovery and set to boost the economy into the future.
“The
latest survey results add weight to Master Builders Australia’s forecast for
residential building to improve strongly over the next three years, with the
number of dwelling starts predicted to draw near to 200,000 in 2016.”
The
survey showed builders were starting to gain confidence in the non-residential
sector as well, and there is a rise in the backlog of work in the industry.
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Would-be buyers will sacrifice distance for space
Would-be buyers will sacrifice distance for space
Posted on Thursday, January 16 2014 at 4:20 PM
Half of would-be homebuyers are willing to sacrifice proximity to the CBD in favour of a bigger block, according to research.
A survey of 2000 people conducted by Slater Gordon’s
Conveyancing Works found 48 per cent would buy a home beyond the traditional
10-kilometre radius of the city centre.
A further 57 per cent said they’d rather buy a house-and-land
package further out than an inner-city dwelling.
Even though the property market is gaining momentum, many
people are willing to show flexibility in their decision-making process in
order to get a backyard, according to the company’s general manager Lee Bailie.
“Despite interest rates remaining low, increasing property
prices and higher demand are driving people out of the inner city,” Bailie
says.
“What’s more, many people, particularly once they have started
a family, don’t want high density living – they want a particular lifestyle and
that lifestyle includes space to live and play.”
The study indicates that the majority of aspiring buyers
aren’t ready to trade backyards for balconies, he says.
Despite Australia being home to
the largest houses in the world, 74 per cent of respondents say they
expect land and home sizes to reduce in the next 10 years.
“So it’s possible that people have this at the top of their
mind when buying and are actively seeking out property in areas where the size
of the land is generally larger,” Bailie says.
Older Australians are more likely to look to buy property in a
regional area, according to the study, with 15 per cent of those surveyed over
the age of 55 saying they’d consider a regional area compared to just nine per
cent of buyers aged up to 24.
There was little difference between the intentions of men and women with 57 per cent of males and 65 per cent of women
saying they’d look at a house with land more than 10 kilometres from the CBD.
Buyers in Brisbane (50 per
cent), Sydney (49 per cent), Melbourne (52 per cent), Perth (50 per cent) and
Darwin (75 per cent) were most likely to look for property further from the city.
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Queensland property market continues revival
Queensland property market continues revival
Posted on Thursday, January 16 2014 at 4:27 PM
New data shows the Queensland Titles Registry recorded a strong increase in the number of lodgements last year.
The government says there was an average of
3240 lodgements per day in December, which is well above the overall daily
average of 2640.
Andrew Cripps, Minister for Natural
Resources and Mines, says the figures are encouraging for the state’s property
sector and shows growing optimism.
“Construction is one of the four key
pillars of the Queensland economy and strong property market activity is great
news for economic growth and jobs in this sector,” Cripps says.
The majority of lodgements in December were
title transfers, he says, most of which were property sales, new mortgages and
mortgage releases.
New lot creations also steadily increased
last year, with an average of 3460 new lots being created per month for
building projects such as subdivisions and housing developments.
“This compares with the 2012 monthly
average of 3240 lot creations,” Cripps points out.
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Rental market result brings mixed news
Rental market result brings mixed news
Posted on Thursday, January 16 2014 at 4:28 PM
One market analyst says the market for rental properties is shifting back into balance, bringing mixed news for tenants and landlords.
Australian
Property Monitors (APM) has released figures indicating national asking rents for houses increased by 0.9 per cent, while unit rents fell
by 0.4 per cent during the December quarter in 2013.
The APM numbers show Brisbane, Hobart, Darwin
and Adelaide all saw growth in both house and unit rents during the period.
The report confirms Sydney as the most expensive
capital city for tenants with unit rental rates increasing by 5.4 per cent
during 2013.
Sydney’s median weekly asking rent was $500 for houses
and $485 for units.
Melbourne’s overall result was subdued for the
period, according to Andrew Wilson, a senior economist at APM.
“Melbourne’s recent trend of rising house rents
is also consolidating, with December quarter median asking rents increasing by
1.4 per cent.”
Wilson says an increase in the supply of new
inner city apartments is contributing to weaker unit rental growth in the Victorian
capital.
Adelaide is the most affordable mainland capital
with a current median weekly asking rent of $350 for houses and $285 for units.
Wilson says Melbourne and Sydney are delivering
the lowest yields for both houses and units.
“Rental yields for
houses in Sydney continues to weaken as a result of strong price rises and a
surge in investor activity.
“This year, we can
expect to see rising supply and moderating demand put further downward pressure
on house rental growth in the city.”
In contrast, Brisbane
and Perth are providing investors with the highest yields for most housing.
Wilson is particularly bullish about the result
for the Queensland capital.
“Brisbane continues to provide investors with
the highest gross yields for both houses and units of all the major capitals.
