LEND A HAND FOR RENTERS

November 23, 2011 Leave a comment

Mark Millington principal of First National Real Estate Lakeshores says government needs to do more to support renters and provide better assistance than is currently offered through the National Rental Affordability Scheme (NRAS).

“While we support NRAS, it is no longer enough in its existing form, to meet rising rents, leaving those most in need of assistance flailing in their efforts to make ends meet,” Mark Millington said.

“It could soon be the case that with falling house prices, lower interest rates and reduced consumer confidence, purchasing a home will make more economic sense for those doing it tough, where the monthly mortgage is not too far off what they are paying for rent.”

According to Mark Millington, evidence of improving housing affordability can be garnered through recent home value index results.

“Home values recently posted the best results in seven months and the recent cuts to interest rates, along with talk there may be even further drops, is resulting in NRAS losing some of its validity as an assistance package, especially for those who are finding it difficult to come up with the rent each week or month,” Mark Millington said.

“What the government needs to do is look at changing NRAS so it has more relevance and achieves what it set out to do, or consider other forms of assistance such as bringing back some of the grants and other incentives that were obviously phased out too soon.”

Mark Millington said although it is good news for the property market that home buyer activity is increasing as a result of the market conditions, it is not good when it is done at the expense of those renters who can least afford it.

“It is always encouraging to hear that more people are realising their dreams of home ownership, but there also exists the reality that there are those in our community who are forced into rental accommodation and can ill afford to fall behind in any way at all in keeping pace with rental increases,” Mark Millington said.

“In these situations, they need access to assistance schemes that meet their circumstances and offer real assistance, which NRAS initially did, but has since failed to recognise the growing demand of assistance required, making it virtually obsolete.

“We don’t see property market conditions altering too dramatically in the near future, and certainly not to the extent that they will improve the situation for struggling renters.”

For further information contact Mark Millington, on 02 4359 1555 or 0418 970 591.

Filed under Media Releases, Opinion 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 , ,

Property Remains a Sure Bet

July 23, 2010 1 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 , , , ,

FIRST NATIONAL SAYS NATIONAL PLANNING NEEDED

May 1, 2010 Leave a comment

First National Real Estate CEO, Ray Ellis, supports the call from the Australian Local Government Association for a national planning authority but says Australia’s problems with its planning processes go far beyond the single issue of coastal climate change planning and require a major overhaul.

“It’s very myopic to just consider this one issue in isolation of what is happening in other areas of the property market around this country,” Mr Ellis said.

“In Queensland, they are working off two year old planning approvals, while NSW planning approvals have dropped dramatically in recent times.

“And, while Victoria has just posted strong planning approval figures for some years, this is a result of a minister wielding a big stick rather than systemic structural changes.”

Mr Ellis agreed that the confusion created by inconsistent sea level rise predictions makes planning and development increasingly difficult on coastal regions, but more importantly have the potential to impact negatively on the property market in general.

“Home owners and other property market pundits need certainty around property prices so that they can make decisions based on facts and consistent information,” Mr Ellis said.

“It’s all well and good to say that the responsibility for planning rests with state and local government, but ultimately, a consistent, unified and national approach needs to be considered in the property market.

“This is unsustainable and I can’t think of any other industry that would operate with this level of uncertainty and confusion.”

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

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