There is no excuse not to remember Valentine’s Day for those living in many of the State’s most loved-up residential addresses.
Among the street names that would no doubt be approved by Cupid, is Darling Street,
Balmain; Heart Place, Blacktown, Cuddlepie Place, Faulconbridge, and of course Kissing Point Road, Dundas.
Love may be considered a two-way street, but at Emus Plains there is a Love Court.
Winston Hills resident Ashleigh Bowles didn’t think too much about the street name when she bought her home at Eros Place more than a decade ago. Surprisingly its street sign has never been ‘borrowed’.
This four bedroom property in 60 Dilkera Avenue, Valentine has a price guide of $1.8m — $1.9m
“It is definitely an easy way to tell people where I live, I just tell them `Eros Place’, the god of love — they usually have a bit of a giggle,” she said.
“Valentine’s Day is a bit of big deal for me to an extent, we usually go out for dinner but I specifically ask my boyfriend not to get flowers because they are always really marked up on that day.”
Residents living in the Lake Macquarie township of Valentine won’t be able to escape the significance of February 14. While those living in the more commonly found Rose Street and Diamond Court may feel pressure to deliver a gift.
The Grose Valley and Bridal Veil Falls from Govett’s Leap, in The Blue Mountains
It could, however, be a lonely night for residents living in Single Street at Werris Creek.
Marriage has also inspired many names around NSW such as Honeymoon Bay, at Currarong on the South Coast, Wedding Cake Island, just off Coogee and Bridal Veil Falls in the Blue Mountains.
There is a Bachelor Rd at Wotton on the State’s mid-north coast, yet no Spinster Street.
At Wolli Creek, several apartments have been sold in Lusty Street, but the risqué name hasn’t put off buyers. Agent Paul Karasalidis from Century 21 Southern Realty admits he was amazed when no one questioned the unusual address when they sold a two-bedroom unit there 18 months ago.
“People just didn’t bring it up at all — I’m really not sure why they chose that street name,” he said.
This Lovedale has just been listed for sale
The suburb of Lovedale is capitalising on its romantic name becoming an increasingly popular destination for couples wanting to marry in the Hunter Valley. Agent Ray Armstrong has just listed a stunning vineyard set on 12.14ha at 162 Wilderness Rd. It has attracted several inquiries from buyers interested in turning the property into a wedding reception venue.
“People really do like the name of Lovedale and that is how they have promoted the area,” he said.
This home in Love Street, Blacktown sold in December for $718,000
Romance is literally just around the corner at Blacktown and Cessnock, both of which have a Love Street. But if you are hoping to impress a potential Valentine, maybe steer clear of Dubbo — one of the few towns in the State with a Rocky Road.
This article was first published in www.realestate.com.au. This is the link to the original article: https://www.realestate.com.au/news/street-names-that-cupid-would-approve/
Uncertainty is the only certainty when it comes to the future of Sydney’s property market.
With the final report from the banking royal commission handed down last week and both a state and federal election looming, we asked five experts how they expect the Sydney market will fare over the rest of this year.
Ernst & Young Oceania chief economist Jo Masters
Weakening demand and market sentiment are the emerging themes for 2019, Ms Masters said.
“There are widespread expectations of further prices falls,” she said. “We’re starting to see weakness in the housing market broaden out, not from just Sydney and Melbourne geographically, but across segments.”
“There’s real weakness in owner-occupier finance and also in the first-home buyer segment.”
While first-home buyer demand may have been pushed forward by changes to stamp duty in 2017 and was also affected by tighter lending restrictions, Ms Masters said it reflected a pull-back in buyer sentiment.
“We know that first-home buyers were accessing credit throughout 2017 and 2018,” she said. “[But now] the segment seems to be falling, despite affordability improving.”
Ms Masters said the upcoming state and federal elections were only feeding into the market uncertainty and expected buyers — particularly first-home buyers who have higher loan-to-value ratios — would wait to see signs of a slow down in price falls.
She predicted we’re halfway through the market downturn, but noted unless price falls slowed soon, we could see a peak-to-trough fall of more than 20 per cent.
“Those forecast of 20 per cent peak-to-trough declines were predicated on starting to see signs of the slowdown in house prices falls, and we just haven’t seen that yet.”
BIS Oxford Economics managing director Robert Mellor
Hesitation from both buyers and sellers could continue until at least mid-year, according to Mr Mellor.
While “we’ve seen the worst of it” when it comes to tighter lending restrictions, Mr Mellor also expected a decline in buyer demand, particularly among first-home buyers who have been propping up loan volumes.
“First-home buyers don’t want to buy into the market if they there is another 10 per cent decline [possible],” he said.
While timing was less critical for upgraders and downgraders, buying and selling in the same market, Mr Mellor said many would be reluctant to make a move.
“We’re in for a fair degree of hesitation until people see price data start to show, not flattening prices, but at the very least [smaller price declines],” he added.
As for investors, Mr Mellor said it was possible some were sitting on their hands awaiting the outcome of the federal election and potential changes to negative gearing. But, he added, it was unlikely they would rush back if the current tax settings remained because there was little growth on the horizon.
He noted that, for the same reason, if negative gearing was scrapped by a Labor government, the impact shouldn’t be significant because investors had less market share than in previous years.
If the market — forecast to see a peak-to-trough fall of about 15 per cent — bottoms out late this year or early next year, it will be a slow recovery, with mediocre price growth expected for a couple of years, Mr Mellor said.
“It’s not because of constraint on the supply of credit; it’s basically because demand for credit has come off in line with views that house prices have further to fall,” Mr Aird said.
He expects credit demand to remain soft for the next three to six months and said the sharper than expected fall in credit growth, and drop in market sentiment, were key factors behind revised forecasts released by Commonwealth Bank last week.
The forecast, released on Thursday, predicted Sydney’s prices would fall another 5 per cent this year — which would take them to 15 per cent below their June 2017 peak.
“There’s a self-fulfilling nature … the timing of lending standards occurred quite a while ago. It’s not that, in and of itself, now,” Mr Aird said.
“If households as a collective expect house prices to go down … they invariably will because buyers hold off buying or offer lower prices, and that’s in part how you can get a correction down, the same thing happens on the way up.”
As prices continue to fall, Mr Aird expected investors would make their way back to the market as yields would become more appealing.
“I’m sure there are some investors sitting on the sidelines, just waiting to see the result of the election [and potential changes to negative gearing].”
NAB chief economist Alan Oster
Sydney’s property market has been hurt by APRA’s crackdown, said NAB chief economist Alan Oster, and prices have further to fall.
“I don’t see tightening of credit coming out of the royal commission … but I do see more emphasis on expenses and [banks] may become a little more gun shy, in the sense of knowing people are watching them in case they make a loan that turns bad.”
Mr Oster said while banks were looking more carefully at expenses, customer expectations were also changing.
“Previously buyers thought I better get in or prices will keep going up, now they’re thinking they’re not sure if they should,” Mr Oster said.
While NAB has kept its price forecast at a 15 per cent peak-to-trough fall, it announced on Tuesday that it now expects the Reserve Bank to keep interest rates on hold well into the next decade.
The bank, which had previously believed the next move would be up, now believes the RBA could even be forced into cutting the rate from its record low of 1.5 per cent, within months.
“I don’t see it going up, [but] we do see a significant and growing chance that it might go down,” said Mr Oster. The revision comes as its latest monthly business survey shows a slump in confidence across the east coast.
Housing Industry Association principal economist Tim Reardon
Despite a record number of apartments set to be completed, there is little fear of an oversupply of dwellings and significant further price falls, said Housing Industry Association principal economist Tim Reardon said.
“While unemployment remains low … and population growth remains strong, the depths of this cycle will be relatively shallow,” Mr Reardon said.
Apartments will clear relatively quickly, Mr Reardon added, as developers were holding back until conditions improved – with apartment approvals data for the December quarter down more than 33 per cent year on year.
“The rate at which they slowed down at the end of 2018 was a surprise, but now that the credit squeeze has occurred, we expect approvals will continue with a relatively slower, slow down over the next two years.”
Mr Reardon expected both developer and investor activity to increase as the market stabilised, potentially by mid-year, but said the upcoming elections were adding to the market uncertainty. At a federal level there are potential changes to negative gearing on the cards meanwhile, at a state level, there were concerns regarding development sentiment, which was shaping up to be a key election issue.
This article was first published in www.domain.com. This is thelink to the original article: https://www.domain.com.au/news/what-now-for-sydneys-property-market-five-experts-give-their-predictions-800490/
In Aboriginal, Nundah means “chain of water holes” and there sure were watering holes aplenty as I drove down its impressive high street recently.
There were so many, in fact, that even though I missed the turn-off to Sandgate Road from the Airport Link, I found myself gawking left and right at the myriad upmarket retail offerings on either side of the road.
On one side of the street there were trendy barista coffee and gelato shops, and on the other hip bars like The Village Social as well as stylish interior decorating stores.
Nearly half the population in Nundah is single, according to census data — that’s significantly higher than the national and Queensland averages — and it’s easy to see why the unattached are so drawn to the area.
Nundah’s vibrant village vibe with bars, cafes and shops makes it the perfect place to socialise, live and work and the big clincher: it’s also still mainly affordable.
Ray O’Brien, principal of LJ Hooker Lutwyche, has witnessed the once working-class suburb gentrify over the past decade in particular.
It all started when through traffic from busy Sandgate Road was diverted via a bypass tunnel in the early 2000s and then continued apace when the suburb was selected for urban renewal.
“The council basically did some social engineering,” Mr O’Brien said.
“The reason is because of the infrastructure that’s already here – you’ve got tunnels, train, and easy access to the airport, which is like a mini-city so there are a lot of people who work there.
“The vibe has changed. It’s a bit more of a village now.”
Over the past five years, the suburb has seen a sharp increase in commercial offerings in its retail strip as well as unit developments, which has temporarily impacted prices.
