“Since peaking in the early nineties, home loan affordability has been trending downwards to alarming levels,” Ms Bennett said.

“The Reserve Bank did the right thing by lowering the cash rate, but now it seems the commercial lenders plan to keep a third of the discount themselves, which limits its benefit to borrowers,” Ms Bennett said.

“Interest rates are only part of the equation. There are budgetary measures we expect the Government to take as well to ease the pressure on affordability and to help young people in particular to purchase their own home.”

Ms Bennett says first home buyers have been very cautious in early 2012, with the number of first home buyers as a percentage of total owner occupied housing commitments decreasing to 17.2 per cent in February, down considerably from the long-term average of 20.2 per cent.

“One of the most effective housing policy instruments in assisting first home buyers is the First Home Owners Grant, but it has been allowed to lose more than half its value relative to purchase prices since it was introduced in 2000. We are urging the Government to review the amount currently provided,” Ms Bennett said.

“With more than two-thirds of first home buyers preferring established housing, it is also essential the scheme continues to apply equally to buyers of new and established homes,” Ms Bennett added.

“The Treasurer can’t rely on the RBA and the banks to do all the heavy lifting on affordability. We’ll be looking to him on Tuesday night to show the Government’s commitment to making housing more affordable for Australian families,” Ms Bennett concluded.

The REIA has called for nine specific matters in its pre-budget submission aimed at contributing to Australia’s economic development, addressing the supply of rental housing, ensuring adequate access to housing finance, improving the operating environment for small business and improving housing affordability.

The REIA’s full pre-budget submission can be downloaded from reia.com.au

Property values across the combined capital cities of Australia showed renewed softness in the latter half of April with dwelling values falling by -0.8 per cent after a stable first quarter. Over the three months ending April 30 the RP Data-Rismark Index has seen values rise by 0.3 per cent. On a year to date basis, dwelling values are now down -0.7 per cent.
 
Values were down across five of the eight capital cities over the month of April, with Hobart (-2.9%), Melbourne (-1.7%) and Brisbane (-1.3%) recording the largest falls. On a 12 month basis capital city dwelling values have fallen by -4.5 per cent with the weak conditions in Melbourne (-7.0%) and Brisbane (-6.4%) dragging the weighted average down.
 
RP Data’s research director Tim Lawless said that the housing market gains seen throughout February and March, which delivered a flat first quarter result, have now been mostly offset by the -0.8 per cent fall over the month of April.

“Our estimate of transaction volumes to February suggest that the two interest rate cuts in November and December last year are yet to provide a sustained stimulus to the market, with transaction volumes remaining reasonably steady at around 31,000 sales each month. Comparing this with the sales rate through mid 2009 when around 45,000 homes were selling each month, the slowdown in buyer activity becomes quite clear,” he said.
 
Rismark’s Managing Director, Ben Skilbeck, added, “The stability seen in the first quarter continued though mid April before the market declined in the last two weeks of the month. This decline coincided with the considerable interest rate uncertainty introduced by the ANZ Bank increasing its interest rates and the anticipation of the first quarter inflation figures. With inflation figures now behind us, if the Reserve Bank does cut interest rates today and then again in June, as is highly anticipated by the financial markets, home buyers will benefit from considerable affordability gains and the housing market is likely to see improved conditions building off the stability evident in the first quarter.”

 
According to Tim Lawless, segmenting the housing market performance by price point shows the premium housing market remains the weakest across broad price brackets. The most expensive 20 per cent of suburbs across the capital cities have seen dwelling values fall by 5.7 per cent over the twelve months to March this year while the most affordable twenty per cent of suburbs have seen values decline by 2.3 per cent. This trend is most evident across Sydney, Melbourne and Perth where the premium housing markets are most established.

While April saw values reduce across most capital cities, rents continued to show modest improvements. At the combined capital city level, the weekly rent on a detached house is up by 4.1 per cent over the year to April and unit rents are up by 3.7 per cent,” Mr Lawless said.
 
Growth in rents has been varied across the country with the largest increases in Perth where weekly rents have surged by more than 14 per cent over the year. Smaller rental increases were recorded across Sydney, Brisbane, Darwin and Canberra. Rents in Melbourne and Adelaide were reasonably flat while Hobart rents went backwards by 3.9 per cent over the year.
 
Higher rents and lower home values are contributing to higher rental yields. The average capital city house is now returning a gross yield of 4.2 per cent, up from a low of 3.6 per cent just over a year ago. Units, which typically provide a higher rental return, are providing a gross yield of 4.9 per cent, up from a low of 4.4 per cent.

Across each capital city housing market there is a significant gap between those houses that have the lowest rate/sqm and those that have the highest. All figures quoted in this report are based on median sale prices over the 12 months to January 2012 and the average lot size of those properties which have sold.

