Welcome Guest [Log In] [Register]


Reply
Aussie John's market outlook for 2014
Topic Started: 23 Dec 2013, 12:38 PM (907 Views)
mel
Member Avatar


Quote:
 
Aussie John's market outlook for 2014

By John Symond
Tuesday, 17 December 2013

The residential housing market has seen strong growth over the last year, with combined capital city home values now 7.9% than they were a year ago.

While home values are broadly climbing across the combined capital cities, growth has been fuelled by a large rise in values across only a handful of cities, with Sydney leading the way with 12 per cent growth, while Melbourne and Perth rose 6.5 per cent.

Housing is at its most affordable level in a decade, despite the recent rises in home prices, according to the November Housing Industry Association-Commonwealth Bank housing affordability index, which tracks the relationship between household income, mortgage costs and home prices.

Major factors behind the growth in affordability has been this year’s historic low interest rates and growth in wages.

Sydney’s housing market experienced a spring revival, which has seen prices climb steeply as buyers compete for homes and caused the city to post just a 0.5 per cent improvement in the index, compared with Melbourne at 2.6 per cent growth.

The Reserve Bank’s rate cuts since 2011 have seen variable interest rates for mortgages fall from about 7 per cent to around 5 per cent.

However the drop in rates has not attracted first home buyers, who made up just 12.5 per cent of all loans written in September.

The drop in the first home buyers indicates what I believe will be a growing trend throughout 2014, when investors will continue their domination of property purchases.

This is a long term fundamental shift in the property market, where in many areas first home buyers have simply given up on what has been a long held tradition in Australia – getting started with a small house or an apartment in the suburbs.

First home buyers simply can no longer compete against investors in many hot property pockets of most capital cities, preferring to invest in shares and rent in apartments nearer their workplaces or CBD’s.

Many of the new homes being built are longer distances from the city where there is little infrastructure and a long drive to work or attractions for young people.

This problem needs to be addressed by governments at all levels as the economy needs first home buyers, with the key benefits being they are forced to save for a deposit or pay-off a mortgage, while also stimulating the building industry.

The Federal Government should look at creating tax incentives for first home buyers to save for a deposit, while more affordable new housing should be constructed to accommodate them.

There is currently a boom on mortgage lending, with Aussie posting record figures for October and November, and there is little sign of a drop-off in the new year, following what will be a strong Christmas retail season.

Low rates, which should remain at their current lows for most 2014, will continue to fuel the strong growth in lending.

First home buyers will continue to face challenges to get into the market in this climate and they should avoid the temptation of going after very low deposit loans, as they can lead to dramas with a job loss.

Meanwhile I see more people seeking to address their personal debts, with the big repayments of credit cards and personal loans being made during 2013 expected to continue in the new year.

For those home and apartment owners seeking certainty around their mortgage repayments, I suggest it would be a good time to fix their rates – which have now started to edge higher and will continue to do so in 2014.

2014 will have its challenges for consumers and businesses but I believe better times are ahead of economic confidence improves both in Australia and overseas.
APF - a place where serious people don't take themselves too seriously. There's nothing else like it.
Profile "REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
« Previous Topic · Australian Property Forum · Next Topic »
Reply



Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.

Forum Rules: The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.

Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.

Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.

This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.

For more information go to Limitations on Exclusive Rights: Fair Use

Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ

Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy