Australia Property

[greengiraffe]

The music is stopping and looks like the investor herd is rushing for the big EXIT sign with all those big auction numbers coming up...

Pretty poor preliminary clearance rates when just few months back they were running at 80%+

NSW 56% 1284
https://www.realestate.com.au/auction-results/nsw


Vic 65% of 1828
https://www.realestate.com.au/auction-results/vic


Correction or crash coming? Tide is turning, who's gonna be swimming naked?

As the deadline for declaring illegally owned property ends on tomorrow, divestment orders are going to start flowing out from the aus tax office for illegal china/foreign property buyers starting next month.

hopefully SG developers developing down under with significant debt dun go down under when reality hits, especially if Yellen decides to liftoff in December, starting to look bad for SG listed companies like CES/Weehur/SL/FCL/ChuanHup..

I think you should be applying yr bear case in Singapore rather than Down Under...

As I have always been saying Down Under mkt is way too big for you to simply apply yr cosmopolitan city view...

So far FCL's land sale on the Eastern states have been sold out. AVJennings has been reporting strong sales.

What you have been focusing and extrapolating are the overheated Sydney and Melbourne apartment markets.

Even the tightening of the investment property lending also have means and ways of getting round.

As I have been saying, you have not been working hard enough to read up on the diversity of a big market.

You have been choosing to focus on your naked theory and so far have missed out on the steep rise in Sydney since you raise yr red flag on the mkt 2 years ago.

Your would have better enhance support your claims via a more comprehensive claims rather than keep re-iterating your unchanged melody.

[greengiraffe]

Somehow I cannot reconcile claims that a market is heading downwards when prices are still forecasted to itch up at a much slower rate than a neck breaking pace seen during the last 2 years...



Focusing on clearance rates is 1 measure but the clearance prices is another key factor to watch...










Auction clearance rates set tone as Melbourne firms, Sydney withers

• THE AUSTRALIAN
  
  
• NOVEMBER 30, 2015 12:00AM
  
• Greg Brown
  [Image: greg_brown.png]
  Journalist
  Melbourne
  
  

[img=650x0]http://cdn.newsapi.com.au/image/v1/60a4f2374ccac21b5c2ce442875aa244?width=650[/img]

Auction clearance rates in ­Melbourne rose last week despite a record 1800 homes going under the hammer.

[*]

Auction clearance rates in ­Melbourne rose last week despite a record 1800 homes going under the hammer, with demand in the Victorian capital remaining firm, unlike a withering Sydney market.

About 65 per cent of homes auctioned in Melbourne last week found a buyer, slightly higher than the previous week, despite 300 more homes being put to the market, according to preliminary figures released by CoreLogic RP Data.
Sydney posted its lowest clearance rates of the year at 56.3 per cent and analysts warned the market could weaken further as buyers felt the burn of a lack of affordability after two years of roaring price growth.
Sydney and Melbourne are the only mature auction markets in the country, with figures from other capital cities considered too volatile to indicate the strength of housing in those markets.
CoreLogic RP Data auctions analyst Kevin Brogan said Melbourne had performed stronger than expected. “It was a record offering to the market, a shade over 1800, and there was a possibility that all of that stock might have caused a drop in the clearance rate, but it actually rem­ained steady,” Mr Brogan said.
He noted the dour performance of Sydney would be watched over coming weeks as an indicator of how the market would perform next year. “We have now had four weeks of clearance rates below 60 per cent and obviously earlier in the year the clearance rates were significantly higher. It’s something that we’ll have to watch,” he said.
Australian Property Monitors senior economist Andrew Wilson said the numbers ­pointed to Melbourne being Australia’s strongest performing housing market next year.
He expected most capital housing markets to post price growth next year at a rate of ­between 4 per cent and 5 per cent. “Even though those (clearance) rates are down from a year ago, the actual volumes of sales is well up. It is a significant factor for the Melbourne market that clearance rates have held over that record-breaking (weekend),” Dr Wilson said.
“The Melbourne market looks like the best in the country. Certainly, confidence is quite reasonable in that market and it has ended the spring selling season on a positive note. It is not a boom market, it’s just solid.”
Demand nationally would slow unless there were more ­interest rate cuts, he added. “Wages growth is low and there is really no capacity to keep pushing prices up.”
Melbourne homes had the strongest value growth in the three months to October, the median dwelling price rising by 3.1 per cent to $600,000, according to CoreLogic RP Data.
Sydney home prices were boosted 1.5 per cent over the same period to $800,000. Prices in Sydney have risen more than 15 per cent in the past 12 months after a booming start to the year.