Although the analysis doesn’t take into account qualitative factors such as the quality or size of the home, views, state of repair or other factors, the analysis provides a simple proxy for the premiums being paid for housing in certain areas.

Generally it is the inner city suburbs within each capital city which have recorded the highest average rate/sqm over the past year.

Not only are these suburbs characterised as being close to the city centre, they have also recorded a subsequent high median selling price and tend to have a fairly small average lot size. As a result of these conditions the rate/sqm is highest in these inner city areas and representative of the premium residents will pay to purchase in these regions even if it means they are acquiring a relatively small lot.

Focusing on those suburbs with the cheapest rate/sqm within the capital cities, it is typically acreage areas and/or those on the outskirts of the city which have made the list. Not only are these suburbs further away from the city but their acreage nature means that demand is typically lower for these properties. It is also important to note that often houses in these areas are not linked to town water and sewerage.

The adjacent tables have detailed the five most expensive and five most affordable suburbs on a rate/sqm basis across each capital city.

The beachside suburb of Tamarama in Sydney recorded the highest rate/sqm ($11,449/sqm) based on a median house price of $4,337,500 and an average lot size of 379sqm over the past year. Tamarama has a relatively limited supply of houses and the fact that many have ocean views has resulted in the high median prices. In recent years the area has also seen the introduction of a lot more small lot housing which has contributed to the higher rates/sqm.

In fact, the five most expensive suburbs on a rate/sqm basis in Sydney were more expensive than any other suburbs across the other capital cities capital cities.

Sydney and Melbourne were the only two cities to have suburbs with an average rate/sqm of more than$5,000. Across Sydney, 26 suburbs had a rate/sqm in excess of $5,000 and in Melbourne seven suburbs did. Not surprisingly, all of these suburbs with a rate/sqm in excess of $5,000 were located relatively close to the city centre and many had a relatively small average lot size.

With a median house price of $398,000 and an average lot size of 72,387sqm, Mt Mee in Brisbane had the lowest rate/sqm at just $5/sqm. Although the suburb is undoubtedly desirable, it is located 47 kilometres away from Brisbane and has very little local amenity. The large average lot size of 72,387 sqm also contributes to the low rate/sqm. Overall the evident trends are to be expected, residents pay a significant premium to be located close to the city centre and this is reflected by the fact that those suburbs close to the CBD have a much higher rate/sqm compared to those situated further away. Acreage properties on the outskirts of the city on the other hand may have a relatively high median sale price however, the large lot sizes result in a fairly low rate/sqm.

As inner city areas continue to undergo densification we would expect that the rate/sqm in these suburbs will continue to increase. The reason being that not only is demand likely to remain strong and possibly increase for inner city properties but also as many homes get knocked down and replaced by higher density construction, there will be fewer opportunities to purchase houses in these areas. As a result, the prices paid for these homes is likely to be higher as the supply of these homes is actually lower than it has been historically.  Source: RPData

According to financial market expectations (based on the ASX cash rate futures yield curve), the cash rate is likely to fall by 50 basis points by the June RBA meeting.  In fact, the yield curve is pointing to a 100 basis point rate cut by years end.
 
According to the RBA, the standard variable mortgage rate at the end of March this year was 7.4%, just 6 percentage points higher than the ten year average which is 7.33%. 

Even if lenders don’t pass the full rate cut on (as most expect they will not), it is safe to assume that next Tuesday we will see variable mortgage rates fall below the 10 year average once again (variable mortgage rates were below average between December 2008 to April 2010, a period of significant house value appreciation).

Lower mortgage rates are certainly a positive for the housing market.  Affordability has already improved on the back of lower dwelling values (values are down 5.3% across the combined capital cities since peaking back in October 2010) and the two rate cuts in November and December last year.  Of course housing affordability will improve further after a rate cut.

Will the rate cut be enough to inject a confidence boost in the economy?  Probably.  Of course it depends on other factors, particularly how labour market conditions pan out and any announcements in the federal budget that affect the household balance sheet.  Overall it makes sense that we should see some gradual improvement in the consumer mindset which will have a positive flow on for retail sales and property sales.  Source: RPData

Real Estate Institute of Australia (REIA) President, Ms Pamela Bennett says there is now no excuse for the Reserve Bank not to deliver the much-needed cuts to interest rates that the market has been demanding. “The latest figures are well within the RBA’s target zone of 2-3 per cent and should provide a clear message to the RBA to reduce official interest rates at its meeting next week,” Ms Bennett said.