According to Domain Group data, the median unit price in Nundah fell by 7.1 per cent to $395,000 over 2018, which makes unit buying a very attractive (and affordable) way to get into the property market.
Houses are also still great value. The median price grew by 2.2 per cent last year to $685,000 — that’s a whopping $455,000 less than houses at neighbouring suburb Clayfield, where the median price is $1.14 million.
Nundah’s population also increased 16 per cent from 2011 to 2016, with an enviable median age of its 12,000-plus residents of 33, according to the Australian Bureau of Statistics.
Mr O’Brien said first-home buyers were targeting units while upgrading young couples or families were competing strongly for the dwindling number of timber and tin houses, often choosing to renovate them.
Buyers and renters were also selecting Nundah as their location of first choice these days – compared to the suburb playing second fiddle to locations closer to the city – especially if they were new migrants, he said.
“They don’t know that Hamilton or Ascot is a better suburb,” he said.
Brisbane investor Noel Herbert bought a unit in Nundah in 2011 for $250,000 because of the suburb’s proximity to the city and airport as well as its shopping village precinct.
Not only has he witnessed its many positive changes in the past seven years, his unit also has been rented by the same couple the entire time.
“There has been an expansion of the village and the reinvigoration of the area due to the increased unit development and business activity associated with this,” he said.
“Nundah should progress nicely as a transport hub as well as the second runway adding value to the suburb with more workers wanting to live in the local area.
“The tenants have remained over the years and have always treated it like their home, which it is. They have always paid on time and kept the place immaculate and hence we have replaced fixtures to update the unit for them. It’s all about mutual respect.”
This article was first published in www.domain.com.au. Here is thel ink to the original article: https://www.domain.com.au/news/nundah-now-location-of-first-choice-for-brisbane-singles-790373/
When the banking Royal Commission was announced in December 2017, many commentators believed a large proportion of the final report would be on home loan lending.
In particular, the way the banks lend to home buyers as well as the amount. At its most extreme, there was speculation that someone on an $80,000 income would only be allowed to borrow $200,000.
The effects on lending
Anyone who has applied for a home loan since this time would have found how much harder it now is. As part of responsible lending, more information now has to be provided as to expenses, income and existing debts. While frustrating for some, it is a positive in ensuring that people don’t over borrow and get themselves into financial stress.
On realestate.com.au we can see clearly that access to finance, as well as the cost of finance, is closely linked to search activity. For markets like Melbourne and Sydney, it led to a change in sentiment towards property as people found it harder to get loans.
For Perth, a market that was starting to recover in 2017, it derailed the recovery and led to further price falls in 2018. Although property fundamentals are overall positive in these market (i.e. population and jobs growth are looking pretty solid), less money available affected the market.
While the impact of the Royal Commission on the market will be minimal from this point forward, the way that you get a loan may change. At the moment, over half of all people applying for a home loan do so through a mortgage broker. One of the biggest announcements in the Royal Commission was that trailing commissions should be abolished, and instead be replaced by an upfront fee paid by the person applying for the loan.
At this stage, the Morrison Government has rejected the upfront fee model and instead recommended that the banks pay this fee. So for now, you can still use a mortgage broker without paying an upfront fee, but this may change.
What happens next?
With the Royal Commission out the way, where to now for residential property? It is possible that access to finance will continue to ease up.
In 2018, APRA removed the cap on the number of interest only loans that banks could provide; a restriction they put in place in 2017. They also removed the speed limit imposed on how much banks could increase their lending to investors. This move was implemented in 2014 and restricted investor lending growth to 10% per annum.
The risks around investors borrowing too much seem to have passed.
The next big hurdle for property will be the Federal Election, expected to be held in May 2019. With greater certainty now around access to finance, the outcome of this will give us an idea as to how tax incentives for investors will be handled from that point forward.
Best case, we are looking at far more stable conditions for the second half of the year.
This article was first published in www.realestate.com.au. Here is the link to the original article: https://www.realestate.com.au/news/how-will-the-royal-commission-affect-the-housing-market/?pid=ref-buy-homepage-feature-1
Property prices may be falling across Sydney, but the city’s most popular suburbs are still out of reach for many.
Of the most searched suburbs in Sydney, many have a median house price above $2 million and an apartment median above $900,000.
Paddington, Mosman, Manly and Coogee were among the most popular suburbs searched on Domain in recent months.
“These are suburbs with brand names,” said buyer’s agent and OH Property Group principal Henny Stier. “People look at these suburbs … because it’s a brand they know.”
While these go-to suburbs were popular for a reason, Ms Stier said many house hunters used them as a starting point and extended their search from there.
“Buyers gravitate towards searching in those suburbs … but don’t necessarily end up buying there,” she said. Ms Stier noted similar, but more affordable, lifestyles could often be found in neighbouring “bridesmaid suburbs” and also further afield.
So where else should you look?
Surry Hills House price: $1.785 million
Popular alternative: Redfern – $1.386 million But how about: Erskineville – $1,305,251
“Erskineville is a good place to focus on, if you like that Surry Hills, villages, kind of lifestyle,” said Rose and Jones buyer’s agent Lauren Goudy.
