Investor News
Australian buyers saving pennies and hurting property market
December 22, 2011 by Editor · Leave a Comment
Lack of buying activity from retirees and wealthy professionals, in particular, is exacerbating WA’s embattled residential property market, CBRE says.
Global economic volatility and weak consumer sentiment have caused the local property sector to suffer, with massive stock levels, declining prices and no immediate recovery in sight.
The latest Residential MarketView report from CBRE suggests retirees and wealthy professionals are increasingly less active in the Perth residential market.
CBRE director, valuations and advisory services, Michael Veletta said economic volatility has particularly affected retirees, with this sector of the community seeing superannuation benefits diminish. (more…)
New reality owing more than you own: 60,000 families in Australia in negative equity
December 22, 2011 by Editor · 1 Comment
Rising property values have been an article of faith in the housing market for a generation of Australians who borrowed big as real estate prices marched ever upward.
Now, though, some buyers are finding that their homes are worth less than the size of mortgages taken out to acquire the proverbial roof over their heads.
While the percentage of home owners with so-called negative equity remains tiny – about one in fifty of the 3 million households with mortgages – the number may well swell in 2012 if home prices extend their declines as some analysts expect. The emergence of a sector of the housing market ‘‘under water’’ on their mortgages may hurt an already fragile real estate market.
Any forced sales would obviously dent individual household wealth but further drops in home prices would deter investors from buying residential properties. Ben Phillips, principal research fellow at the National Centre for Social and Economic Modelling, helped prepare the analysis which pointed to 60,000 households nationwide with negative equity. “The prospect of negative returns will certainly detract from sentiment through 2012,” said NATSEM’s Mr Phillips. (more…)
Australia in the grip of unemployment crisis with 100,000 jobs set to be slashed after Christmas: not a recipe for property recovery
December 22, 2011 by Editor · Leave a Comment
AUSTRALIA is on the brink of an unemployment catastrophe, with up to 100,000 jobs set to be slashed in the months after Christmas.
But the news isn’t all bad, with economists suggesting the nation’s wobbly economy could drive the official cash rate as low as 3.5 per cent by the end of 2012, The Daily Telegraph reports.
Westpac chief economist Bill Evans, one of the few economists who correctly predicted a rate cut in November, said lead indicators pointed to a very weak employment growth next year.
“We would expect the unemployment rate to edge up to 5.75 over the next six months,” Mr Evans warned. (more…)
Dodgy real estate agency Blackburne Property Group fined for 50 counts of delays in lodging tenants’ bond
December 21, 2011 by Editor · Leave a Comment
Perth real estate agency, Blackburne Property Group Pty Ltd, has been fined $15,000 and ordered to pay Court costs of $272 in the Perth Magistrates Court for delays in lodging tenants’ bond money with the Bond Administrator.
On Friday 9 December 2011, the agency pleaded guilty to 51 charges of late lodgement of security bonds on four occasions between January 2010 and March 2011, which continued despite numerous warnings from Consumer Protection. The funds were held in an agency trust account which was not a tenancy bond trust account as defined in the Residential Tenancies Act. In some cases, the delays extended to more than two months. (more…)
Australian property spruikers who’s who of 2011 named
December 20, 2011 by Editor · 3 Comments
The property spruikers are at it again talking up the Aussie residential real estate market contrary to objective and factual market information.
Recently the Adelaide property market was booming and now the Brisbane market is predicted to grow by 10% in 2012. We always appreciate well researched analysis and well informed commentary. We enjoy reading articles that demonstrate objectivity and provide factual information. Articles that give the reader a true sense of what is occuring in the market place, so you can make well informed decisions.
However when we read articles that are subjective, false, misleading and deceptive our blood pressure rises. How do you know what to believe? How can you discern what information is accurate and reliable? (more…)
British Foreign Office draws up plans to rescue expats if Spain and Portugal are hit by financial meltdown in 2012
December 19, 2011 by Editor · Leave a Comment
Evacuation plans for British expats stranded in Spain and Portugal if their banking systems collapse are being drawn up by the Foreign Office.
The contingency plans are being put in place to help thousands of Britons if they were unable to get to their money in the event of a catastrophic banking collapse in two of the most vulnerable eurozone economies.
Around one million British expats live in Spain, particularly around Marbella and Malaga, and some 50,000 in Portugal.
The Foreign Office is concerned that those who have invested savings in their adopted countries would face losing their homes if banks called in loans and they were unable to access money.
Last week ratings agency Standard & Poor’s downgraded 10 Spanish banks, including Banco Popular. (more…)
HIA emphasise high transaction costs in moving home: selling costs 4% and buying costs 5% of property price
December 19, 2011 by Editor · Leave a Comment
The Housing Industry Association, the voice of Australia’s residential building industry, today released the summer edition of its National Outlook, Australia’s most comprehensive housing report card.
The summer Outlook confirms deteriorating conditions for the housing industry in the final quarter of 2011.
“There is an immediate requirement for direct, short term stimulus to new home building,” said HIA Chief Economist, Harley Dale. “This needs to occur within an over-arching, renewed focus on structural reform to reduce the disproportionately high, inefficient and inequitable cost of new housing.” (more…)
Pop Melbourne’s median house price drops 8.3% and some suburbs fall up to 25% over 1 year
December 18, 2011 by Editor · Leave a Comment
Coming to grips with Melbourne’s property market has been no easy task this year.
While vendors in some postcodes have been rewarded with quick and healthy sales, many others have struggled to find a buyer even after lowering their reserve.
There’s no doubt the market has been hit with a healthy dose of the blues in 2011.
But just how far prices have come back not only depends on who you ask, but over what period you base your price data on.
At its worst, Melbourne’s median house price has lost $50,000 this year after peaking at $601,000 last December – an 8.3 per cent drop. (more…)
APM Spruiking The Brisbane Market Claiming 10% Growth: All Hot Air and Lacking A Well Researched Reasoned Opinion
December 18, 2011 by Editor · Leave a Comment
The Brisbane property market has been the worst performer of the capital cities in the nation with the median house price taking a tumble of 7 per cent.
Australian Property Monitors released its annual State of the Market report this morning, which took stock of the performance of property markets in capital cities across the nation.
The report found Brisbane house prices took the biggest fall, though next year is looking very rosy with the potential of double digit growth. (more…)
The economy, the Chinese property market & Jim Chanos
December 17, 2011 by Editor · Leave a Comment
As we approach the end of another year we should not be surprised by the economic turmoil in Europe, the ailing U.S. economy or the rumblings of a major slowdown in the Chinese property market. The signs that all was not well with the global economy have been raised on this humble site going back more than a year. Simply put, borrowing vast sums of money and splashing it around did not fix the global economic imbalances highlighted by the market meltdown in 2008.
So here we are near the end of 2011 and the most of the major developed economies have shifted from enthusiastically embracing economic stimulus as a way to fix their ailing economies to implementing programmes to slash government spending.
In Australia over the last few years the government has tossed money at everything from home insulation & i-Pod docking stations at community centres to building new school halls at schools that didn’t really need new school halls.
Now with the Chinese economy slowing and commodities prices coming off their records highs the government has also decided to jump on the austerity bandwagon and will cut spending in an effort to try and balance the budget. (even if this means raiding The Future Fund) (more…)
Australians concerned that home price growth slowing due to Baby Boomer retirement: it is a big problem
December 17, 2011 by Editor · Leave a Comment
Population aging in Australia is expected to accelerate. At present, there are five million people over the age of 55 across Australia. Within the next 40 years, that number is expected to exceed 11.5 million. This represents a projected growth rate of 150,000 people per annum.
Within a generation, a third of Australians are going to be aged over 55 years old and close to a quarter will be aged over 65.
