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Real Estate market insights from Australia’s leading property data and analytics provider

3 June 2011

Within the major regional centres of the country house values have in some instances recorded some substantial falls while other regions have continued to perform comparatively well.

The Hunter and Illwarra regions of New South Wales, directly adjacent to Sydney, have each recorded positive value growth over the last 12 months. Median house values have increased by 2.2% in the Hunter region over the past 12 months and values have increased by 3.6% in Illawarra. As far as major regional markets go these two have been the standout performers.


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The minutes of the Reserve Bank’s board meeting on March 1 gave no indication that another interest rate rise was imminent.

Key to this decision was a steady outlook for economic growth and inflation, aside from the transitory effects of wild weather, which would boost inflation and depress growth over the December and March quarters before having the opposite effects later in 2011.

Much of the discussion of domestic conditions was around the effect of the floods and Cyclone Yasi, but the minutes reiterated the RBA’s determination not to be distracted by these short-term effects.

‘‘Members confirmed that the board’s approach would be to look through temporary effects caused by extreme weather events and to continue to set monetary policy based on the medium term outlook for growth and inflation.’’

With the unemployment rate already at a low five per cent and the RBA’s latest official forecasts already showing inflation heading to the top of the target range over the coming two years, the main risk for the future is still rising inflation rather than slowing growth.

Accordingly, the odds still favour another increase or two in the cash rate from the current 4.75 per cent.

Still, the minutes show no sign the RBA is contemplating such a move in the next few months.

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Intensified competition between the majors has done little to stimulate buyer interest, new research has found.

According to data from the Australian Bureau of Statistics, the number of loans granted to build or buy houses and apartments dropped for the first time in seven months, falling 4.5 per cent from December.

ANZ economist David Cannington said the drop in demand can be largely attributed to the spate of natural disasters earlier this year.

Demand for loans in Queensland plunged 16 per cent as the state was devastated by floods and cyclone Yasi.

“The initial impact of the recent floods weakened housing finance activity,” Mr Cannington, wrote in a report.

But while the Queensland floods cannot be underestimated, mortgage approvals also dropped 5 per cent in Victoria, 4 per cent in NSW and 2.3 per cent in Western Australia.

Source: www.theadviser.com.au

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The number of property transactions fell 20 per cent in 2010, new research has revealed.

According to statistics from RP Data, sales volumes fell in every capital city, with Darwin recording the biggest drop at 30.3 per cent.

Research analyst Cameron Kusher said sales volumes of houses and units in late 2010 slumped to similar levels of those recorded during the depths of the Global Financial Crisis.

Mr Kusher added that “Although we are not anticipating much in the way of property value growth during 2011 some indicators suggest that sales volumes will improve. Unemployment is at 5.0 per cent, wages are growing at a level above inflation and limited growth in property values coupled with wage growth is likely to improve housing affordability.”

Source: www.theadviser.com.au

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The war between Australia’s major lenders shows no signs of abating, with Westpac slashing rates across a number of its mortgages.

Yesterday, the major announced its plans to cut the interest on its two, three, four, five and 10 year home and investment property fixed loans.

The lender cut up to 20 basis points from the various products, taking its two year fixed rate to just 7.39 per cent from 7.54 per cent.

Westpac’s general manager broker distribution Huw Bough has indicated that Westpac seeks to increase market activity by offering a range of competitively priced products.

Source: www.theadviser.com.au

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Despite recent upheaval in the Brisbane property market, there are still plenty of opportunities for investors that are looking for a good return on their dollar.

According to a new report by PRDnationwide, Albion, Bulimba, Chermside, Grange, Hawthorne, Kedron, Milton, Seven Hills, South Brisbane, Wilston and Woolloongabba have all been identified as property hotspots for the year ahead.

PRDnationwide property researcher and author of the report Aaron Maskrey said the suburbs were chosen based on current pricing levels, infrastructure, property trends, access to amenity and other factors.

“Several picks for the 2011 hotspots are suburbs that are located in or next to highly desirable areas at an affordable price,” Mr Maskrey said.

source: www.theadviser.com.au

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One of Australia’s biggest banks has announced rate cuts of up to 80 basis points off one of its products.

Westpac informed its aggregation and broker partners last night that it would increase the standard variable rate discount on some of its selected home loans taken as part of the lender’s Premier Advantage Package.

Effective immediately, the lender will slash 75 basis points on loans ranging between $250,000 and $500,000.

Customers with a loan greater than $500,000 will enjoy a 0.8 per cent discount on their Premier Advantage loan.

In addition, Westpac has announced it will waive the requirement of having lenders mortgage insurance for loans taken as part of Premier Advantage Package between 80 and 85 per cent LVR.

Westpac’s general manager mortgage broker distribution Huw Bough said the changes, which are available to all of the major’s accredited brokers, were designed to help more borrowers into their home.

source: www.theadviser.com.au

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The number of house transactions in Sydney’s middle metropolitan ring below the $500,000 mark has dropped off significantly in the face of rising property prices, new research has found.

According to PRDnationwide, more than half of the city’s affordable markets within a 20km radius of the city are now located in the Bankstown Local Government Area (LGA).

Bankstown LGA recorded 376 house transactions below $500,000 in the half year to September 2010.

Oded Reuveni Etzioni, PRDnationwide NSW research analyst, said topping the list for most house sales below $500,000 was Yagoona, followed by Auburn and Chester Hill.

“In total 1105 transactions below $500,000 were recorded during the September 2010 half year period,” said Mr Reuveni Etzioni.

Mr Reuveni Etzioni said the number of house transactions below $500,000 had been decreasing dramatically since 2000.

“An affordability comparison between the September 2010 half year and the same period in 2009 reveals an average decrease of 41 per cent in transactions in the Top 10 suburbs below $500,000,” he said.

Mr Reuveni Etzioni said the top 10 suburbs which recorded the highest sales activity below $500,000 were all supported by road transport links to the business centres of Parramatta and Bankstown. Many of the suburbs identified also have a direct rail link to the Sydney CBD with an average travel time of 35 minutes to Sydney’s Central Station.

Mr Reuveni Etzioni said movement to higher price brackets had significantly reduced the number of sales below $500,000 but there were still opportunities available.

“Potential gems still exist for the keen investor who has been priced out of metropolitan and coastal areas if they are willing to invest in the middle ring,” he said.

source: www.spionline.com.au

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The recent flood disaster could stop the Reserve Bank from lifting rates until the third quarter of the year.

According to National Australia Bank’s Monthly Business Survey, the Board could postpone the next rate hike until well after May because of the flood disruption.

“The RBA will be watching cost pressures during the reconstruction phase. But while the floods may force the Board to delay the next rate hike, NAB still expects the official cash rate to peak at 5.25 per cent by August 2011,” NAB’s chief economist Alan Oster said.

Mr Oster said buyer confidence had dropped dramatically in the aftermath of the natural disaster, but preliminary indications suggest confidence is starting to rebound nationally. As such, Australian growth forecasts remain presently unchanged.

source: www.theadviser.com.au

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