subject: Market Snapshot: News for First Home Buyers, Investors and Developers [print this page] Market Snapshot: News for First Home Buyers, Investors and Developers
While some indicators point towards a flattening housing market heading into the summer of 2010, experts claim that strong and steadily increasing employment rates, labour prices and CPI will ensure 2011 is a year of steady growth for the property industry. Increasing employment rates have been documented by the RBA who claim that employment has risen by over 50,000 positions in the month of September and has risen by around 3per cent over the year. The Australian Bureau of Statistics released their 'Labour Price Index' for the September 2010 quarter and their 'Average Weekly Earnings' for the three months to August 2010 this week which show labour prices increasing by 1.1% in the September quarter and 3.5% for the year.CPI increased by 2.8% over the same period. Over the year, wages have grown strongest within the mining states with Queensland and Western Australia recording an increase in the Index of 3.9%. RP Data states that full-time wages were highest within Western Australia at $1,461.30 and that full-time wage growth has been strongest in Northern Territory (8.0%) followed by: Australian Capital Territory (7.8%) and Western Australia (6.0%).Andrew Wilson, the senior economist at Australian Property Monitors says that while investors and first home buyers are obviously concerned about possible rate rises early next year he argues that property in most Australian capitals is well positioned to sustain current prices. ''Unemployment levels are falling and new jobs are being created, and recent Australian Bureau of Statistics data indicates incomes are rising,'' he said.FIRST HOME BUYERS:While there is evidence to show that the scaling back of the first home buyers boost at the end of this financial year slowed growth in the first home buyers market, the latest REIA data shows that the number of first home buyers, as a percentage of total owner occupied housing commitments, increased slightly from 15.5 per cent in August to 15.9 per cent in September - still sitting below the national average of 20.1 percent but a modest increase nonetheless. Currently, Victoria and Western Australia are the most active first time buyer markets in the country.In Victoria, the State Government has publicised its plans to cut stamp duty, which will further stimulate home buying. Both the ALP and the Coalition concur that the homebuyers are being forced to pay too much stamp duty which impacts on the availability of affordable housing. Liberal Leader Ted Baillieu is promising to initiate reduced tax rates over four years, with a 20 per cent cut from July, followed by another 10 per cent each year if elected.Enzo Raimondo, Real Estate Institute of Victoria Chief Executive Officer has said that "the Coalition's initial 20 per cent cut would take stamp duty rates (as a percentage of the sale price) back to what was being paid around 10 years ago for first home buyers."On the other hand, the policy put forward by the ALP is directed toward first homebuyers who are building a new property, particularly in regional areas. The ALP only promises to remove stamp duty for first homebuyers of new homes in regional areas.AUCTIONS:The end of spring has signaled a rush in the auction market. Last Saturday was the busiest we have seen all year in terms of auction activity. Almost 750 dwellings were booked in to go to auction this weekend. In 2009, the busiest day showed 690 listings on a Saturday in September. Melbourne is typically the most significant auction market in the country at the moment; during 2010, 47% of all capital city auctions have taken place in the city. In comparison, Sydney has held 34% of capital city auctions, Brisbane 8.5% and Adelaide 5%.INVESTORS:While the recent improvements in rents and yields have been only moderate, higher interest rates, scaling back of government stimulus packages and a reduction in building approvals are all likely to contribute to heightened rental demand. These factors, along with other continuing factors like population growth and the current housing shortage will ensure a sustained growth in rental rates. The low vacancy rates that we see in the current market will persist and increased demand and subsequently competition for rental dwellings will ultimately mean higher prices being paid for rental accommodation.Investors also currently have more dwellings to choose from with RP Data stating that there are 64,000 houses and units listed for sale across NSW which is a 13 per cent increase than at the same time last year.''With listings climbing so significantly, the number of homes being advertised has returned to similar levels to those recorded during the global financial crisis,'' Tim Lawless from RP Data said.DEVELOPERS:Recent figures released by the Australian Bureau of Statistics have shown that Victoria remains Australia's busiest state for residential construction. According to the ABS data Victoria saw $3.2 billion of private sector residential building activity in the September quarter. A collective count of building activity in the private sector sees that Victoria also tops the nation's tally with a total of $5.2 billion of activity."Victoria remains Australia's number one state for residential construction," Urban Taskforce Chief Executive Officer Aaron Gadiel said.Up until 2007, NSW was leading the race for strongest construction rates but Victoria now sits firmly at the top of the list and in the last financial year, for every dollar spent by builders in New South Wales, $1.20 was spent in Victoria."It's time the major political parties started articulating coherent plans to get residential construction going again in New South Wales." Gadiel argued.Interestingly the HIA-CBA Affordability Index this week, showed that Melbourne has overtaken Sydney as the country's least affordable capital city property market for the first time ever. http://www.articlesbase.com/real-estate-articles/market-snapshot-news-for-first-home-buyers-investors-and-developers-3761207.html
