Naked Real Estate News

Keep up to date with the latest articles from around Australia and the globe. 

Multiple indicators point to softer housing market conditions

The CoreLogic May Home Value Index results out today confirmed that the capital gains trend has slowed over recent months with dwelling values edging 0.4% higher over the three months ending May 2017.

According to CoreLogic head of research Tim Lawless, Australia’s capital cities saw a cooling of housing market conditions over the seasonally weak month of May with the CoreLogic hedonic home value index reporting a -1.1% fall in dwelling values across the combined capitals. The month-on-month fall was largely the result of declines in Sydney and Melbourne, where dwelling values have recorded significant gains over the current growth cycle to date.

He said, “The past three months has seen capital city dwelling values rise by a modest 0.4%, with four of the eight capitals recording a fall. Over the past three months, Sydney dwelling values are unchanged while Melbourne values have increased by 0.7%.”

“The trend in growth rates across the smaller capital cities was mixed with dwelling values across Brisbane and Adelaide continuing to inch higher while values in Perth and Darwin showed further easing over the most recent rolling quarter. A steep drop in the Hobart index has reversed the
gains recorded over the previous quarter and the Canberra index was also -1.5% lower over the past three months.”

Read full article from CoreLogic here

Budget explainer: the federal-state battle for funding

There seems to be an ever present struggle for a share of the revenue government collects, not only between states but also between the different levels of government.

In each year’s budget, the federal government allocates funds for federal programs (such as defence) and for some programs operated at a state level (such as school education, public transport, and hospitals). It has this role because it also collects more revenue from taxpayers than the states.

The reason for this all relates back to (at least in part) the Australian constitution.

The division of power between the federal and state governments

The federal parliament can only legislate (that is, make laws) in certain areas, known as “heads of power”, most of which are listed in sections 51 and 52 of the Constitution. This gives the federal parliament the power to legislate with respect to matters such as defence, external affairs, immigration, invalid and old-age pensions, and marriage.

In contrast, there is no equivalent limit on the legislative power of the states. The states may legislate in any area. However, section 109 of the constitution provides that where there is an inconsistency between a federal law and a state law, the federal law will prevail. In simple terms, this means that if the federal parliament has made a law dealing with a particular matter, state governments are unable to legislate in ways that conflict with the federal law.

Read full article from The Conversation here

Newly Built Units Have Outweighed Houses Across Australia for the First Time on Record

Based on Building Activity data released by the ABS there were more newly built units completed over the December 2016 quarter than houses, the first time on-record this has occurred.

The number of new dwellings approved for construction has recently fallen from historically high levels which will over time result in fewer commencements and completions moving forward.  The latest building activity data for the December 2016 quarter, showed that dwelling commencements and completions were actually higher over the quarter.  Meanwhile, the number of dwellings under construction and the number of dwellings approved but awaiting commencement fell. 

Over the December 2016 quarter there were 28,690 new houses that commenced construction and 27,887 new units which commenced construction.  While new house commencements were -3.4% lower, new unit commencements increased by 3.9%.  Since the end of 2016 there has been a substantial decline in house and unit approvals so it is reasonable to expect that dwelling commencements will follow the lead of approvals and start to trend lower over the coming quarters.

Read full article from CoreLogic here

Australia’s Top 20 Fastest Growing Areas, April 2017

It’s that time of year again (not just the AFL season), the ABS has released 2016 Estimated Resident Population (ERP) figures for Local Government Areas and other small area geographies in Australia. As always there’s some very interesting data in this release.

Australia’s growing cities

In 2015-16, Australia’s population grew by 1.4%, or 337,800 persons to reach 24.1 million. Greater Sydney is still our biggest city, this year having (just!) hit the 5 million mark with a population of 5,005,358. Greater Melbourne is hot on Sydney’s heels with 4.64 million. Greater Melbourne recorded the greatest volume of growth – 107,770 persons, and this was also the highest growth rate at 2.4%, quite an increase from last year. Greater Sydney continues its recent growth spurt, adding 82,797 persons (1.7% growth rate). Population growth in Greater Sydney and Greater Melbourne continues to far outstrip that of other capital cities and it’s notable that Greater Brisbane added almost double the number of persons to the population in 2015-16 than Greater Perth (41,135 and 27,428 persons respectively). The slowdown in Perth’s growth is no surprise given recent macro level demographic trends in Australia and this is now being reflected in data for smaller geographic areas such as LGAs.

Where are the fastest growing areas?

The ABS does a great job at providing analysis of this data for SA2s on its website, but this analysis will focus on LGAs. Most of the fastest growing LGAs were located in Australia’s capital cities, typically on the urban fringe – but of course there are notable exceptions. The table below shows the fastest growing LGAs (top 20) as measured by the growth rate in Australia during 2015-16.

Read full article from .id | the population experts here

Is it all doom and gloom after the boom in Western Australia? March 2017

With the end of the mining resources boom in Western Australia, many people are left wondering, Is it all doom and gloom after the boom? We’re so glad you asked! Let’s take a look at what is happening in the West, including the demographic trends affecting the state’s population and the future outlook for WA’s population in the next 20 years.

