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Tuesday, 07 June 2011

Investors appear to be taking advantage of the softer market conditions, with mortgage sales rising 18.8 per cent in May.

According to the latest AFG Mortgage Index, total mortgage volume for May was $2.5 billion – just 1.7 per cent lower than the figure recorded for May last year.

Victoria and New South Wales saw the biggest month on month upswings in mortgage volumes, increasing by 27.2 per cent and 23.3 per cent respectively.

Both states also had the highest proportion of investment loans with 38.8 per cent of loans in Victoria and 37.9 per cent of those in New South Wales, processed for investors… Read more…

Declining home ownership rates mean a quarter of Australians won’t own a home by the time they retire, research from an industry super fund suggests.

Superannuation will become the biggest investment for Australians if the nation’s historically high rates of home ownership erode further, REST Industry Super says. Home ownership rates have been stable at about 70 per cent for decades, and the needle had not moved by 2008, figures from the Australian Bureau of Statistics show. The US, UK, Canada and New Zealand have similar rates, while those of Italy, Spain and Poland are between 82 and 96 per cent.

By retirement age, 80 per cent of Australians usually hold title to residential property. In 2007/08, 78 per cent of those aged over 65 owned their home outright, while five per cent were still paying a mortgage. REST defines home ownership as either owning or paying a mortgage on their primary place of residence, but excludes investment properties. The super fund estimates the current ownership level is 85 per cent of retirees, and will revert back to 80 per cent in the next 15 years, dropping to 75 per cent by 2036 – meaning one in four will retire without owning a home.

Lower housing affordability and higher interest rates dragged home ownership rates among Australians under 35 years down from 45 per cent in 1995/96 to 37 per cent in 2007/08 and was on track to reach just 33 per cent this year, REST said. Given 78 per cent of retirement savings comprise a home and other property assets, a gradual erosion of  one of the three key pillars of the national retirement income policy is taking place, REST says. Savings and superannuation form the other two pillars. “The problem with this is that so much financial advice and policy has been developed around the assumption that people will own their home when they retire,” REST chief executive Damian Hill said. REST is calling on the government to re-examine the adequacy of retirement incomes, given lower home ownership rates. Mr Hill says financial planners, super funds and others should make clients and members aware of the trend.

By 2007, only 12 per cent of Australians aged between 25 and 34 years did not have superannuation coverage, REST says. Of those who did, 27 per cent had a balance above $25,000. Among 35 to 44-year-olds, the median balance was $32,283 and almost half were completely reliant on employer contributions to super. For those aged between 55 and 64 years, the median balance was $70,000.

>>>>One in four Australians will retire without owning home | Courier Mail.

Lucy Ardern | May 20th, 2011

Development  in Coomera could skyrocket following a council plan to target a specific part of the Coast for heavily discounted building charges. Gold Coast City councillor Peter Young said as part of general reductions in building charges, the construction industry had been asked to nominate a suburb for bigger cuts. “We are happy to look at figures of up to 50 per cent less in fees,” he said.

Cr Young said he saw the growth corridor in the northern Gold Coast area as the biggest opportunity to kick-start development with a major drop in fees. Urban Development Institute of Australia Gold Coast boss Steve Harrison agreed that the Coomera-Pimpama area was the most likely candidate.   “The industry and the city as a whole could get a lot out of it if things started moving there,” he said. “This is the last big greenfield area of the Gold Coast.”

Mr Harrison said the Coomera Town Centre was the “most over-planned area of Australia” and an incentive like this could finally get the location moving. “It is particularly important given the large unemployment rate in the northern Gold Coast area,”  he said.Mr Harrison is also pushing for bigger cuts to infrastructure charges for infill development because of the higher costs associated with it and emphasis on brownfield development for the future of the Gold Coast. 101,000 of the 143,000 of the dwellings planned for the Gold Coast under the South-East Queensland Regional Plan are infill developments,” he said.

Council presented a plan to members of the UDIA, Property Council of Australia and Master Builders Association this week that would see infrastructure fees fall further than the levels announced by the State Government last month. It has been proposed that charges for houses are set at $27,000 and one-bedroom apartments do not go over $13,500. Industry groups are expected to come up with their own proposals for changes to the current system when the groups meet again with council later this month. Council will need to vote in favour of any cuts to infrastructure charges for the new regime to proceed. Cr Young said is also hoping to put a system in place that will see the new charges applied to any developments that are yet to proceed and even those that are underway. He is calling on the State Government to also drop its road charge to those development applications DAs, which would ensure the same level of fees are applied to all projects. The State Government has already promised to scrap the road charge for three years from July 1, but the legislation is not retrospective and will only apply to new DAs.

>>>Coomera building fees could be cut in half Local Business | goldcoast.com.au | Gold Coast, Queensland, Australia.