[greengiraffe]

• Nov 30 2015 at 3:13 PM 
  

House prices will fall no more than 10pc, but ANZ says modest growth more likely in 2016

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[img=620x0]http://www.afr.com/content/dam/images/g/k/a/a/6/y/image.related.afrArticleLead.620x350.glbbzt.png/1448857320853.jpg[/img]Queensland house prices are expected to rise 2 per cent next year. Rob Homer
[Image: 1425598457909.png]

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by Su-Lin Tan
Home owners spooked by the cooling market have little fear about a housing crash in 2016. 
While residential property prices might fall in 2016, it will be limited to less than 10 per cent with "little significant downside risk" to the housing market, ANZ Bank has said in its latest housing update. 
"Despite the headwinds facing the housing market through the second half of 2015, we see little significant downside risk to the housing market outlook in 2016. That is not to say house prices won't fall. They may," ANZ's senior economist, David Cannington and economist Daniel Gradwell said.
"But strong underlying demand for housing is likely to contain any price falls in the major capital cities to less than 10 per cent in the absence of an economic downturn."

Auction clearance rates across the country have continued to slide with Sydney taking the lead. Sydney clearance rates have fallen to below 60 per cent from a high of 90 per cent in April. 
ANZ said the overall Australian market is not overvalued because salary and wages were still growing and interest rates were at record lows. 
But the strongest housing market, Sydney might be at a point of "overvaluation". 
"This means there will be little respite for those seeking to enter the market for the first time as deposit affordability will remain difficult," ANZ said. 


While ANZ remained optimistic of continued growth in the housing market, any growth would be soft. 
It is forecasting a 3 per cent price rise for NSW, 3.2 for Victoria, 2 in Queensland and an overall 2.8 per cent for Australia. 
Western Australia will see a recovery at 2 per cent growth in 2016 despite strong declines in 2015 against a disappearing mining boom and falling population. 
ANZ's predictions are more modest against SQM Research's 4 to 9 per cent price growth in Sydney for 2016 and 8 to 13 per cent for Melbourne.

Regulatory controls, in particular Australian Prudential Regulation Authority's clamp down on investment lending, were the main cause for the softening housing market, ANZ added. 
"Across the owner-occupied market, mortgage rates have also been lifted marginally following a requirement that the major banks increase the capital they hold against mortgages."
After a hectic 24 months, housing construction will also post little-to-no growth, ANZ said. 
"The housing shortage remains high, but strong building activity and slower population growth will limit gains."

While construction is cooling, ANZ's observation that rental yields will continue to fall and vacancy rates to rise will further exacerbate fears of an oversupply of apartments particularly in Melbourne and Brisbane. 
But foreign buyers would continue to soak up stock in Australia as foreign interest in Australian housing remained strong especially in Sydney and Melbourne, ANZ added. 
A lower Australian dollar and ample apartment stock would continue to lure foreign buyers. 
Other analysts were not so optimistic. 
Hong Kong fund manager, APT Capital Management is adamant Australia is in a housing bubble which will burst in 2016. 
It cites the rapid rise in house prices, which are out of step with Australia's economic fundamentals, and very high house price to income ratios as reasons for a bubble. 
"Calling the top of an asset bubble is notoriously difficult, but according to our criteria – the level of mania, the increasing overvaluation – it seems not be too far away," APT strategist Amy Reynolds said. 

