Michael Keating's Blog

Melbourne's Median House Price passes $500,000

Lucy Dewhurst — Thu, 04 Mar 2010 04:54:00 GMT

Victoria's newest real estate stars are revealed.

Several locations in Phillip Island, small holiday spots near the beach on the Mornington Peninsula and some outer Melbourne suburbs have emerged as some of Victoria's most popular buying areas.

The suburbs of Newhaven, Kilcunda, Shoreham, Smiths Beach and Balnarring Beach topped the charts with the biggest median house price grown in 10 years between 1997 and 2007. With San Remo, Narre Warren North, Blairgowrie, Williamstown North, Maribyrnong, Huntingdale and Bonbeach closely following with a growth of 15% per year.

It seems that Australia's desire for a sea change has greatly influenced the price rises occurring along our tranquil coastlines.

As well as this, in the December Quarter in 2009 Melbourne's median house price exceeded $500,000, with an increase of 15% since the September quarter. Reaching $540,694 in just 3 months the average price of homes in Melbourne is the highest on record, as well as being the biggest and fastest increase in price.

These astounding changes are believed to be due to a "combination of better than expected economic conditions and strong population growth" according to REIV chief executive, Enzo Raimondo.

The local suburb of Mount Martha was listed as number 10 on Melbourne's top price increases in the last year, rising to $564,000 with a 31.2% increase from 2008.

It is estimated also that as house prices rise homeowners are at the moment looking at an increase of approximately $770 a day for their homes.

Raimondo also stated recently that "we've seen the last of the median price below $500,000 in Melbourne."

Flinders for the rich and famous

Lucy Dewhurst — Sat, 21 Nov 2009 04:23:00 GMT

Sarah-Jane Collins and Natalie Craig
January 19, 2008

BLACK cliffs drop to a volcanic coastline where the sea pounds hard against the deep red rock. Along the bluffs there is a menacing beauty hard to ignore.

It is a breathtaking view. And in the past year, the sleepy seaside town of Flinders has begun to get noticed.

A short drive away, through the small town centre, a creaky pier extends out along calmer waters. The shallow sea is dotted with small boats, remnants of the town's long history as a fishing village and family holiday spot. And then you notice the black stretch limo. The big money has come to town. Last November, a newly built house high above the cliffs sold for more than $6 million.

There have been six building approvals for houses over $1 million in the 2006-07 financial year, putting the suburb at number six, behind Portsea and the likes of Toorak and Brighton in the million-dollar club.

The tiny town has burst onto the scene as a serious player on the Mornington Peninsula. Or as one local real estate agent puts it: "The Portsea when you don't want to go to Portsea."

And, asks acting Victorian building commissioner Sarah McCann-Bartlett: "How high can prices go? How long is a piece of string? People are building their dream homes in Flinders. I think what we're seeing is a mix of luxury family holiday homes and sea changer retirees building their dream homes."

Ms McCann-Bartlett says the approvals reflected confidence in the economy, higher land values and people capitalising on growth at the luxury end of the market, where a distinct trend had emerged for sustainable design in a green wedge area, where everything from views to vegetation were protected.`

Flinders is a rural enclave where people are planning to retire in the long term.

For the moment, many use their houses as weekenders, .

Perhaps they are merely fitting in a few rounds on the famous Cape Schanck golf course`.

Of course, Flinders has always been a holiday spot, but locals have noticed a bigger change. At the General Store, employee Kylie Collison says the local trade in family holidays had dropped significantly as the town changed into a holiday haven for the rich and famous. "The prices are going up, and there seems to be more money people coming through," she says. "Families who used to stay here for Christmas can't really afford it any more because it's got a bit of a name."

Locals all know about their new neighbours, the rich and famous who have made Flinders their getaway. Kate DiPasquale who has lived in the area all her life, says that in the past year the number of people in town had swelled significantly. "John Farnham is building a house round here at the moment," she says.

Other names that get mentioned in the main street include Neil Mitchell, Daryl Somers, Max Walker and Dermott Brereton. Former prime minister Malcolm Fraser is also a regular.

Tony Wise, who runs the chemist shop, says he was not surprised so many prominent names fled to Flinders.

"You can come over here and be anonymous and still get your house overlooking the bay," he says. "And you're nice and close to the wineries and all that."

He expects Flinders to continue to boom.

It's the mecca of the peninsula.

Mornington Peninsula Steady Price Growth

Lucy Dewhurst — Fri, 20 Nov 2009 05:29:00 GMT

Mornington Peninsula: sales remained steady with some parts of the region producing strong results throughout the cooler months. The lack of supply caused a spike in prices for good quality properties in the lower to middle ranges while satisfactory results are being achieved in the upper and prestige markets. Although demand has remained solid and stock in short supply, price growth overall has been steady rather than spectacular; a trend which is expected to continue for the foreseeable future.

