Tag Archive | "Australia"

Australian Real Estate and US Housing Markets May Weaken

While most economists believe that the United States residential real estate market will continue to post slight gains throughout the year, some well-respected experts are not exactly confident that such an increase will be seen. In fact, one top economist believes that the United States housing market will see growth prevented by such conditions as the tightening of credit, poor inventory levels, and overall uncertainty with respect to housing values.

The United States housing market is the not the only one expected to stagnate in the coming year, according to some key economists. Some believe that Australia will also face a relatively stagnant performance over the next twelve months. Construction in Australia has declined, and will likely continue to do so despite actions being taken by the government to boost the market.

There are a number of different factors influencing the residential real estate markets in both countries. In the United States, the biggest threat currently resides in the potential European economic crisis. Many are watching to see if Greece separates itself from the rest of the continent by rejecting use of the Euro. If that does happen, many fear that the stock market will take a massive hit.

Any kind of negative impact on Wall Street as a result of the European issue could negatively impact the housing market, as investors will have lost out on a great deal of discretionary income.

After years of growth, Australia’s market is finally leveling off causing prices to come back down to realistic levels. There has been no clear sign yet as to whether the country will face a housing crisis, or if the current decline is simply a correction in pricing.

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Australian Home Prices Increase

The average home prices in Australia demonstrated a slight increase during the month of March. Residential real estate prices increased by two-tenths of a percentage point in March, which is likely due to interest rate cuts.

 

Housing prices stayed relatively flat during the first quarter of 2012. While there was no significant increase during the three-month period, the stabilization of prices was an improvement over the steady declines that were exhibited during the previous year.

 

Some Australian residential real estate markets are performing better than others, though that trend is fairly normal and healthy. It is unlikely that the market will see significant growth in 2012, though economists are hopeful that the market will inch higher, or at least stay relatively flat throughout the year.

 

It wouldn’t surprise many economists and realtors, though, if a big city like Sydney posted strong results during the year, as the real estate fundamentals are fairly strong there.

 

Although the news of a slight increase in residential real estate prices was a positive indicator for the market as a whole, there was some unexpected negative news as well in the housing market. The number of approvals granted to build new homes fell almost eight percent when it was expected to increase by a half percentage point.

 

The decline in the number of approvals is likely due to lenders and officials tightening their reigns to ensure that the market does not fall into creating an glut of homes in its inventory. They would prefer to keep the inventory at a minimal level to ensure that prices remain strong.

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Australian Banks Boost Home Loans in Act of Desperation

The Australian residential real estate market has certainly seen better times. With a growing number of homeowners stuck with negative equity on their home, many fear that the overall market is headed for very difficult times in the near future.

 

Mortgage growth has slowed tremendously in Australia, leading far fewer potential homeowners to secure home loans that previously seen. With the growth of home loans coming to a near halt, many lenders are feeling the pressure. The decline has caused profits to drop during a time when costs for banks in the region remain high.

 

As such, the banks have taken to experimenting with more extreme measures in hopes of providing a boost to the overall market. Many Australian banks have now opted to increase their loan to value ratios. Some banks are offering first-time buyers loans that are ninety to ninety-five percent of the value of the property. Other banks have even offered one hundred percent of the value of the property.

 

The high percentages are already raising concerns over the potential dangerous impact that they may have on the overall market. The numbers are actually very similar to those seen in the United States just prior to the major real estate crash that continues to plague the economic health of the nation.

 

While economists are not yet pointing to a definite upcoming crash in the Australian market, the overall prospects do not look good. More than six percent of homeowners are already faced with negative equity. With more loans for ninety to one hundred percent surfacing, the market will not be able to sustain itself in the long-term.

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Australia Posts Weak Housing Sales in January

Housing sales once again fell in Australia during the month of January. The most recent reports indicate that housing prices dropped more than seven percent during the month of January, causing great concern among economists.

 

Some areas of Australia performed far worse than others, with Victoria dropping nearly twenty percent in January. Other areas, such as New South Wales and South Australia, also faced significant declines during the month of January.

