housing affordability – realestatesource

Sydney Nations Least Affordable City, Again

Marc Pallisco — Wed, 24 Feb 2010 06:54:32 +0000

Sydney’s housing affordability tanked in the December 2009 quarter dropping by 22.3 per cent, to be 28.6 per cent lower than a year ago.

Affordability in Regional NSW was down by 17.7 per cent over the quarter and 24.6 per cent over the year.

“Sydney remains the most unaffordable city in Australia,” said HIA NSW Excutive Director Graham Wolfe.

“Prior to the December quarter, first home buyers had a small window of favourable affordability conditions to enter the market. That window is now closing with affordability retreating to early 2008 levels when interest rates were significantly higher,” he said.

“Australia’s fast growing population is pushing new dwelling requirements to record high levels. HIA research shows NSW will need to build more than 40,000 homes every year to cater for an expected population of 10.5 million by 2050,” Mr Wolfe said.

“Without the required new home building to keep up with underlying requirements, house prices and rents are expected to continue pushing upwards through 2010,” he said.

Affordability deteriorated in all capital cities and regional areas in the December quarter. The largest falls were recorded in Sydney, Brisbane, Hobart and Canberra.

The affordability index compares average incomes with typical mortgage repayments for first home buyers, the higher the index the more affordable housing is.

Sydney the Most Overpriced Property Market in Australia: Survey

Marc Pallisco — Wed, 17 Mar 2010 12:54:28 +0000

Sydney is Australia’s most ‘overvalued city’, according to a poll released today by PRDnationwide.

The survey of 1200 property investors around the country revealed 28% of respondents said Sydney house prices were most overvalued while 26% of respondents believed Brisbane homes were above a fair market price.

PRDnationwide research director Aaron Maskrey said Darwin followed closely with 13% of respondents choosing it as overvalued.

Only 3% of respondents thought Adelaide, Hobart and Canberra were overpriced compared to other capital cities.

“Basically what this research is saying is that the average buyer feels you get less bang for your buck in Brisbane and Sydney compared to other cities,” said Mr Maskrey.

“We’ve certainly seen house prices fall during the period of economic instability – but many investors believe prices still appear too high in some cities,” he said.

But that’s not about to change according to the research director.

“The number of people moving to Australia exceeds the number of dwellings becoming available — supply and demand suggests that this will continue to put pressure on house prices,” he said.

Mr Maskrey said that the survey shows that some cities are in the midst of a housing bubble in which prices bear no reflection of underlying economics.

“Prices in the Brisbane LGA have increased by 11.7% per annum in the past ten years. Wages on the other hand have increased by a lot less (4.5% per annum),” said Mr Maskrey.

“There will come a time, when people will won’t be prepared to pay these prices in their home town and look to invest in other states.”

The median price of a house in the Sydney statistical district is $487,500 and According to the Australian Bureau of Statistics, average weekly earnings for Australian employees are $49,592.

Therefore, the average house price in Sydney is almost 10 times earnings. Sydney house prices are therefore almost one and a half times those of the allegedly overpriced UK in relative terms. (According to UK National Statistics House Price Index December 2009).

Investment Purchases Fill The First Home Buyer Gap

Marc Pallisco — Tue, 08 Sep 2009 19:16:09 +0000

Loans for owner occupied housing increased in all states and territories, except Tasmania and the ACT.

The figures for the number of loan commitments are now similar to those of two years ago.

“The figures also reflect the impact of the decline in first home buyer activity, which decreased from a high of 27.1 per cent to 25.2 per cent; a figure that still remains well above the long term average of 20.1 per cent,” continued Mr Fisher.

“This is an indicator of what can be expected between now and the end of the year, as the First Home Owner’s Grant Boost (FHOG Boost) is phased out,” he said.

“The gap in the market left by first home buyers is being taken up by increased investment interest.

The value of investment housing commitments was up by 1 per cent in value terms. This is the sixth consecutive month that purchases of dwellings for investment have increased,” Mr Fisher concluded.

