Australian Banks Say Interest Rates Will Hold For Now

February 17, 2012 By Leave a Comment

Australian banks say interest rates will hold for now.

In a surprising announcement Australian banks say interest rates will hold for now. Many experts believed there would be another rate cut this month to boost the mortgage and housing market but the RBA has decided to hold steady for now.

Australian Banks Say Interest Rates Will Hold For Now

BusinessDay reporter Chris Zappone looks at the key factors behind the Reserve Bank’s decision to leave the interest rate at 4.25 per cent.

Australian borrowers will have to wait at least another month for more interest rate relief after the Reserve Bank surprised pundits by leaving its key rate unchanged.

The Reserve Bank today kept its cash rate at 4.25 per cent, defying expectations of a third rate cut in a row – just three of 27 economists polled by Bloomberg predicted the result.

The dollar rocketed on the news, jumping about one US cent to $US1.081 – a six-month high – within minutes of the announcement before easing back to $US1.078 in recent trading It also touched fresh records against the euro and hit a 27 year-high against the pound. Shares, though, fell.

RBA chief Glenn Stevens leaves rates on hold for now. “It’s a pretty big surprise,” said Market Economics managing director Stephen Koukoulas. “They were obviously very close to cutting interest rates and decided not to.

“They put a huge amount of weight on what’s happening in the mining sector by the looks of this,” he said. “So we’ll see whether it’s mining versus the rest of the economy – who wins out?”

The winners today include deposit holders, who can expect to retain their current interest income streams for a bit longer.

“The RBA decision to leave rates on hold reflects their assessment that the two recent rate cuts are already providing some stimulus, while the improving global economic outlook in recent months, particularly in the US economy, as well as signs that the Chinese economy will achieve a soft landing in 2012,” he said.

“The RBA will also be mindful of the very large capital expenditure in the resources sector still to come over 2012-2013, which also has the potential to create inflationary pressures in some segments of the economy.”

Interest rate futures, meanwhile, shifted gear after the RBA’s announcement. Investors are now only pricing in two rate cuts of 25 basis points over the next 12 months – about half the the level they expected only a few days ago, according to investment bank Credit Suisse.

 

What Other Experts Had to Say About Interest Rates In Australia…

A leading bank analyst says it is only a matter of time before the remaining two banks follow ANZ’s decision to raise interest rates independently of the Reserve Bank.

Despite the RBA keeping rates on hold on Tuesday, ANZ lifted its standard variable home loan interest rate by 0.06 per cent yesterday afternoon, and within hours Westpac moved as well, lifting its rates by 0.1 per cent.

The hikes mean ANZ’s average borrower will pay $13 extra in monthly repayments, while Westpac customers will pay $16 more.

The other big banks are yet to say if they will follow suit but Brian Johnson, from brokerage firm CLSA, says it is inevitable.

“I think it’s inevitable that you’ll see the other banks follow very quickly,” he said.

“If you look at the current kind of pricing that the other banks are running, with the exception of Westpac who price at a premium, the returns on equity that the other banks are getting on housing don’t match their cost of capital.”

Mr Johnson says he believes the small rise will hurt home owners, and while the increases may not appear to be significant they are only the start.

“The clear danger is that we know households in Australia have more debt than they’ve ever had in history,” he said.

“And we do know it’s more an indication that regardless of what the Reserve Bank does with the cash rate, we’re going to continue to more than likely see the housing rate move out of sync.

“So I think it is more an indication of some caution for borrowers going forward.”

Click here to read more…

Australian banks say interest rates will hold for now yet some think that decision is not going to last long and soon there will be rate hikes. Other experts say perhaps in a few months the banks will offer that rate cut that was expected this month. This is the ongoing guessing game we play.

 

 

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Tips for Real Estate Shopping In Australia

February 15, 2012 By Leave a Comment

Tips for Real Estate Shopping in Australia

This is an example of a home buyer who learned the hard way that buying a house requires intense research. It’s usually a good idea to go slowly and if you don’t know the area you are buying in, you must invest the time to learn as much as you can before you enter into the biggest purchase of your life. Follow these tips for real estate shopping in Australia found on Australia 101. 

