Saturday Summary – the most interesting articles I’ve read this week (2014/09/13)

There are more interesting articles, commentaries and analyst reports on the Web every week than anyone could read in a month.

Each Saturday morning I like to share some of the ones I’ve read during the week.

Enjoy your weekend…and please forward to your friends by clicking a social link buttons on the left.

The RBA should lower interest rates housing bubble is real and banks are to blame

The Sydney Morning Herald reports that Ross Garnaut, one of Australia’s most pre-eminent economists warned the “whole economy” needs lower interest rates but that the Reserve Bank’s concern over the housing market is preventing this happening.

Professor Ross Garnaut, author of the respected Climate Change Review, says he is concerned about house prices in Sydney and Melbourne because they are preventing the Reserve Bank from lowering interest rates to the level needed to bring down the exchange rate.

Australia’s economy was facing “very difficult circumstances,” he said, and a lower real exchange rate was needed to prevent the economy weakening further.

“We needed a lower real exchange rate 18 months ago,” Professor Garnaut said.

“There may be excessive price inflation in housing, and if that is the case it is very important that we deal with that problem with specific measures rather than running our whole monetary policy to suit the housing sector.”

Be careful using buyers agents | Which properties to avoid | Queensland hot spots | Auction bidding | Plus much more

Another great Real Estate Talk show produced by Kevin Turner. If you don’t already subscribe to this excellent weekly Internet based radio show.

In this week’s show:

Michael Matusik turns the spotlight on a South East Queensland market offering bonus returns right now.

2 industry experts voice their concerns about some aspects of the lack of qualifications with buyers’ agents and Kevin talks about the 5 types of properties the banks don’t like and more!

You should definitely subscribe to this weekly audio program. Click here. It’s free and you can listen on the go on your smartphone, iPad etc.

 

The Average Australian Household’s Income Is $145,400

According to the ABS. the average income of Australia’s 9.3 million households is $145,400, up 2.4% from the same time last year according to

Made up of wages, investment incomes, welfare payments and the imputed rent value of home ownership, here is what Australians are spending their money on according to MoneySmart.

5

 

What’s ahead for the Sydney apartment market?

Your Investment Property magazine reports that investors who are wondering just how long the boom times can continue should find the forecast in an industry analyst BIS Shrapnel, interesting reading.

According to the Inner Sydney Apartments 2014 to 2021 report, the inner Sydney apartment market boom is set to continue – with median price growth of 6% over 2014/15 and 2015/16 – for a few years.

This is due to buoyant investor demand, which is underpinned by low vacancy rates, the expectation of further price growth and low interest rates.

High levels of off-the-plan sales over the next two years will drive further rises in new apartment completions to an historic peak by 2017.

This sustained level of additional stock has the potential to tip the inner Sydney apartment market into oversupply, report author Angie Zigomanis said.

However, in the absence of any negative news in relation to the Sydney residential market, investor demand was likely to remain buoyant, he added.

“Vacancy rates will remain relatively tight in the short term until the upturn in new construction translates to completions.

“Low interest rates and low or volatile returns for other investment classes are expected to continue to encourage investors into residential property.”

In inner Sydney, there are around 5,800 apartments currently under construction with further projects likely to go ahead, according to the report.

This is expected to result in 11,500 new apartments being completed over the next three years.

While the anticipated peak of 4,500 apartment completions by 2016/17 is expected to be on par with the previous 1999/2000 peak, the average supply forecast of just over 3,800 apartments per year will be above any previous three-year period.

Zigomanis said that, to some extent, the market is playing “catch up” after almost a decade of weak demand for new apartments and limited price growth.

“However, the current surge in off-the-plan demand is likely to see the market get ahead of itself again as pre-sold new apartment projects progressively work their way through to completion.”

While demand from investors and owner occupiers is expected to remain strong, it is unlikely to keep pace with the record level of new apartments due for completion over the next three years.

As a result, the report forecast that vacancy rates will rise in the coming years, while rental growth will slow and rental yields will decline.

Zigomanis said this meant that landlords of newly-completed apartments will have to be more competitive to attract tenants over existing stock, while owners of older apartments might have to discount to attract tenants from neighbouring suburbs.

The forecast downturn from 2016/17 will be relatively shallow, with vacancy rates not expected to reach the levels of the mid-2000s downturn following the last apartment market boom, he added.

“Therefore, any underlying excess supply should be mopped up relatively quickly, with an underlying deficiency re-emerging towards the end of the decade to underpin the next upturn in the cycle.”

 

Gen Y’s show biggest interest in property investment

REB reports that young Australians have shown the strongest interest in property investment:

The MLC Quarterly Wealth Sentiment Survey revealed those aged between 18 and 29 were the most eager to invest in real estate.

Australians are becoming a little more aggressive in their near-term investment strategies, the survey found.

While paying off debt remains the focus, it has declined in importance compared with Q1; cash and deposits have also declined.

There is less aversion towards fixed income investments, shares, investment property and balanced funds.

The MLC survey interviewed more than 2,000 people to assess the investment environment by asking questions related to their current financial situation, investment intentions, level of concern related to superannuation and other investments, change in life insurance, and distance to retirement and investment strategy.

Taking a career break to raise kids has been identified as the most significant barrier to having sufficient retirement savings.

In the June quarter, ‘career break to raise kids’ increased by 70 per cent to take out the top spot impacting sufficient savings in retirement.

Previously, unemployment and major health issues have consistently ranked highest.

Women rated a career break as their number one barrier (rated 70 out of 100) to retirement savings, while men ranked it third overall (54 out of 100), behind unemployment and major health issues.

“With just five per cent of Australians confident they will have enough money in retirement, the gap in retirement savings will be one of the biggest challenges facing our ageing population.”

 

10 Things You Can Do To Make You happier

If you’d like to be happier, Buffer came up with an interesting list of 10 things you could do:

  1. Exercise more – 7 minutes might be enough
  2. Sleep more – sleep helps your body recover and repair and you’ll be less sensitive to negative emotions
  3.  Move closer to work – a short commute is worth more than a big house
  4. Spend time with friends and family – don’t wait till it’s too late and regret it on your deathbed
  5. Go outside – fresh air improves your happiness
  6. Help others – 100 hours a year is the magical number
  7. Practice smiling – it can alleviate pain
  8. Plan a trip – but you don’t have to take one – the fun of planning it will make you happier.
  9. Meditate – rewire your brain for happiness
  10. Practice gratitude – increase both happiness and life satisfaction

For more details read the full article here

 

Weekend video:  How to wake up feeling great

Do you know the 90 minute rule that helps wake up feeling better and refreshed?

 

Blogs you may have missed this week:

If you didn’t have a chance to read my daily blog, here’s a list of some of the blogs you missed this week:

There’s No Property Bubble | The 4 Big Bank Economists

Bill Gates on success | Wayne Berry

This week’s Property Market Trends | RP Data

[Video] The latest property news with Kevin Turner | 10th September

Proof it’s getting easier to hold an investment property | Lauren Day

Watch out- rental growth is easing | Pete Wargent



Want more of this type of information?


About

Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He's been once agin been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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