CategoriesNews

Scott Morrison gives blunt assessment of property market: ‘That’s how the market works’

Ashleigh Gleeson February 25, 2022

Prime Minister Scott Morrison says house prices are rising, bluntly adding “that’s how the market works”, during an address to the building and construction industry.

Mr Morrison and Labor leader Anthony Albanese each delivered speeches to the annual Master Builders National Leaders Election Summit on Friday that had to be held virtually due to Covid.

The Prime Minister said builders had been integral to Australia’s economic success because they had “kept moving” throughout the pandemic.

“We’ve seen dwelling approvals, new home sales, housing finance bounce back significantly, not just once but on number of occasions,” he said.

“More detached homes began construction in the year to September 2021 than any previous period since records began.”

He later spoke about the government’s homebuyer guarantee scheme, which helps people looking to buy a property for the first time get into the market without having to pay expensive lenders mortgage insurance.

There are different schemes that allow them to build a new home or buy an existing one.

About 300,000 people have used the schemes in the last three years.

“Now it hasn’t got easier to buy a home in any of our capital cities and particularly in an increasing number of regional areas,” Mr Morrison said.

“Prices have been going up.

“That’s how the market works.”

But Mr Morrison said the number of owner-occupier first-time buyers had risen from 100,000 a year to 170,000 a year.

The Prime Minister’s blunt assessment comes after the latest Australian Bureau of Statistics data this week showed that wage growth rose 2.3 per cent compared to a year earlier, still well short of inflation at 3.5 per cent.

Mr Albanese told the summit that families were struggling to get by and wages weren’t keeping up with the cost of living.

He didn’t go into specifics of how he would fix that problem.

“The key to lifting that is productivity,” he said.

“The key to lifting that is making sure that we boost the economy and that we have appropriate policies in place.”

He said he would take the approach of “co-operation and working with people” if he was prime minister.

Mr Albanese said unions and employer organisations had a critical role to play in building Australia’s economy.

“As you know, one of the things that I’ve always done is say that there’s common interest between employers and employees,” he said.

“That’s why unions as well as employer organisations have such a critical role to play in building our economy.

“Common interest – that’s what we need more of, not division and chaos, which is what we’re seeing at the moment.”

Mr Albanese then spoke about a Labor policy to get tradies onto the tools by supporting construction of social housing.

CategoriesNews

Qld Government to Spend $1.1 Billion for Brisbane to GC Faster Rail

Brisbane Development February 23, 2022

The Palaszczuk Government has committed an additional $1.121 billion to deliver faster rail services between the Brisbane, Logan, Beenleigh and the Gold Coast.

As the first piece of Olympics transport infrastructure, Premier Annastacia Palaszczuk said the major project would see more tracks laid and level crossings removed to support faster, more frequent train services.

“Delivering new transport infrastructure that that will create jobs and ease congestion are central to our COVID-19 Economic Recovery Plan,” the Premier said.

“As we plan and build for the Olympics, this project is all about making sure people spend less time commuting and more time at home with their families and enjoying our great Queensland lifestyle.

“We’ve seen significant growth in South East Queensland over the last two decades and we expect this to continue with an extra 1.2 million people living in the region by 2036.

“My government is committed to seeing transport times between the Gold Coast and Brisbane reduced, as we continue to see the population increase in key suburban areas along the rail corridor.

“It’s only thanks to our strong health response and economic recovery that we’re able to deliver important projects like this that will be critical to serving our growing population and ensuring we’re prepared for the 2032 Olympic and Paralympic Games.”

The Premier said the project had potential to create about 900 jobs.

“Today we’re calling on the Federal Government to match our additional $1.121 billion funding commitment to ensure we can deliver this important project for the people of Queensland,” she said.

“To ensure South East Queensland can continue to grow, we must keep evolving our rail network so it plays a bigger role in moving people from A to B.

“We continue to see progress made on the transformational Cross River Rail project, which today’s investment will complement – meaning faster, more frequent journeys.”

