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House Price Surge Continues in ‘Rapid Recovery’ Corelogic

House Price Surge Continues in ‘Rapid Recovery’ Corelogic (1)

Australia’s housing market is now five months into its recovery, as Sydney and Melbourne drive the turnaround with values up by 2.7 and 2.2 per cent respectively for the month of November.

The national index recorded an increase of 1.7 per cent for the month, with all capital cities but Darwin recording a lift in values.

Corelogic described this as the largest monthly rise in the national index since 2003.

The November results see Corelogic’s national home value index move into positive annual growth territory for the first time since April 2018, with Australia’s dwelling values now 0.1 per cent higher over the past twelve months.

“The Australian housing market is now five months into an unexpected period of rapid recovery,” Corelogic head of research Tim Lawless said.

“The question is, how long can such a high pace of capital gains be sustained?”

Taking in the latest Corelogic data, BIS Oxford Economics says indicators show that sales volumes are still down “significantly on the levels of a year ago”.

As a result, BIS expects “quarterly price growth to slow significantly over the second half of this financial year to June 2020 as listings increase”.


Change in dwelling values

House Price Surge Continues in ‘Rapid Recovery’ Corelogic (2)

Lawless said that the market is yet to be tested on higher supply levels, with advertised listing numbers remaining seasonally low through spring.

“Considering wages and household income growth remains low,” Lawless added, “economic conditions are losing momentum and housing affordability is once again worsening, from an already high base in the largest cities, there are likely to be some headwinds in maintaining such a fast recovery.”

“With interest rates likely to track lower in 2020, we could see additional stimulus counteracting some of these headwinds,” Lawless said.

RBA governor Philip Lowe last week said that the central bank had ruled out quantitative easing as an economic stimulus measure, but that it would become an option to “be considered” at a cash rate of 0.25 per cent, “but not before that”.

While Australia’s economy has been benefiting from low interest rates, ongoing investment in infrastructure combined with the stronger outlook in the resources sector, analysts have predicted rates to be cut to 0.25 per cent by April next year.


Index results as at November 30 2019: Corelogic

House Price Surge Continues in ‘Rapid Recovery’ Corelogic (3)

The index shows early signs of improvement in Brisbane’s market with growth of 1.8 per cent for the 3 months to November, and a slight 0.8 per cent uplift for the month.

Corelogic’s national dwelling value index has recovered by 4.7 per cent since hitting its trough in June, but nationally home values remain 4.1 per cent below their 2017 peak.

Four of Australia’s capital cities returned to positive annual growth, led by Hobart, up by 4.2 per cent, Canberra with a 3 per cent rise, Melbourne up 2.2 per cent for the year, and Sydney, up 1.6 per cent.

While the largest declines remain concentrated in Darwin, down 10.9 per cent and Perth.

Perth’s housing rebound

While Perth’s housing market is down 7.7 per cent for the year, it recorded a slight 0.4 per cent uplift in the November results.

Dwelling values have been trending lower since mid-2014, the index notes this is down a cumulative 21.3 per cent through to the end of November.

“Over the past thirteen years, Perth has seen house values move from being the most expensive across the capital cities to now be the lowest,” Lawless said.

“Great news for first home buyers, however Perth home owners have seen a material reduction in their wealth over the past five and a half years.”

Looking ahead, BIS noted that by June next year, it expects Sydney median house prices could be up nearly 14 per cent on the June quarter of 2019.

While in Melbourne BIS forecast house prices could increase 12 per cent over the year to June 2020.

 

 

Source: theurbandeveloper.com

 

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Brisbane

Experts identify best cities to buy property

Experts identify best cities to buy property

Property hunters after the best value should eye up properties in Brisbane and Melbourne, according to a recent survey.

Finder spoke to experts and economists and asked them which city they would buy a property in if they were to invest today.

Nearly a quarter of them picked Brisbane and Melbourne, while 13 per cent would search for property in Canberra or Sydney.

Nine per cent saw potential in Hobart. But Perth and Adelaide did not rate high, with only 4 per cent of experts enticed to invest there.

“While Melbourne and Brisbane are strong candidates for the most promising property market in Australia, it is a bit stunning to see Sydney perform relatively poorly,” Finder insights manager Graham Cooke said.

The results illustrate that it is essential to consider property in other parts of the country, he said.

“The state you live [in] doesn’t need to be the state where you buy. With many Sydneysiders grappling with housing affordability, rentvesting could be the way to go.”

Although the majority of experts and economists were able to put their finger on a city they would invest, 13 per cent did not think it was the right time to buy a property.

 

 

Source: www.nestegg.com.au

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Brisbane

Queensland Confirms 2032 Olympic Games Bid

Queensland Confirms 2032 Olympic Games Bid (1)

Queensland will join the race to host the 2032 Olympic Games after premier Annastacia Palaszczuk confirmed that cabinet had given the green light for the bid on Monday.

State cabinet officially endorsed the bid after a feasibility assessment detailed significant investment and economic benefits for the state.

A south-east Queensland Olympic Games could create 130,000 jobs and deliver more than $8 billion in new trade opportunities, the analysis found.

“This is about so much more than a few weeks of sport,” Palaszczuk said.

“Hosting the 2032 Olympics and Paralympics could be a game-changer and deliver 20 years of accelerated opportunity for our state.”

More than 80 per cent of venues that would support an Olympic Games are already built, while recent IOC reforms ensure host cities receive significant financial support from the committee.

Preliminary analysis undertaken in May estimated net operating costs of $5.3 billion to host the 2032 Olympic Games.

Queensland Confirms 2032 Olympic Games Bid (2)

Lord mayor Adrian Schrinner said that IOC’s financial contributions may be enough to offset the cost of the games entirely.

