PROPERTY MARKET OUTLOOK – PATCHY BUT SIGNS OF RECOVERY

February 8, 2011 Leave a comment

Property Market Outlook 2011Mark Millington from First National Lakeshores, expects the Lake Macquarie and Central Coast property market to strengthen in 2011, led by investors, upgraders and prices trending upwards.

“There is an undersupply of properties to purchase or rent to meet pent up demand and buyer interest,” Mr Millington said in the 2011 First National Property Market Outlook released this week.

“This will push house and apartment/strata property prices up by between 1 and 5 per cent.”

Vacancy rates are trending down and weekly rentals upwards as shortage of available accommodation and worsening housing affordability making it more difficult for first homebuyers to enter the market.

“Movements in weekly rentals will be up to 5 per cent in the main, and vacancy rates, already tight, will tighten even further by up to 1 per cent,” Mr Millington said.

According to Mr Millington, the banks should be doing more to help keep the property market healthy and robust in 2011.

“Abolishing mortgage exit fees would increase competition in the mortgage industry and give consumers the chance to change lenders for a better deal,” Mr Millington said.

“It would also mean anyone who has to sell for financial reasons will not have to try and get above market value to cover exit costs.

“The banks should also keep their moves on interest rates in line with the RBA and not move independently.”

Mr Millington believes an anticipated additional two interest rate increases will only serve to have a negative impact on affordability as buyers will have a reduced borrowing capacity.

According to Mr Millington, widely anticipated electricity price hikes are expected to increase the number of buyers looking for energy efficient features as well as the types of features they look for.

“Solar hot water and power will become the features that make a home more saleable, and there needs to be more done to educate consumers on the benefits of energy efficient features.”

Mr Millington said the state election scheduled for 2011 may impact on the market as a result of the typical uncertainty caused during the lead up.

“Either way, the government needs to do more to alleviate the lack of supply such as releasing more land, allowing more medium density developments, improving planning and approvals processes and controls, and introducing a national planning authority” Mr Millington said.

Mr Millington said he expected an increase in investor activity in the next 12 months, as increasing weekly rental prices will improve investor returns.  Upgraders and investors are very active in the $600,000 to $1 million range while first homebuyers are still active in the affordable Central Coast market.

Issued by: First National Real Estate

For further information or to receive a copy of the 2011 Property Outlook, Mark Millington, Principal from First National Lakeshores, on 02 4359 1555

Filed under Market Updates

Australian Floods Appeal

January 11, 2011 Leave a comment

Click on the link to make your donation

First National Real Estate has launched a fundraising appeal through the First National Foundation, pledging that all funds raised will go to Australian Red Cross Emergency Services in support of people affected by the Queensland and Western Australia floods.

First National Foundation is committed to the support of Australian Red Cross Emergency Services and, through the fundraising efforts of First National Real Estate agents nationally, has already donated over $1 million towards the preparation of Australian communities for natural disasters such as those currently being experienced.

Funds donated provide real assistance on the ground such as helping Red Cross Emergency Services to coordinate the National Registration and Enquiry System that assists families, friends and relatives to locate each other.

3,919 people have already used the NRIS system currently being operated by Red Cross in Queensland. Red Cross is also assisting with recovery in Bundaberg, Dalby, Warwick, Chinchilla, Emerald and is on standby to provide additional support where necessary.

Red Cross is also distributing practical resources and useful tips to help Queenslanders and Western Australiansbegin cleaning up after floods. The ‘Cleaning Up After Flooding’ booklet helps households start the process, both practically and emotionally, but with a firm eye on safety.

Donations can be made to First National Foundation’s Australian Floods Appeal by visitingwww.firstnationalrealestate.com.au

Issued by: First National Real Estate

For further information contact National Communications Manager, Stewart Bunn from First National Real Estate on 1800 032 332

Filed under Media Releases Tagged with , , , , , , , , , , ,

Bank on leaders working together for affordable homes

December 13, 2010 Leave a comment

First National Real Estate Lakeshores says the recent interest rate hikes demonstrate the increasing need for Governments and the Big Four Banks to work together to address the key issues of supply and demand and housing affordability.

“There seems to be so much debate going on about the market, but no real communication between the banks and the government, and between them they are the ones with the power to fix the property market problems,” Mark Millington from First National Real Estate Lakeshores said.

“There is lots of finger pointing going on, but there is not any real discussion about what we can do to fix it.”