Public Housing Building Boom Underway in Australia

Marc Pallisco — Tue, 01 Sep 2009 13:26:52 +0000

The funding will see around 19,200 new homes added to the public and community housing stock by 2012. Three quarters of these projects are to be completed by December 2010.

Allocations and the number of new dwellings in each State and Territory are:

NSW $1,763,647,000 (allocation for construction); (6,110 (dwellings)
Vic $1,166,757,000; 4,539
QLD $1,085,472,000l 4,132
WA $549,727,000; 1,990
SA $404,263,000l 1,371
TAS $125,480,000; 510
ACT $87,080,000; 340
NT $55,574,000; 208
Total $5,238,000,000; 19,200

State and Territory Governments are now finalising contracts with builders.

The approved projects include funding for a number of specialist services, such as Common Ground models similar to that in New York.

The projects also include contracts for the direct purchase of off-the-plan apartment and house and land packages from private developments. This will allow many developments to attract further finance to complete their developments.

Industry has advised the Australian Government that a further 2,000 private dwellings are able to be built because sales from the social housing program have made it possible to get finance for medium to large scale projects.

Housing Affordability Nosedives in Melbourne

Marc Pallisco — Wed, 24 Feb 2010 06:58:17 +0000

HIA Victorian Executive Director, Gil King, said prior to the December quarter, first home buyers had a small window of favourable affordability conditions to enter the market. “That window is now closing with affordability retreating to 2008 levels when interest rates were significantly higher,” he said.

“Australia’s burgeoning population is pushing new dwelling requirements to record high levels,” Mr Kind said. “Without the required new home building to keep up with underlying requirements house prices and rents are expected to continue pushing upwards through 2010.”

Affordability deteriorated in all capital cities and regional areas in the December quarter. The largest falls were recorded in Sydney, Brisbane, Hobart and Canberra.

Melbourne’s slim affordability advantage over Australia’s large capitals remains intact. Regional Victoria’s affordability has been aided by the State Government’s generous first home buyer boost for regional Victoria and is more affordable than all regions on the mainland.

The affordability index compares average incomes with typical mortgage repayments for first home buyers, the higher the index the more affordable housing is.

Interest Rate Rise Affects Renters too

Marc Pallisco — Sun, 11 Nov 2007 05:26:33 +0000

Those renting while saving to buy a home will be the worst hit, with demand for property this summer expected to match, if not exceed record levels of demand recorded last year, insiders say.

“Rising rents of late have definitely been due to, or impacted upon by rising interest rates,” says Danielle Cargill, manager – property management department at Cantwells Property in Hawthorn. “Owners of these properties need to bump up the returns they are getting, to enable them to easily cover their own costs.”

And easily cover their own costs they can.

Assuming an investor owns a $350,000 2-bedroom inner-city apartment, with a $250,000 mortgage, this week’s interest rate rise means an increased monthly cost of about $52 per month – or about $12 per week.

At current market levels, that property would ordinarily ask about $260 per week. However with rental auctioning and 100-strong crowds for some type of rental properties, an asking rent of $270 or even $280 is not unreasonable.

Ms Cargill says she expects most investors will pass as much, or all of the recent interest rate rise effects to renters, to capitalise on the strong market.

“There’s no indication the interest rate rise will slow private investors in this part of the world,” said Ms Cargill. “Most of the investors we deal with here have been factoring in one or two interest rate rises in the short term anyway.”

Ex Stockland and Mirvac Exec Announces West Footscray Townhouse Project

Marc Pallisco — Sun, 22 Nov 2009 11:47:48 +0000

THE man who bought high rise living to South Yarra ten years ago, and helped develop Beacon Cove in Port Melbourne, has turned his hand to another development, on West Footscray’s Stony Creek.

Former Mirvac and Stockland executive Cameron Alderson’s latest development proposal, Canopi, aims to solve housing affordability issues by offering efficiently designed townhouses on small “inner-city” size blocks of around 175 square metres.

Canopi, at the end of Lae Street, will include 43 townhouses each including three bedrooms, two bathrooms, two car spots and a rear courtyard. Kingsford Property is marketing the townhouses, which range in price from $479,000 to $550,000.