First time home buyers would find it increasingly difficult to purchase a home in Melbourne as property prices moved back to record highs, an industry group warned.
The higher house prices combined with further interest rate hikes being touted as a done deal, and the planned reduction in the state government assistance could see a movement back to regional areas where median prices fell significantly over the last quarter.
According to data released by the Real Estate Institute of Victoria today, the Melbourne real estate market has continued its steady appreciation with a rise in the median price of 1.5 per cent since the June quarter.REIV chief executive Enzo Raimondo said if this trend continued Melbourne's median house price would return to the all-time high of $380,000 recorded in December 2003.
The September Melbourne quarterly median price rose to $377,000 up $5,500 from a revised June quarter. "This quarter's price data shows that all the fundamentals of the Melbourne property market are on track, the median price is steadily appreciating, stock availability at auctions has increased 11 per cent on 2005 and the clearance rate is up five per cent," Mr Raimondo said.
However he said the news was not good for those trying to break into the market. "The steady appreciation continues to affect affordability," Mr Raimondo said. "The most recent ABS data showed that first home buyers have reduced from 19.88 per cent of the local market in June to 17.76 per cent in August. "Further (interest) rate increases, taxes and charges and the planned reduction in the state government assistance for first home buyers in the middle of next year will only make it harder for young families. "This could push young families back to regional areas like Greater Shepparton in the central north were median prices for properties dropped by almost five per cent.
Geelong's median house price fell by 4.6 per cent and Ballarat's dipped 0.5 per cent. Greater Bendigo's median house price was up 3.2 per cent.Newport in Melbourne's inner west was the only area to make the top 20 growth suburbs in both quarters.
Doncaster, a leafy eastern suburb, recorded the biggest increase in median house price up 16.1 per cent to $520,000 while Melbourne's northern suburb of Broadmeadows reported a 13.4 per cent increase to $216,000.
Article source: AAP
Tuesday, October 31, 2006
Friday, October 20, 2006
Mortgage interest rate rise in November on the cards
The pace of Australia's economic growth is expected to pick up over the next few months, increasing the chances of another mortgage home loan interest rate rise this year, a survey reveals.
The Westpac-Melbourne Institute's leading index of economic activity, which indicates the likely pace of activity three to nine months from now, was rose 0.7 index points in August bringing the annualised rate of growth to 6.1 per cent, compared to 6.5 per cent in July.
Despite the moderation, the result was well above the index's long term trend of 4.1 per cent.
Westpac chief economist Bill Evans said the leading index pointed to strong growth in the economy over the next few months.
"The Reserve Bank has also alluded to surprising strength in tax receipts, which is also pointing to a stronger economy than depicted by the official national accounts that measured the pace of growth over the year to June 2006 as an insipid two per cent."
Mr Evans expects the central bank will lift the official rate by a quarter of a percentage point to 6.25 per cent following a board meeting on November 7.
Mr Evans said growth in the coincident index was being underpinned by rising employment. "Growth in the index has now almost returned to trend following a weak first half of 2006," he said.
"This is pointing to better growth conditions in the second half of 2006. Employment continues to be the real driver of the index."
Mr Evans also forecast economic growth in the second half of this year to pick up to around four per cent, as net exports add to growth for the first time in 19 quarters.
But as non-farm inventories are rebuilt, farm inventories will be drawn down and farm production will fall due to the current drought.
"The impact on growth from the drought could be as severe as 2002/03 when growth was reduced by around one per cent," Mr Evans said.
The index also showed that half of the four monthly components increased in August. Share prices grew by 2.6 per cent while real money supply gained by 0.9 per cent.
However, this was partly offset by a 12.6 per cent drop in dwelling approvals and US industrial production fell by 0.1 per cent.
Three out of the four quarterly components also increased. Overtime worked, core manufacturing material prices, and real corporate gross operating surpluses increased, while the productivity measure declined.
The growth rate of the coincident index, which provides information on a weighted average of six economic series that are typically coincident with economic activity, rose 0.7 index points in August to an annualised 3.1 per cent from 2.8 per cent in June.
Source: AAP
The Westpac-Melbourne Institute's leading index of economic activity, which indicates the likely pace of activity three to nine months from now, was rose 0.7 index points in August bringing the annualised rate of growth to 6.1 per cent, compared to 6.5 per cent in July.
