New home sales fell by 5% in February with apartment sales down 11% & detached house sales down by 4%. Detached house sales fell by 14% in Victoria, 3% in New South Wales & 7% in South Australia but rose in Western Australia (+2%) & Queensland (+1%).
Several commentators remarked that the drop in new home sales was not a worry, well “at least for the moment” to quote the Commbank. Home sales are still about 10% higher than the lows set five months ago but for mine, given low interest rates, new sales (and hence new housing construction) should be much higher & they should be improving on a monthly basis.
Despite lifts in new housing starts in recent months, there will most likely be about 146,000 new housing starts across Australia this financial year. This will be just 3% more than the year before.
New housing construction fell by 10% during 2011/12 & also dropped by 6% during the preceding financial year.
In fact, new housing starts across Australia have fallen five out of the last ten years; showed no real change for another two years since the early 2000s; & have risen during three years only since 2002/03.
And next year – financial 2013/14 – if the growth over the past three months can be sustained, then up to 160,000 new housing starts are possible. But the HIA are forecasting a more subdued fiscal 2014 with just 146,000 starts (a repeat of 2012/13), despite interest rates being at record lows & a significant rise in population growth in recent years.
Even if the 160,000 starts happen, Australia’s new housing market needs a serious overhaul. It is just spluttering along.
Below are some housing start statistics.
Distribution of starts. According to the HIA, 40,000 new starts are expected to take place in Victoria next year – this equates to a 28% share of the Australian market. New South Wales is to get 36,000 starts (25% share); Queensland 31,000 new dwellings (21%) followed by Western Australia with 24,000 commencements or a 16% market share.
The other four states/territories combined hold just 10% of the overall Australian market.
Movements in new construction. Despite getting top billing next year, new starts are expected to fall by 13% across Victoria next year, when compared to the 2012/13 financial year. In contrast, new starts are expected to rise by 13% in both Queensland & South Australia. A half decent lift (of 11%) is expected in the Northern Territory. New starts are expected to remain steady in New South Wales, and fall 5% in the ACT.
New product mix. Three out of five (62%) of the new dwellings built across Australia next year will be detached houses. Obviously, 38% will be attached product – most of which will be apartments or townhouses.
Almost half of the new product built in New South Wales, the Northern Territory & the ACT will be attached. Two out of five new dwellings in Victoria these days are also attached; followed by Queensland with 37%; Tasmania and South Australia each with 25% & Western Australia with 19%.
Changes to product mix. Ten years ago, close to one in seven (68%) of new dwellings built across Australia were detached. Today it has dropped to 62%.
The biggest mover by state towards ‘alternate’ new housing forms over the past decade has been Victoria, with a 24% attached market share in 2004 to 41% next year. Next is Tasmania, from 12% to 25%, followed by Queensland from 33% ten years ago to 37% now. The other states/territories have seen little change in their new broad dwelling mix over the last ten years.
All three states essentially are playing catch-up. Stigma (both from the development community & the public), plus archaic planning, has kept new attached development subdued in Victoria; Tasmania & Queensland.
The Newman government’s new state assessment & referral agency (SARA) is a step in the right direction.
In summary, unless we see serious government action (like SARA) to assist new housing get off the ground, new starts will continue to be artificially curtailed. This limitation on new housing construction will see Australia enter another period of serious undersupply – it has already started; which it turn should drive prices north & will create – in about three, maybe four years’ time – another price-driven bust.
Ironically, higher levels of residential construction will be an important economic growth driver once mining investment begins to wind down.
If new housing starts continue to rise in line with the trend over recent months – i.e. head towards 160,000 during financial 2013/14 – then the cash rate is likely to remain at 3.00% throughout calendar 2013.
But if the HIA’s outlook becomes reality (146,000 starts or thereabouts next financial year) – and keep in mind that building approval figures tend to be volatile – then the cash rate will need to fall further.
Enjoy the ride!
Article originally published in Matusikmissive.com.au on 16/4/2013
Sydney Baby Boomers drive real estate boom in Brisbane
A MIGRATION of cashed-up Baby Boomers from Sydney will lead to a real estate boom in Brisbane, according to property investment experts.
A Property Investment Professionals of Australia (PIPA) members’ survey revealed that Brisbane was regarded as the best capital city for property investment.
Of the members who participated in the survey, 46.15 per cent rated Brisbane as the best capital for investment prospects in 2018.
PIPA chairman Peter Koulizos said the Queensland capital was expected to boom as a side effect of the Sydney property boom happening when Baby Boomers were looking at retiring.
“People that have a lot of equity in their home can retire or semi-retire by selling up and buying a home in southeast Queensland,” Mr Koulizos said.
And with the median house price in Sydney more than $1 million, he said this would give them a sizeable pile of cash left over after buying a home further north.
“That is because there is such a big price difference between Brisbane and Sydney,” he said.
A PIPA survey from last year also rated Brisbane as the best capital city in which to invest, but in the past 12 months the average house price has increased by just 2.9 per cent.
Mr Koulizos said a boom would come eventually, but picking the exact point was tricky.
“Property booms take a long time to gather momentum, I doubt you will see double digit growth in Brisbane this year but it may be different next year,” he said.
