| NEWS |
July 2008
Home prices to explode, ANZ Bank predicts
The ANZ Bank says the growing housing shortage is setting Australia up for the "mother of all" housing booms. New home building figures showing slumping building approvals have sparked fears of a price and rent explosion that will price even more prospective buyers out of the market.
The ANZ's senior economist, Paul Braddick, said yesterday that Australia faced a critical and potentially chronic shortage of housing.
"A growing housing shortage is setting the scene for the mother of all housing booms," Mr Braddick said.
"Demand has accelerated and rising immigration, both permanent and temporary, shows no sign of abating. Meanwhile, rising interest rates continue to stymie any building recovery.
"Underlying housing demand is already outstripping new supply, and the gap is set to widen sharply, driving pent-up housing demand to record levels," he said.
The Australian Bureau of Statistics said yesterday new apartment approvals fell 18.2 per cent in May and were down 4.2 per cent over the past 12 months.
New house approvals fell 1.2 per cent and were down 1.7 per cent over the year. In Victoria total building approvals were up 2.8 per cent.
Commonwealth Securities chief equities economist Craig James said buyers had fled the property market because of high interest rates.
"With population growing at the fastest rate in 18 years, we simply should be building more homes, not less," he said. "Interest rate hikes have spooked investors and budding owner-occupiers. "Investors are putting their money in the bank and people are staying in the rental market longer. But the situation is unsustainable."
Mr James said rents and house prices would be forced up because of the tight conditions, which would eventually attract more investors and lead to more building.
"The latest slump in new dwelling approvals is clearly bad news for those renting," he said.
"The supply of apartments isn't rising but the number of people wanting to rent certainly is."
Victorian rents are at record highs and housing affordability is close to record lows. The Commonwealth Bank's senior economist, Michael Workman, said interest rates would need to start falling and buyers would need to believe prices were rising before they would re-enter the market.
The building approval slump has cut the odds of another interest rate increase from the Reserve Bank.
Source: www.news.com.au
A million houses needed to avoid shortfall. A MILLION new homes need to be built over the next five years to cope with Australia’s booming population, new figures out from the Housing Association show. The number of houses currently being built falls well short of this, and according to the HIA, there'll be a shortfall of at least 175,000 houses if current building rates continue. The outlook is even bleaker if household sizes keep shrinking – i.e. more people choose to live alone - this could blow-out to a 240,000 shortfall.“Supply must increase rapidly to meet expected demand,” said the Housing Industry Association’s chief executive of policy, Chris Lamont. “Without a substantial increase in production there will almost certainly be a growth in the number of homeless and further affordability woes.” He said the increased demand for new housing was driven by two main factors: rising immigration, and more people choosing to live alone.
Australia’s population grew by 332,000, or 1.6 per cent last year. www.news.com.au, July 2008
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| Black Gold Bonanza For Region |
Black gold bonanza for region
September 10, 2008
Gas processing plants similar to this are expected to emerge all over the Darling Downs.
By Lacey Burley
THE Surat Basin coal seam gas mining rush is here and will forever change the face of Toowoomba and the Darling Downs.
The figures are astounding.
Dalby Regional Council mayor Ray Brown has seen projections that up to 16,000 workers will be solely employed in the mining industry by 2016.
Cr Brown said the flow-on effect would be up to 100,000 new residents coming to live across the Surat Basin, including Miles, Chinchilla, Dalby and Toowoomba.
On Monday, Origin Energy announced that US oil and gas giant ConocoPhillips had pledged $9.6 billion for a half share in their coal seam gas (CSG) and liquefied natural gas (CGS) projects.
By 2011, the Surat Basin will be Australia's largest energy province and the 40 billion tonnes of untapped resources will be exported around the world.
Surat Basin Developments directors Greg West and Warren Daniells, who are both fourth generation Chinchilla residents, said they predicted Chinchilla's population to increase threefold from the present 6200 over the next 20 years.
Over the past six weeks, they have seen massive changes to the market as investors roll into town and companies snap up housing accommodation for their workers.
