Dear Valued Friend, Yes, there is some good news out there.
It isn't making the headlines, but it is out there never-the-less.
Here are seven positive points to help you make it through your real estate
day.
1. The vacancy rate is tight.
In most capitals and major regional markets it remains under 3% and is much
lower in Brisbane, Sydney, Perth, Canberra and central Queensland.
Rents growth is starting to accelerate and we know of numerous examples
where over 30 rental submissions are being received for vacant rental
dwellings across Brisbane.
2. Sales have improved
Since mid-year and those vendors who meet the market are selling - and now,
often quickly.
It is still a buyer's market - with the high supply of stock for resale -
ensuring that you need to realistically price and market your property well
in order to make a sale.
Investors are starting to take their properties off the market and are
renting them out again, as they are attracting good rental yields.
3. Last year's interest rate drop is having some impact - with the number of
owner-occupier loans up 2% in December.
Housing investment loans rose 7.5% in December, after a 2.7% rise in
November. First home buying activity is currently at a two-year high.
Generic prices might be still falling but there are signs that the housing
sector is starting to turn the corner. The latest housing finance data
provides a degree of encouragement.
Home loans have now increased for nine consecutive months and the investor
market is doing the bulk of the heavy lifting. We have been saying for some
time that it is the investors who will get the housing market back on its
feet.
4. Hamilton Harbour
One of the first major Queensland apartment projects to face settlement
since the GFC - is settling well.
No, that isn't strong enough - it is going great guns! I nearly said
gang-busters, but that might be taking it a bit too far.
At the time of writing, 89% of the 435 apartments sold since early 2009 have
settled, with an overall 95% success rate likely by the end of this month.
We originally wrote about Hamilton Harbour in July last year, stating that
it should be on the industry's "must watch" list; it was a litmus test for
the Brisbane market - a beachhead, if you will.
Sadly, few seem to be watching, and nor are the media writing about it. This
is big news for Brisbane-town. Other, lesser projects (if you ask me), also
appear to be settling well.
The average price of a settled apartment in Hamilton Harbour is $526,000,
with just over $200 million worth of property settled so far.
Over 220 apartments have been leased in both the towers since late November
last year. The average gross rental yield - based on evidence to date and
being rented out for 50 weeks per annum - is 5.3% across the investment
stock. The one-bedroom and one-bedroom with study product are achieving the
higher yields.
5. The Melbourne Institute-Westpac confidence survey shows that late last year, price pessimists in Brisbane dominated (-10%)
versus this month's positive result of 27% (% of those expecting a rise
minus % expecting a fall) - a 180 degree turn in just three months.
The Good Time to Buy a Dwelling Index is up in Queensland and also in
Western Australia. Queensland's pending state and local elections will
hopefully lift confidence higher.
6. Whilst we don't need to build as many new homes as we once did - see here
- outside of Melbourne, Adelaide, Canberra, Cairns and the Gold Coast, the
new housing markets aren't oversupplied.
There is a lot of nonsense written about supply - published often by
young'uns who can count (well sometimes just), but have little understanding
about how the new housing market actually works.
At present, for example, there is a lot of commentary (and press) about a
pending oversupply of new apartments across inner Brisbane.
Now, whilst there is lots of new mooted apartment development - approved in
council - the fact remains that not enough new product is actually being
built.
Over the last five years for example, 13,000 new dwellings were required to
accommodate the population growth, yet - based on the official statistics -
just 8,017 new dwellings were approved.
Last year, just 1,902 new dwellings were approved, against an annual average
demand for 2,650 new housing starts. At present there is a serious
short-fall.
7. To finish, everything cycles, including the property market.
The Brisbane market, for mine, is at 6 o'clock on the property clock or at
the bottom of its cycle. Many investors try to pick the bottom of the
market.
Yet, the direction in which property values travel is only partially
dependent on the broader market conditions.
Recent studies show that about 40% of growth (or otherwise) can be explained
by trends in the overall market. The all-important 60% comes down to more
individual factors such as location, the style of housing, its design and
inclusions, and the income/demographics of the area.
However, a 40% swing in your favour shouldn't be sneezed at, especially
after what the Brisbane market has been through of late.
