Some housing facts that should be of interest to property investors- Michael Matusik

Interested in property investment? Here’s some new information which is worth sharing.

Take a minute or two to hear the real drum.  Just facts & figures here…with a bit of commentary.

Read it now & before the newsprint blows this information out of all proportion.

 Housing finance

  • Money borrowed to buy Australian housing = $221.7 billion over last 12 months (year ending Sept 2013).  It was $19.8 billion the year before.  Increase of 15% on last year.
  • About 55% or $12.6 billion was borrowed by owner-residents; $10.1 billion by investors.  Some change in owner resident borrowings (up 11%) but big lift in investor interest, up 20% on last year.
  • Borrowing for new property & housing construction was $3.5 billion, up from $3 billion a year ago.
  • First home buyers = $2.5 billion, down from $2.9 billion on last year.  86,000 first home buyers borrowed money to buy a home this year versus 103,000 the year before.
  • Average amount borrowed is $305,000 across all borrowers – little change in recent years.  First timers borrow, on average, $290,000.
  • Money borrowed by non-individual investors (such as SMSFs) was $0.9 billion last year, up from $0.7 billion the year before.  A change of 30%.

Comments:

  • More are borrowing to buy property.
  • First home buyers are being somewhat beaten at the post by investors, but are more likely experiencing life & renting, often sharing accommodation in the process.  Many feel they have missed out or don’t see home ownership as a pathway to financial success.  This will have an impact on housing demand – i.e. baby boomers downsizing & trying to sell their larger homes to the younger market as well as the underlying demand to build new homes.
  • Whilst volumes borrowed have increased, the actual amount borrowed hasn’t changed.  Many are utilising their homes more efficiently.  Larger loans aren’t happening yet.
  • SMSFs are still a small component of the investor market but they are increasing with ‘a bullet’.

 

House size

These statistics come from recent work – also published today – by Craig James from CommSec.  Go here for more.  Craig is the good-looking guy, with a dashing smile & fantastic hairdo.  Us bald buggers have to stick together!

CommSec has found:

  • The average size of new houses across Australia is falling – whilst they are still big on the world stage – they are getting smaller, averaging 241 sqm today, the smallest size in over ten years.
  • Twenty years ago, the average new house in Australia, was 180 sqm & 30 years ago it was 160 sqm.
  • New houses in NSW are 266 sqm; Victoria 243 sqm; Queensland 240 sqm; Western Australia 235 sqm & 201 sqm in Tasmania.
  • The average size of a new attached dwelling (townhouses & apartments) is 134 sqm across the country, down from 143 sqm about ten years ago.
  • New apartments in NSW average 151 sqm; 133 sqm in Victoria; 131 sqm in Queensland; 138 sqm in WA and just 79 sqm in Canberra.

Comments:

  • We are now building smaller homes – efficiency seems to be the main driver.  Also, as Craig points out, we are spending our money on experiences  rather than building bigger homes.  Quality is in, size maybe not.
  • Downsizing baby boomers; the want to live closer to the action; increasing travel times; the shrinking of almost everything (phones; TVs; gadgets etc.) & the trend towards more travelling (so locking up & leaving for periods of time) is changing the way we live; where we live & what we live in.
  • New homes are smaller now in Queensland, than in Victoria & NSW.   Many new homes in Queensland of recent times have been sold to investors – smaller allotments with smaller homes.  Driven by the end price point & gross rental yields.
  • Smaller apartments in Queensland too – same reasoning as above.
  • Larger apartments now in NSW, as more owner residents move into apartments in Sydney.  A trend that is set to continue & spread to other capitals.
  • ACT apartments are quite small – part-time use based around parliamentary time-table.
  • Whilst houses are still small in Tassie, they are increasing, as more baby boomers from the mainland discover the Apple Isle & move/build holiday homes.  A great place indeed!  Seriously.

[post_ender]



Want more of this type of information?


Michael Matusik

About

Michael is director of independent property advisory Matusik Property Insights. He is independent, perceptive and to the point; has helped over 550 new residential developments come to fruition and writes his insightful Matusik Missive


'Some housing facts that should be of interest to property investors- Michael Matusik' have 1 comment

  1. November 24, 2013 @ 8:47 am Alison

    Mr Matusik your blog is very interesting reading. Thankyou. At what point is a nation’s debt for houses too much?
    You say TV has shrunk. We upgraded to a huge 46 inch that shows people’s heads as big as ours in the room but our TV is small compared to the 60 inch plus trend. This will portray our leaders as wizard of oz size. Scary.

    Reply


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