Despite the moderation, the result was well above the index's long term trend of 4.1 per cent.
Westpac chief economist Bill Evans said the leading index pointed to strong growth in the economy over the next few months.
"The Reserve Bank has also alluded to surprising strength in tax receipts, which is also pointing to a stronger economy than depicted by the official national accounts that measured the pace of growth over the year to June 2006 as an insipid two per cent."
Mr Evans expects the central bank will lift the official rate by a quarter of a percentage point to 6.25 per cent following a board meeting on November 7.
Mr Evans said growth in the coincident index was being underpinned by rising employment. "Growth in the index has now almost returned to trend following a weak first half of 2006," he said.
"This is pointing to better growth conditions in the second half of 2006. Employment continues to be the real driver of the index."
Mr Evans also forecast economic growth in the second half of this year to pick up to around four per cent, as net exports add to growth for the first time in 19 quarters.
But as non-farm inventories are rebuilt, farm inventories will be drawn down and farm production will fall due to the current drought.
"The impact on growth from the drought could be as severe as 2002/03 when growth was reduced by around one per cent," Mr Evans said.
The index also showed that half of the four monthly components increased in August. Share prices grew by 2.6 per cent while real money supply gained by 0.9 per cent.
However, this was partly offset by a 12.6 per cent drop in dwelling approvals and US industrial production fell by 0.1 per cent.
Three out of the four quarterly components also increased. Overtime worked, core manufacturing material prices, and real corporate gross operating surpluses increased, while the productivity measure declined.
The growth rate of the coincident index, which provides information on a weighted average of six economic series that are typically coincident with economic activity, rose 0.7 index points in August to an annualised 3.1 per cent from 2.8 per cent in June.
Source: AAP
Friday, October 13, 2006
National Australia Bank to bid for RAMS home loans
The National Australia Bank is said to to in the process of making a bid for Major Non bank home loan mortgage lender RAMS.
Most loans written by RAMS now comme from the mortgage broker channel, and this is of obvious interest to the NAB.
THis move could also give NAB the option of growing their mortgage business through the RAMS franchise model.
In any even Nab would benefit from greater distribution with many RAMS offices in Towns and locations where it is not currently represented.
NAB was one of the first Australian Banks to get into securitiesed lending when it bought into HomeSide in the US, and then brought the mortgage lending brand back to Australia.
And that brings up another question. What would happen to the HomeSide brand?
Most loans written by RAMS now comme from the mortgage broker channel, and this is of obvious interest to the NAB.
THis move could also give NAB the option of growing their mortgage business through the RAMS franchise model.
In any even Nab would benefit from greater distribution with many RAMS offices in Towns and locations where it is not currently represented.
NAB was one of the first Australian Banks to get into securitiesed lending when it bought into HomeSide in the US, and then brought the mortgage lending brand back to Australia.
And that brings up another question. What would happen to the HomeSide brand?
Wednesday, October 11, 2006
National Australia Bank says home loan interest rates on hold until 2007
The National Australia Bank (NAB) says its latest analysis of the business climate consolidates the view that official mortgage home loan interest rates will remain on hold for the rest of the year.
For September, the bank's measure of business conditions indicates that they have recovered just a little after two months of decline.
A pick-up in the retail sector has been offset by weaker construction sector especially new homes, land development and building apartments and home units.
Some improvement in Victoria, including home building, has been balanced by softer conditions in New South Wales and Queensland.
Business confidence has remained unchanged after falling sharply in recent months.
So on balance the NAB feels that the official cash rate as set by the Reserve Bank of Australia will remain steady until at least the early part of 2007. This is good news for small business and homeowners with mortgages to repay as well as prospective home buyers.
For September, the bank's measure of business conditions indicates that they have recovered just a little after two months of decline.
A pick-up in the retail sector has been offset by weaker construction sector especially new homes, land development and building apartments and home units.
Some improvement in Victoria, including home building, has been balanced by softer conditions in New South Wales and Queensland.
Business confidence has remained unchanged after falling sharply in recent months.
So on balance the NAB feels that the official cash rate as set by the Reserve Bank of Australia will remain steady until at least the early part of 2007. This is good news for small business and homeowners with mortgages to repay as well as prospective home buyers.
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