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…and please forward to your friends by clicking the social link buttons.
Melbourne property prices: 12,000 families now live in Melbourne high-rises
It may be the most livable city in the world, but there’s no denying Melbourne’s property prices have made buying property a challenge for many.
So what’s the solution?
According to an article on Domain.com.au many Melbournians have turned to high-rise living as a way of calling the city they love home.
Twelve-year-old Caden Beck grew up in a big house in the English countryside.
But his mother opted for a very different lifestyle when they moved to Melbourne two years ago: a two-bedroom apartment.
“I didn’t know if we were going to be on top of each other because we did have quite a big house in the UK,” Caden’s mother, Nadine Bygotte, said.
“But it’s worked out really well.”
The single mother was drawn to South Yarra because it was close to the city, but said it was much more affordable for her to rent a flat than a townhouse.
Caden quickly made friends on other floors in the complex and took a fancy to the rooftop pool.
“He loves it – it’s completely different to what we’re used to,” Ms Bygotte said.
There are almost 12,000 families living in Melbourne’s high-rise apartment blocks, a figure which has more than doubled in the past decade.
The latest census data reveals the quintessential post-war dream of owning a three-bedroom freestanding house is changing, with an additional 4500 families moving into apartment towers since 2011.
But as thousands of parents quite literally level up, planning experts say Melbourne still lags behind Sydney when it comes to family-friendly apartment development.
Professor Carolyn Whitzman from the University of Melbourne said government and developers had been slow to realise apartments were not only in demand from young singles, empty nesters and dual-income no-kids couples, or “DINKs”.
“It’s been a very long evolution but developers are beginning to understand there is a market for family-friendly apartments,” she said, adding that larger two and three-bedroom apartments were trickling into the market.
“Sydney is a completely different story than Melbourne,” she said.
“There’s a lot more recognition of children living in cities [there].”
In many cases, parents now appear willing to trade off a certain amount of space to buy a home.
Read the full article here
Australian households are set to experience a financial squeeze.
Australian household disposable incomes growth has been a bit slow in recent years, following trends in bulk commodity prices.
That said, household wealth is at record highs, with total net worth now approaching $10 trillion, and Aussies sitting on a tremendous pile of cash.
Owner-occupier loans are expected to bounce back moderately in the month.
But given that APRA announced its tightening measures for interest-only loans at the end of March, all eyes will be watching investor loans to see whether this sector has slowed accordingly.
Read the full article here
Lending to property investors slows
If you’re a new property investor or looking to add to your portfolio, you would have no doubt heard that the game of lending is changing.
So what’s really going on?
This article from News.com.au looks at the changes and how they will impact the property market.
The value of loans to property investors continues to fall, underlining the effectiveness of regulatory measures introduced to cool the housing market.
The total value of housing finance rose 1.3 per cent to $33.03 billion in May, seasonally adjusted data from the Australian Bureau of Statistics showed on Tuesday.
That rise was driven by housing finance to owner occupiers, which increased by 2.9 per cent from April, while investor lending fell 1.4 per cent, which follows a fall of 2.3 per cent in April.
ANZ senior economist Jo Masters said the data confirmed a growing divergence in the trend for lending to owner occupiers and investors.
“Not surprisingly, investor housing finance continues to moderate, reflecting the combination of additional macro prudential measures, out-of-cycle rate hikes aimed at investors and various government measures,” she said.
“Owner-occupier finance, on the other hand, looks solid and has recorded four consecutive monthly increases.”
The Australian Prudential Regulation Authority (APRA) capped interest-only mortgage lending in the last week of March, telling lenders to limit higher-risk interest-only loans to 30 per cent of new residential mortgages.
That set off a fresh round of rate increases by the major lenders, with banks repricing their loan books to make interest-only and investor loans more expensive, in order to comply with the new limits.
Home loan approval numbers bounced back in May after declining for three consecutive months, rising one per cent in May.
But the gain fell short of the market expectations of a 1.5 per cent rise, as investment housing continued to be a drag.
Click here for the full article
RBA relying on the rare ‘third objective’ with interest rate calls
For the past 11 month the RBA has left interest rates on hold.
But is there more to it than meets the eye?
This article from The Sydney Morning Herald takes a deeper look what’s really going on.
Australia’s central bank is relying on an obscure piece of legislation dating back to World War II to justify keeping interest rates steady: its rarely-discussed third objective of monetary policy.
Traditionally, the Reserve Bank of Australia is seen as having a dual mandate of maintaining stability of the currency and full employment.
Both goals support its aim to control inflation over the medium-term.
But there’s another goal that’s lesser known and somewhat less defined: the economic prosperity and welfare of the people of Australia.
That’s allowed the central bank to keep the benchmark rate at a record low 1.5 per cent for 11 months as it weighs the impact of a rate move on a financially-stretched population against an array of mixed economic signals.
Both hawks and doves are being kept at bay.
Just four of 24 economists think the RBA will cut rates again, citing stagnant wages, record-high household debt and declining savings.
Seven predict a hike – reflecting expectations of wages and inflation returning to normal in a strengthening economy.
But most reckon rates will be on hold this year and next, while market bets on cuts have faded.
The RBA’s third objective “gives quite a lot of wiggle room” to policy makers, said John Edwards, an economist and visiting fellow at the Lowy Institute for International Policy who served on the central bank’s board until last July. “It’s a sort of a fallback.”
Governor Philip Lowe first appeared to invoke the third objective when fronting a parliamentary panel just four days into his tenure last September, and again during his second testimony in February.
He asked rhetorically at both hearings whether it was in the national interest or “within our broader responsibility to promote the interests of the Australian people” to reduce rates further.
Click here for the full article
How 9 Incredibly Successful People Define Success
What does success mean to you?
Have you wondered how some of the most influential people in the world define success?
An article from Business Insider looks at what success means to 9 such individuals – and their answers may surprise you.
We write lots of stories about success here at Business Insider, but we don’t always agree on its definition.
Merriam-Webster defines it as “the fact of getting or achieving wealth, respect, or fame,” but this interpretation doesn’t feel complete.
With that in mind, we researched what foremost authors, inventors, and entrepreneurs consider success to be.
Read on to see how Richard Branson, Maya Angelou, Deepak Chopra, and others define success.
- Huffington Post founder Arianna Huffington says that money and power aren’t enough.
- Legendary basketball coach John Wooden says it’s a matter of satisfaction.
- Zappos CEO Tony Hsieh says success is about living in accordance with your values.
- Acclaimed author Maya Angelou believed success is about enjoying your work.
- British politician Winston Churchill thought that success is being relentless.
- Billionaire Richard Branson believes success is about engagement.
- Spiritual teacher Deepak Chopra believes success is a matter of constant growth.
- Inventor Thomas Edison recognised that success is a grind.
- Popular author Stephen Covey said that the definition of success is deeply individual.
Click here for the full article
Weekend Video: How Much Sleep Do You Actually Need?
SUBSCRIBE & DON'T MISS A SINGLE EPISODE OF MICHAEL YARDNEY'S PODCAST
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
NEED HELP LISTENING TO MICHAEL YARDNEY'S PODCAST FROM YOUR PHONE OR TABLET?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
PREFER TO SUBSCRIBE VIA EMAIL?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.