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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.

Melbourne apartments face resale issues as experts report saturation of stock

It looks like there’s tough timeS ahead for Melbourne’s apartment market.

This article from Domain.com.au looks at the current state of play in the market, and what the future may hold.

“There is not going to be an auction today,” declared the young sales executive standing in the entrance foyer of an apartment building in Abbotsford. Melbourne

It was just two minutes before a two-bedroom apartment in the block was scheduled to be auctioned on a Saturday in early April – and now the sale had been called off.

Only three people turned up for the auction.

The one good prospect interested in purchasing, a young woman, had opted a day earlier to buy another unit in Northcote.

A second potential buyer was struggling to get finance approved by his lender. 

Wealth Retreat 2018 - General

He was missing in action, too.

Cancelling or withdrawing a booked auction can hit a motivated vendor for six.

But it is happening to an increasing number of apartment sellers in Melbourne – and that’s opening up plenty of opportunities for well-researched buyers.

The golden rule when buying and selling residential property is that the more heavily supplied the market segment, the more likely it is that prices will fall.

Professional buyer Brian Capp, from Statewide Property Advocacy, believes buyers will soon be in a position to purchase units in medium and high-density buildings for below their replacement cost.

He says hundreds of apartments are listed for sale in Southbank, Docklands and Richmond and other areas of inner Melbourne, and there is a shortage of buyers for them. Melbourne-July

“There will be some bargains to be found in the next six to 12 months in the high-rise buildings in the inner suburbs,” Mr Capp says.

“Some of the second-hand two-bedroom apartments in the already established buildings, even though they are very small, are going to become an attractive buy because the replacement cost is greater than the price the owners are asking.”

In some pockets of the inner suburbs, the surge in new apartment construction has put a brake on prices for older apartments built between the 1920s and the 1980s. melbourne

At the right price, these units offer good value because they are larger than most modern apartments and have a high land-to-unit ratio.

According to a market analysis released this month by Capital Economics, apartment prices in Melbourne could fall 8 per cent this year and by 4 per cent in Sydney.

“Units look much more vulnerable than single dwellings, while Melbourne appears to be the most exposed of the eight capital cities,” chief economist Paul Dales wrote in the analysis.

He maintains that while prices may only edge lower this year and in 2019, higher interest rates will probably mean they will fall more sharply in 2020 and 2021.

Read the full article here

Hunter-killer

What in store for Sydney’s apartment market?

This Blog by Pete Wargent shows the statistics.

Return of the Hunter!

Although Sydney has a record number of apartments under construction, the rising number of completions through this cycle to date has generally been absorbed by faster population growth. Sydney+suburbs

The vacancy rate for metropolitan Sydney declined from 2.3 per cent to 2.2 per cent in March 2018, according to the latest REINSW data.

Inner ring Sydney recorded a vacancy rate of just 1.9 per per cent – and that figure has been tracking lower for quite a few months now, down from 2.3 per cent in July last year.

However, there have been some signs of rising vacancy rates in the middle and outer rings at 2.6 per cent and 2.3 per cent respectively.

Smoothing the figures on a 6-month moving average basis shows the trends.

Reinsw

It’s interesting to note that Newcastle and the Hunter Valley have seen vacancy rates tightening substantially since the coal bust of 2012.

Read the full article here

ANZ says Australia’s housing market downturn has largely run its course

Is this the end of Australia’s housing market downturn?

According to an article on Business Insider the forecast from ANZ indicates that the downturn has largely run its course.

Australia’s housing market is slowing down, led by outright price declines in Sydney and Melbourne.

According to CoreLogic, prices across the country fell 0.5% in March in weighted terms, trimming the increase on a year earlier to 4.8%, well below the double-digit gains seen in early 2017.  Sydney-melb

Some believe the Sydney and Melbourne-led slowdown has a lot further to run, while others believe the weakness will be short-lived.

Safe to say, forecasters from ANZ Bank remain firmly in the latter camp.

After updating its Australian house price model, ANZ says weakness seen in recent months will soon come to an end, leaving annual price growth higher both this year and next.

“The model’s forecasts are broadly unchanged, predicting an annual increase in prices of 2% in 2018 and 4% in 2019,” say Jack Chambers and Jo Masters, members of ANZ’s Australian economics team.

