Real Estate Agents Adelaide

The housing boom, which saw strong auction clearance rates throughout March and last month, has cooled significantly after six interest rate rises since October and a worsening European financial crisis.

According to Australian Property Monitors, auction clearance rates over the weekend in Melbourne and Brisbane were down considerably compared with the previous weekend, while Sydney and Adelaide showed modest gains.

Real Estate Institute of Australia president David Airey cited consecutive interest rate rises, tighter lending criteria and the continuing financial crisis in Europe as contributing to the softer clearance rate.

“In March, based on the figures, I predicted this was going to be a very strong year for real estate; now I have to review my thinking,” Mr Airey said.

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“The simple fact is that the handbrake has been pulled up very suddenly.

“I would not call it a crisis of confidence, but the speculative end of the market has completely ceased and the enthusiasm has been dampened.”

In Brisbane, only $6.5 million of property sold at auction over the weekend, about half of the $12.8m auctioned the previous weekend. The city’s 21.7 per cent clearance rate was 14 percentage points lower this week.

In Melbourne, APM figures showed just $93.3m in property sold over the weekend, down substantially from $239.3m the previous weekend. The state’s most expensive property was a three-bedroom townhouse in Toorak that sold for $2.38m.

Figures from the Real Estate Institute of Victoria painted a healthier picture of the state’s property market, recording a clearance rate of 75 per cent. But REIV chief executive Enzo Raimondo said, “interest rates and a large number of homes on the market continue to keep the clearance rate below the pre-Anzac Day norm of over 80 per cent.”

In Sydney, the auction clearance rate was up 2.5 points to 63.2 per cent. The result was still down markedly on the 70 per cent clearance rate the city was recording in the first quarter of the year.

The number of Sydney auctions was also down from 409 the previous week to 331, with the most expensive property sold under the hammer being a four-bedroom home in Strathfield, which went for $2.35m.

Adelaide’s property market fared better, with the clearance rate up six points to 51.4 per cent over the weekend.

Category: Adelaide Market News

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Category: Adelaide Market News

The housing boom, which saw strong auction clearance rates throughout March and last month, has cooled significantly after six interest rate rises since October and a worsening European financial crisis.

According to Australian Property Monitors, auction clearance rates over the weekend in Melbourne and Brisbane were down considerably compared with the previous weekend, while Sydney and Adelaide showed modest gains.

Real Estate Institute of Australia president David Airey cited consecutive interest rate rises, tighter lending criteria and the continuing financial crisis in Europe as contributing to the softer clearance rate.

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“In March, based on the figures, I predicted this was going to be a very strong year for real estate; now I have to review my thinking,” Mr Airey said.

“The simple fact is that the handbrake has been pulled up very suddenly.

“I would not call it a crisis of confidence, but the speculative end of the market has completely ceased and the enthusiasm has been dampened.”

In Brisbane, only $6.5 million of property sold at auction over the weekend, about half of the $12.8m auctioned the previous weekend. The city’s 21.7 per cent clearance rate was 14 percentage points lower this week.

In Melbourne, APM figures showed just $93.3m in property sold over the weekend, down substantially from $239.3m the previous weekend. The state’s most expensive property was a three-bedroom townhouse in Toorak that sold for $2.38m.

Figures from the Real Estate Institute of Victoria painted a healthier picture of the state’s property market, recording a clearance rate of 75 per cent. But REIV chief executive Enzo Raimondo said, “interest rates and a large number of homes on the market continue to keep the clearance rate below the pre-Anzac Day norm of over 80 per cent.”

In Sydney, the auction clearance rate was up 2.5 points to 63.2 per cent. The result was still down markedly on the 70 per cent clearance rate the city was recording in the first quarter of the year.

The number of Sydney auctions was also down from 409 the previous week to 331, with the most expensive property sold under the hammer being a four-bedroom home in Strathfield, which went for $2.35m.

Adelaide’s property market fared better, with the clearance rate up six points to 51.4 per cent over the weekend.

Category: Adelaide Market News

Interest rises kick the stuffing out of auction clearance rates NEWS.com.au Real Estate Institute of Australia president David Airey cited consecutive interest rate rises, tighter lending criteria and the continuing financial crisis … Housing market slowdown worse than official auction data suggests: ExpertSmartCompany.com.au Is the Housing Market Set to Topple?Money Morning (blog) all 5 news articles »

Category: Adelaide Market News

AUSTRALIAN house prices will rise by nearly 20 per cent over the next three years, buoyed by the “current heat” in the market surrounding first home buyers.