It has cafes, restaurants and bars, and plenty more can be found on Newtown’s King Street, just a short walk away. It had a similar feel and lots of terraces, Ms Goudy added, and while it was further from the city, the CBD was less than a 10-minute train ride away.
She added the inner west had seen greater price falls than Surry Hills, with the latest Domain data showing Erskineville’s median house price dropped 8.7 per cent over the year to December, while house prices in Surry Hills went up 10.2 per cent.
Mosman House price: $3.76 million
Popular alternatives: Cremorne – $2.7 million, Northbridge – $3.26 million, Cammeray – $1.975 million But how about: Willoughby – $2.15 million
While it doesn’t have the same beach and water access as Mosman, Flint Property director and buyers agent Brooke Flint said Willoughby was popular among family buyers looking for a similar lifestyle at a more affordable price.
“The suburb has [almost] everything Mosman has, it doesn’t have the beach, but because it’s still so close families will buy there – from an affordability perspective, it offers more value for money,” Ms Flint said.
She added when house hunting it was better for buyers to cast the net wide and focus on a set of criteria of what they wanted in a home or suburb, rather than specific places.
“Often people have a dream suburb that they look in and then get smashed over their head with the reality of what they can afford and start being more realistic,” she said.
Balmain House price: $1.89 million
Popular alternatives: Rozelle – $1.585 million, Lilyfield – $1.755 million, Annandale – $1.66 million But how about: Haberfield – $1.945 million
Its median house price is higher, but Haberfield buyers get a lot more space for their money, making it a good switch for families, says Ms Flint.
“I think what attracts people to Haberfield is that there’s a very European influence to the suburb. It’s got a strong Italian community, the high street has got some beautiful, authentic restaurants.”
For public transport it’s got the light rail and the bus, however it has fewer shops than Balmain and there’s no pub.
“It’s more of a life-cycle move, it’s the step for couples in Balmain or looking around there who are looking for a family home,” she says.
Paddington House price: $2.505 million
Popular alternative: Darlinghurst – $1.876 million But how about: Bondi Junction – $2.1 million
It’s hardly a suburb that flies under the radar, but Bondi Junction gets the attention of far fewer house hunters than Paddington. While only one suburb away, less than half the number of people searched for property in Bondi Junction in recent months than Paddington.
Thanks to the huge Westfield at its centre, it’s best known for shopping but it’s also got plenty of cafes, restaurants and public transport options.
Though dominated by apartments, which make up more than 60 per cent of homes, there are still about 1200 houses and terraces scattered across the suburb, which saw its median house price drop 5.3 per cent last year, while Paddington’s increased 8.9 per cent.
Ms Goudy said that with declining house prices, traditionally blue-chip suburbs were offering better value than they had in years gone by.
She noted that if people had their heart set on a specific area that wasn’t completely out of reach, there was no harm in waiting for prices to fall further. “I would be more inclined to be patient to see what comes up in your areas, but the market is going to improve [at some point],” she added.
Cronulla House price: $2.13 million
Popular alternatives: Woolooware – $1.75 million, Caringbah – $1.055 million But how about: Kirrawee – $1.05 million
Wedged between Gymea and Sutherland, Kirrawee is seeing great change, with the suburb’s old brick pit site transformed into a new development The South Village. While not to everyone’s taste, there’s no denying it will transform the neighbourhood — bringing a new shopping centre, restaurants, cafes and amenities to the area.
Ms Flint said Kirrawee’s affordability made it appealing to young families. She noted the suburb offered very good value compared to Cronulla, was still a short car ride to the beach and had some nice, quiet tree-lined streets.
Other popular suburbs and where the experts say you should also look:
Randwick – $2.35 million Try: Maroubra – $1.8 million, Rosebery – $1.64 million, Little Bay – $1.75 million
Marrickville – $1.32 million Try: Earlwood – $1.35 million
Newtown – $1.345 million Try: Enmore – $1.32 million, Erskineville – $1,305,251, Alexandria $1.433 million
Chinese activity on the international investment portal Investorist has been low, which is abnormal for the lead-up to the Chinese New Year, the site’s founder Jon Ellis said.
“Typically what we see with Chinese New Year is a few weeks before there’s a big spike in activity on our platform. This year it’s been flat,” he said.
Mr Ellis put the slump down to the departure of Chinese speculative investors from the Australian market, due to tight capital controls imposed by the Chinese government and a raft of Australian taxes on offshore buyers.
“The trend we’ve noticed is there are no longer speculative Chinese buyers coming in,” he said. “There are still Chinese people buying property if they have migration plans, if they have education plans. The straight investor is gone.”
Carrie Law, the chief executive of Juwai.com, another Chinese-focused investment portal, said deteriorating US-China relations were helping the Australian market but demand was likely to hold steady rather than pick up.
“You could see investors at the airport in Shanghai getting out of the line for the flight to LA and getting in line for the flight to Sydney,” she said.
“Because of its deep market and long-term stability, Australia is a natural alternative for a certain class of property buyer, who would have been seeking those same benefits in the USA.”
