Latest Property News from Ted Hanson

Food for thought When one door of happiness closes, another opens; but often we look so long at the closed door that we do not see the one which has been opened for us. 1. Investors return There is increasing evidence that investors are starting to return to the property market, due to attractive yields, low interest rates and the ability to earn a positive return, according to the Real Estate Institute of Australia (REIA). REIA President David Airey said recently that after nine months of market domination by first home buyers, there are signs of investors returning to the market. Read More... There is increasing evidence that investors are starting to return to the property market, due to attractive yields, low interest rates and the ability to earn a positive return, according to the Real Estate Institute of Australia (REIA). REIA President David Airey said recently that after nine months of market domination by first home buyers, there are signs of investors returning to the market. In April, the seasonally adjusted value of finance commitments for investment housing increased for the second consecutive month. "This is the first time investment in housing has increased for two consecutive months since mid 2007", Mr Airey said. The rise in April was due to increases in finance commitments for the purchase of existing dwellings while for the investment of newly constructed dwellings, there was a decline. "Investors are returning to the market because of strong rental returns creating positive gearing and excellent capital growth prospects", continued Mr Airey. The REIA's recent Mortgage Choice Real Estate Market Facts publication indicated that average loan repayments were cheaper than median rent payments in Hobart, Darwin and Canberra. "Based on median house prices and median rents, investors in six of the eight capital cities can expect a positive return based on a 25 per cent deposit and by using an interest-only loan", Mr Airey said. "History shows that fortune favours the brave and astute investors may see this as a great opportunity to invest in quality property with great long-term growth prospects", he concluded. Top 2. Forecast is good: ACIF The outlook for residential building is strong and clear, according to the latest forecasts from the Australian Construction Industry Forum's Construction Forecasting Council (CFC). ACIF executive director Peter Barda said this week that while the short-term outlook is beginning to look encouraging, the medium-term outlook for single unit dwellings is very good. Read More... The outlook for residential building is strong and clear, according to the latest forecasts from the Australian Construction Industry Forum's Construction Forecasting Council (CFC). ACIF executive director Peter Barda said this week that while the short-term outlook is beginning to look encouraging, the medium-term outlook for single unit dwellings is very good. "Residential building in 2008/09 and 2009/10 will be steady in real terms, before increasing moderately in 2010/11", Barda predicted. "Also looking quite positive is engineering construction, where - aside from mining infrastructure, which has seen massive expenditure on the back of the resources boom and a corresponding large slump in spending as commodity prices have fallen - the outlook for infrastructure construction means much of this sector should avoid a collapse in activity." ACIF's figures suggest that while approvals have continued to slide in recent months, substantial pent-up demand remains for housing and there will be a strong upturn in the near future. "After falling by 17.6 per cent in the December quarter 2008, total approvals were down a further 16.4% in the March quarter 2009, with all categories falling", Barda said. "Approval levels in the investor-sensitive unit/townhouse market have almost halved in the past six months, while house approvals have fallen by more than a quarter since the September quarter of 2008." He said that while 2008/09, and 2009/10 total residential building activity was forecast to be flat in real terms, it would rebound by 35 per cent in 2010/11. "Demand is still there for housing: stocks still remain in short supply, and rents are continuing to rise," said Barda. In addition, household debt levels have come down significantly, consumer confidence looks to be returning and bank lending for home borrowers is loosening up. "Currently, the main negative is uncertainty over unemployment levels - which on the latest figures looks to have less impact than was being predicted a few months ago," said Barda. "As the economy turns around, and people start finding jobs again, residential will start to really take off. "And once the commercial developers re-enter the market and house price growth starts to improve, this sector will record strong growth," he predicted. ACIF's Construction Forecasting Council (CFC) produces twice-yearly forecasts of building and construction activity, covering short, medium and