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.

How long first-home buyers need to save up for a deposit to buy a house in Melbourne

How long do you think you’ll need to save if you want to buy your first property in Melbourne?

According to an article on Domain.com.au there’s a new report – and the numbers may be surprising.

Young Melburnians looking to buy their first home in the city’s cheapest suburbs will likely spend at least five years saving for a deposit, a new report shows. Propertyupdate Victorian Property Melbourne

Domain Group analysed entry-level house prices in the city’s most affordable areas, and estimated the amount of time required to save a 20 per cent deposit, using average wage data from the Australian Bureau of Statistics.

A dual-income couple aged between 25 and 34, who were each saving one-fifth of their post-tax income, would need to save for six years to come up with a $116,500 deposit for a property priced at $582,500, the report found.

The city’s cheapest local government area to buy a house was Melton, which takes in Caroline Springs, Toolern Vale and new suburb estates like Rockbank and Fraser Rise.

An entry-level house costs about $424,000, and the report estimated a couple would spend four years and three months saving the $84,800 required for a deposit. 

Reno-Workshop-2017-small-ad

Couples looking to buy in the western growth corridor of Wyndham, where affordable houses cost about $490,000, would need to put away  money for five years.

And in Casey, Frankston, Whittlesea, Brimbank and Greater Dandenong, it would take closer to six years.

Entry-level property prices were calculated based on the 25th percentile of recent sales data.

The most affordable place within 10 kilometres of the city was Maribyrnong, where property hunters face 7½ years of saving to buy a $752,000 house, or 3½ years to buy a $360,000 apartment.

At the other end of the scale, it would take the average couple 16 years to save a deposit for a $1.6 million house in Boroondara.

Domain data scientist Nicola Powell said the time required to save a deposit for the average entry-level property in Melbourne had ballooned by eight months in the last year. Melbourne property skyline

The most affordable place within 10 kilometres of the city was Maribyrnong, where property hunters face 7½ years of saving to buy a $752,000 house, or 3½ years to buy a $360,000 apartment.

At the other end of the scale, it would take the average couple 16 years to save a deposit for a $1.6 million house in Boroondara.

Domain data scientist Nicola Powell said the time required to save a deposit for the average entry-level property in Melbourne had ballooned by eight months in the last year.

Read the full article here

Job vacancies at the highest level on record

What’s the state of play in our job figues?

This Blog by Pete Wargent shows the statistics.

Job vacancies flying Job Opportunity

Labour market figures continue to defy the sceptics and pessimists, my semi-optimistic self included!

Although telcos, banks, and eventually construction companies may well be shedding staff in the years ahead, the strength of the services sector is overwhelming the bad news.

Vacancies exploded 24.1 per cent higher year-on-year to a seasonally adjusted 236,000.

Not only is that the highest level on record, it’s actually an acceleration in the annual rate of growth to the steepest trajectory since the post-crisis recovery period of 2010.

Job Vacancy

 

 

The Tasmanian economy hasn’t seen much change over the past year, with vacancies reportedly being filled by applicants quickly.

However, in all other states and territories there was very significant year-on-year growth.

Read the full article here

Australian auction clearance rates have improved

Things a taking a positive turn in the auction market.

An article on Business Insider looks into the state by state results.

After six consecutive declines, leaving them at the lowest level since 2012, Australian auction clearance rates increased last week. Auction

But not by much.

According to CoreLogic, a final clearance rate of 55.5% was recorded across the capitals, lifting from 52.4% one week earlier.

In the same corresponding week in 2017, clearance rates stood at 66.5%, reflective of the slowdown seen in Australia’s east coast property market over this period.

Australia Clearance RatesCoreLogic

The improvement may have been helped by a lower number of properties going under the hammer, falling to 1,849 from 2,002 in the prior week.

In the same week last year, volumes were substantially higher at 2,355.

This table from CoreLogic shows the performance of each individual capital city market last week.

Australia Clearance RatesCoreLogic

The group said clearance rates in both Melbourne and Sydney, Australia’s busiest auction markets, both recorded a modest improvement during the week.

Melbourne’s final clearance rate was recorded at 59.9% across 941 auctions, increasing from 56.2% across 992 auctions over the previous week,” it said.  sold sale

“Sydney’s final auction clearance rate was recorded at 50.1% across 641 auctions, increasing slightly from 49.4% across 708 auctions in the prioer week.”

Despite the modest improvement, those were well below the 70.7% and 68.2% levels recorded respectively in both cities a year ago.

Mirroring the performance from Melbourne and Sydney, clearance rates improved across all other capital city markets except for Hobart during the week.

Reflecting the seasonal slowdown over winter and the start of school holidays in many parts of the country, auction volumes look set to fall further in the week ahead.

CoreLogic is currently tracking 1,557 across the country, with most of those — 735 and 606 respectively — taking place in Melbourne and Sydney.

With the exception of Perth, volumes will also fall in all remaining capital city markets.

Read the full article here

How low will Sydney and Melbourne prices go?

The market has certainly taken some turns, particularly in Sydney and Melbourne.

But where is it really heading?

In this article for Switzer, John McGrath looks at what we can expect.

In the easing markets of Sydney and Melbourne, we’re hearing more speculation in the media and amongst buyers about how low prices will go as our big cities continue to cool.

The latest opinion came from two senior economists at ANZ Bank, who published a paper last week predicting both cities would see a 10% peak-to-trough fall in prices over 2018 and 2019.Sydney-melb

We’re going to hear more of these predictions over the next 18 months, so let me see if I can offer you some reassurance based on my experience of more than 30 years in real estate, during which time I have seen many peaks and troughs in the market cycle.

How far prices will fall is a hard question to answer with any real accuracy.

We know both cities are cooling – Sydney faster than Melbourne (but remember, Sydney had a faster rate of growth during the boom).

We also know that neither market is going to crash because there are too many fundamentals holding prices up, such as the undersupply, high population growth largely due to migration, very low interest rates, low unemployment and a strong economy.

But we’re certainly seeing prices paring back, with auction clearance rates falling into the 50% bracket in Sydney and the low 60% in Melbourne.

Given the property market is cyclical in nature, it’s reasonable to rely on history for an indication of how low prices might go. Sydney suburbs

A Macquarie Bank Sales and Trading note released last week summed it up pretty well: “Australia has had six previous episodes of declining housing prices since 1980, with the peak-to-trough range of 2.5%-8%.

Nearly all previous corrections occurred following interest rate rises, a drag unlikely to be repeated any time soon in this cycle.”

In terms of where we are now, the latest CoreLogic data shows Sydney home values have fallen -4.2% since June last year, while Melbourne values have risen 2.2%.

But a recent acceleration in Melbourne’s cooling is apparent with an -0.5% decline in values in May and a three month decline of -1.2%, which is its largest fall over a three month period since 2012.

Price movements in both cities are tracked monthly and what we’re seeing so far is a very orderly softening of prices.

Sydney has experienced extremely small monthly declines in median values since September last year. Property Market

Out in the marketplace, you can feel that the heat has gone but it’s not translating into a big drop in the city’s median price.

The great thing about this stage of the cycle is seeing buyers get a bit of negotiating power back.

The urgency has gone, competition is weaker, there’s more homes for sale and much less risk of paying a premium at auction.

We’re getting back to normal market conditions.

This is a good thing, especially for first home buyers.

The timing couldn’t be more perfect for young people in Sydney and Melbourne – they’ve got generous stamp duty concessions; property prices are easing; and there’s far less competition from their investor rivals.

Read the full article here

The Block 2018 first glimpse: meet the new Blockheads renovating The Gatwick Hotel

The Block is back and making a statement in Melbourne’s St Kilda.

An article on Homes.nine.com.au gives a first glance into what we can expect this season.

Five couples.

One iconic building. Download

The biggest construction in Block history.

What could possibly go wrong?

Welcome to The Block 2018.

With a truly intriguing location, anticipation for season 14 of Nine’s hit renovation show The Block reached new heights.

And with the first promo now live (you can watch it above), we finally get our first glimpse of the 2018 Blockheads.

The site

Mention “The Gatwick” to anyone living in Melbourne and chances are they’ll have an opinion – so what better project for Australia’s biggest reality TV show, The Block. 

The Gatwick has been called an ‘eyesore’, a ‘dump’ and worse – but for The Block, that only means bigger transformations. It’s just how they roll. Luna Park, Melbourne

“I knew it was a fantastic, iconic building, and I knew it had so much potential, so I was very excited when I heard The Gatwick would be our next project,” says Scott Cam, who returns to host the show for its 14th season.

The hotel is in the heart of one Australia’s most famous postcodes – St Kilda; host to famous landmarks such as Luna Park, the Palais Theatre, the cultural hub of Acland Street. It’s also minutes away from the beach.

For the show’s co-creator and executive producer, Julian Cress, the location is a nostalgic throwback to the show’s first season near Sydney’s most iconic strip of sand.

“This series brings us right back to where we started in Bondi in 2003,” says Cress.

“We filmed in summer, which gives it a flavour that hasn’t been seen on The Block for a very long time.”

The class of 2018: meet your new Blockheads

contestants header

L-R: Carla, Bianca, Spence, Kerri, Scott Cam, Hans, Courtney, Norm, Jess, Hayden and Sara / Supplied

Finally, we have the official announcement from Nine on the five eager new teams chosen from a record-breaking 45,000 entries:

Our first couple are two netballing besties.

But when we say netball, we mean Bianca (36), a Commonwealth Games netball champion, and Carla (35), a former Melbourne Vixens shooter.

The pair hail from Melbourne, VIC.

Kerrie (49) and Spence (47) found in each other the perfect partner, later in life.

Now a happily married couple, they started fresh by moving to the Barossa Valley, SA. construction repair maintenance

Sara (31) and Hayden (45), newlywed parents who epitomise the saying ‘opposites attract’.

They’re from Bondi, NSW.

Hans (37) and Courtney (33), are a jet-setting, loved-up couple from Perth, WA full of character.

Picture the most Aussie couple you can imagine, and you have our final couple, Queenslanders Norm (40) and Jess (33).

They’re engaged parents from the Sunshine Coast, QLD guaranteed to put a smile on your dial.

Watch this space for more about the newest Blockheads.

The hosts, crew and judges

As for the rest of the team? It’s like one big Block reunion.

Scott Cam is once again joined by co-host Shelley Craft, along with judges Neale Whitaker, Shaynna Blaze and Darren Palmer, “The Blockinator” foreman Keith Schleiger, and his right-hand man, Dan Reilly.

Read the full article here

Weekend video: 10 Mind Blowing Optical Illusions

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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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