Increased buyer activity generally evident for most of the year in these housing markets has continued to consolidate over spring. The Sydney weekend auction market has been particularly robust having now recorded five consecutive weekend auction clearance rates above 60 percent. This is the first time in over two years that this has been achieved in the Sydney market.

Although Sydney’s solid auction clearance rates clearly reflect increased buyer activity, the number of listings being offered each weekend remains slightly subdued. This may indicate some continued wariness by sellers with no clear signs yet that auction numbers are set to rise soon.

Sydney’s prestige markets however continue to show some encouraging signs of increasing buyer activity with another healthy auction clearance rate recorded by the Eastern Suburbs this weekend of 70 percent from 49 reported listings.

The most expensive property reported sold in Sydney on the weekend was a 5 bedroom house in Cronulla that went for $2,200,000. The most affordable property reported sold was a 3 bedroom house in Tregear that went for $230,000.

Similar to Sydney, Melbourne has consistently recorded solid auction clearance rates over spring well ahead of last year’s results at the same time. Melbourne’s prestige markets have been the mainstay of these solid sales outcomes with buyers perceiving value opportunities to secure quality properties in prestige locations.

Reports are also emerging of recent increased sales activity in Melbourne’s ultra-prestige market indicating that buyer momentum is filtering through into the upper-price regions.

Next weekend is the big test for the Melbourne market with a Super Saturday of auctions featuring well over 1000 properties listed for sale. This will be the highest weekend offering of properties for nearly 2 years and clearly indicates rising seller confidence in the Melbourne market.

Information source:

Dr Andrew Wilson is Senior Economist for Australian Property Monitors

The smiles say it all.....

5 September 2012

Review of NSW property, stock and business agents laws

Fair Trading is encouraging widespread feedback on an exposure draft Property, Stock and Business Agents Amendment Bill that has been released for public and industry consultation.

The draft Amendment Bill seeks to clarify and streamline the Act and reduce unnecessary red tape for licensed agents. These include stock and station agents, buyer’s agents, business agents, strata and community management agents and on site residential property managers.

Key proposed reforms include: broadening the range of  accepted qualifications for auditors of agents’ trust accounts to include members of recognised accounting bodies who hold practising certificates agents no longer being required to lodge a separate annual statutory declaration with NSW Fair Trading if they did not receive trust money during the financial year agents only having to lodge their annual audit return with NSW Fair Trading if the audit return is qualified by their auditor empowering the Director-General to order random trust account audits requiring agents to notify the Director-General each time they open or close a trust account at a financial institution, and amending the requirements relating to the handling of unclaimed trust money, to ensure money is swiftly returned to its rightful owner wherever possible.

Go to the Review of the property stock and business agents legislation page on the Fair Trading website to download the draft Amendment Bill, fill out a questionnaire or make a formal submission.

Feedback on the review of the property stock and business agents legislation closes on 5 October 2012.

Proposed reformsto national occupational licensing scheme (NOLS)

The Council of Australian Governments National Licensing Taskforce is conducting public information sessions in the capitalcities on proposals to reform licensing for the following occupations: property plumbing and gasfitting electrical, and refrigeration and air-conditioning.

The property industry information session in Sydney will beon Friday 14 September 2012. For more details go to the Public information sessions page of the National Occupational Licensing Authority website.

RP Data – Rismark Home Value Index Release

Dwelling values across capital cities recorded a second month of capital gains in July with dwelling values up by 0.6% over the month following a 1.0% rise in June.

The RP Data-Rismark Home Value indices  posted a second successive rise in capital city dwelling values over the month  of July.  Across the combined capital  cities, dwelling values rose by 0.6 per cent over the month with the rises being  relatively consistently over the first three weeks of July followed by a -0.2  per cent fall over the final week of the month.

Over the three months  to the end of July, capital city dwellings have posted an increase of 0.2 per  cent.

Dwelling values  across the combined capital cities are now down only -0.6 per cent since the  start of this year representing a rebound relative to this year’s low point on  30 May when values were 2.2 per cent below the calendar year starting level.

According to RP  Data’s research director Tim Lawless, the July results were heavily influenced  by improving values across the most expensive capital city markets.

“The July rise was  not as broad-based as the June results, with the month-on-month increase  primarily being associated with the Sydney and Melbourne markets where dwelling  values rose 1.2 per cent and 1.4 per cent respectively.   The July result, when viewed together with  the positive June result, suggests housing markets may be starting to respond  to lower mortgage rates, which according to the RBA’s latest Board meeting  minutes are around 50 basis points below their 15-year average.”

Rismark CEO Ben Skilbeck, added, “Among the  capital cities there remains significant differences in performance. While both  Sydney and Melbourne experienced gains over the month, Adelaide declined -2.5  per cent. On a year to date basis, Sydney values have risen 1.7 per cent while  at the other end of the spectrum, Melbourne and Adelaide have experienced  declines of -2.7 per cent”.

According to Tim  Lawless, at the combined capital city level the July rise was fairly evenly  dispersed between houses and units.

“House values were up  by 0.6 per cent over the month while unit values rose 0.7 per cent.  Over the last 12 months it is clear that unit  values have been the most resilient to value falls with the Home Value Index showing  -1.6 per cent fall in unit values compared with a -2.6 per cent fall in house  values.”

Rental rates are  continuing to rise; across the capital cities weekly rents have risen by 3.3  per cent over the first seven months of the year.  Increases in weekly rents have been recorded  across all capital cities over the last seven months apart from Hobart and  Adelaide.  The largest rises in weekly  rents over the year to date can be found in Perth (13.7%) and Darwin (5.4%).

According to Mr  Lawless, other indicators are also showing some further signs of improving  conditions in the market.  “Auction  clearance rates were recorded at 56.6 per cent over the last week of July, the  highest clearance rate since February last year.  We are also seeing average selling time and  vendor discounting both at healthier levels than what was recorded a year ago  and effective supply levels have also seen some improvement from their highs of  late last year.”

Source : RPData

Reserve Bank Assistant Governor Guy Debelle revealed last week that Australian housing markets were unlikely to record the steep price falls experienced by some markets in Europe and the US.

The underlying resilience of Australian housing markets has of course been apparent for some time and was never really in question given the long-term attachment of Australians to home ownership.

Home ownership rates in Australia have declined only marginally over the past 5 years despite the impact of two significant downturns in buyer activity levels during that period.

According to the 2011 Census, 67 percent of Australian households either own their own home or are in the process of owning their own home with a mortgage. This compares to the 68 percent recorded in 2006. Australia’s home ownership rates have been relatively consistent for over 50 years.

Sydney recorded the best performance in home ownership growth of all the capitals rising from 62.2 percent in 2006 to 65.2 percent in 2011. This is despite Sydney having clearly the nation’s highest capital city median house prices.

Sydney’s home ownership rate would have increased since the census data was collected in August of 2011. This increase is a result of a surge in first home buyers recorded over the later part of 2011 and into 2012 driven by state government changes to buyer stamp duty concessions and grants.

The state government indicated that it also proposes to implement changes to the planning system designed to streamline the development approval process. With current residential construction levels struggling to cater for Sydney’s rising housing demand it can be hoped that this initiative will enhance Sydney’s recent surge in home ownership.

Source:  Dr Andrew Wilson is Senior Economist for Australian Property Monitors

RP Data – Rismark Home Value Index Release

The  preliminary capital city dwelling value index result for December was -0.2% (s.a.)  following an upwardly revised +0.4% rise in dwelling values in November (was  +0.1%). Revised regional house values for November increased from +0.3% to  +0.5%. Sydney housing has been the nation’s best performer with dwelling values  up 0.4% in December and by 0.7% over the quarter (s.a.).

In the generally  seasonally weak month of December, the preliminary RP Data-Rismark Home Value Index  result for capital city dwelling values was -0.2 per cent (s.a.). Low sales volumes  in December mean that this number will likely see a more significant revision  than normal.

The November result  from the RP Data-Rismark index for dwellings  in capital cities has revised up from +0.1 per cent (s.a.) to +0.4 per cent (s.a.) based on  additional sales information. This marks the largest month-on-month improvement  in Australian home values since May 2010.

The RP Data-Rismark ‘rest-of-state’  index, which covers Australia’s regional markets, has also revised up in  November from +0.3 per cent to +0.5 per cent (s.a.).  This is the most significant increase in regional house values since November  2010.

Over the December  quarter, Australia’s capital city home values declined by -0.5 per cent (s.a.).

RP Data’s director of  research Tim Lawless, said, “The December quarter was the year’s smallest  quarterly decline. According to our index, capital city home values fell by  -1.5 per cent (s.a.) in the March  quarter, and by a further -0.8 per cent (s.a.)  in each of the June and September quarters. This rate of decline had  decelerated to -0.5% by the final quarter of 2011.”

In 2011, Australian  capital city dwelling values experienced a capital loss of about three and a  half per cent. Regional  house values fared a little better, correcting by around three per cent. This compared to the  14-15 per cent decline in Australian shares. Adding in rents, the gross total  return to Australian property investors was slightly less than one per cent  over 2011.

Rismark’s managing director  Ben Skilbeck said, “The month of  December is characterised by a significant lull in activity and the preliminary  index results have likely been influenced by some more volatile Melbourne and  Perth estimates. We expect to get better clarity on the monthly movements as  more information is reported.”

“Sydney currently has  the largest volume of reported sales in December. In seasonally-adjusted terms,  Sydney dwelling values rose by 0.4 per cent in the month of December. In the  December quarter, Sydney dwelling values are up a total of 0.7 per cent (s.a.)” Mr Skilbeck said.

RP Data’s Tim Lawless  observed that rental markets continued to strengthen in December.

“Weekly rents across  the capital cities were up 1.0 per cent over the December quarter and are now  6.3 per cent higher than at the same time last year.”

“These higher rental  rates combined with the slide in property values have improved investors’  yields. The average capital city dwelling is now offering a gross rental return  of 4.6 per cent after a consistent trend upwards since mid-2010 when the typical  capital city dwelling was yielding just 4.1 per cent. Darwin and Canberra are  the highest yielding locations for property investors while Hobart, Brisbane,  and Sydney provide gross yields that are better than average,” Mr Lawless said.

On the outlook for  the year ahead, Rismark’s Ben Skilbeck commented, “We  expect that the RBA’s interest rate cuts in the final two months of 2011 will  lend further momentum to housing activity as transaction volumes pick up over  February and March after the seasonally slow months of December and January. If  financial market pricing for substantial additional RBA rate cuts proves  accurate, we could see a stronger-than-expected bounce-back in housing  conditions.”

“Housing  affordability in Australia has experienced a striking improvement in recent  times. While disposable household incomes on a per household basis rose by five  per cent over the year to September 2011, Australian dwelling values have  declined by 3.4 per cent since September 2010. As a result of the RBA’s rate  cuts borrowers can now get fixed- and variable-rate home loans as low as 5.9  per cent and 6.14 per cent. Rismark’s research shows that  disposable incomes per household have risen about 15 per cent further than  Australian dwelling values since the end of 2003. This helps account for the  decline in Rismark’s national dwelling  price-to-income ratio, which is as low as its been since 2003” Mr Skilbeck said.

RP Data’s Tim Lawless  added, “While global uncertainty and a stagnant local labour market could weigh  on the consumer’s mindset, we are nevertheless observing improvements in  monthly housing finance commitments. RP Data’s leading indicators on average selling  times and vendor discounts are also starting to look healthier. There is no  doubt that additional interest rate relief in 2012 would afford a very welcome  cushion to the housing market.”

Source: RPData

It may sound a bit implausible given that swirling around the silver lining of an interest rate cut over the last week, there’s been plenty of gloomy news.

The Reserve Bank has swiftly changed its tone from upbeat to down. In its most recent Statement on Monetary Policy, the bank repeatedly highlighted that risks to the global economy are “skewed to the downside, with the sovereign debt and banking problems in the Euro area remaining the most prominent risks”.

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If it’s interest rate cuts you’re after, that should be music to your ears.

“A follow-up rate cut remains on the radar screen. The question is one of timing,” says CommSec chief economist Craig James.

“If there is more instability in Europe, then another rate cut in December can’t be ruled out. But we currently favour the next move to be made in February, after the next inflation figures in late January.”

Job ads have slid for the sixth time in the past seven months, leading James to predict a jobless rate closer to 5.5 per cent later in 2011 or early in 2012. “A softer job market will keep downward pressure on wages and prices,” he says.

But assuming the US and the Euro zone economies manage to haul themselves out of their collective trough – and that’s a big assumption – we could see rates back on their way up within a couple of years.

And given that old rule about what goes up coming down, and vice versa, rate hikes will obviously have to come at some stage – it’s just a question of when.

Source SMH