Viewing by month: October 2014

RBA decision is good news for property market

Century 21, the largest real estate sales organisation in the Asia Pacific region, believes the Reserve Bank’s decision to leave the cash rate on hold at 2.5 per cent bodes well for the property market as it will provide ongoing certainty to mortgage holders and attract new buyers to the market.

 

“There has been some discussion recently about the potential of the market to overheat,” said Chairman and Owner of Century 21 Australasia, Charles Tarbey.

 

“It’s important to remember that not all areas of the market are experiencing growth like Sydney and Melbourne and that recovery is patchy.

 

“However, today’s decision coupled with Australia’s unique property market, the imbalance between supply and demand of housing, and the ongoing health of the Australian economy are all factors which will encourage the market moving forward,” concluded Charles Tarbey.

 

The Reserve Bank indicated that it still expects growth to be a little below trend for the next several quarters and made note of recent labour market data volatility.

 

Century 21 encourages potential buyers who are looking to purchase real estate to ensure they have obtained the appropriate professional property and finance advice before doing so.

 

With over 3,000 offices, Century 21 is the largest real estate sales organisation in the Asia Pacific region, a region vital to Australia’s continued economic success.


0 comments | Posted by Charles Tarbey on 08/10/2014 at 12:00 AM | Categories:

Capital gains slow over September

Housing values eased their way into spring, with the RP Data CoreLogic Home Value Index posting a 0.1 per cent capital gain across the combined capital cities over the month of September.

Dwelling values across Australia's capital cities were virtually flat over the month of September, according to the RP Data CoreLogic Home Value Index, which recorded a 0.1 per cent rise in values over the month. This translated into a 2.9 per cent overall capital gain during the third quarter of 2014. The flat result for September masks the fact that five of Australia's capital cities recorded a fall in values over the month whilst only Sydney, Brisbane and Adelaide recorded an increase during the same period.

The September quarter saw capital city dwelling values rise by 2.9 per cent. According to RP Data National Research Director Tim Lawless, this was once again driven by strong conditions across the Sydney and Melbourne markets, where the quarterly capital gain rate was 4.1 per cent and 3.7 per cent respectively.

Dwelling values have increased by 9.3 per cent over the last twelve months to the end of September 2014, with all capital cities recording an increase in dwelling values during this period. Sydney values are driving the growth trend, having increased by 14.3 per cent over the past twelve months. A substantial gap exists between Sydney and the next best performer, Melbourne, where dwelling values increased by 8.1 per cent.

Despite the ease in capital gains over September, other indicators remained strong over the first month of spring.

Auction clearance rates continued to beat the 70 per cent mark week-to-week, while volumes across RP Data real estate agent and valuation platforms remained strong- which indicates heightened levels of industry and mortgage market activity.

According to Mr Lawless, more listings are entering the market place as the weather warms up. He said that the big test for the housing market will be whether additional stock is absorbed by an increase in buyer numbers.

"The annual rate of appreciation in dwelling values has actually been moderating since reaching a peak in April this year. The fact that the annual rate of capital growth has been trending lower is an important factor to note, as it highlights that the rate of capital gain is no longer accelerating,” said Mr Lawless.

"A moderating annual trend, as well as the relatively flat September result, is likely to be welcome news to policy makers and potential buyers, after the winter months recorded the largest capital gain since 2007.

"The softer September result is also likely to be seen by the Reserve Bank , which has recently raised concerns about the level of value growth and speculative investing in the Sydney and Melbourne housing markets, as a positive indicator," said Mr Lawless.

The high rate of capital gain has sparked further debate around the sustainability of Australia’s housing markets; however, Mr Lawless points out that most of Australia's capital cities are recording a sustainable rate of appreciation.

According to Mr Lawless, the Reserve Bank has recently singled out Sydney and Melbourne as the markets that require some caution, particularly from investors who are buying into markets at a mature time in the growth cycle – at high price points and where rental yields are very low.

Additionally, Mr Lawless noted that when you look back through the cycles of the housing market, the current growth phase isn't as aggressive as what was recorded over previous cycles.

At their peak, on a rolling annual basis, capital city dwelling values increased at a faster pace over each of the previous three growth cycles in 2001/03, 2007 and 2009/10. The big difference over this cycle is that growth has been very much concentrated within the nation's two largest capital cities.

Mr Lawless said that what is concerning is that we have now seen the ratio of housing debt to disposable income reach a record level at 137.1 per cent, and we are seeing substantial investor concentrations within the two largest capital cities, and more specifically within their inner-city unit markets.

"The Reserve Bank has recently highlighted the risks that are becoming more evident in the Sydney and Melbourne housing markets and therefore it is no surprise that the Reserve Bank, together with APRA, is now contemplating the likelihood of introducing macro prudential tools to reduce some of the exuberance in the housing market, and rebalance investor demand without having to resort to monetary policy" Mr Lawless said.


0 comments | Posted by Charles Tarbey on 07/10/2014 at 12:00 AM | Categories: