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Posts Tagged with Michael Matusik

Posted by admin on 25 November 2011

Home buyers love a good “forced sale” and we’re often asked if we have any mortgagee sales pending. But we just aren’t seeing that many in Brisbane’s inner-city. And a recent article from researcher Phil Ruthven of Ibisworld might help explain. “In the middle of the year, the nearly 9 million occupied households in Australia were valued at a net worth of $6.3 trillion – an average of $714,320 per household.” That’s a fairly impressive level of net assets and he comments that our average wealth continues to climb.

Brisbane-based property commentator Michael Matusik  adds some valuable insight into why we’re not witnessing banks stepping in to sell up property: “Our higher saving rate is well documented, but exactly how it is being achieved doesn’t get much commentary.  It is not just a simple case of saving more money.  For the most part, Australians are saving more by repaying more than the minimum on their housing loans.”

Matusik never shirks from offering an opinion. “The fact that we are paying off our mortgages faster is often ignored by the doom and gloom merchants who predict a repeat here of what occurred overseas, and continue to preach about the pending mother of all property crashes.  Yet, according to AFG, the average new loan-to-value ratio is a comfortable 67% and the latest ABS figures show that house prices fell just 2.2% across the Australian capitals over the last twelve months.  Yawn.  And yet we keep on reading about mortgage stress and impending doom.”

Bargain hunters might get tired of waiting…

Posted by admin on 6 September 2011

It’s hard to imagine a time when we didn’t have full-streaming real estate data bombarding us. Now there’s a number of national and local commentators producing emails, blogs, newsletters, reports and updates. So to help you digest it all here’s a Cook’s tour of the latest:

RP Data say Brisbane’s dwelling prices went down 0.4% in July (or $1,700) for a total 6.6% dip over the past 12 months. Brisbane unit owners can punch the air – your median price apparently rose 0.4% in July, while house-owners lost 0.6%.  Their Tim Lawless says the upper end of the capital city markets is being hardest hit and times on market have increased across the board.  “If these soft trends persist, the Spring Selling Season is likely to open up some attractive investment opportunities for prospective buyers. In contrast, the selling environment is likely to be challenging for vendors, particularly if they have unrealistic price expectations,” Mr Lawless said.

Analyst Michael Matusik says the data suggests the worst may be behind us, with the monthly and quarterly results starting to trend upwards. “Even Brisbane, with the impact of the recent flood weighing down its property market, has fallen just 2.6% or by $11,600 since January.  The Australian sharemarket can fall more than this in a single day.” Matusik says most property owners are still ahead. “Just one in 14 resales across Australia over the last decade made a loss. Importantly, close to half of the sellers since early 2000 made an annual gain of over 10% per annum.  Keep in mind that capital growth can be deceptive as most measures exclude inflation, costs, taxes and charges.  But still, such a positive result is encouraging.”

And first home buyer may be back in the market and taking advantage of good buying. Home loan approvals from first-home buyers jumped to 35% in June, compared with an average of 27%, according to mortgage broker Mortgage Choice. Mortgage Choice says a drop in first-home buyers during the last financial year made it hard for existing home owners to sell before moving onto their next property. Mortgage Choice CEO Michael Russell attributed the fall in numbers to the ending of the boosted first-home owners’ grant, which he says brought forward purchases in 2009 and 2010.

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.

Posted by Rob Honeycombe on 18 January 2011

photo from Brisbane Area Flood Photos & Info on Facebook

Brisbane is picking itself up from possibly our worst natural disaster. Lives were lost and damage is significant. Two of the Bees Nees team suffered flooded homes this past week so we won’t be understating what’s been a major event for Brisbane.

With the media’s frenzy of interest over the past 2 days we do think some common sense is getting lost in an increasingly emotional debate about home prices. There’s no doubt homes that were completely flooded will see a drop in value. We’ve talked to some old heads in our industry, including two who worked in the aftermath of 1974’s floods, and they offered an informed opinion on how much that might be. We also spoke to the head of a national property valuation firm and interestingly he offered the same number – “up to 20 or 25%”.

This is a big potential reduction and all agree luxury riverfront homes will be worst hit. Cheaper properties might not drop as much, and buying a home that flooded in 2011 might soon be comparable to living on a main road or a railway line: you put up with it to have a better home for the same price.

The scaremongering talk in the media of 50% plus drops is just not based in fact, and irrational fear can follow. Will some flooded home owners panic-sell? Maybe. Will bargain hunters be waiting? Of course. But for most owners of flooded homes we’d expect they will clean up, move back, and accept that their property’s value will not be the same. Based on the 1974 experience there won’t be half-price-homes nor a large number on the market.

Partial flooding might only have a relatively small impact on prices. Houses that had water in their yards only, apartments that stayed dry but with basements that flooded – what will buyers make of these? It’s too early to really know, but early signs are that the appeal of inner city living is still stronger than ever and many buyers will accept some risk to be a part of this.

In 1974 no-one knew what flooded and painted lines on the streets recorded the high water marks. Today there’s a huge number of aerial photography sites and Flickr, YouTube and Facebook pages that have catalogued the damage. Home buyers might actually start using Council’s flood mapping info, launched after our last major flood event in May 2009. (Interestingly we had a third of our average annual rainfall on that one day, a reported 15% of homes were affected and 20 months later it’s already been forgotten by many of us…)

Will “dry” properties experience a boom? Based on the minimal true effect on our housing stock our ‘old heads’ just don’t see enough reason for a price spike. We are in for a surge of spending on renovations and some commentators believe this will give the local economy a huge shot in the arm. Market analyst Michael Matusik believes there could be a silver lining with the flood aftermath and renewed civic pride a “key ingredient to restore long term confidence.”

A lot of Brisbanites are suffering right now and it’s definitely not business as usual for inner-Brisbane real estate. But when the flood effect on home prices is debated at your next weekend barbecue we’d encourage you to see through the hype and consider why homes in these areas have always been so sought-after by home buyers. How much of that has changed?

We’d love to hear your opinions.

Posted by admin on 14 January 2011

It’s too early for us to speculate on what might happen to Brisbane’s property market post-flood. But one of this city’s better-respected market commentators says there might be a silver lining. Here’s an email from Michael Matusik received this week.

“The Queensland flood has sadly led to tragedy, with the loss of several lives and billions of dollars in property damage.  I debated with myself, especially given the awful events in Toowoomba, whether to comment, but too much of the coverage, especially concerning the economy, is overly negative.

These floods, catastrophic as they are, can ultimately have some positive results, setting up not only Queensland, but much of Australia, for an economic boom in the years to come.  This, perhaps, is the circuit breaker that has been missing – this year’s probable factor X and a key ingredient to restore long term confidence.  We have been waiting for a GFC-induced Armageddon, which hasn’t arrived; but instead of getting on with our lives, many of us still have our fists clenched ready to fight something, anything – even shadows.  But now a fight has arrived, and after it all settles down, the rebound is likely to be very strong.

The stoic nature of those directly involved heightens one’s pride is being Australian and is resonating around the country and overseas.  These images, which are being beamed around the globe, will have more impact than any artsy jingle or smart-arse tourism one liner.  Even the big-O’s recent visit cannot top this.  Mark my word, tourism down under will improve once this calms down; and not by those who want to gawk at the damage but because people travel to places with character.  This event, and the way those affected are handling it, reinforces our image overseas – tough, can-do, stoic, mateship and a land of extremes.

Yes, the short-term economic negative impacts will be high but there is also a sliver lining.  Flood assistance is costly, but it is generally a one-off, upfront expense.  Whilst inflationary, the good news is that these floods are unlikely to influence the RBA’s thinking on interest rates.

Global demand for coal remains strong, contract prices are on the rise and once the Queensland mines are pumped dry and the coal is loaded onto ships, it will be worth more, helping to offset any losses.  Similar factors are at play for the farming sector.  Yes the floods have destroyed crops, but also increased soil moisture for the future.

To a large extent, the effect of the floods on the economy is a timing issue, slowing down growth now, but adding to it once rebuilding efforts are underway.

Sadly, it is breaking our hearts, but not our will.”

Posted by admin on 30 July 2010

We attended a Macquarie Bank seminar this week where their Rod Cornish detailed historical stats and some forecasts on our property market. One tidbit that stood out was this gem: in the past 25 years Brisbane’s annual median house price went down just twice. In 1993 and in 2009. So in 23 of 25 years our median price went up.

There’s good reason residential property is considered “safe as houses”.

Ask a banker which security they’ll lend on. Residential property is king to them. We understand the merit of a balanced portfolio but do sometimes wonder if some investors have simply forgotten the strength of property?

For those of us too time-poor to track and research, property doesn’t rely on scientific analysis to determine the right time to buy or sell. Rismark’s Christopher Joye says price volatility of property is just 3 or 4% compared with 19% for shares. It’s no surprise you may be feeling giddy watching the All Ords of late.

Matusik Property Insight’s Michael Matusik says Australians on average hold 80% equity in their dwellings, and higher for their principal place of residence. There’s no great risk in that and shows the strength of our nation compared to others. Our love affair with bricks and mortar does continue, even if some of us have had a wandering eye in recent years.

Posted by admin on 5 May 2010

Don’t you love statistics?! Brisbane property researcher Michael Matusik has released some ABS data on Australia’s population growth in 2008-2009 and depending on your preferred interpretation the nation’s fastest growing city is Brisbane, Melbourne and Perth!

Brisbane City is the fastest growing municipality with a 21,161 jump in population for the year. (Now 1.05 million happy Brisbanites who all drive the same way as me at 5.30pm on a Friday!)

Melbourne (the big city not the little council area) grew by 93,478, making it the fastest growing capital city by numbers, with greater Brisbane 4th with 52,104 new residents.

Greater Perth can claim the title of fastest capital city by percentage, with a 3.2% jump!

So there it is – clearly Brisbane IS still the fastest growing city in Australia!

Posted by admin on 10 March 2010

We don’t often repeat material from other people on this blog, but the below notes from prominent Brisbane property commentator Michael Matusik are as topical as they come and deserve repeating as part of the ‘debate’.  The Government wants to debate the value of population growth to our city/state/nation, but unless we erect a big fence along Australia’s coastline how would we ever stop it?

Matusik Missive – Population debacle
10th March 2010

“I was involved in last week’s Great Growth Debate held by the PCA in Brisbane. This was held as a forerunner to the Queensland government’s own debate about the same subject, to be held at the end of this month. The PCA was hoping that the “pro” side of the debate would get a better airing if they ran their own shindig. The jury still remains out on that note.

In recent weeks, I have been asked on numerous occasions what I thought was the purpose of the government’s upcoming debate. My answers included – to distract and confuse the public; to been seen to be doing something; and to remove the sale of public assets off the media’s agenda for a while. I might have even said “bogan” public, which sounds harsh, but too many (and increasingly so) of our fellow citizens are not interested in any serious debate; readily swallow the spin and are more interested in what tattoo they are going to get next, rather than how the place is run. Get rid of compulsory voting if you ask me. But I digress.

As I said in my short presentation at the PCA gig the other day, it is a waste of time debating growth – it will continue to come. We need it, and even if we wanted to stop it (or even slow it down), we are largely helpless to do so. Even “planning for growth” is a waste of time – we have more plans that you can poke a stick at. What we should be debating is “how to accommodate growth”. We need implementation. Action is what is missing, and so too is political fortitude. Whilst I agree more with Mayor Pisasale’s ideals, I also admire Mayor Abbot, for at least he stands up for what he believes in and is prepared to be voted out come the next election if his constituents disagree.

What the market wants – and by, market, I mean residents, business, investors and the development community – is certainty. Strong leadership would have conducted this growth summit before the redrafting of the SEQ regional plan. The same would apply to the koala issue; ban the banning; potential changes to land tax and the sustainability declaration, to name just a few. Future planning matters should be dealt with in an organised way, such as the prescribed five year review of the regional plan.

But at almost every turn these days the Queensland government introduces a bill into Parliament, without adequately consulting the public. Sometimes, as in the sordid land tax case, previous decisions by the court are sought to be overturned. This uncertainty broadcasts loudly to potential investors in the state, to whom a stable legal system, with an observance of the rule of law, is a precondition to any investment. And many are not happy, Anna!

Back to accommodating population growth. I suggest the following measures:

Ø Decentralise the workforce out to major greenfield estates and beyond.

Ø Encourage more competition by forcing the major developers to release stock rather than drip feeding the market. They deny it, but that is exactly what they do.

Ø Get urbanisation to work by having minimum density targets, on a sliding distance scale, around our key pieces of infrastructure.

Ø Shorten, and make development approvals easier to get. ULDA gave themselves an approval in six months. That should be the benchmark now. Proof, as they say, is in the pudding.

Ø Limit local resident involvement to architectural, land use and sometimes tenancy matters only and not in the overall quantum of a new urban development.

In order to do such, a strong top-down approach to planning is needed. This takes political guts. Bottom-up planning, where NIMBY-ism rules the roost, is not working.

Population growth is coming. We cannot stop it and I suspect that it will accelerate (in Australia at least) over coming decades rather than slow down.

Unfortunately, “development” today is a dirty word in Queensland. What is even more despicable is that the government does not appear to see land as a significant asset. Nor do they understand – well, at least it is not portrayed as such to the voting public – that value adding to our land (i.e. development) creates wealth, jobs and a more sound economic future for Queensland.

In the lead up to the government population growth summit at the end of March, I hope that these thoughts or similar get an airing. In my mind, it is vital that they do.”

Share your views on “Michael’s Blog” at www.matusik.com.au

Posted by Rob Honeycombe on 8 April 2009

first home buyersSo 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…

Posted by admin on 4 December 2008

 For those of you who love their property stats, here’s a round-up of some of the latest on our market. According to RP Data Brisbane prices are down 1.7% for 2008 with our auction clearance rate just 25%. The average time it takes to sell a house is now up to 47 days and apartments are 44, with an average discount from original listed price of 6.1%. Rents have risen strongly this year – up 10% for 2 bed apartments and 14% for 3 bed houses in the inner suburbs, according to the Residential Tenancies Authority. The Real Estate Institute of Qld says the vacancy rate is 1.3% (down from 2.6% in June 2007), while in our office it’s currently 0.5%.

The ABS has just released population data for the year to June and Queensland added 98,000 residents. QIC’s Doug McTaggart says this will grow as Sydney house prices recover and New South Welshpersons creep over the border. Valuers Herron Todd White report the inner city’s market is holding up relatively well and “staying near the CBD will certainly help keep property blues at bay.” The Reserve Bank yesterday dropped official interest rates by another full point to 4.25%, some commentators are tipping it’ll go to the 2’s, and analyst Michael Matusik comments that “every 0.25% fall translates into a household being able to push up the price of housing by 2% for the same level of repayments”.