Posts Tagged ‘Adelaide’

RP Data – Rismark Home Value Index Release

National property values jumped by almost 2 per cent in August in the largest monthly movement since the RP Data-Rismark Home Value Indices began in January 2005. 

Using the rpdata.com (ASX: RPX) property database, which is Australia’s largest and includes over 170,000 sales during the first eight months of 2009, Australia’s housing recovery solidified during the month of August with strong capital gains registered across the country despite evidence of fading first home buyer numbers.

According to the “market-leading” RP Data-Rismark National Home Value Index (see Background on p4), home values in Australia rose by an exceptional 1.9 per cent during the month of August. This brings cumulative capital growth in the first eight months of 2009 to a better than expected 7.9 per cent. This is also the single highest monthly index result since the RP Data-Rismark National Home Value Index began in January 2005.

According to rpdata.com research director, Tim Lawless, the August results surprised on the upside and are indicative of very high levels of buyer confidence combined with low levels of listings.

“These buoyant conditions sit in striking contrast to the same time last year when values were falling, less than half of the auctions held cleared and sales volumes were at rock bottom.  We are now seeing home values rising at a solid rate, almost 80 per cent of auctions are clearing, and sales volumes have bounced back significantly”, Mr Lawless said.

Rismark International managing director, Christopher Joye, added, “Australia’s housing market is being underpinned by the strongest population growth since 1971, record housing shortages, historically low mortgage rates, better than expected employment outcomes, and one of the world’s most profitable banking systems.”

Australian home values have now risen 3.8 per cent past their February 2008 peak. This rebound followed peak-to-trough falls in national home values of just 3.8 per cent in 2008, which compares exceptionally well with the 15 per cent and 30 per cent house price declines seen in the UK and US, respectively.

Dispelling concerns that the recovery is limited to first home buyers Mr Joye commented, “In contrast to claims that this is a first time buyer bubble, the cheapest 20 per cent of suburbs in Australia have actually under performed both the mid-priced market and Australia’s 20 per cent most expensive suburbs since the housing market bottomed in December 2008.”

“As recently noted by the RBA, all major lenders now require a minimum 10 per cent deposit and are applying the strictest credit standards we’ve seen in over a decade. Australian housing credit growth has also been running at levels that are extremely low by historical standards and noticeably less than the growth experienced in the 1991 recession,” Mr Joye said.

Rpdata.com’s Tim Lawless concurred with Mr Joye and said that over the last three months the premium residential market increased in value by 4.5 per cent compared with a 3.4 per cent gain in the middle market and a 2.8 per cent improvement at the cheapest end. (Note: numbers in chart  to right show changes since December 2008 in the cheap, middle market, and expensive suburbs.)

“Despite the strong gains, the bounce in the premium sector has not been enough to offset the peak to trough fall of 9.9 per cent between February 2008 and January 2009.  Prices in Australia’s most expensive markets are still 1.1 per cent lower than at their peak.”

Mr Joye added, “While the resounding recovery in Australia’s housing market confirms our forecasts, we expect medium term growth rates to be more measured as mortgage rates normalise back to between 7-8 per cent. This would bring the cost of housing finance back in line with its 2000-01 levels, which is notably well below the searing 9.6% highs endured by borrowers in August 2008 care of the RBA.”

In closing Tim Lawless said that the upward momentum in Australian house prices is a critical economic signal from the market to builders and developers to encourage them to reinvest in producing new housing supply. This was a message reinforced by the RBA’s Dr Anthony Richards in a speech to CEDA yesterday: policymakers need to facilitate significant new investment in housing supply to alleviate Australia’s growing housing shortage, which ANZ and Westpac estimate has risen to around 200,000 homes.

“This price growth will also go a long way to comforting risk-averse lenders to start providing credit again to developers, which has been one of the main bottlenecks on the supply-side. And it will stimulate the reallocation of resources away from other sectors of the economy into much-needed housing investment.” Mr Lawless said.

Other key findings from the August RP Data-Rismark Index results:

Unit values (+2.1 percent) have marginally outperformed house values (+1.8 percent) in the month of August. Over the course of 2009, units (+8.5 percent) have also generated slightly higher capital growth than houses (+7.7 percent).

Most capital cities recorded robust gains in the month of August with every single city experiencing rises in home values during the first eight months of 2009.    

After several years of subdued growth following the end of Australia’s last housing boom in 2003, which saw Australia’s “house price-to-income ratio” fall by nearly 20 percent through to December 2008, home values in the two major capital cities, Melbourne and Sydney, have led the recovery in 2009 with total capital gains of 11.6 per  cent and 8.6 per  cent, respectively.

Following Melbourne, Darwin has been the next best performing capital city with growth of 9.7 per  cent in 2009. Interestingly, Darwin also continues to deliver the highest rental yields, implying that the market may have room for further growth.

Home values in Canberra (+6.7 percent), Brisbane (+5.2 percent), Perth (+4.1 percent) and Adelaide (+3.1 percent) have also realised sustained gains in 2009.

As RP Data-Rismark correctly anticipated, residential real estate in Perth has experienced a recovery in 2009 after a period of falling prices since September 2007. While Perth dwellings have recorded 4.1 percent growth in the first eight months of the year they still remain 3.6 per  cent below their September 2007 peak.

National rental yields have softened slightly given the strong capital growth with the gross annualised rental yield for units being 5.1 percent while house rental yields are slightly lower at 4.3 percent.

This article republished from RP Data – Rismark

Watch this Youtube Video about how Raine & Horne Glenelg can help you with all of your investment needs…

Monika Bonet is the Principal of Raine & Horne Glenelg, your Glenelg Real Estate Agent and Property Management expert.

Monika Bonet, Principal of Raine & Horne Glenelg offers these tips how to bid successfully at Auction;

 1.     Attend Similar Auctions Prior

Attend as many similar auctions as you can in the weeks leading up to your auction. This will allow you to better understand the system and observe your Auctioneer in action. It’s not in your best interests to be a complete novice at the auction, during which you plan to make a purchase commitment.

 2.     Check out the Venue

If the auction is to be conducted ‘in-rooms’, locate the venue and any transport or parking facilities well prior to the auction date. This may avoid a last minute panic and the possibility of missing out on the property that you’re interested in purchasing. 

 3.     Arrive Early

Arrive early and get comfortable. If you need help, bring along a friend or an agent to bid on your behalf. In this instance your proxy bidder must register or otherwise your bid could be thrown out. Also by arriving early you can strategically locate yourself so you ca clearly see the Auctioneers and the other bidders.

4.     Establish Your Financial Limit

Establish a limit of how much you’re willing to spend on a property, and be prepared to walk away when (or if) the bidding exceeds your limit.

 5.     Understand the Bidding Process

Get a feel for the bidding process before you start. If you’re not sure get a Licensed Land Agent to bid on your behalf.

 6.     Start Bidding When Bids Are in Your Price Range

Start bidding when the figure is below or within your price range. Don’t be shy about opening the bid at a figure to suit you, and don’t hang back until the last bid. You should participate within your price range or you could miss out.

 7.     Observe the Bidding Increments

The Auctioneer will generally set the bidding increments, depending on the price of the property and the pace of the bidding.  Bid in these increments and don’t be too eager to raise the price unnecessarily.

8.     Know What’s Happening Around You

Know what’s happening around you. Don’t hide otherwise the Auctioneer may miss your bid.

 9.     Bid Strongly

 Bid strongly with confidence! This shows people that you’re serious about buying.

 10.  Bid Quickly

 Bid quickly in the later stages of the auction when the bidding slows down and there are only a few bidders remaining. If you hesitate, others think it’s your last bid, and this encourages them to keep going. (Likewise, underbidders should realise that others bidding quickly and aggressively are trying to scare you off).

 11.  Don’t wait until it’s declared ‘On The Market’

 If you have been advised not to bid until the Auctioneer announces that the property is ‘on the market’, you may have been badly advised. Most professional auctioneers won’t say this as the terminology is false. After all, the property has been on the market since the day the signboard has been erected and the first advertisements appeared either electronically or in print.

 12.  What happens just before the hammer falls “SOLD”?

When the bidding slows or stops at a figure acceptable to he vendor, the auctioneer will announce that the property is to be sold. As a precaution and to assist underbidders and any ‘last minute’ bidders, the Auctioneer will give the first call and repeat the price, then a second call repeating it again, and finally, a third and final confirming that the property is sold. The Auctioneer then brings the hammer down “SOLD”!

 13.  What’s the difference between a property being “Passed In”, compared to “Held Over”?

When the Auctioneer closes an auction and announces that the property is “Passed In”, this means that the last auction bid has not met the Vendor’s expectations, and the auction is closed. This is very different to when the Auctioneer announces that the auction is “Held Over”, in this instance the Auctioneer is only suspending the auction, whilst negotiations continue between the highest bidder and the Vendor can take place. If a successful outcome can be reached the Auctioneer will then re-open the bidding later in the day, and the bidder will be able to make another bid (and if acceptable to the Vendor) the Auctioneer will give the first call and repeat the price, then a second call repeating it again, and finally, a third and final confirming that the property is sold. The Auctioneer then brings the hammer down “SOLD”! This means the property can be SOLD under Auction Conditions.

 14.  What Do You Need To Do Before You Bid At Auction?

 Prior to bidding at auction you should;

• Have your finance approved.
• Have any building or pest inspections carried out on the property.
• Have your deposit accessible, (usually 10% of the purchase price) as you will have to sign the contract and pay the deposit if you are the successful purchaser.

 15.  Do You Need Further Help?

 If you’re not confident of bidding or you need the confidentiality of bidding, call Monika Bonet of Raine & Horne Glenelg, we can bid on behalf of you as a professional service.

Should I sell by Auction… which method of sale should I use?… read more

Watch this Youtube Video about how Raine & Horne can help you at Auction…

 

Monika Bonet is the Principal of Raine & Horne Glenelg, your Glenelg Real Estate Agent and Property Management expert.

Q. What are the benefits of trading down to a smaller home?

A. Also known as ‘down-sizing’, trading down generally involves selling the family home and relocating to a more manageable alternative. It often involves shifting to a more affordable home to free up capital and is a popular strategy with older Australians approaching retirement and sea changers.

While freeing up some equity can be an attractive proposition, downsizing to a cheaper home could affect any Centrelink entitlements, as a home isn’t included in the means test for the age pension. However by shifting the additional funds into a Centrelink-compliant income stream, like a complying pension, it is possible to maintain social security benefits. It can be a little complicated, so I would advise a meeting with a financial consultant or accountant before making a move.

So, as long as you consider the possibilities, downsizing can help you free up some cash and into a more comfortable lifestyle. If trading down means moving to a new region, town or suburb, the trick is to do some preliminary research. This might involve taking a holiday to a new location – at which point you can investigate the local amenities such as hospitals, schools, transport and leisure activities. A local Raine & Horne real estate agent will be able to help with the features and benefits of locations under consideration.

Q. My agent wants to put a price range on my property rather than a fixed price. Why is this?

A. To ensure a home sells faster, it’s important to take price out of the equation. Auction is often the best method for doing this. However, where an auction isn’t an option, a price range strategy can be a useful alternative.

Choosing a range may increase buyer enquiries and then it is your agent’s job to negotiate the best possible price. Also, the fixed price method doesn’t allow vendors scope to negotiate – except down.

Also if a buyer offers a price, which is rejected, the price range must be adjusted by your agent. Failure here means running foul of the Office of Consumer and Business Affairs (OCBA).

This Newsletter Article was brought to you by Raine & Horne Glenelg – your Glenelg Real Estate Agent and Property Manager.

Check out all the defence and construction jobs in Adelaide … (forget about reading this in the local rags won’t print this good news story as they only sell papers off doom & gloom stories).  

 You just can’t deny the jobs coming off all of the major projects kicking off in South Australia, right now.

 

This story was brought to you by Raine & Horne Glenelg – Your Glenelg Real Estate Agents and Glenelg Property Management Experts – We’ll look after You.

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Buying and owning your first home can be complicated. Monika Bonet Principal of Raine & Horne Glenelg explained; “First home buyers can do well in the property market right now, with lower interest rates, favourable house prices and the government’s extension of the First Home Owners Grant till September 2009, but buying a first home can be a very daunting experience for most first home owners. I have found there are three common mistakes that first home owners make. ”

Here are Monika’s top three common mistakes every first home owner should try to avoid.

1.                  Not setting a budget and knowing how much you can afford?

Do a budget. Work out how much can you afford. There is no point looking at mansions if you can only afford to buy a unit. As a general guide, your mortgage repayments should not exceed 30 percent of your before-tax income.

2.                   Not researching the additional fees like stamp duty and mortgage insurance?

When it comes to buying a home there’s more to it than just a deposit. To avoid any last-minute surprises, you should allow to add in approximately 5% of the purchase price for fees like stamp duty, conveyancing fees and mortgage insurance. Get your mortgage broker or bank to give you a breakdown and estimate of these fees before you make offers.

3.             Not doing your homework?

Many first home owners don’t do their homework before they start looking. To get the best home at the lowest price, you must know the median prices for the suburbs you can afford to buy in. Also, you must be clear what type of property are you after. Are you after a house, or a unit? Be clear on this as it makes it easier by limiting your search to a few suburbs.

This story was brought to you by Raine & Horne Glenelg – Your Glenelg Real Estate Agents and Glenelg Property Management Experts – We’ll look after You.

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