Rent Growth For Perth

by Joy Manginsay 31. October 2011 19:08

Perth rents have shown price growth over the last quarter. Perth home buyers and renters are lacking confidence to buy and get into the property market. Last September, renters suffered the mid-year rent rise and many vendors withdrew properties from sale to rent them out instead. The rent increase was surprisingly increased across the entire metropolitan area. Based on the REIWA,  there was a 6% jump in new rental leases over 3rd Quarter of this year, 20% fall for the strength of demand has the properties available for lease. According to REIWA President David Airey, “the falling stock level has seen the preliminary vacancy rate drop by 0.6 of a percent from 3.4 percent in the June quarter to 2.8 percent in the September quarter. WA property market, after every low, there is always high. Keep our sights set on a better time in the future and stay focused in investing in the real estate market.

 

 

Will house prices Fall or Rise?

by Administrator 29. October 2011 18:25

People in Western Australia are very positive that in house sales will be continuing going strong. Perth transaction sales increased 6% over the last week to 1,026 and it maintained the strengthening trend that started last September. Despite of the high house sales, will house price sales fall or rise?

The Australia and New Zealand Bank (ANZ) with collaboration of Prophell house, "They overall see that prices are settling in most markets and remaining stable in 2012. They are still assuming that there will be no great change in Interest rate even though some markets are rising and others are falling. This view helps to suggests useful reductions in interest rate and lift prices. The ANZ said, “House prices will continue to drift lower over the New Year as increased caution about borrowing takes its toll on home sales.” The ANZ economist Dylan Eades said, “The bank projected that a shortage of available houses and a tight rental market would keep dramatic price falls in check. The same structural shortage of houses will put pressure on the rental market, improving rental yields in a trend that will eventually induce more investors and first home buyers into the market “after” they have tracked sideways and lower for at least a year.” Despite the shortage of housing, house prices unstable and Interest Rate will go up and down, we should something to bear in mind over the next decade, we will have good reason to changed the market.

Is the Market ready for a Rate Cut?

by Joy Manginsay 27. October 2011 19:02

An interest rate cut is eagerly anticipated by business owners and investors as it will lower their borrowing costs. Is this the answer of all the problems that we're waiting for?

The Reserve Bank of Australia could have cue cards on their hands about the interest rate cut with the inflation forecast. The RBA has an inflation target to 2-3% and consumer prices rose 0.6% during the July-September period. According to CommSec economist, Craig James, “If the European Summit is enable to provide a definite solution to the sovereign debt crisis, then it looking likely that Reserve Bank will move to shore up confidence and provide stimulus by cutting rates by 25 basis points on Melbourne Cup Day.” The Melbourne Cup is stated on Nov. 1 and maybe this influenced RBA for looking straight the interest rate cut and helped them decide. Apart of the statement of Mr. Andrew Robb, an opposition Finance Spokesman, “Any reduction in Interest rates next week would give some welcome relief to households feeling the strain of mortgage stress and the many businesses struggling in a two-speed economy.” Many investors, business groups and industry groups believe that there is an interest cut rate next month and predicting to have continuous cut rate and Australian dollar could lose yields for investors if interest rate will cut.

Perth House Prices May Rise

by Administrator 26. October 2011 19:21

Perth is very sensitive to property price rise and the Interest rate as well and WA property prices will rise and it’s getting better. QBE Leader’s Mortgage Insurance (QBE LMI), which supports lenders, last forecast price growth of up to 20% in Perth and Sydney as business and consumer confidence improves. Property prices in Perth reveals the biggest declines in Australia as an oversupply of homes and a “two-speed economy”. According to Paul Braddick, Senior Economist at ANZ, Western Australia’s “economy itself seems to be moving ahead very strongly, getting back towards the boom-type conditions in the resources sector.” ANZ and REIWA forecasted that Perth home values are likely to be little change for most of this year before bouncing back in 2012 with 20% price growth. According to a major mortgage insurer said, “Stable interest rates and improving economic will drive rising house prices in the next 3 years with Perth and Sydney. One of the reasons why house price has risen because of lack of supply of housing caused by mining boom. In contrast of the housing market, where it becomes a buyer’s market and price may have considerable price. According to the RP Data Rismark figures, Perth’s apartment rental yields of 4.3%, the second lowest in the nation after Melbourne. Perth expects to boom in draw resources and it remains the accommodation of the mining industry resources.


Perth CBD Rentals driven by mining demand

by Administrator 25. October 2011 18:47

Commenting on the Perth CBD Rental market, according to MLG Realty Chief Executive Marcus Gilmore, “Mining companies now held at 56% of the CBD leasing market, up from 45% last month, with many properties rented within an hour of hitting the market”. The result for the multi-speed economy especially the mining sector is very influential in housing market. The resource driven markets makes to have high demand, improved demand for rental and capital gain which many investors wants to invest and attract them to start a business. The median house price of Pilbara’s Port Hedland is $775,000 and rentals yields to 13% which considered as top the list of percentage with the benchmark. Mr. Gilmore said, a two-bedroom furnished apartment would rent for between $700 and $750 per week and He’s forecasted for the similar increase in CBD rents to Karratha and Port Hedland. HouseSmart Real Estate suggests that Perth property investors should consider adding some inner-city apartments to their portfolio.

NRAS PROPERTIES IN PILBARA

by Joy Manginsay 24. October 2011 20:16

Investment group Questus will build 920 Pilbara homes under the National Affordability Rental Scheme. The Pilbara is still moving forward with major investment to increase production. The crashed up companies, tighter vacancy rates and an undersupply would push rents up to Pilbara levels.This is the first time that Pilbara set up the record every week, with rentals being leased $950 per work and almost 1000 “affordable” homes will be built in Pilbara. Pilbara has at least 20% below market cost compared other states with high-rent mining towns. In apartment in Pilbara has $1000 a week was a cheaper compared to hold accommodation. According to former Questus Manager MP Alannah MacTiernnan, the company’s housing designs made the scheme effective in the Pilbara for the first time”. Because of this scheme in which investment group Questus will build 920 Pilbara homes under the National Affordability Rental Scheme. The homes are rented in reduced rate in returned for annual tax-free subsidy of $10,000 to the landlord. In this case, the employee will still be better off than if they were paid a higher salary and tenants must be on a low or moderate income.

 

WA: THE NATION'S STRONGEST ECONOMY

by Joy Manginsay 22. October 2011 19:22

According to the latest quarterly report by CommSec, “Western Australia leads the nation in overall economic growth and is strong in retail spending, construction work and population growth. WA is clearly the nation’s strongest economy, underpinned by Asian demand for mining resources”. Because of the rapid expansion in the resources sector has put WA “head and shoulders above” and WA has the lowest unemployment rate.

Western Australian’s Economy is judged as the strongest in the nation because of the continued strength in the mining and engineering sectors, soft job market, and WA has done everything to secure the best-performing state. There is still hope with the state should grow and more developed, more benefited in coming months particularly in high population and firm home lending. It is the start that all business will grow and more people will visit and stay in WA to make the Property market rise.

Rent expectations for office and residential markets

by Joy Manginsay 21. October 2011 18:30

In the world of challenging economic times, capital value and rental expectations for offices were back down in all states. According to National Australia Bank (NAB), rental incentive are still seen as key feature of the office property leasing market in all states bar WA. Rental incentives are now identified as “significant” in all commercial property markets. NAB forecast, by September 2013, all commercial property sectors are expected to record positive rental growth. September 2011 was reported as the weaker condition in the market and industrial property was the only sector that reported strong condition. “Positive growth is set to resume   next year with expectations for capital values and rents over the next 1-2 years strongest in WA and Victoria, NAB said. There is a hope for the local retail sector; WA will lead the nations in terms of rental expectations.

In the residential sector, even though the property market moved back, many are eager to become reliant on public housing. However, according to Professor Gavin Wood, Director of the RMIT Research Centre of the Australia Housing and Urban Research Institute “Australia has a healthy private rental market. The relative ease to renting in Australia might also be a factor in the low mortgage default rates. People sell up before it gets to that point. In housing house prices, we may establishing an income-tested housing allowance that could go to struggling home owners as well as renters, and abolishing subsidies for first-home buyers.

 

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WA IDENTIFIED AS STRONGEST MARKET: NAB SURVEY

by Joy Manginsay 20. October 2011 19:25

The National Australia Bank (NAB) survey for September 2011 period provides very interesting milieu. NAB “Quarterly Australian Commercial Property Survey” reveals that retail property vacancy rates rose to 5.5% in the September 2011 quarter. Vacancy rates for office and industrial assets fell to 6.9% and 5.8% respectively. Hotel property was the best commercial property sector during the quarter. According to a leading property survey, Victoria is now a powerhouse of the nation’s commercial property sector within two years and it is expected to be overtaken by Victoria as the strongest market by September 2013.

Despite a softening in the pace of recovery, there are signs that vacancy rates will fall over the coming two years. The industrial market is expected to have strong recovery in 2012 and NAB Industrial Property forecast to increase +38 by September 2012 and +53 by September 2013 which sees it as one of the strongest performers. The report said “Western Australia continues to be identified as the strongest market. WA is expected to significantly out perform the other states and the national average, with prices rising by 3.4%, while Victoria is the  only state expected to record negative price grow (-2.1%)." House prices in WA have rising slightly with improving conditions expected to lift the local values.The report is optimistic with strong impact on global markets.

Commercial Property Survey _September 2011_.pdf (475.03 kb)

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Equity levels in Perth Property Market

by Administrator 19. October 2011 18:29

Despite of the Property prices dropping recently the figure sales volume has increased 1% in September which is good inflow for property market. A new report reveals WA’s property recession has caused a spike in the number of homes falling onto negative equity with about one in 20 now worth less than their purchase price. The RP Data annual equity Report shows, Perth has the second highest number of homes with negative equity (4.9%) all over Australia and is home to five of the 10 regions with the highest rates in the country.

However, based on the official Landgate figures, Perth Property market recorded its first positive sign that things were moving up in August with 28% increase in sales compared to the month before. Even though Perth has negative equity but still it is a good sign for the Perth property market because there is still plenty of equity out there. This is a reminder to invest for a long term because in the long run with negative equity will fade out as the market improves.


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