Ballina and property price developments
April 2007 - Interest rates, Ballina, Casino, non-property option, property prices
May 2007 - New loan option, NSW country and Brisbane prices
June 2007 - Loans, Navra, Property Residex
July 2007 - Hot properties, Sub prime mortgaging, Housing affordability
August 2007 - Property vs Shares, Local market, Citibank offer
September 2007 - Overview, Loans, rates and the whole d... thing!, Properties
October 2007 - Overview, Byron Bay, Ocean Shores, October Property Hot List
November 2007 - Gazumping, The Rate Dance, MO & CT, Navra, Property
December 2007 - Property valuations, Replacement value, Equity finance mortgage
Last newsletter 2007 - Byron Bay market graph, beach front & other properties
January 2008 - Mood of Moment, post crash summary, Gossip
March 2008 - March Musings, New Developments
April1 2008 - War Stories, Property Punting, Interest Rates
May 2008 - Only in Byron, Lo Docs and Tax
June 2008 - Debt Consolodation, signs of weakness
July 2008 - Property Punting, Byron Bay Holiday Rental, Housing Affordability
August 2008 - The Wash Up, Signs of Weakness, Growth area, Debt consolidation
September 2008 - Take stock and share the pain, Property, Elections and Finance
November 2008 - Downsizing, Prices dropping, Mortgage Watchdog, FHOG
Hi All
Well - welcome to August and what a dry old, constricted winter it has been.
I know we have been using more heating gas and extra feathers in the doona to keep the chills away - or is that just the financial deep freeze I am feeling.
Byron Property Search
Well this is the first time in a few years that I have had literally no clients. I did have clients recently but they have seemed to dropped off the twig. Everyone is sitting on their hands at the moment. I have heard that one of the major real estate agents have let go a number of their permanent staff and other agencies are to follow.
We have been doing some loans but mainly refinancing. I am happy to help some people out of some excessively high interest rates (11%+) so if you are in a home loan at present over 9.5% please let me know and we may be able to lessen the pain a bit.
Property News:
House prices confound expectations.
House prices have not fallen across the country in the past year. Even though many people are murmering and mumbling that it is on the cards but the figures do not indicate that at all. The Fin Review survey states that only Perth has recorded a significant decline –in what had been expected to be a tougher residential market. The RP Data-RismarkNational Residential Property value index found the Sydney median property price across both houses and units was estimated at almost $512,000 in May this year, 2.84% on a year earlier. Melbourne's was $426,199, up 10.85% on May 07. Brisbane's price was up 13.5%; Adelaide 20.1%; Canberra 8.7%; Darwin 8.3%; with the former boom Perth market down 1.2%.
The report also states that the competition for housing among aspiring home buyers is set to intensify, with a big influx of skilled migrants helping drive the most rapid population growth since 1988 and exacerbating the nation's shortage of homes. The population climbed by almost 332,000 people last year, with almost 185,000 of the gain due to net migration. And federal government plans to boost the migrant intake to 190,300 next year have prompted warnings the population rise will increase the pressure on housing at a time of rocketing rents and low affordability. A spokesperson said 156,000 homes are being built annually to meet a demand of 185,000.
Another driver for stable - if not increasing house prices is the increasing rental yield. New research from HIA confirms a requirement for almost one million new homes to meet Australia's growing population. Demand for housing is being driven primarily by two key factors: very strong immigration and the decline in the number of persons per residential dwelling. HIA's Chris Lamont said the challenge of building almost one million new homes in just five years is a daunting one but essential if demand for owner occupied, rental, community and social housing is to be met.
The Housing Industry of Australia, Media Release, 30 June 2008
A similar bullish report has come out in the Domain.com from the SMH. Fortune favours the brave, so they say, which should be a cautionary note to anyone timidly waiting for the next big boom. By then, you've probably missed the boat. The housing shortage is continuing to drive up rents, providing secure - and rising - rental returns. Latest figures from Australian Property Monitors show an 11 per cent jump during the past year for Sydney's unit rental market, giving a median weekly rent of $400.
Experts agree that prices in select hot spots - especially inner city and beachside, and areas with strong population growth and solid infrastructure plans - are primed for healthy capital growth when the market takes off again, signalling a good supply of underpriced properties. Capital growth is still unpredictable but Tim Lawless of RP Data says rental yields are definitely up, with gross returns of about 6 per cent not uncommon. "In the past few years that would have been very difficult to find," he says.
So even though the sentiment out there is one of doom and gloom, most of the experts are promoting a returning buoyant market very quickly and it will be the quick and the brave who can benefit from the recent sluggish climate.
This is also confirmed in another media report - one where yours truly even gets a mention. It was in The Australian August 13. I have copied it intact as I know most of you will be too lazy to cut and paste the URL.
There will not be another newsletter at the end of this month as I am away overseas for 3 weeks. But still able to respond to emails and SMS.
All the best and see you next time.
Michael
---------------------------------------------------
The Australian - Opportunities are there for the taking
Morris Kaplan | August 13, 2008
THE consensus among my Bondi Boomers jogging group is clear: "It's the economy, stupid." "The worst since 1992," says one. "No. The worst in 40 years." "Not as bad as 1973-74," says another.
So how is it then that two of these people were starting new businesses and one looking to buy a beach shack near Byron Bay? These were professionals -- an accountant, mortgage broker, dentist etc. Not high in liquid funds.
"Starting a business in tough economic times is like holidaying in the off-season," says one.
"It's less crowded, and everything starts going on sale." He says that he has got all his suppliers, his accountant and landlord to give him extended credit terms. "That's not something I could have done last year." Moreover, with these relaxed start-up terms, my friend could plan for the long-term success of his business, the foundation of which may be determined not just by how well he handles a downturn, but also by his foresight in preparing for the upturn.
The question isn't whether a downturn is the best time to start up a business; it's what business will benefit the most when things pick up?
This is the old concept of zigging when everyone else is zagging. "It stretches your management skills. You've got to get better at your deals than 12 months ago. We are really good at doing crisis.
"It's about more than simply surviving."
Meanwhile my beach shack aspirant makes a compelling case for his strategy. "Short-term investors have all but disappeared from the second-home market," he says.
There's no official database on holiday properties, but it's fair to say investors are still looking for the bottom of the market. With the overall reduced activity in housing and with lenders tightening up, buyers can no longer count on tapping the equity in their primary residence to buy a second property.
This absence of investors, who were very active at the peak of the boom, gives you leverage to negotiate, especially if you can take advantage of the quirks in the market for holiday homes. "It's not just holiday homes," says buyer's agent Michael Murray from Byron Property Search.
"In most real estate markets at the moment, it's the middle to top end that is lacking buyer competition."
Gone for now are the days of the quick killing or the huge price run-up. Murray says vendors are still not clear on the value of their homes. "Some are saying, I'm fed up with crippling repayments when there's no chance of price gains. If you put in cheeky bids, you may get a nibble."
My jogger mate says: "Time is also on your side because the market shows no signs of reviving any time soon."
You don't need to build a business or buy real estate to look for silver linings. In bad times the situations are there for the taking.
In this economy, with sales softening, major retailers are taking quicker and sharper markdowns to make sure their inventories stay in line.
This creates a ripple effect -- or actually, a tsunami. Watch out for those sales.