Archive for December, 2008
MELBOURNE’S last big auction day of 2008 ended with a mad scramble from buyers and sellers hoping to get contracts signed before Christmas.
The weekend clearance rate of 57 per cent from more than 600 auctions was still low, but up on the previous week.
Industry experts said the scramble, fuelled by interest rate cuts, showed that the property downturn might be easing.
Read the full article here:
Times are tough but some experts believe we’re through the worst of it.
Can you hear it? It sounds like a distant ring, a peal of bells, not of Yuletide bonhomie but of changed fortunes in that most solid of staple investments, bricks and mortar. Shares are so yesterday. Stockbroking is a dirty word. Nobody’s talking margin loans. But could the property market be a bellwether of better times?
At least some of the notes are on song. The Reserve Bank dropping the cash rate to 4.25 per cent and perhaps going even lower. Figures this week from the nation’s largest mortgage broker, AFG, indicate NSW first-home buyers are back in the market, with November’s loan approvals up 113 per cent on August. And Sydney house prices – despite all the doomsday scenarios – actually gained 0.51 per cent in the October quarter. There was also a 1.6 per cent increase in the number of loans for established homes in October.
"The property market has moved through the bottom of its cycle," says RP Data’s head of research, Tim Lawless.
Read the full article here:
The construction industry has hit a wall, with the number of new houses and units built nationwide plummeting to a seven-year low.
New figures from the Bureau of Statistics show the number of dwellings built in the three months to September 30 dropped 10.7 per cent compared with the previous three months.
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Australia’s central bank will hold off on further rate cuts until at least February, according to its December meeting minutes, allowing time for recent rate cuts to work their way through the economy and spur growth.
Read the full article here:
Here’s an interesting article about developers who are spending up to $100,000 to help buyers imagine they’ve already moved in.
Below is an extract:
Discounts on new apartments, deals to pay stamp duty for buyers, special offers galore . . . With developers desperate for buyers of new apartment projects as the banks continue to rein in credit and with many consumers lacking the confidence to actually commit, there’s still one great weapon left in their armoury: the display suite.
Fitted out with top-quality designer furniture, painted in the latest stylish colour palettes, decorated often with original artwork and regularly finished down to the last detail with cutlery, glasses and plates, it’s guaranteed to leave every potential buyer salivating.
"Apartments look so different when they’re empty to when they’re well-furnished," says Andrew Finlayson of developer Carrington, with penthouses for sale at Kensington apartment complex Capella and Wahroonga’s Beumont both beautifully fitted out by stylists.
"It sets the mood and feel, and shows off the architecture of an apartment and it helps people get the sense of how much space is available."
In today’s soft property market, the chief executive of the developers’ lobby Urban Taskforce Australia, Aaron Gadiel, says display suites have never been more important as marketing tools. Today developers are under huge pressure to sell as many apartments as they can off the plan because of the credit crunch tightening bank finance.
"They’re not able to borrow as much as previously, so a good display suite is vital to enable them to sell as soon as possible," Gadiel says. "You’re seeing a lot more developers at the moment using them and their look, feel and quality are now much more important than ever."
At Mirvac’s new Springdale development in Killara, the display apartment cost between $80,000 and $100,000 to be fully furnished and decorated. Marketing director James Bell says the outlay, with apartments still for sale priced from $1,025,000 for two bedrooms and from $1.03 million for three, is absolutely worthwhile.
"If you’ve got good design, good finishes and a good location, it only makes your product even more attractive," he says.
At Beumont, where the three-bedroom-plus-study, three-bathroom penthouse is for sale at $2.5 million, spending about $80,000 on the display styled by Coco Republic was similarly worthwhile. By the same token, the fit-out of the three-bedroom-plus-study, two-bathroom Capella penthouse at $2.2 million was worth slightly less.
"You can fill a place up with utilitarian furniture but really you want people to feel they can see themselves in the space," Finlayson says.
"And you furnish according to the taste of your target demographic."
How to read a display suite
It’s all very well to fall in love with the look of an apartment display suite but don’t forget: love can be blind. Craig Yelland and Ian Briggs of Plus Architecture advise:
- Take a tape measure.
- Understand how an apartment is measured – mostly from mid-wall to the middle of the party wall.
- Confirm the ceiling heights in the display suite are the same as in the end product.
- Check the size of the beds. Double beds make rooms look bigger because they are smaller but many people assume they’re queens.
- Work out whether your fridge will fit in the fridge well.
- Don’t assume what you see is what you’ll get. What are the standard finishes and optional extras? Ask lots of questions to find out exactly what you’re buying.
- Check what you can’t see. Are the walls strong enough to hold a plasma television? Test the firmness of the vanity basin.
- Ask if there are enough power points in every room. In bathrooms and kitchens particularly, adding extras can end up costing thousands.
- Make sure the lift is big enough to fit your couch and fridge.
- Don’t forget to check other items such as the communal gym and pool, strata fees, location and local amenities.
Here’s a list of ideas to make your place look great this summer for the festive season:
1 Wallpaper is hip. Everything old is new again and a quick, neat way to brighten up a wall or even just a strip of wall is to get on to the new generation of wallpaper design. Retro shops often have pristine rolls of old paper too, boasting those sunny oranges, greens and yellows. Don’t be afraid: this is a great way to make a small wall interesting, and if you tire of it, peel it off and paint.
2 Paint, paint, paint. Speaking of paint, get out and have a look at the kaleidoscope of colours on offer, from ginseng to mountain fire. Sure, the names don’t bear much relation to the colours but this is a quick, cheap way to brighten up a room, wall or just a bit of window trim.