The Inside Line, Market Line Opteon, Edition 3/2009

A more accessible Mornington Peninsula

Lucy Dewhurst — Fri, 20 Nov 2009 05:23:00 GMT

Work recently commenced on the $750 million,25-kilometre Peninsula Link Project - formerly known as Frankston By-pass - with construction of the $9.4 million Lathams Road overpass at Carrum

Downs. The body responsible for the project, South Eastern Integrated Transport Authority (SEITA) which had responsibility for overseeing the delivery of EastLink, was renamed Linking Melbourne Authority in July this year to reflect its ongoing role managing complex road projects for the Government and the broader community. "When Peninsula Link is completed Tullamarine Airport will be accessible from the southern Mornington Peninsula in less than 90 minutes off-peak," Market Line - Opteon General Manager Specialised Services Group Mark Holland said. As well as substantially reducing travel times to and from the Peninsula, the new road will relieve traffic congestion in and around Frankston, and on the Nepean Highway. Mornington Peninsula tourist attractions, especially the wineries, will benefit from improved access to the region from the densely populated eastern and south-eastern suburbs which account for around 40 per cent of Melbourne's population. Mark Holland expects areas like Carrum Downs and South Dandenong to become industrial hubs as commercial enterprises relocate to take advantage of the available workforce that will then be within reasonably short travelling times of these suburbs. With limited land available for residential development on the southern Mornington Peninsula, the law of supply and demand will dictate property values down the track as is invariably the case when an area is served by improved infrastructure. "It's also likely that we'll see increased demand from executives for lifestyle properties located on the southern Peninsula when commuting time between the CBD and the emerging south-east region is substantially reduced."

The Inside Line, Market Line Opteon, Edition 3/2009

Median house price hits $480,000

Lucy Dewhurst — Fri, 23 Oct 2009 23:36:00 GMT

MARIKA DOBBIN

The Age, October 24, 2009

MELBOURNE'S median house price has hit a record $480,000 to surpass the heights of the 2007 property boom.

But demand for Melbourne real estate faces its biggest test since early last year, with more than 1000 homes listed for auction this weekend.

The median price climbed by $30,000 in the three months to September, according to the Real Estate Institute of Victoria. Houses are now dearer than the $472,250 median of the boom. But prices and clearance rates this year have been skewed by the comparatively low level of stock offered for sale.

This weekend's sale of more than $800 million worth of real estate will be chance to assess the depth of underlying demand. It is the 12th time in recorded history the number of auctions has exceeded 1000 homes, according to the REIV.

All eyes will be on whether clearance rates that have stayed above 80 per cent since May will decline with the glut of homes offered for sale. But with stock levels set to retract again for the following weekends, it seems the lack of supply will continue to put pressure on prices.

In Melbourne's east, leafy Surrey Hills recorded the most price growth for the quarter, with the median rocketing 24.6 per cent to $1.127 million - a new high for the suburb.

The northern suburb of Pascoe Vale came second on the most-growth list, with a 23.7 per cent rise to $600,000. In the east, Glen Iris recorded a 22.2 per cent rise to $1.112 million.

Unlike previous quarters this year, price growth was consistent across all sectors of the market. In the lower-end suburb of Broadmeadows, in the north, was the fourth-biggest price-mover, with the median jumping 21.5 per cent to $352,000.

REIV chief executive Enzo Raimondo said: ''The improved confidence in the economy has revealed the underlying issue: a lack of supply, both for purchasers and renters … Unless there is a sustained increase in supply, we expect further pressure on prices.''

The Victorian Council of Social Services said affordability was worsening for buyers and renters despite measures such as the first home buyer grants.

''The grants have further exacerbated inflation of house prices and are not the best allocation for taxpayer dollars,'' VCOSS head Cath Smith said. ''We really need to see a lot more new housing in established areas that are well serviced by public transport,'' she added.

Unit and apartment prices also rose in the quarter to a median of $410,000, up from $390,000 in the June quarter. Toorak and Armadale were Melbourne's most expensive suburbs with median prices of $2,300,500 and $2,076,000 respectively.

The cheapest houses were in Wyndham Vale, outside of Werribee, with a median price of $260,750, and Melton in the outer west at $265,000.

Melbourne's home grown real estate profit

Lucy Dewhurst — Tue, 01 Sep 2009 05:16:00 GMT

Craig Binnie

September 01, 2009 12:00am - Herald Sun

MELBOURNE house prices rose to a record high index value of $454,524 in July, a jump of 8.5 per cent this year.

And prices are expected to continue climbing despite the threat of higher interest rates.

Melbourne home values have now risen $17,173 above their February 2008 peak of $437,351, after which the global financial crisis knocked prices down to $419,000.

The national research director of research firm RP Data, Tim Lawless, said prices were growing modestly and showing no signs of stopping.

"Not only has Australia's residential property market outperformed the other major Western markets, it has also provided superior returns compared to shares, commercial property, superannuation, hedge funds and private equities," Mr Lawless said.

"Australia's residential market has been further supported by low mortgage default rates, at just 0.6 per cent, compared with 5 per cent in the United States and 3 per cent in the United Kingdom."

Based on 145,000 sales, house prices had risen by an average of 5.9 per cent this year in every capital city.

Nationally, home values have risen 1.8 per cent past their February 2008 peak.

Australia-wide, Mr Lawless said, homes rose by an average of 0.9 per cent in July alone boosted by historically low mortgage rates and only a small rise in unemployment.

Rismark International managing director Christopher Joye said despite upcoming cuts to first home owners grants and forecast rate rises, home prices should keep rising.

"We believe the housing market will grind out further modest gains over the course of the next 12 months," Mr Joyce said.

"Home values are now increasing steadily in all areas including Australia's most expensive suburbs. This has eviscerated the popular myth that the recovery was being driven exclusively by first timers at the cheaper end of the market.

"While first-time buyers initially furnished the early momentum, upgraders and investors have now taken over the baton."

Macquarie Bank interest rate strategist Rory Robertson said the likelihood of interest rates rising on October 6 by 25 basis points was increasing.

"While the latest brighter news on our still-weak economy suggests the Reserve Bank soon will start edging away from its loosest ever monetary policy stance, the case for aggressive rate hikes still seems rather weak," Mr Robertson said.

MEDIA RELEASE - RBA

Lucy Dewhurst — Tue, 01 Sep 2009 05:14:00 GMT

Date: 1 September 2009

STATEMENT BY GLENN STEVENS, GOVERNOR
MONETARY pOLICY

At its meeting today, the Board decided to leave the cash rate unchanged at 3.0 per cent.

With considerable economic policy stimulus in train around the world, the global economy is resuming growth. Growth in China has been very strong, which is having a significant impact on other economies in the region and on commodity markets. The major economies appear to be approaching a turning point. Most observers still expect only modest growth in the world economy in 2010, due to the continuing legacy of the financial crisis, though forecasts have been revised up recently.

Sentiment in global financial markets has continued to improve. But the effects of economic weakness on the balance sheets of financial institutions will still be coming through for a while. This constitutes one of the main remaining risks to the global expansion. For the recovery to be durable, continued progress in restoring balance sheets is essential.

Economic conditions in Australia have been stronger than expected, with consumer spending, exports and business investment notable for their resilience. Measures of confidence have recovered. Some spending has probably been brought forward by the various policy initiatives; in those areas demand may soften in the near term. Some types of capital spending are also likely to be held back for a while by financing constraints. But overall, it now appears that investment may not be as weak over the year ahead as earlier expected. Higher dwelling activity and public demand will also start to provide more support to spending soon and, hence, growth is likely to firm going into 2010.

Unemployment has not, to this point, risen as far as had been expected. Weaker demand for labour, evident in a decline in hours worked, nonetheless has seen a moderation in labour costs. Helped by this and the earlier fall in energy and commodity prices, inflation has been declining, though measures of underlying inflation remained higher than the target on the latest reading. Underlying inflation should continue to moderate in the near term, but the likelihood of inflation being persistently below the target now looks low.

Credit growth overall remains quite modest. Housing credit has been solid and dwelling prices have risen over recent months. Business borrowing, on the other hand, has been declining, as companies have sought to reduce leverage in an environment of tighter lending standards. Large firms have had good access to equity capital and access to debt markets appears to be improving, helped by the better-than-expected economic conditions and increased willingness on the part of investors to accept risk.

The Board’s judgement is that the present accommodative setting of monetary policy remains appropriate for the time being. The Board will continue to adjust monetary policy so as to foster sustainable growth in economic activity and inflation consistent with the target.

Recovery on track for the world’s housing markets

Lucy Dewhurst — Tue, 01 Sep 2009 02:23:00 GMT

The world’s housing markets are showing signs of recovery, according to the latest survey of world-wide house price indices prepared by the Global Property Guide.
Seven countries have emerged from the house price slump (see below). However, most countries suffered sharp house price falls during the year to end-Q2 2009, so that the general situation remains negative.

The Global Property Guide uses price-changes after inflation, giving a more realistic picture than the (more upbeat) nominal figures usually preferred by real estate agents.

After experiencing declines in 2008, house prices in China, Portugal, Australia, New Zealand, France, Sweden and Hong Kong rebounded during the latest reported quarter, Q2 2009.
Seven countries are in recovery
In Shanghai, China, house prices were up 1.96% during the year to end-Q2 2009. These gains occurred entirely during Q2 2009, when Shanghai’s house prices rose 2.09%.
China’s house prices started falling in the last quarter of 2008, but a strong increase in government spending revived both the housing market and the economy, which has seen 7.1% GDP growth during the first half of 2009. Chinese property prices are now widely expected to increase further.
Average house prices in the Algarve, Portugal, at €1,429 per square metre, were up by 2% during Q2 2009. House prices in Portugal as a whole rose 1.01% during Q2, and were down only 0.43% on the year to end-Q2 2009, compared to -7.24% during the year to end-Q2 2008. New construction orders in Portugal increased 12.3% during Q2 2009.
Australia and New Zealand saw house price increases of 3.73% and 3.31% respectively during Q2 2009. All regional capital cities in Australia registered quarterly house price increases, ranging from 2% to 5%. However, over the year to Q2 2009, there was a price decline of 2.80% in Australia. In New Zealand, the annual change is still negative at -3.07% in the year to end-Q2 2009. But in July 2009, New Zealand had the first yearly house price increase since 2008.
After falling for the last five quarters, house prices in France were up by 3.31% during Q2 2009, thanks to government subsidies. In Sweden, house prices were up by 3.16% during Q2 2009. Hong Kong’s house prices increased by an average of 8.9% during Q2 2009.
The US housing market is stronger
The Case-Shiller house price index was up 0.35% during Q2 2009, from a decline 6.46% during the previous quarter, Q1 2009. Over the year to end-Q2 2009, house prices were down by 13.96%, an improvement from 18.51% fall year-on-year to Q1 2009.
The FHFA’s purchase-only index was however down by 1.74% during Q2 2009, somewhat worse than the 0.04% drop during Q1 2009, so the signals in the US are mixed.Over the year ending in the second quarter of 2009, seasonally-adjusted prices fell 5.03%.This was a lesser fall than in the year to end-Q1 (-9.16%) and than in the year to end Q4 2008 (-9.69%) (all figures inflation-adjusted).
Some countries avoided the crunch
Israel’s housing market has continued to sail through the global recession. The average price of houses rose 8.40% year-on-year to end-Q2 2009. But the quarterly increase in Q2 2009 was down to 1.02%, a drop from 5.52% in Q1 2009.
Switzerland saw an increase of 4.90% over the year to end-Q2 2009. However, house prices barely increased during Q2 2009.
The momentum signals improvement
A key indicator of improvement is the market’s momentum, i.e., the number of countries that did better this year, than during the previous year. Nine countries improved their year-on-year performance to end Q2-2009, compared with the previous year. In contrast during the year to end-Q1 2009, only six countries did better than the previous year.
Many countries are still suffering
The Latvian housing market continues its extraordinary decline. Riga, the capital city, saw the average price of standard-type apartments drop 60.81% (inflation-adjusted) during the year to end-1H 2009. Prices dropped 26.75% during Q2 2009. Demand for houses and apartments has been affected by high interest rates, which in June 2009 stood at 17.72% for credits to households. Residential construction has been dismal since 2008, but in Q2 2009, the value of housing construction plunged 71.6% in comparison to the previous quarter. Latvia’s overall economy shrank 18% y-o-y to Q1 2009, and its recession is predicted to continue until 2010.
The house price index for Dubai, UAE, fell 49.9% during the year to end-Q2 2009. But quarterly data indicates that Dubai’s downward house price spiral is moderating. House prices fell 8.92% in Q2 2009, much less than the 42% drop in Q1 2009.
Double digit year-on-year declines were also experienced in Bulgaria, Singapore, Iceland, UK, Japan, Denmark and South Africa. Most recent quarter declines in these countries range from 2% to 10%.
Nearing recovery?
The International Monetary Fund has declared that global recovery has started. The three big economies of Japan, France and Germany have recently exited from recession. The emerging economies of Asia have revived, with China leading the pack. Whether this recovery will be sustained is the big question.

Description:
The Global Property Guide is an on-line property research house.

Publisher and Strategist:
Matthew Montagu-Pollock

Legaspi Village, Makati City
Philippines 1229

"Hide Park" Bayswater Land Estate Open This Weekend - Agent On Site

Lucy Dewhurst — Mon, 31 Aug 2009 02:43:00 GMT

Hide Park-

We invite all interested parties to visit the Hide Park gated community this weekend.

Inspection times:

Open Saturday 5th of September & Sunday 6th of September from 2pm to 4pm

Location: Melway Map 50 F 12, entry is via Mason Court.

The onsite sales office will be open this Saturday & Sunday

Contact: Michael Keating 0411 178 882

Fred Dumar 0418 537 885

Robyn Courtney 0416 755 523

RP Data – Rismark Home Value Index Release

Lucy Dewhurst — Thu, 27 Aug 2009 03:39:00 GMT

A 4.5 per cent increase in Australian home values in the first half of 2009 heralds good news for the property market with improvements being recorded across all market price segments according to the combined RP Data-Rismark National Home Value Indices out today.

RP Data national research director Tim Lawless confirmed that prices improved across all price segments over the last six months, however growth is moderating as we move into the second half of 2009.

Rismark International managing director Christopher Joye said “Outside of cash, Australian residential property has proven to be a safer store of wealth for households than shares or commercial property.”

Mr Lawless said “The recovering residential environment comes as consumer and business confidence records large improvements. Housing finance approvals are trending upwards for both owner occupiers and investors, and auction clearances are averaging more than 70 percent across the nation.”

“Growth across all markets is being recorded over a broad base, not just in first home buyers markets as commentators have suggested,” he said.

