Housing finance figures released by the Australian Bureau of Statistics today show the number of loans to homebuyers declined in August 2016, although lending to households building or purchasing new homes improved slightly.

The total value of mortgages for new dwellings was $3.7 billion, a fall of 4 per cent over the month, and adding to three consecutive months of negative growth.

Mortgage lending for new dwellings is now at its lowest level since September 2015.

In total, there were 34,349 loans to owner-occupiers purchasing homes (excluding re-financing), down by 1.3 per cent on July’s result and 7.4 per cent lower than the number recorded in the corresponding month last year.

Lending to households building or purchasing new homes fared a little better during the month. The number of loans for construction increased by 3.7 per cent in August, but was still 1.7 per cent down on the level recorded year ago. The number of loans for the purchase of new homes was essentially unchanged in the month (-0.3 per cent) at a level 5.7 per cent higher than a year earlier.

“It is pleasing to see lending in the new home market holding up in an environment where we are seeing the number of loans to homebuyers easing across the housing market more broadly,” HIA economist Geordan Murray says.

“Looking more closely at lending for new homes, the number of loans for construction has been gradually trending down since late 2014.

“This segment of housing finance is closely aligned with the detached house building market and lending activity has been generally consistent with expectations given the level of detached house activity.”

“In contrast, the number of loans to those purchasing newly built homes has been steadily trending higher.”

Despite a slight fall in value, the number of new housing commitments increased by 2.4 per cent in August, with 8285 mortgages taken out to finance either the construction or purchase of new dwellings.

“Over the month, owner-occupied loans for new dwellings fell by 1.6 per cent, but overall, owner-occupiers continue to account for the greatest share of home loans, with approximately two in every three mortgages taken out by owner-occupiers over the month,” Master Builders Australia CEO Wilhelm Harnisch says.

“Due to a fall in new housing approvals recorded earlier in the month, there’s a growing concern by industry that supply constraints may be limiting opportunities for new dwelling construction.

“First homebuyers’ share of home loans continued to improve, edging up to 13.4 per cent, on the back of a marginal improvement in the number of dwellings financed – 3.5 per cent over the month – and growth in the average value of first homebuyer loans to $318,300 – up by 0.6 per cent on July 2016,” he added.

 

 

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Ongoing speculation about another interest rate cut in the coming months has encouraged an increasing number of borrowers to choose a variable rate home loan, new research has revealed.

According to the latest national home loan approval data from Mortgage Choice, variable rate home loans made up 83.3 per cent of all loans written in September – up from 79.7 per cent the month before.

Mortgage Choice chief executive officer John Flavell says with speculation mounting that the Reserve Bank of Australia could potentially cut the cash rate again in the coming months, it’s not surprising to see an increasing number of borrowers opting for a variable rate home loan.

“Borrowers are clearly hoping rates will fall further in the future and are keen to take advantage of this possibility by choosing a variable rate mortgage,” he says.

“While future cash rate cuts are purely speculation at the moment, it would seem the chatter has been enough to encourage more homebuyers to take out a variable rate mortgage.

“Regardless of whether borrowers opt for fixed or variable rate products, they can be assured of securing a very competitive rate,” he says.

Across the country, variable rate demand was highest in Victoria and Tasmania, with this type of product accounting for 93.4 per cent of all home loans written throughout September.

Western Australia and Queensland weren’t far behind, with variable rates accounting for 83.6 per cent and 80.1 per cent respectively.

Demand for variable rate home loans was lowest in New South Wales, accounting for 79.9 per cent of all loans written.
Of the various variable rate products on offer, ongoing discount products remained the fan favourite, with this type of  loan accounting for 48.5 per cent of all loans written.

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A survey of 33 economists by comparison website finder.com.au reveals most predict future interest rate falls.

One quarter of the respondent say the cut will come in November, while 39% believe the drop will occur within the first six months of 2017.

Of the remainder, 15% are tipping a fall later in the New Year and nine experts are forecasting a rate rise beyond October 2017.

The cash rate is unlikely to fall below 1.25% according to over two-thirds of those surveyed.

This month’s RBA announcement that rates would remain at historically low levels, however, may not be enough to overcome a flat rental market and stimulate investors, according to the website.