Transport and Main Roads Minister Mark Bailey said trains between Kuraby and Beenleigh currently share a single track in each direction.

“We are limited in the number of peak services we run each day, but by duplicating the track between Kuraby and Beenleigh stations, we can increase capacity through the region,” Mr Bailey said.

“Local motorists will also benefit with five level crossings to be removed and nine stations will be upgraded – vastly improving the amenities available to local commuters.

“Our government has shown its vision and commitment to investing in transformative rail projects that deliver improve services for Queenslanders and our $1.121 billion commitment is just another example of that.”

Mr Bailey said the Palaszczuk Government’s funding commitment will benefit key areas in the growing South East.

“We know that this project will deliver an abundance of economic and social benefits to the Logan region, and for all those who use the rail line to travel between the Gold Coast and Brisbane,” he said.

“Thanks to our strong health response we’ve seen an even stronger economic recovery, which means we have more Queenslanders back at work and school, and more trips on public transport.

“In the week that school went back, there was a 50 per cent increase public transport use and we expect this number will continue to grow as we get back on track.

“That’s why investing in this infrastructure now – leading to jobs creation through construction and operation, while providing better access to public transport for the growing Logan community.

“We saw some great results from recent community consultation, demonstrating that locals are engaged and helping to shape the future design of this important overhaul.”

Mr Bailey said the Australian Government had already committed $178.1 million in preconstruction funding.

The recently completed business case puts this project at a total cost of $2.598 billion,” he said.

“As with our previous commitment, it’s important the Federal Government come to the table and honour the 50:50 funding arrangement currently in place.

“The Palaszczuk Labor Government has gone it alone on massive infrastructure projects, like Cross River Rail, and it’s time the Australian Government shows its commitment to Queenslanders.

“I am committed to working closely with all levels of government to deliver this project and look forward to seeing the momentum on this project continue.”

Since March 2018, Infrastructure Australia has included ‘Gold Coast rail line and station improvements: Kuraby to Beenleigh’ in the Infrastructure Priority List and the South East Queensland Regional Transport Plan identifies an upgrade of the Kuraby to Beenleigh section of the rail network as a priority action.

CategoriesNews

Where house prices could be in two years if economists are right

Elizabeth Redman February 21, 2022

Where would property prices be if they rise a little further and then fall slightly over the next couple of years, as economists expect?

Home prices could end up close to current levels or back at the same level as last year, but with the kicker that mortgage repayments will be more expensive.

Once the Reserve Bank lifts the cash rate – perhaps as early as June or as late as 2023 – home buyers will be able to borrow less, which could constrain how much they can bid at auction and push prices down.

The forecasts come after home values soared in the pandemic, as locked-down buyers armed with crisis-era interest rates chased more spacious accommodation to work from home.

Sydney home values were already high relative to wages and then jumped 25.3 per cent in 2021 to a median $1.098 million, on CoreLogic figures that include both houses and apartments. Melbourne rose 15.1 per cent to a median of $795,000, while the national median rose 22.1 per cent to almost $710,000.

The jump famously surprised economists, who had expected a deep recession and dwelling price falls of as much as 20 per cent, before stimulus measures and effective social distancing came to the rescue.

Professional property buyers warn serious purchasers against trying to pick the peak and trough of the market, due to the risk of missing out if conditions turn.

ANZ last week predicted average capital city housing prices to rise about 8 per cent this year and fall about 6 per cent in 2023.

Sydney is tipped to rise 9 per cent and fall 7 per cent, while Melbourne is set to rise 5 per cent and fall 6 per cent.

The strong gains of last year are unlikely to be repeated in 2022, the bank warned, due to higher mortgage rates, constrained affordability, and a clampdown from the bank regulator that is already reducing the maximum amount buyers can borrow. A return of demand from immigrant buyers is not expected to be enough to trump the increased cost of borrowing.

ANZ expects the cash rate to start rising in September and reach 2 per cent by the end of 2023, but predicts property price falls would only be modest compared to the run-up over the past two years.