Campbell Newman would love to have a quarter of this momentum. Subject: Overseas Investment Market - in particular China Australian real estate is one of the most attractive investment propositions
around for overseas investors. There are two reasons. First, we have a
strong economy that gained major international attention during and after
the GFC, so we're now very well known in global investment circles. Second,
we have an exceptional track record for capital growth and rental returns
over the long term. Today, we see a lot of demand from overseas buyers, particularly Chinese
families whose children are coming to Australia to study. Under Foreign
Investment Review Board (FIRB) rules, their child is allowed to buy and live
in one established property while they're here. So mum and dad are funding
the purchase both as an investment and to put a roof over their child's
head. Families who can afford larger homes are seeing opportunity in today's
softer prestige market too. This is likely to be a growing trend given our impressive education system.
We're actually the third largest provider of international education behind
the US and UK, with one in five of our university students coming from
overseas (about 20 per cent from China), according to the Bureau of
Statistics. Rules around foreign property ownership can be tricky to understand and
there have been some major changes over the past few years. Let me re-cap
what's been going on. Generally speaking, the FIRB prohibits foreign ownership of established real
estate for investment but allows it for brand new or off-the-plan properties
because this promotes the expansion of housing stock, which we desperately
need. In December 2008, the Government decided to relax the foreign ownership
rules. For a period of about 18 months, until the rules changed again,
overseas students could buy any type of property to live in without seeking
FIRB approval. They could also hold the property for investment as long as
they liked, even if they left the country. The Government also removed the restriction preventing students from buying
property worth more than $300,000 while living here. This meant rich
overseas families could purchase a multi-million dollar home for their child
to live in and keep it for investment as long as they liked. The same rules
applied to businesspeople working in Australia on temporary visas - and
there's plenty of them too! Concerns soon arose about the number of overseas buyers purchasing local
property, as well as the number of properties they were purchasing, and what
this extra demand was doing to prices. Another concern was reports that
foreign owners were holding properties and not renting them out, thereby
reducing available rental stock for Australians during a significant ongoing
shortage. So in 2010, the Government tightened the rules again. They re-imposed the
requirement of notification and approval before a temporary resident could
buy property and introduced a new rule that they must commit to selling as
soon as they leave the country or face strong new penalties. These rules appear not to have dampened the enthusiasm of overseas buyers.
If you have a child coming here to study a six-year or more medical degree,
that's plenty of time to make a healthy gain on your investment before
selling - that is, if your child decides not to stay in Australia after
graduation. You see, many students and professionals who come here on temporary visas
decide to stay (why wouldn't they? Australia is the best country in the
world to live in!), and once they're on a permanent resident visa, they can
buy as many homes as they like - using their own money or that of their
overseas families. Here's an update on the most important FIRB rules. If you want to read more,
go to http://www.firb.gov.au/content/real_estate/real_estate.asp Foreign non-residents are not allowed to buy established dwellings for
investment.
They can, however, purchase new properties (either newly-built or
off-the-plan) or vacant land to build on as this promotes the expansion of
housing stock (some conditions apply).
Temporary residents can purchase one established dwelling to use as their
residence but they must apply for FIRB permission and they must sell it as
soon as they leave the country.
Foreign companies can buy established homes for Australian-based staff as
long as they agree to sell or rent out the property if they expect it to be
vacant for six months or more.
Foreigners living in Australia on a permanent resident visa do not need
approval to buy for owner-occupation or investment.
In addition to education and a strong property market, Australia also has
enormous appeal with international buyers due to our enviable lifestyle,
safety, our strong economy and currency and the astounding natural beauty of
our landscape. Published: Wednesday, February 22, 2012 Best regards
Linda J. Debello
L J Gilland Real Estate Pty Ltd
PO Box 19, Zillmere 4034.
Office:- 07 3263 6085
Mobile:- 0409995578 Confidential Email:- The information in this message is intended for the
recipient named on this email. If you are not that recipient, please do not
read, copy, distribute or act upon the message as the information it
contains may be priveleged. If you have received this message in error,
please notify us immediately by return email. Thank you for your
co-operation.
