Investors knock first home buyers out of the market

Purchasingahouse thumb Investors knock first home buyers out of the market

Low interest rates have not been enough to spur on the first homebuyer market, which continues to dwell at historic lows.

First home buyers currently make up only about 12 per cent of new loans financed according to figures from the Australian Bureau of Statistics.

That figure has hovered around there since September last year, reaching its lowest level of 12.3 per cent in November and clawing back a little traction in December at 12.7 per cent.

Nationally the glory days (of glory month) for first home buyers was in April 2009 when they made up a third of buyers.

The latest data, for the month of December, revealed Victoria had the largest number of first home buyers in December, with 1740 taking the plunge.

The average size loan in that state was $295,500.

First home buyers in the Northern Territory, of which there were only 57 in December took out the largest average loans in the country of $365,900.

Buyers in Tasmania were getting into the market for a lot less with the average size of a loan $218,900.

John Edwards of Residex and analyst for said investors were crowding first home buyers out of the market.

He said the value of loans to investors increased by 2.3 per cent in the final quarter of 2013.

“Investors are currently taking advantage of low interest rates, particularly older generations who are now investing in property through their self-managed super funds,’’ he said.

“As a result younger buyers and those looking to buy a first home are finding it increasingly difficult to afford to purchase property, especially in Sydney and Melbourne and are therefore having to rent.’’

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Who can you trust when selling?

Trust thumb Who can you trust when selling?

Buying or selling a home is an exciting time of change. But it can also be a stressful time, combining frustration and anxiety which can make you wonder who you should trust.

This is not about trusting real estate professionals such as agents, banks, valuers, lawyers etc, but all those other related parties whose good opinion and pearls of wisdom is likely to influence your emotional decision.

It is family, friends, colleagues, that guy at the gym, and because it is real estate — and so many of us have either bought and sold, want to, or invested — EVERYONE has an opinion. The advice comes thick and fast. But should you trust it?

You may be a young, trendy city type loving all things 2014 — would you take advice on window dressing from Grandma’s bestie who has lived in the same house for 45 years? The reality is, advice will be offered from all angles, whether you request it or not. What we are considering here is what elements you should choose to register as worthwhile, and what you mentally file away as trash.

As an agent I attended hundreds of inspection when the dreaded parents, or best mates turned up to advise. I would then observe how this ill-informed, factually incorrect person would allow a really good buy to be missed by their gullible pals.

So here’s how you keep this useless free advice at bay.

•Advice from random strangers — their advice, especially about an area or what happens in a street, is great as they have no vested interest. Throw away comments should always be noted and checked out. I’m not saying it is always valid, but it can be very revealing.

•Close family can be great when you’re selling as they are a source of free labour to help you prepare and declutter and if they’re seasoned movers may be great with packing too. But when buying, only take advice from those who have bought and sold quite a bit. Be very conscious of interior and general design tips are from someone whose style is the same genre as yours — that is me politely saying only listen to people with taste. Advice from close family about repairs, construction etc is only useful if they have the related experience. Otherwise politely nod then get it checked by the professionals.

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Outdoor living: 3 key ways to add real value

Outdoorgarden thumb Outdoor living: 3 key ways to add real value

Are you looking to do a little renovating before you sell?

Outdoor living in Australia goes hand in hand with our laid back, social lifestyles, and a relaxing, practical, inspiring outdoor living space has become an essential inclusion in our homes as we look to enhance both our lifestyle and our property value.

Here are the top three ways to maximise your outdoor living area, which in turn could help towards getting you the return on investment you’re looking for when you sell.

1. Well-planned landscaping

Getting a landscape architect to create a professional outdoor design before you begin will culminate in an outdoor living area that works exactly as you imagined it.

Here are some key areas to pay attention to:

Curb appeal

First impressions last – a home that is visually enticing from the street will impress your guests from the moment they arrive.

Low-maintenance gardens

Less watering, weeding and upkeep means more time enjoying your relaxing outdoor living space. Many landscapers and landscape gardeners cut down on lawn and replace it with low-maintenance, foot-friendly native ground covers, or utilise substitutes such as colourful pebbles and stones.

The tree effect

Trees are unique in that their value goes up over time. Think of them as a long-term investment – buy them at around 2 ½ metres tall and in a matter of years you will have a beautiful, shady outdoor area.