Assuming that all those aged over 55 years were to move into a new dwelling, there would be a need to create 90,000 new homes across the country each year for this older market segment. However, most “55-plus” households cannot afford to move into more appropriate accommodation. The high entry and rental costs of the current retirement products on the market prevent them from doing so. Many will be forced to age in place. (more…)
Major global investment banks downgraded by Fitch: Christine Lagarde warns of 1930′s depression and protectionism
December 16, 2011 by Editor · Leave a Comment
Some of the world’s most powerful investment banks were downgraded by ratings agency Fitch as Germany’s cherished European fiscal compact appeared to be unravelling.
The banks that were downgraded last night include US banks Bank of America and Goldman Sachs, Barclays and France’s BNP Paribas. Switzerland’s Credit Suisse and Germany’s Deutsche Bank were also cut. The downgrade could raise the cost of borrowing for these banks.
Fitch cut the “issuer default ratings” at the banks to “reflect challenges faced by the sector as a whole”. The ratings agency said: “These challenges result from both economic developments as well as a myriad of regulatory changes”.
Credit ratings of the world’s biggest lenders have come under pressure as weak economic growth and concerns about whether European politicians have done enough to end the Eurozone debt crisis.
Long-term issuer default ratings for Bank of America, Citigroup and Goldman Sachs were cut to A from A+. Barclays, Deutsche Bank and Credit Suisse were downgraded to A from AA- while BNP Paribas fell to A+ from AA-. (more…)
China’s property market and credit bubble has finally popped
December 15, 2011 by Editor · Leave a Comment
The property market is swinging wildly from boom to bust, the cautionary exhibit of a BRIC’s dream that is at last coming down to earth with a thud.
It is hard to obtain good data in China, but something is wrong when the country’s Homelink property website can report that new home prices in Beijing fell 35pc in November from the month before. If this is remotely true, the calibrated soft-landing intended by Chinese authorities has gone badly wrong and risks spinning out of control.
The growth of the M2 money supply slumped to 12.7pc in November, the lowest in 10 years. New lending fell 5pc on a month-to-month basis. The central bank has begun to reverse its tightening policy as inflation subsides, cutting the reserve requirement for lenders for the first time since 2008 to ease liquidity strains.
The question is whether the People’s Bank can do any better than the US Federal Reserve or Bank of Japan at deflating a credit bubble.
Chinese stocks are flashing warning signs. The Shanghai index has fallen 30pc since May. It is off 60pc from its peak in 2008, almost as much in real terms as Wall Street from 1929 to 1933. (more…)
Even Moody’s Investor Services has the Australian property mortgage market on negative watch: Moody’s property crash warning
December 14, 2011 by Editor · Leave a Comment
Global ratings agency Moody’s has warned it has serious misgivings about Australia’s housing market amid fears the property bubble will burst if Europe’s debt crisis is not contained.
In a new report, Moody’s says it has Australia’s mortgage insurance industry on “negative” watch and current prices for Australian houses are “not sustainable” despite recent falls.
The ratings agency warns it remains concerned about the medium-term outlook for the housing sector, as the eurozone crisis represents a “material” threat and Australia may face a re-run of the property crash in the US and Europe in recent years. (more…)
Australian consumers turn gloomy despite rate cuts: realistic fears about Eurozone crisis
December 14, 2011 by Editor · Leave a Comment
Consumer sentiment collapsed in December by the most since the start of the global financial crisis three years ago even as the Reserve Bank cut rates to boost confidence in the economy.
The Westpac-Melbourne Institute index of consumer sentiment fell 8.3 per cent in December, after a 6.3 per cent rise in November. That drop is the most in a single month since October 2008 – when US investment bank Lehman Brothers collapsed. The index stands at 94.7 in December, down from 103.4 in November.
The dollar slipped slightly on the news and was recently trading just below parity at 99.98 US cents, after falling in overnight trade. Shares extended their declines, with the benchmark S&P/ASX200 index recently down 0.4 per cent. (more…)
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