“At the end of the day it is the home buyers and owners who suffer, while the banks keep making record profits and governments keep their heads in the sand,” Mark Millington said.

“What they should be doing is looking to influence affordability and supply by reducing or abolishing stamp duties, abolishing exit fees, introducing more competition into the banking sector and looking at policies that will stimulate the construction industry.

“Instead, we keep putting up with inaction from the government and greed from the banks.”

Mark said he was particularly unimpressed by banks who deemed it appropriate to increase their standard variable rates by as much as 14 basis points above the RBA increase.

“What is most disconcerting about this is that it seems each of the banks are taking their turn at being the bad guy and being the first to lift their rate higher than the RBA increase,” Mark said.

“As one consumer interest group spokesperson said, if all the banks moved at the same time by the same amount, and this was a horse race, you would have a steward’s inquiry.”

But not even the prospect of a Senate enquiry into banking competition, or Parliamentary debate on legislation forcing banks to lift rates by no more than the RBA, is enough according to Mark Millington.

“Interest rates on their own are not the problem. We need to have a look at all the factors affecting the property market: planning approvals, interest rates, fees and charges, everything all at once rather than this piecemeal approach,” Mark Millington said.

“New banking policies are called for but so is a national approach to planning, because ultimately it is the “mum and dad” property owners who will suffer the most.

“We need political leaders who have the fortitude and imagination to reform property taxes and the banking sector if there is any hope of addressing affordability issues.”

Filed under Media Releases, Opinion Tagged with , ,

WIN $25,000 OF HOME FURNISHINGS WITH FIRST NATIONAL

October 9, 2010 Leave a comment

Super Massive Comp

Super Massive Comp

Throughout October, First National Real Estate is offering the chance for one lucky individual or family to update their home with $25,000 worth of brand new furniture and energy efficient appliances.

All entrants have to do is visit the First National Real Estate website, firstnational.com.au, follow the prompts, answer a couple of simple questions and submit their entry form to be in the running for the $25,000 home furnishings voucher.

‘Lots of First Home Buyers bought homes last year as a result of the stimulus package and many more Australian families are putting off the replacement of old, inefficient appliances. So, we thought we’d give one lucky family or individual a helping hand’ says Mark Millington, principal of First National Lakeshores.

First National Real Estate adopted an energy efficiency stance in 2009, providing its national network of offices with an Energy Efficiency Kit to assist its agents to reduce energy consumption in their offices and their customers’ homes.

‘An important part of the kit is a booklet printed on recycled paper that shows Australian homeowners and tenants how to lower their home’s energy bills’ says Mark Millington.

‘The book was so popular, our office soon ran out of copies but customers can still download a copy, or see all our energy efficiency and sustainability advice, by visiting firstnational.com.au/energyefficient’.

The website, booklets and brochures help people choose, and better use, more efficient appliances, solve design problems in older homes, and create more sustainable Australian native gardens.

To enter the competition, participants should visit www.lakeshores.com.au and follow the links to the Super Massive $25,000 Giveaway.

‘You can enter as many times as you like between 1 October 2010 and 31 October 2010. It’s that simple, there’s no skill required and all entrants have an equal chance to win’ says Mark Millington

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First National Real Estate CEO says search engine ranking critical (via First National Real Estate)

September 3, 2010 Leave a comment

A great article about the emerging importance of search engine ranking for real estate companies and individuals.

First National Real Estate CEO says search engine ranking critical First National's Chief Executive Ray Ellis has commented on the critical importance of real estate website search engine ranking, saying Australian consumers should take a closer look at their agent's websites. 'While many homeowners understand that the Internet is now a crucial component of market … Read More

via First National Real Estate

Filed under Media Releases, Opinion

CLIFFHANGER

August 25, 2010 Leave a comment

Election Cliffhanger

Election Cliffhanger

Uncertainty surrounding the outcome of the weekend’s federal election looks like having a depressing effect on share, money and real estate markets. The Australian dollar was already falling on early morning trade as Your Industry was being written.

With the coalition releasing its housing policy just one day before the election, and there being so little housing policy debate throughout the campaign, it could be some time before a degree of normalcy returns.

That, of course, depends entirely upon a smooth resolution of the current situation.