Irrigation system

Keeping your outdoor space looking lush and green with minimum effort is great for you and highly appealing to future buyers.

Custom lighting

Custom lighting can showcase features and light pathways at night, making it a practical and visually stunning addition.

2. Outdoor living designs

Showcasing your property’s ability to entertain friends and family outdoors really sells the alfresco lifestyle dream.

Outdoor structures

A covered patio creates year-round inviting decking. Landscape architects love designing patios for their shade and shelter benefits. Consider patio heating and a screened area for added comfort in the winter months.

Full outdoor kitchens

A well-designed outdoor kitchen, complete with drinks fridge, sinks and built-in barbeque, will allow you to entertain your guests outdoors for the entire evening without having to run in and out to prepare the food.

3. Create a sanctuary in your backyard – water

It may sound cliche, but the secret to the ultimate outdoor escape really is water.

Water features

The soothing sound will make your home feel more like a tropical holiday retreat.

Swimming pool

Pools continue to be a highly valued addition to any outdoor living area. They’re cool, inviting and serve as a shimmering centerpiece.


A great complement or alternative to a pool that extends your outdoor living season into winter with its luxurious heating ability.

Story:   Tony Palmer     Source:

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Love is in the air and the mortgage

LoveisintheairandtheMortgage thumb Love is in the air and the mortgage

VALENTINE’S Day is a chance to celebrate the most important relationships in life. And a handful of people will today embark on a fresh relationship — with their new home

Falling in love isn’t supposed to be about settling, but when your house settlement falls on Valentine’s Day it’s hard to forget you’re making a lasting commitment.

The average homeowner relationship lasts about 11 years in Melbourne and Sydney and around nine years in Canberra, Brisbane and Hobart.

RP Data figures show homes are held for an average 8.4 years in Western Australia, 7.9 years in South Australia and 6.1 years in the Northern Territory.

Many of those periods beat a lot of marriages with the average time between marriage and separation in Australia now 8.7 years.

Not to mention you’re probably going to spend more money on your home than your partner — possibly a few hundred thousand dollars more.

Forget flowers or a box of chocolates, a shiny new set of keys are the perfect gift for these homebuyers taking the property plunge today.

Story Source:

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Is it cheaper to rent or buy?

RentorBuy thumb Is it cheaper to rent or buy?

WHILE renting may seem the cheaper alternative to buying a home, new figures have revealed it can end up costing pretty much the same over the long term — and you’ve got nothing to sell at the end.

The figures collated by reveal that renting a house over 30 years will cost you almost $1 million, while buying a house at today’s current median house price will end up costing about $1.2 million.

Michelle Hutchison from said the figures showed it was worth considering buying a home instead of wasting dead money renting.

“If you are renting that money has paid for someone else’s investment,’’ she said.

She said the total cost for a house based on the national median house price with a 30-year loan term was more than $1.2 million.

“Compared to renting, the national median weekly rent for a house is currently $424, which equates to about $998,830 over 30 years (adding current inflation of 2.7 per cent p.a.),’’ she said.

Ms Hutchison said it can be a tough decision to choose between renting and buying a home.

“The question to stay renting or to enter the property market is a constant struggle for many Australians because of property prices, saving for a deposit and uncertainty of interest rates,’’ she said.

“But if you compare the likely cost of rent for the next 30 years, it’s worth considering buying a home.’’

With the current low interest rate environment Ms Hutchison said it was more affordable to maintain a mortgage now than it was three years ago.

She said while buyers were concerned about affordability, it was still a good time to enter the market because interest rates were low.

According to figures from RP Data Darwin has the highest median asking rent in Australia for houses at $650 a week.

Where the renters are

Darwin — 43.2%

Canberra — 31.0%

Sydney — 32.4%

Perth — 28.2%

Brisbane — 33.7%

Melbourne — 28.0%

Adelaide — 28.8%

Greater Hobart — 28.2%

Source: RP Data

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Listings and prices up

forsale3 thumb Listings and prices up

COMPETITION for property sellers may heat up with new figures revealing the number of properties listed for sale has increased in most capital cities since the start of the year.

The number of residential property listings rose during January, after the traditionally quiet Christmas period.

According to SQM figures nationally stock on market came to 342,157 properties, a monthly increase of 1.3 per cent.