Based on the first half year results, home values have risen in the top 20 per cent of most expensive suburbs, the middle 60 per cent of suburbs, and the cheapest 20 per cent of suburbs ranked by price.

The top 20 per cent of most expensive suburbs across Australia have risen in value by a stunning 5.7 per cent since their lowest point in January 2009 which follows a hefty 10.3 per cent fall in values between February 2008 and December 2008.

Mr Lawless said the fact that prices are improving across all segments of the market demonstrates that improved affordability and attractive buying conditions are the key market drivers rather than the boost to the First Home Buyers Grant.

Latest results windfall for Perth property values. After falling by 7 percent in 2008, Perth values are rebounding having risen by 1.9 percent over the first half of 2009.

Perth has been the weakest performing capital city since price growth peaked at 46 per cent back in 2006. Perth values still need to see an improvement of about $30,000 before the market has ‘officially’ recovered to the high of $507,500 achieved in September 2007.

Capital gains likely to be less in the second half of 2009. After an initial burst of activity following the introduction of the First Home Buyers Boost and the 40 per cent fall in mortgage rates, there is evidence that the rate of house price growth is slowing back to more modest levels. With growth rates moderating, it is likely capital gains in the second half of 2009 will not be as significant as the first half.

Christopher Joye said, “While Australia’s housing recovery has been emphatically confirmed, it would be premature to assume that this is going to lead to higher growth rates. The June month results were a modest +0.4 per cent and the housing industry will face challenges in the second half of the year as the First Home Buyers Boost is withdrawn and fixed mortgage rates trend up.”

“In modest June growth followed on from a 0.8 per cent rise in May, and a 0.9 per cent increase in April. Given this slow rate of growth, there is absolutely no evidence of any house price bubble brewing.” he said.

Houses once again outperforming units. Houses (+2.4 per cent) have significantly outperformed units (+1.2 per cent) in the three months to June 2009, reversing the trend in the first three months of the year when units outperformed houses.

According to Mr Joye, this is likely because more upgraders have entered into the market following the record levels of first time buyer participation earlier in the year. It also presages a strong recovery in the ABS house price index, which only includes houses.

Rental yields flat as house values rise. Given the capital gains recorded across most cities, rental yields have softened slightly with the gross annualised rental yield for units being 5.3 per cent while house rental yields are slightly lower at 4.4 per cent.

Despite Darwin’s strong price growth, the rental market in Darwin has kept pace, providing the best of both worlds to investors; strong capital gains as well as high rental returns. Darwin houses are returning a gross yield of 6.4 percent and units are returning 6.0 percent.

RBA highlights the disconnect between supply and demand. RP Data and Rismark have been vocal in raising the need to address the housing supply deficiency in Australia for some time. In a recent speech RBA Governor Glenn Stevens highlighted this issue as one of the more important that Federal and State Government’s need to address.

Tim Lawless commented that the disconnect between supply and demand has been long running, with developers simply lacking the financial ability to produce desperately needed housing stock.

“Compounding this issue are high government charges and policies that restrict developers from producing affordable housing stock as well as the lack of quality transport infrastructure and amenity linking the outskirts of Australia’s cities with the key working areas.”

“Until these issues are seriously addressed the Australian housing market will continue to be undersupplied,” he said.

The RBA Governor Glenn Stevens expressed hopes that housing supply will respond to demand without the need for a major run-up in prices.

Mr Joye said, “We have been relentless in drawing attention to Australia’s acute housing shortages, which have, ironically, been a key factor underpinning the market’s resilience.”

“Yet the biggest constraint on new supply coming online is access to finance—developers have had grave difficulties getting adequate credit from lenders. The banks have been reluctant to lend because of concerns about house price falls since the crisis began. If policymakers want to stimulate new supply, the last thing they should be doing is spooking lenders about a recovery that has only just started,” he said.

*TECHNICAL NOTE: There are two ways that you can measure quarterly house price changes: the first involves pooling all the sales over a quarter (eg, all sales in January, February and March) and then creating an index value from those sales and comparing that to the index for the previous quarter (ie, an index from all sales pooled over October, November and December). A more accurate approach is to calculate monthly index values and compare the end of March index result with the end of December index outcome. In this way, you treat each month separately and do not average through the quarter. This is exactly what investors do when measuring quarterly returns to the ASX All Ordinaries Index: they compare the end March ASX index value to the end December value. What they do not do is, for instance, calculate daily returns to the ASX index over January, February and March, jumble these returns up, and then try and estimate a March quarter return from three month’s worth of averaged daily returns. The month-by-month approach is therefore RP Data-Rismark’s preferred method. Because both the ABS and APM use a much cruder “stratified median price” index than RP Data-Rismark’s hedonic regression technique, their methodology results in typically more volatile index outcomes that are subject to higher revision biases. This means it is hard for them to release credible monthly results (since they change all the time). As a consequence, the ABS and APM only publicly report every quarter, and pool transactions over that quarter to give themselves a bigger sample to work off. RP Data-Rismark does not need to do this because of the statistically more precise hedonic regression technique, which allows them to report every month. RP Data-Rismark prefers not to pool over the quarter although they do report a pooled quarterly number so people can make correct comparisons.

