Posted by admin on 9 June 2011
Apparently us Queenslanders are worrying ourselves silly that rates are about to leap upwards. So we thought this graph might help allay your fears!
The yellow line shows the current variable rates and it’s encouraging to see the 3 and 5 year rates are not much higher. In fact you can lock your loan in for 5 years from as low as 7.54%. And if you think that’s just the banks being competitive what about a 10 year rate? You’re guessing maybe 12%, 10% if you’re lucky? You can currently lock in your home loan rate for 10 years from 8.09% – or approx 1% more than where variable rates are today.
Hopefully Brisbane home buyers can sleep better tonight!
This info from www.ratecity.com.au and the graph from the mortgage brokers at SmartLine.
Tags: Brisbane real estate, interest rates
Posted in property taxes and rates etc | No Comments »
Posted by admin on 1 April 2011
Westpac's Bill Evans
A really interesting seminar today with the Real Estate Institute of Queensland and guest speaker Bill Evans, Chief Economist with Westpac.
Bill says 95% of Queenslanders believe that interest rates are on the way up. We’re amongst the nation’s most pessimistic on this topic and a big number of us expect rate rises to exceed a full percentage point. But his forecasts point to just a 0.25% rise over the next 12 months. He says there’s “no way” we can expect a full 1%. Bill’s an economist and they do make mistakes in their forecasts – but he’s been in the same job for 20 years so you have to give him a bit of a hearing.
Interestingly when they survey on whether it’s a good time now to buy real estate, most of us say “absolutely yes”. But many of us don’t want to do it ourselves! Bill says memories of GFC job insecurities still linger and even with the mining boom happening under our noses here in Queensland many of us think it won’t benefit us personally.
He says underlying demand for housing is still very strong and any comparison to the US housing market is “fundamentally flawed”.
Tags: Bill Evans Westpac, Brisbane house prices, Brisbane housing supply, interest rates, Real Estate Institute of Queensland
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Posted by Rob Honeycombe on 8 February 2011
Floods, cyclones, bush fires… if we get a snowstorm we’ll have the full set.
This has been a start to a year unlike any I’ve seen before and home buyers and investors could be forgiven for being a little unsure of which way the market is heading. But interestingly the past two weeks has seen some of the busiest sales enquiry we’ve had to our agency in months. Maybe the Premier was right in saying we breed “tough north of the border”.
To help you make some sense of it all for Brisbane’s inner city property market, here’s a snapshot of some of the latest research commentary:
Westpac’s Chief Economist Bill Evans says interest rates will stay flat, maybe rising just a 0.25% by June 2012. At a seminar we attended this week he said the expected economic impact of the flood recovery has seen him jump his GDP forecast from 3.4% to 4.2% for 2011. He expects more than $2.5b to be spent on post flood works. Queensland’s exports remain strong and he has increased his growth expectation from 4.25% to 5% for the “sunshine” state. That seems a pretty impressive number.
Amongst a balanced range of comments he made the point that Australians are “de-leveraging” at a great rate, with our savings rate now higher than it’s been since the 1960’s. Housing affordability is not as big an issue as often proposed.
Population growth, or the cooling of its pace, has been raised as a question mark on demand. Local commentator Michael Matusik says Queensland grew by 89,000 in 2010, now a lower number than NSW and Victoria are getting. We’re not attracting the net migration we used to. But with 244 new people crossing the border each and every day (and many of them choosing inner-city Brisbane) it still seems a big number. And will Victorians and New South Welshmen stay put in future?
RP Data released 2010 stats showing Brisbane’s house price dropped 1% for the year. And amongst their data here’s the info we believe most home buyers and property investors should consider: During this past decade Brisbane’s house prices rose an average of 10.6% per annum. Over the past 5 years it was 6.6% per annum. We don’t know what they’ll do over the next 5 and 10 years and that’s exactly the point.
We were looking this morning at the true cost of owning an inner-Brisbane investment property and one real life example was $100 per week – or approx 1% of the apartment’s value. Tax deductions and strong rents shouldered much of the holding cost so if its value rises more than 1% that investor is ahead.
If you can “pick” an upcoming jump in the market you’re wiser than most. The rest of us might just recognise the long term view that’s served inner Brisbane property owners so well in the past.
Tags: Bill Evans Westpac, Brisbane house prices, Brisbane median home prices, interest rates, investment property deductions, Michael Matusik, RP Data
Posted in Brisbane's sales market, trends in Brisbane property | No Comments »
Posted by Rob Honeycombe on 15 February 2010
A recent full price sale in South Brisbane
Brisbane’s inner city home buyers are out in force and 2010 is looking like it might easily overtake last year’s sales volumes. Regular readers will know we’re reluctant to draw too wide a comment based on a small number of transactions. But right now we’re flat out!