Sydney and Melbourne were the only two capital cities to record falls for the month with listings down by 3.4 per cent and 1.9 per cent respectively.

The drop in the Sydney market means the city now has its lowest number of listings for at least eight years.

Listings in Melbourne were steadily dropping with levels now down 5.4 per cent compared to the same time last year.

Darwin listings went up 3.1 per cent and a massive increase 23.1 per cent compared to this time last year.

Listings for January increased in Canberra by 5.4 per cent, Brisbane 4.1 per cent, Perth, 3.3 per cent and 1.1 per cent in Adelaide.

SQM Research director Louis Christopher said the Darwin yearly figures could signal a slow down for that housing market.

Mr Christopher said at the same time as listings had dropped in Sydney asking prices had gone up on average by 11 per cent since the same time last year.

Asking prices also jumped significantly in Perth by 9.4 per cent and Melbourne 4.2 per cent.

All other capital cities had increases in asking prices of under 2.7 per cent, while in Darwin they dropped 1.9 per cent.


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Reserve bank leaves cash rates on hold

reservebank thumb Reserve bank leaves cash rates on hold

At its meeting today, the Board decided to leave the cash rate unchanged at 2.5 per cent.

Since the Board’s previous meeting, information on the global economy has been consistent with growth having been a bit below trend in 2013, but with reasonable prospects of a pick-up this year. The United States economy continues its expansion and the euro area has begun a recovery from recession, albeit a fragile one. Japan has recorded a significant pick-up in growth, while China’s growth remains in line with policymakers’ objectives. Commodity prices have declined from their peaks but in historical terms remain high.

The Federal Reserve has begun the process of curtailing stimulus measures but financial conditions overall remain very accommodative. Long-term interest rates and most risk spreads remain low. Equity and credit markets remain able to provide adequate funding, but for some emerging market countries conditions are considerably more challenging than they were a year ago.

In Australia, information becoming available over the summer suggests slightly firmer consumer demand and foreshadows a solid expansion in housing construction. Some indicators of business conditions and confidence have shown improvement. At the same time, with resources sector investment spending set to decline significantly, considerable structural change occurring and lingering uncertainty in some areas of the business community, near-term prospects for business investment remain subdued. The demand for labour has remained weak and, as a result, the rate of unemployment has continued to edge higher. Growth in wages has declined noticeably.

Inflation in the December quarter was higher than expected. This may be explained in part by faster than anticipated pass-through of the lower exchange rate, though domestic prices also continued to rise at a solid pace, despite slower growth in labour costs. If domestic costs remain contained, some moderation in the growth of prices for non-traded goods could be expected over time.

Monetary policy remains accommodative. Interest rates are very low and savers continue to look for higher returns in response to low rates on safe instruments. Credit growth remains low overall but is picking up gradually for households. Dwelling prices have increased further over the past several months. The exchange rate has declined further, which, if sustained, will assist in achieving balanced growth in the economy.

Looking ahead, the Bank expects growth to remain below trend for a time yet and unemployment to rise further before it peaks. Beyond the short term, growth is expected to strengthen, helped by continued low interest rates and the lower exchange rate. Inflation is expected to be somewhat higher than forecast three months ago, but still consistent with the 2–3 per cent target over the next two years.

In the Board’s judgement, monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target. On present indications, the most prudent course is likely to be a period of stability in interest rates.

Statement by Glenn Stevens, Governor: Monetary Policy Decision


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New home sales hit five-year high

NewHomesalesno2 thumb New home sales hit five year high

NEW home sales in Australia posted their first annual increase in five years in 2013, according to the Housing Industry of Australia.

"New home sales hit a low ebb during 2012," HIA economist Diwa Hopkins said.

"However, a strong recovery took place in 2013 with sales recording their first annual increase in five years.

"The key now will be for these improved sales levels to expand further in the year ahead."

During the final quarter of 2013 aggregate new home sales increased 6.3 per cent to hit a level not reached since mid-2011.

In the month of December alone, the HIA new home sales report showed that total seasonally adjusted new home sales eased by 0.4 per cent.

The aggregate decline was driven by a 6.6 per cent decrease in multi-unit sales while detached house sales increased by 0.9 per cent.

"During 2013 as a whole, new home sales rose by 14.4 per cent, representing the first year of growth since 2008," Ms Hopkins said.

