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

Despite the RBA’s decision to keep the cash rate on hold yesterday, the threat of higher interest rates is stopping Australians from purchasing property.

According to a new survey conducted by Homeloans Ltd, which surveyed 2000 Australian first home buyers, homeowners and investors, 45 per cent of Australian home buyers said they would put off purchasing a property this year. Of those who were planning to buy a property this year only 6 per cent would do so within the next six months, while 74 per cent have reconsidered how much they are able to spend.

Homeloans’ chairman and chief executive officer Tim Holmes said Australians continue to take a cautious approach to purchasing property.

“There are now so many variables which have a profound effect on the Australian economy and consumer confidence, such as the recent floods and the just-announced flood levy tax. These obviously create some uncertainty.”

“Although the RBA obviously made the decision to keep official interest rates on hold today, it’s difficult to predict what it will do in months to come, particularly in light of the recent disasters. However, it is clear that concerns about finances are keeping Australians on their toes.”

source: www.theadviser.com.au

Almost 50 per cent of Australians won’t pay their mortgage off before retirement.

According to RaboDirect’s National Saving and Debt Barometer, 49 per cent of Australians would be 60 and over before their mortgage was officially paid off.

Of the 2000 financial decision makers surveyed, 980 said that they would be “beyond retirement age” before their mortgage debt was completely gone.

Australia has suffered the largest annual decline in housing affordability since the beginning of the decade, according to the Real Estate Institute of Australia (REIA).

The REIA Deposit Power Housing Affordability Report released yesterday, has revealed that over the September quarter, the total number of loans (excluding refinancing) was down 2.9 per cent to 101,364. Housing affordability also declined 0.2 percentage points nationally in the September quarter.

Meanwhile, over the year, the total number of loans fell 28.3 per cent – the largest annual decline in Australia since March 2001, according to the report.

“The largest decreases were evident in New South Wales and Victoria where the proportions of income required to meet loan repayments increased 6.5 and 7.5 percentage points respectively,” REIA President David Airey said.

Australia has recorded a solid year for full time job creation, as businesses aggressively hire new staff to cope with the biggest commodities boom in the last century.

According to the latest figures from the Australian Bureau of Statistics, full-time employment jumped 55,100 to 8.033 million in November, taking the unemployment rate down to 5.2 per cent.

This record low unemployment rate could encourage the Reserve Bank to lift rates sooner rather than later, as demand for higher wages could ultimately add to inflationary pressures.

Mortgage sales increased by 12.4 per cent in November, despite the RBA lifting the official cash rate 25 basis points.

Across Australia, mortgage sales in November grew by 25.7 per cent in WA, 12.1 per cent in NSW, 8.1 per cent in Victoria, 6.5 per cent in SA and 5.6 per cent in QLD. Australian Finance Group (AFG) general manager of sales and operations, Mark Hewitt said the increased volumes did not come as a complete surprise given that November is traditionally a strong month for mortgage sales.

“This year we didn’t see the usual spring uplift in the preceding months, and it’s possible that many buyers were sitting on their hands, waiting for greater certainty about the economy in general, and out of cycle rate rises in particular. Now that we’ve had the rate rise, more buyers seem to be coming off the fence,” Mr Hewitt said.