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Issue # 058 November 22 2013

"What's Happening In New South Wales"

"What's Happening In Queensland"

Kingsgrove Area Sees Price Climb

No-Reserve Auction For Waterfront Airlie Beach Bungalow Kicks Off With "Courageous" $1 Bid

Sydney's south west area of Kingsgrove has seen an increase in the median price over the 12 months to August 2013, with PRDnationwide's research analyst, Oded Reveni-Etzioni, saying that the area is becoming desirable for home buyers. 19 November 2013. More.

Radical NSW Apartment Reforms Challenges Owners’ Rights Some of the most controversial planning reforms in NSW history could see apartment owners forced out of their homes if a majority of building owners agree to sell to a developer for demolition. It’s a move by NSW Fair Trading minister Anthony Roberts that fundamentally challenges the previously sacrosanct view of property ownership, and not everyone will be happy with it. 19 November 2013. More.

Auction Market Maintains Runaway Results Sydney’s weekend auction market did not slow down over the weekend, with buyer and seller numbers at record levels. According to Australian Property Monitors (APM), the city recorded an auction clearance rate of 80.6 per cent across 767 auctions. 18 November 2013. More.

Purchasing A Unit In NSW – What You Need To Know Unit and apartment quality of life is more important than ever, with the prediction that we’ll see over 50% of the Sydney urban area’s population living in units and apartments in coming years. There are some great ‘wins’ that have come down that will ease quality of living for all occupants. 15 November 2013. More.

High LVRs Spur Property Boom High loan-to-value ratios, particularly on new residential property loans for investors, is fuelling what could – in Sydney at least – be the hottest property market since the 2003 residential housing bubble. LVRs are above 90 per cent on average among investors, according to a study by Digital Finance Analytics, which surveyed 2000 households per month over the course of the past year. 11 November 2013. More.

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A "courageous" opening bid of $1 began proceedings at the no-reserve auction of 13 Palm Bay Street, Airlie Beach, last night. But things didn’t stop there: the 20 registered bidders quickly edged the price up to $120,000 for the beachfront bungalow which is on Long Island close to the resort’s pools and facilities. 19 November 2013. More.

New South Wales Buyers Propping Up Brisbane's Housing Market Southern investors are buying up bargains in Brisbane fuelling the recovery in the city's property market in a bid to get more bang for their buck. With prices booming in Southern capitals and forcing out house hunters, Sydneysiders and Melbournites are turning attention north and splashing the cash on Brisbane homes. 18 November 2013. More.

Next Capital City To Boom Brisbane will be the next Australian capital city to take off, according to a panel of property experts. Speaking at a recent Smart Property Investment roundtable, Propertyology’s Simon Pressley, Destiny Financial Solutions’ Margaret Lomas, property lecturer and author Peter Koulizos, Empower Wealth’s Ben Kingsley and ProSolution Private Client’s Stuart Wemyss all agreed Brisbane would be the best performer over the next two to four years. 15 November 2013. More.

Valuers Predict Southeast Strengthen in 2014

Queensland

Property

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Australia’s largest independent property advisory firm believes property prices are set to firm in southeast Queensland during 2014. Gavin Hulcombe, chairman of Herron Todd White, says real estate across the Sunshine Coast, Gold Coast and Brisbane markets will continue to recover from the low values and sale numbers of the past half-decade. 14 November 2013. More.

Brisbane Shows First Clear Signs Of Growth Brisbane is beginning to join the capital city growth trend. The latest edition of the House Price Indexes from the Australian Bureau of Statistics shows that Brisbane’s index grew 1.2% in the September Quarter, for annual growth of 4.1%. 11 November 2013. More.


State Of The Nation Continued… "What's Happening In Victoria"

"What's Happening In South Australia"

Adviser Group To Keep ‘Bastards Honest’

Why South Australia Could Be The Perfect Storm For New Investors

An organisation of Melbourne-based financial advisers has defended itself against allegations made by a fund manager, explaining its opposition to a proposed fund listing and merger. The Investor Action Group (IAG) – an association of Melbourne financial planning firms including boutique AFSL Segue Financial Services and other groups who spoke to ifa on condition of anonymity – has hit back at a statement issued by Rural Funds Management (RFM) accusing the group of scuppering a proposed merger. 19 November 2013. More.

Buyers Won't See Price Rise By End Of The Year: RP Data's Melbourne Weekend Auction Analysis A preliminary clearance rate of 70.3% was reached from 1,119 auction results so far this week in Melbourne. This was the third largest auction weekend this year and the seventh with over 1,000 auctions scheduled this year for the city. As the Melbourne market heads to the end of the year it appears that buyers won’t be confronted by price rises of any significance. 18 November 2013. More.

Geelong On The Rebound Geelong house prices are at the highest levels since mid-2011, according to a report from PRDnationwide. Research by the real estate agency shows prices have rebounded in the wake of the federal election, although the number of transactions in the area has decreased over the past 12 months. 18 November 2013. More.

Granny Flats: Do The Cons Outweigh The Pros? To granny flat or not to granny flat, that is the question. And it deserves serious consideration from the many home owners wanting extra liv ing space for in-laws, relatives or teenage children, or perhaps to earn rental income. But does the addition of a granny flat – at a cost of $55,000 to $200,000 – provide that much-needed space without detracting from property values? Do the cons outweigh the pros? 15 November 2013. More.

Landlords Urged To Prioritise Repairs Landlords and real estate agents have been warned to ensure regular maintenance of their properties after a Melbourne man was awarded $300,000 for injuries sustained after a balcony collapse. Three people were injured at the rental property when the balustrade of a balcony collapsed causing them to fall approximately five metres. 15 November 2013. More.

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There could be unique benefits to investing in South Australia for first-time or younger investors. With much of Australia’s population living on the east coast, it is understandable that many investors stick to these st ates when investing. However, neglecting South Australia, Northern Territory, and Western Australia could be a missed opportunity for new investors. However, South Australia; the country’s fifth largest state by population (overtaken by NSW, VIC, QLD, and WA), is often overlooked, however it really shouldn’t be. 18 November 2013. More.

First Home Buyer Investment 'Easier' In One State First home buyers in South Australia are finding it easier to break into property than in most other regions, with activity continuing to outshine the national average, according to the latest Australian Bureau of Statistics (ABS) figures. The monthly ABS finance commitment figures for September showed that at a national level, first home buyer activity continued to fall, accounting for 12.5% of total finance commitments in September, falling from 13.7% in August and against a 12 month average of about 15%. 18 November 2013. More.

This House Is Shooting Up In Value: Meet The Property Owner Advertising To Drug-Dealers Calling for a buyer who is an 'Amateur chemist or horticulturalist,' a description from Property Now advertises this Price Street, Parrakie, South Australia property on the market for $55,000. Owner of the property Michael Uspensky from National Rental Inspections told Property Observer that it is, of course, tongue in cheek. With its nod towards Breaking Bad, Uspensky said he'd bought it about four years ago for around $60,000 and put it to market about six months ago, with the "normal, nice, happy way" of advertising. 13 November 2013. More.

More Turbulence Ahead For Fragile Adelaide Office Market: BIS Shrapnel More turbulent times are ahead for the already fragile Adelaide office market, with predictions that the CBD vacancy rate could surge to as high as 15% in 2015. According to the latest BIS Shrapnel Adelaide Commercial Property Prospects 2013 to 2023 report, the weak South Australian economy and lack for growth drivers for the state over the next few years will see the city's current vacancy rate lift from 12.1% to a peak of between 14% and 15% in 2015. It is not expected to fall below 14% until 2017. 13 November 2013. More.


State Of The Nation Continued… "What's Happening In Western Australia"

"What's Happening In The Northern Territory"

Stunning Perth Homes On Show In China

Housing Construction Set To Rise

Luxury homes in WA will be showcased in Shanghai in a bid to tempt cashed-up Asian investors into our high-end suburbs. Real estate agent and director of Harcourts Applecross, Eric Hartanto, is one agent who has been selected to showcase exclusive homes at the Luxury Property Showcase in Shanghai from December 6. 20 November 2013. More.

The residential construction sector recovery is well underway and should continue into the coming year, according to predictions from the Housing Industry Association (HIA). “The improving level of dwelling commencements achieved in 2012/2013 will be consolidated this year before moving up a further leg in 2014/2015,” HIA senior economist Shane Garrett said. The association’s quarterly National Outlook shows the revival of the residential construction industry since its trough in 2011. 14 November 2013. More.

Vacant Houses Have A Date With Bulldozer Property Development Director Found Guilty On 20 Counts Of Stealing A former director of now-defunct property developer Ocean Key Holdings Ltd has been found guilty of stealing more than $820,000. Neil James Duckworth was accused of stealing the property in October, 2007. ASIC alleged he used money borrowed by Ocean Key Holdings Ltd and secured against land owned by the company to pay for personal and other unrelated expenses. 18 November 2013. More.

The Defence Department is planning to demolish 108 empty houses at Eaton and turn two-thirds of the suburb into an ADF working facility, confidential documents show. A ministerial advisory paper states the hundreds of empty homes in the middle of Darwin are not suitable for civilians because the land is a critical base from which to launch large-scale military operations from northern Australia. 9 November 2013. More.

"What's Happening In Tasmania" Lenders Tighten Screws Despite Record Home Loan Values Mortgage brokers are processing record values of home loans nat ionally but a leading WA developer says buyers have begun to find it difficult to get finance. Australian Finance Group (AFG) processed a record $4,057m in home loans nationally in October 2013. That's 12 per cent more than the $3,624m processed the month before, which was itself a record. 14 November 2013. More.

Build Smaller Homes To Save Costs: RP Data Investors involved in residential construction should consider building smaller houses in response to rising land costs, a leading industry expert has urged. “Developers targeting price sensitive purchasers should potentially look to develop smaller floor areas with fewer bedrooms as a way to improve affordability,” RP Data research analyst Cameron Kusher said. 15 November 2013. More.

