Real Estate Review » TAS

Housing is becoming more affordable

admin — Wed, 14 Dec 2011 02:09:42 +0000

Recent figures suggest that housing has become more affordable in recent years across all states of Australia.
The Real Estate Institute of Australia (REIA) – Deposit Power Housing Affordability Report showed the proportion of income required to meet the repayment of home loans has declined by one percentage point to 33.6 per cent during the September quarter.

With the exception of Victoria, where the proportion of income required to meet repayment of home loans has gone up by 0.4 per cent to 35.6 per cent, all Australian states and territories recorded drops in this figure. This was led by Western Australia, which enjoyed the largest fall over the quarter, down 2.3 per cent to 23.9 per cent.

According to the REIA, this brings the state’s affordability back to the level it was in December 2003.

The REIA said the Australian Capital Territory remained the most affordable state or territory in which to buy a home, a title which the territory has held for the past five and a half years. The proportion of income to meet loan repayments declined by 0.9 per cent to 17.9 per cent over the quarter; 15.7 percentage points below the national average.

NSW remained the least affordable state or territory in which to buy a home. The proportion of income required to meet loan repayments decreased 1.6 per cent over the quarter to 37.1 per cent; 3.5 per cent higher than the national average.

In South Australia, the proportion of income required to meet loan repayments fell one per cent quarter-on-quarter to 33.5 per cent; in Tasmania it decreased 1.5 per cent to 28 per cent; in Queensland it dropped by 0.5 per cent to 32.5 per cent; while the Northern Territory witnessed a 1.4 per cent drop to 21.4 per cent.

The REIA added that the number of Home Loans taken up by first home buyers increased by 4.4 per cent to 23,997 over the September quarter and 5.4 per cent over the year. During the September quarter, first home buyers made up 15.6 per cent of the market compared to 15.4 per cent in the June quarter.

Most states have see a decline in the value of properties in some cases by as much as 25%, although the average statistics are significantly lower.

No joy from auction clearance at weekend

admin — Tue, 22 Nov 2011 01:44:15 +0000

Auction clearance rates were down this weekend despite talk of consumer confidence returning.

Auction figures released by Australian Property Monitors found clearance rates in Brisbane were down by 35.5 per cent over the weekend, with Brisbane recording the lowest clearance rate of only 12.5 per cent.

The story was much the same in Melbourne, with auction clearance rates declining by yet another 10.3 per cent to 47.4 per cent.

The Real Estate Intitute of Victoria (REIV) reported a 53 per cent clearance rate in Melbourne on the weekend.

Enzo Raimondo, REIV’s CEO, said the auction market “has been typified by consistently moderate levels of demand this year and this weekend [was] no different.”

Almost half of all auctions held were passed in with majority of these being passed in on a vendor bid.

“Next weekend the REIV expects around 1045 auctions next weekend.”

Despite the sharp falls in both Brisbane and Melbourne, clearance rates in Sydney and Adelaide remained relatively stable with 52.4 per cent and 34.5 per cent of properties selling, respectively, over the weekend.

A three bedroom house located in Annandale, in Sydney’s inner west, took the title as most expensive property sold over the weekend, selling for in excess of $2.4 million. The most affordable home was three bedroom villa in St Marys, in Sydney’s outer west, which sold for $241,000.

The Real Estate Institute of NSW (REINSW) reported a Sydney clearance rate of 58 per cent for the weekend, with 372 properties selling and 268 passing in (33 of those on a vendor bid).

Across the board buyers appear to be holding back hoping to see further property price drops. It does not appear that the recent interest rate cut by the RBA has made any difference to buyer demand. Despite home loans being significantly cheaper now than even 3 months ago, demand for property is just not there.

Property sharing can assist with home affordability

admin — Tue, 24 May 2011 05:27:09 +0000

It seems that in an effort to afford that dream first home, some buyers resort to renting out rooms in their new home to assist with home loan repayments.
A recent survey of home buyers conducted by Mortgage Choice, revealed that 14 per cent of home buyers said that they intend to reduce their costs of living by sharing their property with others.

Property cohabitation works well for those who have already purchased their home as well as potential buyers who need to save up a deposit. House sharing can reduce the burden of home loan repayments even though it may not be the answer for everyone.

As first time home buyers are getting older, many take years to save up a deposit while either living at home with family or house sharing. If so, this would be especially prevalent in areas of dense housing and high property prices and living costs.

Sharing your home with others outside your family or romantic relationship is often a financial necessity when utility, petrol and other costs increase as they have recently. The same goes for home owners who are trying to make ends meet.

Research from RP Data shows capital city rents grew a solid 4.8 per cent in the first quarter of 2011 – markedly higher than the 2.9 per cent experienced in the year to March 2011.

Sales of new land at a 10 year low

admin — Mon, 18 Apr 2011 07:24:18 +0000

As cost of land continues to increase and the size of new house block continues to shrink, residential land sales across Australia have fallen away to their lowest level in at least 10 years.

The Housing Industry Association – RP Data residential land report showed that the volume of land sales dropped to about 11,500 lots in the three months to December 2010 from 12,500 in the previous quarter.

If we were to look at land sales statistics a year earlier we would see a drop of just over 40 per cent. The quarterly drop was the biggest since 2001 when the HIA-RP Data survey began.

At the same time that land sales are dropping the weighted price of a residential block increased 4.1 per cent to $194,161 across the country.

“The sharp drop in the volume of land sales signals a very weak 2011 for new home building,” said HIA economist Matthew King. “The escalation in land values highlights an on-going deterioration in new home affordability driven by constraints on supply.”

The latest residential land price data follows a report from the Real Estate Institute of Victoria over the weekend showing that Melbourne home prices had posted their biggest decline since 2008. The median Melbourne house price for the March quarter fell by 6 per cent to $565,000 from $601,000.

Auction clearance rates have also deteriorated to about 60 per cent in Melbourne and Sydney since the beginning of 2011, significantly lower than the highs of 80 per cent seen last year, as the effect of higher interest rates, crumbling affordability and economic uncertainty took their toll.

REIV chief Enzo Raimondo said “the current residential market in Melbourne and Victoria has entered into a different phase of lower transaction numbers and reduced price growth.”

Nationally, home prices were flat in February, following a revised 1.5 per cent drop, seasonally adjusted, in January, according to RP Data-Rismark figures released last month, with January’s fall the biggest decline since 2005 when the index began.

In addition to the increasing cost of purchase and the tighter regulation in lending for residential purposes, there are a number of other adverse influences driving down land prices. There are the high costs of land tax, the difficult lending conditions, the increasing costs of living and the list goes on.

The Reserve Bank raised our cash rate to 4.75 per cent in November, a move that was followed by even larger rate increases for borrowers from most lenders.