The Australian dollar was down about 5 per cent on the yuan, which was helping Chinese buyers justify purchases, Ms Law said.
“If it falls another 2 or 3 per cent, that completely erases the cost of the foreign buyer stamp duty, which tops out at 7 to 8 per cent, depending on the state.”
But despite this, the outlook continued to be less than ideal.
“Some people in the industry feel that 2018 could be the year that Chinese demand stops falling and starts to recover,” said Ms Law. “Our conservative forecast is for flat demand, which is an improvement over last year’s decline.”
Interest from high net worth Chinese investors has been increasing in the commercial property sector instead of housing, and demand was steady in the very top end of the residential market, Black Diamondz Property director Monika Tu said.
“It looks like it’s a growing portion of Chinese investors [looking at commercial property],” Ms Tu said.
“These are newcomers, first-timers.”
Kay & Burton’s Jamie Mi agreed buyers were concentrating on the top end of the market, taking demand away from investment-grade properties.
“The activity in terms of volume won’t be a significant as before but now [they’re] talking about the top end of the market,” she said.
“It just seems more under the radar these days.”
This article was first published in www.domain.com.au. Here is the link to the original article: https://www.domain.com.au/news/rivers-of-gold-dry-up-chinese-new-year-likely-to-be-flat-for-property/
No bills, a low carbon footprint and plenty of serenity — it might sound like a pipe dream to many city slickers, but a sustainable lifestyle is possible with the right property.
Across Australia it is estimated that over half a million homes are “off-grid” when it comes to water supply and more than 11 million solar panels have been installed on rooftops around the country.
But while a growing number of homeowners in urban areas are looking for ways to make their metropolitan properties more sustainable, there are loads of homes in rural (and not so rural) regions that are completely off the grid — and that means you can say goodbye to nasty bills.
These eco-friendly houses can be big bold and beautiful with million dollar plus price tags, or affordable cabin style retreats with heaps of potential.
Here are 10 of the best off-grid homes on the market right now that are ideal for a calming tree change lifestyle, or even a getaway with the scope to starting a side hustle through short term rentals.
71ha of natural beauty with 500 year old grass trees.
Sitting between the Watagans National Park and the Corrabare State Forest, this wonderland is 71ha of natural beauty with 500-year old grass trees, gums, fruit trees, hibiscus and orchids. There is a four-bedroom, two bathroom barn style home on site that offers a low carbon lifestyle with solar power that includes a four-day battery storage system, two large water tanks and grey water irrigation.
Cheap as chips, but great for the environment. This summer escape includes a one-bedroom cabin on 3611sq m. The completely off-grid property does have access to town power and the phone at the boundary if desired, but to be fully disconnected from the hum drum the place also has a wood stove for heating and cooking as well as productive gardens, a dam, chicken coops and a nearby river for fishing.
At this country retreat it is as simple as turning up and switching off. The 40ha estate known as Flatrock Forest Farm is an off-grid sustainable property with a three-bedroom timber cottage featuring a stone fireplace, a saltwater pool and spa plus a guest cottage. On site there is an orchard, a solar power system and when it comes to water you are spoiled for choice with a dam, four tanks and a creek.
Built with Kangaroo Island stone.
Address: Kangaroo Island, South Australia
Price: On application
Overlooking the peaceful Pelican Lagoon, this 7.68ha sustainable property is secluded but brimming with wildlife. Built with Kangaroo Island stone, the designer home has created to blend the inside with the local environment. In addition to all the mod cons inside, the property has passive solar with battery storage, a back up generator, wind turbine and four huge water tanks.
This island home is surrounded by 16ha of usable land.
An island home surrounded by 16ha of usable land, this hideaway features a three-bedroom house with wood heater, solar hot water, off-grid power which includes a wind turbine, and there is a battery bank to store electricity. Live even more sustainably with your own water supply, veggie patch and cattle yards.
It may be on Roaring Beach Rd, but this secluded spot is far from the sounds of the city. There are two properties selling at the same time totalling 5.75ha. Wingrove House is a rustic homestead built by the craftsman owner and is hidden in its own forest with a few modern comforts such as a tennis court, workshops and a sauna. The adjoining land is a 4.5ha block surrounded by bushland close to the beach.
Reduce your footprint with this solar sustainable home 22km from the centre of Perth. The one-bedroom cabin style house is powered by an off grid solar system with storage batteries and an underwater rain storage system. Made from recycled materials, it has high cathedral ceilings, great cross flow ventilation and sits on its own 300sq m survey-strata lot with no fees.
So off the grid, this property has its own private road. It has been in the same family for more than 50 years and while there is a charming settler’s cottage on site it does come with DA approved plans to build a four-bedroom homestead. There are established orchards, cottage gardens, grazing land, a large catchment dam and a bushland backdrop all on 74ha.
This off-grid two-bedroom has a battery-powered solar system.
Address: Wingham, NSW
This handcrafted home on 163ha in the Manning Valley was built with timber from the actual property and stone from a nearby quarry. The off-grid two-bedroom, two bathroom property has a battery-powered solar system with gas cooking and hot water and views over the natural bushland and mountains.
