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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:
http://www.realestate.com.au/doc/Resources/News/market-going-up.htm
Paul Castran
This week’s interest rate cut is expected to lead to an investor resurgence.
With the arrival of spring, they started emerging from their winter bunkers, scouring every neighbourhood, on the prowl for the easy kill. As December broke and interest rates fell again this week, they became bolder and began pacing, waiting and watching for their weakened prey.
And now, finally, they’ve begun to pounce. “Yes, at last we’re seeing evidence of investors returning to the apartments market,” says John Edwards, managing director of residential property researchers Residex. “There’s real activity now from the investment community and we’re predicting we’ll soon see that translated into a lot more sales.”
The latest rate drop in the cash rate this week, a further 1 percentage point to 4.25 per cent, is expected to further lure the investment hunters. “It will have an effect over time, especially if the rates stay permanently down,” says Australian Property Monitors’ senior economist Liam O’Hara.
It’s amazing to see them stalk in terrain that otherwise looks so parched and barren but the experts are adamant: with falling interest rates, rising rents and the continuing sharemarket volatility, the conditions are perfect for the lean and mean to make an absolute killing.
Read the full article from Susan Wellings of the Sydney Morning Herald here:
Paul Castran
Castran Gilbert are at the forefront of technology in Real Estate sales. Our Toorak Road office provides a location and profile second to none. Our sales force is the largest single office operation in Melbourne with 22 sales people.
Paul Castran his team have a combined experience of 50 years providing the most up to date and accurate Real Estate advice.
Our negotiating skills and level of expertise is the envy of the Real Estate industry. In fact, we are the agent that other agents choose when they wish to sell.
Melbourne is, with some justification, known as the auction capital of the world. But that doesn’t mean that an auction is our automatic recommendation.
We would be inclined to recommend a PRIVATE SALE, if:
- You can’t face large numbers of people inspecting your property.
- You are in no hurry.
- You have a desire to keep the sale relatively low-key.
In the absence of these factors, we recommend an AUCTION, for several powerful reasons:
- The selling period has a fixed time span, which precipitates a definite result.
- The publicity and timing of an auction frequently stimulate PRIOR OFFERS. The pressure is on the prospective purchaser, not you.
- The successful bidder at an auction enters into a binding unconditional contract on the spot, with the terms and conditions previously approved by you. There is no opportunity to “cool off” without forfeiting a substantial deposit to you.
- A property such as yours will attract genuine buyers and is in a desirable location therefore it is the competition between them that so often drives the price up. This is the main reason for the popularity of auctions in inner suburban Melbourne.
Presentation is the key to achieve the highest possible sale price.
Nothing is clearer than when you look at how Australia’s great retailers present and merchandise their products. For example; Sportsgirl illuminate, air-condition, merchandise in size and colour and display in the highest retail fit out possible. This enables a substantial margin.
Presentation of your most valuable asset is paramount. We would suggest that one of Castran Gilberts representatives advise you on a case by case basis before you sell.
Melbourne’s residential vacancy rate is hovering at around 0.5%. This is the lowest vacancy rate since records have been kept 40 years ago!
Economic forecaster, BIS Schrapnel have reported that they expect residential rents to rise 50% over the next 5 years as there is an acute shortage of rental stock available.
Victoria’s current immigration is approximately 88,000 per year and Australia’s population is growing at the fastest rate since 1947.
Given these economic parameters, it is clearly a great time to buy real estate.
Auction clearance rates have fallen from 80 odd percent 12 months ago to around 53% currently giving further opportunities for people to purchase good value in the market.
The current economic commentary is that official interest rates are reported to fall to 3.75% by March next year!!
With falling interest rates and increasing rental values and the pressure put on available stocks with the first home owners grant, there is a cocktail for rapid growth in the under $500,000 market.
Right now the Federal Government is stimulating the ‘first home buyer’ end of the market increasing the current state grant of $7000 to $14,000. The boon is, that if people purchase a new property between October 14, 2008 and June 30, 2009, the grant increases to $21,000 and if they purchase a property that is new and under $500,000 the grant increases to a massive $26,000!!!
This, coupled with the falling interest rates, has provided an opportunity for first home buyers that had previously been shut out of the market to take the opportunity!
The “Blog” is a new feature to Castran Gilberts’ website which will see you regularly updated with what’s going on around the property market place!
If you haven’t bought, sold or rented in a while it’s very easy to fall out of the loop.
Paul Castrans constant dealings within the property sector will see you get regular and relevant info.
Remember to log on and keep up to date with this handy little feature!!
Paul Castran and Castran Gilbert are now utilising online video hosting service YouTube, to post regular video updates to their customers about the state of the Australian Real Estate Market.
Go to www.castrangilbert.com.au to see the first video post.