City by City Summary
Sydney With the median value of a Sydney home rising to $533,904 in June, an improvement of 4.8 percent over twelve months, Sydney property prices have finally surpassed the February ‘04 peak when prices were $530,536. Growth in the value of houses has surpassed that of units over the first half of 2009, with house values up 6.3 percent compared with units at 5.2 percent. The health of the Sydney market is reflected in the average time it takes to sell a home, which is now just 28 days compared with 37 days at the same time last year. Gross rental yields in Sydney are outperforming the national average with houses returning 4.5 percent (national 4.4 percent) and units returning 5.6 percent (national 5.3 percent).

Melbourne Melbourne is the second best performing capital city market with home values up 6.5 percent over the first half of 2009. Houses and unit performance is virtually on par with values in both sectors increasing by 6.5 percent. Melbourne’s median house value is 20 percent, or $117,000 lower than Sydney house values, reflecting a significant value differential. This may be one of the reasons why Melbourne’s housing market performance has been so strong. Melbourne’s rental market hasn’t kept pace with capital growth however, with rental yields now the lowest of any capital city. Melbourne houses are returning a gross yield of 4.2 percent and Melbourne units are returning a gross yield of 4.8 percent.

Brisbane Brisbane’s housing market has been relatively subdued in comparison with Sydney and Melbourne. Home values are up just 1.4 percent over the first half of the year compared to the national increase of 4.5 percent. Despite the fact that South East Queensland remains the population growth epicentre of Australia and the city is home to some of the largest infrastructure projects in the nation, growth in home prices has been relatively subdued. Market conditions are improving, however, with houses and units taking just 29 days and 27 days respectively to sell. Brisbane’s unit values, at $337,003, are the most affordable of any mainland capital city providing a very strong value proposition to potential buyers.

Adelaide Adelaide home values have been relatively flat over the first half of 2009, recording growth of just 0.6 percent. In 2007 Adelaide was one of the best performing cities with growth in housing prices peaking at 24 percent for the 12 months ending December 2007. The Adelaide unit market has well and truly outperformed houses, with unit values up by 3.0 percent over the first half of 2009 (compared with a 0.2 percent increase in house values).

Perth Perth housing values are finally improving, recording a 1.9 percent increase over the first half of 2009. Perth values still have some way to go before recovering, with home values about $30,000 lower than the September 2007 peak. Market conditions have improved, however, with houses and units selling much quicker than they were a year ago. Over the June quarter houses averaged 31 days to sell (compared with 59 days last year) and units averaged just 23 days to sell (46 days last year).

Darwin The northern capital continues to show strong growth with the market seemingly unaffected by the Global Financial Crisis. Values are up 13.4 percent over the last year and over the last five years value growth has averaged 15.4 percent per annum. The rental market has kept pace with housing values and Darwin is still providing the highest rental yields of any capital city.

Canberra Canberra home values have increased by 3.1 percent over the first half of 2009 which is lower than the national average. Houses are outperforming units with house values up 3.7 percent over the last six months and unit values up by just 0.7 percent. The Canberra rental market is still very strong with rental yields the second highest of any capital city after Darwin. Canberra houses are providing a gross rental return of 5.2 percent and units are returning a gross yield of 5.7 percent.

While you were sleeping: US confidence rises

Lucy Dewhurst — Thu, 27 Aug 2009 03:09:00 GMT

Wednesday, 26 August 2009, 8:34 am
Article: Businesswire

While you were sleeping: US confidence, home prices rise; dollar dips

August 26 (BusinessWire) – U.S. consumer confidence rose more than expected and house prices posted their first gains in three years, adding to signs the world’s biggest economy is emerging from recession.

The Conference Board’s confidence index rose to 54.1 this month, the first gain since May, while July’s reading was revised to 47.4 from 46.6. The S&P/Case-Shiller home-price index climbed 2.9% in the second quarter, the first increase since 2006.

President Barack Obama nominated Federal Reserve Chairman Ben Bernanke for a second term leading the central bank after he helped steer the U.S. economy through its worst slump since the 1930s.

Bernanke “helped put the brakes on our economic freefall,” Obama said.

U.S. stocks edged up after the economic data. The Dow Jones Industrial Average climbed 0.3% to 9539.29 and the Standard & Poor’s 500 rose 0.2% to 1028.00. The Nasdaq Composite rose 0.3% to 2024.23.

Home Depot, the world’s large home-improvement chain, rose 1.1% to US$27.32 on signs of improving consumer sentiment. Pulte Homes Inc., the biggest U.S. builder, rose 3.5% to $13.06 after the home-price data.

Boeing Co. gained 2.4% to US$48.25, leading the Dow higher. Exxon Mobil slipped 0.9% to US$70.68 as the price of crude oil declined.

More than 72% of companies in the S&P 500 beat the average analyst estimate for second- quarter earnings, according to Bloomberg, the most since at least 1993.

The U.S. consumer price index may fall 0.7% this year, before resuming its climb with a 1.4% pace in 2010 and 1.5% in 2011, according to Christina Romer, the White House’s chief economist.

Crude oil fell after briefly touching US$75 a barrel. Crude oil for October delivery dropped 3% to US$72.04 a barrel on the New York Mercantile Exchange.

Copper for December delivery fell 1.4% to US$2.89 a pound in New York.

Stockpiles of copper monitored by the London Metal Exchange rose 1.3% to 296,600 metric tons.

December gold futures rose 0.6% to US$949.20 an ounce.

Treasuries after the White House said inflation will remain benign and after the Treasury sold US$42 billion of two-year notes, the first sale in a week where US$109 billion of government debt is slated for sale.

The yield on the benchmark 10-year notes fell 3 basis points to 3.44% and the yield on 30-year Treasuries slipped 4 basis points to 4.22%.

The two-year notes drew a yield of 1.119% in the auction while the bid-to-cover ratio, which gauges demand by comparing total bids with amount of securities offered, was 2.68. The yield on existing two-year notes was unchanged at 1.02%.

Indirect bidders, which include foreign central banks, bought 49.4% of the notes, up from 33% in July’s sale but down from 68.7% in June.

European stocks rose, with the Dow Jones Stoxx 600 Index rose 0.4% to 237.84, its fourth daily gain.

Among national benchmarks, the U.K.’s FTSE 100 climbed 0.4% to 4916.80, Germany’s DAX 30 rose 0.7% to 5557.09 and France’s CAC 40 gained 0.8% to 3680.61.

Vodafone Group Plc rose 2.4% and French Telecom rose 3.7% after analysts at JPMorgan raised European phone companies to ‘overweight.’

The U.S. dollar traded at $1.4309 per euro in New York, from $1.4304. The greenback slipped to 94.11 yen from 94.56. Japan’s currency traded at 134.65 per euro from 135.27.

(BusinessWire)

National News - City set for property boom

Lucy Dewhurst — Tue, 25 Aug 2009 03:47:00 GMT

AAP

August 23, 2009 12:01am

THE average price of a Sydney home could rise by $100,000 in the next two years, according to an investment group.

A shortage of homes and a growth in population will cause the property boom, The Investors Club says.

Kevin Young, president of the group, which has 90,000 members in Australia, says the last spike in Sydney property prices occurred between 2002 and 2004 when the median house price surged by over $150,000 to $524,000 because of under-supply.

"This spike in property prices was caused by an under-supply of houses relative to population growth which resulted in a major blowout in prices over this two year period," Mr Young said in a statement.

"House prices in Sydney have been in recession for the last five years.

"In contrast, other capital cities have recorded major growth in their median house prices during this five year period, with the median house price in Perth, for example, jumping by around $200,000 during this five year period.''

Mr Young says it has become difficult for developers secure building approval in Sydney.

Shoreham Brae in Mornington Peninsula is Sold!

Lucy Dewhurst — Fri, 21 Aug 2009 02:53:00 GMT

Mornington Peninsula, Victoria - The single story at Shoreham Brae has been sold.

Property information

"Telford Springs" - For Sale - 76 Lot residential subivision with planning permits.

Lucy Dewhurst — Tue, 11 Aug 2009 02:57:00 GMT

"Telford Springs" - Bacchus Marsh

76 lot residential subdivision with planning permit in place in Melbourne's growth corridor surrounded by substantial homes close to schools, shops, golf course and transport.

Direct Link :

http://www.aabglobal.com/Bacchus_Marsh/Victoria/Homes/Bacchus_Marsh/Bacchus_Marsh/Agent/Listing_1691379.html

---------------------------------------------------------------------------------------------------------

For additional information or to inspect the property, please contact:

AAB Global Flinders
0411 178 882
aabglobal@gmail.com

Fred Dumar
0418 537 885
dumar@aabglobal.com

Industry Market Wrap 7th August, 2009

Lucy Dewhurst — Tue, 11 Aug 2009 02:52:00 GMT

The Reserve Bank of Australia decided to keep Australia’s cash rate at a near 50 year low of just 3% when they met this week. In his statement the Reserve Bank Governor pointed to the fact that worldwide economic stimulus was helping the global economy to stabilise. He also stated that economic conditions have been stronger than anticipated in Australia for a few months and that the risk of a severe economic contraction had now abated. The Governor’s statements seem to suggest that the scope for further interest rate cuts is very minor and given this, the latest interest rate futures yield curve is indicating that financial markets believe that rates will not fall any further. The yield curve shows an expectation that in one year’s time interest rates will sit 1.5% above their current level. With the first increase in rates expected around November or December this year.

