Viewing by month: September 2014

Capital city housing market records strongest capital gain for winter since 2007

According to the latest RP Data-Rismark Home Value Index, capital city dwelling values moved 4.2 per cent higher during the winter months, driven by large capital gains across the Sydney and Melbourne markets.

Canberra was the second best performing city, with values creeping 2.5 per cent higher over the same three month period. This trend was driven by a gain in detached house values which largely compensated for the 2.1 per cent fall across the weaker apartment market. The winter months saw moderate conditions across other capital cities, with Adelaide up 1.5 per cent, Brisbane achieving a 1.3 per cent gain and Perth a 1.0 per cent increase. Darwin and Hobart both recorded slight drops.

The latest growth cycle has seen Sydney dwelling values rising by 27.2 per cent while Melbourne was also up by 19.5 per cent. Since the beginning of 2009 values have risen by 50.1 per cent and 46.1 per cent respectively in Sydney and Melbourne, figures which confirm both cities to be the strongest performers in this cycle.

According to RP Data research director Tim Lawless, the onset of spring is likely to be accompanied by an increase in listings numbers which will be a real test for the housing market.

“Considering the ongoing high rate of auction clearance rates, a generally rapid rate of sale and the ongoing low interest rate environment, it’s likely that dwelling values will rise even further over the next three months,” said Mr Tim Lawless.

“Consumer confidence is also moving in the right direction now after the post-budget slump which will add fuel to the exuberant buying and selling conditions we have seen during winter.”

RP data is expecting a compression in rental yields as rental rates rise at a slower pace than dwelling values. Across the combined capital cities, the typical gross yield on a house has reduced from 4.1 per cent to 3.7 per cent over the past twelve months.

Sydney and Melbourne have experienced the largest yield compression evidenced by a fall of 47 and 32 basis points respectively. However the current rate of value growth and moderate rental growth suggests that Sydney yields will move below Melbourne in the near future.

“With yields so low in the cities where values are seeing the largest capital gains, it is clear that investors remain very much focussed on value growth rather than yield,” said Mr Tim Lawless.

Investor loan commitments have represented 38 per cent of all mortgage lending for the last nine months, which is the lengthiest period investor lending has held above that level. These investors are typically focused on the Sydney and Melbourne apartment markets where capital gains are high and yields lower.

“Investment returns may be higher however in smaller capital growth cities where the growth trend is more mature and yields are also healthier,” concluded Mr Lawless.


0 comments | Posted by Charles Tarbey on 12/09/2014 at 12:00 AM | Categories:

RBA decision may drive auction activity

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 may result in more vendors seeking to list through Auction this spring.

 

“Heading into the traditionally busy spring selling season, the Reserve Bank’s decision to keep interest rates on hold will likely bolster buyer’s confidence,” said Chairman and Owner of Century 21 Australasia, Charles Tarbey.

 

“This may result in a larger turnout at spring auctions as the warmer weather and favourable interest rate environment results in more buyers out in search of their dream home.”

 

The Reserve Bank in a statement reasoned that it was appropriate to leave the cash rate on hold in light of a small recovery in household sentiment and gradually improving business conditions.

 

“Century 21 believes vendors would be wise to begin preparing their homes for auction in anticipation of this added interest,” said Charles Tarbey.

 

“Some vendors might like to take advantage of the seasonal change by having small repairs conducted around the house,” concluded Charles Tarbey.


0 comments | Posted by Charles Tarbey on 03/09/2014 at 12:00 AM | Categories:

Century 21: Bubble talk ‘misguided’

Century 21 believes warnings that the Australian property market is overheated and developing into a real estate bubble are misguided.

 

“If the Reserve Bank was to unexpectedly raise interest rates steeply, it may look like we’re approaching ‘bubble’ territory,” said Chairman and Owner of Century 21 Australasia, Charles Tarbey.

 

“However, despite strong growth in Australia’s capital city dwelling values, these only sit 7 per cent above the previous market peak and have only grown by 4.5 per cent over the past ten years.

 

“To me, this clearly demonstrates that the market has experienced a market correction over the past twelve months and is not approaching ‘bubble’ territory as hypothesised by some market commentators.”

 

A recent Fairfax Media survey revealed that few economists think the market is suffering a bubble or likely to crash and most expected the Reserve Bank cash rate to stay at, or near, current levels until halfway through next year.

 

“Continued stability in interest rates is good news for anyone looking to purchase the property this spring,” said Charles Tarbey.

 

“However, I would caution homebuyers to carefully budget for the effect any interest rate fluctuations could have on their finances,” concluded Charles Tarbey.

 

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


0 comments | Posted by Charles Tarbey on 02/09/2014 at 12:00 AM | Categories:

RBA decision good news for spring selling season

Century 21 believes the RBA’s decision to leave interest rates at 2.5 per cent may encourage interest in real estate during the traditionally busy spring selling season.

 

“The Reserve Bank’s announcement marks twelve months of interest rates being held at an unprecedented low of 2.5 per cent,” said Chairman and Owner of Century 21 Australasia, Charles Tarbey.

 

“Interest rate stability is good news for the Australian property market as we head into the traditionally busy spring selling season.

 

“Stable interest rates provide peace of mind for buyers and sellers of real estate.”

 

In a statement, the Reserve Bank reasoned that it was appropriate to leave the cash rate on hold in light of a strong expansion in housing construction and moderate growth in consumer demand.

 

“I encourage Australians looking to transact property this spring to brush up on their negotiating skills,” said Charles Tarbey.

 

“Negotiating skills are going to be of increased importance to vendors and buyers following the transition to a negotiators market earlier this year,” concluded Charles Tarbey.

 

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


0 comments | Posted by Charles Tarbey on 01/09/2014 at 12:00 AM | Categories: