The New South Wales residential building industry is being stifled by red tape and taxes leading up to the state election, according to the Housing Industry Association (HIA).
A large portion (43%) of a new house and land package's cost of is made up of taxes, charges and levies from all three tiers of government. On top of this, the policies implemented by the state government continue to add to the tax burden for the housing industry, according to David Bare, HIA executive director NSW. Several regulations and taxes have been implemented or proposed in the last 18 months, each one having a negative effect on housing affordability and supply, Bare said. These include slashing caps on Section 94 development contributions, adding $20,000 to $40,000 per home; increasing the BASIX energy efficiency targets, adding an average of $10,000 per new dwelling; introducing a 2% defect bond and an additional double-barrel inspection regime for strata developments. These modifications could easily account for an additional $70,000 to $90,000 per home, and once applied, they may be subject to stamp duty, said Bare. With the issues mentioned above, HIA asserts that all new legislation and regulation affecting the housing sector should be subject to a thorough public regulatory impact assessment. "There are many things our state politicians can consider to help housing supply and affordability that dont require drastic structural change," said Bare. Can you afford to buy in this suburb? Find out how much you can borrow https://www.yourinvestmentpropertymag.com.au/news/taxes-obstacle-for-nsw-residential-industry-260622.aspx
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Chinese buyers will likely continue to account for the largest share of all foreign buyer purchases in Australia this year, according to a report by Juwai.com.
Victoria is set to remain the number-one recipient of Chinese residential investment, both by offshore and local Chinese buyers. Data from the Foreign Investment Review Board showed that the state receives about $4 of foreign real estate investment for every $3 that goes to New South Wales and for every $2 that go to Queensland. Melbourne retains clear advantages over Sydney in terms of lifestyle, prices, and also a foreign buyer stamp duty that at 7% is one point lower than the New South Wales equivalent, Juwai.com CEO and Director Carrie Law said. Consequently, Sydney is forecasted to hold on to the second spot this year. Chinese purchasers consider the city iconic. Very few attractions in Melbourne have earned the same level of awareness among Chinese consumers as have Sydney stand-outs such as Sydney Harbour, Harbour Bridge, the Opera House, and Bondi Beach. More than half (62%) of Chinese tourists visit Sydney, while only 50% go to Melbourne. Brisbane will also benefit from Chinese buying, thanks to families whose children are studying in the city, and who want to house them in a property that they own. Over 33,000 mainland and Hong Kong and mainland Chinese students were studying in Queensland the past year up from about 21,000 in 2015, marking a 57% rise in four years. Many of the buyers we work with hope to defray or actually make a profit on their student housing costs. They buy a residence and rent out an extra bedroom to another student as a roommate. If the combination of that income and possible capital gains is high enough, the student could complete his or her studies having paid a net of zero for their housing, said Law. Chinese buyers are likely to continue to prioritise new apartments and house-and-land packages when looking at all four cities. Notably, buyers are being pulled away from more traditional inner-city locations, and they turn instead to outer suburbs where new estates are rising. Where developers or third parties can provide financing, demand is likely to follow, said Law. Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork plus there is no charge for this service. Get help from a local mortgage broker https://www.yourinvestmentpropertymag.com.au/news/top-locations-for-chinese-buyers-revealed-260679.aspx Investors contributed significantly to the heyday of Sydney and Melbourne in which record-breaking price rises were being posted in these markets, according to a report by Yahoo Finance.
The countrys property market is currently weakening, but in the few years leading up to 2017, prices in major housing markets jumped by more than 50%. Since this property price boom, the amount of investor cash entering Australias housing market has halved, according to the Australian Bureau of Statistics (ABS). The downturn may be linked to the restrained presence of investors in the market, given that they have a lot to do with price increases, said an industry expert. What pushes prices up is when you have more buyers than sellers. For example, at an auction when you have a number of people competing hard for a home. Once you knock the froth off the market and take the excitement away, rather than having a number of people going hard at it you end up with one or maybe two, and most can only go so hard because theyre getting a limited amount of money from the bank, University of Sydney social economist and housing expert Peter Phibbs told The New Daily. Investors propelled the substantial value increases in Australias two biggest cities more than owner-occupiers, he said. Lending to investors was down by 47.8% to $4.89 billion in December from its peak of $9.37 billion in April 2015. The value of home loans issued to owner-occupier home buyers, on the other hand, has barely dropped over the same period down only 0.2% from $12.53 billion in April 2015 to $12.49 billion in December. The level of owner-occupier interest in the housing market has been relatively stable, but investors appetite has fallen. The pace of the decline in investor housing finance is faster than before as the Sydney and Melbourne downturns have worsened. Investors also have a significant advantage over potential owner-occupiers due to the government incentive of negative gearing. This may change, though, depending on the result of the federal election. The Labor Party claims to address the long-outdated negative gearing, but Starr Partners CEO Douglas Driscoll said that that the proposed modifications to the policy could result in a likely influx of overseas property investors. Can you afford to buy in this suburb? Find out how much you can borrow https://www.yourinvestmentpropertymag.com.au/news/the-secret-to-the-property-boom-260585.aspx The Melbourne property market started to cool in 2018 after six years of solid growth, but upswings in median prices at the latter part of the year may be an indication that it is not all doom and gloom for the capital in 2019.