Over half of the surveyed experts believe slow rental market growth could affect property prices, with many saying falling rental yields are making housing less viable for investors.

An increase in housing supply has kept rents down across the country’s capital cities, according to Graham Cooke, Insights Manager at finder.com.au.

“This could see the housing market become less attractive for investors, but the government’s continued policy of negative gearing could potentially ease this effect by reducing investor risk.”

Cooke says the results indicate lenders should consider offering longer terms on fixed-rate loans.

“The ability to lock in a competitive fixed rate for a specified term provides borrowers with the peace of mind in knowing that their repayments will remain unchanged for the duration of the term so they’re protected from interest rate rises,” he says.

Shane Oliver of AMP said, however, Australian borrowers have been reluctant to take on short-term fixed rate mortgages in the past.

“Generally speaking, Australians have been a bit wary of fixed rates even over three or five years, so I suspect there may not be a lot of demand for fixed rate 10 or 20-year mortgages,” he said.

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Crystal Legacy, RMIT University and Ian Woodcock, RMIT University

Australian cities are inherently diverse places, but that diversity can lead to conflict between different values about what cities should and can be. Our series, Conflict in the City, brings together urban researchers to examine some of these tensions and consider how cities are governed and for whom.

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There has been no shortage of ideas about how to spend the A$9.7 billion the Victorian government will receive from selling a 50-year lease for the Port of Melbourne. While Premier Daniel Andrews lamented the Melbourne Metro rail project is already fully funded, the government was quick to announce its program of level-crossing removals would be fast-tracked.

Victoria’s major media outlets have also used this announcement to push for their favourite projects to be funded. These include a rail line to the airport, a second rail tunnel beneath the city, a new tollway in the northeastern suburbs, and even a revival of the zombie East West Link, which was dumped after the last state election.

No doubt, the proceeds from the port lease signal an exciting and productive period of transport infrastructure construction for the state. This is particularly so with Infrastructure Victoria’s 30-year Infrastructure Strategy due out by the end of the year. The release of the draft strategy for public comment until the end of October has further fuelled the debate over competing projects.

However, this strategy is not, and was never intended to be, an integrated land use and transport strategy. Instead it lists a pipeline of projects to meet Victoria’s short-, medium- and long-term infrastructure needs and priorities. It also calls for a congestion tax to ease the pressure on roads.

Infrastructure Victoria will provide guidance to governments, which must then determine what projects are of greatest “need”.

It is still not clear how this strategy will complement and be used in conjunction with the metropolitan strategy Plan Melbourne, which is being “refreshed”. There is no evidence that public consultations to support the development of these two plans have intersected.

Building without a plan?

Melbourne has had 11 metropolitan strategic land use plans since 1954, but has really only ever had one transport plan. The core elements of the 1969 Melbourne Transportation Plan have dominated and driven transport planning ever since.

The 1969 plan included a network of more than 500 kilometres of freeways, new and upgraded arterial roads, the City Loop rail system, new rail lines to Doncaster, Rowville and between Frankston and Dandenong, and 80 level-crossing removals.

The total budget was equivalent to about $30 billion in today’s money. Of this, 86% was devoted to roads – and three-quarters of that was earmarked for freeways.

The plan reflected the thinking of the time globally: cars had come to dominate planning ideology. Few of the rail projects – apart from the City Loop – were realised, while most of the freeways have been built and expanded numerous times. Even the Andrews government’s signature level-crossing removal project is 30 crossings short of the 1969 plan, leaving more than 100 still in place.

Much of the world has moved on since then. Most enlightened governments have realised the focus on private cars at the expense of active and public transport is not viable.

However, the car-based logic of Melbourne’s 1969 plan has been deeply implanted into Victorians’ collective consciousness. The Infrastructure Victoria citizen jury report showed interest in the “completion of existing roads and the existing freeway network”.

It is problematic to not think critically about what “completing the network” means when it is conceived only for private cars. It has long been known that building more and bigger roads cannot solve the congestion problems created by relying on cars to move people around.

It is a problem of spatial efficiency where cars cannot compete. All other modes of transport use space more efficiently and can be extended and upgraded to move millions more people without destroying the city.

