Is the Australian Residential real estate market set to fly higher again ?

Signs that banks will soften lending standards and a return of China-based buyers are combining to push property prices higher again.

James Kirby of the Australian  7:41pm May 22, 2023

• banks loosen lending rules
• China buyers return
• Tight rental vacancy rates

In my view, this bodes well for increases in Australian property prices over the next 10 years 

The question to ask is

• what to buy?
• Where to buy ?
• what it will cost ?
• What are the projections ?
• Do you buy 1pm of 100 properties ?
• Do you buy an investment property ?
• Do you buy your own home?

If you believe property prices will increase 2pc per annum or by 10pc in the next 5 years…. You should look at buying an investment property.

REA Group Senior Economist Eleanor Creagh says selling conditions have “picked up this year” amid stronger housing demand and four consecutive months of home price increases. Auction activity is relatively strong with around 2000 properties going to auction per week with clearance rates at a 15-month high of 75.3 per cent

National Australia Bank’s Market Research desk reports this week that “property prices continue to rise with some degree of acceleration

The latest CoreLogic figures for the residential market show that Sydney residential prices are now up 4.8 per cent since the beginning of February 

Over the next 6 months, we will be hosting a series of property companies, builders and developers to share there opportunities with you. 

Let me know if you would be open to being invited to these forums! 

Have a great weekend !

Australia to 2030 - an exciting place to be! (In my view!!!)

• Have Interest rates peaked?
• Is Property on the March upwards?
• Is Australia heading into a Purple 7 year patch? 

Some indicators of the Australian economy from Ark Total Wealth’s Chris Magnus 

Trade 

Aussie Exports may have a windfall - with China easing restrictions on Aussie exports -  Coal, Barley, Wine and Timber - Particularly as most of them have found other strong markets over the last few years, exporting to India, Japan, South Korea instead, so any extra exports to China will be just a bonus. 

Job Market 

Currently at an all time low … less than 4% 

Property Market 

Fewer people are selling - immigration growing - pressure on rents dues to  lack of property supply … indicating property prices will increase with inflation 

Superannuation pot 

 Continuing to grow - with SGC rising to 11% 

Share market 

Global shares - hitting a peak of 4,818 in aug 2021 before dropping down to 3,636 at the lows. It has then since recovered back to 4,151 today. 

Asx200 - hittkng a peak of 7,632 dropping to a low of 6,407 recovering to 7,345 today.

Where to from here ? Up or down ?

Taking care of our planet and people 

Corporates and Government listening to our Children -  becoming more Focussing on Climate change - diversity equity and inclusion - and being human - seems not only to be the right thing to do but the smart thing to do 

Chris Magnus’s gem 

Increase your income, spend less, save more and invest the difference to build your future wealth. 

Here is Chris Magnus’s  article 

https://mailchi.mp/arktotalwealth/financial-planning-update-april-23?e=cf6b747540

Where to from here ? 

Are you well placed to take advantage of the potential opportunities that Australia has to offer over the next 10 years? 

If you want a referral to Chris and his team - for an obligation free chat let me know 

Good time to buy, sell or hold property in Oz?

Contact me for a free chat about property and finance 

Is this the right Time to invest in Property?

Click link to vote 

Tell us what you think!!!

Will property increase of decrease in next 5 years ? 

James Kirby of the suggests  that Property Prices are on the rise !

Property prices have been rising in March! 

Foreign  investors are coming into the market 

And yet Australians are highly geared into property!!

Mortgage stress seems to be minimal with households being able to pay their commitments even at higher mortgage rates 

However - The RBA estimates that about 16 per cent of owner-occupier mortgage holders in Australia are unable to refinance just now because they do not meet the current serviceability rules. That is, they may have fixed a mortgage at, say, 3 per cent, and now find they must pay a variable of 6 per cent (which would be “assessed” at 9 per cent if they tried to change banks). This segment is stymied financially but there is little to suggest they will push prices much lower.

Rents are rising up to 30pc per annum !!

There have been the biggest flow of migrants - where are they going to live? 

The weeks jobless rate is less than 3.5%

Here is article 

Property prices 2013 - 2023

So what does the above graphs show about property price movements in Australia  over the past 10 years ? 

1. Houses seem to have increased more than units 

2. Darwin and Perth have stagnated - why?

3. Property in creases - but never in a straight line - it’s always the right time to get u to the market ! 

4. Understand the property clock - buy when all are selling ! 

5. Properties tend to increase steadily over time -

6. Focus on where best place is to buy - do the research 

What else? 

💰 💴 So what’s happening in the world of mortgages and finance?

#Refinances and rebalancing banks books are a happening thing !!

💰 owner-occupier refinances is at a new record high of $13.6 billion! (The Australian Bureau of Statistics Data)

Here are some of the reasons why this is happening:

💥Fixed-rate periods are coming to an end, which is prompting borrowers to look for better deals 

💥 Unique policy changes allowing "mortgage prisoners" to refinance out...

💥 Borrowers are onto their banks"loyalty tax" by shopping around for better deals. If you go to your bank - and say you’ve got a better deal - they have “a pricing department” who will look to match your best offer!!

💥 Homeowners are looking for lower interest rates and innovative solutions due to the recent cash rate hikes by the RBA.

💥- Lenders are offering cashback incentives to encourage people to switch lenders.

Can you save significant coin ? 

Have you got a strategy when your cheap fixed rate turns into a p and I with a 5+% interest rate ?

Would you be open to chat and explore whether there is an opportunity for you to save money on your mortgage?

If so - direct message  me or like this post 

Don’t take your eye off the ball

Great article by Franchise Accountant - Peter Knight 

Quote of the week from a new client...

"I guess I took my eye off the ball..!" 

(Err… understatement of the week)

Eighteen months ago they were making profits.

Then things turned.

For the worse.

- Decisions were being made without deep consideration of the longer term impact.

- Debt was taken on to allow for expansion, without sufficient planning.

- The owner of the business started taking more time away from the business, leaving the day to day running to a new manager.

- The results are now obvious.

It's easy with hindsight to see the impact of these decisions. Now we're in a fight for survival.

Action points arising from the meeting I've just had with this client:

- Owner to cease drawing a wage for the next 12 months.

- Owner to cease having personal expenses paid for by the business.

- Drop one highly paid manager.

- Renegotiate with the bank.

- Renegotiate with the landlord.

- Focus on increasing sales.

- Find alternative sources of income.

This has all happened within the last 18 months. That's how fast things can change.

Lesson to be learnt: Don't take your eye off the ball.

#business #sales #planning #bank #change #smallbusiness #smallbusinessowners #franchise #franchisebusiness

Great insight By Michael Murray FCA

Was a deep analysis done on the P&L, variable cost have been steadily creeping up on businesses over the past few years. Most of the proposed solutions seems to be on fixed cost. High Cost of Sales  can be the death of most SME especially if they keep prices steady....

Ivan Kaye comments 

Maybe a solution is 

—— to upskill employees to be great leaders

 …. Have a clear business model and formula that works 

—— hire the thriftiest and best - Reward team for performance of Botton line  - make sure rewards are in line with shareholders - bonuses in line with dividends and growth Kpis 

Analyse why the profits went down 

Sales? 

Margins?

Customer service?