Tucked away beyond fields of wildflowers and tall timber, this 35ha estate is a sustainable home in the heart of the Chittering Valley. It is a solar passive home with valley views and is made from straw bale and timber, double glazed windows, a waterless composting toilet, wood fire hot water system, three water tanks, vegetable beds, fruit trees and a chicken run.
This article was first published in www.realestate.com.au. Here is the link to the original article: https://www.realestate.com.au/news/for-sale-australias-best-offgrid-properties/
The following graphs show how much money would be made from selling the median value house or unit in each city at December 2018, based on when it was purchased over the past 15 years.
Although the Domain price series goes back more than 25 years for most cities, the past 15 years have seen some of the largest structural disruptions to parts of the Australian economy. These include the onset of the global financial crisis, a record low cash rate, the mining boom and the east-coast housing boom.
Historic values were adjusted for inflation so both the buying and selling points are represented in 2018 dollars. Therefore, the gains and losses reflect “real” returns, taking into account the effect of inflation.
Admittedly, without the aid of a time machine, this data crunch may not seem actionable. Many weren’t in a position to enter the market over the past 15 years (whether that’s because you didn’t have the money, or you were 11 years old).
And of course, capital gains are not everything. Buying at the bottom of the market might have meant paying higher mortgage rates. Looking only at capital gains also does not take into account other benefits of owning property – such as rental return, or getting to live in it.
But there are important lessons from looking at the past.
This data provides insight into the unique economic drivers of each state and territory that have led to different patterns in returns over time. It shows us that recognising structural shifts can be just as important as holding onto assets.
It potentially foreshadows future peaks and troughs in our cities, by highlighting what areas are starting to provide stronger returns.
When it comes to capital gains in Sydney, those who bought 10 years ago might actually be better off than those who bought 15 years ago.
But those buyers had to be bold enough to purchase in the midst of the global financial crisis.
Despite recent declines in the Sydney housing market, the real gain in the median house price between September 2008 and December 2018 is $398,000. For units, the real gains are $238,000.
In the lead-up to the GFC, the NSW economy under-performed relative to other states and territories. In September 2008, the economy faltered further with the onset of the GFC.
Demand for goods and services within NSW contracted in the September 2008 quarter. In this climate, the nominal median Sydney house price sank to $540,000, while the median unit was down to $377,000.
But by 2011, there was a turnaround in economic performance. Growth in Gross State Product (the state and territory equivalent of GDP) rebounded to 2.4 per cent, up from 1.1 per cent in 2009.
Property prices boomed as inflation stayed low across Australia. From 2009, the rate of inflation has been 2.1 per cent a year, as opposed to a long-term historical average of 5.1 per cent.
This means buyers who picked up a Sydney property at the height of the GFC have not only seen high value increases, but inflation has not eroded these gains as significantly.
Those who bought more recently have not been as lucky, with prices returning to 2016 levels. Since the market peak in June 2017, the median sale price for Sydney houses declined $173,000 in real terms.
Those who bought houses in September 2004 are the best placed to sell in the current market, with a $364,000 capital gain on a typical priced house. For units the best buying was December 2005 with values up $110,000.
High returns hold fairly steady for the median house purchase before September 2006. Domain data suggests purchases before this point yields real increases above $350,000.
However, by June 2010, the gains more than halve to $159,000.
This is because 2010 brought a significant surge in house prices off the back of strong economic performance in Victoria, and six cash rate cuts between September 2008 and April 2009.
The unit market in particular performed so well during this period, that those who purchased the median Melbourne unit during 2010 would likely not realise real gains if they sold today.
As the Melbourne property market experienced another surge from September 2012, the return on both houses and units purchased after this point depleted rapidly.
Melbourne units purchased at the market peak (March 2018), have seen the sharpest real decline in value, down $36,000. For houses bought at the market peak in December 2017, the median sale price is down by about $92,000.
Unlike Sydney, Brisbane property has seen real declines since the GFC. The median Brisbane unit sale price has seen declines relative to every quarter since December 2006.
Those who purchased a house in September 2005 would be best placed to sell today, with the median sale price up $124,000.
The best time to buy a Brisbane unit was all the way back in March 2004, with gains of $56,000 in the median price.
But it was not time in the market that benefited buyers, which is evidenced by the losses incurred by purchasers just four years later. It was buying just before a once-in-a-lifetime mining boom.
Queensland annual growth in ABS gross state product averaged 4.5 per cent a year, driven by a mining boom through the expansion of the Chinese economy.
ABS export figures suggest the value of coal exports from Australia more than doubled from 2007 to 2008, to $46.6 billion.
Queensland’s mining sector expanded, and property prices responded, providing rapid capital gains for those who bought beforehand.
The end of the mining boom in Queensland saw the rapid slowdown of migration and investment into Queensland between 2010 and 2014.
This in turn created subdued performance in the Brisbane property market. However, the graph above represents a turnaround in the market, as price declines become less severe over time.
