Archive for November, 2011
Once again Melbourne has risen above the pack of Australian capital cities to claim a prestigious liveability award.
1,000 readers of Australian Traveller magazine were surveyed about their thoughts on the history, shopping, bars, restaurants, sporting events and other factors of the nation's cities, with Melbourne emerging in top spot as the most popular.
Destination Melbourne chief executive Chris Buckingham told the Herald Sun on Wednesday (November 30): "People like coming to Melbourne because we are a welcoming destination that celebrates cool and accepts difference."
"We love the validation that comes from the millions of visitors that grace our streets every year," he said.
Buckingham also claimed that Melburnians would feel a "warm inner glow" from gaining such national acknowledgement at the awards ceremony held in Sydney.
The accolade is yet another feather in the cap of Australia's cultural hub and for Melbourne property investment owners it is likely to be seen as an indirect boost to the value of their house or unit.
National and international recognition – along with improved infrastructure and the hosting of major events – has the potential to drive up housing demand in a city and consequently lead to higher rental prices and benefits to homeowners.
Posted by Sara Pritchard
2012 is set to witness the arrival of a new type of investor in the property market that could have a significant impact on the landscape of the entire industry, according to one analyst.
Australian Property Monitors senior economist Andrew Wilson says that in the second quarter of next year it is likely that self-managed superannuation fund (SMSF) investors will surge into the market and possibly even jump ahead of traditional investors.
Based on anecdotal feedback from sources right across the sector such as lawyers, accountants and SMSF advisers, Wilson forecasts that 'the wheels are already in motion' for new and existing property investors to take the plunge in the medium-term.
Such an outlook stems from the large hit taken by many super funds during the GFC, Wilson asserts, as well as worldwide economic weakness in more recent times.
"Many individuals don't want their super funds exposed to stock market activity any more and instead want to take back control of how their funds are invested," Wilson told Australian Property Investor (API) last week (November 24).
Many buyers still appear to be waiting for a clearer indication that housing prices have improved and that capital growth is on its way toward overshadowing the cost of property ownership.
However, there are also signs across many of the nation's capital cities, including Sydney, that buyer confidence and enthusiasm is beginning to pick up.
Although auction volumes and clearance rates have only shown minor improvement in the harbour city since the Reserve Bank's decision to lower the official cash rate to 4.5 per cent earlier this month (November 1), it is widely regarded by industry experts that the true level of consumer confidence will be revealed next year.
Trilogy Investment Property Funding's David Thomas told API he had noticed a wave of enquiries about borrowing through a SMSF in order to buy a residential property, which suggests Wilson's analysis may be accurate.
Thomas said that enquiries tended to stem from the 40-something demographic with sufficient accumulated super and that while many individuals still need time to do their homework and commit to a purchase, signs point to 2012 market growth.
"If the process has started now then it’s highly likely we’ll see these SMSF investors ready to buy second quarter of next year," he told the publication.
Sydney investment property may prove to be highly sought after over the next 12 months and the market is likely to draw close attention from a variety of sectors.
Posted by Grace Neale
Auction clearance rates in the low to mid-50s are giving first home buyers a chance to pick up a bargain Melbourne investment property, according to the Real Estate Institute of Victoria (REIV).
The clearance rate over the weekend (November 26 and 27) was 53 per cent, the institute reports, compared with 50 per cent the week before and 59 per cent over the corresponding period in 2010.
899 houses and units went under the hammer this past weekend of which 477 sold.
422 were passed in, of which 264 were on a vendors bid.
With approximately half of auctions resulting in a sale over the past month, REIV chief executive Enzo Raimondo asserts that the market is "evenly balanced" and this may represent a good time to be looking for a property.
"This provides buyers with considerable opportunities to make offers on homes that are not being sold at their auction," says Raimondo.
Next weekend (December 3 and 4) there are expected to be around 800 auctions, while 925 are due to be held the weekend after.
Certain stamp duty concessions will be removed for buyers at the beginning of 2012, so it appears that savvy investors might be strongly considering their portfolio options during December.
Posted by Sara Pritchard
One of the biggest days of the year for the Sydney property investment market got off to a subdued start on Saturday (November 26) – more than likely due to heavy rain across most of the city that kept many buyers indoors – but picked up significantly in the afternoon.
Australian Property Monitors reports that results are in for 401 of the 652 properties to go under the hammer in the harbour city, with a clearance rate of 54.9 per cent a slight improvement on the previous week.
Although the day got off to a slow start in the end 260 of the 401 listed houses and apartments reached a sale.
This amounted to total sales of $204.75 million in Sydney with a median sale price of $740,000.
Many vendors were likely keen to sell their properties before Christmas, while first home buyers are aware that from January 1 they will have to pay full stamp duty on existing property priced up to $600,000.