If this forecast played out, home values would finish 2023 barely changed compared to the end of 2021, with Sydney just $15,000 higher at $1.113 million and Melbourne $10,000 lower at about $785,000.

ANZ senior economist Felicity Emmett expects a soft landing for the property market as prices peak this year and fall next. But the buying landscape may look different in two years with a higher cash rate.

“By the end of 2023 prices are going to end up close to where they are now,” she said.

Though property prices would ease as interest rates rose, reduced borrowing power would also make it harder for some to get into the property market, Ms Emmett said.

Westpac is a little more downbeat on prices and tips the cash rate to start rising in August, eventually reaching 1.75 per cent.

Home values are set to rise just 2 per cent this year, fall 7 per cent in 2023 and a further 5 per cent in 2024 before stabilising, the bank expects.

But in Sydney and Melbourne, dwelling prices are tipped to finish this year flat and drop 9 per cent next year, with further falls in 2024 of 5 per cent for Sydney and 6 per cent for Melbourne.

That would leave Sydney median values just under $1 million by the end of next year and about $950,000 by the end of 2024, while Melbourne would sit at about $723,000 next year and $680,000 by late 2024.

The bank said prices at the end of 2024 would be on par with their level in April last year.

Westpac senior economist Matthew Hassan said the bank’s surveys showed most consumers were only expecting 50 basis points of rate hikes and had not yet realised how high interest rates were likely to climb.

Once they realised, that could halt property price growth, although Sydney and Melbourne could see steeper falls than relatively affordable cities such as Brisbane and Adelaide.

“Initially, the move higher in interest rates dominates the affordability picture,” he predicted.

“As we move through the price correction into 2023 and 2024, once rates stabilise we do get some improvement in affordability. It’s probably only going to be if and when an easing cycle materialises we’ll see an affordable market.”

Wage rises could help potential home buyers, but the effect would only be marginal.

NAB economists expect the cash rate to rise from November and a turning point for property prices in the second half of this year.

Overall dwelling prices are tipped to rise 3 per cent this year and fall 10 per cent next, with Sydney to rise 1.9 per cent and Melbourne to rise 1.2 per cent this year, and both cities to fall 11.4 per cent in 2023.

This would leave Sydney values about $107,000 lower by the end of next year, at just over $991,000. Melbourne values would be $82,000 less, at about $713,000.

“We do not see these declines as disorderly, with the labour market remaining strong, wages growth picking up and rates still relatively low – though steadily increasing,” NAB Group chief economist Alan Oster wrote in a recent note to clients.

Commonwealth Bank head of Australian economics Gareth Aird made headlines last week when he tipped the cash rate to start rising from June.

He had been thinking dwelling prices would rise 7 per cent this year, but will now reassess. He still expects a 10 per cent fall once prices peak.

“What ends up happening to home prices will be dictated by what happens when the Reserve Bank ends up moving interest rates,” he said.

“The earlier they lift the cash rate the earlier that’s going to mark the peak.”

He noted that Sydney and Melbourne home values have been holding broadly steady in February so far, as measured by the daily CoreLogic index, adding one month did not make a trend, but tentative evidence was emerging that prices were close to peaking in the largest capitals.

If wages rise as the Reserve Bank hopes, that could help borrowers repay their loans, but the increase in interest rates would have a bigger impact than the increase in wages, he said.

CategoriesNews

Would you co-buy with the government if it meant you could own a house?

Kate Burke February 20, 2022

The federal government could help more Australians into the property market by co-purchasing homes with lower-income earners, a leading think tank has proposed as the nation’s housing crisis pushes the dream of homeownership further out of reach for many.

A national shared equity scheme, where the federal government co-purchases up to 30 per cent of a property’s value, is being called for by the Grattan Institute ahead of the next election as a way to help arrest declining rates of homeownership among poorer Australians.

The proposed scheme would enable first-home buyers and older Australians re-entering the market to buy with as little as a 5 per cent deposit when co-purchasing with the government, which would then take the same proportionate share, of up to 30 per cent, of any profits when the home was sold.