ANZ price model april 2018Source: ANZ Bank

Helping to underpin that view, the pair say stability in the RBA cash rate will help to underpin prices.

“We no longer expect any changes in monetary policy in 2018, and instead expect two rate hikes in 2019. Reserve Bank Of Australia

For the model’s forecasts, this is a positive for price growth in 2018 due to the lack of interest rate rises,” they say.

Along with no increase in official borrowing costs, ANZ says a pick-up in household income growth, already running at the fastest annual pace since 2015, should also act as a tailwind for prices.

“Gross total income growth improved to 3.4% year-on-year in the December quarter of 2017,” say Chambers and Masters.

“We expect this will slowly become more positive for the model’s forecast throughout 2018 and 2019 given our expectation of a gradual improvement in wages growth.”

ANZ says these factors should help to offset an expected drag on prices from new housing stock hitting the market.

“Ongoing residential construction activity is expected to remain elevated in 2018 [which is] a negative for the model’s forecast due to the additional housing supply,” say Chambers and Masters.

Read the full article here

Geelong leads regional growth as city dwellers escape stress

If results are anything to go by – Geelong is the place to be.

In this article for Switzer, John McGrath looks at why all roads seem to be leading to Geelong.

The inevitable ripple effect seen in regional markets at the end of capital city booms has always been driven by affordability.

City buyers see phenomenal price growth in their city and buying becomes too hard, so they look further afield – usually to nearby regional areas with the best commuter access, for a cheaper family home.   Geelong City Australia Sign

While affordability remains an important factor, we are finding that more city dwellers are looking to regional areas to escape the stresses of city life, in addition to achieving better affordability.

Our McGrath Geelong Principal, Jim Cross, says “The biggest difference with the family buyers from Melbourne and Sydney compared to two or three years ago is the reasoning behind moving to Geelong, with liveability a key driver.”

CoreLogic data shows regional markets are now outperforming capital cities in terms of price growth.

This trend is not surprising given the disparity between city and regional home values, and hence the demand in those areas increases and price growth ensues.

Leading the top five regional areas for price growth over the past year is Geelong at 10%; followed by Southern Highlands/Shoalhaven at 9.5%; Capital Region NSW and Newcastle/Lake Macquarie both at 8.3%; and Coffs Harbour/Grafton at 8.1%.

I asked some of our McGrath Principals in these areas to give us their insights into today’s market trends.

Here’s what’s happening on the ground in Geelong, Coffs Harbour and the Southern Highlands.

GEELONG (VIC) 

10% price growth over 12 months

Our expert: McGrath Geelong Principal, Jim Cross

“The culture in Geelong has changed dramatically over the past five years with the café lifestyle in full swing,” Jim says. geelong

“There’s trendy laneway restaurants, cafes, boutique shopping all mirroring Melbourne trends so Melbourne buyers are not seeing Geelong as a sleepy, backward city anymore.

“The number of Melbourne buyers coming through open homes in the premium areas of Geelong has increased from approximately 10% to 35%, in some cases, over the past two years.

“We haven’t experienced demand like this before. In the past, Melbourne and Sydney buyers, investors and developers were a passive trickle but now the flood gates have opened, as people genuinely see Geelong as the next big property market.

“Typical scenarios include young double income professionals living in an apartment in Richmond, for example, who want to start a family and are purchasing in a trendy area of Geelong at an affordable level with great schools and lifestyle. Aerial View Of City At Sunset

“Downsizers are selling the big family homes in Melbourne and Sydney for $1.5M – $3M and purchasing a nice townhouse in a trendy area of Geelong for $750,000 to $1M and putting the balance into super.

“Sydney investors are buying affordable properties in Geelong North – typically three bedroom, one bathroom brick or weatherboard homes on around 600 sqm with the intention of sitting on them for five to 10 years and subdividing or re-selling in the future.

“We are also seeing a fast growing trend in mid to large size developers focusing on Geelong for residential and commercial projects and investments.”

Read the full article here

4 Lessons Your Heroes Learned From Their Parents

What was the best lesson your learned from your parents?

An article in the Huffington Post shares the lessons some of the most influential people in the world learned for their parents.

What did your parents teach you? inspiration motivation lesson

We can all recall the frequent reminders to say our ‘pleases’ and ‘thank you’s.