Renee Viellaris | The Sunday Mail (Qld) | May 29, 2011

Unstoppable momentum: State Treasurer Andrew Fraser says decentralisation of industry and the mining boom mark II will lead to Queensland’s population reaching 7.2 million by 2031.

Regional Queensland is facing a population onslaught, with new modelling predicting an extra 800,000 people will squeeze into the state’s resource-rich communities in the next 20 years. The “rise of the regions” will raise significant challenges for public health, transport and education, as well as the ability for companies outside mining and tourism to find workers. State Treasurer Andrew Fraser will release the Office of Economic and Statistical Research population report today, projecting growth rates to 2031 and showing a vastly different state to today’s. “Decentralisation of industry and of course mining boom mark II are both significant factors in Queensland’s rise of the regions and it is one trend that is unlikely to be reversed,”  Mr Fraser said.

Queensland’s population, now 4.6 million, is projected to increase by as much as 2.6 million during the next 20 years, reaching 7.2 million by 2031 and breaking the 11 million barrier in 2056. Births and longer life spans – and not interstate migration – are the biggest contributors to Queensland’s population growth.  However, the need for overseas skilled workers will continue to be a factor. The report identifies the eastern regional local government area – which includes Gladstone, Mackay, Toowoomba, Bundaberg, Cairns, Townsville and Rockhampton – as the population growth hot spots.

The region’s population of 1.3 million is expected to explode to 2.1 million in two decades, a rise of more than 61 per cent. According to the report: “The continuing demand for resources is expected to drive population growth throughout much of the region, despite the increasing use of non-resident workers, who fly or drive in and out to mining sites. “While the Gold Coast and Brisbane are projected to experience slower growth in the next 20 years, southeast Queensland will still absorb the biggest overall increase – an extra 1.8 million residents . By 2031, the equivalent of the entire state’s current population will be crammed into the southeast corner.

Planners in the growth corridor city of Ipswich, west of Brisbane, will face one of the greatest challenges – finding room for an extra 175,600 residents by 2031. Aged services will become an increasingly important factor over the next 20 years, when one in five Queenslanders will be 64 years or older.

>>>>>People to pour into booming regions | Courier Mail.

The price of property on the light rail route from Southport to Broadbeach has started to rebound despite the fact the transport project’s completion is not expected until 2014.

In new price figures released by the Real Estate Institute of Queensland, Gold Coast chairman John Newlands said the city had fared better in the March quarter than in any other quarter in more than 12 months.  He said Gold Coast property prices had “held their own”, unlike other capital cities such as Brisbane and Perth, which had recorded decreases in property values.

Infrastructure such as the $1 billion Rapid Transit project and the possibility of the 2018 Commonwealth Games coming to the Coast had boosted confidence, Mr Newlands said. “The Gold Coast in the last quarter has maintained its median price … it is certainly showing signs of stabilising and it is giving people confidence again,” he said. “For the last two years we have seen prices peeling back … but prices are now holding their own. “Properties along the light rail, in particular, have really firmed up and if we were to get the 2018 Commonwealth Games that would be the jewel in the crown. “We would see the benefits immediately. There are green pastures ahead.”

via Light rail property values rebounding Real Estate | goldcoast.com.au | Gold Coast, Queensland, Australia.

John Masanauskas |  Herald Sun |  April 06, 2011

AUSTRALIA must boost its population to better defend itself against attack, says big business. The Business Council of Australia has told a federal inquiry a bigger population meant a bigger defence force to protect “our freedom and way of life.”

But federal labor MP Kelvin Thomson accused the council of old-fashioned thinking. “This is a throwback to the ‘populate or perish’ argument,” he said yesterday. “It doesn’t take into account modern realities.”

The council’s submission to the sustainable population inquiry said the growing economic and political power of Asia-Pacific nations meant considerable uncertainty and some risk for Australia.”The security of our nation is critical to protecting our freedom and our way of life,” it said. “The size of our population and the strength of the economy are important enablers of investments in defence capability.”

The council backs having a population of 30 million by 2030 and 36 million by 2050, achieved by net annual immigration of 180,000, and high fertility rates. Read more…

There  is a 50 per cent chance Australia will have even more people that Kevin Rudd’s Big Australia population of 36 million by mid-century, research shows.

The federal government’s population policy, unveiled by Population Minister Tony Burke on the Gold Coast on Friday, was criticised for failing to nominate targets or set figures. University of Queensland Centre for Population Research QCPR demographers have released a new generation population forecasting model that incorporates uncertainty about the future.” Our modelling indicates there is a 95 per cent chance that by mid-century Australia’s population will be between 29 and 43 million,” QCPR spokesperson Dr Tom Wilson said.

