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Claims that Australia is heading for a 50 per cent drop in house prices are ‘outrageous’, economists say

For those excited by the prospect of snagging a home for half price following predictions of a home loan crisis and a plunge in property values, don’t get your hopes up.

Claims that Australia is heading for a 50 per cent drop in house prices are ‘outrageous’, economists say

A US-

based researcher’s predictions that we will witness up to 50 per cent price drops across Australia are “outrageous” and “not going to happen”, according to leading economists.

In a 60 Minutes episode on Sunday, Jonathan Tepper, founder of macroeconomic research group Variant Perception, predicted a property market crash of 30 per cent to 50 per cent.

Mr Tepper expects property prices to plummet at similar rates seen in the US, Ireland and Spain as a result of huge mortgages on “overvalued” property in Australia.

AMP Capital chief economist Shane Oliver said it’s nothing new to find people making claims of upcoming property prices crashes, but “unless we have a very severe recession or interest rates go sky high causing people to default, it’s not going to happen,” he said.

“They often make the claim that [Australia has] the highest household debt to income ratio, but if the figure is adjusted for the amount kept in offset accounts and for businesses … it’s at the same level as it was in 2007/2008,” he said.

“As we can see at the moment, the banks are telling us households aren’t having problems servicing their debt.”

While he said “everything is possible” and there is the chance fraudulent pay slips have been used by some brokers, the banking regulator APRA is serious on banking standards.

“If we had unemployment at much higher levels than 6 per cent, if we had mortgage rates at more than 10 per cent I would be much more worried,” Dr Oliver said.

“But I’ve seen all these claims before and there is an underlying resilience in the Australian housing market that sees it hold up,” he said.

Domain Group senior economist Andrew Wilson called the claims of a 50 per cent price drops in Australia’s capital cities “outrageous”.

“The clear characteristics of Australia’s capital city housing markets are orderly growth and correction phases, if anything we’re going to have a less volatile market in the future,” Dr Wilson said.

“Even in the deepest of recessions we haven’t seen [house prices drop 50 per cent], even in the 1990s with unemployment pushing over 10 per cent in some areas and high mortgage defaults, we saw a very modest change in house prices.”

Among all Australians, it’s typically under 5 per cent who are “highly leveraged” for their homes, with 96 per cent either owning their own home outright or paying less than 30 per cent of their incomes on repayments, he said.

“The logic doesn’t support any prospect of the type of house price drops being forecast by the doomsayers.”

HSBC chief economist Paul Bloxham does not believe Australia has a housing bubble, saying high prices are “explained by the fundamentals of supply and demand”.

“Most of the loans are held by upper income earners and the housing debt is fairly well allocated,” Mr Bloxham said.

While the ramp up in investor activity seen in 2015 was “concerning for the Sydney and Melbourne markets” he said measures taken to restrain those risks appear to have been successful.

“In Ireland, the US and Spain house prices went up and credit was misallocated to households who couldn’t afford to service it, but there was also an oversupply of dwellings, which meant when the falls happened [it was exacerbated],” Bloxham said.

In most areas of Australia there is no oversupply of homes and, in the case of Sydney, it is “very undersupplied,” he said.

However, LF Economics’ Lindsay David agrees “100 per cent” with Mr Tepper’s view the national housing market is “a bubble just waiting to burst” with a mortgage crisis on the cards.

“By global standards our banks are lending what could only be described as toxic sums of debt to homebuyers that will never be repaid,” Mr David said.

“One only needs to walk into a bank or mortgage broker and have a five minute chat to realise they will lend to you a sum of debt you could never ascertain in other countries with no core evidence that you could ever repay the debt, particularly interest only loans, in a market downturn,” he said.

 

Original Publish: http://www.domain.com.au/

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Gold Coast

Why Hope Island is attracting every kind of buyer

The best representation and offering of Hope Island living is the standout Hope Island Resort gated community, of which the Peninsula Collection represent the last apartments on offer

Hope Island, despite not being named after hope but instead colonial aristocrat Captain Louis Hope, remains one of Queensland’s premier living and holiday destinations.

Hope Island is attracting every kind of buyer, from young families who are attracting to the local schools, to downsizers and retirees who want to live the lifestyle that Hope Island offers.

Investors, as well as first home buyers, have been interested given the price point of the apartments on the island in comparison to the houses, which have fetched upwards of $10 million in recent years.

Infrastructure is already well in place on the Island, with marina shopping and dining precincts, medical facilities, and three 18-hole golf courses.  The Links Golf Club in particular is recognised internationally for its 18-hole championship design and multi-million dollar clubhouse.

Some other activities on offer include the nearby tennis centre, theme parks and diving attractions.

Hope Island also plays host to a bustling nightlife with some highlights being Georges Paragon, Boardwalk Tavern and The Verandah Bar.

New property on Hope Island however is becoming increasingly scarce, with only a limited amount of land left to be developed.

There’s been huge demand due to the lack of supply for Peninsula Collection, the last stage of the The Peninsula Hope Island, a development by the ASF Group.

Peninsula Collection

Peninsula Collection 52 Harbourview Drive, Hope Island QLD 4212 

They’ve seen everything snapped up, from the blocks of waterfront land on offer, to a variety of townhouses.

