Each Saturday morning I like to share some of the interesting property investment and economic articles I’ve read during the week.
I’ve put them here all in the one place for your easy reading.
Enjoy your weekend….and please forward to your friends by clicking a social link buttons on the left.
July capital city home values increase for the second consecutive month
The latest figures from RPData show that dwelling values across capital cities recorded a second month of capital gains in July with dwelling values up by 0.6% over the month following a 1.0% rise in June.
The RP Data-Rismark Home Value indices posted a second successive rise in capital city dwelling values over the month of July. Across the combined capital cities, dwelling values rose by 0.6 per cent over the month with the rises being relatively consistently over the first three weeks of July followed by a -0.2 per cent fall over the final week of the month.
Over the three months to the end of July, capital city dwellings have posted an increase of 0.2 per cent.
“The July rise was not as broad-based as the June results, with the month-on-month increase primarily being associated with the Sydney and Melbourne markets where dwelling values rose 1.2 per cent and 1.4 per cent respectively. The July result, when viewed together with the positive June result, suggests housing markets may be starting to respond to lower mortgage rates, which according to the RBA’s latest Board meeting minutes are around 50 basis points below their 15-year average.” Said analyst Tim Lawless
Do valuations reflect true market value?
Another great Property Uncut show produced by Kevin Turner. If you don’t already subscribe to this excellent weekly Internet based radio show.
With the property market being so uncertain and volatile, property valuers have the task of producing valuations for property owners, buyers and lenders that reflect fair market value. Most owners think their property is worth more and buyers think its worth less but the banks rely on the valuer.
This week he has a heap of great guests:
- Gavin Hulcombe from Herron Todd White
- Michael Matusik from Matusik Property Insights
- Michael Teys from Teys Lawyers
- Rolf Schaefer from Metropole Finance
- Michael Yardney from Metropole Property Strategists
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.
Video of the week – Westpac Economist Bill Evans July Market Update
In this 5 minute video Westpac Chief Economist Bill Evans comments on the week’s market events with a look at the Reserve Bank Governor Speech, June Quarter Consumer Price Index results and world economies, plus looking ahead to next week’s retail sales and building approval results.
Australian Housing Not Unaffordable
In a recent speech titled “The Lucky Country” RBA Governor Glen Stevens focused on Australia’s relatively favourable economic performance.
He used his speech to answer a number of questions posed in the general economic debate about Australia’s economic performance.
- Did luck have a significant role or was it due to the implementation of sensible policies?
- What are the risks of things going awry e.g. China’s economy weakening dramatically and/or domestic house prices here collapsing?
- Can we avoid the consequences of a severe global downturn, like a banking crisis or an inability to fund the current account deficit?
He also presented two charts to show how Australian housing affordability has diverged from the US since 1986, but performed in line with many other comparable countries.
Superannuation dilemma – especially for Baby Boomers
A recent Rabobank poll showed that baby boomers are retiring, on average, on about $200,000. That’s well short of the $800,000 they indicated they would like to have in retirement.
In fact it’s generally accepted that you need around $1 million in retirement to live quite comfortably. That is, assuming you live in retirement for 15 years with no extra income, a million dollars would give you an annual income of around $65,000.
What Boomers didn’t count on though of course was the global financial crisis – or as the rest of the world defines it – the global recession.
This article on Yahoo suggests that we are living in extra-ordinary economic times, and it’s about time investors realised they need to execute or at least look in to extra-ordinary investment strategies. While it suggests taking on more risky investments like commodities, I’s suggest you look at buying property in your superannuation fund. I don’t think most Boomers can afford to take more risks.
House prices: The latest June quarter data may not lie, but it’s rarely in agreement
Trying to work out whether the Sydney, Melbourne or Brisbane housing market is going up or down?
It all depends on which housing data provider you choose to reference – they all use different methodologies to calculate their indexes and hence will never be in agreement.
RP Data-Rismark, Residex and Australian Property Monitors (APM) have all released their June quarter data, and Property Observer provided a comprehensive chart of direct comparisons.
In just two markets – Brisbane houses and Melbourne units – do all three providers agree on the direction they are heading…in both cases down.
Rarely are the national data providers within $10,000 of each other on the median house or unit price. For example, RP Data-Rismark has the Sydney house price at a median of $616,000. Residex says the median is $50,000 higher at $666,500, while APM’s Sydney median house price is in between the two at $642,425.
Some of the differences are startling. To see what each of the data providers are saying is happening in your state…
Nobel-winning psychologist Daniel Kahneman offers a long list of things he’s learned over the years to Guardian UK.
Human beings cannot comprehend very large or very small numbers. It would be useful for us to acknowledge that fact.
Investment bankers believe in what they do. They don’t want to hear that their decisions are no better than chance. The rest of us pay for their delusions.
There is a powerful idea that we should want to be richer. I went to a financial advisor in the States and said: “I don’t really want to get richer, but I would like to continue to live like I do.” She said: “I can’t work with you.”
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