Thursday, February 7, 2008
The clearance rate for properties rose by almost 10 per cent in Sydney to 56 per cent while the number of houses listed also increased by 10 per cent compared with this time last year.
Of the 77 properties listed in Sydney, 59 were auctioned, with 36 sold, seven more than at the same time in 2007.
Melbourne had a slower start with only 29 properties listed for auction compared with 55 at this time last year. The clearance rate rose by 1 per cent to 50 per cent and out of 27 properties reported as auctioned, 14 were sold compared with 24 out of 49 properties reported as auctioned this time last year.
Whilst it is early days yet, the 2008 story will indeed be an interesting one to follow. Marquette Turner will of course keep you on track.
Thor was patron of justice, his oath-ring could seal any contract, the Althing assembly of Iceland was opened on Thor's day (Thursday). Thor was seen as a protector, defending the old order of the heathen landowners and petty nobles from the predations of the land-grabbing, power-hungry and zealously Christian Kings of Norway.
Wearing the sign of the hammer, then, was not just a symbol of one's trust in Thor, it was also an instrument of his protection.
Across all capital cities, unit values increased by 16.9%, compared to 11.9% for houses. And units still produced a better yield for investors of 4.8%, compared to just under 4% for houses.
The best performing market in 2007 was Adelaide with a 27.3% increase in dwelling value to a median of $375,685. Brisbane, with 22.8% capital growth, and Melbourne, with 19.6% capital growth, were next best.
This time it will be different. The cheaper end of the property market simply will not be invited to the party.
A tanking share market is going to have divergent effects in Sydney. On one hand, in our eastern suburbs and the North Shore there is an army of baby boomers and wealthy business owners with high discretionary income and asset wealth. Property will continue to look good in leafy suburbs.
In this demographic, many nervous “mum and dad” shareholders will retreat from the volatile, and less the welcoming share market and head for the safety of property. For some, the tax-free haven of a more expensive family home is a compelling place to park cash. For others, rising rental returns will provide the reason to transfer equity from shares to property.
Fuelling this trend, apartment prices in inner-urban Sydney markets are starting to look cheap compared with other capitals. Typical prices in the top five national apartment markets are within 16 per cent of each other. Undervalued Sydney apartments will be on the shopping list of many investors and capital growth over the calendar year should exceed 5 per cent. House values are also forecast to grow by 5 per cent, propped up by the top end.
While Sydney's enduring obsession with beach and harbour will ensure the top end of the market continues to record ridiculous prices, there is strong evidence that this year lower- to middle-income mortgage holders and first-home buyers will be further squeezed out of well-located property markets. House values grew by 10 per cent last year in lower North Shore suburbs but Sydney's south-west had a 2 per cent drop in house values over 2007.
Those pinning hopes of a recovery in outer suburban property markets off the back of a faltering share market will be sorely disappointed. In mortgage land, few will be influenced by the fortunes of shares when they do not even hold any. Rising interest rates and record petrol prices do not leave room for such luxuries.
In 2000 a softening share market, buoyed by cheap interest rates and easy credit, was perceived by some to have triggered the frenzied property market that followed. Meanwhile, aggressive mortgage market competition helped baby boomer mums and dads to become landlords. Low interest rates helped. They competed with droves of first-home buyers, and brokers fell over themselves to lend money.
In 2007 the correlation between inner vs. outer suburbs and wealthy vs. poor strengthened, with stark contrasts between the thriving inner cities and the struggling outer ‘mortgage belts’. Overall, however, the national property market has performed extremely well, and this general trend has begun to flow over to major regional centres.
The biggest factor in rising prices is demand: we are simply not building enough quality detached owner-occupied housing.
The underlying demand in Australia is approximately 170,000 new starts per annum – this equates to 450 new dwellings per day. According to BIS Schrapnel there will be a deficiency of approximately 100,000 dwellings by June 2008, which equates to eight months of construction. This undersupply is causing a surge in rentals and land prices. With current vacancy rates hovering around the 1% mark (a balanced market is 3%) I cannot foresee prices falling in the short term. Our national population continues to grow in record numbers at 1.5% annually, with our population now estimated at 21 million.
Derailers are rising interest rates, rising oil prices and a looming credit squeeze. However, unlike the last property correction, this time we have high employment levels and a strong stock market. The rich appear to be getting richer and have greater propensity to manage any changes in their financial circumstances. Last time it was corporate debt, this time it will be consumer debt, and it will be the many on the bread line in the mortgage stress suburbs who will suffer the most and be least able to cope with even small changes to their financial circumstances.Simon Turner email@example.com
Federal and New South Wales politicians are calling for an inquiry into online real estate agents who offer quick house sales to people who can no longer pay their mortgages. It is feared the agents are exploiting people who are under pressure to sell their houses below market value due to falling prices and high interest rates.
Some agents have promised to sell houses in just days without the usual fees. One organisation advertises for houses where owners are behind in repayments and face repossession.
The new World Edition follows on from the hugely successful election campaign for the all new Australian Here & Now MONOPOLY in 2007, which attracted in excess of 17 million votes from MONOPOLY enthusiasts around the country. Australians are now being asked get on line and get voting again, to ensure Australia is well represented on the first ever global edition of MONOPOLY.
While Sydney and Melbourne are on the voting card together with 66 of the world’s best known cities, any other towns or cities, big or small can also vie for one of two wild card spots on the board to be nominated and determined by public vote. Hasbro are hopeful of not only getting both cities on the board, but even possibly securing the coveted blue position and becoming the new “Mayfair” and “Park Lane”. The most prestigious positions will be assigned to the cities that receive the most votes.
Size does not matter when it comes to winning a spot on the board, for example last year it was the Barossa Valley that secured the most votes in the Australian MONOPOLY elections. With other small towns like Kalgoorlie and Sovereign Hill attracting many more votes than the big cities, proving that community spirit and enthusiasm is the key to securing a spot on the MONOPOLY board.
Australia has already proven we’ve got what it takes when it comes to voting, clocking up more votes in the Australian national elections than either the USA, United Kingdom or Germany did for theirs.
Voting is easy and accessible to everyone from 23rd January 2008 – 28th February 2008 at http://www.monopoly.com/, where you can cast votes for up to 10 nominated cities daily, and nominate 1 wild card city each day. Voting for the top 20 wild card nominations will begin on 29th February and will close on the 9th March 2008.
The twenty cities that receive the most votes will be part of MONOPOLY history as the first cities selected to be on the World edition game board. However, two spaces on the board will be reserved for cities that are nominated through the wild card vote. Any city from any country in the world can be nominated for these property spaces, which means that anywhere from Condobolin to the “Back O’ Bourke” could make it on the board!
Simon Turner firstname.lastname@example.org