Peninsula Collection is the last piece for ASF, comprising just 63 apartments designed by Archidiom.

The three-bedroom apartments, which have nearly 120 sqm of living space, start from just $565,000. The three-bedroom apartments rise to $780,000 for the 133 sqm apartments, which also include a study room.

The biggest apartments on offer, with five bedrooms and four bathrooms, have nearly 180 sqm of living area and start from $1.28 million.

A limited number of the 5-bedroom apartments include a dual-key access option and many of the three-bedders come with a study integrated into the floorplan.

Completion is forecast for 2023, with construction set to begin in a few months.

Residents will also have access to The Peninsula BBQ area and waterside gazebo beyond the Hope Island Resort offerings like a fitness centre and swimming pool.

 

Article Source: www.urban.com.au

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Brisbane

Why investors snap up apartments in Aria Property Group’s Brisbane apartment developments

Aria Property Group have pushed the envelope not only on sustainability but value at their newest tower, Trellis in South Brisbane

Aria Property Group always have a steady stream of interest from off the plan investors in their Brisbane apartment developments.

Investors who bought in to one of Aria’s most recently completed developments, The Standard, Aria, located in the heart of the Fish Lane arts precinct, saw great success.

Those who bought pre-completion have secured resales between 10 per cent and 38 per cent more than what they paid. Owner-occupiers showed the greatest keenness on the resales.

The investors who decided to hold on to their apartments are seeing strong 5.48 per cent rental yields throughout the building.

Aria’s latest development, Trellis, also in South Brisbane, is also expected to be a hit with investors.

The 12-story building with 110 apartments is Aria’s most sustainable yet, with 60 percent of the building covered in greenery of some variety. It will feature trellises within which improve biodiversity, as well as solar technology and even Tesla batteries and charging stations.

Aria Property Group

Trellis 20 Edmondstone Street, South Brisbane QLD 4101 

There’s over 1,000 sqm of recreational amenity space, including the Temple of Wellness on the ground floor and the Residents’ Rooftop Club on level 13. That features magnesium baths and an infinity pool with views across Brisbane. Amenity is also high on the priority list for tenants.

Apartments in Trellis start from $739,000 for a two-bedroom, two-bathroom apartment. Three-bedroom apartments are priced from $1,084,000 to $1,224,000.

Completion is forecast for mid-2023.

The Brisbane apartment market has continued to show strength over 2021, after a resilient 2020 in the wake of the pandemic.

Research from property data firm CoreLogic showed Brisbane apartment values rose 0.6 per cent over September, triple the growth of apartments in Melbourne.

At the end of 2020, the median apartment value in Brisbane was at a yearly high of $390,000. Now it’s $430,000.

Unit rental prices have also seen steady growth in 2021, up 3.5 per cent over the past 12 months.

This growth trend is expected to continue, backed in large part by billions of dollars in investment from both private and public sectors as part of the pipeline for the 2032 Olympics.

 

Article Source: www.urban.com.au

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Opinion

Why the rise of the Sunshine Coast’s prestige market is only just beginning

Sunshine Coast

Once a humble home for barefoot surfers and retirees seeking sand in their golden years, the Sunshine Coast is now one of Australia’s most prized playgrounds for prestige buyers, with property prices swelling by up to 46 per cent in 12 months across its most sought-after postcodes.

Fuelled by exclusivity, driven by development restrictions along the coastline and augmented by the remote working wave – the relaxed region just a couple of hours north of Brisbane is also becoming a mecca for cashed-up tech wizards with nine key suburbs now members of the million-dollar-plus club for median house prices

It’s a region that also obliterated the Queensland house price record with the $34 million sale of a Sunshine Beach trophy home at 17 Webb Road in June this year – a sale that came hot on the heels of the $14 million transaction of 8 Noosa Court, Noosa Heads, a three-bedroom penthouse that eclipsed the previous Sunshine Coast apartment record by $5 million.

 Sunshine Coast

The pandemic-era lifestyle changes have created a perfect storm for the Sunshine Coast’s prestige market. Photo: Supplied 

Both sales were handled by Tom Offermann, of the eponymous real estate firm.

While the quiet beachside strip still lacks the grandeur of Sydney’s Darling Point or the overwhelming wealth of Melbourne’s Toorak, property experts say the unstoppable wave of buyer demand is paving the way for an unprecedented growth cycle.

“Our buyer base was traditionally wealthy, self-funded retirees, but now we’re seeing this massive influx of young, financially capable families who are picking up properties in A-grade positions, and we’re seeing a lot of younger wealth that’s coming out of IT, finance and tech that’s tapping into new lifestyle opportunities [off the back of COVID-19]. So, we’re right at the beginning,” Adrian Reed of Noosa’s Reed and Co Estate Agents said.

“The abundance of nature, shopping, the beaches and the prestige amenity that is afforded to us is pretty desirable … and it’s all limited stock, so there’s going to be [further] price increases. In fact, we’re probably in what appears to be the early stages of a fairly significant growth cycle.

 

Article Source: www.domain.com.au

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