The scheme would be restricted to single people with incomes below $60,000, or couples with combined incomes below $90,000, purchasing their principal place of residence. Regional price caps would mean participants could only buy homes costing less than the median property price in their city or region.

Grattan Institute economic policy program director Brendan Coates said the rapid rise of house prices had made saving a deposit a huge problem for those without the help of “the bank of mum and dad”.

“House prices have risen so much relative to incomes that it is increasingly difficult for anyone to buy a home without family support,” Mr Coates said.

He noted that homeownership rates were falling fast, especially among the young and poor, halving over recent decades for lower-income earners aged 24-34, from 57 per cent to 28 per cent.

The proposal follows the NSW government’s recent announcement that it was developing a shared equity scheme to help first-home buyers, and the Victorian government’s expansion of a similar scheme late last year.

Shared equity schemes are already in place in Western Australia, South Australia and Tasmania but offer comparatively few shared-equity loans, Mr Coates said. They are also an option for public housing tenants in Queensland, while low- to moderate-income earners can access a land rent scheme in the ACT.

“There is a patchwork of existing state schemes – the longest is Western Australia’s Keystart, and that’s been effective but still relatively small,” Mr Coates said, adding that it had a very low default rate and had turned a profit for the government over time.

State schemes should be replaced or funded through a national partnership agreement, the proposal suggests, as the federal government had lower borrowing costs than state governments and was better placed than private providers to secure the long-term financing required.

The shared equity scheme would help first-home buyers into the market faster, but also help older Australians, especially vulnerable older women who may have the savings needed for a deposit but too little time left in the workforce to secure the loan they need, Mr Coates said.

It would be capped at 5000 places a year in the early years, and purchasers would borrow the remaining funds from a private lender. Participants would then have the option to buy out the government’s equity stake, in 5 per cent increments, for the market rate at that time.

The paper also noted that governments needed to reform the planning system and wind back housing tax breaks such as negative gearing and the capital gains tax discount to reduce demand, as the Grattan Institute has long argued. The think tank has also previously called for a 40 per cent rise in Commonwealth Rent Assistance and the establishment of a social housing future fund.

Mr Coates acknowledged that shared equity schemes could result in higher house prices by adding to housing demand but said the targeted nature of the scheme meant any impact would be modest.

He said the direct financial cost to the federal government would also be modest, at just $220 million over the first four years, but the federal budget would probably benefit in the long term.

Independent economist Saul Eslake said while the targeted scheme tried to minimise the risk of putting upward pressure on property prices, it was still a risk factor.

“My instinctive reaction to schemes like this is that anything that allows Australians to spend more on housing than they otherwise would, which this does, results in more expensive housing rather than more people owning housing,” Mr Eslake said.

He would prefer buyers to purchase new homes, as with some state schemes, so helping to add to new supply, although he acknowledged there was a risk that this would add to the cost of new homes and end up in the profit margins of builders and developers.

Mr Eslake said the scheme would be preferable to grants and concessions, and there would at least be a return on the taxpayer dollars used for the scheme when a property was sold. The inclusion of older Australians looking to re-enter the market was also favourable.

“I still think it is no substitute for other measures to increase the supply of [social, affordable and private] housing and to reduce demand for it from investors,” Mr Eslake said.

Professor Hal Pawson, associate director of the University of NSW’s City Future Research Centre, felt it would be a politically attractive policy but shared similar concerns.

“The challenge for all these types of schemes is how much are they really lowering the income threshold for homeownership?” he said, noting that they typically brought forward first-home buyer purchases that would have otherwise occurred and did little to help those for whom homeownership was completely out-of-reach.

He expected the scheme could have a small impact on property prices but that this would be “less damaging than simply dishing out grants to first-home buyers”.

However, he felt it would be hard to justify such program without committing to an equivalent or larger expansion of support for low-income renters, who were more in need of assistance.

“The next federal government will ideally look at the whole housing system and does not only focus initiatives on homeownership, which is what we’ve seen in this term … where the two major initiatives have been the First Home Loan Deposit Scheme and then HomeBuilder.”