Both Labor and the Coalition are busy courting independent MPs and the Greens in order to form a Government. With The Greens likely to hold the balance of power, it may not be long before Bob Brown’s stated intention to demand a higher mining super profits tax becomes reality. Weeks before the election, sales were reported as having fallen by as much as 18 per cent in some mining towns, even after Labor’s hurried, reparative negotiations with mining companies, so property investment in Western Australia and Queensland may suffer further.

While reports of slower sales and hesitant buyers have dominated media recently, this is typical of the winter months and is likely a reflection of the wearing off of historic low interest rates as well as historic Government incentives and stimulus. You can’t have 20 per cent capital values growth in one year and no penalty in the following, on the back of a GFC and a housing market force fed on steroids. The market has to adjust and with the additional retarding effect of a federal election, any other outcome would see the bubble brigade gaining legitimacy.

While niggling uncertainty about world financial health continues, rightly or wrongly, the perception is that low unemployment, the minerals boom and China’s economic growth offset Australia’s risks. The RBA’s decision to keep rates on hold earlier this month has also helped, enabling the market to quickly adjust to real world rates being closer to 7.5 per cent.

Headlines about lower auction clearance rates don’t necessarily accurately reflect the true state of the market. The Australian Bureau of Statistics indicated that there was a 2.3 per cent rise in May loan approvals and in July first homebuyer mortgages were up from 9.5 per cent to 11.1 per cent –indicators that don’t look too shabby at all.

The combined national rise left loans up 1.9 per cent, the first such increase in eight months – a good harbinger for spring.

Valuer Herron Todd White’s August review might have had some journalists thinking agents should be running a bath and looking for a toaster. Fundamentally, it indicated fewer properties were for sale, more were being sold by private treaty and things were taking longer to sell. Once again, a quiet market is common in winter and the quieter the market and the fewer the listings, the more likely a spring surge of listings and activity becomes.

HTW indicated a slight August fall in values in the prestige Melbourne markets and the under $600,000 segment in Brisbane was thought to be driving the overall market. Perth’s median has again fallen below $500,000 but prestige sales have been so limited that it is impossible to draw a conclusion as to what’s happening there. Darwin prestige units have stabilised but houses over $1m are thinly traded. Hobart sales are slow, but no more so than normal for this time of year. Adelaide showed some minor growth in the June quarter.

In all cases it seems quality property is moving but secondary property is taking longer to find buyers – again, unsurprising in winter. Overall, there are positive indications that once the winter chill and political impasse are history, there could well be a groundswell of vendors ready to sell on the spring market. First homebuyers are likely to make a return however investors may, depending on the political landscape, be less inclined to invest in the traditionally high return mining markets.

Filed under Opinion Tagged with , ,

Market Ripe to Bear Fruit

August 4, 2010 1 Comment

Market Ripe to Bear Fruit

Market Ripe to Bear Fruit

Commenting on yesterday’s announcement by the RBA that it will hold interest rates at 4.5 per cent, Mark Millington, Principal, First National Real Estate Lakeshores says there are plenty of opportunities around for home buyers and sellers, given current market conditions, as long as the fundamentals are focused on.

“At times like these, homes that are properly presented, appropriately priced and well marketed will always do well, regardless of what happens with interest rates,” Mark Millington said.

“It’s a matter of making sure you get the basic factors right and plum properties should bear fruit.”

When there is relatively high business confidence, strong levels of immigration and low unemployment, the market becomes suitable for buyers. However, those seeking to sell can also make sure they take advantage of these prime conditions.

“In a slower market, there is less pressure on sellers and buyers and during the cooler months, there is less volume of stock around from which buyers can choose, so houses are more likely to sell,” Mark Millington said.

Mark Millington said currently there are growing investment returns in the property market, which should prove lucrative for the astute investor.

“Investors, in particular, can benefit greatly from the current market conditions and pick up some terrific properties that offer strong returns,” Mark Millington said.

Issued by: First National Real Estate
For further information contact Mark Millington, Principal, First National Real Estate Lakeshores on 0418 970 591.

Filed under Market Updates, Media Releases Tagged with , , , , ,

Property Remains a Sure Bet

July 23, 2010 Leave a comment

Mid year property outlook 2010

Mid year property outlook 2010

As property punters across New South Wales hedge their bets both ways, First National Real Estate Lakeshores’ Principal, Mr Mark Millington is bringing some much needed clarity, predicting property prices’ growth will slow but that the market will remain buoyant despite ongoing uncertainty and increased consumer nervousness.