But how about the other — more significant — pearls of wisdom?

“Our relationship with our parents is fundamental in defining who we will become later in life,” Psychotherapist at Associated Counsellors & Psychologists Sydney Dan Auerbach said.

“Parents who clearly share their values and their moral reasoning with their children, and who themselves have the emotional capacity to live these values, are able to have a profound influence on their children’s adult personality,” Auerbach explained.

“Once we’re older we can undertake more cognitive moral reasoning. We begin to understand and think about our parents values and consider the merit of these values for ourselves.”

Same goes for your heroes. Politicians, sporting stars and celebrities — big names whose work ethic, drive, determination and courage didn’t materialise entirely of their own accord…

Beyonce

She’s one of the most renowned and influential female singers in recent history, but Beyonce still credits her mum as the most influential person in her life.

“My biggest hero is and always will be my mother,” Beyonce said.

“She taught me the principles of hard work, setting my own goals and visualising my future.”

Indeed, Bey’s stellar career proves the singing icon has a huge capacity to stay focused and persevere.

“When we have modelling from our parents on how to manage frustration and how to keep trying even when things get difficult, it sets us up with a great capacity for learning and achieving,” Auerbach said.

“After all, achievement often comes after sticking with a task through moments of frustration, stress or failure and getting through to the other side.”

Barack Obama

Growing up in Jakarta, Indonesia, a young Barack Obama received some tough love lessons from his stepfather, Lolo Soetoro, after a tussle with an older neighbourhood boy who threw a rock at him.

Recalling the event in his memoir “Dreams From My Father,” Obama complained to Soetoro that the incident “wasn’t fair.”

The next day his stepfather produced two sets of boxing gloves, one for himself and one for Obama. While sparring he offered advice that would stay with Obama for the rest of his life.

“Men take advantage of weakness in other men,” Soetoro said, “The strong take the weak man’s land…which would you rather be?…

If you can’t be strong, be clever and make peace with peace with someone who’s strong. But always better to be strong yourself. Always.”

Proving to be an invaluable lesson that we would apply during his tenure as the American President, years later Obama would later say of his stepfather; “he gave me some things that were very helpful. One of the things that he gave me was a pretty hardheaded assessment of how the world works.”

“Children observe influential models, like parents and they learn from them,” life coach at Upstairs Coaching, Alex Kingsmill said.

“(Soetoro’s) rhetorical question offered both a lesson in the realities of the world, but also a lesson in choice — it showed (Obama) that he could choose to be his own person.”

Rafael Nadal

As one of the world’s top tier tennis players, Rafael Nadal has achieved fame, professional success and banked millions.

But it’s his family focused upbringing that has had a lasting impact on the sporting great.

“My family had always been the holy, untouchable core of my life, my centre of stability… cocooning me from the dangerously distracting hurly-burly that comes with money and fame, and create the environment of affection and trust I need to allow my talent to flower,” Nadal said in his autobiography, Rafa: My Story.

Rather than living a lavish life, the Spanish tennis player still lives with his family and maintains his uncle as his coach.

“Having a family who are a safe base to return to can give us enormous confidence to go out into the world,” Auerbach said.

“These close relationships mean greater life satisfaction. And for those who haven’t been so lucky in childhood, we can still develop similarly close relationships in adult life with friends or partners.”

Jennifer Lawrence

One of Hollywood’s most successful and likeable stars, Jennifer Lawrence learned compromise and sacrifice at an early age.

As a teen she informed her mother that she wanted to be a movie star — a big dream for a 14-year-old — and her mother in return cut the wannabe-actress a deal; Jennifer could get into acting only after she graduated from high school.

Cue Lawrence working overtime at school, which culminated in her graduating two years early.

Her mum, as promised, found her an agent in New York.

“My mum believed in me when…nobody else did,” Lawrence said.

“It cost her, her life in Kentucky and almost her marriage, but she stuck with me because she saw how happy acting made me and she didn’t want to take me away from it. I owe her everything.”

Now one of the highest paid actresses in Hollywood, Kingsmill explained that Lawrence’s mother’s actions taught her that success requires determination and conviction.

Read the full article here

Weekend video: Where Do Your Texts Go?



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About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again 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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