Dwelling sales continue to surge across Australia against low listings levels. In the three months to July, Corelogic estimates there were around 171,100 sales.
This was 53.4 per cent higher than what has typically been seen this time of year for the previous five years.In the same period, there were just 121,200 newly advertised properties for sale in the three months to July.
This has taken the sales to new listings ratio to recent highs nationally, at 1.4 over the three months to July.
The sales to new listings ratio is calculated by dividing the number of sales that have taken place over a given period by the number of new listings added to the market over the same time.
For the past decade, the ratio has averaged 0.9, suggesting for each listing added to market there was just under one transaction that took place.
When the ratio is 1, it implies buyer demand and advertised supply is balanced.
A sales to new listings ratio of 1.4 suggests strong selling conditions, as there is more than one transaction taking place for every new unit of supply in the same period.
The sales to new listings ratio has averaged above 1 since June, 2020.
Dwelling sales to new listings ratio, national
Each of the capital city markets currently has a sales to new listings ratio of greater than 1, ranging from 2 in Adelaide, to 1.1 in Darwin.
Capital cities with imposed lockdown restrictions through July saw a particularly strong uplift in the ratio, which may be a result of a disproportionate number of vendors postponing the start of a selling campaign amid lockdowns.
Multiple factors can explain the surge in sales relative to low listings levels from mid-2020.
On the demand side, these factors include:
Low mortgage rates
Increased buyer demand has stemmed from continuously falling mortgage rates.
Despite concerns of an earlier-than-foreshadowed lift in mortgage rates, RBA data shows average new home loan rates for owner-occupiers fell 12 basis points through the first half of 2021 and 18 basis points for investors.
Mortgage rates are one of the most important determinants of housing demand and in the current climate, where GDP is once again expected to decline, the RBA will likely facilitate a low rate environment for longer.
A savings windfall
As social consumption declined through lockdowns, and household financial support was increased, household savings peaked at 22 per cent of household income in the June quarter of 2020, which was above the-then decade average of 7 per cent.
Combined with a range of incentives for home purchases introduced through 2020, increased savings levels may have bolstered borrower deposit levels, triggering additional sales since the onset of Covid-19.
Savings rates remained elevated at 11.6 per cent through the March quarter of 2021, which have supported sales volumes through the first half of this year.
Incentives for first home buyers
Last year saw the introduction of multiple first home buyer incentives, from the first home loan deposit scheme before the pandemic, to various state-based grants and concessions, along with incentives for the purchase or construction of new or off the plan property.
Dwelling sales to new listings ratio, capital cities
First home buyer purchases would go a long way in explaining the current supply and demand dynamic.
This is because owner-occupier purchasers who already own property would presumably list their existing home around the time they are purchasing a new one.
First home buyer activity, on the other hand, creates additional housing demand without adding new advertised stock to the market.
The chart below shows the volume of secured home loans for first home buyers, which shows an extreme uplift in first home buyer activity.
First home buyer loans recently peaked at 16,260 in January 2021, which is almost double the series average of monthly first home buyer loans secured (8731).
Though first home buyer loan commitments have since trended lower, they remained 58.8 per cent above the series average through June.
In the same way that first home buyer purchases increase demand without adding to supply, investor purchasing activity has also trended higher since mid-2020.
Unlike first home buyer activity, investor purchases are not slowing down.
Through June, there were 18,625 secured home loans for investor property purchases, which is a 74.8 per cent increase on commitments in the same month of 2020.
Number of FHB owner occupier loans secured monthly
On the supply side, new listings stock was persistently low through 2020, as a lack of mobility and extended lockdowns across Victoria saw fewer Australians list their home for sale.
Through 2021, new stock added to the market has actually hit levels that are on par with previous years.
In the four weeks ending July 4, Corelogic counted around 38,000 new listings added to the market nationally, which is actually higher than the five year average level.
