Investment Ideas Article of Interest 16-10-23

Will residential property prices continue to surge despite record breaking interest rate hikes? – article of interest 16-10-2023

Brisbane (1.4%) CoreLogic’s national Home Value Index (HVI) has recorded a third consecutive monthly rise, with the pace of growth accelerating sharply to 1.2% in May.

Brisbane (1.4%) CoreLogic’s national Home Value Index (HVI) has recorded a third consecutive monthly rise, with the pace of growth accelerating sharply to 1.2% in May.

Brisbane (1.4%) CoreLogic’s national Home Value Index (HVI) has recorded a third consecutive monthly rise, with the pace of growth accelerating sharply to 1.2% in May.

— Read on ljgillandrealestate.wordpress.com/2023/06/01/brisbane-1-4/

Brisbane (1.4%) CoreLogic’s national Home Value Index (HVI) has recorded a third consecutive monthly rise, with the pace of growth accelerating sharply to 1.2% in May.

Brisbane (1.4%) CoreLogic’s national Home Value Index (HVI) has recorded a third consecutive monthly rise, with the pace of growth accelerating sharply to 1.2% in May.

Brisbane (1.4%) CoreLogic’s national Home Value Index (HVI) has recorded a third consecutive monthly rise, with the pace of growth accelerating sharply to 1.2% in May.

— Read on ljgillandrealestate.wordpress.com/2023/06/01/brisbane-1-4/

CoreLogic Home Value Index: Australian housing values down -5.3% over 2022 | CoreLogic Australia

Home Value Index

January 2023

After the monthly rate of decline moderated between September and November, housing markets finished the year on a weaker note, with CoreLogic’s national Home Value Index falling -1.1% in December, taking values -5.3% lower over the 2022 calendar year.

The re-acceleration in the downwards trend was mostly driven by a worsening in the monthly rate of decline across Melbourne (which lifted 40 basis points between November’s -0.8%, and December’s -1.2% fall), but declines also accelerated across Sydney, Adelaide, Darwin and Canberra month-on-month.

On the flip side, the pace of falls eased across Brisbane and Hobart, while value movements in Perth remained slightly positive for the second consecutive month.

The -5.3% drop in housing values through 2022 marks the first time since 2018 where national home values fell over the calendar year. The 12 months to December also mark the largest calendar year decline since 2008, when values were down -6.4% amid the Global Financial Crisis, and successive interest rate rises.

Annual value falls were the most significant in Sydney (-12.1%) and Melbourne (-8.1%) where conditions peaked early in the year. Hobart (-6.9%), the ACT (-3.3%), and Brisbane (-1.1%) also recorded an annual drop in housing values, while three capitals saw values rise over the year: Adelaide (10.1%), Darwin (4.3%), and Perth (3.6%).

CoreLogic’s Research Director, Tim Lawless, said this has been a year of contrasts, with housing values mostly rising through the first four months of the year, but falling sharply as the RBA commenced the fastest rate tightening cycle on record.

“Our daily index series saw national home values peak on May 7, shortly after the cash rate moved off emergency lows. Since then, CoreLogic’s national index has fallen -8.2%, following a dramatic 28.9% rise in values through the upswing.”

https://content.corelogic.com.au/e/994732/m-campaign-au-res-hvi-2023-jan/x5skb/579383307?h=CIQjGaHR1ru7ARZ3zIPQKoeXgK2IruXTRinUyLxnWKk

Flooding property under contract what are your rights?

Hello Valued Clients, Friends and Associates,

**Flooded property under contract – what are your rights?**

Many Queenslanders will once again have to deal with the tragic outcomes of the floods and many will be wondering what to do when they’re in the process of buying or selling their homes.  

The standard REIQ residential contract provides that risk in the property (and by inference any included chattels) passes to the buyer at 5pm on the first business day after the contract date. The intention here is to allow the buyer some time to obtain insurance. Risk includes the risk of flooding.