 

Lenders had initiated interest rate cuts towards the end of 2011, but even those have been ineffective in providing a boost to the residential real estate market. The number of new homes being built has dropped tremendously, which is a very disconcerting sign for the health of the Australian economy.

 

The regions that are struggling the most were actually those that were leading the market during the housing boom. In fact, many of the new homes that were built during the boom were in Victoria. Now Victoria has one of the weakest new home markets in all of Australia.

 

The Australian government is considering further reform to help boost the housing market, though there has been no clear indication as to what kind of actions they will take. Economists believe that Australia will continue to see its housing market struggle until the global economy picks up, or serious reform is taken to revitalize the Australian residential real estate market. There have been talks that Australia will possibly reform its taxation system for new homes, though nothing concrete has been confirm at this point in time.

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Sydney Real Estate Market Booming

Although Australia’s residential and commercial real estate markets are currently threatened by the likelihood of a major crisis, there are certain areas of the country that are performing far better than ever expected.

The nation’s Olympic Park continues to defy expectations, as it boasts an incredibly low vacancy rate. When Olympic Park was first built, many thought that it would sit unoccupied once the Olympic festivities were finished. However, the Park continues to perform well beyond expectations. While the rest of Sydney, and the rest of the country struggle to fill vacant properties, Olympic Park has very little commercial and residential space left.

One reason for the booming performance of the real estate market in Olympic Park is that the nation has consistently worked towards developing the park to adapt to its growth. As a result, the Park serves as the home to over one hundred businesses that employ twelve thousand people. The area is expected to grow even more substantially over the next two decades.

Despite the growth in the area, rent prices in Olympic Park have not yet increased at the rate that one might expect given the demand to do business and live in the area. However, even with limited growth in rent prices, the performance of the real estate market in Olympic Park is very much welcomed by the nation.

Recent reports have indicate that Australia’s real estate market is in complete disarray, and is not expected to show any kind of improvement in the near future. While the performance of Olympic Park’s real estate market is certainly a positive element of the market, analysts do not believe that it will influence the market’s performance in the rest of the country.

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Major Crisis in Australian Housing Market a Real Possibility

Analysts warn that the current conditions in Australia’s housing market indicate that a potentially major crisis may impact the nation in the very near future. The current data figures within the residential real estate market in Australia point to a highly realistic possibility that the housing market could experience a crash that would cripple the Australian economy similar in a fashion similar to that which happened in the United States.

Overall construction in the Australian housing market has experienced an enormous drop, and the overall supply of unsold homes continues to increase out of control. Home building activity has dropped roughly twenty five percent in the last two months, and will likely drop even further in the coming months.

Analysts believe that as homes remain unsold on the market for an extended period of time, more homeowners will follow suit. As such, demand for residential real estate properties will continue its descent.

The supply of unsold homes available in Australia has jumped thirty percent in the last year alone. Prices have already dropped by five percent from where they were last year, and they are anticipated to drop even further in the coming months. In general, when homeowners see housing prices start to collapse, they tend to list their home for sale as well. Such a reaction generally causes prices to drop even further, as it builds upon the already bloated housing supply.

Analysts are comparing the current situation in Australia with that of the United States just prior to the major crash that, to this day, continues to affect the nation’s economy.

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Consumer Confidence Falling in Australia

The real estate market in Australia is expected to continue it’s downward slide, as consumer confidence in the nation continues to drop at unprecedented levels. With the European debt crisis looming, and there are fears worldwide of another global recession taking place, Australians are opting to hold off on buying properties.

The majority of Australians believe that housing prices will continue to decline in the next quarter, and even throughout the next year. The biggest declines in property values are expected in the nation’s largest cities. In order to prevent any serious declines, banks have cut lending rates significantly.

Even with the cuts, many believe that the market will continue to struggle. The United States has experienced a similar market situation, in that despite record-low mortgage loan rates, the housing market has yet to see an end to its steady decline.

Aside from the global economic crisis factors, one of the primary reasons as to why the Australian property market has struggled is that many first-time homebuyers have opted not to enter the market in recent times. First-time homebuyers remain down from previous years. The government and banks are working together in establishing incentives to attract more first-time homebuyers. There is hope that lower interest rates will have a positive impact.

