The WIRE | 1 Nov 2019

The WIRE | 1 Nov 2019


– This week on #TheWIRE,
confidence in market returns, under-supply to push prices, and new first home buyers scheme. G’day, guys, my name is Tim Guest, and I’m Australia’s
leading financial educator and the founder of Infinite Wealth. and welcome to #TheWIRE,
the Week in Real Estate, where you can get all
the top stories happening this week in finance, real
estate, investment, and more. Now please like, comment,
and share this video, and if it’s your first time
tuning in, welcome along and don’t forget to follow or subscribe wherever you’re seeing this. Now, our top story for this week, confidence in market returns. So Australia’s housing market has regained the confidence of property
experts and market watchers, and this is according to a recent poll by the National Australia Bank. So the NAB Residential Property Index has moved into positive
territory for the first time since mid-2018, as capital
city housing markets rebound. The so the index, which is a measure of housing market sentiment
based on the expectations of property professionals
for both capital growth and rents, rose 26 points
in the December quarter to an above average rating of plus 18. Now, “The results suggest
the Australian housing market “is on the way to recovery.” That comes from NAB chief
economist, Alan Oster. So the survey also shows
positive expectations for house prices over the next 12 months, with prices expected to
strengthen into 2021. “This marks a sharp reversal “from the previous survey where Victoria “and New South Wales were expected “to be the weakest states for price growth “and the only states where prices “were tipped to fall,” Oster said. So next up, under-supply to push prices. So a looming shortage of
residential dwellings, driven by the twin forces of
a downturn in construction and population growth, will
lead to price gains in 2020, say industry experts. An under-supply of housing could put downward pressure on vacancy rates and further upward pressure
on rents and dwelling prices. “Estimates by the
Commonwealth Bank suggest “an under-supply of apartments from 2020,” says CBA economist, Kristina Clifton. Sorry, “On our calculations, “the decline in residential
construction is taking place “at a time when the excess supply “of dwellings is relatively
small,” Clifton said. She attributes the
housing market turn around to the Coalition election win, rate cuts by the Reserve Bank, and APRA’s changes to
serviceability metrics. Though there are some
reports that some developers and prospective unit buyers are still having difficulty obtaining finance. Mirvac chief executive,
Susan Lloyd-Hurwitz, says, “Access to credit
is critical to prevent “a housing shortage within a year,” while Stockland’s CEO,
Mark Steinert, said, “We need 180,000 dwellings a year “to keep up with demand and
it’s not going to happen.” So the downturn of the past few years is really starting to bite now. And now for our final story for the week, new first home buyers scheme. So first home buyers will soon
be able to purchase a home with a deposit of 5%
instead of the usual 20% required by most banks. The balance of 15% would be
guaranteed by the government, but would still have to
be repaid by the borrower. The scheme to be
implemented in January 2020 aims to help low income
earners buy a property, but only 10,000 applications
will be accepted. To be eligible, applicants
must have earned less than $125,000 in the
previous financial year as a single or $200,000 as a couple. Other limitations by the
way of pricing thresholds also apply, depending on the
state and regional centres. For example, first home
buyers in Sydney are limited to a purchase price of $700,000, Melbourne, $600,000, Brisbane,
$475,000, Perth, $400,000, the ACT, $500,000, Northern
Territory, $375,000, and regional New South Wales, 475, and regional Victoria, 375. The same price thresholds for
capital cities will also apply to large regional centres
with populations over 250,000. So that includes things like
the Gold Coast, Newcastle, Lake Macquarie, the Sunshine
Coast, Illawarra, and Geelong. So some great news for first home buyers. And guys, that’s pretty
much it from me today. Now remember to like,
comment, and share this video, and don’t forget to subscribe or follow wherever you’re seeing this. Also, stay tuned early next week for our #JustAskTim video series and if you want to submit a question or there’s a topic that you’d like me to discuss in more detail, there’s a link in the
post for you to do that. Apart from that, guys, have a great week and remember, there’s
only one thing in life that makes a difference; action.