Melbourne was the next best investment option according to the survey, with 19.23 per cent believing it was a good place to invest, followed by Perth at 15.38 per cent.
Originally published: brisbaneinvestor.com.au
The property clock strikes big for hot spot areas
9 Lion St, Ipswich. Picture: realestate.com.auSource:Supplied
DESPITE last month’s previous lacklustre values, analyst Michael Matusik has identified the areas on the upswing.
While property values remained fairly stagnant during February, property analyst Michael Matusik has revealed where the housing market is on the upswing.
Mr Matusik’s latest property clock for houses, has Brisbane, Gold Coast, Logan, Redlands, Sunshine Coast and Gympie all in upswing.
He said a market’s position on the property clock was based on the strength and direction of key indicators including sales numbers, price and rent, demand and how much new supply there was.
His latest Matusik Missive also listed Ipswich, the Fraser Coast and Noosa markets as heading into upswing territory.
Ipswich has many beautiful homes, often at prices well below what something similar would cost in Brisbane’s suburbs. A four-bedroom home at 9 Lion St,Ipswich is listed for $879,000.
The land the home sits on was bought in 1904 from the family of the then Ipswich Mayor Mr Pettigrew. A home was built on it in 1907.
The period home has 3.5m high ceilings, VJ walls, period window, and timber floorboards which have all been restored.
The home has two new bathrooms, a large separate dining area and study. It is listed through Steve Athanates of NGU Real Estate Ipswich.
On the Gold Coast at Robina, 196 Easthill Drive is listed for more than $850,000.
The three-bedroom home is within the Glades Golf Community.
It has formal and informal living and dining areas, and an outdoor entertainment area with a swimming pool nearby.
It is listed through Ian and Linda Mills of McGrath – Palm Beach.
On the Sunshine Coast at Noosaville a home at 15 Bluebell Court is listed for offers of more than $740,000.
The three-bedroom home is in a cul-de-sac in a residential pocket bordered by the Lake Doonella Reserve.
The single-level home has open plan living and dining areas. An outdoor area overlooks the pool and reserve at the rear of the property.
It is listed through Tansy Grant and Justin Sykes of Ray White – Noosa.
Originally published: brisbaneinvestor.com.au
Where to invest: These are the suburbs where house prices are tipped to grow
Annaliese Bullock, 27 with husband Jared, 27 and daughter Lyla 5 months sold their Burpengary before it even went on the market. Picture: AAP/ Megan Slade.Source:News Limited
THESE are the rising stars of Brisbane’s property market, the 27 growth suburbs investors need to know about.
INVESTORS chasing capital growth in Brisbane are spoiled for choice, with a new report identifying 27 suburbs where house prices are tipped to rise — and more than half of them have a median price of less than $500,000.
Property analyst Terry Ryder has identified the rising stars of the property market — where sales are rising steadily and house prices are set to follow. And they’re not the inner-city, blue chip suburbs you might expect.
The report examines sales activity, rather than prices, to determine the best and worst local government areas for property market growth.
The Moreton Bay region has 10 rising star suburbs where sales have been steadily increasing including Banksia Beach, Bellmere and Deception Bay.
Quarterly sales in Burpengary have risen from 69 to 97 in the past six quarters, while at Sandstone Point, sales are up from around 40 per quarter to 55 to 60.
Homes are selling so fast in the area that Jared and Annaliese Bullock just sold their four-bedroom house in Burpengary for $475,000 before they had a chance to even put it on the market.
Mrs Bullock said she contacted an agent at RE/MAX Ultimate, who brought through a couple of potential buyers and the offer was made within days.
But she’s not too surprised, given how close the suburb is to the train station, shops and the highway. The couple also recently bought two units as investment properties in nearby Caboolture. Acacia Ridge, Algester, Eight Mile Plains, Kuraby and Sunnybank Hills are also predicted growth areas.
“It’s the affordable, outer areas that have got the most activity at the moment,” Mr Ryder said.
“The infrastructure is pretty good, with train links to the centre of the city, and there’s lots of shopping centres and good amenities.”
“The sweet spot is to be about 200 metres from a school, a shopping centre and a train station.”
SUBURBS WHERE SALES ARE RISING
Acacia Ridge $402,000
Banksia Beach $550,000
Caboolture South $290,000
Deception Bay $345,000
Eight Mile Plains $788,000
Ferny Grove $595,000
Kippa Ring $415,000
Mt Warren Park $390
Sandstone Point $420,000
Sinnamon Park $720,000
Sunnybank Hills $660,000
Victoria Point $522,000
Originally published: www.news.com.au
Property Management3 years ago
7 Common GST Mistakes On Property
Education2 months ago
MP vows Petrie university campus will be a reality despite claims saying otherwise
Market Place2 months ago
Queensland’s property flipping hotspots rise as profits roll in
Infrastructure2 months ago
How train lines are driving property prices
Education2 months ago
Mayor calls funding freeze a ‘stake in heart’ of regional university plan
Infrastructure3 months ago
Decision on horizon for key marina section of huge North Harbour development at Burpengary
Market Place2 months ago
These are the suburbs with more sales than any other
Market Place1 month ago
The best brand new developments in south-east Queensland