However, recent lockdown conditions have seen new listing counts slip back below the historic average, with Sydney in particular recording a -17.3 per cent drop in new advertised stock during the past four weeks.
Part of the reason listings have remained low through lockdown conditions is the assistance offered to home owners seeing hardship through Covid-19.
Mortgage repayment deferrals and household income support have kept distressed sales from hitting the market, and have more broadly been a factor in keeping housing market conditions stable.
However, it has also contributed to a persistent seller’s market, which is reflected in the high sales to new listings ratio.
The ratio may ease in the coming months as advertised supply moves through the normal seasonal spring uplift and buyer demand is limited by extended lockdowns, and affordability constraints.
Article Source: www.theurbandeveloper.com
Why owner-occupiers are loving the Chevron Island apartments at Allure
Perfectly proportioned, generous living spaces boast a natural palette, providing a sense of ease and opportunity for you to bring your own sense of style to the space
Offering a unique blend of inner-city convenience and coastal bliss, it is no surprise that owner-occupiers are acting quickly to secure an apartment at Allure.
The latest development by Macquarie York, Allure is “inherently opulent and meticulously crafted”, a resort-style development in the heart of the Chevron Island precinct.
Delivering 95 two, three and four-bedroom apartments, the project boasts generous floorplans and a sleek contemporary design by BDA Architects.
Perfectly proportioned, generous living spaces boast a natural palette, providing a sense of ease and opportunity for you to bring your own sense of style to the space.
“Whether you’re entertaining or enjoying some private reflection time, you will always feel right at home”, the project marketing reads.
Among other design details are the subtle natural timbers and stone that celebrate the beauty of organic materials and connect the interiors with the landscaping outside.
Contemporary bathrooms feature a semi-frameless shower, large format tiling and intelligent storage.
However, it’s the wealth of facilities designed to enhance quality of life that are pulling in buyers to the Gold Coast development.
The rooftop, the pinnacle of Allure, delivers panoramic views from north to south, while residents can enjoy an exclusive lounge, barbeque and dining area, infinity pool as well as several viewing decks to take in the impressive vistas.
A coastal aura and resort experience is felt as soon as you walk through the prominent lobby doors, with a double-storey atrium is crafted to draw natural light while bespoke lighting add a touch of elegance.
Chevron Island is a location that allows Allure to feel both secluded and connected.
“Everything you need to lead an exceptional life is at your fingertips, yet the hustle and bustle of modern life is kept at bay”, the developers said.
The development is expected to reach completion in mid-2022 but discerning buyers should act fast to secure one of these exclusive residences.
Article Source: www.urban.com.au
Investing in property: The art of picking the right drivers for price growth
It’s all a question of demand and supply, and nowhere is that more critical than when planning a residential property investment.
The art of picking the right drivers for price growth is a tricky one.
You might have found the perfect property in a popular area with lots of jobs, a healthy rate of population migration and excellent infrastructure but if there are plans underway for 1000 new homes in the next year … suddenly, it’s no longer such a good prospect.
“The basic equation that underlines everything is a low level of supply and a high level of demand,” says Kate Hill, founder and director of investment property buyers’ agency Adviseable.
“And you want that imbalance to be sustained, not just short-term in a volatile mining market, for instance, or for the demand to be extrinsic, like the quick blip in Brisbane when the Olympics come but then everyone moves on. It has to be good, long-term demand to drive capital growth.”
You also need to judge the demand for the type of property too.
There’s no point in investing in a two-bedroom apartment if everyone there is looking for four-bedroom houses.
Don’t be too entranced, either, by the promise of good capital growth in a spot where rents are low and there might be a high vacancy rate and too many days on market for property sales.
Uwe Jacobs, the founding director of Property Friends and author of the book, The 7 Secrets of Highly Successful Property Investors, says being enticed by the lure of negative gearing schemes is a common error of people trying to build a property portfolio.
