Oct 29

Victorian Consumer Affairs are intending to stop real estate agents from continuing to under-quote expected property prices.

Agents will not be allowed to say that expected price is $400,000 plus, but rather will be required to nominate a clear price range.

The pledge follows complaints from disappointed house hunters duped into attending auctions they cannot afford and wasting money on property inspections.

Authorities have also come under attack for prosecuting only a handful of agents despite hundreds of under-quoting claims in recent years.

If the current Victorian government is re-elected, they are intending to issue legislation to address agent under-quoting concerns from the public.

An education campaign highlighting auction and sale practices and the need to research prices obtained for similar properties is also promised.

Agents will be allowed to publish a price range that is supposed to be based on recent sales in the area. It should also ideally reflect the vendor reserve.

But home seekers know the ranges that many agents publish have little relevance to the actual sale price.

Banning of price-plus quotation will have no affect on auction results, but will assist consumers and bring some consistency into property advertising.


Oct 28

THE Australian housing market has definitely stalled, with national price growth of only 0.1 per cent for the September quarter.

According to the residential researcher Australian Property Monitors, the annual inflation now stands at 2.8%.

The Australian believes that this level of inflation may not require the RBA to increase interest rates next week as previously expected.

While  Sydney and Melbourne recorded very small property price increases – of 0.7 per cent and 1.2 per cent respectively for the three months to September, other states fared worse.

Darwin showed the biggest fall, 1.9 per cent, Brisbane prices were down 1.7 per cent and Adelaide was down 1.6 per cent.

Perth was down 1.5 per cent, Canberra 1 per cent and in Hobart housing prices were unchanged.

Nationally, house price growth has slowed to an annual rate of 11.5 per cent, a drop from 15.2 per cent in the June quarter.

It is quite unusual to see property prices stall in the pre-Christmas period. The current quarter historically offers the best property clearance and prices for prospective vendors.

Oct 26

According to recent research conducted by the National Centre for Social and Economic Modeling, First Home Buyers are staying away from making a property purchase as they are finding the level of property pricing unaffordable. They are also somewhat concerned about the future direction of interest rates.

Natsem identified a decline of 12 per cent in the number of new first home buyers entering the property market, to 292,000, in the eight years to 2008. Most of these first home buyers need a mortgage to buy a home. The Australian population has grown by 12 per cent over this period.

The increase in house prices and the failure of incomes to keep up with these is the primary reason for the decline in the number of first home buyers. Over the past decade, house prices have increased by 132 per cent while Australia’s disposable income has increased by only 64 per cent during that time.

Natsem said that, Australia-wide, the proportion of disposable income required to service housing costs in 2010 was 47 per cent. In 2000 the percentage was 43 per cent.

In Melbourne the percentage of disposable income required to keep up with mortgage repayments had increased to 53 per cent from 36 per cent over 10 years, with a similar increase recorded in Brisbane.

Oct 25

This weekend has seen some improvement in auction clearance rates over past weeks. While all states performed better the clear winner was Melbourne.

In Melbourne, more than 1,100 properties were listed for sale, of which 66.2 per cent were sold at auction.

“In light of the very high number of auctions this weekend the clearance rate that was achieved is a very healthy result and demonstrates that underlying demand is good,” REIV chief executive officer Enzo Raimondo said.

Both Adelaide and Brisbane reported a similar rate of property clearance.

In Brisbane, 30.4 per cent of properties cleared – up from 16.1 per cent last week; while in Adelaide, 63.0 per cent of properties were sold under the hammer – up from 60.9 per cent.

Sydney did not do as well as Melbourne, however, it still managed to sell more than 55 per cent of the 501 properties listed for auction.

The most expensive property sold in Sydney over the weekend was a four bedroom house in Queens Park, which was sold at auction for $2.4 million. The cheapest sale was a $148,000 four bedroom house in Oatley.

Oct 22

According to the latest research from RP Data, at the present time Australia is suffering from a terrible housing shortage, with Melbourne being in the worst position.

RP Data found that Melbourne has the lowest current effective supply at 2.8 months, while Perth and Brisbane have the greatest effective supply recorded at 9.0 and 5.9 months respectively.

Melbourne was also the city which recorded the strongest property price growth since 2007 with property prices on average increasing by over 50%. The strong market conditions over this timeframe have resulted in increasing demand for properties and as a result, those listed for sale have been being rapidly consumed by the property buyers.

Oct 21

Ralph Norris of CBA believes that competition from non-banks and mid-tier banks will soon begin to challenge Australian Banks and other mainstream lenders.

Norris, who was speaking at a FINSIA conference in Sydney yesterday, told members that the competition that existed pre-GFC still exists and that the market should be expecting some new players in the near future.

“The level of market competition prior to the crisis that drove banks and financial institutions to see new and riskier ways to increase their profits is still around today,” Norris said.

“The wake-up calls provided by the crisis and the fact we’re now operating in a much higher funding cost environment will influence the nature of that competition.

There may be some new lenders and funders wishing to try Australia out from overseas as well as locals re-grouping and returning.

“The strength of the Australian economy and our proximity and links with Asia present a very appealing option for offshore banks, particularly for those banks faced with a subdued home economy.”

Oct 19

Resimac has introduced a number of enhancements to it’s suite of low doc home loans which will make obtaining a low doc mortgage simpler.

Self employed applicants will be able to just provide a letter from their accountant in support of their income position. Previously they had to provide 12 months of BAS statements.

This change may indeed be an indication of some easing in low doc lending requirements.

In addition, the non-bank lender is also re-launching its popular Specialist Lending LoDoc product which allows for a maximum LVR of 85 per cent, includes the purpose of refinance, and permits unlimited cash out to 65 per cent LVR and up to 25 per cent cash out to 80 per cent LVR with substantiation.

Resimac is a strong believer in the self employed market and it’s new range of home loan products are a testament to this.

RESIMAC’s latest product change follows a spate of recent low doc product enhancements by other wholesale lenders.

Last month, both Advantedge and Adelaide Bank announced changes to their low doc product policies.