Weekend reads – Must read 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.

The weekend will be over before you know it, so enjoy some weekend reading.

Why you can no longer expect a discount on homes in Sydney and Melbourne

Is this the end of discount property prices in Sydney and Melbourne?

According to an article on Domian.com.au Buyers wanting to purchase property in Sydney and Melbourne will no longer have the same chance to ‘but low’ as they did a year ago.

Property buyers looking for a bargain would have had their best chance to buy low in Sydney and Melbourne exactly a year ago, when price discounting was at its highest level in years, new data shows.

But the tide has turned and as vendors have wised up to the improving market, the number of homes and apartments being discounted has dropped significantly.

In fact, the Sydney and Melbourne markets are now seeing the number of properties being discounted back to boom-time levels, with fewer properties needing to drop the selling price to get an offer, Domain economist Trent Wiltshire said.

In Sydney, the number of homes being discounted to sell dropped by 3.8 percentage points over the 12 months to January, while the number of unit (apartment) discounts dropped 3.9 percentage points, Domain data showed.

It was a similar story in Melbourne, where the number of homes discounted fell 2 percentage points.

Discounts on units, however, dropped by just 0.5 per cent, with apartment prices holding up strongly across the downturn in 2018 and the first half of 2019.

Mr Wiltshire said the figures were another indicator of how quickly the markets and Sydney and Melbourne had bounced back since last year.

Data from private treaty sales from January 2019 to January this year showed prices were rising across the two cities.

“There is strength across the market, as this data took into account the lower to middle-priced homes and units,” Mr Wiltshire said.

“There’s still stronger growth at the top end of the market but prices are rising across the board.”

With more buyers flooding the market, the increased competition was pushing up prices, agents said.

Ray White NSW’s chief auctioneer Alex Pattaro said some vendors were even shifting their reserves upwards on auction day, due to the number of buyers.

“Although vendors have the tendency to shift their reserves up because of the competition, that can be a bad thing because they may not get the price they want,” Mr Pattaro said.

LJ Hooker Sydney’s Ben Mitchell said off-market sales in suburbs like Baulkham Hills were up due to increased buyer numbers.

“I think people are just frustrated they are missing out at auctions on Saturday so they just go and door-knock instead,” Mr Mitchell said.

Prices have been on the rise even for fixer-uppers – a near derelict one-bedroom home in Newtown that had a reserve of $875,000 sold for $1,112,000 million at a weekend auction.

Read the full article here

Rental vacancies tumble, having peaked

It would seem vacancy rates are at a high.

This Blog by Pete Wargen looks at the results.

Rental vacancy declines

Australia’s greatest ever construction boom has caused some headaches for landlords since 2016, with a record volume of supply hitting the market.

However, vacancies have now peaked in Sydney, Brisbane, Perth, and Darwin, according to SQM Research’s latest, er, research.

JLL noted in its latest quarterly that inner city apartment completions had shrunk by a fifth, and the supply is now set to tighten.

In Sydney the rental vacancy rate tumbled from 3.6 per cent to 3.1 per cent in January, despite the potential for challenges related to the return of Chinese students.

Perth’s vacancy rate is now down to just 2.1 per cent, while Brisbane isn’t too far behind on that curve at 2.4 per cent.

Adelaide’s vacancy rate is now very tight at just 1 per cent, and following on from Hobart looks set to be the next city to see a sudden ‘pop’ in rents and prices.

Nationally the vacancy rate at 2.1 per cent is now tracking lower than a year earlier, with supply set to slow considerably through 2020.

Read the full article here

Aussie auctions are running hot again, as eager buyers push price growth to the limit across the country

The auction market is heating up!

An article from Business Insider looks the the results around the country.

Anxious buyers appear to be flooding into the real estate market this year, with around four in five selling at auction around the country.

According to preliminary CoreLogic figures, buyers snapped up an astounding 90% of Canberra properties at auction and 80% of properties at auction in Sydney, Melbourne and Perth over the weekend.

CoreLogic preliminary auction clearance rates

While the final figures for each city will come in a little lower as sales are confirmed, it demonstrates the momentum now careening through the market.

For reference, auction clearance rates of 65% and above typically inspire modest price growth.

Rates closer to the 80% mark, if sustained, will likely see prices climb higher still as buyers compete.

It marks a miraculous turnaround for the capital markets.

Over the same weekend last year, Sydney and Melbourne clearance rates wallowed at around 55%, while Canberra’s sat at 45%.

Those kinds of results characterised more than 12 months of declining prices and subdued buying and selling activity, taking the edge off 2017 record high prices.

A recent history of national auction clearance rates (CoreLogic)

In the middle of last year, it began to turn around with three interest rate cuts, a tax cut, easing of credit regulations, and a Coalition federal election victory which all but obliterated any chances of negative gearing reform.

In tandem, it helped spur a market recovery. With Domain now forecasting 8% price growth nationally, led by 10% in Sydney this year, it’s widely expected 2017 highs will soon be surpassed.

But for how long? ANZ economists put price growth to peak in the coming months, after which it may taper off as prices meet affordability constraints.

Current price growth may be exacerbated by a limited supply coming to market. While the current recovery may be on track to be the fastest on record, auction activity remains “well down on boom levels”, according to AMP Capital chief economist Shane Oliver.

Read the full article here

Latest data on the uptake of first home loan deposit scheme released

How is the first home loan deposit scheme performing?

An article from Abc.net.au delivers the results.

Nearly half the applicants using a new Federal Government scheme to purchase a property with a deposit of as little as 5 per cent are planning to buy outside Sydney, Melbourne or Brisbane.

Key points:

• Figures show more than half the scheme’s applicants so far are under the age of 30, except in Sydney
• There are 3,500 places left in the scheme this financial year, with another 10,000 spots becoming available from July
• Most of the buyers have been single buyers

But new figures show many younger buyers in Sydney are still struggling to get a leg-up on the housing ladder.

The Government today released the latest data on the uptake of its First Home Loan Deposit Scheme, which launched at the beginning of this year.

Under the scheme, the Government offers loan guarantees for properties worth up to $700,000 in Sydney or other New South Wales regional centres.

Prices are capped at $450,000 for the rest of New South Wales.

Melbourne buyers can spend up to $600,000 on a home while the limit is $375,000 across other parts of Victoria.

The figures showed more than half the scheme’s applicants so far were under the age of 30, except in Sydney.

Housing Minister Michael Sukkar acknowledged helping those younger city buyers was an ongoing challenge.

“There’s no scheme, including this one, that is a silver bullet to the difficulties that particularly younger people face in our major capital cities, where their jobs are,” Mr Sukkar said.

However, he said this deposit scheme was partially designed to encourage people to look beyond the capitals, by capping the property prices and including smaller and regional lenders.

“One of the things the Prime Minister and I wanted to do was make sure this didn’t just become a Sydney-, Melbourne-, Brisbane-centric scheme,” Mr Sukkar said.

“And if we didn’t pay such close attention to the way we designed it, it could easily have gone that way.”

Just a month and a half into the program, the figures showed about 6,500 loans were being processed.

Some of those had been approved for financing for a loan while others were at a much earlier stage.

That has left another 3,500 places in the scheme this financial year. Another 10,000 spots will become available from July.

The figures showed the average income of participants was $67,126 for single buyers or $111,534 for a couple.

The cap on an applicant’s income was $125,000 for a single buyer or $200,000 for a couple.

Most of the buyers have been single.

“We’ve certainly put in place modest price caps around the country — this is designed for people who are purchasing a modest first home,” Mr Sukkar said.

“Of course, if you’re on a single income, you’re … going to be more likely to be someone who fits within those price caps.