As with Brisbane, the Perth property market has been heavily impacted by the wider resource-based economy of the state.
Through the mining boom and bust, prices have settled to levels last seen in December 2005.
The median Perth house price has increased most since March 2004, up $133,000. However, those who purchased at the median level just four years later in December 2007 saw the largest real declines – down $162,000.
Interestingly, while the declines are large, they are not as large as the declines seen in the Sydney market from the June 2017 peak.
In units, the real return based on the median sale price ranges from $90,000 at June 2004, to a loss of $102,000 from a purchase at June 2014.
Now that the Perth economy and housing market is showing signs of a recovery, houses purchased today may start seeing gains in value.
The real change in median house price purchases between the September and December quarters of 2018 was a relatively small decline of just $3000.
Perth and Darwin dwellings show similar patterns in changes to the median house and unit returns over time. However, the depths of decline over the last 15 years have been more severe in Darwin.
This is because the NT more broadly attracts a more mobile workforce, creating high fluctuations in population. As a result, property demand and prices see fluctuations.
The mining-induced peak of the Darwin house market was in March 2011. When taking inflation into account, the median house price rose to $744,000.
Since the March 2011 quarter, the median house price fell $229,000 – the most severe fall of the capital city markets.
The same is true of units, which have declined $197,000 since the peak in March 2015.
For both houses and units, the peak return based on median price data stems from purchases well before the mining boom, in March 2004.
When it comes to houses in Adelaide it is very much a ‘time in market’ investment. The highest gains come from purchases at March 2004 for both houses ($144,000) and units ($64,000).
Adelaide houses have largely seen slow and steady capital growth. The housing market has not been as attractive to investors, with ABS census data suggesting approximately 80 per cent of the house market is owner-occupied.
Therefore, a home owner who entered the housing market at any point in the past 15 years has generally seen a real gain in value from a sale in the current market environment.
The exception is 2018, where growth in the Adelaide house market has not kept up with inflation.
The biggest loss on Adelaide houses was relatively small, with a decline of $4000 from June 2010 to December 2018.
The recent slowdown in growth of the Adelaide housing market may be attributed to the generally subdued lending environment, and continued uncertainty of job creation in the SA economy.
The unit market has not been as steady over time, with real value declines of $40,000 for those who purchased in June 2010. It may be that in an affordable, low-density market, unit stock may not have been as desirable as houses over time.
Employment growth, particularly full-time employment growth, has been fairly strong in 2018 across SA, peaking at an annual growth rate of 2.5 per cent at April 2018.
Employment growth may flow into stronger demand for Adelaide property as jobs and wages lift. Adelaide units have seen modest increases over 2018.
Canberra has had the most remarkable divergence in returns between house and unit stock.
The median Canberra house price from anywhere between 2004 and 2017 would yield an increase if sold in the current market.
The highest increase is from a purchase at June 2005, where the real increase in price is $204,000.
The median unit price over the past 15 years has largely seen declines to December 2018.
The largest of these price falls would be from a purchase date of December 2010, when unit prices peaked in real terms at $501,000.
Since this time, a relatively high supply of unit stock may have contributed to declines in unit prices, which sat at $413,000 in December 2018.
ABS building activity data shows that unit completions largely out-paced house completions in the ACT from 2011. Unit completions have since averaged approximately 2800 a year, compared with an average 1485 house completions.
The most a Canberra unit has made from the past 15 years if sold today is just $11,000 from September 2004.
Those purchasing houses between September 2014 and December 2017 did so in a rising market, before prices plateaued over 2018. Therefore, house purchases in 2018 have not seen median house prices outpace inflation.
Selling the typical house in Hobart today would likely leave the seller better off, no matter when they purchased the property over the past 15 years.
From a humble house price of $214,000 in March 2004, the median Hobart sale price is now approximately $480,000. Taking inflation into account, the gains on this holding period are $175,000.
Units also have maximum returns from a property acquired at March 2004, which would see real returns of $85,000 if sold today.
Hobart was not always a desirable market. In September 2012, prices approached a trough off the back of weak tourism, public spending and construction.
This was partly related to the peak of the mining boom, which saw construction projects winding down, and a high Australian dollar deterring international tourism.
Domain’s median price series suggests a house purchased at this trough has since increased by $137,000.
Between September 2016 and December 2018, the median Hobart house price increased 34 per cent, while units increased 33 per cent.
However, growth in Hobart dwelling prices is starting to ease, as tighterlending conditions and subdued demand will likely see the Hobart prices stagnate over 2019.
Units have already seen a fall in values over 2018. Those who purchased at June 2018 have already seen a real decline of $23,000.
Ultimately, there will be many variations on the capital gains of an individual property. But median price analysis suggest for most cities, economic structural shifts in the last 15 years have challenged the time in the market rule.
The global financial crisis, a once-in-a-lifetime mining boom and record-low interest rates have created different experiences of loss and opportunity from city to city.
This article was first published in www.domain.com.au. Here is the link to the original article: https://www.domain.com.au/news/when-you-should-have-bought-in-australias-capital-cities-797932/
THE housing slump led by Sydney and Melbourne could be a windfall for Brisbane buyers, with home values in the Queensland capital dropping for a second straight month.