The bayside suburb of Carrum hit the $1 million mark for the first time in the last quarter of 2018, following a 10% increase in the median house price, according to the Real Estate Institute of Victoria (REIV). Carrum was the only suburb to enter the 127-member $1 million club in the October-December quarter of 2018. The bayside location and existing infrastructure, including the train station and schools, were Carrums selling point to families, young people and retirees. In addition, the new Skyrail, as well as an increase in culinary and entertainment options in the suburb and its neighbours such as Patterson Lakes and Chelsea, may have pushed the property values. Bayside locale Elwood also posted a rise in the median house price up 19.6% from $1.73 million to $2.07 million. A total of 10 suburbs with a median price of more than $2 million were recorded in December. Toorak almost joined the $3 million club with its median reaching $2.8 million. Carlton, meanwhile, broke into the $2-million club in 2018 for the first time after its median house price climbed by 36.9% in December. Carlton joins Toorak, Armadale, Hawthorn, Black Rock, Albert Park, Malvern, Elwood, Balwyn and Canterbury in the top 10 most expensive Melbourne suburbs for median house price. Brighton was just nudged out in 11th place with a house median of $1.99 million. Last year, 11,300 houses and 2,000 units sold for more than $1 million in Victoria, REIV President Robyn Waters said. Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork plus there is no charge for this service. Get help from a local mortgage broker https://www.yourinvestmentpropertymag.com.au/news/price-hikes-may-bode-well-for-melbourne-market-260677.aspx Weak Chinese yuan and trade war could be good for Australias property market, according to Juwai.com.
Much has been made of the weakness in the Chinese yuan and how it may restrain overseas investment. In the case of Australia, we disagree. The yuans weakness is not holding back investment in Australian property, said Carrie Law, Juwai.com CEO and director. The yuan-to-Australian-dollar exchange rate is currently up around 6% compared to the number recorded during the same time last year. This means that relative advantage in currency rates is higher in Australia compared to other major countries. While the yuan lost ground to the U.S. dollar and other major currencies, it gained ground on the Aussie. This has led to the yuan becoming an incentive for Chinese buyers to direct their investments to Australia and other countries where their purchasing power is still robust. The report also found that some Chinese investors may opt to enter the Australian market, with trade war making some increasingly anxious about purchasing real estate in the United States. Chinese students who were pulled away from US schools and universities may also opt to go to Australia instead, which would also have spill-over effects on local real estate investment. The trade war could mean more Chinese investment for Australia, said Law. Factors obstructing investments in Australia, though, cannot be discounted from the equation. There are a number of restraints holding back Chinese acquisitions of Australian property at rates much lower than actual demand. Chinese demand is vast, as was revealed in the boom investment years of 2015 and especially 2016. But today that desire to purchase property in Australia is held back. Our metaphor is aquatic. The huge reservoir of Chinese demand is like water held back by a dam. That dam consists of capital controls, onerous Australian foreign buyer taxes, and the difficulties obtaining financing in Australia, said Law. Should a substantial change in any of these areas occur, a corresponding rise in buyer activity could follow. Do you have more than $200k in your super fund? You could use your super to buy property - Find out how https://www.yourinvestmentpropertymag.com.au/news/weak-chinese-yuan-trade-war-benefit-property-market-260625.aspx The auction market continues to record positive results as auction volumes maintain its upward trend, and preliminary clearance rates are higher than the previous weeks figures.