The lack of a new strategic transport plan means there is a lack of coherent guidance on how Victoria might tackle its mobility challenges. The need is especially pressing in light of the contemporary environmental and social challenges of climate change and rising social inequality.

Without a new plan, there is no clarity about the values that should frame transport investments and priorities. Infrastructure Australia and Infrastructure Victoria must resort to evaluating “worthy projects” on a case-by-case basis of costs and benefits.

What’s missing is a transparent, coherent and rigorous framework that integrates future transport and land use to meet 21st-century goals of sustainability and social equity.

In the absence of a new plan, politicians focus on the election cycle to win a mandate for projects. The projects that win these “popularity contests” cannot be subjected to rigorous analysis until after the fact.

Today’s priorities for a transport plan

What would a contemporary transport plan need to do?

It would first acknowledge the importance of network connectivity to make the shift to the sustainable modes the 21st-century Australian city demands.

Road networks are the most well-connected and continuous surfaces in our cities, which is why most travel is by private car. To induce significant shifts to active and public transport, any new plan must recognise the massive deficits in networks for cyclists, pedestrians and public transport users, then seek to rectify the gaps.

Such a plan would highlight the network of networks necessary to meet these goals. It would tackle questions of sequencing, design, funding and financing options, and prioritisation of infrastructure needs. Who wins and who loses from a range of scenarios would form part of the process of planning.

These scenarios would allow fundamental questions to be raised. For example, with the creeping privatisation of roads and shifts to tolling instead of taxation, should everyday commuters be forced to subsidise transport projects for road freight corporations? Or should there be viable public transport alternatives?

Surely our transport markets should be competitive for the average user, rather than a monopoly that makes ever-larger numbers of Australians highly vulnerable.

For at least two decades, voters have called for better public transport. Australian cities need a new kind of plan. We need a plan that can survive the vicissitudes of electoral fortune and profit motives to secure an equitable and sustainable future.

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Crystal Legacy is hosting a free screening of the 2011 Melbourne International Film Festival favourite, The Triangle Wars, from 5-7pm on October 20 at RMIT University. The event will include a discussion of the larger themes around citizen activism, grassroots campaigning and the contest of ideas in urban planning. See here for details and to register.

You can read other Conflict in the City articles here.

Crystal Legacy, Australian Research Council (DECRA) Fellow and Vice Chancellor’s Research Fellow, Centre for Urban Research, School of Global, Urban and Social Studies, RMIT University and Ian Woodcock, Associate Lecturer, School of Global, Urban Social Studies, RMIT University

This article was originally published on The Conversation. Read the original article.

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Meriton founder, Harry Triguboff, says the decision to sell their strata management business is a response to law reform in New South Wales.

“One of those reforms effectively shuts Meriton, and other developers, out of having any role in the strata-management of their properties until the buildings are 10 years old,” he says.

The new strata-laws come into effect 1 December this year.

“We are veterans in this business and haven’t taken the decision to exit it lightly,” Triguboff adds.

Meriton is the country’s largest apartment developer, and it’s strata business manages 6194 lots spread over 33 schemes in Sydney and the Gold Coast.

Meriton’s Ryan Walmsley says the company’s gross annual income from base management fees and insurance commissions exceeds $1.1 million.

He said two-thirds of the strata-management schemes in Meriton’s portfolio are under contract until 2018 or longer, and will be an attractive investment for the right buyer.

“They will be buying well-maintained schemes that are big and viable – they have an average of 188 lots.”

Walmsley says the sale is being conducted against a backdrop of Australia turning into a nation of apartment dwellers.

“Nearly one third of NSW residents already live in apartments and one estimate is that the figure could climb to 50 per cent by 2040.”

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A survey by financial comparison website Mozo.com.au has revealed the top property buyer turnoffs sellers can address to maximise price.

Mozo’s report shows mould and dark rooms are among the main reasons why buyers might try elsewhere.

According to Mozo property expert, Steve Jovcevski, while the survey reveals a lack of parking topped the list of turnoffs, many other major deterrents could be addressed.