CategoriesNews

What each state’s restriction status means for real estate

Sarah Dowling 17 Feb 2022

Live auctions and inspections are up and running across the country as vaccination rates surge, however some restrictions remain.

Here’s a state-by-state look at what each government is currently permitting.

Victoria

From 6pm, Friday 18 February a number of restrictions and recommendations in place during the state’s Omicron surge will be eased.

Density limits in hospitality and entertainment venues will be removed, and QR check-in requirements scrapped in shops, schools and many workplaces.

Face masks rules will remain in place, with masks required indoors, except at home, for everyone aged 8 and over, unless exempt, although Premier Daniel Andrews flagged other changes will be considered next week.

Auctions and open homes can take place under the following settings.

Inspections:

There are no vaccination requirements for people attending real estate inspections, however real estate agents must be fully vaccinated (unless exempt).

There are no density limits for open homes.

Face masks are mandatory indoors. If outdoors, a face masks must be carried at all times.

Auctions:

There are no vaccination requirements for people attending real estate auctions, however real estate agents must be fully vaccinated (unless exempt).

There are no density limits for auctions.

Face masks are mandatory indoors. If outdoors, a face masks must be carried at all times.

New South Wales

The NSW Government has scaled back COVID-19 restrictions further as part of a staged approach to living with the virus.

Density limits will be scrapped from Friday 18 February, with QR check-ins only required for nightclubs and music festivals with more than 1,000 people. The recommendation to work from home will change and be returned to the employer’s discretion.

Rules will ease further from Friday 25 February, when masks will no longer be mandated for indoor settings, instead limited to certain settings, such as on public transport, planes and airports, hospitals and aged care facilities.

Auctions and open homes can take place under the following settings:

Inspections:

There is no density limit for how many people can inspect a home for sale or lease.

There are no vaccination requirements for agents or buyers attending open homes, however some agents and owners may choose to require people to be fully vaccinated as a condition of entry.

People no longer need to check-in when inspecting a home.

Auctions:

There is no density limit for how many people can attend an auction.

There are no vaccination requirements for agents or buyers attending auctions, however some agents and owners may choose to require people to be fully vaccinated as a condition of entry. If you want to enter premises where an occupier has chosen to require you to be fully vaccinated, you do not have to show the occupier your vaccination evidence, but if you do not, the occupier may not let you in.

People no longer need to check-in when inspecting a home.

Western Australia

Home inspections and auctions are currently allowed to take place under the following guidelines:

Inspections:

Home inspections can take place. While not mandatory, real estate agents are encouraged to maintain 1.5 metres separation between people who are not from the same household or groups of other patrons.

Masks are not mandatory indoors but encouraged where physical distancing is not possible.

Real estate agents are required to maintain a mandatory contact register for staff and visitors to assist with WA Department of Health contact tracing, should it be required.

Real estate agents are expected to ensure their COVID Safety Plans are updated and continue to be implemented (social distancing, hand sanitiser and record keeping etc).

Residents in Perth and Peel, the South West, Wheatbelt and Great Southern regions are required to wear a face mask in all public indoor settings.

Auctions:

Live auctions can take place. While not mandatory, real estate agents are encouraged to maintain 1.5 metres separation between people who are not from the same household or groups of other patrons.

Masks are not mandatory indoors but encouraged where physical distancing is not possible.

Real estate agents are required to maintain a mandatory contact register for staff and visitors to assist with WA Department of Health contact tracing, should it be required.

Real estate agents are expected to ensure their COVID Safety Plans are updated and continue to be implemented (social distancing, hand sanitiser and record keeping etc).

Residents in Perth and Peel, the South West, Wheatbelt and Great Southern regions are required to wear a face mask in all public indoor settings.


Northern Territory

Home inspections and in-person auctions are allowed to take place under the following guidelines:

Inspections:

In-person inspections are permitted.

All people must check in using the Territory Check-In App, no matter how long they spend at the venue.

Real estate agents must have a COVID-19 safety plan in place and provide hand sanitiser. People are encouraged to follow physical distancing rules and keep 1.5 metres from people they don’t live with.

