To make sense of the property market we must separate opinion from fact. Opinions will always be heard… just in greater numbers now perhaps. If you are prepared to “drill deeper” and dissect the evidence available; the facts will speak for themselves. There’s no reason for allowing the conflicting voices of opinion to keep you confused!
In the current round of Web Seminars we are offering, I highlight four key factors that are a MUST… if you expect to draw any credible conclusions.
1. Record Population Growth
2. Investors Have Fled The Market
3. Home Ownership Unattractive
4. New Construction Has Stalled Badly
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RP Data – Rismark Property Value Index Release
Released 01 October 2008
The national end of month property indices report released today by RP Data & Rismark International confirms that the supply and demand imbalance currently being experienced in the Australian property market has placed a floor under housing prices, resulting in minimal value falls.
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Despite the doom and gloom, housing prices have risen overall.
IT HAS been a bad week for property. It’s now confirmed what’s been widely forecast: prices are falling. And the doomsayers are predicting we will follow the United States and United Kingdom into a broad-based and prolonged housing slump.
Here’s why I don’t think that’s true.
For starters, the figures responsible for all the gloom and doom headlines – the official ones from the Australian Bureau of Statistics – were not actually that bad. While a survey of analysts by Bloomberg had forecast a 1.3 per cent national drop for the quarter, the dip came in at only 0.3 per cent. This meant the market shed just a skerrick of the 1.1 per cent it gained in the first three months of the year.
What’s more, for the year prices rose 8.2 per cent – almost exactly the long-term average annual property growth and a far cry from the 10 per cent-plus plunge some pundits have been bandying about.
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Property prices have defied expectations and proved resilient in the first few months of the year, according to research released by RP Data and Rismark International. While the share market has fallen around 11 per cent since the beginning of the year, property values have held steady on a national basis – although there have been fluctuations between cities.
RP Data national research director Tim Lawless said Perth was the only capital city where house values fell over the period. Brisbane, Adelaide, Darwin and Canberra all notched up increases, and Melbourne and Sydney were neutral.
But it’s not all good news. While values have held up, market activity has slowed down, with houses taking longer to sell.
A housing shortage is likely to underpin the market and keep demand strong. Rismark International’s head of research Matthew Hardman says high construction costs provide a natural floor under property prices in major centres.
OWNING a place of your own has been an entrenched part of Australian culture since Federation but the “Australian dream” now seems unattainable for many. The latest in a long line of depressing statistics about the difficulties of buying a home are figures from the Real Estate Institute of Australia showing that in major cities such as Melbourne, a household on average wages cannot afford a median-priced house.
Explanations of the situation often assume that we have a relatively short-term problem. They boil down to economic factors: too much demand and too little supply. Some people suggest that housing markets will ultimately self-correct through declining house prices and, however unpalatable this may be to those who already own a house, this will help people wanting to buy and deal with affordability problems.
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- Up to half of people aged 48-61 will rely on pension
- Bottom 25pc of boomers have saved just $300,000
As many as half of Australia’s baby boomers will run out of money in retirement, an expert says.
Professor Sol Encel, in Adelaide to address the Australian Association of Gerontology’s national conference on ageing, said that between a quarter and a half of people now aged 48-61 will be reliant on the old-age pension.
Professor Encel said latest figures from the Centre for Economic Modelling in Canberra showed that the top 25 per cent of baby boomer savers had put away about $1 million each, but that the bottom 25 per cent averaged savings of only $300,000.
“Finance experts will tell you (this amount) isn’t going to last 25 years, which is the expected lifespan for 60-year-olds,” Professor Encel said.
He said that boomers have already been defined by class, income and education and that these differences would be sharpened by loss of income and large differences in superannuation benefits.
“There are enormous variations in income, education, occupation, health and housing in the boomer population,” he said.
“They are as diverse as any previous generation, as they age, their social situation will be dominated by class differences; it’s absurd to lump boomers together as some homogenous block.”
Source: News.com.au