“The main driver for investment is the balance between the short-term income of rental income and the long-term prize of capital growth,” he says.
“That rental money is what’s going to sustain you during periods of low, or no, capital growth so your investment doesn’t eat you out of house and home.
“The vast majority of people invest for financial independence, choices in retirement or leaving a legacy to children, so highly negatively geared properties aren’t the way to go. You need a more risk-averse strategy.”
That means not skipping essential research, he advises.
All factors like vacancy rates, days on market, median prices, growth forecasts, any upcoming property developments, and whether there’s an influx of people – or they’re leaving – are all critical to calculations.
“And you need to visit the area to check that it physically matches the research,” Jacobs says.
More than almost anything, the area where you’re considering investing should also be liveable and desirable.
“It should have amenity close by,” says Lachlan Vidler, director of the Atlas Property Group.
“That means transport options for people to get to work easily, shops, cafes, restaurants and parks, so there’s plenty to do when family or friends visit. Don’t be too caught up in promises of infrastructure to come, either. How many promises of infrastructure have there been which takes decades to arrive – if it ever, eventually, does?”
Article Source: www.domain.com.au
What to ask agents when being taken through a display suite online
Here at Urban, we have compiled a list of questions so prospective buyers can get a handle on what they should be asking agents during online inspections, useful both during lockdown and for those buying out of state or internationally
Australians have been staying at home on and off during the intermittent lockdowns and for homebuyers, this means a delay, sometime indefinitely, in purchasing property.
However, data in both the first Melbourne lockdown and beyond shows that online visits and enquiries of property listings have surged by over 50%.
Here at Urban, we have compiled a list of questions so prospective buyers can get a handle on what they should be asking agents during online inspections. This is useful both during lockdown and for properties available for purchase off-the-plan, or available across state or national borders when in-person inspection may not be possible.
For a more in-depth guide on off-the-plan buying check out our expert guide.
1. What’s the cost per square metre for each floorplan configuration? (make a note of this and compare to other properties you virtually view)
This is vital information to compare the value of the property to others in the area as well as the suburb/region you are looking to buy in. It is important to make sure you are buying a property that suits your needs and has room to grow, one marker of such potential is if the $/psqm is below median for the area, however it isn’t the be all end all
2. When is construction slated to start/be completed?
Construction projections are important information as it will have an effect on how long you may rent or choose to settle on your current property. Ensure the builder/construction firm is reliable and has a good reputation to reduce the likelihood of delay.
Keep in mind that some delays may occur if a coronavirus outbreak occurs.
3. Which items within the display are included and which are optional upgrades?
Straightforward enough, make sure you don’t get blindsided and chuck out your old washer/dryer just because the display suite has one, double check with the agent to see what is supplied by the developer as some offer white-goods packages and optional deals.
4. What customisation option do you have available?
Depending on the design firm and developer, some firms offer a higher degree of customisation, this tends to increase linearly with price as the more expensive the property is, the more customisable it generally is. Either way you should ask as many developments offer at minimum a choice in colour pallete and fittings
5. What’s the ceiling height? (compare this to your own ceilings at home)
While this many not mean as much to someone who is 150 cm tall, for prospective basketball players… and everyone else, it’s worth knowing ceiling height as this can impact whether the home feels claustrophobic or spacious and airy regardless of your personal height.
6. Which aspect does the particular apartment I’m considering buying face? (take note of where the sun is throughout the day in your own home)
This is important for natural light purposes, as well as potential views as some apartments will offer a better aspect than others.
7. Who built the display suite and will they be constructing the actual apartments/townhomes?
A vital point of note is the builder, don’t misunderstand something because of an unrealistic display suite.
8. If taking a virtual tour, ask the agent to zoom in on details so you can see the build quality
If the builder doesn’t put their best foot forward with the display suite, it is worth asking the agent about it and whether other properties you have looked at demonstrate better build quality or detailing.
Article Source: www.urban.com.au
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