This week’s wrap – Location trumps size; NRAS on ice; Miners edgy; China bracing for new lows; Sales pests; Brisbane apartments; Flood-prone suburbs. And lucky last. …Brisbane, a slow-burner.
- A million dollars – doesn’t cover a lot of ground if you are buying a house in Sydney – based on land value, it would give you an eighth of a house in Point Piper, a double garage in Vaucluse, the lower floor of a Paddington terrace, and a super small semi in Mosman. Analysis of 2013 sales data shows that for many Sydney buyers, “bang for your buck” is no longer defined by land size. It’s all about the property’s title – where it is, not how big.
- The National Rental Affordability Scheme is about to be slashed. Labelled as ‘flawed’, the $4.5 billion scheme has been criticised for letting wealthy foreign students access taxpayer-subsidised housing meant for low-income Australians. The present round of applications has been frozen and the programme will face a revamp that delivers ‘substantial’ savings in next month’s budget. It has done its job –true it is misunderstood (go here for more) but I cannot think it is time to let it go.
- Warning over coal industry’s future – Australia’s $60 billion coal sector is under extreme pressure with global giant Rio Tinto warning the industry is ‘staring down the barrel’. The sector is facing a wide array of challenges – lower prices, strong Aussie dollar, high taxes, increasing regulations, delays in government approvals & community opposition to mining. Coal is Australia’s second largest export by value; forecast to earn Australia $40.1billion this year, increasing to $55.1 billion in 2018-2019. The secondary coal mines in terms of quality & efficiency must surely be scaled down or closed completely. This will hurt some regional centres as the number of employed decline. [sam id=43 codes=’true’]
- China is bracing for a new low in growth, as trade officials reported a surprise drop in exports, which fell 6.6% last month. China’s central bank pumped money into the banking system for the first time in nine weeks – a move that appeared intended to give individuals and companies cash for the tax season, but also a step that follows soft results in trade & manufacturing. There is only so much pump-priming that can go on. This increasingly looks like ‘sub-prime’ to me. I cannot help but think that this will end in tears. If so, how can we not catch a cold, maybe even something worse?
- Those pesky callers – SMH readers were asked when the last time was they had received an unsolicited phone call to sell something. 46% said in the last week; 25% in the last month; 9% this year; 8% last year; 7% before last year; 1% never; and 4% didn’t know. Well we get calls every day! At least someone is pretending to want to talk to us.
- New stock hits – Brisbane’s property market will be flooded with new apartment stock as developers prepare for one of their biggest years in the state’s capital. Inner Brisbane had a record 58 new development applications lodged with Brisbane City Council in 2013, with 19 already receiving development approval – in total, 20,621 potential apartments are awaiting approval in the region. Ouch!
- Floods not a turn-off – sales in flood-prone Brisbane suburbs are occurring in swift succession with home buyers willing to take the risk on another flood. Properties once inundated by water are being snapped up, with sales in Brisbane’s south-western flood-prone areas having increased by 42% since the 2011 floods. Short memories or what!
- Brisbane – according to some reports, is one of the hottest real estate markets. The reality is not quite – Brisbane is in recovery, yes. But in terms of price & rent growth, the recovery is likely to be milder than in the recent past. While Brisbane looks set to enjoy a much-awaited upturn, the recent lifts in new dwelling & rental supply, plus relatively high levels of existing property for sale, have put a brake on potential price & rental growth. Don’t believe everything you read in the press!