Weekend Reads – Must see articles from the last week

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.

Monday will be here before you know it, so enjoy some weekend reading…and please forward to your friends by clicking the social link buttons.

Sydney’s housing market will soon start to look like New York, expert says

We’ve all often wondered what it would be like to attain the lifestyle of those living in Soho or the upper east side of New York.

As with most things, movies television shows paint a glamorous picture, excluding realities such as home ownership and rent.

Well now is would seem that Sydney will get a taste of that illusive lifestyle as reported in an article on domain.com.au.

Sydney’s housing market will soon start to look like New York’s where apartment living is the norm, home ownership is unattainable for the majority of inhabitants and renting will be the only choice unless buyers look to regional towns, a prominent housing analyst has warned. sydney office australia new south wales nsw

Domain Group’s chief economist Andrew Wilson told a property seminar on Thursday that house and unit prices in Sydney were now so high that very little could be done to make the city affordable for first-home buyers and this would be exacerbated as the demand for housing – already chronically in short supply – increased in the coming years.

“The boom has entrenched significant barriers of entry to the market and fast-tracked the rise of Sydney as the high-rise and renting capital, we’re moving inexorably towards that outcome,” Dr Wilson told the Property Market Outlook, put on by the Committee for Economic Development of Australia.

“The correction phases are not going to bring in waves of new home buyers. First-home buyer numbers are rising in all capital cities, it’s only Sydney [where it’s not] and it’s because Sydney has that price tag.”

He said this was what had happened in the big “global cities” such as New York, London and Paris, where home ownership rates declined and permanent renting had become more prevalent.

Find the full article here

Is Melbourne the top Aussie market? + Lessons from WA + Qld results are overshadowed

Another great Real Estate Talk show produced by Kevin Turner.

Michael Yardney makes the point that there is no one property market in Australia and that is being highlighted as we continue to look at the various markets that make up the country.

Damien Collins says the market there continues to suffer from the downturn in mining and the over building for first home buyers.

John Lindeman shares that he passionately believes in the apple isle and it appears from the figures he shares with us that he is not the only one.

Cameron Kusher from Core Logic RP Data gives us the national overview this week and he points to a slowing in the rate of national capital growth and says that while more people are bringing their properties onto the market they are not selling and that is resulting in more choice for buyers.

Shannon Davis gives us his view on the outlook for Queensland, which is being tipped as one of the big improvers for this year.

Bernard Hickey joins us for the first look at the New Zealand market which is going gangbusters and he explains why that is the case.

If you don’t already subscribe to this excellent weekly Internet based radio show do so now by clicking here.

Sydney auctions rebound

The latest Sydney market results appear to show a positive outlook according to this blog from Pete Wargent.

It is generally felt that Sydney’s housing market is cooling right now.

That said, CoreLogic’s final auction clearance rate for Sydney last week was strong at 77.4 per cent from 643 auctions, well ahead of Melbourne at 71.4 per cent from 602 auctions.

At the sub-regional level Sydney’s Eastern Suburbs recorded a massive result at 92.9 per cent from the highest number of auctions.

Certainly there still remains a high level of competition in the east, and overall not that much quality stock on the market.


Read the full article here

Aussie Borrowers Becoming Smarter When It Comes To Repayments

Planning ahead has taken on a whole new meaning when it comes to interest rates in Australia.

Ahead of what predicts to be a interest rate rise, an article in Your Investment Property Magazine suggests that Australians have taken advantage of the recent low interest rates to pay off their loans faster ad smarter.

With interest rate rises predicted in coming months, Australian borrowers will more than likely be able to absorb any increase to their mortgage repayments. 

According to global financial firm Deloitte’s 2016 Australian Mortgage Report, a large proportion of Australian borrowers have taken advantage of low interest rates on offer in recent years and have built a repayment buffer of up to a year in some cases.

“Customers are also continuing to access the benefits of the low interest rate environment by paying down their loans faster than their contractual obligations,” Deloitte’s report said.

“At the end of 2015, two thirds of borrowing was covered by at least one month’s repayment buffer. And for around a third of the loans for which data was available, the buffer was greater than 12 months,” the report said.

“This demonstrates some of the capacity of borrowers to absorb any potential, albeit modest, near term interest rate rises and is a strong indicator of the serviceability of loans.”

Deloitte claims Australian borrowers have also gained an increased understanding of the different repayment methods available to them, with offset accounts becoming increasingly popular.

Click here for the full article

Reserve Bank focuses on real estate and China as biggest financial risks

What does the Australian apartment construction boom and China’s economy have in common?

According to an article in abc.net.au, quite a bit, as both are served with a warning from the Reserve bank.

Australia’s apartment construction boom and the health of China’s economy, inexorably linked, have dominated the Reserve Bank’s latest commentary on financial risks. city apartment urban

It is not surprising that, with nearly two-thirds of the major banks’ loans concentrated in residential real estate, the residential real estate sector is the RBA’s primary concern.

Worries about housing have been circulating amongst Australia’s financial regulators for a while, prompting a belated crackdown on the booming investor lending segment from late-2014 onwards.

The tightening of lending standards and cap on investor loan growth by APRA is clearly having an effect, with annualised growth in this segment falling from around 11 per cent to 5 per cent over recent months.

That is not surprising, given that the RBA noted that investor loans now attract an average 25-basis-point higher interest rate than owner-occupier loans.

However, the success of the crackdown on lending standards is raising the risk of new headaches for property developers and, via them, to the banking system and its regulators.


Click here for the full article

Weekend Video: A little bit of magic

Also published on Medium.

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Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He's 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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