Tips for Real Estate Shopping in Australia

When I first came to Australia from England back in 1988, I couldn’t wait to get into my own house. I had never been to Australia before, and migrated without ever having seen the place. This meant I had a bunch of pre-conceived ideas based on what I had read and seen on the TV. Many of these were wrong.

I stayed with friends on the south side of Brisbane for the first six weeks. Within the first two weeks I found employment and a house.

It was a three bedroom low set brick house, (bungalow), on a quarter of an acre with a swimming pool & gum trees in the back yard. There was plenty of car accommodation, and it was about 25km south of Brisbane, in an almost rural setting. (Today, that same area, Browns Plains, is absolutely crammed with housing and a huge shopping centre).

Once I saw the house and surroundings, I knew I had to buy it. I put in an offer of $84,000, and it was accepted. Within 30 days I had moved in. To my British background, and experience of living & growing up in south London, this place seemed like the Ponderosa. Admittedly it needed a bit of work, (total redecoration, new kitchen, pavers around the pool, a new liner for the pool), but I thought I was a bargain. How wrong I was.

Don’t rush into anything! It is much better to put time & effort into research, than to make a snap decision that you may regret for years!

I lived in that house for five years, spent nearly $30,000 on it, and finally sold it for $110,000. You do the math. Not the most fruitful investment one could have made! Having experienced the relentless growth of the UK housing market, (I left before it crashed), I expected a similar deal from Browns Plains.

At that time, the Brisbane housing market was stagnant. I couldn’t have made a worse decision. What I should have done was rent a place. If I had done this, I would have got to know Brisbane & its suburbs before making a purchase decision.

It can be tempting to rush in and buy something that looks like a bargain. Even if you have been to Australia before, and feel you have a good grasp of the housing market, think twice before signing that contract.

Do your homework:

  • Research the area and type of property you are interested in on the Internet. (See links below to get you started).
  • Find out what has sold in the area, and how much for. (Most real estate agents will help with this & you can visitwww.onthehouse.com.au & propertyvalue.com.
  • Go to the area. Get a feel for the demographics & socio economic cross section of the place.
  • Look at the types of house and the condition of them.
  • Are there a lot of renovations in progress? (This is a good sign and normally means other people think the area is worth investing in).
  • What facilities are there in the area? (Schools, transport, shops, sports centres etc).
  • Talk to the local police and ask about crime rates in the area.
  • Talk to an insurance company to find out what sort of risk they think the area is.
  • Check what data the Australian Bureau of Statistics (ABS) have on the area & the local housing market.

Where I Should Have Bought

The next house I bought was in the Bayside suburb of Manly, about 20km east of Brisbane. This is where I should have bought in the first place. A good rule of thumb is to buy anything you can, as close to the water as possible. This equation has worked very well for me over the years.

The main message I hope to convey here, is don’t rush into anything! It is much better to put time & effort into research, than to make a snap decision that you may regret for years.

These are great tips for real estate shopping in Australia but when you decide you are ready to buy a home you also need to have a list of your “must haves”. Chances are you really won’t find a “perfect” home. What are your deal breakers? What are you willing to compromise on?

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What are the Risks Involved with Rent to Own Deals?

February 14, 2012 By Leave a Comment

What are the risks involved with rent to own deals?

What are the risks involved with rent to own deals? Rent to own agreements are sometimes considered unfair to the buyers. Because of the structure of the deal, the buyer may pay a higher purchase price. In addition there is a risk of losing the money paid towards the down payment each month if the sale does not go through. Although this article found on Renters Insurance is not specific to Australia it does give the consumer a very clear picture of how rent to own actually works.

What are the Risks Involved with Rent to Own Deals?

A small percentage of houses for sale or rent are offered with a rent to own option. In a typical rent to own contract, you will agree upon a purchase price and timeframe for closing the purchase with the landlord seller. In addition, you will pay an agreed upon monthly rent, just like any property you would lease. However, in a rent to own situation, the monthly rent you pay will typically be an amount above the fair market rent for the unit you are renting. The amount that is above the fair market rent is usually held by the landlord and used as your downpayment when you purchase the property.

For example, the market rent may be $1,200 for the property you are moving into, but the landlord may offer a rent to own option where you pay $1,600 per month in rent instead. That additional $400 per month is held by the owner and adds up towards your downpayment on the purchase of the property. Let’s say 12 months go by and your downpayment balance with the landlord is up to $4,800. This means that if you eventually buy the property, that $4,800 will be credited to you when you close escrow on your purchase.

However, if you decide not to purchase the property after initially opting for the rent to own option, or cannot obtain financing to purchase it later, you would most likely lose your $4,800 balance when you vacate the property. That is the risk you must understand, as you lose that money if you decide to not purchase for any reason.

These agreements, though, can be structured in any form or fashion, so there is a chance that you might get your $4,800 back if the seller agreed to this in the original rent to own arrangement. Make sure you fully read and understand the terms of the contract if you are going to contemplate one of these, and use an experienced real estate professional and lawyer to help you negotiate a fair contract with the seller.

To read more of this original article click here

Every financial deal has risks and real estate is no different. I also agree that buyers and sellers should discuss every detail with an attorney and make sure you understand the risks involved with rent to own deals. Once you understand what rent to own really involves you can feel more comfortable moving forward. The good thing is that each contract is unique in that the buyer and seller can negotiate the terms of the agreement and make it work fairly for both of them.

 

 

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Lower Rates For Homeowners Gives the Economy a Boost

February 13, 2012 By Leave a Comment

Lower rates for Australian homeowners gives the economy a boost by leaving more money in consumers bank accounts for personal spending. See just how much extra income the recent rate cuts has provided in this selection from an article found on International News written by Wayne Swan.

Lower Rates For Homeowners Gives the Economy a Boost

Lower Rates For Homeowners Gives the Economy a Boost

As we all know, mortgage repayments are the biggest strain on many household budgets. That’s why the reductions in interest rates since Labor came to government have delivered so much relief. Based on standard variable interest rates, a family with a $300,000 mortgage is now paying around $250 a month or $3,000 a year less in mortgage repayments than they were four years ago. For one family, that extra cash in the pocket is obviously a big help.

When you look at it on a wider scale, you also see the benefits that flow across the entire economy. For instance, Treasury estimates the decline in interest rates since Labor came to government means the total mortgage repayment bill for Australian households has been cut by around half a billion dollars a month. Think about that – that’s half a billion dollars more in the pockets of Australians each month. That’s more money that can be spent in Australian businesses, which in turn supports jobs.

The official cash rate, the main benchmark off which most interest rates in our economy are set, is determined by the Reserve Bank. After back-to-back cuts in November and December, the cash rate is now at 4.25 per cent, down from 6.75 per cent when the previous government left office. As always, there’ll be plenty of attention when the Reserve Bank Board meets this week. Its decisions are independent of government, as they should be. I don’t speculate on them – the Board will release a statement on Tuesday with the reasons for its decision.

What the Government can do, however, is continue our disciplined budget policy to make sure we’re not putting extra price pressures into the economy. Our strong fiscal credentials are critical in these uncertain times and for the first time in Australia’s history we’ve received the gold-plated AAA-rating from all three global ratings agencies – something never achieved by the previous government. The Reserve Bank has recognised our strict budget policy on many occasions and said it has room to cut interest rates further if it thinks that’s necessary.

Even though lower rates for homeowners gives the economy a boost, the Reserve Bank has made the decision to hold off on another cut right now. The thinking is that there has been enough stimulation to the economy in recent months and other global indicators seem to be showing some positive movement as well, so the best course of action for now is not to raise or lower interest rates.

 

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First Home Buyers In Australia Went For the Rate Cut

February 2, 2012 By Leave a Comment

First home buyers in Australia went for the rate cut.

First home buyers in Australia went for the rate cut and boosted home sales in November 2011. We hope to see an even bigger boost this spring when rates are expected to be cut again.

First Home Buyers in Australia Went for The Rate Cut

Australia reported that home loan approvals rose in November as the Reserve Bank of Australia delivered its first rate cut in 2011. Loans for houses and apartments rose 1.4%, beating analyst expectations of a 1% growth. First time home buyers rushed into buy homes and the report shows that they accounted for 20% of home loans in November.