CoreLogic reported that there were 1,444 homes taken to auction across the combined capital cities over the week, up from the past week when 928 homes went under the hammer. However, this is lower than the 1,992 auctions logged during the same period in 2018. Preliminary clearance rates, on the other hand, are at 55.2% and are expected to revise over the week as remaining results are collected. Last weeks final clearance rate across the combined capitals significantly jumped to 51.1%, marking the first time the final clearance rate hit the above 50% mark since September. Prior to that week, final results were at 42.8%. Year-over-year, the numbers are lower compared to the clearance rate of 66.1% recorded. Going by the data for each capital city, CoreLogic revealed that Melbourne was host to 657 auctions this week with preliminary results showing a clearance rate of 54.2%. This is higher than last week when the final clearance rate was at 52.4% across 350 auctions. The auction clearance rate was higher over the same week last year, with 69.8% of the 932 auctions returning a successful result. Sydney logged a total of 521 auctions with a preliminary clearance rate of 61%, up from 54% across 322 auctions last week. During the same time the past year, 737 homes were taken to auction across the city returning a clearance rate of 67.8%. Brisbane and Tasmania were the only cities to log auction volumes drop week-on-week among the smaller auction markets. Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork plus there is no charge for this service. Get help from a local mortgage broker https://www.yourinvestmentpropertymag.com.au/news/clearance-rates-continue-to-swell-260531.aspx The number of suburbs with a million-dollar median across Australia fell year over year, with only 649 suburbs recording a median house or unit value at or in excess of $1 million at the end of last month, compared to the 741 suburbs logged in January 2018.
The current figure is significantly higher than the 123 suburbs a decade ago, but is lower than the 651 suburbs in 2017, according to CoreLogic. The decline in million-dollar suburbs over the year occurred across houses and units. A total of 602 suburbs nationally have a median house value of at least $1 million currently down from 669 suburbs in 2018. On the other hand, only 47 suburbs have a median unit value of at least $1 milliondown from 72 suburbs a year ago. The report found that there were 366 suburbs in New South Wales that had a median house value of at least $1 million and 46 suburbs with a median unit value of at least $1 million. This is much higher than the figures 10 years ago, when only 78 suburbs had a $1 million median house value and only two suburbs had a $1 million median for units. Year over year, though, numbers were down. In January 2019, 402 suburbs had $1 million median prices for houses, and 67 had $1 million median prices for units. Sydney accounted for 93.7% of all million-dollar suburbs in NSW. All of the million-dollar unit suburbs were within the capital. In Victoria, a total of 129 suburbs had a median value of at least $1 million in the previous month, and only one suburb had a median unit value of more than $1 million in the same period. In January 2009, 16 suburbs had a median value of at least $1 million, reflecting the strong growth in dwelling values over the past decade. The number of Victoria suburbs with a million-dollar median has fallen drastically over the past year, down from 170 suburbs 12 months ago. Notably, 125 of the 129 suburbs with a million-dollar median value are located in Melbourne. Queensland boasted 38 million-dollar suburbs, up from 34 a year prior. CoreLogic reported that the number of million-dollar suburbs in Qld has consistently increased each year since 2013 In Brisbane, there were 26 suburbs with a million-dollar median, up from 22 suburbs the previous year. For Tasmania, this year marked the first time in which Hobart had a suburb with a median value in excess of $1 million. The median house value in Battery Point is currently at $1,067,186. Although values in Hobart have risen substantially over recent years, the supply of homes worth more than $1 million remains very low relative to other mainland capital cities. The Northern Territory, meanwhile, had no suburbs with a million-dollar median value throughout any of the past 10 years. The Australian Capital Territory recorded nine suburbs with a median house value of at least $1 million in January. However, there were no suburbs that had a median unit value of at least $1 million Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork plus there is no charge for this service. Get help from a local mortgage broker https://www.yourinvestmentpropertymag.com.au/news/update-on-suburbs-with-a-milliondollar-median-260429.aspx Things are looking up for the residential construction sector as the recent Australian Bureau of Statistics figures on new home building approvals revealed the continued positive results in Hunter region the past year.
