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October 29, 2010

Focus on the big property picture, not noise from the naysayers

The alarmists are out in droves at the moment, sounding warnings that Australia is apparently on the brink of a property crash. Some commentators are even claiming that a move by the Reserve Bank to jack up interest rates either at its meeting next week or in the coming months will be the pin prick that deflates the “housing bubble” they believe we are experiencing.


House prices have undeniably come off the boil over the past few months, with estimates from industry analysts suggesting that Melbourne and Sydney’s median prices fell by two per cent and 0.5 per cent respectively over the last quarter.

But does this minor correction mean that prices are about to plummet

? Should we be panicking about the future of Australian property?

Read more →

October 27, 2010

How much capital growth is enough?

House price growth in Australia is predicted to be slower from hereon in, but at least values are still expected to keep growing.

By Vanessa De Groot

At a recent QBE LMI conference I attended, BIS Shrapnel had compiled research to present its outlook for the Australian housing market from 2010 to 2013.

The seminar was held in several capital cities around the country, so by the time it reached Brisbane the media was already abuzz with BIS Shrapnel’s predictions for property price growth. Read more →

October 26, 2010

First homebuyer incentives

Unless help is granted to our younger generations, the property market will split down the middle and turn the wheel on the long-term trend of home ownership.


Despite lacklustre moves in recent median figures, RP Data recorded a bountiful 17.2 per cent rise in Australia’s residential median since the final quarter of 2008 and the second quarter of 2010. Along with this, other stats collected by RP Data for the same time period show a dramatic decrease in the number of properties selling below $500,000. In 2008 a little over 73 per cent of Melbourne sales were priced below $500,000, however during the second quarter of 2010 this figure dropped nearly 20 per cent to just over 55 per cent. Results were similar across all Australian capital cities and it wouldn’t take much of a jump to assume affordable opportunities were fast disappearing. Read more →

October 22, 2010

Is cheap always good?

Just because a property is affordable doesn’t mean it’s a good investment for the future.


The term ‘sea change’ became popular in property circles to describe urban families packing their belongings and making the pilgrimage to various parts of our extensive coastline.

One of the most popular destinations for sea changers was Queensland’s Gold Coast, which for decades claimed the title of Australia’s fastest growing region… until recently that is. Read more →

October 20, 2010

New investors – be prepared for the costs of investing in property

Before you sign the contract for your first investment property, make sure you’re going in with your eyes open.


I recently read a report by Datamonitor which found that out of a large survey sample, eight per cent are intending to purchase an investment property in the next 12 months. While this sounds low, it’s actually an increase on the prior 12 months. According to the same source, there were only five per cent who intended to invest in property last year.

The fifth consecutive month of no change to the Reserve Bank’s official cash rate (at 4.5 per cent) certainly explains some of the likely growth, by easing concerns of a dramatic rise to interest rates. We’ve actually seen a fall in fixed rate home loans – for example the benchmark three-year fixed rate, which is the average of the major four banks, has dropped by 33 basis points since May to the current rate of 7.45 per cent. Read more →

October 19, 2010

RBA rules with an iron interest rate fist

It wasn’t just homeowners and property investors who were given a reprieve on October 5 when the Reserve Bank declared it intended to keep interest rates on hold; certain sectors of the economy also took the announcement as welcome news.


While many economists were surprised by the Reserve Bank of Australia’s (RBA) decision to keep the cash target rate on hold due to various positive economic indicators – including escalating employment levels and a resources boom the likes of which Australia hasn’t experienced since the late 19th century – some are questioning whether our fiscal position is really as vigorous as the policy makers would like to believe.

With continuing uncertainty surrounding the economic status of other developed nations and the Aussie dollar going from strength to strength, the fact of the matter is we might be putting the horse before the cart with all this ongoing talk of an impending inflationary blowout. Read more →

October 18, 2010

Addressing the supposed ‘housing shortage’

Another week passes by with yet more arguments on the wisdom of property investment, one of them being about whether or not this country really is facing a housing shortage.


New reports of an extreme national house shortage recently hit the media, this time from Goldman Sachs which foresees a 250,000 housing shortfall by 2013.

It’s not easy to accurately assess the gap between available house supply and demand. To do so analysts take numerous factors into account including rental vacancy rates, the number of homeless, the level of migration, and various other statistical data from the 2001 and 2006 census. Read more →

October 15, 2010

The great dividing price range

Why isn’t the outlook the same for all of Australia’s property markets?


Over the past year or so much of Australia has experienced a significant property boom causing many commentators to suggest we were getting ourselves into a bubble that is ready to burst.

But when you examine the figures more closely, not all areas performed so well. Looking at Melbourne and Sydney as an example, some areas experienced two per cent growth a month while others were meandering along at a less than remarkable rate. Read more →

October 13, 2010

How to sell in a buyers’ market

Selling your home in a buyers’ market leaves little room for mistakes.


There are few situations more psychologically challenging than having a property on the market that does not sell – no matter how much you will it to.

A property that sits also becomes stale, leaving you with the choice of taking it off the market or reducing the price.

Make no mistake: today’s is a buyers’ market with supply outstripping demand. Australian Bureau of Statistics figures released this week show housing finance for August was down by 1.3 per cent (seasonally adjusted) on last year. Finance for owner-occupied housing was flat (no change) and investment housing was down by 3.9 per cent. Read more →

October 12, 2010

Is it privacy or secrecy?

What do you do when your property has been listed for sale and your agent refuses, on the basis of the Privacy Act, to give you the names of prospective buyers introduced to your property? Well, I’ll tell you what clients of mine recently did.


These folk had listed their home with a local agent who was a member of the Real Estate Institute of Queensland (REIQ). Their listing agreement with the agent, unusually, didn’t provide for a sole or exclusive agency. Rather, it was an open listing which meant my clients had the contractual right to try to sell their home themselves. So, while their agent showed buyers through the property, my clients placed their own adverts on the internet and dealt with a number of consequential private enquiries. When one of these internet buyers offered to buy at the right price, a private sale was negotiated subject to the parties’ solicitors finalising formal and binding contracts. Read more →

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