The analytical series of trimmed mean and weighted median increased by 0.3 per cent and 0.4 per cent respectively for the March quarter 2012, compared to 0.7 per cent and 0.6 per cent respectively in the previous quarter. “The annual change in trimmed mean is 2.2 per cent and 2.1 per cent for the weighted median, compared to 2.6 per cent and 2.5 per cent respectively for the twelve months to December 2011,” Ms Bennett said.

The housing group increased by 0.6 per cent for the March 2012 quarter compared to 0.4 per cent in the December 2011 quarter. The annual rate decreased from 4.0 per cent for the 12 months to December 2011 to 3.4 per cent for the 12 months to March 2012.

The main contributor to the March quarter increase for the housing group was electricity which increased by 3.0 per cent. For the year to March 2012 the biggest increases in the housing group were for electricity (9.9 per cent), water and sewerage (9.3 per cent) and gas and other household fuels (6.7 per cent). “With inflation well within the RBA’s target zone and a clear message from the Government that there will be a focus on reducing expenditure in the 2012/2013 Budget, it is appropriate to have a cut in interest rates, “concluded Ms Bennett.

Sunland has put the hotel on the market to make way for other future projects, with possible sites at Mariner’s Cove, south of Versace and an up market Brisbane apartment tower.

The new owner will have the keys to a property that has been admired internationally since it was built nearly 12 years ago. According to the article, it is the ultimate entertainment venue, where guests can be spoiled in six-star luxury.

Major features of the three-level complex are 200 en-suite bedrooms, a 65 metre lagoon pool, luxury spa, high-tech gymnasium and marina. There is also a number of first class restaurants, bars and convention facilities.

When building this property, no expense was spared. The developer imported specially-designed Italian fittings and furnishings and flew Italian artisans in to undertake the intricate tiling and mosaic work. The decision to sell the 200 room hotel comes six months after Sunland regained 100 per cent ownership of the property in a deal with a Middle Eastern partner who acquired a 49 per cent stake seven years prior.

McVay Real Estate principal Dan McVay says he expects the hotel to fetch at least $80 million. “It’s totally unique and will be seen as a trophy property, not just by hoteliers but by some of the world’s wealthiest people. “There has been a never-ending trail of people wanting to buy the hotel over the years, virtually all of them from offshore.

“Hence I expect the buyer to be international, with Asian parties probably at the front of the queue.” Mr McVay says Sunland is selling to focus on its core business, property development. “Sunland is not a hotelier and it has retained Palazzo Versace more for sentimental reasons than hard business reasons.

“After all, it’s not easy to walk away from something that was a world-first.” Mr McVay, who with son Sam is marketing Palazzo Versace through an expressions of interest campaign, says he expects the hotel to sell well below replacement cost. “The 200 rooms average 50sq m and at $80 million that equates to $8000 a sq m.

“For that figure you’re not getting just 200 rooms — you also get three restaurants, a ballroom, shops, a gymnasium, a spa, a marina and other facilities.” Mr McVay says Palazzo Versace has performed solidly in the past year against the backdrop of what he regards as the worst market for hotel operators in more than 20 years.

“It’s been making money and should net $4 million or more in the 2011-12 year. “It’s also being sold in pristine condition, having undergone a multimillion-dollar revitalisation in the last 18 months.” Mr McVay says Mariner’s Cove, bought by Sunland for $13 million in September, gives the company an opportunity to create a project with similar landmark status to Palazzo Versace.

Sunland also owns a $25 million central Brisbane development site. Expressions of interest in Palazzo Versace will close in early June.

The hotel has had several famous guests since it opened, including the Rolling Stones, Paris Hilton, Sir Anthony Hopkins and Beyonce and Jay Z and more recently Rod Stewart and Chris Brown. Ruler of the United Arab Emirates Sheikh Maktoum bin Rashed al-Maktoum died at the hotel in 2006.

Vacant land prices start at $199,000, whilst House & Land Packages start from $394,000.  Already buyers have been quick to secure these picturesque acreage allotments with two blocks selling in the first week!

For investors and First Home Buyers, the developers at Jaraman Heights Estate, Boyland are contributing to the purchase costs, enabling you to buy a BRAND NEW HOME on one acre for under $400,000, with NO DEPOSIT and payments of just $497 per week to approved customers.  This is fixed with a low interest rate of 5.9% for three years.

Thanks to reputable Gold Coast builders GM Homes, you get an eighteen square home, in a quiet cul-de-sac, with nothing to do except move in!  Imagine being far enough away from your neighbours that you cannot hear them!  Imagine having room for the kids to play and for dad to build a decent size shed!

But you don’t have to be a First Home Buyer to enjoy the benefits of an eco-friendly lifestyle on offer at Jaraman Heights! The surrounding area has many $600,000 plus properties, so if you’re looking to build a substantial residence, you’ll be in good company!