It isn't making the headlines, but it is out there never-the-less.
Here are seven positive points to help you make it through your real estate
day.
1. The vacancy rate is tight.
In most capitals and major regional markets it remains under 3% and is much
lower in Brisbane, Sydney, Perth, Canberra and central Queensland.
Rents growth is starting to accelerate and we know of numerous examples
where over 30 rental submissions are being received for vacant rental
dwellings across Brisbane.
2. Sales have improved
Since mid-year and those vendors who meet the market are selling - and now,
often quickly.
It is still a buyer's market - with the high supply of stock for resale -
ensuring that you need to realistically price and market your property well
in order to make a sale.
Investors are starting to take their properties off the market and are
renting them out again, as they are attracting good rental yields.
3. Last year's interest rate drop is having some impact - with the number of
owner-occupier loans up 2% in December.
Housing investment loans rose 7.5% in December, after a 2.7% rise in
November. First home buying activity is currently at a two-year high.
Generic prices might be still falling but there are signs that the housing
sector is starting to turn the corner. The latest housing finance data
provides a degree of encouragement.
Home loans have now increased for nine consecutive months and the investor
market is doing the bulk of the heavy lifting. We have been saying for some
time that it is the investors who will get the housing market back on its
feet.
4. Hamilton Harbour
One of the first major Queensland apartment projects to face settlement
since the GFC - is settling well.
No, that isn't strong enough - it is going great guns! I nearly said
gang-busters, but that might be taking it a bit too far.
At the time of writing, 89% of the 435 apartments sold since early 2009 have
settled, with an overall 95% success rate likely by the end of this month.
We originally wrote about Hamilton Harbour in July last year, stating that
it should be on the industry's "must watch" list; it was a litmus test for
the Brisbane market - a beachhead, if you will.
Sadly, few seem to be watching, and nor are the media writing about it. This
is big news for Brisbane-town. Other, lesser projects (if you ask me), also
appear to be settling well.
The average price of a settled apartment in Hamilton Harbour is $526,000,
with just over $200 million worth of property settled so far.
Over 220 apartments have been leased in both the towers since late November
last year. The average gross rental yield - based on evidence to date and
being rented out for 50 weeks per annum - is 5.3% across the investment
stock. The one-bedroom and one-bedroom with study product are achieving the
higher yields.
5. The Melbourne Institute-Westpac confidence survey shows that late last year, price pessimists in Brisbane dominated (-10%)
versus this month's positive result of 27% (% of those expecting a rise
minus % expecting a fall) - a 180 degree turn in just three months.
The Good Time to Buy a Dwelling Index is up in Queensland and also in
Western Australia. Queensland's pending state and local elections will
hopefully lift confidence higher.
6. Whilst we don't need to build as many new homes as we once did - see here
- outside of Melbourne, Adelaide, Canberra, Cairns and the Gold Coast, the
new housing markets aren't oversupplied.
There is a lot of nonsense written about supply - published often by
young'uns who can count (well sometimes just), but have little understanding
about how the new housing market actually works.
At present, for example, there is a lot of commentary (and press) about a
pending oversupply of new apartments across inner Brisbane.
Now, whilst there is lots of new mooted apartment development - approved in
council - the fact remains that not enough new product is actually being
built.
Over the last five years for example, 13,000 new dwellings were required to
accommodate the population growth, yet - based on the official statistics -
just 8,017 new dwellings were approved.
Last year, just 1,902 new dwellings were approved, against an annual average
demand for 2,650 new housing starts. At present there is a serious
short-fall.
7. To finish, everything cycles, including the property market.
The Brisbane market, for mine, is at 6 o'clock on the property clock or at
the bottom of its cycle. Many investors try to pick the bottom of the
market.
Yet, the direction in which property values travel is only partially
dependent on the broader market conditions.
Recent studies show that about 40% of growth (or otherwise) can be explained
by trends in the overall market. The all-important 60% comes down to more
individual factors such as location, the style of housing, its design and
inclusions, and the income/demographics of the area.
However, a 40% swing in your favour shouldn't be sneezed at, especially
after what the Brisbane market has been through of late.