The report showed that the lending to owner occupied homes rose 2.2% and that lending to investors rose 1.8%. The Reserve Bank of Australia was concerned about the inventory of unsold homes and general construction activity amid a crisis in Europe. This prompted the RBA to cut rates by 25 basis points in November and another 25 basis points in December. Soon after the RBA decision, banks in Australia cut rates on home loans.

While the rate cuts helped boost home sales as intended, we are yet to still see positive effects in the labor markets. According to a survey on job ads conducted by the ANZ bank, job ads fell 0.9% in December. In November, the survey posted a 0.1% rise in job ads. On an annualized basis, ads were down 2.6% making it a worrisome trend.

The Australian government will release the official employment report later this week which will shed further light on the labor market. Most market participants expect the RBA to deliver another rate cut at the February policy meeting to boost the economy.

Click here to read the original article

I wonder if another rate cut have the same uplifting effect on the housing market? We will only find out if the banks decide to pass it along to the consumers. First home buyers in Australia went for the rate cut last time and they would go for it again.

 

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No Federal Tax Grants for Foreign Real Estate Investors in Australia

January 31, 2012 By Leave a Comment

No federal tax grants for foreign real estate investors in Australia

There are no federal tax grants for foreign real estate investors in Australia, in spite of advertisements geared towards Malaysian investors that claim they are available. Read what this article appearing in the Herald Sun has to say on the subject.

No Federal Tax Grants for Foreign Real Estate Investors in Australia

The Federal Opposition has called for a crackdown on potential rorters after revelations new-home grants are being offered to Malaysian buyers whose adult children are permanent residents.

An advertisement that appears in Malaysian newspaper the New Straits Times, spruiks properties in Whittlesea as an “exclusive release to Kuala Lumpur”, adding: “Hurry get the AUD $13,000 Australian Government Grant.”

The $13,000 First Home Bonus is given on top of the $7000 First Home Owner Grant and both are only available in Victoria to Australian citizens and permanent residents.

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Monica Quaresima, from Lloyd Meridian Legal in Melbourne, said foreign parents would typically buy the homes for their children living in Australia as gifts.

“If they want to purchase the property and their children actually reside down here, (then) they’re buying it for their children, under their children’s names for them to keep,” Ms Quaresima said.

But she stressed most applicants were ineligible for various reasons.

Despite this, the ad targets investors with seminars on “What foreign investors need to know”.

Under state law, foreign investors may buy new homes, but cannot apply for government grants.

Jamie Briggs, Opposition spokesman for government waste, said the Government had to ensure the scheme was not abused.

“It’s a scheme funded by Australian taxpayers for the benefit of Australian residents, and clearly the Government has to keep a close eye on it to ensure it isn’t abused,” Mr Briggs said.

Planning Backlash convener Mary Drost said foreign buyers were exploiting a legal loophole.

“The Government, I’m sure when they started, they were trying to help the young people of Australia to be able to buy a house,” Ms Drost said.

State Revenue Office spokesman Darren Joyce said there were strict requirements for the grant.

“You do have to move in to the property as your principal place of residence for a consecutive six months, starting within 12 months,” Mr Joyce said.

Minister for Housing Robert McClelland said if an applicant proved they were a permanent resident and satisfied all criteria, they were entitled to the grant.

The law is clear, there are no federal tax grants for foreign real estate investors in Australia. If the government is allowing foreign investors to exploit a loophole, that is unfair to all Australian taxpayers whose taxes support those federal grants.

 

 

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What Does It Take to Become A Real Estate Agent in Australia?

January 30, 2012 By Leave a Comment

What does it take to become a real estate agent in Australia?

What does it take to become a real estate agent in Australia? Buying a home is a big deal, which is why a real estate agent is usually recommended for such a complex and expensive project. We depend on real estate agents to help us in many ways.

We expect them to be knowledgeable on all real estate issues and know the housing and rental markets well enough to advise us were to look for the homes in our price range. Financing is another area that we expect a real estate agent to have basic knowledge of. Where to go, how to apply, what are banks looking for? These are just a few of the common questions for agents.