[greengiraffe]

• Dec 31 2015 at 12:32 PM 
   
  
  
•  Updated Dec 31 2015 at 12:38 PM 
  

2015 house price forecasts: the good, the bad and the hopeless



Why Hobart property could be hot in 2016
[Image: 1426319989079.png]

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by Larry Schlesinger
As is tradition, housing market gurus looked into their crystal balls at the end of December and made predictions about what would happen over the coming 12 months.
The general consensus is for cool winds to blow through the housing market in 2016, particularly in Sydney and Melbourne where house price growth is forecast to slowdown dramatically according to both CoreLogic RP Data and Fairfax-owned Domain Group. SQM Research is far more bullish, especially about Melbourne.
But how did experts go in predicting what turned out to be another strong year for house prices in 2015? 
Figures from CoreLogic RP Data will show that house prices across the five major cities ended the year up just over eight per cent, more or less matching the house price growth of 2014.
[img=1022x0]http://www.afr.com/content/dam/images/g/h/z/0/b/d/image.related.afrArticleLead.620x350.glx5ih.png/1451525660472.jpg[/img]House prices rose more than twice as much as many experts forecast in 2015 Glenn Hunt
Sydney and Melbourne house prices will finish 2015 up over 11 per cent with Brisbane and the Gold Coast up 4.5 per cent, Adelaide flat and Perth down almost four per cent.
The winner is: SQM Research
The most accurate forecasts for 2015 came from property guru Louis Christopher's SQM Research outfit, (so its worth taking a close look at his forecasts for 2016).
Based on the scenario of a rate cut in the first quarter of 2015 (this occurred in February), Mr Christopher correctly tipped capital city house prices to rise between seven and 12 per cent over the year and also got it right on the two biggest housing markets, forecasting Sydney house prices to rise between 11 and 15 per cent and seven to 13 per cent in Melbourne.


But he was too bullish on Perth (growth of 2-5 per cent) and Brisbane (7-11 per cent).
Domain gets it wrong
Domain Group's prediction that house price growth for most capital cities will "hover around the inflation rate" (about 2.2 per cent) looks rather foolish in light of the double-digit growth achieved in Sydney and Melbourne and the overall market, which ended the year up around eight per cent. 
Senior economist Dr Andrew Wilson made this forecast because of the weaker economic conditions, a lack of consumer confidence and weak income growth, but perhaps did not factor in the huge investor push into Sydney and Melbourne housing.

But he was right in saying that Sydney would be the leading performer in 2015 - just ahead of Melbourne. 
Fitch also gets it very wrong
Credit rating agency Fitch was way out on its 2015 forecasts predicting annual house price growth in Australian to slow to about 4 per cent in 2015 - half the actual rate - "as buyers reach the bounds of affordability". 
The credit rating agency also misread the investor-led appetite for Sydney and Melbourne property, forecasting only three to four per cent price growth. It was also wrong on its forecast for a flat Perth market.

"People just can't afford to pay much more for housing," said Fitch Australia's managing director of structured finance, Ben McCarthy a year ago. "At 4 per cent growth, prices will still rise higher than people's incomes. This will be driven by the demand in the market but this will slow over time."
CoreLogic RP Data mistimed slowdown call
CoreLogic RP Data forecast a slowdown in Sydney house price growth in 2015 to more sustainable levels due to affordability constraints and a reduction in investor demand.
While this did indeed begin occurring towards the end of the year, Sydney house prices still ended the year up 11.5 per cent not much of a moderation from the 12.4 per cent growth recorded in 2014.
CoreLogic RP Data also tipped Melbourne to slowdown from the 7.6 per cent growth rate achieved over 2014, but the market ended the year well above that.
Other forecasts which did not eventuate were predictions that Brisbane's capital growth would outperform the capital city average and expectations that Adelaide prices would rise modestly in 2015. In fact they did not rise at all.
John McGrath misses Sydney surge
But even real estate boss John McGrath underestimated the investor-led demand that fuelled Sydney house price growth in the first half of the year.
Mr McGrath took a bearish tone at the start of 2015, saying Sydney house price growth would slow down "but not go backwards".
His outlook for Brisbane and SE Queensland was more accurate though.
Mr McGrath said Brisbane was it's only just beginning its recovery and while there would unlikely to be any major price spikes there would be "consistent growth in South-East Queensland in 2015".

