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.
First-home lift in weak housing finance figures
While the changes in our property market have left investors concerned, it would seem first home buyers are making the most of it.
According to an article on Domain.com.au the number of taken by first home buyers has taken a significant growth.
Another sharp fall in lending to property investors saw official housing finance figures drop in June, but first-home buyers appear to be making the most of a transforming property market.
The value of total housing finance commitments fell a seasonally adjusted 1.6 per cent to $31.23 billion in June, figures released on Wednesday by the Bureau of Statistics show, with owner-occupier loans falling 1 per cent, and investor loans slumping 2.7 per cent.
The data shows investors now account for 41 per cent of new loans, which is the lowest it has been in seven years, with lending to property investors said to be 16 per cent lower for the year.
First-home buyers, meanwhile, appear to have taken advantage of the investor exodus and increased their portion of new loans to 18.1 per cent – its highest level since October 2012.
The average size of a loan to a first-home buyer grew by $5200 in the month, and sits at $349,800.
The average loan size for all owner-occupiers, meanwhile, fell $3500 to $396,600.
Economists point to the influence of tighter lending standards to explain the drop in June’s finance figures, and say the weakness is unlikely to be reversed this year.
“Tighter credit conditions continue to impact, reflecting APRA’s earlier supervisory measures, as well as additional tightening in the wake of the Royal Commission into Financial Services,” ANZ senior economist Jo Masters said.
“We expect credit conditions to tighten further over this year and, as a result, to see further weakness in house prices and building approvals.”
The new high struck by first home buyers, as a portion of new loans, came after three monthly declines and was driven by a 6.9 per cent month-on-month rise in Victoria and a 7.4 per cent monthly rise in Queensland.
First home buyer finance in NSW grew a more modest 2.1 per cent in the month.
Read the full article here
Listings down in dry July
Results indicate a slowdown in listings.
Residential listings fell across the board in seasonally quiet July, driving national listings 5 per cent lower to 314,229 (about 1 per cent lower than the 316,748 recorded a year earlier), according to the latest SQM Research figures.
Sydney recorded a sharp 7 per cent drop as some potential vendors elected to sit tight.
Despite this drop Sydney listings remain 23.5 per cent higher than a year earlier, after nearly half a decade of low stock listings.
Read the full article here
The RBA just flagged a downgrade to its inflation forecast
The RBA has left interest rates on hold this week – for the 22nd consecutive time.
So what does this mean for the inflation forecast?
This article from Business Insider look at what we can expect.
The Reserve Bank of Australia (RBA) kept official interest rates unchanged at 1.5% in August, extending its current streak of policy inertia into a 22nd consecutive meeting.
The last time the RBA moved rates was in August 2016, and market pricing for a full 25 basis point increase has now extended all the way to 2020.
That was reflected in the latest statement, as the RBA still looks set to keep rates on hold for the foreseeable future.
“The low level of interest rates is continuing to support the Australian economy,” the RBA said.
“Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual.”
“Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.”
Just like the July statement, the entire final paragraph was identical to the previous month.
Based on the wording in the statement, the RBA looks likely to downgrade its 2018 inflation forecasts at this Friday’s quarterly Statement on Monetary Policy (SoMP).
“The central forecast is for inflation to be higher in 2019 and 2020 than it is currently,” the RBA said.
“In the interim, once-off declines in some administered prices in the September quarter are expected to result in headline inflation in 2018 being a little lower than earlier expected, at 1.75%.”
In the previous SoMP in May, the RBA forecast headline inflation would run between 2-2.25% for the remainder of 2018.
The Australian dollar was little-changed following the release.
In the previous month’s announcement, the RBA removed the words “an appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast” for the first time since April 2016.
The passage was also held out of the August statement.
Committee members maintained their upbeat assessment of the labour market, highlighting the recent jump in vacancy rates and taking a positive view of other leading employment indicators.
“Employment growth continues to be faster than growth in the working-age population,” the RBA said.
“A further gradual decline in the unemployment rate is expected over the next couple of years to around 5%.”
Neither of the lines on employment were included in the bank’s July statement.
The May SoMP forecast the unemployment rate to run at 5.5% for the remainder of this year, before declining to 5.25% in 2019.
The RBA noted that wage growth remains low, and this is “likely to continue for a while yet”, however it remains optimistic that improvements in the economy “should see some lift over time”.
In addition, the bank repeated its assertion from the July statement that wage growth “appears to have troughed”.
On the subject of the housing market, the RBA noted repeated the previous month’s observation that house prices in Sydney and Melbourne continue to decline.
However, the line in the July statement that “nationwide measures of housing prices are little changed over the past six months” was removed. The bank also noted the ongoing decline in credit growth.
“Housing credit growth has declined to an annual rate of 5.5%.
This is largely due to reduced demand by investors as the dynamics of the housing market have changed,” the RBA said.
In line with the July statement, the bank noted that funding costs for banks have risen since the start of the year, but added that “they have declined somewhat since the end of June.”
In addition, “these higher money-market rates have not fed through into higher interest rates on retail deposits.”
Read the full article here
Why buy property this Spring
With spring just around the corner – it’s the perfect time to plan your next property purchase.