That’s the forecast from research house BIS Shrapnel’s Residential Property Prospects report - based on data from the Real Estate Institute - released today.

BIS Shrapnel’s Angie Zigomanis said activity in the lower end of the market - buoyed by the boost to the first home owners grant and low interest rates - were generating “green shoots” of recovery.

The report says average house prices in most capital cities will grow by between 11 and 19 per cent over the next three years. In real terms (where prices are adjusted for inflation) the level of percentage growth is about half.

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Mr Zigomanis, who said actual prices were more indicative than prices adjusted for inflation, predicts the boost to the first home owners grant combined with low interest rates would kick start further activity in the “upgrading” market.

“If the first home buyers are in the market buying, someone is selling it to them,” he said.

“We’re expecting that increased first home buyers activity to lead through to stronger upgrading demand for people upgrading to their next property,” he said.

Mr Zigomanis said once the (boost to the) first home owners grant expires, and first home buyers drop back out of the market, there’s enough activity in the market so it becomes self-sustaining.

The boost to the first home owners grant will finish at the end of this year.

Unemployment curbing  property growth  

But the research, based on Real Estate Institute data, said house prices would remain relatively stagnant until unemployment peaked around June 2010.

“Everything’s pointed at people jumping in the market”.

“At the moment we’re dealing with a confidence issue,” he said.

Weak economic growth and rising unemployment meant Australians were hesitant to jump into the market, he said.

The Government forecast in its May Budget that unemployment will rise to 8.5 per cent by mid-2011, leaving one million Australians out of work.

BIS Shrapnel predicts unemployment to peak “somewhere between 7 and 8 per cent” mid next year.

Mr Zigomanis said unemployment would impact house prices “more so from a confidence perspective”.

“Those people who have the means to buy property, and still have a job to buy property, they may be concerned about their employment outlook,” he said.

Outlook via region, according to BIS Shrapnel

Sydney

- Median house price $530,000 in June 2009

- New home construction at 50-year lows

- Total price growth forecast at 19 per cent to 2012

- Strongest growth at end of three year period

Melbourne

- Median house price $425,000 in June 2009-06-12

- A fall of 6 per cent for the financial year

- Pick up in “upgrader” activity expected

- Nearly 20 per cent increase in prices to 2012

Brisbane

- Median house price $391,000 in June 2009

- Down 7 per cent for financial year

- Interstate migration to boost modest price growth

- House prices to rise by 16 per cent to 2012

Gold Coast and Sunshine Coast

- House prices generally move in tandem with Brisbane

- Expected to grow by 14 per cent to 2011

- Price growth to lag slightly behind Brisbane

Adelaide

- Experienced double-digit growth to 2007

- Now down 3 per cent to $360,000 in June 2009

- Lowest median house price of mainland state capitals

- Incentives “having the greatest financial impact”

- Tipped to jump 19 per cent to 2012

Perth

- Market began slowing in 2007, ahead of eastern states

- Median house price tripled in five years to 2006

- Affordability improving; price decline stabilising

- Median house price $425,000 in June 2009

- House prices to increase by 12 per cent to 2012

Hobart

- Median house price declined marginally in 2008

- Increased interstate migration attributed to “tree-change” mentality

- Average house price $335,000 in June 2009

- To jump 15 per cent in the next three years to 2012.

Darwin

- Only capital city to record a rise in median house prices in 2008

- Average house price $470,000 in June 2009

- NT reliant on oil, gas; hasn’t weakened as much as other economies

- Gap in investments to kill short-term price growth

- To grow by 11 per cent in three years to 2012

Category: Adelaide Market News

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Category: Adelaide Market News

Over the first 11 months, home values rose by 11.3 per cent after their modest 3.8 per cent peak-to-trough falls in 2008.

The data, compiled by property RP Data and Riskmark International, found the best-performing capital city was Darwin with values up 17.9 per cent during the 11 months.

Adelaide was the worst, recording just a 5.7 per cent increase.

Christopher Joye, managing director of Rismark International, said the figures indicated the Australian market was less sensitive to interest rate rises and the removal of the government stimulus than previously thought.

“The story here is we saw quite spectacular growth in contrast to the quite pessimistic predictions,” he said. “The key driver of Australian housing demand in the latter half of the year appears to have been upgraders and investors. We expect this trend to continue in 2010.”

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Of the rental markets, Darwin came out on top again with gross rental yield of 5.7 per cent for houses and 6 per cent for units.

