November 2011
15,000 properties on WA market, 25% above the average, builders and developers squirming and offering freebies
November 30, 2011 by Editor · Leave a Comment
Builders, estate agents and developers are using unprecedented measures to attract customers with incentives such as free iPads, cars and even homes.
The Real Estate Institute of WA said the freebies and competitions were being used by companies to stand out from their competitors in a tight market.
There is currently an oversupply of homes on the market, with 15,000 properties vying for a new owner, which is 3000 more than the traditional average. It takes an average of 79 days to sell a property, which is well above the 31 days it took in the June quarter of 2006. (more…)
RP Data make misleading claim that Australian housing affordability is back to 2003 levels
November 30, 2011 by Editor · Leave a Comment
RP Data are at again and spruiking the Australian property market. Christopher Joye is claiming that housing affordability is back to 2003 levels and a sustained housing recovery is imminent in 2012. Aagh hello Chris are you familiar with the global financial crisis and the impact on our banking sector? Not sure if this fixation on talking up the Australian property market is called denial? Perhaps just good old fashioned smoke and mirrors?
Joye claims “RP Data-Rismark’s estimate of the national median dwelling price across all regions and dwelling types has fallen from a recent high of $420,000 to $400,000 today. So the cost of Australian housing is unambiguously lower than it was one to two years ago. Concurrently, discounted fixed and variable mortgage rates are now well below their long-term historical averages while disposable incomes per household have been expanding at a healthy 8% per annum pace, according to the ABS’s National Accounts. This has resulted in Rismark’s national dwelling price-to-income ratio falling to its lowest level since before 2003. It is little wonder that first time buyers are returning to the market”. (more…)
Western Australian median property prices drop 7.4%, country WA land prices drop 9.5%, lot creation drops 28%: Landgate State Government data
November 30, 2011 by Editor · Leave a Comment
Are you looking for objective and reliable market data. The most reliable and accurate information is that provided by the Valuer Generals Office in each state of Australia.
The Valuers General Office and the State Government based residential property data provider, is the number one source of information for consumers. All property sales that are settled must be registered with the Valuers General office as required by law. This is referred to as ‘lodging land title dealings’ and there is a Settlement Conveyancing Act in each state of Australia , which guides this process.
The Valuer Generals Office and Land Titles Office in each state is subject to State Government legislation, Public Sector Legislation and Professional Standards Legislation. There are strict legal guidelines, so the information can be accurate and reliable.
A new development is the National Electronic Conveyancing System (NECS) which will benefit consumers and provide a national centralised property database. This database will be subject to relevant State Government legislation, National legislation, Public Sector legislation, Professional Standards legislation and National Electronic Conveyancing System legislation.
Check out the most recent Landgate reports below. (more…)
The Australian housing and Chinese housing connection: Chinese downturn and heavy investment in Australian property
November 30, 2011 by Editor · Leave a Comment
While most of Australia’s commentators are focusing on Europe and the US, the most immediate danger for Australia is what is happening in Hong Kong and China, because it goes straight to the heart of Sydney’s – and to a lesser extent, Melbourne’s – dwelling market.
And of course, lower Chinese demand has already depressed iron ore and other commodity prices.
Mainland Chinese have been pouring about $2 billion annually into the Sydney apartment market and in the vicinity of $1 billion into Melbourne. But much of that money is coming out of big profits on the Chinese mainland apartment market. There are now signs of weakness in the Chinese buying of Sydney apartments because of the problems in China and the fall in the copper price. Many Chinese apartment developers have been using copper as a security for their property loans. (more…)
Australian first-home buyers encouraged to wait until global recession has stabilised: why buy now if property prices may fall further?
November 30, 2011 by Editor · Leave a Comment
The article below encourages first-home buyers to buy before the January 1 deadline. However we encourage first-home buyers to wait until the financial crisis in the Eurozone and the USA stabilises. The Chinese economy is contracting and a recession in Asia is possible . Australian mining resource exports may decline further and this may impact on the Australian economy. Credit availability and credit conditions may tighten and this will affect the Australian property market. Australian banks are 40 per cent exposed to global sovereign debt so this will affect the Australian banking system.
If you are a first home buyer and you are considering taking out a large home loan with a high loan to value ratio (LTVR) be very careful. There is a distinct risk that your first home may have lower value in 6 to 12 months time. Depending on your LTVR you may find you are in negative equity territory over the next 1-2 years. Buying a first home now, could be high risk.
You may find that prices for established homes will be lower over the next 1-2 years. Imagine this. The price for your property is $24,000 lower than today. Or you negotiate a much lower price by $30,000-$40,000, because the seller is distressed and highly motivated. The outcome is that you don’t have to rely on the stamp duty exemption and you can take out a much smaller loan….. Most importantly beware of the global financial crisis and falling property prices in Australia. (more…)
White House Summit Lacks Progress With Absence of German Chancellor and French President: Eurozone US financial concerns deepen
November 29, 2011 by Editor · Leave a Comment
The United States said Monday that Europe needed to act “now” with force and decisiveness to attack the eurozone debt crisis, as President Barack Obama hosted a summit with top European officials.
The US-European summit at the White House came amid stark new warnings on the depths of the eurozone turmoil and renewed fears that the exposure to Europe of US banks could rebound and harm the slow US economic recovery.
“This is something they need to solve and they have the capacity to solve,” said White House spokesman Jay Carney.
“Our position is and has been that it’s critical for Europe to move with force and decisiveness now, particularly with new governments coming into place in Italy, Greece and Spain.” (more…)
OECD warns Britain is facing devastating financial crisis and double dip recession: Eurozone melting down
November 29, 2011 by Editor · Leave a Comment
Britain should brace itself for a devastating financial crisis, the governor of the Bank of England warned last night.
Sir Mervyn King told MPs there was no doubt the banking system was ‘less safe’ than three months ago and might not be strong enough to withstand a eurozone meltdown.
He spoke out amid fresh warnings that the UK is set to plunge into a double dip recession.
The Organisation for Economic Cooperation and Development said the economy will shrink in the final three months of this year and the first three months of next. (more…)
NSW housing stress soars Fairfield residents show 34% mortgage stress and 51% private rental stress
November 28, 2011 by Editor · Leave a Comment
Australians for Affordable Housing (AAH) today revealed the extent of housing stress across Sydney, and the top five housing stressed council areas.
New modelling commissioned by AAH shows the Sydney Local Government areas where renters and home purchasers are struggling with high housing costs – and the figures are dire.
AAH Campaign Manager Sarah Toohey said that people in Auburn suffered most with 28% experiencing housing stress, while Fairfield had the highest proportion of people experiencing both mortgage stress (34%) and private rental stress (51%).
“Areas such as Canterbury, Strathfield, Liverpool and Bankstown all have rates of housing stress over 20%,” said Ms Toohey. (more…)
Sir Ralph Norris claims global financial crisis 2 is on its way in 2012: don’t buy property in a falling market
November 27, 2011 by Editor · Leave a Comment
Outgoing Commonwealth Bank chief executive Ralph Norris has warned that the European debt crisis has entered a dangerous phase, likening the current turmoil to the global financial crisis of three years ago.
Mr Norris said global money markets ”effectively froze” this week as Germany failed to sell the entire stock of €6 billion ($8.2 billion) worth of long-term bonds.
His comments came as the leaders of the euro zone’s key economies, France, Germany and Italy, met in France overnight to resolve differences over how to handle Europe’s debt crisis.
But Mr Norris, who retires next Wednesday after more than six years in the role, cautioned that credit-crunch conditions were returning, which is threatening to choke off funding for banks around the world.
”This has potential to be significantly worse than the Lehman Brothers collapse and the subprime crisis because now we are talking about nation states,” Mr Norris told BusinessDay. (more…)
Dow Jones Industrial Average’s worst Thanksgiving week performance since markets began in 1942
November 26, 2011 by Editor · Leave a Comment
US stocks eased lower this morning, capping the Dow Jones Industrial Average’s worst Thanksgiving week performance since markets began observing the holiday in 1942.
The Dow lost 25.77 points, or 0.23 per cent, to 11,231.78 in a shortened session, and finished the week down 4.8 per cent. Increasing sovereign debt worries in Europe and the US supercommittee’s failure to reduce the deficit were the main drivers for the week’s downdraft. The Dow has lost 7.6 per cent over the last two weeks and finished at its lowest level since October 7. It is down 3 per cent for the year.
The Standard & Poor’s 500-stock index dropped 3.12 points, or 0.27 per cent, to 1158.67. It has registered seven straight days of declines, falling 7.9 per cent during the streak.
The Nasdaq Composite fell 18.57 points, or 0.75 per cent, to 2441.51. The technology-oriented index notched its fourth straight weekly decline, dropping 11 per cent throughout the skid. (more…)
Australian house prices at risk from Europe crisis – realistic concerns and fears
November 26, 2011 by Editor · Leave a Comment
What an irony it would be if, just as our esteemed leaders finally squeezed their resources tax through parliament, there were no super profits left to tax.
If things keep heading south on world markets, the most the Mineral Resources Rent Tax will raise is a few musty old coins and some pocket fluff.
But that is the least of the government’s worries. As outgoing Commonwealth Bank chief Ralph Norris has claimed, the sovereign debt crisis in Europe is threatening to descend into a fully-fledged credit crisis where banks stop lending to each other.
The implications of another meltdown in credit markets are dire. Roughly a third of the funding for Australian mortgages comes from overseas bond markets. Were a third of the big banks’ sources of capital to suddenly dry up so would credit for housing markets here. Ergo, price drops. (more…)
Global consumer ground swell against Chinese goods and services – interesting times ahead
November 26, 2011 by Editor · 1 Comment
In these very challenging global economic times western developed countries are looking east towards China, to provide some economic hope. This asian economic powerhouse has well above average gross domestic product (GDP) and a national economic surplus. The Chinese Government has recently adjusted economic policy to control inflation and to try to manage unsustainable economic growth.
This has included manipulation of the real estate market by restricting second home ownership and tightening credit conditions. This has resulted in softening of median property prices and protests by Chinese homeowners as capital growth has flattened or is dropping in property submarkets.
Now the Chinese manufacturing sector is suffering as global demand for cheap Chinese goods is flowing through. Chinese workers are not being paid and are now protesting. In 2012 large scale factory layoffs are predicted.
It is interesting to note that in western developed nations their is a ground swell of consumer sentiment against Chinese made goods. Most countries worldwide are experiencing some level of economic slowdown or recession. Government and consumers are considering strategies to support their local economic community and support their national economy. It is not surprising to find out that consumers are suggesting to buy local goods and services. This is reasonable and rational.
Currently there is a viral message being circulated via the web and via e-mail across the globe. You will find Australian versions, US versions and other versions with the same message. Buy local. It is called ” Christmas 2011 – Birth of a New Tradition”. (more…)
Global slowdown triggers China factory strikes – hundreds of thousands of Chinese jobs at risk
November 25, 2011 by Editor · Leave a Comment
Factory strikes have spread across China as slowing orders from the West and increasing wage pressure triggers unrest.
Thousands of workers have downed tools from the factory hotspot in the east of Guangdong province, to sports and electronics plants to the south and west.
The social tension comes as manufacturing orders are slowing in China in the wake of slowing external demand from trade partners hit by the eurozone debt crisis. (more…)
Germany unmoved by French pleas for more ECB action – financial and market catastrophe predicted
November 25, 2011 by Editor · Leave a Comment
French appeals for Germany to sanction extra powers for the European Central Bank have been firmly rejected, despite warnings from politicians, economists and even the Vatican that it is the only way of “averting a catastrophe”.
Angela Merkel was unmoved by another roller-coaster day that saw Portuguese debt being downgraded to junk status, Italian bond yields pushed into the bail-out zone, and doubts cast over France’s AAA rating: the German Chancellor refused to allow the ECB to become Europe’s lender of last resort.
Ms Merkel instead used a three-way summit with France and Italy in Strasbourg to insist that new treaty powers to intervene and punish sinner states remained the key focus of Europe’s rescue efforts. She said: “The countries who don’t keep to the stability pact have to be punished those who contravene it need to be penalised. We need to make sure this doesn’t happen again.” (more…)
UK banks must brace themselves for euro break-up: Eurozone financial crisis is official now
November 25, 2011 by Editor · Leave a Comment
British banks must prepare for the worst-case scenario of a disorderly break up of the euro, according to a senior UK regulator.
Andrew Bailey, deputy head of the Prudential Business Unit at the Financial Services Authority (FSA), noted that British banks are not heavily exposed to the eurozone, but said they must prepare for some countries to exit the single currency – or a complete break up.
“We cannot be, and are not, complacent on this front,” Mr Bailey said. “As you would expect, as supervisors we are very keen to see the banks plan for any disorderly consequence of the euro area crisis.
“Good risk management means planning for unlikely but severe scenarios and this means that we must not ignore the prospect of a disorderly departure of some countries from the eurozone. (more…)
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