Latest Figures Show New Home Sales Increased in Australia

The latest figures for June show sales of new homes in Australia increased for the second month in a row, according to the Housing Industry Association. Their report showed an increase of 2.8% in June which is being attributed to a 15.7% increase in the sales of multi-units. In contrast the sales of detached homes grew by just 0.7% in June having declined by 2% in May. 

The chief economist for the HIA, Harley Dale, has pointed out that although these figures are encouraging sales in the multi-unit sector are still 36% below their 10 year average.

During the last quarter the sales of detached homes fell by 1.1%, and were 24.5% lower than the same quarter last year. Sales volumes for detached homes are currently around 35% below the 10 year averages.

Lower interest rates may help the housing market to some extent, but this impact is likely to be minimal. Experts believe more investment and reform from the governments, and especially the federal government, is key in helping to boost the housing sector.

Seasonally adjusted figures for June show the number of new detached house sales rose by 2% in New South Wales, by 4.4% in South Australia and by 23.5% in Western Australia. However sales of detached houses fell by 11% in Queensland and by 9.6% in Victoria. Seasonally adjusted figures for the June quarter show sales of detached homes fell by 6.2% in New South Wales, by 21.1% in Queensland and by 8.3% in South Australia. However Victoria sales increased by 9.8% due to first-time buyers making the most of the state boost before it ended.

Australian Banks Warned by IMF to Stash Cash

The main four Australian banks have been warned by the International Monetary Fund to make sure they have sufficient cash reserves to cover any potential downturn in the housing market.

The IMF is worried that the Australian housing market may be overheated and that prices in cities are artificially inflated due to a number of wealthy overseas property investors from China entering the market.

Around 80% of the mortgage market is shared between just four domestic banks which are Westpac, NAB, ANZ and the Commonwealth Bank.

According to the IMF report, combining any corporate losses due to the global financial crisis with possible mortgage defaults could put too much pressure on Australian banks.

The situation isn't helped by economists at ANZ, who are already predicting government cuts will shave around a half percentage point off economic growth for the next four years.

US analyst Jordan Wirsz has already warned that house prices in Australia could slip by as much as 60%, although most would think that is quite an extreme prediction, and the latest report from Australian Property Monitors may yet prove it to be wrong.

After five consecutive quarterly falls, property prices have risen nationally for the first time since September 2010. Melbourne saw the greatest house price growth with prices rising by 1.1%, while in Sydney property prices remained the same. Melbourne is now ranked as one of the world's most costly cities in which to buy property, and is more expensive than London, New York and Los Angeles.

Interest Rate Cut Boosts Australian Property Sales

Australia recently saw its first interest rate cut in two and a half years, and this has had a positive effect on the sales of new homes which have increased by 6.8% from October to November. Sales of detached properties increased by 9.8% which was mainly due to more properties being sold in New South Wales and Victoria.

However the picture isn't quite so rosy for multiunit sales which fell by 17%. Experts have played down the increase saying it is only to be expected as two months earlier sales of detached homes fell to an 11 year low which was partly due to speculation about a rate cut, and although this latest news is welcome sales volumes are currently at least 20% below levels required for a healthy market.

They point out that a sustained government stimulus is needed to bring about a strong recovery within the homebuilding market. In November sales of detached homes increased in four out of the five main and states and were up by 22.8% in New South Wales, by 11.6% in Victoria, by 5.7% in Western Australia and by 4.7% in Queensland.

In South Australia sales fell by 11.3%. It is however a great time for anyone wishing to build a new home as the building market is very competitive with a good availability of skilled trades combined with lower interest rates creating favourable conditions. Some economists are even predicting further interest rate falls as early as next month in an effort to boost retail sales and lift consumer sentiment.

Australia's House Prices Fall for the Third Straight Quarter

Property prices in Australia have fallen for three straight quarters due to increased borrowing costs, but there are signs this decline could be bottoming out as September marked the smallest price decline in seven months. Homes in capital cities fell by just 0.2% while regional home values increased by 0.1%, and experts think the trend of downward prices may be reversing.

House prices in capital cities have decreased by 4.2% this year while apartment prices have fallen by 1.4%, with Brisbane proving to be the worst performer so far this year, although all the signs are that it could be the first to see prices recover as home values increased by 0.4% in September.

Adelaide did even better with prices up by 0.5%, while more resilient markets such as the Sydney and Canberra saw the largest price declines with prices down by 0.6% and 0.5% respectively.

Economists are also hopeful that interest rates will be gradually reduced which could help to revive the first-time buyers' market, although most are predicting a recovery will come by the middle of next year. Another hopeful sign for the housing market is the fact that auction clearance rates are stable and there are less signs of discounting. Financing is also becoming easier.

The decline in house prices in Australia is certainly good news for all the Brits wanting to move to the country, as apparently the Overseas Guides Company has seen a 160% increase in the last quarter. Australia is seen as being particularly attractive as there is a skills shortage so certain professionals will find getting visas to live and work a relatively straightforward process.

Australia’s Booming Property Market Attracting Attention of Investors

Australia’s housing market continues to grow stronger and is anticipated to remain a strong contender for drawing property investors in the upcoming year. Australia and Canada have been competing neck and neck but it seems that Australia is pulling away as Canada’s real estate sales are cooling down.

Due to low interest rates as well as economies beginning to recover, global markets have seen some rebounding this year. It has been reported that house prices rose in six of twelve industrialized countries, including Australia, Canada, France, Sweden, Switzerland, and the U.K.

Low interest rates and a strong and stable economy attract first time buyers as well as property investors looking to capitalize on the real estate market’s abundance of affordable homes. Investors have confidence that their investments will yield good size returns in years to come as the property market continues to grow strong and house values rise.

Some of the success of the property market will depend on factors such as job growth as well an income growth. Interest rates and lending rules play important roles as well. Interest rates are expected to stay relatively the same throughout next year which will help keep the market stable. Australia seems to be doing well as solid job growth is reported and high demand comes from Asia.

Other areas of the world are seeing some growth as well. The U.K. and Swiss markets are seeing some recovery and it is reported that Sweden is actually experiencing somewhat of a mini-boom. In Italy house prices are dropping some and the U.S. market is becoming more stable.