[greengiraffe]

• Dec 31 2015 at 2:59 PM 
   
  
  
•  Updated Dec 31 2015 at 3:23 PM 
  

Property investors switch loans worth $32.5 billion to owner occupiers

[img=1022x0]http://www.afr.com/content/dam/images/g/l/l/f/0/a/image.related.afrArticleLead.620x350.glxbn8.png/1451535869747.jpg[/img]Switched: $32.5 billion worth of loans was moved from investment loans to owner occupiers. Gabriele Charotte
[Image: 1425598457909.png]

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by Su-Lin Tan
Property investors switched $32.5 billion worth of loans to owner occupier loans between July and November, new information revealed by the Reserve Bank of Australia on Thursday shows. 
"Following the introduction of an interest rate differential between housing loans to investors and owner-occupiers in mid-2015, a number of borrowers have changed the purpose of their existing loan," the RBA said in its Financial Aggregates data for November. 
In July, the major banks raised interest rates on investor loans between 0.27 and 0.29 percentage points, moves they blamed on the Australian Prudential Regulatory Authority for clamping down growth on investor lending. 
The two major markets at that time had exploded to double-digit year-on-year growth in dwelling prices. 

"The only surprising thing about the $32.5 billion is if anyone was surprised at all," Mortgage Choice chief executive John Flavell said. 
"Of course people can represent their loans as something else just to get the price differentials."
Mr Flavell said many switches could be legitimate where some borrowers had started as investors but have now decided to live in their homes. But many others would have just rung their banks or lending institutions just to get a "good deal" on their loans. 
"The moves by APRA claimed to have stamped out investor lending. But the changes have not provided any assistance to affordability," Mr Flavell added. 


Mortgage Choice's loan book has shown a small fall in investor loans in the same July to November period but not a large increase in new owner occupier loans. First home buyer loans have not grown at all. 
Head of mortgage aggregator Finsure Finance and 1300 Home Loans, John Kolenda, agreed the switches were split between investor borrowers who have genuinely changed their intentions for their properties and those who wanted cheaper owner-occupier loans. 
"Remember that these are historical numbers, that is loans that have settled. There has not been a spike in owner-occupier loans although investor borrowing has come down in the last three to four months," he said. 
Taking into consideration adjustments for loan switching in the RBA statistics, however, investor credit growth has slowed, JP Morgan said. 

"It is now about half the monthly rate at the peak of the cycle a year or so ago, indicating that prudential tightening is working to crimp investor activity," JP Morgan analyst Ben Jarman said in a note. 
Total housing credit has also held steady. November recorded a 0.6 per cent growth, the same as October. 
Including personal and business lending however, the private sector credit growth in Australia has slipped in November growing 0.4 per cent from 0.7 per cent in October. 
"Business credit was responsible for the deceleration, with zero growth over the month, after consecutive strong months of 1 per cent gains," Mr Jarman said. 

"The trends in business credit overall have been encouraging in [the second half of 2015] ... the strongest since 2008. Alongside stronger labour market outcomes, this bodes favourably for stabilisation in the non-mining economy."