Several of the lots have sensational views of the surrounding countryside, including Boyland, Biddaddaba and Mount Tamborine.  The school bus is an easy walk for th kids, whilst the surrounding National Park is the perfect place for them to play.

The closest town is Canungra, where you’ll find a Primary School, Supermarket, Newsagent, Hotel, Cafes, Medical, Dental, Chemist and specialty shops.  Canungra is an easy twenty minute drive with no traffic lights or peak hour traffic from Nerang on the Gold Coast.  For Brisbane commuters, you’re just 45 minutes from the CBD!

For details on the vacant land, house and land packages and No Deposit Finance, contact Geoff Brand Real Estate on (07) 5543 5558.

As a first home buyer purchasing or building a new house, townhouse or unit under $600,000 in value, you may be eligible to receive the Queensland Government’s Building Boost Grant of $10,000. Combined with the First Home Owner Grant, you may be eligible for grant assistance totalling $17,000.

For investors and First Home Buyers on the Gold Coast, the developers at Jaraman Heights Estate, Canungra are also contributing to your purchase costs, enabling you to purchase a BRAND NEW HOME on acreage for under $400,000, with ZERO DEPOSIT and payments of just $497 per week to approved customers. This is fixed with an interest rate of 5.9% for three years.

Thanks to Gold Coast builders GM Homes, you get an eighteen square home, in a quiet cul-de-sac, with nothing to do except move in! Imagine being far enough away from your neighbours that you cannot hear them! Imagine having room for the kids to play and for dad to build a decent size shed!

Jaraman Heights is situated 8 kilometres west of Canungra in the picturesque suburb of Boyland! Surrounded by natural bushland, the eco estate offers a limited opportunity for country style living, close to the convenience of shops, schools and transport.
Vacant land prices start at $199,000, whilst House & Land Packages start from $394,000.

The Australian Bureau of Statistics (ABS) recently released demographic data for September 2011 and it showed that population growth has stabilised over the year after falling for much of the past three years.

Over the 12 months to September 2011, Australia’s population increased by almost 320,000 persons (319,632). This is an improvement compared to the recent low of 312,016 over the 12 months to March 2011 however, it is much lower than the peak of 467,314 over the 12 months to December 2008.

On the first graph, the dotted line represents average population growth over the past 30 years and the current rate of growth remains well above average.

Across the states, Victoria has recorded the greatest numerical increase in population with almost 83,000 new residents. Population growth in Victoria, New South Wales and Queensland has accounted for 73% of the nation’s growth in population over the past year.

In percentage terms, Western Australia has been growing at a much faster rate than all other states and territories, increasing by 2.6% over the year. To put this in context, the Australian Capital Territory has been the second fastest growing region with the population increasing by 1.9% over the year.

Over recent years, the slowdown in population growth has largely been the result of a targeted strategy to reduce overseas migration by the Federal Government.

Over the 12 months to September 2011 net overseas migration was 172,498 persons. Although this rate of migration is below the peaks of 315,686 persons over the 12 months to December 2008, the annual rate has been increasing over the past two quarters. Although the rate of net overseas migration has eased over the last few years it remains well above the long-term average (121,499).

The other component of population growth is natural increase (births minus deaths) and it remains quite high despite some recent easing. Over the year, around 147,000 more persons were born than those that had passed away. Natural increase has eased slightly in recent times after peaking at 155,082 persons over the year to September 2009 however, it still remains well above the long-term average levels of around 130,000.

Over the past 12 months, natural increase has accounted for 46% of population growth compared to 54% of population growth which was due to net overseas migration. Much more recent data on long-term arrivals and departures published by the ABS suggests that the rate of overseas migration is set to increase. Over the 12 months the January 2012, the net annual long-term arrivals was recorded at 248,530 persons and this figure has increased by 24.6% compared to January 2011. Given this increase, we would expect that net overseas migration will increase over the coming quarters and subsequently, population growth is also likely to increase at a faster rate.

The likelihood of higher rates of population growth are likely to provide some debate, especially considering that many expect the unemployment rate to increase over the coming year. Skilled overseas labour is important especially within the mining and resources sector where there are labour shortages. Of course, higher population does bring some potential problems as it increases the demand for housing, the need for infrastructure investment and demand for essential services. There are also environmental impacts of population growth with more demand for electricity and gas, building materials for homes and more pollution.

On the other hand, increases in population, particularly skilled working age population growth, increases the tax base and helps boost revenues for all levels of Government. It also increases demand for goods and services across the economy. Population growth is a balancing act and both sides of politics have argued that they don’t believe the record high rates of population growth recorded over 2007 and 2008 were appropriate. Given this, it will be interesting to see how much further the rate of net overseas migration increases over the coming quarters. Source:RPData