Without a sufficient number of first-time homebuyers in the market, there is not enough demand for other homeowners to consider selling their home in order to move into a new one. As such, the market as a whole declines, as buying and selling activity remains down from desired levels.

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Australian Real Estate Market Continues to Experience Decline

Australia’s residential real estate market continues to struggle, as the average home value fell more than one percent in the last quarter. Prices have dropped more than two percent in the past year, with its major cities experiencing some of the more significant drops.

Home values in the city of Darwin have dropped more than four percent in the past year, making it the city with the largest decline. The cities of Perth, Adelaide, and Canberra have also had strong decreases in housing values in the past year.

Australia had originally avoided the struggles experienced by the rest of the world with respect to the residential housing market. However, they have finally started to experience a downturn in the pricing, as factors such as cost of living increases, and the performance of the dollar have taken their toll.

The overall sales volume in the month of September hit the lowest point that Australia has experienced in more than ten years. With less than five thousand residential real estate properties being sold, the overall volume hit its lowest point since December of 2000. Sales dropped more than five percent in the past month.

Analysts believe that the overall housing market in Australia will continue to decline in the short term, but are uncertain at this point as to how the market will perform overall in the long term. Despite the severe declines, the nation still hasn’t suffered the massive drops as experienced by many other countries around the globe. Analysts remain hopeful that Australia will continue to avoid such decreases, particularly based on the fact that it took quite a bit of time for the nation to be affected by the first global recession.

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Australian Real Estate Analysts Not Expecting Crash

Real estate analysts in various countries across the globe are anxiously anticipating another potential crash in their respective residential and commercial property markets. However, those in Australia are much more positive about the nation’s real estate market.

Although the housing market in Australia has declined slightly in the last two years, much of the declines have been seen in luxury home sales. While the sales numbers are down slightly, prices have actually remained flat during the same time frame. In fact, in some cities such as Sydney have actually seen rices increase during the past two years.

Despite overall bleak global economic news, analysts in Australia are very confident that a crash will not take place, as Australia is not facing nearly the same predicament as has been seen in the United States. There are a number of different reasons as to why the situation in Australia does not mimic that in the United States despite the similarities that exist between the two countries.

One of the biggest reasons for the contrast in confidence levels between Australian real estate analysts and American real estate analysts is the overall lending process. Those that default on a mortgage loan in Australia are far more likely to face greater consequences than those in the United States. As a result, Australia has seen far less defaults on homes, even in the hardest of economic times.

By minimizing the number of defaults, Australia has been able to limit the supply of homes on the residential real estate market. As such, prices have not seen the same kind of price drop on homes that has taken place in the United States.

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Australian Officials Look to Improve Affordability of Housing Market

Australian Officials Look to Improve Affordability of Housing Market

Although Australia has not faced many of the same troubles as the rest of the world when it comes to their housing market, they are still dealing with issues of their own. The most recent real estate market report indicates that housing prices have increased an unbelievable one hundred and fifty percent over the past ten years. During the same time period, the average income for Australians has increased only sixty percent. Rents have also increased faster than inflation in the last few years.

Officials worry that the lack of affordability that has overcome the housing market in Australia may eventually lead to a real estate market crash similar to those seen around the world. As such, they are debating ways in which they will be able to curb the unprecedented growth in housing prices in order to avoid any kind of bubble.

Other groups are lobbying the Australian government to reform the current housing industry so as to make changes in taxation system, and to also provide better alternatives for low-income renters. The government currently does have a First Home Owners Grant in place to help first-time homeowners make a housing purchase. However, many real estate experts believe that the program has been vastly ineffective, and has actually accomplished the opposite of what its initial intentions were. They claim that the program has actually served to further increase prices, making housing even less affordable than ever before.

The Australians for Affordable Housing group has been very vocal in their push to make housing more affordable in Australia, and believes that comprehensive reform is absolutely necessary to change the overall course of the housing market.

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