Conditional contracts

Buyers who have the benefit of a cooling off period (usually 5 business days from receiving the signed contract unless sold at auction or waived by the buyer) may be able to terminate a contract for any reason with only a small cooling off penalty of 0.25% of the price.

If the contract is still subject to a building inspection and the inspection occurs after the flood and the buyer is not satisfied with the report then the buyer has the right to terminate the contract.

Unconditional contracts

If the contract is unconditional then the buyer may have no right to terminate the contract unless they can rely on section 64 of the Property Law Act 1974 (Qld) which allows a buyer to terminate the contract if a “dwelling house” (defined to include a unit) is damaged or destroyed to such an extent that it is unfit for occupation as a dwelling.

Whether a dwelling is unfit for occupation will depend on the facts and will therefore vary from case to case. It would be prudent for sellers seeking to enforce a contract to obtain an independent building inspection report that addresses this issue and concludes that the dwelling is fit to be occupied. 

There will be other cases where flood damage has occurred but does not render the property unfit for occupation.

Another matter of concern for buyers who have already satisfied a finance condition and are relying on finance to settle is whether their lender will require a fresh valuation for a flood affected property and if the new valuation doesn’t stack up whether the lender will withdraw their offer of finance putting the buyer in a position where they cannot settle. 

Insurance

If as recommended by their lawyers buyers have arranged insurance after signing a contract then they should check with their insurance brokers to ascertain whether they are covered for loss through flooding.
Many properties damaged by the flooding will not be covered for damages caused by flooding as it has been the practice of most insurance companies not to offer flood insurance for dwellings in known flood areas.

For those that are covered but where the buyer has not effected insurance then the buyer may have some protection if they can rely on section 50 of the Insurance Contracts Act 1984 (Cth) which deems that the buyer is insured under the sellers insurance policy until the earlier of possession or settlement. However this is limited to whatever current insurance the seller has which may be insufficient or ineffective.

Buyers may find themselves in a situation where (if they have to proceed with the contract) they will have a substantial repair bill for the damage to the dwelling.

We look forward to your instructions.

                              Best Regards,

Linda 姬琳达珍 and Carlos Debello (LREA) 
LJ Gilland Real Estate Pty Ltd 
电话：07 3263 6085 

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手机号码: 0409 995 578 & 0400 833 800 

http://ljgrealestate.com.au/testimonials/

linda@ljgrealestate.com.au

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PO Box 19 Zillmere QLD 4034 

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🙏✅ Excellent Realtor

Linda is a dedicated and honest real estate agent with a high level of attention to detail. Linda helped me throughout the way with the whole buying process. She followed up on her promises and assisted in ensuring the buying process was problem free. She has a significant level of industry experience and would recommend her to anyone for the sale and purchase of a property.

Verified by RateMyAgent #property #property #realestateagent #experience #propertymaintenance #propertyinvestment #property #propertymanagement #brisbanewide #referrals #wordofmouthmarketing #est1996 #ljgrealestate Linda J.姬琳达珍 Gilland (Debello) LindaandCarlos Debello Linda-Jane 姬琳达珍 Gilland(Debello) #realtor

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Proposed changes to residential tenancies legislation before the Queensland Parliament have met with a mixed reaction — fair and balanced according to the real estate lobby, but a “disappointment” according to those who represent tenants.

Key points:

•
Draft laws introduced this week make it harder for landlords to end leases

•
A proposal to prevent landlords not being able to end a tenancy after a fixed-term lease was dropped

•
Renters would have more power to meet safety, security and functionally needs

The draft laws amend the grounds for ending tenancies, make it easier for renters to keep pets, and establishes minimum standards for rental properties.

They also ensure people fleeing domestic and family violence are able to end a lease with seven days’ notice.

The legislation was introduced this week after an earlier proposal was put out for consultation in 2019. Housing and Communities Minister Leeanne Enoch said the bill strikes the right balance.

“The new laws provide a strong, balanced approach that protects the rights of renters and lessors, while improving stability in the rental market,” she said.

“At a time when more Queenslanders are renting, and renting for longer, we need to encourage market growth to help increase the number of rental properties in Queensland, while also protecting the rights of tenants.”