“With prices growth likely to accelerate this
year, expect increased house investor activity.”
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Housing finance through the roof
Housing finance through the roof
Posted on Tuesday, January 14 2014 at 8:48 AM
Home loan approvals in November reached their highest level in more than four years, according to new data released yesterday by the Australian Bureau of Statistics (ABS).
New South Wales,
Queensland and Western Australia were the strongest-performing states, helping
the housing finance market return to pre-GFC levels.
Loan Market
director of sales Mark De Martino says the low and stable interest rate
environment that characterised 2013 has been a critical factor in drawing out
more homebuyers.
“New South Wales
has recovered nicely over the past two years, with consecutive month-on-month
growth since January 2012,” De Martino says.
“The resource-rich
states of Queensland and Western Australia approved 15 per cent and 12 per cent
(respectively) more loans (in November) than the same time (the previous)
year.”
While official
statistics show first homebuyer activity remains very low in most states and
territories, De Martino has a theory as to why.
Since the removal
of grants for established properties in almost every state, the statistics have
become skewed, he believes. Reported first-time buyer finance commitments are
only for those using a concession or grant.
Given that the
remaining government incentives for first-timers are geared towards newly-built
or off-the-plan dwellings, the data isn’t collecting any
other first homebuyers.
“Enquiries for first homebuyers remain strong at Loan Market, accounting
for 39 per cent of enquiries in November and December. These active buyers are
shopping around and waiting for the right property and time to purchase. The
first homebuyers of 2014 are going to be very prepared and well researched.”
There are growing signs that the Reserve Bank of Australia could raise the
official cash rate at some stage in 2014, he says.
“Fixed rates for both two and three-year terms have been adjusted upwards,
albeit by small increments, by several lenders in the past few weeks.”
Major banks tend to shift their fixed rates back up when they sense
official rates could be about to move, he says.
Housing finance statistics, November 2013
Source:
Australian Bureau of Statistics
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Asking prices rise
Asking prices rise
Posted on Wednesday, January 08 2014 at 3:45 PM
Market analyst SQM Research says property values look set to strengthen with capital city asking prices continuing to rise as stock levels fall.
SQM’s Asking Prices Index
shows the capital city average asking price for houses is now at $706,300
reflecting a 7.2 per cent increase year on year.
For units, SQM Research has
recorded an average asking price of $459,300, which is a 2.3 per cent increase
year on year.
“SQM Research’s Asking
Prices Index has revealed that vendors of Sydney houses have lifted their
asking prices by 14 per cent over the last 12 months, further demonstrating the
strength in the Sydney housing market recently.
“Canberra was the only
capital city to record a decline in asking prices for houses on a yearly basis,
falling by 1.5 per cent since this same week, 12 months earlier.”
Figures for stock levels,
released along with the Index results, show a fall in the number of properties
listed for sale.
National stock levels dropped by 8.5 per cent
in December 2013 to 337,744, while the annualised figure reflects a fall of 4.3
per cent in advertised stock since December 2012.
SQM’s latest release shows all capital cities
except one (Hobart) recorded a drop in listings during December 2013 with decreases
ranging from 8.5 per cent in Darwin to 26.4 per cent in Sydney.
Louis Christopher, managing
director of SQM Research, says although monthly decreases are seasonal, it’s
the year-on-year figure that’s most indicative of a strengthening market.
“There were some rather
large declines in listings over December, however that is to be expected for
this time of year given how the housing industry shuts down over Christmas and
much of January, though the large year on year decreases in some cities such as
Sydney are noted once again.”
Christopher says their
analysis indicates a strong start to the market in 2014.
“Overall I see no evidence
of any slowdown in the market itself with these numbers, and indeed our Asking Prices
Index recorded some very strong increases right throughout December.
“We are confident of a very
strong market opening later this month.”
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Housing approvals rise again
Housing approvals rise again
Posted on Thursday, January 09 2014 at 2:22 PM
The number of new dwellings approved across the country rose 2.4 per cent in November, marking the 13th consecutive monthly increase.
New figures released by the Australian
Bureau of Statistics (ABS) shows approval growth was strongest in Queensland,
up 4.9 per cent, followed by South Australia, up four per cent.
Victoria also recorded a 3.7 per cent
increase in dwelling approvals in November, while New South Wales saw a 1.3 per
cent rise.
Western Australia (0.6 per cent), Tasmania
(0.4 per cent) and the Northern Territory (0.2 per cent) also recorded modest
positive results.
The Australian Capital Territory was the
only jurisdiction to see a decline in approvals.
“The value of total building approved rose 2.3 per cent
in November, in trend terms, after rising for 22 months,” the ABS reports.
