It is refreshing to see the overwhelming support of local residents towards the City’s proposed $80 Million dollar Ocean Reef Harbour development with 95.6% of respondents being in favour of the development. The City is yet to advise the outlook for the inception of planning prior to any commencement of construction to start.
The proposed Arts and Culture centre for Joondalup is underway and is set to commence in 2010. The third project for the City will be the Edgewater Quarry development said to benefit the local residents and improve the aesthetic of the location. Capital spend in the City will also be more evident as new facilities in Joondalup are under way, such as the 9500m/2 4 storey building on Reid Promenade, the 192 unit development and the $17.7 Million car lot.
The study conducted by the City’s economists suggests a straight swap between private sector and Government spending. Production prices are said to go up with commodities base in an upswing. World Industrial markets have fallen and recovery is said to be patchy. Our economical exposure to Asia is increasing off the back of a stronger economy.
Projects underway are only 15-20% with some lenders not prepared to borrow more than 50% equity. The sentiment is still pessimistic about residential markets however the September quarter property figures (REIWA) suggest activity in the $500-$700’s properties and a increase in activity in the $700-$1’000000 properties. Properties under $500’000 performed lower than June 09 with a reduction in sales volumes. This change in first home buyer activity is largely due to the changes in interest rates rises, the changing face of affordability and the demand of first home buyer activity creating an incubator for price growth in this market.
The Recession is different to the 80’s and the 90’s in that in the 80’s oil shocks and runaway wage inflation with new residential construction now largely concentrated in the engineering, railway and urban areas.
The new resources boom could spark fears of faster rate rises than expected Shane Wright reports: David Hale, a leading economist predicts a new commodities boom could have the Reserve lifting rates to almost 8% very quickly, said to impact the home owners of Sydney and Melbourne whilst the incomes for people in WA and Queensland would soar. The Reserve is said to see sharp interest rate rises as a fear of another run-up in house prices, with Mr Battellino concerned that a boom in the resources field will fuel affected housing markets, such as Perth.
Anz’ chief executive Mike Smith warned that further moves from the Reserve bank could be a set back for the economy and urged the RBA to wait until after Christmas before it pushes ahead with its tightening policy.
The better than expected unemployment figures from the November update is equivalent to almost 250’000 people keeping their jobs but they will face higher interest rates. There are still more firms not putting on staff than employing them. The Reserve Bank took rates from their 3.25% to a more normal level with a quarter percentage rate rise at 3.5% earlier this month. The stronger growth will push inflation to a still low 2.25% over the next two years.
In articles published in The West Australian; Reserve bank governor Glenn Stevens declared, WA will be more vital to Australia’s economic health but it will bring with it greater risk due to increased dependence on China and India. Mr Stevens said the country’s long term prospects were good, with the resources sector and those States close to it. The share of the economy taken up by mining activity would grow financed substantially by overseas investment. Access Economics in its quarterly report believed unemployment will increase only marginally in coming months. Strong population growth have helped the State through the worst of the global financial crisis and will continue to aid to the recovery. Even tough it believes official interest rates will rise to 5%, by early 2011 this will do little to slow WA. Access believes the State will account for about 14.3% of Australia’s economic output within three years from just below 14% at present. Access expects inflation to pick up.
The Australian dollar regained territory opening to 92.25 to the dollar today.
According to ANZ chief economist Warren Hogan the fact that the Reserve was arguing it would “gradually” normalise interest rates meant it would not inflict quarter percentage rate rises on homeowners at every meeting in coming months.(as published in The West Australian) “ We think a gradual policy normalisation means periodic pauses in the rate hike process’ Mr Hogan said. “On this basis, we are not expecting another rate hike in December and given there is no meeting in January, the cash rate is now likely to remain at 3.5% per cent until February, Mr Hogan said.
Reserve bank governor Glenn Stevens addressing a John Curtin institute, set expectations the Reserve will lift rates to 4% by early next year.