3 Colourful glass bottles. These are a great idea to bring a bit of life into a home. Get an instant stained-glass effect by positioning two or three different colours near a natural light source. Don’t use them as vases; they look better when the light can shine through unencumbered.
4 Clean out the shed. Not only will you get kudos from significant others for finally doing something in that black hole, you might just find something in there worth reclaiming – an old chair, plant stand or simple timber box might be cleaned up and become a cool interior feature.
5 Tablescaping. A slightly grand appellation for the meeting of interior design and craft. Use a table (or any flat surface) to create a tableau or simple display using flowers, knick-knacks or fabrics. A current American craze.
6 Handle it. Make over a kitchen or a bathroom with something as simple as changing the door handles. You can go for bling at designer shops or check out the local hardware stores for a more economical selection.
7 One giant green leaf. While it might seem as if everything is withering and brown in your garden, you’ll always be able to find some hearty old souls still shining verdantly. Pluck them out (large palm, monstera, lily leaves) and pop a couple in a large vase to create a cool, serene feature, particularly soothing in summer against a crisp white wall.
8 Get rid of the stuff. Summer is a time to enjoy your home so let the light in. Look at peeling the kids’ pictures off the fridge and storing them. Take away the bits and pieces that accumulate around windows and near doors as these can block the flow of light through the home. If you have a little unused corner consider installing a small desk with drawers to stash bills, paperwork and miscellaneous items.
9 Rearrange. It’s hot outside, baseliners are dominating the tennis, even looking at cricketers standing out in 40-plus degree heat makes you feel slightly woozy so turn off the box and start rearranging the furniture. You’ll be amazed how you can give your home a fresh new look by moving or even removing a few key pieces of furniture.
10 Herbs. Simple, beautiful and useful. A window box full of summer flavour looks great against a kitchen window and there’s nothing like the satisfaction of snipping off the basil and sprinkling it in the salad. They smell fantastic, too.
You can find the remaining 10 ideas from author Lou Sweeney of The Age, by going here: http://www.domain.com.au/Public/Article.aspx?id=1228585111557&index=NationalIndex&headline=To%20great%20effect
Wizard home loans have produced a list of 12 mortgage myths that are of concern to Australian home buyers, here are the first six:
A bad credit history doesn’t matter if you eventually pay it off
Your credit history records any missed or defaulted payments on things such as credit cards, interest free contracts, and mobile phone plans. A patchy credit history can haunt you – even if it is very old or just a one off small amount. There are two major credit reporting agencies that record all of these debts and lenders consult these agencies before they complete your loan application.
Assets are the same as income
No matter the strength of your assets, what really makes the difference is your capacity to repay the loan through a regular income. When it comes down to servicing, a lender will only lend as much as people can afford to repay. The amount of income earning capacity you have will ultimately determine how much you are able to borrow.
It’s the credit card balance, not the limit that counts
When it comes to credit cards it’s not all about the balance on your card, or cards, it’s the total available credit that counts. Having a large range of credit does not necessarily equate to a good credit history.
You need a 20 per cent deposit to get started
Not true. These days, you can borrow up to 97 to 100 per cent of the property value, which is proving to be an attractive option for many cashed up first home buyers who often wonder whether they’ll ever get their feet onto the property ladder. What’s important to remember is a lower deposit may mean a higher interest rate and fees.
Cheapest is the best
A ‘cheap as chips’ interest rate may be a good incentive to sign the dotted line, but beware – in many cases these loans may have higher fees and less flexibility, costing you more money over the life of your loan. A standard variable loan at a slightly higher rate with flexible features, such as the ability to make additional and lump sum repayments, can save you more money in the long run.
A fixed rate is always safer than a variable rate
Every home loan is different – so too are your home loan needs. What’s important to remember is that fixed rates are calculated by the capital markets over the period you sign-on for, whether that be for three, five, or seven years. If variable interest rates go down during this fixed period, you could end up paying a higher interest rate than compared to the standard variable rate.
Get the full 12 mortgage myths here:
Two of Australia’s biggest residential developers have called the bottom of the housing market, saying some life should return to the troubled sector next year.
Billionaire apartment developer Harry Triguboff and the listed Mirvac Group said signs of growth in demand were emerging.
It runs counter to a report this week from AMP chief economist Shane Oliver, who said Australia’s overvalued house prices could fall 10-15 per cent next year.
Mr Triguboff, founder and owner of the country’s biggest apartment builder Meriton, completed and sold 1000 apartments this year, well down on the 3000 a year built during the boom in 2002, The Weekend Australian reports.
Next year, he hopes to build 1500.
While Mr Triguboff said he "always met the market" when conditions cooled, he expected Meriton’s prices to rise 10 per cent next year underpinned by the government stimulus of rising rents and the lack of supply.
"I don’t think we have to worry, we have such help from the Government," he said, referring to Canberra’s $14,000 grant for established homes and $21,000 for newly constructed homes announced in October.
"Petrol has come down, income tax has come down. Some people will lose their jobs, sure, but let’s talk about the ones who won’t."
AMP’s Mr Oliver said an increase in unemployment posed a significant threat to house prices. AMP forecasts the jobless rate will rise from 4.3 per cent to 6.5 per cent in 2010.
Mirvac Group chairman James MacKenzie said the company was starting to see "what we hope are early signs that the residential market, and consequent demand for Mirvac product, being stimulated", though he was cautious, given the state of the market.
He also cited the Federal Government’s boost to the first home-buyers grant, the cuts in interest rates and measures in the NSW Government’s mini-budget as factors.
Read the full article from Jessica Irvine and Turi Condon of Perth Now here: