RETIREES HOLD ANSWER TO HOUSING SUPPLY WOES

October 28, 2010 Leave a comment

First National Real Estate’s Tasmania Chair and principal of First National Burnie, Deanne Lamprey said the real estate industry and governments should look to older Australians and retirees for part of the answer to the housing supply dilemma.

“We know from the recent survey conducted by the Australian Housing and Urban Research Institute that older Australians were not keen to move house, and they are a primary source of housing stocks,” Ms Lamprey said.

“I call on governments and real estate industry representatives to look at ways to make downsizing an attractive option for this key demographic group.”

According to Ms Lamprey one way might be to consider waiving, or reducing, stamp duty as an incentive.

“They are already doing this in NSW and it is something that has merit for other states in Australia,” Ms Lamprey said.

“Older Australians and retirees have already given so much to this country, and paid their fair share of taxes, so why not reward them and at the same time free up their homes for other would-be homebuyers?”

The survey showed that if just 20 per cent of baby boomers were to downsize into smaller accommodation, the vexing housing supply problem would be solved.

Statistics show that over 55 year olds make up 25 per cent of Australia’s population – that’s 5.6 million people.  Over 65 year olds make up a further 13 per cent – 2.9 million people.  The over 65 component will grow to 19 per cent by 2021 and when you add the figures together it’s not hard to see that the problem, with immigration thrown into the mix, is getting worse.

“At current rates, it’s possible that close to 20 per cent of Australia’s larger housing stock will be inaccessible to first home buyers, young families or investors,” Ms Lamprey said.

“Home ownership among young people is falling and this is not a new trend. So it is up to those with a vested interest in the housing market to put our collective thinking caps together and come up with solutions that will prove too attractive and lucrative for older Australians to pass up.”

Issued by: First National Real Estate.  For further information contact Deanne Lamprey, Principal, First National Real Estate Burnie, on (03) 6431 4544

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GIRL POWER SHOULDN’T BE TURNED OFF

October 27, 2010 Leave a comment

First National Real Estate‘s national communications manager, Stewart Bunn cautions that agents who continue to ignore women in the property purchase process, do so at their own peril, as they risk alienating a major buying audience.

According to research commissioned by the First National Real Estate network, more than one in four women say real estate agents take more notice of their partner when they buy a home together, with older women feeling they are the most discriminated against.

“This is completely unacceptable in this day and age,” Mr Bunn said.

“Women play a critical role in the property purchasing decision, and as such, it is crucial agents take this into account, from the way the property is marketed, right through to inclusive conversations with both sides of the home buying relationship.

“Apart from being discriminatory, it is not good business practice and bad for the industry overall.

“Statistics show the number of women planning to purchase property on their own has more than doubled in the last two years alone, so they are an important part of the real estate market.”

The survey, conducted on behalf of First National Real Estate by Newspoll, interviewed 1200 women from around Australia, across all age groups, and found that the older women got, they more they felt they were not being considered, or listened to by real estate agents.

“While a slightly higher percentage of women who felt this way were found in capital cities, 28 per cent, it was followed closely by those in metropolitan areas outside the capital city centres, at 22.7 per cent,” Mr Bunn said.

“The feeling seemed more prevalent in those who had bought a house between 11 and 20 years ago than those who bought a house more than 20 years ago.”

The survey also found that the major influence on the home buying decision for women was whether the area was safe to live in.

“Interestingly, the older the women surveyed were, the less important this became as an influencing factor, although it was still the key one,” Mr Bunn said.

“For 100 per cent of the women surveyed aged 24 to 28, safety was a major influence, but this declines as the women got older.  78.2 per cent of those aged 25 to 34, 71.1 per cent of those aged 35 to 49 and then only 59.3 per cent of those over 50 considered it a major issue.”

Other main influences for women were:

· The number of rooms, with this being the top reason for 55.8 per cent of the 35 to 49 year old age bracket

· Potential for the home to increase in value – 55.1 per cent

· Outdoor living area – 49.2 per cent

· Having off-street parking – 45.4 per cent

· The home having good potential to improve or renovate – 44.2 per cent

· Proximity to shops – 35.7 per cent

· Home already being new/fully renovated – 29.5 per cent

· Proximity to public transport – 29.2 per cent

“Safety, space and value are clearly issues of major concern to women and it is important that agents remember that when selling or renting a home, or helping women to find their next purchase” Mr Bunn said.

 

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COMMERCIAL PROPERTY SET TO BOOM

October 26, 2010 Leave a comment

Media Release – 26 October 2010

Australia’s commercial property market is set to enter a boom phase, driven by strong demand and high rental yields, according to First National Real Estate CEO, Mr Ray Ellis.

“While the commercial property sector has been slow to rebound from the troubled financial times of last year, and a full recovery is anticipated to occur between 2011 and 2015, the addition of 316,635 square metres of office space has helped spur interest and activity,” Mr Ellis said.

“At the same time, banks are showing more confidence in approving loans for commercial property purchases, a sure sign the Australian economy is further strengthening.”

Mr Ellis said the network had undertaken a survey of its commercial property managers recently, with respondents saying many investors realised commercial property may be more attractive than residential, as it can offer much better returns, is relatively hassle-free and tenants are usually on long term leases of three or more years.

“Yields can start at around six per cent, which is much higher than what you might currently expect from a residential investment, despite the emerging recovery evident in the residential sector” Mr Ellis said.

“Plus, it is tenants, not the landlord, that bear the cost of many of the outgoings such as council rates and maintenance.”

Mr Ellis said that according to the survey, current levels of return ranged between 5.6 and 9.5 per cent, with 21 per cent indicating returns were around 8 per cent.

“For the majority of members responding to the survey, around 61 per cent, this was a decrease over the previous 12 months, however 57 per cent expected returns to increase in the coming 12 months.

“Around 92 per cent of survey respondents also said they expected rental values to increase in the next 12 months, and vacancy rates were expected to decrease for almost 70 per cent of respondents, easing the supply situation to some degree.”

In the last 12 months, 44 per cent of respondents said rents had increased, 33 per cent said they had remained the same and 22 per cent said they had decreased.  Vacancy rates had increased for almost 65 per cent of respondents.

The majority of rental movements were between 1 and 5 per cent.

Based on survey responses, the major factor influencing demand for office space remains position, followed by transport access, exposure and then energy efficiency, which is increasingly playing a role in the decision making process.

Issued by: First National Real Estate

For further information contact Karen Panna, National Commercial Manager, First National Real Estate on (03) 9418 9137 or 0466 771 038

 

 

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Time running out to win

October 25, 2010 Leave a comment

Time is running out so don’t miss out on our competition!

First National Real Estate is offering the chance for one lucky individual or family to update their home with $25,000 worth of brand new furniture and energy efficient appliances in October.

Visit www.firstnational.com.au and follow the links to the Super Massive $25,000 Giveaway.

Just answer a couple of simple questions and submit your entry form to be in the running for the $25,000 prize.

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House prices poised to rise, not burst: BIS Shrapnel report

October 12, 2010 Leave a comment

A exposure blended photo of the Sydney Opera H...

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AUSTRALIAN house prices will rise for the next three years on the back of the country’s robust economy, according to a BIS Shrapnel report.

The report, commissioned by QBE and written by BIS Shrapnel, forecast median house price growth of 20 per cent in Perth, Sydney and Adelaide over the next three years, with prices in every major city in Australia rising by 9 per cent or more.

The survey comes at a crucial time in sentiment surrounding the Australian housing market. Recent data shows pricing in the market is starting to slow, while international investors and even the International Monetary Fund have recently argued the local housing market is overvalued.

As prices have dipped, some economists and investors — most notably GMO chief investment strategist Jeremy Grantham — have even argued a housing bubble was being created in Australia, something both BIS and QBE dismissed at a press conference.

“We aren’t in for a period of phenomenal growth but we’re certainly not in for a 20 per cent drop either,” said BIS managing director Robert Mellor.

Mr Mellor argues a string of six rate hikes in seven months by the Reserve Bank of Australia in late 2009 and early 2010 has more to do with the recent slowdown than anything else. Earlier this month, RP Data-Rismark reported Australian capital city house prices fell 0.2 per cent in August from July.

However, should a correction occur, mortgage insurers such as QBE would be arguably most exposed to the drop.

Ian Graham, chief executive of QBE, said the firm hasn’t made any broad changes as the concern has picked up, though he noted the firm went through some changes to tackle the ongoing credit issues during the global financial crisis.

“Any adjustments we’ve made have been at the margin,” said Mr Graham.

In addressing the slowdown in prices, Mr Mellor said even though a first-time home buyer’s grant pushed some sales up to the early part of this year, he expects first-time home buyers to return to the market with vigour late this year and early next year partly thanks to a recent pause from the RBA.

The RBA has now paused with rates in its last five meetings, including last week when it surprised economists by keeping rates steady at 4.5 per cent.

In dismissing the idea of a bubble, Mr Mellor noted than unlike the bubble in the US, Australian housing prices haven’t moved upward continuously, adding prices were still 12 per cent to 15 per cent below peaks from 2003.

Still, the local housing market doesn’t come without risk, according to BIS. Should the economy heat up even more than BIS forecasts, the impact that move would have on interest rates could damage an already somewhat stretched affordability issue in Australia.

“The big risk is affordability,” said Mr Mellor, who said affordability wasn’t a short-term risk but could turn into one by 2013 should rates reach above 8 per cent.

The report come on the heels of a senior central bank official last week saying the housing market has already cooled off. Luci Ellis, head of financial stability at the RBA, said dwelling prices have tapered in recent months and housing credit has slowed, most notably to first-time home buyers.

