Saturday Summary – the most interesting articles I’ve read this week (2014/05/31)

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.

What agents don’t want you to know

News.com.au revealed some of those secrets are that your agent might not necessarily want to you know.

  1. Your house is probably not worth what you think it is.
  2. The more the agent says your home is worth, the more likely you’ll sign with them.
  3. By law the agent has a duty of care to prospective buyers to alert them to any major issues.
  4. They must take all written offers to the vendor
  5. Commissions are negotiable.
  6. It takes about 2 days to be granted a certificate of registration to be allowed to sell real estate.
  7. Real estate agents aren’t licensed to provide investment advice.

 

When will this property boom end? | Busting some popular property beliefs | When you should sell up

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

Details of this week’s show:
Ben Kingsley will bust some of the most popular beliefs about the factors that influence the value of residential property
Mark Armstrong tells us about four situations in which it may be appropriate to sell
Louis Christopher from SQM Research talks about rising listing numbers
Pete Wargent tells us how high school maths can help property investors

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.

 

Sydney Rents Leap – Pete Wargent

In his blog regular Property Update Blogger Pete Wargent says:

A lot of focus on Sydney house prices which Residex recorded as having jumped by 20.14% over the past year.

The tight Sydney market has shown itself in another way too: a surge in rents.

Rents for houses have increased by 9.73% over the past year according to Residex up to $620 per week:

1

Source: Residex

Meanwhile, rents for units have increased by 6.00% over the past year, to $530 per week:

2

Source: Residex

New dwelling supply is coming to the market in Sydney, but not quickly enough…at least, not according to what vacancy rates and rental values are saying.

 

Lower Consumer Sentiment Is Causing House Prices To Ease

In their market commentary this week ANZ Bank warn that despite a pick up in auction sales in the past week, dwelling prices continued to ease in seasonally adjusted terms across all capital cities, reflecting the sharp decline in consumer confidence in recent weeks.

Home prices posted the sharpest weekly fall in Adelaide, followed by Sydney, Melbourne and Perth- see the graph below:3

House Prices – from Boom to Crash

Economist Stephen Koukoulas also comments on softer house prices in his blog:

The RPData house price series shows that house prices have tumbled a quite remarkable 1.7 per cent so far in May. This follows a softish 0.3 per cent rise in April and it just might be signaling something starting to go amiss in the $5 trillion housing market.[sam id=43 codes=’true’]

To be sure, the RPData house price series are not seasonally adjusted, they are produced on transactions from several months ago and no doubt there are other foibles in the series, but they are often used by the RBA to judge house price trends and for that reason alone, they are worthy of mention.

It was always likely that house prices would be softening after the strong gains between late 2012 and early 2014. It is just that the catalyst for the slowing – higher interest rates – has not been the cause.

In clutching at reasons for the fall in house prices, here are a few possibilities:

  • The high prices themselves and less extreme dwelling rents are driving potential buyers away, which is slicing back on demand.
  • Falling real wages, which is eating away at disposable income, which is undermining demand.
  • The jolt to confidence from the government trash talking the economy and exaggerating the budget “crisis” may have had impact on buyer demand.
  • New supply coming onto the market from the lift in dwelling construction is a possible factor – it is early days to be sure, but dwelling approvals have been trending higher for two years.
  • Of course, it could just be statistical noise and the series will show a rebound in house prices in the months ahead. Or it is seasonal, with prices edging off a bit a month or two ago and this will reverse soon.

Whatever the issue, house prices require close scrutiny. Unrelenting house price inflation is not good for an economy but worse is a house price crash. We are nowhere near that, of course, and I am strongly of the view that Australian house prices are simply expensive but nowhere near bubble territory. Some moderation in house price growth or even small falls are a good thing. We might be seeing that now and not much else.

But in a classic ‘be careful what you wish for’, if house prices are in fact falling and there are more substantial falls ahead, the damage to household wealth, consumer sentiment and bank balance sheets could be a worst-case nightmare.

Just ask the Irish, Spanish, Americans, Japanese and British about the effect of sharp house price falls on their economies.

 

Stressful marriage more likely to kill men

Yahoo reports that an unhappy marriage can triple the chances of a man going to an early grave. Women reported much the same stresses from a demanding spouse but it was less likely to kill them.

A Danish found 6 per cent of men and 4 per cent of women went to an early grave.

The main cause of death was cancer, followed by heart disease, stroke, liver disease, and suicide.

But the researchers say at least half of the deaths could have been prevented if the person had not also been suffering from the added burden of a hostile marriage, a difficult relationship with their children, and often no way to escape them after a job loss.

“Of course not all arguments will end up having this deadly end, but in general if you have these stressful relations, very frequently that will lead to an increased risk of death,” study author Professor Rikke Lund said.

 

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:

This week’s property market trends | RPData

[Video] The latest property news with Kevin Turner | 28th May

Understand The Dynamics Behind The Property Markets | Pete Wargent

An Economist’s View Of The Budget

Strong Property Results are Surprising & Could Pose Problems

Fixtures and Fittings or Goods and Chattels – what stays and what goes when you buy a property?

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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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