Optimistic Michael Pascoe believes WA’s is positioned right for an opportunity to garner more commercial activity in Perth, more tertiary services and WA can capitalise on the opportunities ahead, whilst WA is going to outperform the rest of the country for a number of years. Mr Pascoe said, to what extend WA can capitalise on this opportunity depends on pricing and availability.
Housing approvals were mixed and fell 0.1%, with the sector dragged down by units and townhouses favoured by property investors. Andrew Tillett The West Australian reports. Approvals for private houses were up 3.1%. Kate Cambell The West Australian reports a report by QBE Lenders Mortgage Insurance and BIS Sharpnel said a buoyant mining sector would keep Perth’s property market rising in the short to medium term. QBE chief executive said he expected the median house price to rise to $505’000 in 2012, reportedly.
Canning Vale was the most popular suburb for first homebuyers in the three months to September with 183 properties bought. In September 2203 grants were approved compared to 1978 in August Debra Goostrey reports according to a Western Australian article.
First home buyers free up rental properties as Perth vacancy rate doubled to 4.8% (REIWA Sept figures) hitting a 14 year high. Many first homebuyers left the rental market during the first home buyer ‘storm’ fuelled by record low interest rates, REBA assistance funding and government handouts.
It would be reasonable to consider that, demand is likely to be felt by population growth, as a result of the resources boom according to a The Western Australian article earlier last month. Dr Ken Henry Treasury Chief said it now appeared Perth would be home to the nation’s current population of 22 million by 20250. Perth could have up to four million from its current one point six million.
This could mean a steady flow of properties being sold in high demand locations with relatively short days on market. A market fuelled by underlying demand. Growth could remain patchy with a renewed focus on the impact of our housing on the environment, the investment in more infrastructure rich development and a renewed confidence in WA’s economy.
Tuesday, November 24, 2009
Monday, September 7, 2009
The Best House on the Worst Street!
You don’t have to be an economist to note we are in extraordinary times, with the Australian economy, one of only four nations to avoid recession (two consecutive quarters of negative growth) and the only major economy to have grown over the past year.
The latest figures from the ABS showed the economy grew 0.6 per cent in the June quarter and by the same amount over the year to June. (Source: Shane Wright, the West Australian). In normal circumstance a 0.6 may not be considered strong but in comparison to all advanced economies Australia came out on top, the only one staying in positive territory. (Ref: Andrew Probyn – the West Australian)
The latest ABS figures point to market recovery with loans in June reaching $1.8 billion for established owner occupier homes. According to valuations manager Travis Coleman, this represented a jump of nearly 39 per cent compared with June 2008. During the past year the ABS figures show that the average home loan for an established owner occupier home in WA jumped by more than $39’000 to $282’900.
Figures from RP Data and Rismark showed prices in Perth are up 2.5 per cent this year to a median of $481’903, REIWA reported at a Perth Median of $450'000 with a percentage change of 4.6% over the last three months. Figures from RP Data and Rismark recorded nationally house prices rose 0.9 per cent in July to be up 5.9 per cent for the first seven months this year. Perth has some time to go still in comparison to other states although land sales are at peak levels Perth’s leafy suburbs are leading at discount prices with Applecross at 9.3% of homes advertised discounted to an average of 19.7%.
Early signs that investors are slowly starting to return to the market are due to rising rental returns and first home buyer demand starting to fall back. Low interest rates and lower house prices have been the driving factor behind many Australians taking advantage of the First Home Owners Boost which will be reduced to $3500 for established and $7000 for new homes come Sept 30th. The First Home Buyers Grant of $7000 will remain. As demand for homes surged some first home buyers and investors put off entering the market for more attractive bargaining power taking advantage of the first home buyer aftermath.
The Reserve left rates at 3% at their board meeting last week but is tipped to start raising interest rates, possibly as early as next month. The Reserve has expressed concern about low interest rates fuelling a bidding war in home sales. Rory Robertson an interest strategist predicted probably a quarter percentage point in October. NAB global markets senior economist David de Garis said the timing of official interest rate rises would depend on retail trade figures due out in the next few weeks.
(Source –The West Australian)
More residential development will be required in the next 20 years in the central business district according to a recent survey and featured in an article in The West Australian by Beatrice Thomas.
According to a State-Federal project, more than 1700 homes will be built for people on low incomes in WA under stage 2 and are set to be completed by June 2011 as the latest figures from the Department of Housing shows the number of people in urgent need of housing had risen almost 80 per cent over the last year. (Source -The West Australian Yasmine Phillips)
According to a West Australian article earlier this week, “There are $100 billion worth of projects either in the pipeline or under construction for WA, chief economist John Nicolaou said”. Most notable will be the $50 billion Gorgon LNG project, based on the supply of liquefied natural gas from WA to China under a 20 year agreement, and tipped to create up to 10’000 jobs during construction at Barrow Island of Dampier. Karratha and Dampier are said to benefit as they are near the proposed development.
The number of properties for sale fell by 25.6% during the June quarter 2009 and the number of sales were rising by 59% compared to June 2008. Racquel de Brito from the Sunday Times reported earlier this week.
Fix or variable, seems to be the hot topic for the opinion poll. With Michelle Hutchinson, consumer advocate at financial comparison website, RateCity saying interest rates would have to rise faster than market expectations for fixed loans to pay off for borrowers over the next five years. (Source API.) Lenders price in future interest-rate movements, in other words already factoring in the rate rises they see over the coming years. If rates where to sharply increase those on variable could be ending up paying more, while gradual increases on a variable rate over the same time frame could be more cost effective than a higher rate on fixed rate today. The question remains that of risk, and consumer sentiment.
Some say the market has bottomed out? Others say we will zig zag, then plato for a while as one investor notes we are not out of the woods yet but we can be likened to the best house on the worst street.
The latest figures from the ABS showed the economy grew 0.6 per cent in the June quarter and by the same amount over the year to June. (Source: Shane Wright, the West Australian). In normal circumstance a 0.6 may not be considered strong but in comparison to all advanced economies Australia came out on top, the only one staying in positive territory. (Ref: Andrew Probyn – the West Australian)
The latest ABS figures point to market recovery with loans in June reaching $1.8 billion for established owner occupier homes. According to valuations manager Travis Coleman, this represented a jump of nearly 39 per cent compared with June 2008. During the past year the ABS figures show that the average home loan for an established owner occupier home in WA jumped by more than $39’000 to $282’900.
Figures from RP Data and Rismark showed prices in Perth are up 2.5 per cent this year to a median of $481’903, REIWA reported at a Perth Median of $450'000 with a percentage change of 4.6% over the last three months. Figures from RP Data and Rismark recorded nationally house prices rose 0.9 per cent in July to be up 5.9 per cent for the first seven months this year. Perth has some time to go still in comparison to other states although land sales are at peak levels Perth’s leafy suburbs are leading at discount prices with Applecross at 9.3% of homes advertised discounted to an average of 19.7%.
Early signs that investors are slowly starting to return to the market are due to rising rental returns and first home buyer demand starting to fall back. Low interest rates and lower house prices have been the driving factor behind many Australians taking advantage of the First Home Owners Boost which will be reduced to $3500 for established and $7000 for new homes come Sept 30th. The First Home Buyers Grant of $7000 will remain. As demand for homes surged some first home buyers and investors put off entering the market for more attractive bargaining power taking advantage of the first home buyer aftermath.
The Reserve left rates at 3% at their board meeting last week but is tipped to start raising interest rates, possibly as early as next month. The Reserve has expressed concern about low interest rates fuelling a bidding war in home sales. Rory Robertson an interest strategist predicted probably a quarter percentage point in October. NAB global markets senior economist David de Garis said the timing of official interest rate rises would depend on retail trade figures due out in the next few weeks.
(Source –The West Australian)
More residential development will be required in the next 20 years in the central business district according to a recent survey and featured in an article in The West Australian by Beatrice Thomas.