According to Mr Millington, property prices across all sectors of house, land and apartment/strata in the Lake Macquarie and Central Coast region rose by up to 1 – 5 per cent in the last six months, driven mostly by an increase buyer pool and lower level of available homes for sale, plus lower interest rate and government stimulus. 

The rental market has seen vacancy rates decrease marginally by no more than 1 per cent as housing affordability and immigration create more tenants than available homes – a factor which has seen rents increase by as much as 5 per cent in some cases.

For the remainder of 2010, property prices, across all sectors (house, land and apartment/strata) are expected to continue to increase by up to 5 per cent as there is a shortage of new listings and a growing buyer pool to draw from.  However, this is dependent on the RBA not increasing rates too high. 

“The last two rate rises have already impacted on buyer confidence and also housing affordability and it is hoped they have now done their job and will hold rates where they are for some months, significantly improving buyer confidence,” Mr Millington said.

Vacancy rates are expected to ease even more, decreasing by a marginal 0-1 per cent, while rents are expect to further increase by up to 5 per cent due to the ongoing shortage of available rental accommodation.

Sales should continue to increase as Generation Xers continue to seek, and take advantage of, opportunities to trade up.

The new tax by the NSW government for home owners selling property over $500,000 will have a negative impact on the market, similar to the results of the NSW vendor exit tax for investors.

Housing affordability has come to the forefront in NSW, particularly in Sydney, while other parts of NSW, such as the regional and coastal areas, enjoy lower median prices and are attracting investors and first home buyers. It is expected affordability will remain a major factor in property decision-making throughout 2010.

Property hot spots are considered regional and coastal areas that have the greatest potential for growth as capital cities become more expensive.

A highlight for the second half of 2010 will be an expected 5-10 per cent increase in investor activity in the property market, on the back of an already 1-5 per cent increase in the last six months.

The expected increased activity is due mainly to finance markets becoming more volatile and consumer confidence being affected, investors will return to property for security, with a housing shortage that appears unable to change quickly, ensuring real estate holding values or increasing in value.

Interest rates are expected to continue to increase further by the end of 2010, by between 1-1.5 per cent, further impacting on the Lake Macquarie and Central Coast property market and adding to housing affordability concerns.

The environment is continuing to be a factor for consideration by homebuyers, with the most popular ‘green’ features being water tanks and solar hot water.

According to Mr Millington, the Government needs to take greater control of the supply versus demand issue for the Australian property market.

“They need to consider a holistic approach to the issue and look at a number of factors, such as releasing more land; overhauling the planning process and introducing a national planning authority; and introducing incentives for more medium density developments,” Mr Millington said.

There is a strong trend developing for Gen Xers and Baby Boomers opting to stay in their homes, rather than sell, making it harder for Gen Yers to get into the property market.

To view the full report for the Australian property market mid year update click here.

Filed under Market Updates, Media Releases Tagged with , , , , ,

HOME OWNERSHIP STILL WITHIN GRASP

June 21, 2010 Leave a comment

First Home Buyers

Home Ownership Still Within Grasp

Home owners and buyers are once again feeling the pinch to keep their dreams of home ownership alive as housing affordability returns to the property market agenda.  But, First National Lakeshores Principal, Mark Millington says it’s a matter of rethinking options and developing creative strategies.

Impending future rate rises, along with tightening lending conditions and increasing mortgage stress concerns have started to take their toll on home buyers’ ability to own their own home.  According to Mark Millington home buyers need to take action on an individual level to tear down the wall of housing affordability in any way they can.

Recent research has found a decline in the number of home loans with a high loan-to-value ratio (LVR) of 95 per cent or above.  LVR refers to the amount of money borrowed for a property, compared to what the property is worth.

Mark Millington says while lending criteria has toughened in recent months, there are still lenders willing to negotiate a better deal around a number of factors such as fees or rates or the actual LVR itself.

“Lending institutions need to be willing to negotiate and be a little more flexible,” Mark Millington said.  “And there are plenty of lenders out there who are willing to do just that, if home buyers are willing to shop around a little and do a bit of homework themselves.  It’s up to the individual to take matters into their own hands and ask.

“But they need to have the facts that support their case as well.”