“Home sellers can make a number of easy fixes to impress potential buyers, such as removing mould, which is the second biggest deterrent, and installing skylights or clever lighting with over a third of potential buyers saying dark rooms are a turnoff,” he says.

“Sellers might think they need to invest tens of thousands of dollars to upgrade the kitchen or bathroom, but our research shows that damp and poor natural light are a bigger turnoff than outdated kitchens and bathrooms, which are a turnoff for just three in 20 potential buyers.

“This isn’t too surprising given a lot of buyers like to add their own style to a space, so an unrenovated kitchen or bathroom could be a drawcard for them,” Jovcevski adds.

Small rooms round out the top five turnoffs for prospective buyers, but according to Jovcevski a few tricks like painting the walls white, removing bulky furniture and decluttering can make a small room look bigger.

“Lack of storage also made the top 10 turnoffs with 14 per cent of would-be buyers saying they’d walk away if a property lacked storage, so it could be worth installing shelving or under-stair storage,” says Jovcevski.

“Our results show how important it is to consider your market before putting a property up for sale, and only make the changes that will drive up value for those most likely to be interested in your home,” says Jovcevski.

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Successful first time buyers are compromising on location in order to purchase property, according to mortgage broker Mortgage Choice.

The company’s latest survey shows almost 40 per cent of first home buyers who purchased within the last two years struggled to buy property in their preferred location.

According to the survey, 37 per cent of respondents said they couldn’t buy exactly where they wanted to – up from 34.7 per cent in 2015.

More than 80 per cent of these buyers said a lack of affordability was the reason they couldn’t buy in their desired suburb.

John Flavell, CEO of Mortgage Choice says although disappointing for the first timers, the results aren’t surprising.

“Generally speaking, first home buyers will want to buy in an area that is close to family, friends and work,” he says.

“However, in most cases, these are generally the more expensive areas.”

Flavell says a lot of these buyers want to be, “close to the action and buy property as close to their capital city as possible,” however extraordinary price growth in major capitals has dashed hopes.

“In Sydney and Melbourne, property prices climbed 11.3 per cent and 11.5 per cent respectively over the 12 months to July 2016.

“As a result, these cities boast median dwelling prices above $500,000.

“Understandably, it can be very difficult for many first home buyers to save the deposit needed to buy a home worth at least $500,000.”

Flavell’s advice for first time buyers is to compromise on their expectations and get into the market as soon as possible.

“Property can be a great investment and, once in the market, home owners might find it easier to purchase a property in their desired area,” he said.

“First home buyers need to think sensibly when buying property, and understand that while they cannot afford their dream home today, that doesn’t mean they won’t be able to afford it in the future.”

According to Flavell, low interest rates should encourage participation, although a strict approach to budgeting and lifestyle will help get a deposit together sooner.

 

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A 43-storey residential tower has been approved in Parramatta city centre’s commercial-only zone, which, according to the Urban Taskforce, highlights the need to rethink zoning in Parramatta’s centre as well as all city centres in Sydney.

“Parramatta currently has a commercial-only zone for a significant area of the city centre but it’s clear that the take-up of commercial uses is very limited,” Urban Taskforce CEO Chris Johnson says.

“The approval of the planning proposal for 116 Macquarie Street requires only four of the 43 floors to be for commercial uses and rezones the land from B3 Commercial Core to B4 Mixed Use.

“The New South Wales Government should look at the potential to rezone the whole centre of Parramatta as mixed-use with a requirement of including a few floors of commercial uses.

“The Parramatta example of mixed-use zoning should also occur in all of Sydney’s city centres to ensure bustling cosmopolitan environments that incorporate residential uses and are active 24/ 7.”

The Parramatta rezoning, Johnson adds, has also shown flexibility with the floor space ratio by increasing the current allowance of 10:1 to 19:1, which he says demonstrates the support the government and Parramatta City Council are giving to the market place feasibility of development proposals.

“A similar flexible approach is required for two recent planning proposals lodged for sites also in Macquarie Street that had been dramatically downsized due to the state government unexpectedly changing development controls regarding overshadowing,” Johnson goes on.

“It’s good to see the confidence the industry has in development in the centre of Parramatta and that planning rules are being adjusted to take into account practical considerations, such as economic feasibility.”

