In this weeks real estate summary we cover:
· RP Data’s property hotspots
· Unit rents on the increase in Sydney and Melbourne
· The government considering changes to negative gearing
· Calls for a crackdown on property investment advisors
· Limited auction activity across Sydney and Melbourne
For more information on how we can help you with buying, selling or renting please call us on 1300 30 30 70 or visit www.foxwood.com.au
Auction results
The REIV reported no clearance rate over the Easter weekend. There were only 27 auctions across Melbourne, with 13 sold. Last weekend there was a 61% clearance rate on 840 auctions, the REIV expects around 545 auctions next weekend and 620 the weekend after.
Sydney – APM did not report on auctions over the Easter weekend.
Experts play down fears of dramatic drop in Melbourne house prices
Property experts say Melbourne house prices are likely to fall in 2011, but have questioned new REIV figures showing a 6% fall in median prices in the March quarter. SQM Research, who are predicting most capital cities will see prices fall by at least 5% during 2011, says the REIV figures – which are based on raw price data, unadjusted for factors such as more sales at the high or low end of the market – can be skewed by big price movements in particular suburbs.
Land sales slump to near decade lows, but prices strong
The HIA says governments must do more to increase the land supply, after new figures revealed residential land sales have slumped to near-decade lows despite prices remaining high. Land sales dropped 40.4% in the December quarter, while the weighted median land value Australia-wide lifted 4.1% over the same period. Melbourne recorded a 50.1% drop in land sales for the three months to December 31. The HIA says inadequate land release is a structural problem – with buyers in Sydney needing $300,000 just for land, and over 50% of the cost of a new house and land package being for the land rather than construction of the home.
Melbourne renters see signs of hope
The latest APM data has shown that the median weekly rental for houses fell by 1.4% over the March quarter to $360, with unit rents up by 2.9% to $350. Over the last 12 months house rents in Melbourne have fallen 2.7% while unit rents have risen by 2.9%. Rises in unit rents reflect increased demand from potential 1st home buyers who are currently priced out of the market, along with an increasing preference by Melbournians for lower-cost, convenient inner-city apartment living as opposed to more expensive, dislocated and under-serviced outer-suburban houses.
Devine acquires Wallan land
Devine has acquired 88 hectares of land at Wallan about 48 kilometres north of the
Melbourne CBD. The site comprises two parcels of land, with 870 lots expected to
yield over $300 million. The project is expected to be launched in the first half of
2013.
Construction levels decline further
Australian construction levels fell in the December quarter of 2010, with the value of work
falling 4.3% to $20.69 billion following a 2.9% fall in the September quarter. The value of new
residential work completed fell slightly by 0.7%, while the value of renovations increased
by 0.1% over the December quarter. Victoria recorded a rise of 3.2% in new residential
construction, while it declined 2.3% in NSW and 4.8% in Qld.
Report reveals national property hotspots
A St George/RP Data report has revealed property hotspots around the country, with a clear focus on suburbs within a 10 kilometre ring of capital cities, with warnings however of soft and flat conditions. Sydney hotspots were Arncliffe (Houses), Eastlakes (Units), Newtown (Units), Potts Point (Units) and Sydenham (Houses). In Melbourne the hotspots are Braybrook and Heidelberg West (Houses ) and Carlton, Kingsville and Travancore (Units); and in Brisbane Arana Hills, Holland Park and Salisbury (Houses) and Greenslopes and Windsor (Units).
Property industry mixed on report Government is examining changes to negative gearing
The Government and unions are believed to have discussed introducing a 4% sales tax for owners of multiple investment properties and a reduction in the 100% negative gearing-tax benefit property investors with more than one property can currently claim. Experts say that scaling back of negative gearing would likely see property prices fall, but rental yields rise; however what is needed is incentives for developers to increase supply.
No relief in sight for Sydney's renters
APM has reported that during the March quarter median weekly rent for houses in Sydney rose by 1% and by 2.3% for units. Over the last 12 months house rents rose 5.4%, and unit rents surged 7.1 per cent; and in the last 4 years house rents have increased 35% and units 33%.
Crackdown call over property advice
The REINSW is supporting calls to crackdown on property investment advisors, with the number of “property advisors” up from 1,000 to over 4,000 in the last 5 years. Some advisors charge mentoring fees of up to $30k.
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