According to a State-Federal project, more than 1700 homes will be built for people on low incomes in WA under stage 2 and are set to be completed by June 2011 as the latest figures from the Department of Housing shows the number of people in urgent need of housing had risen almost 80 per cent over the last year. (Source -The West Australian Yasmine Phillips)
According to a West Australian article earlier this week, “There are $100 billion worth of projects either in the pipeline or under construction for WA, chief economist John Nicolaou said”. Most notable will be the $50 billion Gorgon LNG project, based on the supply of liquefied natural gas from WA to China under a 20 year agreement, and tipped to create up to 10’000 jobs during construction at Barrow Island of Dampier. Karratha and Dampier are said to benefit as they are near the proposed development.
The number of properties for sale fell by 25.6% during the June quarter 2009 and the number of sales were rising by 59% compared to June 2008. Racquel de Brito from the Sunday Times reported earlier this week.
Fix or variable, seems to be the hot topic for the opinion poll. With Michelle Hutchinson, consumer advocate at financial comparison website, RateCity saying interest rates would have to rise faster than market expectations for fixed loans to pay off for borrowers over the next five years. (Source API.) Lenders price in future interest-rate movements, in other words already factoring in the rate rises they see over the coming years. If rates where to sharply increase those on variable could be ending up paying more, while gradual increases on a variable rate over the same time frame could be more cost effective than a higher rate on fixed rate today. The question remains that of risk, and consumer sentiment.
Some say the market has bottomed out? Others say we will zig zag, then plato for a while as one investor notes we are not out of the woods yet but we can be likened to the best house on the worst street.
Thursday, July 16, 2009
Perth Looks Up
Perth, the well kept secret the rest of the world has soon to discover. Despite sharp price falls in recent months, we have some of the nations biggest house prices earning us the 2'nd, 5'th, 7'th and 8'th position in a recent newsletter from Propell National Valuers according to and article published in the West Australian earlier this week. From $18'000'000 for a home in Dalkeith to a West Perth apartment asking $12'000'000, the city is labelled one of Australia's most wanted.
A forecast from the Residential Development Council after a report compiled by Matusik Property Insight forecasts Western Australia's population is estimated to grow 39% by 2027, it is estimated Perth would need 17'000 homes per annum for the next 5 years and it is reported in the wa business news, in accordance with the council, builders in Perth are delivering a shortfall of 3'553 homes per year. If demand continues to outweigh supply we may well again see prices on the rise. The slight rise in the Median house price suggest in realestate circles we are in some respects heading back to a normal market.
In interesting articles in the West Australian, Professor Weller from the UWA said Perth needed to accomodate at least 1.5 million extra people and 700'000 homes in the following 40 years.
Despite the downturn in job advertisements in June at 51.4% down on the same month last year, there was a slight rise in newspaper advertising in WA. Adverts in WA rose 3.6%, the first increase since January, reportedly.
Interest rates remained unchanged by the Reserve Banks meeting earlier this month at 3% with reports of a chance for a further quarter % point cut later this year.
UBS chief economist Scott Haslem said according to an article in the West Australian, their continued to be signs of stabilisation in the job market, although this week's unemployment report was likely to show the jobless rate edging up to 5.9% from 5.7%. He said the Reserve was more likely to cut rates in coming months as unemployment edged higher and growth slowed or contracted.
According to an RP Data senior research analyst rental prices in Perth jumped 12.4% for houses and 8.6% for units in the 12 months to May. Perth's rental yield improved from 3.8% to 4.5% for houses in the same period, with the suburbs of Tuart Hill, Mirrabooka and Nollamara in the top 5 while the rental return for units has jumped from 4.4% to 5%, with the suburbs of Jolimont, West Perth, Stirling and Perth coming in under the Top 5, in a West Australian report. The demand for rentals appear to be softening with lower interest rates, and first home buyers taking advantage of the extended grant incentives. Some investors may find this market enticing with price falls and rising rents, where as others are thought to be delaying decisions ready to jump in 2010, avoiding the healthy first home buyer competition.