Some key tips for overcoming housing affordability concerns include:

  • Time your purchase for when there is a lull in the market, such as winter, when the market generally slows and lower demand can potentially tip the balance in favour of buyers.
  • Calculate what you can afford to spend, factoring in any interest rate increases, probably 2 per cent higher than current levels.  Match this to your list of preferred suburbs and concentrate on properties that are genuinely within your range.
  • Be flexible and adjust expectations as required.  You may dream of buying a home in a particular area, but consider a smaller home, or even a unit or apartment, with a view to upgrading later.  Alternatively, consider an area a suburb or two removed from your where you would like to live.
  • Start a disciplined saving strategy immediately.  Set realistic savings goals and set up an achievable budget for household expenditure.

Mark Millington also had some sage advice for home owners currently experiencing mortgage stress.

“Home owners can consider extending the life of the mortgage,” Mark Millington said.

“In recent years, all the focus has been on how quickly a family can pay back the mortgage and then move another rung up the ladder.

“Obviously, that is the most desirable situation, but times are changing and it may be more useful to focus instead on how to get into the market in a way that is financially manageable.

“But whatever they do, they should seek the services of a qualified, reputable and trustworthy financial advisor.”

Filed under Market Updates, Media Releases Tagged with , , , ,

Residential Market Slows

June 2, 2010 Leave a comment

For the last year, strong demand has led to high auction clearance rates and marked growth in residential real estateProperty Outlook 2010 values nationally. However, it’s now official – clearance rates have slumped after the compounding effect of six interest rate increases since October, tightening lending criteria and a worsening European financial crisis.

Eight weeks ago, Melbourne was riding the crest of the demand wave with a clearance rate of 85.3 per cent. That’s now fallen to 69.4 percent. Similarly, Sydney was enjoying a clearance rate of 73.7 per cent but that’s now just 63 per cent. However, while these are the nation’s two largest auction markets, they’re only a small proportion of all dwelling transactions nationally. Still, the traditionally weaker auction markets of Perth, Adelaide and Brisbane have eased as well.

In contrast though, the total number of auctions taking place has remained very strong and measures released yesterday by RP Data indicate that although prices growth has slowed, home values are up nationally by an average of 0.2 per cent in the month of April and 2.4 per cent for the quarter. Of concern though is the change in direction for both Brisbane and Perth values, with the former dropping 0.5 per cent and the latter 0.6 per cent in the April quarter. Could this be the beginning of a downward trend?

The Government’s planned imposition of a Super Profits tax on mining companies is affecting confidence as it attempts to position the tax as a battle between big business mining and average Australians. With several future mining projects either now on hold or cancelled, it may still be too early to be sure whether this is having direct effect but both Western Australia and Queensland have shown anecdotal evidence of cooling consumer sentiment and, as the above figures confirm, a slide in prices.

Last week, the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) contributed conflicting commentary on Australia’s housing position. The IMF suggested that its analysis of housing slumps since 1970 shows home prices will fall much further and for much longer. In a report in The Australian, its economist Prakash Loungani said previous slumps had lasted on average for 18 quarters, with prices dropping 22 per cent. The current housing slump has lasted only 14 quarters and prices have dropped just 15 per cent.

Prices have dropped 15 per cent? Not according to Australian data. Taking the opposing view, The OECD was more upbeat, even though it predicted at least four more rate rises, and most likely five in the year ahead. It suggests the RBA will finish the year with a cash rate of 5.1 per cent by December and push on to 5.7 per cent by next June.

This is completely at odds with Australian financial markets, which are anticipating a tightening of only 0.25 per cent over the next year. Yet, despite the OECD’s gloomy interest rate outlook, it still expects demand for Australian real estate to remain strong, ‘bolstered by immigration’ and above average economic growth – exceeding 3 per cent. New South Wales is paying the price for the State Government’s introduction of a new property tax which is making new construction less attractive for developers. Brisbane also appears to have fallen out of favour, with big residential developers pinning hopes of future profits on Melbourne, Perth and Adelaide.

Stockland have recast their product to the affordable end of the market and will be relying on the ‘boom market in Melbourne’. Its recent investor update says that 50 per cent of all jobs created in the past 12 months were created in Victoria and that the state has been more successful than any other in tapping the population surge driven by migrants from China and India. Billionaire developer Lang Walker is firmly focused on Adelaide as well as Melbourne, and most other developers are following in his footsteps.

The RBA Board met to yesterday determine what action to take with interest rates for June. The weakening market indicators and falling Australian dollar led to a hold in the official cash rate.

Filed under Market Updates, Media Releases Tagged with , , , ,

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