Despite the volume of auctions over the weekend standing about 20 per cent lower than for the corresponding weekend last year APM data shows that recent clearance rates have been relatively steady compared to historical figures.
7,953 properties were listed for auction in the NSW capital this spring. Although this was 9.2 per cent lower than 2010, it appears the 8,757 auctions held last year was abnormally high.
Between the 2007 and 2009 the average amount of properties to go under the hammer each spring was around 6,500, according to APM.
Preliminary figures show that the average weekend clearance rate this season has been 53.2 per cent.
There has been speculation recently that Australian house prices were set to stagnate, but many industry experts disagree with the negative sentiment.
APM senior economist Andrew Wilson asserted November 26: "I think any talk of a shake-out of house prices is overly pessimistic and at worst scaremongering."
Prior to Saturday's auctions Wilson said first home buyers are still well and truly out in force in November.
"They've only got three weeks to buy something [to avoid the new stamp duty fee], so they aren't going to be worried too much about the global scene or what's happening in the share market," he said.
And Hunters Hill real estate agent Maureen Smith told The Sydney Morning Herald: "It's not all doom and gloom – buyers are still out there, but they're looking for value for their dollar."
Posted by Grace Neale
South Yarra was rated the most liveable suburb in the most liveable city in the world, according to a study of 314 suburbs commissioned by the Age.
Titled Liveable Melbourne, the analysis was inspired by the Economist's pronouncement of Melbourne as the world's most liveable city this year.
South Yarra scored perfectly on nine of the 14 factors used by the researchers including culture, schools, shopping and quality of cafes and restaurants.
It is also close to the central business district and the coast while also providing open space and trees.
Close behind South Yarra is East Melbourne, which scored higher than in previous years as a result of improved shopping amenities.
Armadale, Hawthorne East and Toorak, completed the top five.
On the other end of the spectrum, Hallam came in at 314th and the suburb that was comfortably in the middle was Moorabin.
These ratings are bound to be controversial however, as there are many things that cannot be accurately measured and taken into account when a suburb is being judged by an outsider.
Moreover, liveability can mean different things to different people.
When considering where to undertake a property investment in Melbourne, it is important to consider think about what your day-to-day needs are and the aspects of an environment that are most important to you.
Posted by Sara Pritchard
This weekend (November 26 and 27) is set to be the busiest of 2011 in terms of Melbourne auctions, according the Real Estate Institute of Victoria (REIV).
1,000 houses and units are expected to be going under the hammer – just 100 less than the corresponding weekend last year – in a sign that the Melbourne property investment market may be fighting back after a period of relative inactivity.
REIV data indicates that this will be the highest number of auctions held since February, March and April when there were four weekends with over 950 properties up for sale.
Clearance rates at that time varied between 59 and 64 per cent, but it is unlikely such figures will be repeated given that last weekend (November 19 and 20) only 50 per cent of 761 reported properties were sold.
Bentleigh East, Brunswick and Glen Iris are due to hold the most auctions, with each of these suburbs possessing a year-to-date clearance rate higher than the city-wide average.
A high volume of auctions generally represents opportunities for investors to find bargains in a heavily-supplied market.
Posted by Sara Pritchard
The Real Estate Institute of Queensland (REIQ) believes the local property market has made strong progress in its attempted fight back over the second half of 2011.
Declaring that sales activity strengthened across the state over the September quarter, institute chair Pamela Bennett added that compared to the first six months of the year the signs pointed to a feeling of cautious optimism.
The REIQ September quarter median price report released Saturday November 19 found that the preliminary number of house sales rose a solid 17 per cent from the June quarter in the sunshine state.
Some regions in particular recorded substantial jumps, with Brisbane one of those performing well above average.
Bennett asserted: "What these figures show is that it appears it took about six months for our property market to begin to heal from the natural disasters earlier this year.
While the median house price in the capital fell two per cent to $500,000, the number of preliminary house sales experienced a 13 per cent jump in an indication that Brisbane property investment buyers may be returning to confidence.
"While global conditions remain concerning, more sales activity locally shows that buyers have a little more confidence and are much more prepared to sign on the dotted line now than they were earlier this year," asserted REIQ managing director Dan Molloy.
Posted by Tyler Wyndham
Rising rental prices are set to provide a boost to Sydney investment property owners, who will be able to see notable improvement to the bottom line of their property portfolios, one industry analyst has asserted.
Rental markets across Australian capital cities are split in terms of recent performance, in the NSW capital vacancy rates are low and demand remains high, a combination that leads to significant rent price hikes.
RP Data national research director Tim Lawless says: "The good news for Sydney landlords – or bad news for Sydney renters – is that rents are heading north."