Market commentators will probably note the recent RBA decision to hold official interest rates, but the activity from Brisbane home buyers was already busy before this piece of good news.
Of our last seven sales 5 were secured within a week of the property going on the market. Unsurprisingly the prices achieved have been strong.
During 2009 sellers sat on their hands waiting for a healthier market and those that have now made the decision to sell are being rewarded.
Tags: Brisbane home prices, interest rates, Reserve Bank, sales volumes Brisbane
Posted in Brisbane's sales market | No Comments »
Posted by Rob Honeycombe on 16 December 2009
As a group, we property owners are a jittery bunch! Sure we do have a lot at stake, with an inner Brisbane property now regularly topping the half million dollar mark. But it still surprises us to see how much some owners look to the news and ‘property soothsayers’ for guidance. Boom or bust? Sell, buy, panic? If the global economic challenges showed us one thing, surely it’s the importance of trying to read the tea leaves yourself. So here’s some of the forecast signposts for 2010.
Unemployment this week nudged down to 5.7% (up slightly in Queensland) but most economists point to this growing to high 6’s during 2010. More people will lose their jobs, effecting buying power. But Phil Ruthven of IBISWorld is upbeat for 12 months time, predicting “a return to full employment by early 2011″.
Variable mortgage rates will be around 7.75% by the end of 2010, according to a BRW Magazine report on economists’ consensus. This reflects an RBA position in “neutral”. Combined with an end to Federal stimulus offers, especially to the general public, rates rises will leave home buyers with less to spend. The temporary boost to the First Home Owner’s Grant (now $3,500) ends on December 1st, albeit the Grant will still be $7000.
New housing construction remains slow. The Housing Industry Association says “We are looking at a moderate rather than strong lift in new home building in 2010. This disappointing outlook will remain in play until such time as credit constraints on medium and high density developments are eased.” That means some new suburban housing but bank not supporting inner city development. Given the long lead times for new inner Brisbane projects supply may remain tight for some time yet.
New Brisbane infrastructure will make our inner city more ‘liveable’. The Clem 7 Tunnel and Go Between Bridge will each make traveling around, and into, the city much quicker. And the CityGlider bus service will start running from Teneriffe through the CBD to West End on a 10 minute interval, vastly improving non-car movement.
Will prices rise again? Will investors find new reward from rents returning to an upward trend?
The only sure bet for 2010 is that 20/20 hindsight will count for nothing. If the new year presents the right opportunity for you maybe it’s time to act on it…
Tags: Brisbane house prices, Brisbane rents, interest rates
Posted in Brisbane landlords, Brisbane's rental market, Brisbane's sales market, trends in Brisbane property | No Comments »
Posted by Rob Honeycombe on 8 April 2009
So the Reserve Bank dropped official rates yesterday and we now have a cash rate of 3%, the lowest since 1960. What’s next from the government for property? We all know confidence remains low but (while not wanting to talk things up) the worst may be over for real estate. In March the major property web portals had another big jump in traffic. Almost 5 million visitors went to realestate.com.au, up 11% on the same time last year.
Some markets (but not all) are witnessing more sales. In making the rate cut announcement the Reserve Bank’s Governor confirmed there’s been more activity. “Demand for credit is weak overall, though credit for owner‑occupied housing is picking up”, he said. The chatter about the market right now is getting more positive. The big surge of course has been from first home buyers, keen to take up the $7000 boost to the usual grants. In the last quarter of 2008 the govt handed out 7,659 FHOG giftbags, up a whopping 39% on the previous 3 months. And we can’t help wondering if Swan and Rudd will feel that when the boost offer expires on June 30th it’ll be time to shift their support to another market.
Reserve Bank deputy Ric Battellino might agree. He last week told a Brisbane seminar the grant’s benefits could quickly be eroded. “By all accounts the bottom end of the housing market has picked up a lot in recent times and it doesn’t take long for the average house price to increase by $20,000 and leave the homebuyers no better off than they were before.” Market analyst Michael Matusik is opposed to the grant. “The FHOG is inflationary, distorts the normal cycle and creates few new homes over the longer term.” He argues in a time of undersupply we should have incentives to build new housing.
Some commentators worry that removing the first home boost will punish the lower end of the market. But our view is there’s a whole bunch of forgotten buyers on the sidelines getting closer to acting. Investors might just be the next busy audience as they recognise the opportunities on offer.