“This was a result of rises in trend terms for both total residential building
(2.6 per cent) and non-residential building (1.9 per cent) value.”
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Major renovations potentially eligible for First Home Owner Construction Grant
Posted on Tuesday, January 07 2014 at 2:43 PM
Queensland first homebuyers looking to utilise the State Government’s First Home Owner Construction Grant (FHOCG) should also consider purchasing properties requiring major renovations, according to Lachlan Walker of Place Advisory.
The $15,000 grant has predominantly been used to purchase newly-built
properties or off-the-plan properties under construction.
However, Walker says homebuyers have been ill informed about the
possibility of buying existing properties that require substantial renovations.
The option to consider properties needing major renovations will offer a
much greater selection of homes to first homebuyers, he says.
“Many young people don’t understand that a ‘new home’ doesn’t
necessarily mean something that has just recently been built or is in the
process of being built; substantial renovations are also eligible for the
FHOCG,” Walker says.
“I believe that substantial renovation gives people many more options.
“They can buy into an area that they like far more easily and have the
option of a self-renovation job, or they can purchase a property that has
recently been substantially renovated, just as long as it hasn’t been
previously occupied or sold as a place of residence.”
According to the Queensland Government website, a substantial renovation
involves any structural building work such as replacing or altering foundations,
floors, supporting walls, brickwork and roofs.
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Australian house prices continue to rise
Australian house prices continue to rise
Posted on Thursday, January 02 2014 at 2:06 PM
The outlook for home values in 2014 is looking positive with last year’s figures showing a 9.8 per cent increase over the 12 months to December.
The RP Data-Rismark results show that across Australia’s capital cities
there was a 1.4 per cent rise in December and a 2.8 per cent rise in dwelling
values over the final quarter.
Cameron Kusher of RP Data says the results from the December Hedonic
Home Value Index show the fastest annual rate of value growth since August
2010, and the largest calendar year increase in values since 2009 when home
values were up by 13.7 per cent.
However, Kusher was quick to point out the increase was not overly
significant when considering the long-term data.
“Despite the strongest annual value growth since 2009,
the rate of growth was not that startling given the low interest rate
environment and the previous successive years in which home values fell,”
Kusher says.
“Although home values increased by 9.8 per cent in 2013 the growth follows
a 3.8 per cent annual fall in values in 2011 and a further 0.4 per cent annual
fall in 2012. Cumulatively, from peak to trough, capital city dwelling values
were down 7.7 per cent prior to this current growth cycle.”
According to Kusher, although value growth has been strong compared to
recent years, the current growth cycle has been somewhat muted.
Overview of figures:
Best performing capital city: Sydney +4.1 per cent
Weakest performing capital city: Canberra, -1.3 per cent
Highest rental yields: Darwin houses with gross rental yield of six per
cent and Darwin Units at 6.2 per cent
Lowest rental yields: Melbourne houses with gross rental yield of 3.4
per cent and Melbourne units at 4.2 per cent
Most expensive city: Sydney with a median dwelling price of $655,250
Most
affordable city: Hobart with a median dwelling price of $330,000
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Calls for SA government to assist market
Calls for SA government to assist market
Posted on Tuesday, December 31 2013 at 10:08 AM
SA property academic Peter Koulizos says the removal of the grant will have a negative impact on the industry.
The Urban Development Institute of Australia (UDIA) in South Australia
has called on the State Government to extend the cut-off for the housing
construction grant beyond Tuesday, December 31.
The $8500 payment was introduced in October 2012 and is granted to
residents who build new homes.
UDIA executive director Terry Walsh says the housing industry in SA
needs the grant in order to assist with the recovery of the housing market,
which is still sluggish.
“It wouldn’t surprise me if this was shortlived and there was some other
announcement of an incentive by both parties leading up to the election.
“The housing construction grant has certainly helped the housing
industry and the economy here in South Australia and if they withdraw it
permanently it will have a negative impact,” he says.
“If you look at the national data, South Australia is lagging behind the
majority of the country, so if the purpose of it was to stimulate the housing
industry it would need to remain until we set out to achieve what we needed to
achieve and that could be years.”
Meanwhile, the Real Estate Institute of SA (REISA) has called on the State
Government to reduce the amount of stamp duty applied to house sales in the
state.
REISA chief executive officer Greg Troughton slammed the cost of stamp
duty and says, coupled with land tax, it is incarcerating potential investment
in the state, according to a News Limited report.
Koulizos agrees, saying there should be no stamp duty for properties
under the median house price.
“I think there should be no stamp duty. If we go back many years there
was supposed to be no stamp duty when the GST came in,” Koulizos says.
“So, if they’re going to keep stamp duty they need to eliminate it for
cheaper homes, anything less than the median house price there should be no
stamp duty. That way you are truly making housing more affordable.”
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