What Does it Take to Become a Real Estate Agent in Australia?

The real estate agent (affordable housing) licence allows you to:

rent out houses or units that operate under a affordable housing rental scheme sanctioned by the Department of Housing

collect rent

operate a trust account for trust monies received.

Eligibility

To be eligible for a real estate agent licence (affordable housing), you must:

  • be 18 years or over
  • be a suitable person
  • have at least one place of business in Queensland
  • have completed the required training units through a registered training organisation.

An individual is considered suitable if they:

  • are not bankrupt
  • have not been convicted in the previous five years of a serious offence which is punishable by 3 or more years imprisonment, such as:
    • fraud and dishonesty
    • drug trafficking
    • extortion
    • arson
    • unlawful stalking
    • violence or the threat of using violence
    • any offence of a sexual nature

     

  • are not disqualified from holding a licence or registration certificate
  • are not recorded in the register of disqualified company directors under the Corporations Act 2001.

If you are not an Australian citizen, you need to provide an international passport to complete the check on your working visa. Your visa must state that you can work in Australia. You must also provide written advice from the Department of Immigration and Citizenship to explain any conditions on your visa.

Training requirements

To qualify for this licence you must complete these subjects from the industry-recognised Property Development and Management Training Package:

  • PRDRE28A Maintain trust account
  • PRDRE37A Perform and record property management activities and transactions.

Alternatively, you can complete these three units from the Property Services Training Package (CPP07) endorsed by the National Quality Council:

  • CPPDSM3008A Maintain and protect condition of managed properties
  • CPPDSM4006A Establish and manage agency trust accounts
  • CPPDSM4016A Monitor and manage lease or tenancy agreement.

Registered training organisations

For information on courses and training providers in Queensland, contact the National Training Information Service.

Applying for a licence

To apply for a real estate agent (affordable housing) licence:

  • meet the eligibility criteria
  • complete the training requirements and attach proof of qualifications
  • complete PAMD Form 1-1 and notes – Application for individual licence (PDF, 624 KB)
  • provide originals or certified copies of your birth certificate, birth extract, passport, Australian citizenship certificate or drivers licence (see below for advice on getting certified copies)
  • pay the licence fee of $1124.50 for one year or $2105.85 for three years
  • pay the criminal history check fee of $35.90
  • lodge the application (see the application form for lodgement details).

 Criminal history checks

Applicants must undergo a criminal history check to confirm their suitability.

The criminal history check costs $35.90 (which includes $1.13 GST) for each person who appears on the application form. The fee applies to all applications and renewal notices.

Processing time

Processing time is 4-6 weeks. However, it can take longer if we need to contact you for missing information or fees.

The processing time may be up to six weeks because the criminal history check process, handled by the Queensland Police Service, is thorough and time consuming.

Send certified documents

Take the original document and a copy to a Justice of the Peace, Commissioner for Declarations, solicitor, barrister or a Notary Public. They will stamp and/or sign the copy and write ´This is a true copy of the original document´.

The Department of Justice and Attorney-General has a list of JPs in your area. Otherwise, contact your local post office, courthouse, bank, shopping centre manager or pharmacy who may be able to advise on the location of local JPs.

Please note that a photocopy is not a certified document.

It is also helpful if a real estate agent understands people as well as the rules of the industry. People are funny, especially when it comes to their money. Successful agents understand how to listen to what home buyers are telling them and know how to work with people to guide them in the best possible choice for them. Some think the job of real estate agent is an easy one. I am here to say,  it is not. It is rewarding to help people find their dream home and to be a part of assisting families with choosing where they will raise their kids.

I think this information from the Queensland Government answers the basic question “What does it take to become a real estate agent in Austria?’ However, additional people skills are not listed there and they are a very important key for a successful real estate agent.

Click here to read source document

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Australians Renovating Existing Homes to Add Value

January 25, 2012 By Leave a Comment

Benefits of Renovating a home in Australia

Like so many people in other countries Australians are having trouble qualifying for mortgages and other financing issues. This is leading to more Australians renovating existing homes to add value. Based on the The article I came across on the Property Oz , there are definitely some sound benefits to renovating a home in Australia.

Australians Renovating Existing Homes to Add Value

 Adelaide’s renovation market is set to skyrocket with Scott Salisbury Homes experiencing a 70% increase in renovations and additions over the past two years, leading to more anticipated growth in the next 12 months.

More people are opting to renovate their existing house, as they like the location, lifestyle, or history associated with it. Scott Salisbury Homes General Manager, Chris Schutze says, “These people have decided they love where they live and want to do more than just add space, they want us to come up with a design that really works for them.”

“In the past some people have underestimated what can be achieved through well executed renovations and additions. Through careful client collaboration and design, extensions and renovations produce great results.”

“Adding on a room can be very affordable, and people often want to enhance and update aspects of their current home, without losing the original character.”

After falling 5% in 2010/11 the renovation market in Adelaide is expected to bounce back to $2.1 billion in 2011/12 (HIA Housing Forecast August 2011).

With many Adelaide homes built in the ‘50s and ‘60s consisting of outdated and now less practical designs, people now want to live in more modern surroundings, with open-plan living that is both practical and aesthetically appealing.

Chris says, “Busy people and families don’t have the time and energy for DIY renovations, therefore they’re choosing to source a reliable builder that looks after the entire process, from design to completion.”

“We commonly see people wanting to remove an old lean-to structure, to replace it with an airy modern and functional space. They come to us seeking advice to assess how to make the space work.”

The ever popular trend in renovations is integrating indoor and outdoor entertaining and living areas, often around a totally redesigned kitchen, as well as the increasingly popular parents retreat, consisting of an open bedroom, with lounge area, walk in robe, and ensuite.

Whilst the increase of renovations is significant, Scott Salisbury Homes are still experiencing a high level of growth in the new home division, with income through residential developments increasing by 38% in the past year.

What people want and what they can afford are often very different things. Many families want a new luxury home with extra rooms and a home theater but can’t afford to get all that brand new.  So as a compromise Australians are renovating existing homes to add value. A well done renovation does several things for you as a homeowner.

  • Increased value
  • usually saves you money in the long run on utilities (better quality materials,fixtures,appliances,lighting etc.)
  • personal choices included in design
  • Live longer in the home and get more equity
  • You get to enjoy all the beautiful new appliances
  • You don’t have to move to a new home or town (unless you want to)

 

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Will Australians Borrow From Japanese Lenders For a Dream Home?

January 24, 2012 By Leave a Comment

Will Australians borrow from Japanese Lenders for a dream house?

It seems several of the Australian banks are unwilling to pass on future rate cuts for home buyers. The Japanese banks have indicated that they will pass along the savings when interest rates go down. The next question is will Australians borrow from Japanese lenders for a dream home?

 Concerns are that up to 10% of the Australians applying for mortgages will take their business to Japanese banks where the rates are lower. That’s a $100 billion dollar chunk of the home loan market in Australia. The article Of course the Japanese are quite interested in this opportunity. John Rolfe writing for the Adelaide Now had this to say on the issue.

Will Australians Borrow From Japanese Lenders for a Dream Home?

JAPANESE banks could snatch $100 billion of the Australian home loan market by undercutting local lenders that fail to pass on rate cuts. At least three big banks, the $62 billion Mitsubishi UFJ Financial Group, $42 billion Sumitomo Mitsui Financial Group and $35 billion Mizuho Financial Group, are said to be considering opening here.

The arrival of those giants would be good for homebuyers, with Australia’s big four banks hinting they will not pass on an expected Reserve Bank 0.25 percentage point rate cut early next month and others likely to follow.

They blame the rising cost of funds in world debt markets spooked by eurozone woes. Finding funding is less of a problem for Japanese lenders as they have mountains of inexpensive deposits at the ready courtesy of their country’s savings culture.

“The Japanese banks could take 5 to 10 per cent market share away from the Australian banks quite quickly,” said Mark Bouris, head of non-bank lender Yellow Brick Road and a member of Treasurer Wayne Swan’s Financial Sector Advisory Council.

“It is what our marketplace needs.”

To get 10 per cent of the local mortgage market, the Japanese would need to write more than $100 billion worth of home loans, as the domestic mortgage sector totals $1.06 trillion, the latest Australian Prudential Regulatory Authority data reveals.

A new report by Deloitte Access Economics, one of the nation’s top teams of economic analysts, nominates the well-resourced Japanese banks as the most significant threat to Australia’s finance giants after Europe’s debt mess.

“With the eurozone crisis also haunting the horizon and rumours of Japanese competition in mortgage markets, 2012 may be a tough year for the finance sector,” its Business Outlook report, published today, warns.

Our mortgage market “ticks all the boxes” for Japanese banks, said Mr Bouris.

With Aussie Home Loan’s John Symond, he spearheaded the last significant challenge to the big banks.

Australia offered stability, growth, diversification and healthy returns, with lending margins of about 2.5 per cent.

“That level of yield is unbelievably good for Japanese banks,” Mr Bouris said. “It’s quite a compelling argument why they would look at the Australian mortgage market.”

Japanese banks might set up mainly online operations, like those of ING; wholesale like Mr Bouris’s Yellow Brick Road; or use a broker, such as Aussie.

Owning a home is a big deal and so often lately it feels so out of reach for many people. I think it is likely that for some the savings from the rate cuts could be enough to change a hope into a reality. I am curious, will Australians borrow form Japanese lenders for a dream home? Japanese banks willing to pass along the savings are doing exactly what needs to be done. Stimulate the economy. Sell more houses, put more people back to work and boost the housing market at the same time.

 

 

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Higher Rents In Store For Australian Housing Market

January 22, 2012 By Leave a Comment

Higher Rents In Store For Australian Housing Market

Higher rents are in store for Australian housing market, nearly crippling consumers ability to find affordable housing anywhere. What are you supposed to do if you can’t afford to buy a home and you are priced out of affordable rentals too? Live with Mum and Dad?

Higher Rents are in Store for Australian Housing Market

LANDLORDS are cashing in on Australia’s ruinous housing affordability and buyer caution, with median rents hitting record highs.

Darwin and Sydney rounded out the top two most expensive cities with median rents of $505 and $480 a week each, compared with the national average of $411 a week, according to an Australian Property Monitors report.

The data for the September quarter shows rents for houses rose to record highs in Sydney and Canberra clocking a median of $500 per week, and similarly in Perth to $400 and $380 in Brisbane.

See Photos of what these rents will get you…

For the year, housing rents in Canberra rose 6.4 per cent, in Perth 5.3 per cent and Sydney 4.2 per cent.

Darwin outstripped Sydney as the most expensive city to rent a house. The Top End’s capital costs tenants $550 a week for a housing rental – $50 more than Sydney and $140 higher than Melbourne.

And the average rent for a Darwin unit is $460 – sharing top spot with Sydney.

APM senior economist Andrew Wilson said the sky-high rents reflected a lack of housing supply and showed that landlords were cashing in on people’s reluctance to buy property because of the global economic uncertainty.

“Increasing competition for properties, particularly from homebuyers unable or unwilling to enter the property market, has resulted in rising rental prices,” Dr Wilson said.

“After flat results over the previous two quarters, landlords have capitalised on the high competition in the marketplace, and are charging a premium for their properties.”

Unit rents continued to rise over the three months to December across all capital cities except Melbourne and Perth, which were flat for the quarter.

Nationwide house rents were up 1.7 per cent over the year, while rents on units outpaced houses, rising 4.1 per cent for the year.

Dr Wilson said higher rental increases for units compared to houses reflected a growing lifestyle choice for more affordable inner-city dwellings close to infrastructure.

In Melbourne, rents on houses were flat over the three months to December and fell 1.4 per cent last year.

Also dropping were rents on Hobart houses, which were flat over the quarter and fell 3 per cent over the year.

Adelaide’s rental market picked up during the last three months of the year, with median rents on houses rising 1.5 per cent to $340.

The real problem as I see it is the lack of employment. If you’ve got income then these prices, while high enough are not out of reach. But many people who are out of work or have been out of work are taking lower paying jobs and shortening the budget so higher rents in store for Australian housing market won’t help anyone but the landlords. Many people are looking into a rent to buy agreement since they’ll be paying higher rents anyway why not eventually own the property?

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