“Loans to property investor households have not surged the way they did during the more buoyant, rather speculative period in the early 2000s,” Mr Ellis said.

While a temporary cooling of house prices will be welcomed by those worried the market place is overpriced, it has done little to calm those concerned about a bigger correction.

Set for release tomorrow, Fitch Ratings will conduct stress testing on the housing market after being inundated with inquiries both locally and abroad on the sustainability of prices.

SOURCE: The Australian |

  • Geoffrey Rogow
  • From: Dow Jones Newswires
  • October 12, 2010 1:39PM

Filed under Market Updates Tagged with

Soft Landing | Houses slip but rents rise

October 11, 2010 Leave a comment

August national results released by RP Data on 30 September showed that Australian capital city home values declined 0.2 per cent (seasonally adjusted) in August, bookending a strong run that saw home values rise by 8 per cent in the preceding year, despite poor global conditions. At the same time, homes outside capital cities stood still, showing exactly zero per cent growth.

The good news for investors is that rental markets are showing signs of recovery with capital city rents lifting by 2.9 per cent in the past 12 months.
It could be said that the Australian housing market has experienced a broad-based soft landing.
The big surprise for October was the Reserve Bank’s decision to leave rates on hold at 4.5 per cent. Markets had factored in a 76 per cent probability of a 25 basis points increase, and now, despite markets reducing the probability of a November hike to less than 50 per cent, Westpac indicates in its October economic update that everything still points to upward movement in November. The reasons are threefold.
Markets will focus on the next CPI, employment and consumer sentiment figures – all due this month.
The RBA Governor’s speech and September Board Minutes contained a very clear signal that the primary concern remains inflation risks associated with the mining boom. Its policy will be set to pre-emptively avoid inflation while rebalancing growth away from consumer/housing to investment/exports.
Westpac is of the belief that even lower than expected inflation or evidence of slowing credit and moderating housing/retail markets will not divert the RBA from its objective of improving growth with investment/exports at the expense of housing for years to come.
All of this comes as no great surprise to First National agents who have been observing a parallel shift in the marketplace towards an increasing investor presence. Both residential and commercial markets show considerable promise for the years ahead.
Key statistics from RP Data’s September Quarter Rental Review highlight that Darwin still leads the pack when it comes to the most expensive rental houses in Australia. Canberra is hot on its heels. Key statistics reveal that city and regional rental markets are in recovery:
•    Weekly rents up 2.9% over last 12 months
•    City unit rents increased more than houses – past five years
•    Canberra and Melbourne houses recorded rental increases in September quarter
•    Western Australia’s Pilbara has the most expensive rents – $1500pw
•    Adelaide has the cheapest capital city rents at $320pw
Changes in capital city housing values (three months to August) are detailed below:
Sydney    + 0.2% to a median of $505,000
Melbourne    – 1.5% to a median of $470,000
Brisbane    – 2.3% to a median of $434,000
Adelaide    – 0.2% to a median of $387,500
Perth    – 4.8% to a median of $460,000
Darwin    – 1.4% to a median of $485,000
Canberra    + 1.2% to a median of $480,000
Hobart    + 1.4% to a median of $325,000
So, the weakness seen since the end of the first quarter has materialised in all cities as the effects of higher interest rates and the absence of the first home buyers boost make themselves felt. While capital growth has broadly halted, property owners are still realising positive total returns due to the effect of direct or imputed rents.
Gross rental yields across capital cities are estimated to be 4.9 per cent and houses 4.0 per cent, but on a total return basis, Australian housing has outperformed most other asset classes in the past ten years. However, if the resources boom combines with excessive consumer spending, the RBA may lift rates 4 to 6 times before the end of 2011, which could lead to further modest declines in property values.

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Spring real estate market and interest rates decision

October 8, 2010 Leave a comment

CEO Ray Ellis discussed the national market’s conditions and the RBA decision to leave rates on hold earlier this week on Finance News Network.

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Australian Marketing Institute Awards for Excellence

October 1, 2010 1 Comment

Effective, well targeted, and cost effective mass communication is now the cornerstone of every successful real estate agency – particularly in tight economic conditions and increased customer service expectations. That’s why First National Real Estate created Utopia.

Utopia guarantees that First National estate agents and property managers never miss an opportunity to communicate information that is specifically targeted to the customer’s interests. Potential buyers are informed of new property listings that specifically meet their search criteria. If a property they’ve inspected is sold, or the price reduced, they’re also immediately advised of that changed circumstance. Tenants are informed of new vacancies and can even have the system identify properties where the landlord will consider pets – Pet Friendly.

The Australian Marketing Institute has recognised Utopia in its Relationship Marketing category, grating finalist status to the product. Winners will be announced in Melbourne on 13 October.

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