Over the past year Sydney rents have risen by 5.9 per cent for houses and 5.4 per cent for units, he says, bringing the weekly rent for typical properties up to $550 and $513 respectively.
These results far outweigh those for most other capital cities including Melbourne, which saw house rents go up by just 1.9 per cent and unit rents remain flat.
Strong rental conditions may be driven by insufficient new housing supply in relation to population growth, while the number of dwellings that began construction across NSW over the June quarter was a low 6,696 according to Lawless.
"With the Sydney housing market clearly under-supplied we have seen rental vacancy rates reportedly fall below 1.5 per cent and the upwards pressure on rents is likely to persist," Lawless wrote for The Sydney Morning Herald on Sunday (November 20) in an article titled Rental Yields To Continue Climb Sue To Low Supply.
The average Sydney house is returning a 4.4 per cent gross yield and for units this figure is 5.2 per cent. These statistics are well above the combined capital-city average and represent a good sign for property owners.
Lawless encourages investors to buy in areas where rental demand is potentially the highest and supply constraints appear to exist, in order to maximise rental income over long periods of time.
"Established suburbs close to major working nodes are generally a safe bet, as are suburbs close to universities and major public transport hubs," he said.
Sydney homebuyers may therefore do well to investigate their options thoroughly and perform a wide-ranging review of popular suburbs as they seek the ideal property.
For off-the-plan purchases it is prudent to factor in location and potential rental yields that may contribute greatly to future savings and home loan repayments.
Posted by Grace Neale
The Melbourne property investment market has been "typified by consistently moderate levels of demand" throughout 2011, according to the Real Estate Institute of Victoria (REIV).
And there was little change to the status quo over the weekend (November 19 and 20), with the auction clearance rate standing at 53 per cent compared to 51 per cent the week before, the institute reports.
On the corresponding weekend last year the clearance rate was 57 per cent.
While the Reserve Bank's decision to cut the interest rate 25 basis points to 4.5 per cent earlier this month (November 1) is widely expected to boost buyer enthusiasm, tangible sales results may not be seen until 2012.
But in terms of auction volumes there has already been a noticeable lift in the market over the past few weeks – a trend that appears likely to continue.
The REIV expects around 1,045 auctions to be held next weekend (November 26 and 27), a figure that compares favourably with results both recent times and last year.
This past weekend there were 668 properties reported to go under the hammer, with 352 sold and 316 passed in – 204 of which were on a vendors bid.
Higher numbers of available properties may represent opportunities for investors to find a bargain.
Posted by Sara Pritchard
Sydney could be set for a dramatic and influential overhaul to its layout and sustainability, with discussions between respective key figures of the harbour city and international leader Copenhagen taking place today (November 21).
The meeting will be held at Sydney Town Hall and hosted by Sydney Lord Mayor Clover Moore, with the Danish business delegation led by Lord Mayor of Copenhagen Frank Jensen in the country to coincide with of Prince Frederick and Princess Mary.
Moore praised Copenhagen for the inspiration it has provided cities around the world looking to promote sustainable living and improve open spaces and facilities that benefit residents.
"They call it 'the Copenhagenisation effect' and it's significant that these sustainability policies have greatly improved the quality of life for people living and working in the city," Moore said today.
"In five years, turnover in Copenhagen's green sector has jumped 55 per cent, with 12 per cent annual growth rates in exports and productivity increases four times higher than the region's average."
Calling Copenhagen "possibly the most bike-friendly city in the world", Moore added that Sydney could take a leaf out of the Danish book and continue to build on its sustainability quest.
Jensen shared Moore's enthusiasm for the cities' common ground and future potential.
"It is very inspiring to hear about the plans in Sydney and I am impressed to learn what is being done," he asserted.
"Our experience shows that investments in green urban development deliver economic benefits.
"A good example is cycling – almost half of the Copenhageners use their bike to work and school every day. A recent study shows that we are avoiding external costs of more than $40 million every year because of this."
Challenges such as adapting to a changing climate, waste handling, delivering effective services to citizens and creating jobs are common among all cities, according to Jensen, who suggested that sharing efficient solutions can help stimulate economic growth, reduce carbon emissions and improve quality of life.
Tomorrow morning (November 22) Lord Mayors Moore and Jensen will attend Curating Cities: Sydney – Copenhagen, a Customs House exhibition featuring artwork from both nations that highlights the human impact on the environment.
A greater status of cleanliness and economic strength has the potential to provide a significant boost to the value of houses and apartments in the harbour city.
This could in turn benefit individuals with a Sydney investment property who would likely notice an ability to increase rental prices and consequently make larger mortgage repayments.
Posted by Grace Neale