"Total new home sales were largely unchanged in the month of December, however, the broader trend shows a healthy profile of recovery throughout 2013 and the underlying details are also fairly encouraging."

Ms Hopkins said the aggregate monthly decline was due to an unsurprising pull-back in multi-unit sales, following the previous month’s very strong result.

"Looking at detached house sales, the growth in this segment has broadened in its reach, with four out of the five surveyed states showing monthly and quarterly increases in December 2013," she said.

In December, private detached house sales increased by 22.5 per cent in South Australia, 7.3 per cent in Western Australia, 5.8 per cent in NSW and 1.5 per cent in Queensland. Detached house sales fell by 13.4 per cent in Victoria.

In the final quarter of 2013, detached house sales increased by 50.9 per cent in South Australia. They also rose by 12.3 per cent in Queensland, 3.5 per cent in NSW and 2.3 per cent in Western Australia. In Victoria, detached house sales fell by 9.5 per cent in the quarter.

Story:   Mitchell Neems      Source:

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Are we really ready for Generation Y to leave the nest?

GenerationY thumb Are we really ready for Generation Y to leave the nest?

I HAVE a theory about business, market opportunity and demographic change.

My theory is that business is so finely tuned to shifts in market demand that it supplies not only to baseload, but it also supplies to anticipated ongoing demand. Let me explain.

The demand for housing is largely driven by population growth. Sure there’s an upgrader market as well as a market for housing resulting from separation and divorce or indeed from shifts in market preference from say suburbia to seachange to apartments. But mostly it is net population growth from one year to the next that drives demand for household formation and for housing.

In the year to June 2013, this nation expanded by 407,000 residents, including 244,000 from net overseas migration. Just two years earlier in the year to June 2011 the net growth figure was 308,000, with net overseas migration then sitting at 180,000. Over the two years to June 2013 migration ramped up as did births, from 301,000 to 311,000.

The building industry builds housing to accommodate demand from the baseload population of 23 million, but it also builds to meet demand from the expected rate of growth. And since 2011 this growth figure has pushed up largely as a consequence of an easing in immigration controls.

Net overseas migration peaked at 300,000 in the year to June 2009 when prime minister Kevin Rudd said he believed in a big Australia. The policy response was panic. Immigration plummeted the following year to 196,000 and to 180,000 the year after that.

Once the big Australia issue had subsided the immigration levers were reopened and as a consequence we are now in an era of rising population growth with a consequential rising demand for housing.

But there is more to tactical demographics than rationalising whether the market is rising or falling at an aggregate level.

That aggregate demand for housing in the coming year is likely to be "a bit more" than the previous year based on population trends is a reassuring insight, but it doesn’t represent a business opportunity. Tactical advantage in business comes from acting on a directional shift in the market.

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5 ways to make your home more efficient

homeenergyefficiency thumb 5 ways to make your home more efficient

One of the big benefits of building a new home is that they are more energy efficient, which means you can enjoy big ongoing savings on your running costs.

While all new homes must meet a minimum level of energy efficiency under the Building Code of Australia, some builders are now offering 7-star and 8-star energy efficient homes – and it doesn’t mean you have to add unnecessary expense, or sacrifice the look and feel of a traditional family home.

Constructing an 8-star home will generally only add around 3.6% to the total cost of your build, but it could potentially save you more than 40% in heating and cooling costs. You will also have a more comfortable lifestyle, with a home that is warmer in winter and cooler in summer.

If you’re renovating an older home, it’s also possible to retro-fit many energy efficient features, such as ceiling insulation, water-efficient shower heads, and LED or compact fluorescent lights.

Whether you’re building new or wanting to make your existing home a little greener, here are five simple ways to make your place more efficient:

1. Make sure your home is well insulated

Insulating the ceiling will help reduce the amount of heat entering your home when it’s hot, and trap the warmth inside when it’s cold.

There are many insulation options to choose from depending on your circumstances or preferences. Some of the most popular choices are wool, loose fill, reflective foil and batts.

Glass fibre batts are an environmentally friendly option because they’re made from 80% recycled material. You can further reduce heat build-up in the ceiling cavity by installing a whirly bird on the roof.

2. Ensure you have cross ventilation

Don’t just open one window or door. A house will cool down more quickly if the airflow can enter at one point and exit at another.

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