In this article for Switzer, John McGrath explains why spring is a great time to buy.
History tells us that we shouldn’t expect a correction of more than 8-10%.
CoreLogic analysed every period of decline in Sydney since 1980 and found the biggest price loss was -11.6% over 28 months in the correction of 1988-91.
In Melbourne, the biggest price loss was -9.4% over 12 months in the correction of 2008-09.
If you’re looking to buy a first home, upgrade your family residence or purchase a new investment, you should have at least a 10-year horizon in mind and by that time, whatever you pay today will look cheap.
The best time to buy has nothing to do with the market – it’s when you can comfortably afford it and want to do it.
There will be a couple of distinct advantages for buyers this Spring:
- There will be more homes for sale, as is always the case in Spring but it will come on top of already elevated levels of stock. CoreLogic figures for Sydney show stock for sale in July was 21.7% higher than the same time last year and the greatest volume for sale since 2012. In Melbourne, stock in July was 10.5% higher than last year and the greatest volume since 2014
- You’ll likely face less competition, not just because some buyers have left the market but also because so many buyers are struggling to get finance these days. This is having a material impact on sale prices because it is reducing competition at auction
Also bear in mind that today’s low interest rates are a major benefit for buyers but they won’t last forever.
Your loan is at its most expensive in the first five years when the bulk of your repayments go towards interest.
Spring buyers should use today’s low rates to make extra repayments and get a serious jumpstart on paying down debt.
Your loan is a long-term liability – usually 25 or 30 years; and during that time rates will return to their long term average of 7-7.5%, which could make tens of thousands of dollars difference to your loan repayments.
Read the full article here
Time-saving tips to be more productive in less than a minute
If there is one thing we all want more of in our day – it’s time!
But what if you could use the time you already have to be more productive?
An article on Executivestyle.com.au shares some of the best tips to get the most out of one minute.
Life coaches, success coaches, motivational speakers: there’s an entire industry of people who’ve made it their job to tell you how to be better and achieve more, sooner.
Then there are the books, from How To Win Friends and Influence People to 7 Habits of Highly Effective People. Motivation is big business.
But many Australians don’t want American-style motivational speeches, or to read a book of cliched aphorisms.
With that in mind, I approached some of the country’s most successful men across a range of fields, sectors and backgrounds, and asked for their 60-second tip to staying motivated and achieving their goals.
Their answers – all nuggets that can be completed in under a minute – may surprise you. Certainly, they may inspire you to spend the next minute of your life wisely, creatively and usefully.
Turn off the internet (by force if necessary)
“Maybe it’s a generational thing, but I find it near-impossible to concentrate for long periods of when my phone is close or the internet is turned on – which is constantly. So if I need to writing something long or do offline research, I activate Freedom on my laptop (which forcibly deactivates the internet for set periods of time) and Forest on my iPhone.”
– Benjamin Law, Fairfax columnist, writer, has PhD in creative writing and cultural studies.
Set just three tasks for the day
“Don’t create a long to do list. In the morning, set three tasks for the day that are the most important things to get done. Don’t finish the day without making at least some progress on those three things. has a shoirt At the end this is better than having a long list of many things to do and getting lost and distracted in the noise of things that are ultimately not that important to you achieving your short and long term goals.”
– Wyatt Roy, youngest ever person to be elected to Australian Parliament.
“I always like to get a minute of sun – just quiet time no interruptions, usually while walking my dog. I find a spot and just sit for a minute empty my mind, close my eyes and let the sun warm my face. When I was young, I’d sit in my parents’ car and feel the sun through the window. I carry a lot of things in my head. I read constantly, I’m always thinking and it can get crowded in there! It always works. It never fails to leave me feeling calm and clear-headed.”
Stan Grant, journalist, broadcaster, presenter, author.
Leave the best for last
“When reading emails, people tend to take notice of what’s in the ‘PS’ line. So if you need to get cut through or if you’re asking for something big, add or repeat your important requests as the very last line of the email.”
– Tim Fung, CEO and co-founder of Airtasker, Australia’s largest community marketplace.
“When you’re contacted by someone who needs a response, it’s much better to respond quickly and briefly – even if it only takes 59 seconds! – than putting off getting back to them until later. Every day you wait to get back to someone, the expectation about the length and detail of your response increases and ultimately puts a bigger burden on you. I should stress that although I strive to do this myself, I don’t always succeed!”
– James Paterson, youngest ever senator for the Liberal Party, aged 28.
Take a step back
“As lifelong learners, we need to be constantly updating our mental maps, expanding our repertoire of responses, and inventing new ways to approach complex problems. Every leader needs a certain curiosity about their world. But they also need the capacity to step back from intense activity and reflect carefully on where they and their organisations are going.”
– Tim Costello, AO, CEO of World VIsion Australia, 2004-2016
Trust and love
“Remember that all your achievements will be forgotten soon after your funeral but the love you shared will live on for generations. Surround yourself with people who are better at what they do than you’ll ever be – and trust them.”
– Graham Long, AM, Pastor and Chief Executive of the Wayside Chapel.
Read the full article here
Weekend reads: ONLY A GENIUS CAN SOLVE THIS IN 15s!
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.