We think we will continue to do well if we can keep up supply, as we are growing from strength to strength.
A forecast from the Residential Development Council after a report compiled by Matusik Property Insight forecasts Western Australia's population is estimated to grow 39% by 2027, it is estimated Perth would need 17'000 homes per annum for the next 5 years and it is reported in the wa business news, in accordance with the council, builders in Perth are delivering a shortfall of 3'553 homes per year. If demand continues to outweigh supply we may well again see prices on the rise. The slight rise in the Median house price suggest in realestate circles we are in some respects heading back to a normal market.
In interesting articles in the West Australian, Professor Weller from the UWA said Perth needed to accomodate at least 1.5 million extra people and 700'000 homes in the following 40 years.
Despite the downturn in job advertisements in June at 51.4% down on the same month last year, there was a slight rise in newspaper advertising in WA. Adverts in WA rose 3.6%, the first increase since January, reportedly.
Interest rates remained unchanged by the Reserve Banks meeting earlier this month at 3% with reports of a chance for a further quarter % point cut later this year.
UBS chief economist Scott Haslem said according to an article in the West Australian, their continued to be signs of stabilisation in the job market, although this week's unemployment report was likely to show the jobless rate edging up to 5.9% from 5.7%. He said the Reserve was more likely to cut rates in coming months as unemployment edged higher and growth slowed or contracted.
According to an RP Data senior research analyst rental prices in Perth jumped 12.4% for houses and 8.6% for units in the 12 months to May. Perth's rental yield improved from 3.8% to 4.5% for houses in the same period, with the suburbs of Tuart Hill, Mirrabooka and Nollamara in the top 5 while the rental return for units has jumped from 4.4% to 5%, with the suburbs of Jolimont, West Perth, Stirling and Perth coming in under the Top 5, in a West Australian report. The demand for rentals appear to be softening with lower interest rates, and first home buyers taking advantage of the extended grant incentives. Some investors may find this market enticing with price falls and rising rents, where as others are thought to be delaying decisions ready to jump in 2010, avoiding the healthy first home buyer competition.
We think we will continue to do well if we can keep up supply, as we are growing from strength to strength.
FURTHER READING REFER SOURCE ARTICLES:
THE WEST AUSTRALIAN
Australia's most wanted by Raquel de Brito
Architect looks up and out in planning for Perth by Beatrice Thomas
Rental returns lure investors by Kate Campbell
Online ads hit in job vacancy fall by Shane Wright
WA BUSINESS NEWS
Housing pressure by Dan Wilkie
RP DATA
*Figures are indicative
Thursday, July 2, 2009
Victim or Victor!
If this post grabs you then you are sure to agree, with global recession looming in the minds of most Western Australians, the roller coaster to try and keep up with the papers seem to have slowed down in recent weeks with more important global news making the front pages and some positive reports entering the market.
Relatively we are experiencing some of the most attractive opportunities today, lower interest rates, generous first home buyer grants, further consideration to transfer fees, some of the highest rates of national building approvals and better than expected unemployment rates at 4.7% despite the level of reposessions after riding the crest of the boom.
Could we all afford a little more lifestyle? For some it's a smorgas board of opportunity and a quick move to secure their first home or upgrade to the ulitmate lifestyle. For others a time to rearrange finances and wait for someone to make the next announcement.
Relatively we are experiencing some of the most attractive opportunities today, lower interest rates, generous first home buyer grants, further consideration to transfer fees, some of the highest rates of national building approvals and better than expected unemployment rates at 4.7% despite the level of reposessions after riding the crest of the boom.
Could we all afford a little more lifestyle? For some it's a smorgas board of opportunity and a quick move to secure their first home or upgrade to the ulitmate lifestyle. For others a time to rearrange finances and wait for someone to make the next announcement.
Saturday, June 13, 2009
Here we go
10pm Saturday night and excited to say that I have just set up our blog on our new dqrealestate.com domain to bring you the very best in real estate news, ideas, trends, etc.
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