The Intergenerational Report’s projection of 36 million, dubbed a “big Australia” by former prime minister Kevin Rudd, lies in the middle of this range..”Our model tells us there is a 50 per cent chance that the nation’s population will be greater than 36 million by 2051, so we could have an `even bigger’ Australia,” Dr Wilson said.The majority of this growth is going to occur in mainland capital cities, the director of QCPR, Professor Martin Bell, said. “It is surprising that the government strategy has little to say about measures that address this burgeoning growth along Australia’s east coast,” Prof Bell said.

Dr Wilson said projections of future population were essential for planning in both the public and private sectors, but conventional approaches provided little guidance on the uncertainties associated with them. “These uncertainties can include fertility rates, major recessions, government migration policy, major crises which generate refugee flows and demand for labour in the Australian economy.”QCPR’s new model is able to tackle these uncertainties by providing upper and lower limits to their projections,”  Dr wilson said.Yesterday, Labor MP Kelvin Thomson broke party ranks to join in the criticism of the government’s new population stance, saying the government had missed an opportunity to curb population growth.

via ‘Even bigger’ Australia likely, say researchers in blow to government | Courier Mail.

Real Estate Institute of Australia (REIA) President, Mr David Airey appeared on ABC’s Business Lateline last night to shed some light on the state of the Australian housing market and a slight softening of house prices. REIA is yet to release its review of Australian house prices, REIA Real Estate Market Facts, for the first quarter of 2011, however, state and territory figures are showing evidence of decreases in
house prices.

“It is important to understand that house prices, whilst increasing over time, have periods when price growth either subsides or decreases, however, over time the fundamentals are there for continued growth. The drivers for this growth will come from lack of supply, population growth and changes in the household formation rate,” Mr Airey said.

In the Reserve Bank Minutes of the Monetary Policy Meeting released today, the RBA board comment on a slight but not worrying change in prices, saying, “Conditions in the housing market remained subdued, with housing prices down slightly over the first two months of the year and
auction clearance rates a little below average.” “The current lower activity levels have to be seen in the context of the increased buyer levels
during 2009 and the earlier part of 2010. Lower interest rates post GFC stimulated interest in house buyers,” Mr Airey continued.

The temporary slowdown in housing price growth can be attributed to a number of reasons,
including:
• A more conservative outlook by home buyers, reflecting concerns about economic growth in the two-speed economy.
• Increased savings reflecting an aversion to debt in the current economic circumstances.
• Affordability reaching a record low.
• Seven interest rates increases.
• A retraction of first home buyers from the market – the group which provides the catalyst for other buyers to trade-up.

Via REIA Media Release Tuesday April 19th 2011

THE State Government will spend $1.7 billion building new sporting venues, upgrading existing ones and constructing a massive village to house athletes if the Gold Coast wins the 2018 Commonwealth Games.

Premier Anna Bligh detailed spending plans for the Gold Coast when she headed to the city to talk up the benefits of the bid in front of more than 300 business leaders at a Property Council lunch yesterday.

It is estimated that 30,000 full-time jobs would be created in five years by the string of sport-related projects if the bid is successful and the economic benefits for the Gold Coast of hosting the event is believed to be $2 billion.

The Gold Coast is bidding against the Sri Lankan city of Hambantota for the right to host the Games and the winner will be announced in St Kitts on November 11.

Ms Bligh outlined how the government’s investment could transform the city when it needed it the most, with the construction and tourism industries set to benefit.

“It is not a matter of can we afford it,” she said.

“It is a matter of the fact we can’t afford not to do it.”

The centrepiece of the plan is the athletes village earmarked for the health and knowledge precinct at Parklands, which the government hopes will be built and paid for by the private sector.

Other new venues include indoor facilities at Coomera and Carrara, a temporary 7500-seat venue to be built at Southport’s Broadwater Parklands and relocated elsewhere on the Gold Coast after the Games and a mountain bike track at Hinze Dam.

via 2018 Games would boost building, tourism Commonwealth Games Bid Gold Coast | goldcoast.com.au | Gold Coast, Queensland, Australia.

Michael Matusik | The Courier Mail | May 09, 2011

THE residential property market has been sailing like a rudderless ship of late.  And the fact we have been somewhat out of step with housing markets across the world seems to be making some a bit nervous.  But indications are, in theory at least, that in Queensland and especially in Brisbane, now appears to be a good time to buy.

To illustrate the economic theory behind market supply and demand, I like to use the property clock.  We have used the clock for illustrative purposes in the past,when the residential market was in somewhat uncharted waters, as it is right now. Let’s consider the traditional property clock, where 9 on the clock indicates the start of an upswing; 12 represents the market peak; 3 is the start of a downswing and 6 is the location of the market trough. The positions on the property clock are determined by supply either undersupply or oversupply. Everything else is either leading in to or out of one of these market conditions. Many of the residential markets across the country are positioned between… Read more…