Mr West said the town's weekly average of 100 available rental properties had now all disappeared and been replaced by a growing waiting list.
"Unit rental prices have also increased from $250 weekly to $500 in town just in the last month.
"We're very passionate from a developer's point of view to ensure the growth is sustainable."
Ausco Building Systems is currently putting a development application through Dalby council for a 660-person camp in Zeller Street, Chinchilla. Ausco account manager Myke Cavanagh said they had their eye on Origin Energy to hopefully become their main tenants.
Ausco has also turned the old Kogan Creek manager's site at Windmill Road into a 170-person site for Origin Energy.
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| 'Market ripe for buying' |
News
September 2008
Home buyers are being urged to move quickly, with house prices across Queensland defying predictions of big drops and poised to take off again on the back of cuts to interest rates and stamp duty.
Real Estate Institute of Queensland figures for the June quarter, released today, show the industry weathered the effects of interest rate rises and big petrol price increase.
Median prices were steady across most of the state for the three months. Some areas including the Gold and Sunshine coasts, Townsville and Macky registered falls, but Brisbane, Ipswich, Moreton Bay and Redland continued to grow.
A 1 per cent rise in Brisbane took the median price to $495,000 for the quarter, overtaking the Gold Coast which had a 2.4 per cent dip to $490,000.
These results fly in the face of some commentators who had predicted doom and gloom and substantial price drops for property markets across the country, REIQ chairman Peter McGrath said.
Brisbane, particularly was an extremely pleasant surprise. Considering what the consumer had to go through during that quarter two interest rate rises and the filtering down of earlier interest increases, massive spikes in petrol prices and general negativity about the economy the market has shown a lot of resilience.
Its set a very important platform for the market to ease forward later this year as interest rates begin to come down.
The message is simple the market has bottomed in real terms, interest rates have stabilised. So if people have the financial capacity to enter the market, now is the time to start looking to go forward.
In southeast Queensland, the median house price for Ipswich was up 1.6 per cent to $32,000, Moreton Bay rose 0.7per cent to $379,000, Redland was $450,000 (up 0.2 per cent) and the Sunshine Coast dipped 1.2 per cent to $464,500.
The Whitsundays was the strongest regional centre in the quarter, with median prices up 7.4 per cent to $385,000.
Townsvilles median fell 1.8 per cent, to $355,500, in the period, Mackays by 1.5 per cent to $374,250 and Cairns stayed at $375,000.
Toowoombas median price of $259,000 remained unchanged and still offers the most affordable option in the southeast region.
Mr McGrath said figures for the current quarter, up to the end of September, would also be flat or marginally lower due to a lag effect, but four building blocks were now in place for growth by year-end:
The Reserve Banks decision on Tuesday to reduce the official interest rate by 0.25 per cent the first cut in seven years.
Major bank passing the cut on immediately to customers.
The removal of stamp duty on properties worth up to $500,000 from the start of this month should encourage first home buyers back. The proportion of first-time purchasers, usually about 20 per cent of the total, had slipped to 17 per cent.
The flattening of prices in the June quarter had given prospective buyers some breathing space. They havent been chasing their tails with big price increases as they tried to save, Mr McGrath said. The continuing mining boom and strong migration especially from overseas, to Queensland underpinned the ability to escape the big falls that had been feared.
And results for the 12 months to the end of June show strong growth, with prices across most of SEQ and major regional centres climbing between 10 and 20 per cent.
Brisbane increased 17.1 per cent over the year, Ipswich was up 20.6 per cent, Logan 17.5 per cent, Redland 17 per cent, Gold Coast 13.6 per cent and Sunshine Coast 12.3 per cent.
With superannuation funds reporting their worst losses in two decades and the share-market down 25 per cent for the year, Mr McGrth said the rise in house values was impressive. In the past decade, the Queensland median house price has almost tripled from $135,000 to $390,000.
Property analyst Michael Matusik says returns on residential houses have out-stripped all other major investment options over 10 years and he predicts property prices will group 8-10 per cent per annum over the next three years.
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