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September 14, 2020

Australians appear to have a spring in their step after suffering the doom and gloom of the pandemic, with people becoming more ready to take on a home loan.

Australian Bureau of Statistics figures released today show the value of new loans for owner-occupied housing jumped 10.7 per cent in July, the largest month-on-month rise on record.

First-time homebuyer loans rose 1.4 per cent.

The bureau put this strong demand for credit down to the easing of COVID-19 social distancing restrictions in most States and Territories.

“New loan commitments for owner-occupier housing rose in all States and Territories, except the Australian Capital Territory,” ABS head of finance and wealth Amanda Seneviratne said.

“The largest increases were in NSW, Victoria and Queensland.”

However, the data predates Victoria first entering into its harsh COVID-19 lockdown.

Fixed-term personal loans also rose, but lending to small and medium-sized businesses decreased after rising strongly in June.

Meanwhile, the monthly Westpac-Melbourne Institute consumer sentiment index released on Wednesday roared back by 18 per cent in September after dropping 9.5 per cent in August.

This recovery came despite confirmation last week the nation is in recession for the first time since 1992.

“Clearly this was ‘old news’ with respondents more focused on the future,“ Westpac chief economist Bill Evans said.

He said the confidence fall in August was in reaction to the deteriorating virus situation in Victoria and the introduction to harsh lockdown measures in the State.

Adding to concern was the slump in NSW.

“We suspected last month’s 9.5 per cent collapse in the index was an overreaction but this month’s 18 per cent rebound is a pleasant surprise nonetheless,” Mr Evans said.

However, the September survey was completed before last weekend’s announcement by Victorian Premier Andrews of a slow move to reopening its economy.

Consumer confidence is a guide to future household spending.

However, Mr Evans warned progress in managing the virus and the opening up of economies still remained key to the outlook.

Every quarter, respondents are surveyed on what news they recall most and their assessment of it. News on “economic conditions” had a recall of 42 per cent, the highest proportion in almost nine years.

“News on this front was still assessed as overwhelmingly unfavourable,” Mr Evans said.

However, views on “budget and taxation“, “interest rates” and, most notably, politics received favourable assessments.

Mr Evans said the latter should be welcome news for Australia’s Federal and State politicians with an extraordinary 70 per cent of consumers assessing political news as favourable.

“A result unlike any seen in the 45-year history of the survey and further evidence of what is proving to be a very strange recession,” Mr Evans said

Source: thewest.com.au


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September 7, 2020

Experts and property economists have lauded Perth as Australia’s next property hotspot after spending years in the doldrums following the decline of the mining boom.

Western Australia has been named Australia’s most affordable state to live in by the Real Estate Institute of Australia for eleven consecutive quarters, and the Perth property market is seeing its highest number of property sales in five years.

According to Hotspotting.com.au managing director Terry Ryder, Perth has become one of the “busiest markets in Australia” thanks to the containment of Covid-19, the activity of first-home buyers, government support, low interest rates and low vacancy rates.

“The Perth market has shown greater resistance to the pandemic impact than most Australian markets in terms of sales activity. Its market is now pumping strongly,” said Ryder.

The prices of homes in Perth began rising in June, said Realestate.com.au chief economist Nerida Conisbee.

“The increase was microscopic and unit prices dragged down the overall numbers; however, all signs are now pointing to very good things for Perth,” she said.

According to Conisbee, three regions in Western Australia more broadly are seeing strong price growth: Karratha, Collie and Port Hedland; Capel, Harvey and Darnadup in WA’s south-west; and the Margaret River.

(Source: realestate.com.au)
(Source: realestate.com.au)

Perth’s economy overall is more coronavirus-proof than other capital cities, with mining still a major driver of the local economy.

And the prices of iron ore and gold, another one of WA’s major commodities, have surged, she added.

“At the same time, WA has managed to escape high rates of infection and people are working relatively normally again. From an economic perspective, it looks pretty good for the state.”

CoreLogic data released yesterday revealed that there was no change to Perth’s property prices in the month of August, while Sydney, Melbourne and Brisbane prices fell.

Expert names top 5 Perth property hotspots

Looking at metropolitan Perth, Ryder pinpointed five suburbs set for property price growth: Stirling, Joondaloop, Rockingham City, Kwinana, and Wanneroo.

Stirling’s economy and property market is on the rise thanks to several major infrastructure projects, including a $1.6 billion upgrade to two of the suburb’s major shopping centres.

The lifestyle offered by the city’s cafe and bar culture and proximity to Scarborough Beach has attracted younger residents and first-home buyers to the area, pushing up sales activity and house prices.

Joondaloop has seen a rise in buyer demand, helped by a major retail/waterfront projects and the Boas Place project which involves retail, office, hotel and residential elements.

“Joondalup is an area with strong amenities, services and good road/rail links to the CBD,” Ryder said.

“Joondalup offers a pleasant waterside environment (Lake Joondalup) while being within easy reach of the ocean and beaches. For property investors, it has the important quality of major education and medical facilities, which provide a steady pool of rental demand.”