long-term prospects for the industry. These forecasts are based on modelling of the economy by KPMG Econtech, and include short-term to long-term forecasts (10 years). The CFC's latest forecast figures have been derived from the December 2008 quarter National Accounts and Australian Bureau of Statistic building approvals to the end of January. Top 3. Aussies still opt for variable rates Australian borrowers continue to show their traditional leaning for `a bob each way', opting for variable rate mortgages in the face of some of the lowest interest rates in years, according to figures released by mortgage broking firm AFG this week. Read More... Australian borrowers continue to show their traditional leaning for `a bob each way', opting for variable rate mortgages in the face of some of the lowest interest rates in years, according to figures released by mortgage broking firm AFG this week. AFG's latest Mortgage Index shows an increase in the proportion of buyers opting for fixed rate mortgages from a low of 2.5 per cent in February 2009 to 8.3 per cent in June 2009. Nevertheless, while more buyers are seeking to lock in low fixed rates, the vast majority of buyers still believe they are better off with variable rate mortgages, according to AFG's General Manager of Sales and Operations, Mark Hewitt. The report also shows that the mortgage market is becoming more stable again, with numbers of first home buyers dropping to more normal levels, investors returning and Loan to Value ratios becoming more realistic as lenders again tighten their credit policies. Top 4. Home lending defies global doom A lift in home lending in May points to a green shoot in home building, the Housing Industry Association said this week. HIA Senior Economist Ben Phillips said that the number of loans for new dwellings had risen for nine consecutive months and pointed to a modest recovery emerging for residential construction. Read More... A lift in home lending in May points to a green shoot in home building, the Housing Industry Association said this week. HIA Senior Economist Ben Phillips said that the number of loans for new dwellings had risen for nine consecutive months and pointed to a modest recovery emerging for residential construction. "New home lending figures are in contrast to the surprise negative building approvals figures for May and show that the housing sector continues to be buoyed by the first home buyers grant and low interest rates", Phillips said. The total number of seasonally adjusted loans for owner occupiers increased by 2.2 per cent in the month of May 2009 to a level 23.5 per cent higher than in May last year. There was an 8 per cent increase in loans for construction while lending for established dwellings (net of refinancing) was up by 2.7 per cent. The number of loans for the purchase of new dwellings grew by 2.9 per cent. "First home buyer activity continues to be a key feature of the strength in housing finance with the number of loans for first home buyers up by 102.5 per cent in May compared to a year earlier," Phillips said. "Most pleasing was a return of investors for the construction of new rental dwellings which grew by 83.7 per cent over May", he added. "Conditions for rental investment have improved significantly recently with strong rent growth, low interest rates and renewed confidence in house prices buoying the sector." HIA is forecasting a 15 per cent increase in housing starts by the December quarter this year following a trough reached in the March quarter. In seasonally adjusted terms the total number of owner occupier loans in May 2009 increased in New South Wales (up by 1.5 per cent), Victoria (up 3.1 per cent), Queensland (up 3.4 per cent), South Australia (2.6 per cent) and Western Australia (0.5 per cent), but fell in the Northern Territory (down by 5.4 per cent), Tasmania (down 3.3 per cent) and the Australian Capital Territory (down 1.0 per cent). Top 5. Ninja coat hooks When your little warriors return after a hard day battling enemies and roaming the big bad world, the last thing they may feel like doing is hanging up their clothes. Unless of course you carry on the theme with Ninja Star Coat Hooks that screw into the wall, making it look like a ninja attack just went down. Top 6. Winning with a smile Parisians are hoping grinners are winners in the face of economic downturn. With the prospect of dwindling tourism numbers fuelled by the financial crisis and a stereotype that pegs them as an unfriendly country, the Paris tourist board has requested simply that residents smile. Reuters reports the board has set up stands manned by teams of "smile ambassadors" to welcome holiday makers at the city's most popular spots. And while they may not be able to guarantee sunny dispositions, the French can offer insurance cover for bad weather. The insurance policy, launched by holiday groups Pierre et Vacances and FranceLoc, will mean holiday-makers can recoup part of the cost of their trip if they endure four or more days of rain in any one week.