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Posts Tagged ‘House Prices’

RBA says No Housing Crisis Here

Posted by Tamara McDowell on June 9, 2010

Speaking on recent developments in the housing market the RBA’s Head of Financial Stability, Luci Ellis recently stated that any housing collapse like that seen in the US at the start of the global financial crisis is unlikely to occur in Australia.

Ellis notes that if the current benign picture of the financing of the housing market is to continue it is crucial that lending standards in the mortgage market remain prudent.

“Past experience has clearly shown that in the long run, you don’t improve housing affordability by easing lending standards. That just gets capitalised in the price.

“In fact, easing mortgage lending standards too far can be outright damaging to long-run affordability. This has been amply demonstrated in the recent United States housing meltdown,” Ellis said.

In Australia, lending standards never eased that far, and conditions didn’t get that grim.

Ellis notes that first-home buyers have long faced greater risk than more established home owners who have more equity in their homes. She states that there appears to have not been a drop in lending standards to first-time buyers, even when the First Home Owners Boost was in effect.

“Indeed, across the mortgage market as a whole, lending standards are a little tighter than they were a couple of years ago,” says Ellis.

In summary Ellis said that the global economic slump may still have a way to go and with consumer confidence still low financial conditions could remain tight for several years.

Mortgage holders should expect then, that current lending criteria will remain in force – which generally means borrowers will be required to provide a minimum deposit of  5 per cent as well as provide evidence that genuine savings forms part of that deposit.

Borrowers who require assistance finding a home loan, or who are looking for a low deposit option, should talk to a good mortgage broker for assistance.

Posted in Bank & Lender News, House Prices, Interest Rates, Loans, Mortgage Broker Service, Real Estate News | Tagged: , , , , , , , , | Leave a Comment »

Perth median to break through $500,000

Posted by Tamara McDowell on April 6, 2010

 

The resources juggernaut is fuelling the next Perth property boom, with the city’s housing markets unable to absorb WA’s continuing massive population growth.

According to the Real Estate Institute of WA (REIWA), growing confidence has led to an increase in listings as well as sales. At the end of March, there were 12,700 properties on the market – an increase of 22% from December.

“The Perth median house price is very likely to top $500,000 for the first time when official figures are released in early May,” said REIWA president Alan Bourke.

The busiest sector during the March quarter was the $500–600,000 range. “Here, the proportion of sales jumped 2.5 percentage points to represent about 18% of the market,” Bourke said. “The other price range to show increased activity for the quarter was in the $750,000 to $1m range.”

By contrast, sales of homes under $400,000 are beginning to subside.

Posted in House Prices, Investors, Real Estate News | Tagged: , , , , , | Leave a Comment »

Buyers opt for higher priced properties as confidence returns

Posted by Tamara McDowell on March 29, 2010

A growing number of property buyers are snapping up more expensive properties in capital cities amid predictions that value will double over the next 10 years.

The latest data from Loan Market showed mortgage demand from borrowers buying top end properties jumped by 30% over the past 12 months. The report also found a dramatic increase in borrowers seeking loans in excess of $800,000 and those who are borrowing more than $3 million.

“There is strong evidence that the prestige property market is on the move and people are on the hunt for homes worth more than $1 million,” said Dean Rushton, Loan Market chief operating officer. Read the rest of this entry »

Posted in House Prices, Investors, Real Estate News | Tagged: , , , , , , , | Leave a Comment »

Property Investment…New or Old?

Posted by Tamara McDowell on March 27, 2010

 

Property investment is not just about whether you decide to buy a unit or a house, you also have the option of new or old.

There are advantages for both styles of properties, and it really comes down to your short and long term objectives. Where you intend to purchase the property will also influence what type of properties are available in a particular geographic location.

Purchasing a property off-the-plan – which allows you to lock in today’s prices for a property that may be finished in a year or two in the future – can be an effective investment strategy as you will not have to make any mortgage repayments until the property is ready for habitation. The only cost will be the deposit.

The key potential pitfall with an off-the-plan purchase is that there is no guarantee that the property you buy today will have grown or even maintained its value. The downside of this is that your lender may not be willing to fund the entire purchase price, which will leave you with a shortfall.

There are also pros and cons associated with the purchase of an existing property. Read the rest of this entry »

Posted in Investors | Tagged: , , , , , , , , , | Leave a Comment »

Interest Rate Rises Inevitable

Posted by Tamara McDowell on March 26, 2010

Australian interest rates will continue to rise to more normal levels despite global jitters as holding off with increases risks falling behind on inflation, according to a top central banker.

Meanwhile Businessspectator reported RBA assistant governor Philip Lowe as also issuing the clearest warning yet against a speculative bubble in home prices, while welcoming a higher local dollar as part of boom in the country’s terms of trade. 

The Australian dollar duly rallied after his speech while bill futures slid as investors revised up the chance of a rise in the cash rate as early as next month. 

“The RBA remains very upbeat and that means a rate hike in April is more likely than not,” said Rory Robertson, interest rates strategist at Macquarie. 

The central bank has already lifted rates by a full percentage point in six months and the market was now implying a 57% probability of a move to 4.25% at the next policy meeting on April 6.  Read the rest of this entry »

Posted in Bank & Lender News, Interest Rates | Tagged: , , , , , , , | Leave a Comment »

Home sweet Home

Posted by Tamara McDowell on March 25, 2010

 

The Great Australian dream – to buy and own your own home – has always been the ambition of the majority of Australians.  Buying a house remains the biggest single purchase made by most Australians. Given the high rate of home ownership in Australia, our residential mortgage market is one of the most innovative, varied and competitive in the world.

 “Peace and rest at length have come, All the day’s long toil is past; And each heart is whispering “Home, Home at last!”

– Thomas Hood

Posted in First Home Owners, Investors | Tagged: , , , , | Leave a Comment »

Property Prices over the Last Decade

Posted by Tamara McDowell on February 11, 2010

Across the capital city residential property market, the last 10 years has seen home values almost double with an annual rate of growth of 9.4%. Today the capital city median dwelling price across the country sits at $451,000 with houses recording a median of $485,000 and units at $400,000. If you bought a home 10 years ago, you were probably looking at a median price of less than $200,000 for either property type.

As the capital city market pricing graph shows, there has been distinctive periods of growth during the last decade. Between 2000 and 2003 there was a strong growth period which was following a long period of negligible value growth. Following this boom, values nationally showed little growth again until 2007.

In fact, the majority of value growth recorded between 2004 and 2007 was due to the Perth market which was undergoing a significant surge in values due to unprecedented strength in the mining and resources sector. Read the rest of this entry »

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