The Gateway Determination for 116 Macquarie Street Parramatta also recommends that the Council for Parramatta City, in finalising its City Centre Planning Framework Study, rationalise development controls for its CBD to ensure a consistent planning framework to give certainty for community and industry.

The Urban Taskforce says it’s keen to work with the council, the Department of Planning and Environment and the Greater Sydney Commission to ensure that the planning framework will encourage quality development.

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A new partnership has been announced between hipages, the app and website for finding and hiring trusted tradies, and the Housing Industry Association (HIA), the official body of Australia’s home building industry.

The partnership is part of hipages’ efforts to bring digital innovation to the building and trade industry and introduce more trade professionals to Australian customers.

As an industry sector organisation, HIA represents the views and the voice of the residential building and renovation industry. The membership builds more than 85 per cent of all new residential detached, medium-density and high-rise construction work and undertakes over 80 per cent of renovations in Australia.

The HIA logo is displayed as a sign of professionalism on sites around the country. Members abide by a strict code of conduct and the partnership will bring another level of professionalism and credibility to the hipages platform.

The new partnership will see HIA members having their membership visible on their hipages profile, indicating to customers which qualified trade and building professionals are registered with the HIA, as well as access to more than 90,000 hipages’ monthly job requests.

“We’re thrilled to start working closely with the HIA team,” chief commercial officer of hipages Gideon Kline says.

“This strategic partnership is another reinforcement of our commitment to connect Australians with qualified and licensed trade and building professionals.

“Trust and quality are at the forefront of our DNA and we see a natural fit between hipages and HIA in promoting the highest work ethics within the industry.”

With more than $1.35 billion worth of jobs processed annually, hipages helps homeowners find professionals that are ready and available to do the job while providing tradies with tools to easily manage their workflow and grow their business.

Customers have access to more than 80,000 trade and building professionals, providing a simple platform to see reviews, contact businesses directly and get quotes within minutes.

“We’re designed to help people spend less time finding a tradie and spend more time admiring the handiwork,” Kline says,

“Technology is shaping the industry and with thousands of local recommendations and real-time information at your fingertips, getting help and finding work has never been easier.”

“Joining forces with the hipages team is an extremely valuable development for us,” says Shane Goodwin, managing director of the HIA.

“The impact of digital technology is changing the way we do business in our industry and we need to embrace it.

“Our members see the benefits of embracing new technological advancements as they look to gain an edge on their competition.”

 

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Victoria’s population has hit 6 million, according to figures released by the Australian Bureau of Statistics (ABS) today.

ABS acting director of demography Phil Browning says that in the year ending March 31, 2016, Victoria grew by 1.9 per cent, adding an extra 114,900 people to the population.

“This is the fastest population growth for Victoria since 2009 and is well above Australia’s growth rate of 1.4 per cent,” he says.

“New South Wales was the next fastest state, increasing by 1.4 per cent. Queensland and the Australian Capital Territory were not far behind, with both growing at 1.3 per cent.”

Net overseas migration was the main contributor to growth in Victoria, adding 62,800 people to the population over the year. The remainder of Victoria’s population change was explained by natural increase (+37,600) and net interstate migration (+14,500).

“The last time Victoria was growing this fast, back in 2009, the breakdown of Victoria’s growth was different, with net overseas migration at 84,200, natural increase 34,600 and a net interstate migration inflow of just 500 people.”

The Victorian population is projected to reach 7 million in 2024.

Overall, Australia’s population grew by 327,600 people (1.4 per cent) to reach 24 million by the end of March 2016.

Net overseas migration added 180,800 people to the population (2 per cent higher than the previous year) and accounted for 55 per cent of Australia’s total population growth.

Natural increase contributed 146,800 additional people to Australia’s population, made up of 304,300 births (1.6 per cent lower than the previous year) and 157,500 deaths (1.7 per cent higher).

Over the year, net overseas migration was the major contributor to population change in New South Wales, Victoria, South Australia and Tasmania, whilst natural increase was the major contributor in all other states and territories.

 

(a) Includes Other Territories comprising Jervis Bay Territory, Christmas Island and the Cocos (Keeling) Islands.

 

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