Rockingham City offers a seaside lifestyle and access to job hubs, and has been described as a community for young families with first-home buyers particularly attracted to this area.

Residential construction, driven by strong population growth, are expected to continue for another 20 years, said Ryder. The area also has some of Perth’s lowest vacancy rates.

The Kwinana precinct is a beneficiary of a number of State and Federal Government grants, and is an affordable area with good yields, low vacancies and solid population growth.

“This is the cheapest precinct in the Perth metro area, with several suburbs having median house prices in the $200,000s (and one is below $200,000),” said Ryder.

Kwinana, which is part of the Western Trade Coast industrial area which hires 11,000, also has links to key job hubs, trains to the city, is in close proximity to beaches and is nearby green spaces such as The Spectacles Wetlands.

Wanneroo has a plentiful supply of vacant residential land ready for development yet low vacancy rates.

“Over the past decade, 177,000 new residents have moved to this municipality, making it the fastest-growing local government area in Western Australia. There’s little sign of a slowdown in the growth of this region,” said Ryder.

“Growing industrial areas are providing employment opportunities and with houses in most suburbs priced in the $300,000s and $400,000s, properties in the city of Wanneroo are worthy of attention by both home buyers and investors.”

Source: au.finance.yahoo.com


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September 3, 2020

Aussie home prices are holding firm despite the dramatic economic challenges of the coronavirus pandemic but things are set to change significantly in 2021.

Home values across Australia continue to remain remarkably resilient to the economic effects of COVID-19 with prices nationally dipping just 0.4 per cent in August.

According to CoreLogic’s Home Value Index, it was the fourth successive month of price declines. However the rate of decline is easing.

The slip in prices was led by a fall of 1.2 per cent in Melbourne and 0.5 per cent in Sydney, followed by -0.1 per cent in Brisbane.

In Adelaide and Perth prices remained steady while Hobart’s values were pushed up by 0.1 per cent, Canberra’s by 0.5 per cent and Darwin’s by 1 per cent.

The combined capitals fell 0.5 per cent, while regional areas remained steady.

CoreLogic’s head of research, Tim Lawless said Melbourne, which is still under stage 4 restrictions, is the real estate market hit hardest by the coronavirus pandemic.

“Following a similar decline in July, Melbourne home values fell by 1.2 per cent in August, the largest fall recorded amongst the capital cities, demonstrating the impact of a worse viral outbreak relative to other cities, along with a larger demand side impact from stalled overseas migration,” he said.

CoreLogic home values index August 2020.
CoreLogic home values index August 2020.Source:Supplied

“Through the COVID period to date, Melbourne home values have fallen by 4.6 per cent.”

Over the last quarter Melbourne home prices have fallen by 3.5 per cent but they are up 5.9 per cent annually.

In Sydney prices have fallen 2.1 per cent over the quarter but are up 9.8 per cent over the past year.

“The performance of housing markets are intrinsically linked with the extent of social distancing policies and border closures which also have a direct effect on labour market conditions and sentiment,” Mr Lawless said.

Weak economic performance is hitting Melbourne hard says Tim Lawless.
Weak economic performance is hitting Melbourne hard says Tim Lawless.Source:News Corp Australia

“It’s not surprising to see Melbourne as the weakest housing market considering the extent of the virus outbreak, and subsequent restrictions, which have weakened the economic performance of Victoria.

The slowing rate of decline outside of Melbourne is a positive for the market. But as we move through the coronavirus period, real estate markets across Australia are set to splinter further.

Hobart home prices continue to perform well. Picture: Sam Rosewarne.
Hobart home prices continue to perform well. Picture: Sam Rosewarne.Source:News Corp Australia

“Looking forward we are likely to see a diverse outcome for housing markets around Australia, depending on how well the virus is contained and the regions exposure to other factors such as its reliance on overseas migration as a source of housing demand,” Mr Lawless said.

Much has been made of the spike in interest of regional areas due to COVID-19. Prices are holding in such areas because they are less reliant on economic and population growth.

“Unlike their capital city counterparts, which usually receive 85 per cent of net overseas migration, most regional markets have avoided the drop in demand caused by the pause in migration,” Mr Lawless said.

“Regional markets may also be appealing for their relatively low density and lower price points. The normalisation of remote work through the pandemic could make proximity to major cities less of a factor.”

Lack of stock holding prices

A lack of stock is a significant contributing factor in prices remaining stable.

“Through the COVID pandemic to-date, active listing numbers have remained extremely low, demonstrating both a lower than average amount of fresh stock being added to the market, and a strong rate of absorption,” Mr Lawless said.

“So far there has been no evidence of urgent or distressed listings starting to pile up.”

Sales activity fell by 1.9 per cent in August and CoreLogic expect Spring will not witness a normal selling season.

