National property clock points to Brisbane boom
Hi Everyone,
Here are a few interesting articles that came up during the week.
Paul Bennion from Depro said “While Brisbane has been an underperforming property market for several years, there is every indication that property prices in the city will boom during 2014”
I take a more conservative view as I don’t believe we have seen a “boom” anywhere to date and the market in some cities has simply been catching up on sub trend growth from prior years. However, prices in Brisbane are still below pre-GFC levels, while Sydney is about 10% above now, so there is a greater likelihood of better capital growth in the Queensland over the next few years. I agree with the article by John McGrath and his view : “I think Sydney will have a strong Autumn as the Spring momentum carries over to 2014, but I’m not expecting the same intensity of demand for the entire year. My guess is 5-10% growth in prices this year but certain market segments will, of course, perform better than others. “
The other comforting news for most property investors is that the banks are now looking to increase market share by increasing competition in the fixed rate mortgage market. This means that you can now make meaningful investments and lock in what I think are extremely cheap interest rates for a long time frame, and this can provide the long term cash flow certainty that will create genuine “peace of mind” for most investors.
And, lastly an outlook on the Aussie $ for 2014 ……….. most forecasts seem to be in the 82 – 85 range against the USD by year end.
National property clock points to Brisbane boom
While Brisbane has been an underperforming property market for several years, there is every indication that property prices in the city will boom during 2014. Read more…
Major bank cuts fixed rates
As the battle for customers intensifies, a second major bank has announced a cut to its fixed rate on selected home loan products. More>>
Non-major slashes fixed rates
Following recent cuts to fixed rates by two major banks, a non-major has followed suit, slashing its fixed rates by up to 40 basis points. More>>
Looking ahead in 2014
John McGrath
After a phenomenal spring season in Sydney last year, I’m expecting another good year for Sydney.
Click here to read more.
Richard Grace speaking on Bloomberg about CBA’s FX forecast changes
Best Regards,
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RATES FORECAST TO FALL TO 2PC By Smart Property Investor Staff Reporter Friday, 06 February 2015 Two prominent economists have praised the Reserve Bank of Australia’s decision to reduce the cash rate and have predicted at least one more cut to come. Domain Group senior economist Andrew Wilson said the Reserve Bank had made the right decision to reduce the cash rate from 2.5 per cent to 2.25 per cent. Dr Wilson also said that another cut is likely, given that the economy received minimal stimulus from the succession of rate cuts between October 2011 and August 2013.
“We haven’t had much action from cutting from 4.75 per cent to 2.5 per cent, so I’m not sure what a 0.25 per cent improvement is going to do,” he told Smart Property Investment's sister publication Real Estate Business. “Certainly the Reserve Bank had to act – it’s really the only tool in the box that we’ve got left.” Pricing gaps across product types and capital cities are widening by Cameron Kusher 30 January 2015 The cost of Sydney housing relative to other capital cities is widening and the cost of buying a house as opposed to a unit is increasing as a record number of units commence construction. The cost of Sydney housing relative to other capital cities is widening and the cost of buying a house as opposed to a unit is increasing as a record number of units commence construction. According to median selling prices over the three months to December 2014 published in the CoreLogic RP Data Home Value Index report, the gap between capital city house and unit prices has never been greater. As at December 2014, the capital city median house price was almost 20% higher than the capital city median house price. In dollar value terms, median house prices are $100,000 greater than unit prices. read more...
John McGrath ignites Sydney's "hot forever" inner ring debate by Jonathan Chancellor 1 FEBRUARY 2015 John McGrath has always been passionate about the property prospects of Sydney’s inner ring suburbs. But last week he went a little further, saying suburbs close to the city are becoming so desirable that they will be “hot forever” But last week he went a little further saying suburbs close to the city are becoming so desirable that they will be "hot forever". The high profile agent stopped short of declaring inner city property prices were immune from price falls. But the chief executive of McGrath Estate Agents told Fairfax Media these areas would always be attractive to buyers. "There is just no end of demand from overseas and local buyers who want to live in those precincts," McGrath said. |
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Sydney property bubble to pop when rates rise, says HSBCWednesday, 11 Feb 2015 | James Mitchell 0 · · A fresh round of cheap credit is further inflating Sydney’s investor-driven property prices. In a research note released yesterday, HSBC economists Paul Bloxham and Daniel Smith predict strong national housing price growth to continue at seven to eight per cent, driven by record-low mortgage rates. “We see Sydney prices rising by 9 to 10 per cent in 2015 and expect that, when rates do eventually rise, there is now a high risk that Sydney will see price falls,” the economists said. “Although we do not see a national housing bubble, we believe that growth in Sydney housing prices is currently running at an unsustainable pace and that any further growth is likely to be met by housing price declines in future years, when interest rates do begin to rise,” they said. A signal of the growing risk of overinflation in the Sydney market is the high level of investor demand, according to HSBC.
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JESSIE RICHARDSON | 10 FEBRUARY 2015 Melbourne growth to stand out in 2016: HSBC's Paul Bloxham Melbourne will see the highest price growth of any capital city next year, HSBC has forecast. In the latest HSBC Australia Downunder Digest report, HSBC Australia chief economist Paul Bloxham forecasts 4% to 8% price growth in Melbourne for 2016, after 7% to 8% growth in 2015. Bloxham expects that in 2015, Melbourne and Sydney will "continue to outpace the rest of the nation", noting that from its mid-2012 trough, Melbourne's housing prices have increased by 20%. Read more
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Commonwealth Bank posts 8pc half-year profit rise to $4.5b By business reporter Michael Janda Updated 11 Feb 2015, 5:49am
PHOTO: The Commonwealth Bank has posted its half-year results. (ABC News: Nic MacBean, file photo) The Commonwealth Bank has reported an 8 per cent rise in half-year profit to $4.54 billion. The bank's preferred cash measure of net profit, which adjusts for some accounting items, also rose 8 per cent to $4.62 billion. CBA said its improved profit came on the back of a 5 per cent increase in revenue, despite subdued conditions in the lending market. It also said it had lowered its cost to income ratio by 70 basis points to 42.2 per cent, as productivity initiatives continued to contain business expenses.
http://www.abc.net.au/news/2015-02-11/cba-half-year-profit-result/6084926
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Dr Unterweger is a highly qualified financial and property adviser, experienced venture capitalist and successful investor