Late last week the ABS released their building approvals data and although building approvals increased by 9.3% during June on a seasonally adjusted basis, on a state-by-state basis the performance was quite varied. In the three largest states, which as a result are the states with the strongest demand for housing and requirement for new dwelling building approvals, the number of approvals on a trend basis rose by: 1.0% in New South Wales, 0.2% in Victoria and 1.8% in Queensland. Even compared to just one year ago, the number of dwelling approvals nationally in June 2009 is -14% lower with approvals in New South Wales -28% lower and in Queensland they were -31% lower.

These results highlight the significant demand and supply imbalance and also provides some insight as to why property values are once again beginning to rise. With fewer properties being built than required to cater to demand, competition for available stock increases and as a result, upwards price pressure is created. This is why Governor Steven’s highlighted the under supply issues in his speech last week and why governments need to be much more proactive in allowing additional construction and most importantly, these new dwellings need to be available at affordable prices coupled with provision of critical infrastructure in and around these dwellings.

The ANZ released their latest July job advertisements survey this week and the results showed a -1.7% fall in advertisements during July. The results although showing a decline in the number of jobs advertised represented a marked slowdown from the previous month when job advertisements fell by -6.7%. Later this week the ABS will release the labour force statistics and many expect unemployment to be recorded at or around 6%. In the Federal Government’s Budget they anticipated that unemployment would peak at 8.5% in mid 2010. Despite the fact that unemployment is still rising the rate of increase in the unemployment rate to date coupled with the fact that the rate of decline in the number of job advertisements appears to be slowing suggest that the forecast unemployment rate of 8.5% may have been a little too pessimistic.

Time to revisit top end property

As last week’s RP Data-Rismark Monthly Home Value Indices release detailed, all sectors of the market are now beginning to recover and now may be the time to look to reinvest in top end property.

Across the country the most affordable 20% of properties, the middle of the market and the top 20% of properties are now all recording increases in their values. After bottoming in the March quarter of 2009, the top end of the market has now begun to improve. The median value of Australia’s premium property market is still 8.1% below the March 2008 peak but early evidence suggests the top end is following the broader market into a recovery.

For those people that have the financial ability it now appears to be a good time to purchase more expensive properties at competitive prices. The prestige market has suffered due to few active buyers and a higher than normal amount of stock on the market which has led to price falls and reductions in the asking price of many homes that are being advertised for sale.

Our analysis this week focuses on the ‘discounting’ within Australia’s most expensive suburbs. The ‘discount’ refers to the average difference between the original asking price of a home and the ultimate selling price of a home. Nationally, the average rate of vendor discounting stands at about 5.6% for houses and 4.6% for units.

Of Australia's top 20% of most expensive suburbs which recorded 10 sales or more over the last 12 months, many have recorded much larger discount levels.

An interesting trend to note is that all of the suburbs detailed with the greatest average discounts for houses are situated adjacent to water. Western Australia clearly dominates the list with half of the suburbs detailed with nine of these being situated in Perth. Outside of Perth, Queensland has four suburbs listed with all of them located in either Brisbane or the Gold Coast. New South Wales also has four suburbs on the list with only Byron Bay outside of Sydney. Melbourne is the only other region included on the list with two entries.

When looking at the percentage of total stock listed for sale over the last 12 months you can see that these suburbs have also generally had a high level of stock available. Nationally the average percentage of total stock listed for houses sits at 7.8%. Across the 20 suburbs with the largest average discount 13 of these suburbs have had a greater than average amount of stock advertised for sale over the last 12 months. The most extreme examples are two of the Gold Coast’s suburbs: Paradise Point has had 15.1% of its total stock advertised for sales and Surfers Paradise has seen 14.7% of that suburbs stock listed in the last year.

Throughout the unit market there is also some significant levels of discounting however, the average levels are much smaller than those recorded for houses.

Like the results for houses, the vast majority of suburbs sit adjacent to water with Balmoral, Doncaster and Mount Waverley the exceptions. Queensland suburbs dominate the list of units with the greatest discount accounting for half of the suburbs, all of which are found in Brisbane, the Gold Coast or the Sunshine Coast. New South Wales has the second greatest supply with five of the 20 suburbs detailed, all of which are in Sydney whilst Melbourne has three entries and Perth has two.

On average, suburbs with 10 or more unit sales during the year have recorded 8.0% of their total stock advertised for sale during the last year. Across the 20 suburbs detailed, their average level of stock listed for sale is 8.5% however, only six of the 20 suburbs have had more than 8.0% of their total stock listed for sale. Like the results across the housing market, coastal areas of Queensland have recorded some of the largest levels of stock on the market with Twin Waters seeing 27.0% of its total unit stock put up for sale last year and Hope Island recording 21.0%

The clear trend throughout both lists is that suburbs located adjacent to water are the ones which have been hampered by the greatest level of discounting whilst they have also seen above average levels of stock come to the market during the last year. With the upper end of the market showing the first signs of improvement, but with prices still well below peak and potential buyers remaining thin on the ground, now is clearly the best opportunity to get a competitive price on a high quality property before buyers become more active.