Harder to end leases, easier to have pets

Under the new laws, landlords, or lessors, will no longer be able to terminate a lease “without grounds”.

Instead, new grounds for terminating a lease will be added, so landlords can terminate a lease if it is the end of the agreed term under a fixed-term lease, significant repairs or renovations are needed, or they want to move into the property or sell it.

https://www.abc.net.au/news/2021-06-19/qld-rentals-renting-lease-tenancy-agreements-laws-changes/100227230

Australian housing market May 2021

The housing market in Australia has defied expectations and continued to grow in May, despite fears of a drop-off.

Many experts had predicted that the ongoing property boom would fade out, driven by the end of the JobKeeper and HomeBuilder subsidies from the government.

These predictions had been helped along by the slower speed of growth in April, when auction markets were affected by Easter, school holidays and the ANZAC Day long weekend.

Markets have rebounded into May, however, with growth intensifying and ancillary factors, such as unemployment rates, economic participation and wider economic recovery continuing to drive demand.

First home buyer numbers have fallen slightly, a logical consequence of the rise in house prices that has priced many out, but auction listings are still breaking records. Clearance rates have also dropped, though that is largely due to the increased number of listings in total.

“When we were in the midst of COVID a year ago, there was a lot of uncertainty about the outlook,” said Dr Andrew Wilson, Chief Economist for Archistar. “It was uncharted waters, particularly regarding the economy. The government moved appropriately to instigate widespread and unprecedented support for incomes, but obviously it had a horizon in terms of when support packages would end.”

“I think, once we got out of lockdown, we start to see a brighten future in terms of health issues, and people started to focus on getting back on with their lives. There was a fixed period for income support announced, and we were always going to see a movement back towards normality and that would mean that people were prepared to stay on income support for the shortest time that they could. We saw that people moved quickly back into the workforce as the economy recovered and that’s been a continued process right through until JobKeeper finished at the end of March.”

“We saw signs early on, from as soon as the economy started opening up mid-year last year. People were moving back and recapturing their lives and getting back to work. That’s it really, people weren’t prepared to stay on income support longer than they had to. The economy was recovering, jobs were being created and people were motivated to go out and rediscover their old lives. The publicity around ‘the cliff’ did run out of steam when that became evident.”

“There was a little bit of headline chasing, but it was a period of high uncertainty and we really didn’t have any sort of blueprint to follow. Nothing like this had ever happened previously.”

Related stories:

• Auctions maintain momentum, with record clearance rates again
• First Home Buyer numbers drop – but are still at near record levels

index #propertyvalues #boom #capitalgrowth #realestate #australia

The March national home value index recorded a 2.8% rise over the month, the fastest rate of appreciation since October 1988. Read more: ow.ly/sDlp50EdURg

Property price versus employment

At the end of last week, the RBA released a previously confidential report from November that showed the consequences of reducing the cash rate by 100 basis points. The document pointed to a potential 30% increase in property prices over the next three years should borrowers see the low rate as being permanent, and a price increase of 10% should they see it as temporary. While this would help drive the economy through increased wealth and household spending, it could also induce borrowers to bite off more than they can comfortably chew in credit. 

Property price versus employment

According to the internal RBA communication, an increase in asset prices is likely on the cards as lower financing costs work to support the supply of credit and contribute to a lower exchange rate. The report said rising asset prices, including those of property, would create an increase in wealth which would invariably lead to an increase in household spending – while an increase in collateral would boost the borrowing capacity of households and businesses.

But according to Edge, this could come at the detriment of first-home buyers.

“I don’t believe that either scenario can point to precisely what increase we will get in house prices but there will be a sustained increase as a result of a permanent rate cut,” he said. “It will continue to push housing prices higher and out of reach for first home buyers, so we will be revisiting the same issues.”

Mitchell agreed that property prices would likely increase as a result of sustained low interest rates, but referenced a recent increase in loan commitments within the first home buyer segment.