Regional property is highly sought-after.
Regional property is highly sought-after.Source:Supplied

“The spring selling season is likely to be less active than normal this year. Spring is a period where the housing market typically becomes more active, from both a sales and listings perspective. Heading into spring, the trend in advertised listing numbers and home sales is trending in the opposite direction,” the CoreLogic report said.

Rents holding up better than prices

Since COVID-19 hit rent values have been holding up better than home prices.

Capital city rents have fallen 1.4 per cent since March compared to the 2.3 per cent fall in home values.

However unit rents have fallen 3.5 per cent over the same period in the cities.

“Supply levels for rental grade units have surged over recent years, especially in Sydney and Melbourne, where high-rise unit supply across key inner city markets has remained substantially above average.,” Mr Lawless said.

“At the end of March there remained around 51,000 units under construction across NSW (+19 per cent on the 10 year average), and about 45,000 units were under construction across Victoria (+24 per cent above the decade average).”

Rents have fallen the most in inner city suburbs. Picture: Jason Edwards
Rents have fallen the most in inner city suburbs. Picture: Jason EdwardsSource:News Corp Australia

“On the demand side, rental demand for inner city apartments has been significantly impacted by stalled overseas migration, including foreign students, as well as less demand from domestic students who are generally studying from home,” Mr Lawless said.

“Rental demand has also been impacted by weak labour market conditions across industry sectors common with renters, including the food, accommodation, arts and recreational services sectors.”

According to CoreLogic’s August report: “rental listings data shows advertised rental supply in select inner city areas has more than doubled between mid-March and early August. With high supply and weak rental conditions likely to persist, at least until international borders re-open, inner city investment unit values are likely to remain under significant downside risk.”

Source: news.com.au


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August 28, 2020

WA’s home building boom is pushing some construction companies to look interstate for workers and offer up huge incentives, including airfares and accommodation, to lure them.

Wormall Civil, an engineering construction company with infrastructure projects across Perth, is offering a suite of incentives to attract interstate workers — provided they can get approval to enter the state under COVID-19 restrictions.

Its online job ad spruiks return airfares to Perth, six months’ accommodation including utilities in “a modern fully furnished share house”, and the cost of two weeks in quarantine, among other benefits.

“Western Australia is COVID-19 free and enjoys the freedoms we are all used to,” the ad stated.

“If you’re looking for a sea change, meet the essential criteria and willing to abide by Government entry requirements.”

‘We are run off our feet’

Managing director Shane Wormall said he needed to recruit 20 to 30 workers.

“It has never been busier, we are run off our feet — as is the whole industry,” he said.

“We are extremely short-staffed presently.

“We have the resource sector here in WA that is drawing from the same pool of people as well, [and] a lot of big capital infrastructure projects.

A house under construction with building materials in the foreground.
HIA believes WA may be the only state to increase home building starts in the coming year.(ABC News: Graeme Powell)

“We’ve reached out now and tried to go out on a limb and advertised in the Northern Territory, in Queensland and in South Australia to try and get final trim machine operators here in Western Australia.

“We are looking for final trim operators, excavators, front end loaders and the likes.”

‘From historic low to historic high’

HIA executive director Cath Hart said the demand for skilled labour was a direct result of state and federal government home builder stimulus packages — $25,000 from the Federal Government and then another $20,000 from the West Australian Government.

She said new home sales data showed a 170 per cent increase in sales in the two months since the government incentives were announced, compared with the previous two months.

“When the grants were announced, the residential building industry in WA was at a 20-year low in activity, so we are effectively going from a historic low to a historic high pretty well overnight,” she said.

“So it doesn’t come as a complete surprise that we have some constraints around labour and land.”

Cath Hart smiling and standing in front of shrubs.
Cath Hart says new home sales data has skyrocketed since government incentives were announced.(ABC News: Rhiannon Shine)

Ms Hart said she hoped skilled workers who left WA after the mining boom might return to the state for work.

Worker shortage pushing wages up

“HIA’s latest forecast for residential building shows that WA will be the only state to increase home building starts in the coming year,” she said.

“And interestingly in detached housing, we are also seeing a return to pre-COVID levels of activity.”

Hays Recruiting state director Chris Kent said there was a labour shortage across mining and construction, with operator drivers in high demand.

He said it would be difficult to attract workers from interstate for short-term contracts.

“The challenge with some of this contract work is it is hard to lure families, particularly if they have to come over and isolate for two weeks for a casual position,” he said.

Chris Kent looks at the camera while sitting at a row of desks in a boardroom.
Chris Kent says some companies are putting wages up to attract workers.(ABC News: Elicia Kennedy)

“The solution is really to look to our displaced workforce and see if we can upskill them quickly and safely.”

He said some companies were pushing up wages in order to attract workers.

“It is definitely putting upward pressure on hourly rates for casual labour and casual operators,” he said.

“Really the only thing that can be done is more friendly rosters, higher wages and potentially bonuses for completion of contracts.

“Unfortunately, companies with a lesser brand will probably need to pay a little more than the big-name companies in order to attract staff.”