The NSW region recorded 4,928 approvals for new dwellings over the period, up by 3% compared to the 4,795 approvals logged in 2017, according to the Housing Industry Association (HIA). Lower Hunter continues to be a key contributor to the improvement of the residential sector. The local government areas of Lake Macquarie, Newcastle, and Maitland remained the top three locations for approvals, making up more than 76% of total approvals. The report also found that the largest percentage increases in total dwelling approvals continued to occur in regional locations. Singleton generated the highest rise, up 41%. It was followed by Cessnock, up 25%, while Muswellbrook climbed 9%. In addition, Cessnock was named the biggest mover, with its housing approvals rising by 129 in 2017. Detached house approvals, which accounted for 60% of all approvals, decreased by 3% compared to the 2017 calendar year. Multi-unit approvals, meanwhile, increased by 2% over the same period. These results point to very healthy levels of activity for the residential construction sector in early 2019. The approvals also reinforce the affordability advantages that the region has over other locations in NSW, particularly Sydney, where housing remains far from affordable for verage households, said Craig Jennion, HIA Hunter executive director. Can you afford to buy in this suburb? Find out how much you can borrow https://www.yourinvestmentpropertymag.com.au/news/new-dwellings-boost-construction-sector-260476.aspx When looking ahead at what 2019 will bring, many in the industry believe that it will continue to be a turbulent year for property investors.
Were seeing an increasing number of borrowers being frustrated by cumbersome, slow and unclear approval processes and policies by major banks, says Heidi Armstrong from Liberty. That means there are a lot more borrowers who are on the cusp of qualifying for a traditional loan, but who find themselves needing a custom lending solution. There could be all sorts of reasons for this including a small, non-financial blemish on their credit history, criteria such as employment length or even spending habits seen in bank statements. As a result, non-bank lenders have increased in relevance in recent years, Armstrong says, because they offer helpful solutions right across the lending spectrum. The need for investors to be savvy in their research while remaining open to all options on the table is a trend that is expected to continue as the one thing that everyone agrees on is the fact that the situation we have now is the new normal. The major lenders are unlikely to soften their policies, and may even become more restrictive as a result of the royal commissions recommendations, says Royden DVaz form Bluestone. In the meantime, more and more interest only loans are set to expire, leaving many investors keen to refinance their loans, which will continue to be difficult. For property investors, the most important takeaway for the coming year should be that valid options are still out there, DVaz adds. Keep looking for a lender who is willing to help if you cant find a solution with your existing bank. The coming year may bring continued upheaval to the sector, but with the right strategy and the right support, there is potential for great opportunity among the chaos, he says. For the full story, including a full investigation into the credit crisis and strategies to help you get a loan in 2019, read the complete feature article in the March 2019 edition of Your Investment Property magazine. On sale at news agencies and Coles supermarkets February 14th to March 14th 2019, or download the magazine now. With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now https://www.yourinvestmentpropertymag.com.au/news/nonbanks-the-answer-for-investors-259917.aspx When looking ahead at what 2019 will bring, many in the industry believe that it will continue to be a turbulent year for property investors.
Were seeing an increasing number of borrowers being frustrated by cumbersome, slow and unclear approval processes and policies by major banks, says Heidi Armstrong from Liberty. That means there are a lot more borrowers who are on the cusp of qualifying for a traditional loan, but who find themselves needing a custom lending solution. There could be all sorts of reasons for this including a small, non-financial blemish on their credit history, criteria such as employment length or even spending habits seen in bank statements. As a result, non-bank lenders have increased in relevance in recent years, Armstrong says, because they offer helpful solutions right across the lending spectrum. The need for investors to be savvy in their research while remaining open to all options on the table is a trend that is expected to continue as the one thing that everyone agrees on is the fact that the situation we have now is the new normal. The major lenders are unlikely to soften their policies, and may even become more restrictive as a result of the royal commissions recommendations, says Royden DVaz form Bluestone. In the meantime, more and more interest only loans are set to expire, leaving many investors keen to refinance their loans, which will continue to be difficult. For property investors, the most important takeaway for the coming year should be that valid options are still out there, DVaz adds. Keep looking for a lender who is willing to help if you cant find a solution with your existing bank. The coming year may bring continued upheaval to the sector, but with the right strategy and the right support, there is potential for great opportunity among the chaos, he says. For the full story, including a full investigation into the credit crisis and strategies to help you get a loan in 2019, read the complete feature article in the March 2019 edition of Your Investment Property magazine. On sale at news agencies and Coles supermarkets February 14th to March 14th 2019, or download the magazine now. Can you afford to buy in this suburb? Find out how much you can borrow https://www.yourinvestmentpropertymag.com.au/news/nonbanks-the-answer-for-investors-259917.aspx |
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