[greengiraffe]

• Jan 4 2016 at 11:45 PM 
   
  
  
•  Updated Jan 4 2016 at 11:45 PM 
  

Inner Melbourne and Sydney a 'millionaires' club' for home owners

[img=1022x0]http://www.afr.com/content/dam/images/g/i/2/4/h/c/image.related.afrArticleLead.620x350.glxbpy.png/1451900834563.jpg[/img]The median house price is expected to top $1 million in 75 suburbs around Sydney over the coming 12 months if recent growth trends continue. Daniel Munoz
[Image: 1426318770901.png]
by Duncan Hughes
Houses valued under $1 million could disappear in Melbourne and Sydney's inner- and middle-ring suburbs over the coming year if the pace of recent property price rises continues, according to analysis of house prices.
Many of Melbourne's traditional working class areas, such as western suburbs in the federal seat of Maribyrnong, held by Opposition Leader Bill Shorten, are being transformed into millionaire enclaves, the research reveals.
More than 70 suburbs ringing Sydney are predicted to have a $1 million median by the end of next year, compared to 65 suburbs during the previous 12 months.
"Buying a quality freestanding home on more than 400 square metres on the traditional inner ring will cost more than $1 million," said Christopher Foster-Ramsay, managing director of Capital Home Loans, a mortgage broker.
[img=1022x0]http://www.afr.com/content/dam/images/g/l/z/1/i/9/image.imgtype.afrArticleInline.620x0.png/1451884809933.png[/img]
An increasing number of owner-occupiers, investors and first-time home buyers who want to live in an area are buying apartments, he added.
Nearly 30 Sydney suburbs, some more than a one-hour commute from the central business district, are expected to top the one-time trophy price tag of $2 million, analysis reveals.
PRICE RISES TIPPED TO SLOW
The analysis, which was exclusively compiled for The Australian Financial Review by research group Corelogic RP Data, is based on the assumption that the average rate of appreciation during the past three years will continue for the next 12 months.


It is based on the median or middle value property, rather than the average, which can be distorted by a handful of blockbuster sales.
Market commentators, including John Symond, chairman of Aussie Home Loans, are tipping property value increases to slow over the next 12 months.
"There will be hot spots – particularly inner-city suburbs – where demand will continue to outstrip supply," Mr Symond said.
There are 75 suburbs around Sydney where the median price is expected to top $1 million over the coming 12 months if recent growth trends continue.

Many of the suburbs, such as Belfield, about 14 kilometres south-east of Sydney's central business district, have seen annual median price increases of more than 11 per cent since 2012, and already have a median close to $1 million.
Others, such as Waterloo, which is four kilometres south of the CBD, have experienced increases of 17 per cent a year, which is more than 10 times the official rate of inflation.
The gilt-edged postcodes are creating a golden arch around Sydney's CBD covering more than 15 kilometres – pushing those without huge deposits, big salaries or generous benefactors further out.
Communities more than 160 kilometres north of Sydney, such as Hamilton South, which is a suburb of Newcastle, need to maintain recent growth rates of 10 per cent to slip into the $1 million bracket.

'WEALTH ARC' OVER 16KM
The rippling wealth effect from traditional exclusive central suburbs is also creating a widening wealth arc around Melbourne's CBD, spreading up to 16 kilometres west, north-east and south-east.
The gentrification of the city's inner communities, which has taken about 40 years to reach suburbs like Essendon West and Northcote, has produced annual growth rates of about 10 per cent, pushing them close to a $1 million median.
Suburbs in the north-east with even higher growth rates are particularly popular with Chinese buyers for investment property and student accommodation.
First-time buyers and growing families needing more space are often moving into sprawling suburbs built around freeways and toll roads in the city's south and west.
Tasmania, South Australia, the ACT and the Northern Territory still lag the nation's pace-setters, with no suburbs expected to top $1 million based upon growth projections.
North Perth, which is tipped to top $1 million next year, still offers value for money, with a seven-figure price buying a renovated, triple-fronted Edwardian within an easy commute of the city.


Read more: http://www.afr.com/real-estate/inner-melbourne-and-sydney-a-millionaires-club-for-home-owners-20151231-glxbpy#ixzz3wK7RBnVM 
Follow us: @FinancialReview on Twitter | financialreview on Facebook

[BlueKelah]

LOL.. as expected the apartment bust is in its first legs. Even the BIG BOSS HARRY is worried liao. What will happen to Frasers / CES /etc etc.. so called FULLY SOLD projects when their foreign buyers cant pay up?