Campbell Newman would love to have a quarter of this momentum. Subject: Overseas Investment Market - in particular China Australian real estate is one of the most attractive investment propositions
around for overseas investors. There are two reasons. First, we have a
strong economy that gained major international attention during and after
the GFC, so we're now very well known in global investment circles. Second,
we have an exceptional track record for capital growth and rental returns
over the long term. Today, we see a lot of demand from overseas buyers, particularly Chinese
families whose children are coming to Australia to study. Under Foreign
Investment Review Board (FIRB) rules, their child is allowed to buy and live
in one established property while they're here. So mum and dad are funding
the purchase both as an investment and to put a roof over their child's
head. Families who can afford larger homes are seeing opportunity in today's
softer prestige market too. This is likely to be a growing trend given our impressive education system.
We're actually the third largest provider of international education behind
the US and UK, with one in five of our university students coming from
overseas (about 20 per cent from China), according to the Bureau of
Statistics. Rules around foreign property ownership can be tricky to understand and
there have been some major changes over the past few years. Let me re-cap
what's been going on. Generally speaking, the FIRB prohibits foreign ownership of established real
estate for investment but allows it for brand new or off-the-plan properties
because this promotes the expansion of housing stock, which we desperately
need. In December 2008, the Government decided to relax the foreign ownership
rules. For a period of about 18 months, until the rules changed again,
overseas students could buy any type of property to live in without seeking
FIRB approval. They could also hold the property for investment as long as
they liked, even if they left the country. The Government also removed the restriction preventing students from buying
property worth more than $300,000 while living here. This meant rich
overseas families could purchase a multi-million dollar home for their child
to live in and keep it for investment as long as they liked. The same rules
applied to businesspeople working in Australia on temporary visas - and
there's plenty of them too! Concerns soon arose about the number of overseas buyers purchasing local
property, as well as the number of properties they were purchasing, and what
this extra demand was doing to prices. Another concern was reports that
foreign owners were holding properties and not renting them out, thereby
reducing available rental stock for Australians during a significant ongoing
shortage. So in 2010, the Government tightened the rules again. They re-imposed the
requirement of notification and approval before a temporary resident could
buy property and introduced a new rule that they must commit to selling as
soon as they leave the country or face strong new penalties. These rules appear not to have dampened the enthusiasm of overseas buyers.
If you have a child coming here to study a six-year or more medical degree,
that's plenty of time to make a healthy gain on your investment before
selling - that is, if your child decides not to stay in Australia after
graduation. You see, many students and professionals who come here on temporary visas
decide to stay (why wouldn't they? Australia is the best country in the
world to live in!), and once they're on a permanent resident visa, they can
buy as many homes as they like - using their own money or that of their
overseas families. Here's an update on the most important FIRB rules. If you want to read more,
go to http://www.firb.gov.au/content/real_estate/real_estate.asp Foreign non-residents are not allowed to buy established dwellings for
investment.
They can, however, purchase new properties (either newly-built or
off-the-plan) or vacant land to build on as this promotes the expansion of
housing stock (some conditions apply).
Temporary residents can purchase one established dwelling to use as their
residence but they must apply for FIRB permission and they must sell it as
soon as they leave the country.
Foreign companies can buy established homes for Australian-based staff as
long as they agree to sell or rent out the property if they expect it to be
vacant for six months or more.
Foreigners living in Australia on a permanent resident visa do not need
approval to buy for owner-occupation or investment.
In addition to education and a strong property market, Australia also has
enormous appeal with international buyers due to our enviable lifestyle,
safety, our strong economy and currency and the astounding natural beauty of
our landscape. Published: Wednesday, February 22, 2012 Best regards
Linda J. Debello
L J Gilland Real Estate Pty Ltd
PO Box 19, Zillmere 4034.
Office:- 07 3263 6085
Mobile:- 0409995578 Confidential Email:- The information in this message is intended for the
recipient named on this email. If you are not that recipient, please do not
read, copy, distribute or act upon the message as the information it
contains may be priveleged. If you have received this message in error,
please notify us immediately by return email. Thank you for your
co-operation.
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