“If you’ve got a double income, perhaps your capacity is higher than a single, and my view is it probably pushes some people to looking at homes outside the house-price caps.”

The data also showed 70 per cent of the certificates issued so far had been for houses. Apartments made up 25 per cent and townhouses made up 5 per cent.

Read the full article here

This article from Realestate.com.au re-imagines six of your favourite Disney characters in their dream tiny homes in 2020.

UK creative agency NeoMam Studios has collaborated with Angie’s List to imagine six of our favourite Disney characters in their dream tiny homes in 2020.

“Partly inspired by Lester Walker’s 1987 book Tiny Houses, this blossoming culture of homes no bigger than 27sqm is aimed at saving money and reducing waste,” NeoMam Studios says of the project.

“Not exactly priorities in the worlds our Disney heroes inhabit, but hey, it’s 2020 and even real-life royalty are downsizing their palaces in search of simpler lives.”

So if these Disney icons ever decided to give up their happily-ever-after style castles in favour of a more sustainable and modern abode, these tiny homes are ready and waiting.

1. Woody from Toy Story

As the sheriff in his world, it seems only fitting that a tiny home befitting Woody would be a wholesome wooden cabin set to a backdrop of nature.

Woody would feel right at home in this wooden cabin. Picture: NeoMam Studios

Inside Woody’s would-be tiny home, you can expect a modern take on a western cabin, of course. Yee-ha!

The perfect western touches for a sheriff. Picture: NeoMam Studios

Wood, leather, an antler chandelier – we think Woody would feel right at home here.

2. Elsa from Frozen

As the Snow Queen of Arendelle, we think Elsa would fall head over heels for the castle-look wooden cabin in the snow-laden woods.

Do you want to build a snowman? Could there be a more perfect tiny home for Elsa? Picture: NeoMam Studios

With structural woodwork inside that looks like a snowflake, and a colour palette of blue and purple, this has certainly got to be the tiny home of Elsa’s dreams.

That is one clever use of woodwork. Picture: NeoMam Studios

3. Merida from Brave

This magical hideaway in the forest is the perfect home for Merida who hails from Castle DunBroch in Scotland.

If you wanted to downsize from your Scottish castle, this is definitely a great option. Picture: NeoMam Studios

With her wild curly red hair and brave spirit, this is the perfect setting for the adventure-loving character.

A cosy interior of this secluded cabin is fit for a brave independent princess. Picture: NeoMam Studios

4. Mulan from Mulan

Chinese warrior Mulan would love this tiny home nestled in the mountains – it’s the perfect place to work on battle strategies and play with her dragon, Mushu.

We can easily imagine Mulan waking up and practicing martial arts on that porch. Picture: NeoMam Studios

She’s from a traditional culture but has a progressive spirit – famed for dressing up as a male soldier in order to join the army – so we think she’d love this mix of Asian design and modern accents.

This Zen space is the ideal place to unwind after a day on the battlefield. Picture: NeoMam Studios

5. Jack Skellington from The Nightmare Before Christmas

Part spooky and kooky, this home has Jack Skellington (and his ghost dog, Zero) written all over it.

It might not be to everyone’s taste but the Pumpkin King will love his new digs. Picture: NeoMam Studios

Being the Pumpkin King by day who scares people on Halloween, we are pretty sure Jack would love what the interior designers have done with the decor in his tiny home.

It’s Christmas meets Halloween… sign us up! Picture: NeoMam Studios

6. Belle from Beauty and the Beast

Aw, the little girl in us just squealed a bit at the thought of Belle living in this tiny home – it’s castle chic meets secluded cabin in the woods.

Tale as old as time, song as old as rhyme… this place screams Belle. Picture: NeoMam Studios

Imagine cosying up on the couch all weekend with books while taking our pick of princess dresses from the feature wardrobe.

A beautiful space fit for a Belle. Picture: NeoMam Studios

A beautiful space fit for a Belle. Picture: NeoMam Studios