How should the government support the housing market? We’d love to hear your comments…
Tags: Brisbane home prices, Brisbane housing supply, first home buyers, interest rates, Michael Matusik, Reserve Bank, www.realestate.com.au
Posted in Brisbane's sales market, property taxes and rates etc, trends in Brisbane property | 1 Comment »
Posted by admin on 3 February 2009
From www.brisbanetimes.com.au today: Interest’s rates are at their lowest in 45 years with the current cash rate slashed to 3.25%. Today’s announcement will save the median South Brisbane apartment owner with a typical 30-year, $569,000 mortgage about $340 in monthly repayments. All 4 big banks have today confirmed that the rate cut will be passed on in full. We’re expecting that this additional reduction in official rates will see even more buyer’s return to the market.
Tags: interest rates
Posted in South Brisbane and South Bank | No Comments »
Posted by admin on 5 March 2008
The announcement of a further 0.25% interest rate rise has predictably drawn comment that recent strong property sales volumes will slow. And we agree. There’s no doubt buyer confidence in the market will ease because this is exactly what the Reserve Bank needs. To rein in inflation the RBA needs you and I to put our wallets away. But in the face of this co-ordinated campaign to slow property sales we thought it worth reviewing some of the supply and demand issues behind Brisbane’s solid property price growth.
More people require more homes, and the ABS tells us our national population grows by 1 person every 1 minute and 42 seconds. New arrivals off the plane pretty much cancel out deaths, so every time a doctor slaps a new-born bum our country needs more homes. Queensland was the only state last year to record significant population growth (approx 24,000) while NSW the only to record a big drop (approx 24,000 – if only they would support our Origin team once they got here!).
What about ability to borrow and repay a loan? Our unemployment rate dropped again in January, now at 4.1%. And in the year to November our wages were up 5%. There’s no doubt interest rate rises will put home ownership out of many people’s reach, and these people will continue to rent, adding pressure to that surging market.
On the supply side Queensland’s building approvals dropped almost 6% in December and nationally we had a 3% drop in investment housing finance in the same month. The Housing Industry Association says we’re undersupplied by 20,000 homes and the prices of new homes are continuing to rise. In its recent HIA Trades Report it records all residential construction trades as being in short supply with SE Qld one of the most severely affected by skills shortages. If you can’t find a sparkie to fix anything it’s because they’re rated as “critical short supply”. Booms in mining, infrastructure works and commercial building are all forcing construction prices higher.
Overall we have more people earning more money needing more homes, with those homes costing more to build. In areas like Brisbane’s inner city this situation is at its strongest. So while the RBA wields its ‘rates sabre’ the decision to not buy will for many be based on fear, that strongest of investment emotions.
For those who understand the strength of demand and scarcity of supply, and recognise an opportunity, this could well be a great time to buy.
Tags: Australian Bureau of Statistics, Brisbane housing supply, Housing Industry Association, interest rates, population growth Brisbane, Reserve Bank, unemployment rate Australia
Posted in Brisbane's sales market, trends in Brisbane property | No Comments »
Posted by Rob Honeycombe on 27 December 2006
Wondered why it’s so hard to find a plumber?! Latest stats out show Australian property owners are continuing to spend big on upgrading their homes. For the third time in a row major renovation spending (substantial work requiring licensed contractors) rose in the September quarter. More than 10,300 households spent almost $900 million, the highest amount in two years, adding to the pressure on construction prices that’s preventing new housing supply coming online. Secure in their jobs but possibly spooked from moving by interest rate rises, home owners seem content to keep investing in improving their homes.
The resources boom has already sucked large numbers of Queensland tradies out to the mines – one mining town mayor says their key recruitment criteria is a heartbeat! – and while long overdue, new Queensland government infrastructure works are adding to construction industry demands. One major Brisbane plumbing contractor told us he’s knocking back 20% of requests due to staffing shortages so for your leaking tap and general maintenance the days of ‘getting a few quotes’ seem gone for now!
Our property managers keep the best tradespeople available by ensuring easy access to the home, paying them every week, and giving them plenty of info on the problem ahead of time. Renovated homes will improve owners’ lifestyles and their suburbs’ median sale prices, but with inner Brisbane’s population growing strongly what we really appear to need is a few shiploads of skilled tradespeople to build us new homes and apartments!
We believe the continued growth in construction prices can only result in a significant surge in property values where housing demand is at its strongest. The price differential between established and new is just not sustainable – and we don’t see those plumbers cutting their prices anytime soon!
Tags: construction costs Brisbane, interest rates, population growth Brisbane
Posted in Brisbane's sales market, architecture and renovation | 1 Comment »