“The operating costs of the games can be done in a cost-neutral manner,” Schrinner said.

Schrinner, along with the council of Queensland mayors, has been vocal in his support of 2032 Olympics campaign—penning an open letter to the premier in an attempt to fast-track the bid.

The premier said the bid process will be staged, with the first phase about securing financial support across all levels of government.

On Monday, the premier said that the government has “not discounted” the use of the Gabba for the opening ceremony, and flagged upgrades to the ageing QEII Stadium and Albion Park raceway for major events.

The International Olympic Committee is not expected to announce the winner until 2022, giving the state government two years to finalise its bid.

Queensland Confirms 2032 Olympic Games Bid (3)

Both the opposition leader Anthony Albanese and prime minister Scott Morrison have already thrown their support behind the bid.

“We will continue to work closely with our partners to ensure we receive the financial support we require from all levels of government,” Palaszczuk said on Monday.

Queensland’s initial bid will be assessed by the IOC executive committee, before being signed off by more than one hundred Olympic delegates.

China, Germany, Indonesia and the “combined Koreas” are among rumoured early-stage bidders.

 

 

Source: theurbandeveloper.com

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Brisbane

Window to slam shut for first-time buyers as property prices surge

Window to slam shut for first-time buyers as property prices surge (2)

First-time buyers could well be locked out of the market again if property prices continue to surge – and the government’s scheme to help new buyers with small deposits is unlikely to make much of a difference, experts say.

Property investors often compete in the same parts of the market as first-home buyers, particularly modestly priced apartments.

The prospects of surging prices, future capital gains and even lower mortgage rates next year are likely to see investors flood back into the market.

While the increase in investor finance for mortgages so far has not been overly strong, this is highly likely to change in 2020, according to Doron Peleg, founder of property researcher RiskWise.

With official interest rates likely to be even lower from as early as February, he expects Sydney and Melbourne property prices to snap back to record highs by the end of 2020.

“First-home buyers are likely to be significantly impacted due to projected increased competition [from investors] and way less affordable houses,” Mr Peleg said.

I think [first-home buyers] will be crowded out of the market in 2020 – as has happened in previous upward price cycles

Louis Christopher, managing director of property researcher SQM Research, said first-home buyers have been entering the market in greater numbers over the past two years, particularly in Sydney and Melbourne.

“But following the latest price surges in both cities, I think [first-home buyers] will be crowded out of the market in 2020 – as has happened in previous upward price cycles,” he said.

Property prices in Sydney dropped about 15 per cent after peaking in mid-2017 and dipped a little more than 10 per cent from peak to trough in Melbourne, before recovering strongly from the middle of this year.

Figures released by the Australian Bureau of Statistics show that during 2014, 2015 and 2016 – when prices were booming – the number of loans to owner-occupier, first-home buyers was between 7000 and 8000 a month.

Window to slam shut for first-time buyers as property prices surge (2)

However, since prices started falling in 2017, commitments by first-home owners have surged to between 9000 and 10,000 a month.

Since the beginning of June,  the Reserve Bank of Australia has cut the cash rate three times to a new record low of 0.75 per cent.

Over the three months to November 30, Sydney dwelling prices lifted by 6.2 per cent and by 6.4 per cent in Melbourne, CoreLogic figures show. Dwelling values in Sydney rocketed 2.71 per cent and across Melbourne by 2.25 per cent in November alone.

For many first-time buyers, even when prices were falling, a significant obstacle was coming up with a sizeable deposit. And buyers with less than a 20 per cent deposit of the purchase price are usually required by lenders to have mortgage insurance.

Though paid for by borrowers, the insurance covers lenders for any shortfall that may occur through the sale of a re-possessed house.

The one-off premium can to run to several thousands of dollars – even on modestly priced properties – although it is usually added to the home loan at the time of purchase.

The Morrison government’s First Home loan Deposit Scheme will start on January 1.

The scheme guarantees mortgages for up to 10,000 first-home buyers each year who have saved deposits as low a 5 per cent, helping them buy sooner and avoid having to pay mortgage insurance.

The government’s scheme limits the purchase price of Sydney properties to $700,000, which to be honest, is a joke

Graham Cooke, insights manager at comparison site Finder, said that aside from the small number of borrowers who may be able to get help in buying their first home, the property value caps for the scheme are also “problematic”, especially in Sydney.

“The government’s scheme limits the purchase price of Sydney properties to $700,000, which to be honest, is a joke,” he said. That is also the cap for regional centres in NSW, defined as cities with populations of more than 250,000. The cap for the rest of NSW is $450,000.

“Not many properties [in Sydney] will qualify for this scheme – some apartment buyers may qualify, but not many houses are available for below that price,” Mr Cooke said.

The cap for houses is $600,000 for Melbourne and regional Victorian centres and $375,000 for the rest of Victoria.

Successful applicants must have taxable incomes of $125,000 or less a year for singles and $200,000 or less for couples.

The scheme is administered through the National Housing Finance and Investment Corp. in partnership with major lenders. Last week, the scheme signed its first lender, NAB.

The government has said the scheme is designed to help first-home buyers purchase a modest home and is just one way it supports them.

In 2017, the Morrison government introduced the First Home Super Saver Scheme, which helps first-home buyers save a deposit inside their superannuation fund by making voluntary contributions.

The government will be monitoring the new scheme, including how the supply for loans is meeting demand, and it can be modified, if required.

Robert Mellor, executive chairman of economic and property forecaster BIS Oxford Economics, said first timers can take some heart that prices of cheaper dwellings, particularly apartments, are not rising as quickly as the middle and upper ends of the market.

 

 

Source: www.brisbanetimes.com.au

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