“Lower rates are going to mean that property prices will probably increase,” she said. “I guess the question is, what’s the most important thing? Is it allowing some of those property prices to increase but actually stimulating the economy and getting more people employed? I think they’ve (the RBA) decided that employment’s more important.”

On the question of how this would affect housing affordability, Mitchell pointed to record high loan commitments from November, adding that moderation would be key when it came to balancing rising asset prices.

“If it doesn’t get out of control that’s great, and if first home buyers are now able to come into the market when they haven’t really had that opportunity in the past that’s great too,” she said. “It’s really all in moderation that we can let some of the asset prices go up a bit.”

The risk of taking on too much debt

One of the risks attached to rising asset prices in the RBA report was that “borrowers might be induced to take on too much credit if accompanied by looser lending standards and/or optimistic assessments of risk.” When coupled with the treasurer’s proposed relaxation of responsible lending obligations, and an increase in new LVR lending above 85%, Edge believes price increases are likely.

“However, we do run the risk of households getting into more debt and financial trouble due to the looser lending requirements,” he added. “I see banks tightening their own internal systems and checks to avoid having borrowers who cannot afford the loans they want.”

“It’s important to understand that when the treasurer says he wants to pull back on some of the parts of responsible lending, he’s not trying to get rid of oversight of the lending process,” said Mitchell. “APRA still has oversight of the lending process and more than that they’ll also bring the non-banks into that same oversight.

“I still believe that APRA will have a tight rein on the different institutions and I also believe that the banks themselves will look very, very much at their credit and what may happen with some of these asset values, and they will take that into consideration because they want a safe portfolio as well.”

She said that while we won’t know exactly what the reimagined responsible lending obligations will look like until March, one thing is clear.

“It’s getting more and more complicated,” she said. “It’s unprecedented times and I just want our brokers to think very carefully and make sure that they are focusing on all the change happening out there.”

She said it is important for borrowers to reach out for guidance given the complexity of the lending environment – making it all the more crucial that brokers understand each change that happens while understanding how the changes will affect each individual client that comes to them.

Edge said that rising house prices would lead to more work for brokers, adding that “compliance will be more important than ever.”

Related stories:

What does 2021 hold for property market?

With Australia’s housing market recording respectable growth in 2020 despite the COVID-19 pandemic, the Real Estate Institute of Australia is predicting further price increases in 2021.

REIA President Adrian Kelly said the winding down of the JobKeeper and JobSeeker programs may cause temporary issues for tenants in some capital cities, but the trend of relocation to regional areas is likely to pick up steam.

“Traditionally there is a reduction in the number of house sales over the holiday period due to buyers going away for the festive period, but due to the current restrictions, people are taking advantage of market conditions whilst they are unable to travel and looking to buy while they can,” Kelly said.

Kelly also said that the property sector has been critical to Australia’s economic performance.

“Government stimulus measures and continued low interest rates have been in part responsible for the resilient demand for residential property,” he said. “Even though growth in new dwelling investment is unlikely in the 2020-21 financial year, given the lags between building approvals and construction activity, the forecast for dwelling investment has been revised from -4% in the Preelection Economic and Fiscal Outlook to -3.5% in MYEFO.”

Kelly said that with the possibility of a federal election being called as early as August, policy makers should make commitments about property policy for all stakeholders in the real estate industry – from first-home buyers to investors.

“In May just prior to the 2019 election, house sales were the lowest in two decades across Australia, which was largely attributed to election commitments from the federal opposition to abolish negative gearing and capital gains tax (CGT) in their current form,” Kelly said. “Given the major role investors played and continued to play in providing housing over the pandemic, it is critical that in the run-in to the election that policies from all sides of politics work for all players in real estate.”

On the whole, Kelly expressed optimism about the year’s possibilities for the housing market.

“Overall, the real estate industry looks forward to a positive year for the Australian property market, with the promise of an Australian COVID-19 vaccination program allowing life to resume to a new normal,” he said. “For customers, whatever your objective is for this year, whether you’re downsizing, investing or making a lifestyle move, talk to your local agent about your options for 2021.”

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