Sydney and Melbourne property prices led house prices higher yet again in June, rising 2.8% and 2.9% respectively.
According to CoreLogic RP Data, Sydney’s median house price is now $900,000 while units go for $650,000. That’s even higher than Melbourne’s median house price of $615,000. Sydney and Melbourne have now posted gains of 16.2% and 10.2% respectively since last year.
The mining states of Western Australia and Northern Territory are going backwards though, losing 0.4% in Perth and 3.9% in Darwin in June, with both cities seeing negative growth over the past year. Other cities and regions have posted low single-digit growth over the past year, as you can see from the graphic below.
CoreLogic RP Data senior research analyst Cameron Kusher expects Darwin and Perth to experience ongoing weakness over the next 12 months, if not longer. That is primarily due to the huge slide in mining investment in those states.
CoreLogic RP Data’s head of research Tim Lawless added that interest rate cuts in February and May had contributed to growth. The RBA dropped the official cash rate by 0.25% in each month, lowering the rate to 2.0%. Interest rates on mortgages are available at under 5% from most lenders, making it more attractive for investors to borrow and existing homeowners to refinance and move up the property ladder.
But property investors should heed a new report from forecaster BIS Shrapnel. While the company says doomsday warnings of a housing crash are premature, property prices are expected to begin falling from as early as next year. BIS Shrapnel senior manager Angie Zigomanis only expects the RBA to raise the cash rate by 0.5%, but that will be enough to kill the surge in property prices.
That is expected to coincide with interest rates moving higher, a big increase in supply and weaker investment returns. BIS Shrapnel is forecasting that Sydney and Melbourne are only likely to see median prices rise by 2% and 4% respectively over the next 3 years.
AMP chief economist Shane Oliver agrees and has told the Australian Financial Review,
“The real risk for property is in 2017 when the Reserve Bank starts raising rates and then you will see prices come off 5 to 10%, particularly in Sydney”.
Mr Zigomanis also noted that many capital cities are building apartments at record rates, driven by investor demand. Brisbane is the only capital city expected to see growth over the next few years, with growth languishing below that of its southern sisters Sydney and Melbourne.
That’s probably no surprise. The median house price in Brisbane-Gold Coast region is $500,000, only higher than Adelaide and Hobart, and well below that of Sydney’s $900,000. The Gold Coast is hosting the Commonwealth Games in 2018, which could spur further demand for property.
The key thing to remember with property is that it moves in cycles, like other asset classes. Don’t put all your eggs in one basket, and don’t take on too much debt, like this poor unfortunate investor has.
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Auction tips: Why and when you should auction
WHEN it comes time to sell your property, the age-old argument of auction versus private treaty naturally comes to the fore.
There is no one best practice but the general consensus among property professionals is both type of housing and market confidence play pivotal roles.
Core Logic RP Data auctions spokesman Kevin Brogan crunched combined capital city data over the 12 months to November 2015 and found higher valued and more unusual properties were taken to auction.
“If you have a house in a street and there are 10 others like it, you have a pretty good idea of what it’s worth,” Mr Brogan said.
“But if it’s unique or unusual you might not be able to pick what it’s worth so you take it to auction on the proviso there’s enough interest.
“Looking at the combined capital city data over the past 12 months to November, you see the general median price of houses that sold at auction is about $950,000.
“Sold by private treaty that median is $530,000, so that tells you a story about types of properties taken to auction.”
Digging further into the Core Logic RP Data digits, almost half (45 per cent) of houses sold at auction sold at a price of at least $1 million whereas only 12.5 per cent of houses sold via private treaty sold for more than $1 million.
“If you’ve got a property you think will be a successful property to take to auction, agents will tell you it offers the maximum chance of success,” Mr Brogan said.
“If you’ve got interested parties it brings matters to a head so it’s a very effective tool.”
Market analyst and buyers’ agent Simon Pressley of Propertyology agrees with Mr Brogan, adding strength of market is key.
“When I would go to auction would be in a rising market when you could be confident there’s going to be competition because of the state of the market, look at Sydney last year,” Mr Pressley said.
“And other times, it might be best if there’s something niche about it.
“That’s often why more expensive homes go to auction because it’s harder to compare $3 million homes to other $3 million homes.”
News Corp columnist and Ray White auctioneer Haesley Cush believes any property can and, with the right marketing, should be auctioned as long as the agent knows what they’re doing.
“Auction allows buyers and potential buyers to judge a property on the features and benefits without price involved,” he said.
“The alternative is that buyers disregard properties all the time based on a listed price attached to photos only to find it’s eventually sold for a price they would’ve paid.
“The stats we carry show auctions get more buyers through the door because they don’t have a price and are usually better promoted.”
Mr Haesley said auctions open up a pool of possibility rather than capping a property by price.
“If your property has no price on it, the value is the value you attract,” he said.
“Alternatively, if you put a price on it and it’s the wrong price then you’re wasting advertising money and time.”
TOP AUCTION TIPS FOR VENDORS:
• Visit your local Office of Fair Trading or Real Estate Institute website to educate yourself about auction rules and the process
• Experience is key so go to auctions to see how they work and what’s involved
• Research the market value of your property
• Select a realistic reserve price
• Only auction with experienced auction agents
• Talk to your agent and be honest with your feelings as it’s their job to support you through the process
• Don’t be disappointed if your property fails to sell on auction day. It is not a wasted effort.
Original Published On: http://www.couriermail.com.au/
Construction Begins On Sunshine Coast CBD
Construction officially began today on a new central business district for the Sunshine Coast, which is forecast to create more than 30,000 permanent jobs in the region by 2040 and provide a $5.9 billion boost to the Queensland economy over the project‟s 20-year life.
Premier Annastacia Palaszczuk turned the first sod on the prime 53-hectare SunCentral Maroochydore development site, which promises to showcase excellence in urban design, technology and innovation, including some Australian firsts, such as automatic waste collection.
SunCentral Maroochydore‟s Chief Executive Officer John Knaggs said the unique development represented a coming of age for the region.
“The Sunshine Coast is already the second highest performing regional economy in Queensland and the fifth highest nationally,” Mr Knaggs said.
“With the $1.8 billion Sunshine Coast University Hospital due for completion at the end of this year along with the planned expansion of the Sunshine Coast Airport, the new city centre at Maroochydore will ensure we are rising to the challenge of growth, with a clear focus on jobs.
“The Sunshine Coast population has risen from 65,000 to 335,800 in the past 40 years and by 2040, well over half a million people are likely to call the region home.”
The Council-owned land would deliver more than $300 million in public space and infrastructure to the people of the Sunshine Coast.
Sunshine Coast Mayor Mark Jamieson said the site on the former Horton Park Golf Club would be transformed over the next two decades to include commercial buildings, destination retail outlets, a premium hotel, civic facilities and an exhibition, convention and entertainment centre, with 40 per cent of the new city centre site dedicated to waterways and parkland.
“This is Australia‟s only greenfield CBD within an existing urban area, which provides us with the opportunity to build from scratch, a city centre that is able to meet the needs of people both now and in the future,” Mayor Jamieson said.
“Applying our smart city framework – which includes digital solutions for the management of street lighting, car parking, water, power and signage that is detected by smartphones and other technologies, and where rubbish bins are emptied via automated underground tubes means SunCentral Maroochydore will become a nation-leading destination for innovative businesses.
“Importantly, given its significance to the Sunshine Coast, this is a project owned by the community. Independent expert analysis suggests our new city centre will grow our local economy by $4.4 billion over the life of the project.”
SunCentral Maroochydore‟s CEO said the project was vital to preventing urban sprawl on the Sunshine Coast and would deliver a viable commercial hub, public recreational facilities and an interconnected city.
“Urban sprawl has been a challenge on the Sunshine Coast for decades and SunCentral Maroochydore is about consolidating future development and delivering an outstanding city centre,” Mr Knaggs said.
Originally Published On: http://www.theurbandeveloper.com/
Coast real estate experts say property still on the rise
REAL estate identities say the Sunshine Coast market will continue to grow steadily, regardless of reports that the housing cycle has peaked.
Investment bank Morgan Stanley released research this week calling the peak and forecasting a slowdown in price growth, followed by a negative impact on building activity next year. (more…)
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