Auctions:

All people must check in using the Territory Check-In App, no matter how long they spend at the venue.

Real estate agents must have a COVID-19 safety plan in place and provide hand sanitiser. People are encouraged to follow physical distancing rules and keep 1.5 metres from people they don’t live with.


Queensland

From 17 December, new restrictions came into effect for people who are not fully vaccinated.

Unvaccinated residents will no longer be able to visit vulnerable settings, such as hospitals and aged care facilities, or attend hospitality and entertainment venues.

In addition, these venues will no longer have density limits, with only fully vaccinated people permitted.

From January 2, masks must be worn in all indoor settings, except in your own home or where it is unsafe, such as while doing strenuous exercise.

Home inspections and live auctions are allowed to take place in Queensland under the following guidelines:

Inspections:

Open homes are permitted and people do not need to be fully vaccinated to enter.

A density limit of one person per two square metres applies for indoor areas.

Agents must collect contact information and follow the government’s COVID-19 safe checklist.

Masks must be worn indoors.

Auctions:

Auctions are permitted and people do not need to be fully vaccinated to attend.

A density limit of one person per two square metres applies for indoor areas.

Agents must collect contact information and follow the government’s COVID-19 safe checklist.

Masks must be worn indoors.

Australian Capital Territory

Home inspections and live auctions are currently allowed to take place under the following guidelines:

Inspections:

Property inspections are permitted in the ACT. If there are 25 people of fewer across the venue, no density limit applies.

If there are more than 25 people a density limit of one person per four square metres per indoor space, or one person per two square metres per outdoor space applies. Outdoor spaces are capped at 300 people. Density limits exclude real estate agents or staff in the count.

People must check in using the Check In CBR app.

Face masks must be worn indoors by people aged 12 years and over, unless exempt.

Auctions:

Auctions are permitted to take place. If there are 25 people of fewer across the venue, no density limit applies.

If there are more than 25 people a density limit of one person per four square metres per indoor space, or one person per two square metres per outdoor space applies. Outdoor spaces are capped at 300 people. Density limits exclude real estate agents or staff in the count.

People must check in using the Check In CBR app.

Face masks must be worn indoors by people aged 12 years and over, unless exempt.

South Australia

Home inspections and live auctions are currently allowed to take place under the following guidelines:

Inspections:

In-person inspections can take place with a one person per two square metre density quotient.

Masks must be worn where social distancing is not possible.

Attendees must check in using the provided QR code (or an alternative record keeping method, where relevant).

Auctions:

Live auctions can take place with a one person per two square metre density quotient.

Masks must be worn where physical distancing is not possible.

Attendees must check in using the provided QR code (or an alternative record keeping method, where relevant).

Tasmania

Home inspections and live auctions are currently allowed to take place under the following guidelines:

Inspections:

Up to 250 people are allowed to attend an open inspection per undivided indoor space, or up to 1,000 people per undivided outdoor area, including staff and children. The total number of people at a premise cannot exceed one person per two square metres.

All attendee names and contact details must be recorded for contact tracing purposes.

Real estate agents must follow a COVID-19 Safety plan.

Auctions:

Up to 250 people are allowed to attend an auction per undivided indoor space, or up to 1,000 people per undivided outdoor area, including staff and children. The total number of people at a premise cannot exceed one person per two square metres.

All attendee names and contact details must be recorded for contact tracing purposes.

Real estate agents must follow a COVID-19 Safety plan.

Get in touch

phone

1300 869 618

Sydney Office : Suite 18, 33 Waterloo Rd Macquarie Park NSW 2113

Brisbane Office : Suite 4, 88 Brandl St Eight Mile Plains QLD 4113

email

about us

Better Life Property Group (BLPG) is a Property Project Marketing company which offers a “one stop property consulting” services covering the metropolitan NSW and the regions of Queensland. learn more

Newsletter

Get latest property news & events

© 2006 – 2022 Better Life Property Group.  All rights reserved.

Website by Hyeon Design