Melbourne was the worst with gross rental yields of 3.7 per cent for houses and 4.4 per cent for units.

SQM Research managing director and property expert Louis Christopher said he believed renters were in for a rocky year with rents set to continue rising.

“Rents continued to rise in 2009, particularly in the medium to affordable end of the market, and I expect that to continue into 2010,” he said. “I wouldn’t be surprised if rental growth tops 7 per cent.”

Mr Christopher also said the phasing out of the boost to the first-home buyer grant, to take effect from today, would “seriously hurt” the property market. “There will be an impact on the market. Because of the wind back to the FHOG, it will be a considerable factor to the slower house price growth in 2010,” he said.

“Holiday homes and prestige property will see a major return and will be the best performers. The affordable end will still record growth but not as robust because of the scale back.

“Nationwide we are going to see 4-6 per cent house price growth as an average for 2010.”

Real Estate Institute of Australia president David Airey said that despite the prospect of further interest rate rises this year, he was optimistic buyers would continue to return to the market.

“Australia has a passion for real estate. Although we’ve been through a huge storm following the financial meltdown, many think we got out of that fairly easily,” he said.

“The buyers are there and they are looking out for property.”

Category: Adelaide Market News

Adelaide real estate agency John R Ring Pty Ltd, which trades as Ring Partners, has asked the Supreme Court to declare their advertised “buyer inquiry range” does not infringe pricing laws introduced in July.

Ring Partners today continued with the practice, advertising a Seacliff Park property with a vendor’s selling range starting at $390,000, but inviting buyers from $335,000 – more than 16 per cent lower.

The new regulations, which require all price representations to show the vendor’s genuine price or price range if they are disclosed, were introduced in July in a bid to reduce “bait pricing” or underquoting.

State Real Estate Institute chief executive Greg Troughton said Ring’s case was “incredibly important” for homebuyers and the industry.

“It goes to the cornerstone of how we make representations to the public as to likely selling price,” he said.

“It will determine if it is a representation or whether it is legal or not.”

Representative for Ring, Richard Ross-Smith, argued the buyer’s inquiry range did not change the vendor’s disclosure of their price range – instead, it told potential purchasers “come along and have a look at this price and you might just get it at the price you’re looking”.

“It is not about value, it is about what it is in your interest to inspect,” he told the court.

But representative for the Commission for the Office of Consumer and Business Affairs, Helen Ward, said homebuyers would look to both prices, not just the formal “vendor’s price range”.

“(Readers) are being invited to talk them up to that higher price . . . and they are reading the ads with those prices in mind,” she told the court.

“Everything is negotiable and there is a positive invitation that they inspect the property (at that price range).”

Mrs Ward confirmed the Office of Consumer and Business Affairs was considering prosecuting Ring Partners for the ads. Justice John Sulan reserved his decision until later this month.

 

Category: Adelaide Market News

TENANTS can expect to pay out an extra $5 billion or more in the next two years as landlords push up rents to cover spiralling mortgage costs.

Property analyst Residex and the country’s biggest real estate chain Ray White say the Reserve Bank’s lifting of interest rates is flowing straight through to the rental market.

A shortage of available properties and increased population are adding to the rate pressure, with weekly rents expected to rise between $40 and $100 in the next two years.

“Every force in the marketplace will be driving rents higher,” Ray White director Ben White says.

“The mortgages of rental property owners are becoming more expensive, so it’s inevitable that this will result in rents going up,” White says.

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There are about 2 million rental properties in Australia and if rents increase an average of 7 per cent it will push them up by about $20 a week this year, according to Ray White. However, property analyst Residex paints a bleaker picture.

It expects rents to rise more rapidly, predicting Sydney will be hardest hit, with rents expected to be $108 a week higher in two years, while Melbourne rents are expected to be $71 a week more expensive by 2012.

Rents in the other states are all forecast to be higher by more than $40 a week within the next two years, Residex chief executive John Edwards says.

A rise of $50 a week is forecast in Hobart; $47 in Adelaide and $46 in ACT.

“It’s a perfect storm because while rents are rising, tenants are suffering but in most cases the increases in rents won’t be enough to cover the higher mortgage repayments,” Mr Edwards says.

Although landlords can offset some losses against other income tax through negative gearing, they can only claim back an amount equivalent to their marginal tax rate.

And the expected rise in rents will increase the number of tenants in “rental stress” by about 50 per cent, according to Martin North, director at Fujitsu Consulting.

North expects the number of people who struggle to pay their rent to increase from 44,000 to 66,000.
 

Category: Adelaide Market News