HTW Month In Review Mar 2013

“Are rates causing any interest?” is the Theme of this month’s HTW Month in Review

Opinion on the Melbourne residential market here are some highlights:

– In the past 12 months we have seen an unusual event where multiple interest rate reductions do not appear to have spurred on the residential market in the same way they have over previous times.

– Efforts of the RBA to stimulate the home finance sector in 2012 appear to be having a mixed effect on home loan approvals within Victoria while also considering incentives (first home buyer reduction and stamp duty savings) being added and removed during the year.

-The tightening of credit controls by the banks, and the uncertainty around medium to long term job security, are likely to be at the heart of buyer resistance to be enticed by the offer of cheaper money……… for the moment anyway.

– The impact of consumer sentiment / job security is clearly reflected in the decline in approvals for home loans for properties located in the growth corridors of Melbourne and the first home owner markets.

– Job security is a major influence and the subdued property markets can have a strong correlation.

– The growth suburbs (first home owner markets) are among the most sensitive when it comes to changing interest rates due to the uncertainty of rates matched with the fixed incomes of residents in such areas.

– In these markets families are usually borrowing to their maximum capacity and interest rate changes can correlate directly to the families weekly expendable income amounts and impact day to day living standards.

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Thanks to Therese from Alphabroker

HTW Month In Review Nov 2012

“Outer Space ‘Far flung suburbs and their performance’”

·   These buyers are willing to deal with time spent travelling in search of affordable living in Pakenham, Officer, Cranbourne East and Clyde North

·  Many purchasers are trade or manufacturing related who work in the south-east.

·  The area is currently being developed with low density, affordable living in mind.

·  These properties are being purchased mainly by owner-occupiers who are taking advantage of relatively low interest rates along with developer/builder incentives that are on offer.

·  The developers are aiming to reduce holding costs and move stock, so the enticing incentives that are being offered are promoting sales in the region

·  There is a range of choices available for homebuyers as there is currently a multitude of land estates and builders within this outer south eastern area

·  The market in this area is likely to remain static as the impacts from the government’s withdrawal of the first home buyers’ grant is being felt.

·  Developers and builders are offering incentives such as cash rebates upon settlement to stimulate the market but this will take time as buyer confidence is slow in recovering and job security is becoming a concern.

·  As the urban sprawl continues and inner city house prices/affordability continues to rise these areas will quickly develop and median house prices within the area can be expected to rise over the medium to long term.

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Thanks to Therese Oneill from Alphabroker Mentoring

HTW Month In Review Oct 2012

“Brickbats and Bouquets – ‘All that’s Right and Wrong with Our Markets’ ”

Opinion on the Melbourne residential market….

· Areas such as the northern suburbs are experiencing a slide in demand since the expiry of the first home owners grant by the government which was a huge stimulus for growth in the area.

· There is a large supply of estate houses for sale along with developments under construction in Mernda and Craigieburn are experiencing less demand then what was originally planned for.

· In these areas there is little reason to celebrate as property prices have experienced a drop due to the lack of demand for these products ever since the incentives were taken away.

· With special finance options for first home buyers, developers have identified their target market as young couples and families looking for affordable living options.

· The Melbourne housing market has experienced a shift in development focus. For the first time there are more multi-residential developments such as townhouses, units, apartments, flats, etc being built in Melbourne instead of houses.

· Housing affordability is the main reason for this shift as people are pushed to build smaller more modest, cheaper homes.

· The transitioning mentality of the population in relation to buyer preferences is also another reason as people are developing an interest in terrace housing as it looks appealing and is essentially affordable.

· Overall the market outlook in the northern suburbs has changed due to macro influences which have put pressure on house prices and influenced demand for product in these areas.

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Thanks to Therese O’neill from Alphabroker for this summary

HTW Month In Review Sept 2012

“What Can I Buy for just $300,000?

Opinion on the Melbourne residential market here are some highlights:

· The patch we have chosen stretches from as close to the city as Preston out to as far north as Craigieburn offers primarily 1- and 2- bedroom apartments and blocks of vacant land that can be afforded for $300,000.

· In Preston the range is very restricted with single bedroom units primarily being all that can be purchased. If you do purchase a 2- bedroom apartment it will be in a poor location or in extremely poor condition.

· In the new estates in northern suburbs closer to Wollert, and where  apartments are scarce and little infrastructure has been developed, it is still extremely hard to find any liveable homes for under $300,000

· To enter into the market in the northern suburbs around Craigieburn and Wollert, a family requiring a 3- bedroom home can be expected to pay around $350,000

· Closer  into the city around Pascoe Vale prices will start from $360,000 to $370,000 range. The houses for this price are very basic and will often be in the poorer locations of the suburbs.

· At the moment, with house prices experiencing decreases in the past year, we are now seeing them stabilising.

· It is expected that in the coming year house prices will bounce back with growth expected.

· Prospects in the inner suburbs such as Preston and Coburg are enticing as rental returns are still competitive. 1- bedroom apartments that are selling for under $300,000 are still demanding rental returns above $1,200 p/m

· Investing in the outer suburbs throws up more uncertainty as the perception that these undeveloped suburbs creates risk and doubt leads to them experiencing slower growth patterns.

· Once these suburbs are established in terms of infrastructure  and the anticipated planning comes to fruition the growth will then be seen

If you don’t already, you can subscribe to receive this report directly each month for FREE. Simply jump on the HTW website www.htw.com.au and follow the prompts.

Summary courtesy of Therese O’Neill from Alphabroker

HTW Month In Review August 2012

Herron Todd White Opinion’s On The Melbourne Residential Market

Property prices in Melbourne have generally shown steadying signs over the past few months after experiencing a decline early in the year.

The general consensus from property professionals and research data is that REIV data indicates median house prices have remained steady at $535,000 in the past quarter, which is 5% down on the year.

Consumer confidence within the market is still low due to local and global economic uncertainty, but signs are evident that consumer confidence is slowly improving.

With another rate cut not on the agenda, property professionals advise the market should continue to steady and possibly show slight signs of growth in the near future.

Supply and demand for Melbourne’s residential property  market indicate it is predominantly a buyer’s market as consumers have the opportunity to ‘shop’ around for longer for a better product at a better price.

Houses sold through private sale have recorded an increased median  price of 2.1%, while those sold at auction have seen a 2% drop.  This reflects buyers willingness to be conservative and adopt a wait and see approach when it comes to auctions, resulting in a low clearance rate of 60% for the June quarter.

Agents are indicating many vendors are still dreaming of post GFC property prices and are unwilling to settle for much less, even though market conditions have softened considerably since then. This is leading to extended marketing times as properties are sitting on the market for much longer than usual as buyers are being smart, knowing very well the majority of properties aren’t worth what they were 12 months ago.

Residential rental vacancy rates have slightly dropped  down from 2.2% to 2%, this will create more competition in the rental market.

Property professionals working the outer suburbs indicate there is an oversupply of new homes in the area which is driving prices down.

Highlights Summary courtesy Therese O’neill from Alphabroker Mentoring