Rental Vacancies Down In October

WA Bucks National First-Home Buyers Trend First-home buyers have gone missing in the latest national housing market upswing, despite low interest rates - but WA FHB's have continued to buck the trend. New national figures show the proportion of first-home buyers taking out a mortgage in any one month shrank to an all-time low of 12.5 per cent in September. 12 November 2013. More.

SQM Research has released rental vacancies data for the month of October, which revealed that the vacancy rate nationally fell by 0.1% to 2.0%, with most capitals experiencing declines. SQM Research does expect vacancies to begin to rise in the lead up the Christmas as this normally occurs during this time of year. 15 November 2013. More.

TAS Doubles Home Builder Grant

WA Housing Industry Getting Stronger Housing construction in Western Australia has rebounded strongly in the past 12 months, with increased activity predicted to continue over the next year, according to a new report. "New residential construction levels are expected to remain relatively steady over the 2013/2014 year, which is good news for the industry because this is an important economic driver and employment generator,” WA planning minister John Day said. 8 November 2013. More.

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The Tasmanian government has announced it will double the First Home Builder Boost to dramatically stimulate first home buyer and construction activity. The grant for first home owners who choose to buy or build a brand new home will be increased from $15,000 to $30,000 and is effective immediately. Ms Giddings said the take-up for the grant, which was increased from $7,000 last year, had been slower than expected. 11 November 2013. More.


State Of The Nation Continued… "Market Update"

"What's Happening Internationally"

What Today's Home Buyers Want

This Is A Housing Bubble

What those features are depends in part on the home's price, size and geographic locale as well as who the buyer is; owneroccupier, investor, or developer. Some features are more beneficial than others, depending on those categories, and for every feature that appeals to one buyer, there will be another purchaser who wants the exact opposite. Land size: Owneroccupiers generally look for a relatively large block of land, especially if they are considering having a family. However, tenants hate it. 19 November 2013. More.

What does a housing bubble in a mid-sized, commodities rich country with a stable financial sector that weathered the global financial crisis look like? Very much like the one gathering momentum in Canada, according to Toronto-based economist for Capital Economics David Madani. The former Canadian central bank economist says the signs of a “disruptive housing downturn in a developed economy” are overvaluation, excessive household debt and overbuilding. 13 November 2013. More.

House Sizes Falling After Decade-Long Rise

Stand Up And be Counted: Are The FHB Stats A True Reflection?

House sizes increased half a percent a year since 2001, five times the rate of apartments, according to RP Data. The average area of a new house across Australia increased from 227.50 square metres to 241.10 square metres from 2001 to 2013. Over the same period the average floor area for apartments and townhouses increased from 132.6 square metres to 133.9 square metres – an annual growth rate of 0.1%. 18 November 2013. More.

According to data released by the ABS earlier this week, the amount of loans financed to first home buyers in September recorded a new low at only 12.48%. This week’s exclusive piece is putting the spotlight on this data and whether or not it’s a true reflection of what’s going on in the market. Many property forums are arguing that first home buyers are no longer ticking the first home buyers box, and therefore skewing the statistics. 15 November 2013. More.

First Home Buyer Scheme Languishing Is a Federal Government program aimed at supporting would-be buyers isn’t helping as much as it could? Financial comparison website RateCity says First Home Saver Accounts (FHSA) haven’t delivered for first time buyers. The FHSA scheme was launched in 2008 with the aim of helping a high number of Australians get onto the property ladder. Only 45,000 accounts were active as at June 2013. 15 November 2013. More.

Controversy Corner WA Broker Defrauds Investors, Given Prison Sentence ASIC has banned former mortgage broker Catherine 'Kate' Anne Thompson of Mortgage Miracles Pty Ltd after she defrauded 24 investors of more than $4 million, leading to a five year and one month sentence in prison. Thompson was convicted of stealing and, in three years and one month, will be eligible for parole. She is also expected to pay compensation to the victims. 19 November 2013. More.

Housing Materials Signal Tepid Building Recovery The Australian Bureau of Statistics (ABS) has just released data on construction materials volumes for the September quarter. While it showed a continued improvement in the production of clay bricks – a material typically used in housing construction – there was no associated increase in roof tile production. There was also ongoing weakness in the production of concrete blocks and plaster board, whereas production of cement and pre-mixed concrete – items more associated with infrastrure and mining investment – rose. 15 November 2013. More.

SMSF Retirement Assets To Hit $562bn SMSF retirement phase assets in Australia are projected to account for 61.5 per cent of retirement income assets, according to research from DEXX&R. By 2023, SMSF retirement phase assets are projected to account for $562 billion of Australia’s $914 billion in retirement income assets, according to the DEXX&R Market Projections Report. 14 November 2013. More.

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If you would like to voice your opinion on any article you have read in the State Of The Nation Newsletters or elsewhere that has concerned you, please send the article and your opinion on it to us and we will include it in a future issue of the State Of The Nation. Send your opinion to kevin@smartpropertyadviser.com.au

Some Parting Advice “There's no problem with investing outside of your 'home' state. But, you must do your homework and seek out research-based and trustworthy advice.”

Until Next Time… Kevin Lee www.smartpropertyadviser.com.au


State of The Nation Issue 58 Nov 22, 2013