The CoreLogic January home value index found dwelling values in the river city fell 0.2 per cent in the first 29 days of the month to a median of $493,500.
It follows a drop of 0.2 per cent in December.
CoreLogic head of research Tim Lawless said the silver lining for Brisbane was that buyers were in now in the box seat, with homes more affordable and stock levels higher than they were a year ago.
“We’ll probably be looking at Brisbane having a flat year, with no growth at all in dwelling values, which in some ways is positive with the market in a downturn,” Mr Lawless said.
“There’s plenty of stock to choose from and buyers are looking at relatively affordable housing compared to Sydney and Melbourne, and because there’s lots of stock to choose from, there’s no urgency — buyers can negotiate quite hard.”
The slowdown is being led by heavier price falls in the nation’s two biggest housing markets.
in the month to date.
Mr Lawless said the results showed the housing market slowdown was not just restricted to price corrections in Sydney and Melbourne.
“The first month of the new year has seen housing market conditions continue along the weak trajectory seen throughout 2018,” Mr Lawless said.
“The falls continue to be led by Sydney and Melbourne, while the early indications were also pointing towards a monthly fall in dwelling values across Adelaide, Perth and Brisbane.”
National dwelling values fell 1.1 per cent over the first 29 days of January, while Sydney values dropped 1.3 per cent and Melbourne values slid 1.6 per cent.
Home values across the five major capital cities declined 7.2 per cent over the past year.
Mr Lawless said tight credit conditions remained the key factor in slowing the housing market, while other factors such as a softening in consumer sentiment, higher supply and less investment were also having an impact.
The full set of CoreLogic index results will be released today.
CORELOGIC HEDONIC HOME VALUE INDEX
Sydney Jan. -1.3%; Qtr -4.4%; Year -9.6%
Melbourne Jan. -1.6%; Qtr -4%; Year -8.2%
Brisbane Jan. -0.2%; Qtr -0.3%; Year 0%
Adelaide Jan. 0.4%; Qtr -0.1%; Year 0.9%
Perth Jan. -0.9%; Qtr -2.6%; Year -5.5%
Combined 5 capitals Jan. -1.1%; Qtr -3.4%; Year -7.2%
(Source: CoreLogic, based on first 29 days of January 2019)
This article was first published in www.realestate.com.au. Here is the link to the original article: https://www.realestate.com.au/news/buyers-in-the-box-seat-as-brisbane-home-values-start-to-fall/
The tech industry’s ability to disrupt exisiting markets is well documented, with major players like Uber and Airbnb making their presence felt abroad and closer to home. When it comes to the rental market, rent-bidding apps such as Silicon Valley-based Rentberry and Live Offer have also been feted for an Australian launch.
Now, another start-up has established itself in the US, offering tenants using its platform the ability to borrow money in the form of a one-off loan to help them cover the rent.
The company operates an online rental payment platform, working with companies that manage large residential complexes, with revenue coming from payment processing fees.
The tenants in those properties pay through Domuso, and have the option of applying for a Domuso Instalment Loan to cover a rental instalment they can’t manage rather than incur late fees and potentially risk eviction. There is also financing available to cover security deposits, or rental bonds.
The loans are available for six to 12 months and are reported to have an average annual interest rate of 27 per cent, which has triggered some concerns from financial experts. However, Domuso co-founder Michael Lightfoot argued that some residents were already paying their rent on credit, and Domuso was a safer digital alternative.
He said the company had “no intent of going down a path of payday lending, or anything in that regard”.
“We provide one loan at a time for any one-time payment that is due [one month’s rent, move-in and deposit, move-out, etc]. Renters must pay off their current loan before taking a new loan,” explained chief executive Damian Langere in a L.A. Biz interview.
He said the service would be beneficial for gig-economy workers facing strict rental payment deadlines, or renters grappling with unexpected financial emergencies, such as medical bills or losing their jobs.
While the platform is not available in Australia, other forms of credit such as short-term loans may be used by tenants struggling to make ends meet.
The managing editor of comparison platform Finder.com.au, Kate Browne, said using credit to pay the rent was a dangerous situation to get into.
“Payday lenders have been on the rise in Australia for a long time,” she said, noting the casualisation of the labour market and the situation of low-income earners. Rental stress remains high in Sydney and Melbourne, despite Sydney’s recent rent falls.
“Another reason we are seeing this is the rise of online access – you don’t even need to get off the couch, and you can get a loan in as little as 30 minutes,” she added.
“In terms of an alternative – the very first one is to try to negotiate with your landlord or agent. There are also financial counsellors that offer free independent advice, that’s a really sensible port of call.”
For those still needing to borrow money, it was worth comparing options, she said, with low-interest loans available to those on low incomes.
“We are always reticent to suggest people get into debt,” Ms Browne said.
This article was first published in www.domain.com.au. Here is the link to the original article: https://www.domain.com.au/news/would-you-take-out-a-loan-to-pay-the-rent-797525/