Harry Triguboff warns of China crisis

EXCLUSIVE
A “VERY significant” number of Chinese buyers are failing to settle their off-the-plan units and urgent action is needed to prevent a crisis, Australia’s richest man has warned.
Harry Triguboff, founder of Australia’s biggest apartment builder, Meriton, says he predicts an increasing number of Chinese buyers will be forced to forfeit their deposits as local banks pull funding and China cracks down on capital outflows.

Mr Triguboff is the country’s third-richest person with an estimated net worth of $10.1 billion. Australia’s foreign investment driven property boom boosted the 83-year-old’s net worth by $1.3 billion last year, the biggest gain of anyone on Forbes’ annual rich list.

In earlier reports, Mr Triguboff appeared to downplay the impact of the “very small” number of defaults Meriton had seen, but he told news.com.au the problem was growing.
“There are a lot of Chinese now that are not settling. When you say the numbers are low, it’s because you take it over a long period, which is irrelevant,” he said.

“You must take today’s figures, so the numbers are very significant. Now the people are running around trying to find alternate finance.”

In February, broker CLSA cut its apartment forecasts due to concerns around ongoing bank tightening of lending to foreign investors, and an official crackdown by the Chinese government trying to stop the flow of money leaving its shores.

Mr Triguboff confirmed that a growing number of Chinese were desperately seeking local buyers to enter into third-party settlement arrangements so they could recover their deposits

[BlueKelah]

This unbelievable statistic shows the scale of Australia's apartment building boom

Australia is building more apartments than ever before right now, and it looks like there’s a whole lot more coming.
All you have to do is look to the skies in any of Australia’s eastern capitals to get an understanding of just how enormous the high rise building boom is.
They’re everywhere, as pointed out by UBS’ Australian economics team, comprising George Tharenou, Scott Haslem and Jim Xu, in a research note released earlier today.

Using the just released ‘RLB Crane Index’, which counts and maps ‘hotspots’ of both residential and non-residential cranes, the number of cranes currently in use for residential construction has rocketed by a cumulative 313% in the last 3 years to a ‘sky-high’ record level of 528 in Q3-2016 – mainly for high-rise units in Sydney, and to a lesser extent in Melbourne and Brisbane.

528 cranes were in use for residential construction across the country in the September quarter — a truly epic number.
[Image: ubs-crane-count.jpg]
To put that figure into perspective, RLB estimates that there were more cranes in use for apartment construction in Sydney, Melbourne and Brisbane (454) than there were in New York, Boston, Chicago, San Francisco, Los Angeles, Toronto and Calgary combined (419)

Go Australia!

It not only underlines the scale of the construction boom that is currently underway in Australia, but also why an increasing number of analysts are warning of a potential bust ahead.

[tonylim]

But still under supply ! They should build more to meet the demand !

[BlueKelah]

This will affect property market in Aus.

.......................
Westpac tightens property lending rules again

Westpac is to announce a new crackdown on local and overseas property buyers, in response to growing pressure to improve the quality of its loan book as lending and regulatory costs squeeze profits.  

The changes, to be announced to customers this Saturday, will be target dubious sources of income used for loan applications and impose tougher controls on foreign buyers with Australian visas.

Westpac and its subsidiaries St George Bank and Bank of Melbourne have introduced other changes in recent months targeting investor-only home loans and overseas buyers.
The latest moves follow warnings to its mortgage brokers – which advise borrowers on the best loan – about inaccurate and misleading applications delaying responses and increasing costs.

The bank says many applicants fail to fully disclose payments to finance companies or other banks, borrowing limits with other lenders, monthly repayments and the balance of their debts.

Refinancing applications for existing property loans with other lenders often fail to include explanations for late fees or other apparent lending problems, such as payment default interest, it claims.

Westpac announced in April it was ceasing lending to all foreign residential property buyers.
All lenders are nervous about the quality of tranches of overseas loans, particularly from mainland China, after widespread fraudulent applications were detected. 

Other lenders have tightened lending to varying degrees.