I’ll use .id’s recently updated small area population forecasts for Western Australia as a basis for this blog to give you the most up to date future view possible. Our Small Area Forecast information (SAFi) for WA covers nearly 3,000 geographic areas across the state, which provides the ability to drill down into granular, hyperlocal detail or build up into customised catchment areas.

How is Western Australia’s population changing?

Some highlights include:

  • In the last decade, WA’s population increased by over 511,000, boosting the state’s total population to over 2.6 million.
  • During the height of the mining boom, the state’s population growth rate peaked at 3.6% p.a., well above that of Australia.
  • More recently, WA’s population growth has slowed from its previous heights.

Read full article from .id | the population experts here

CoreLogic March 2017 Housing Market Update

Watch the latest Housing Market Update for Perth, WA, presented by CoreLogic research director Tim Lawless.

"The latest hedonic index results from CoreLogic showed further growth in dwelling values across most of the capital cities. The February data showed capital city dwelling values rose by 1.4% over the month, once again being fuelled by Sydney and Melbourne, as well as strong capital gains across Canberra and Hobart where the performance of the housing market has been gathering some pace.  

Weaker market conditions have persisted in the mining states, with dwelling values slipping lower over the year in Perth and Darwin, while Brisbane values also slipped over the month."

National housing market update - Australia

Household debt likely to stand in the way of rate hikes

Official interest rates are at historic lows and it seems unlikely that they are going to be increasing in the near future. Furthermore, don’t expect interest rates to return to historic average levels due to record high levels of household debt.

The Reserve Bank (RBA) Governor Phil Lowe suggested last week that if it wasn’t for the strength of the housing market, and a fear of inflating it further, official interest rates would be lower.  It was an interesting comment from an RBA Governor, especially when you read what the RBA’s function is: The (RBA) is Australia's central bank and derives its functions and powers from the Reserve Bank Act 1959. Its duty is to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people. It does this by setting the cash rate to meet an agreed medium-term inflation target, working to maintain a strong financial system and efficient payments system, and issuing the nation's banknotes.

Read full article from CoreLogic here

Where are we in the global investment cycle? What does this mean for investors?

It’s now a decade since the first problems with US sub-prime mortgages started to appear and nearly eight years since share markets hit their global financial crisis lows. From those lows in 2009 lows US shares are up 239%, global shares are up 167% and Australian shares are up 80% (held back by relatively higher interest rates, the absence of money printing, the plunge in commodity prices from their 2011 highs and the high $A). An obvious question is how close the next downturn is, which ultimately relates to where we are in the investment cycle.

Read full article from AMP Capital here

CoreLogic February 2017 Housing Market Update

Watch the latest Housing Market Update for Perth, WA, presented by CoreLogic research director Tim Lawless.

The housing and economic data is derived from the CoreLogic Hedonic Home Value Index for the month of January, released February 2017.

Naked Real Estate Market Updates, January 2017

These Market Updates give you information on recent property transactions that have taken place.

Click on the suburbs below to see what real estate activity is happening in your area.

Bedfordale          Canning Vale         Darling Downs / Oakford         Harrisdale

Kelmscott          Kelmscott Hills         Mount Nasura         Mount Richon

Piara Waters          Roleystone         Seville Grove         Southern River         Yangebup

Corelogic Monthly Housing & Economic Chart Pack, January 2017

The latest Monthly Housing & Economic Chart Pack from CoreLogic provides a detailed national market update with a focus on capital city housing market conditions and performance over time.

Click image for full Report







CoreLogic Housing Affordability Report, December 2016

Approaching its five year anniversary, the current upswing in housing values has shown unprecedented longevity. The past five years has seen national dwelling prices rise by 19%, while simultaneously, modelled income estimates from the ANU Centre for Social Research and Methods (ANU) suggest household incomes rose by just 9.2%.

The CoreLogic Affordability Report provides valuable insights, particularly when analysed over time. However, it is important to remember that the analysis considers the median household income and dwelling prices, and therefore may not capture all household demographics such as single income families, the quality of housing and housing size. 

Furthermore, measures of affordability can be skewed in some regions such as coastal and lifestyle markets, where a large proportion of retirees and/or absentee owners (holiday homes) can cause a downwards bias in household income measures.

Click image for full Report







Code of conduct for agents and sales representatives, October 2016

New Code of Conduct

A review of the Code of Conduct for Agents and Sales Representatives 2011 (old Code) under the Real Estate and Business Agents Act 1978 (the REBA Act) has been completed following a consultation period held in April and May of this year that provided industry members with the opportunity to make comment on the proposed changes to the Code.

The Code of Conduct for Agents and Sales Representatives 2016 (new Code) is to be gazetted 4 October 2016 and will take effect on 5 October 2016.

A two-month transition period is in place.  During this period, if an agent or sales representative fails to comply with the new Code, but does comply with the old Code, they will not be taken to be in breach of the new Code. 

Agents should make it a priority to revisit their business practices and procedures during the transition period, in order to implement any changes necessary to comply with the new Code.  The two-month transition period also provides an opportunity for agents to educate themselves and their staff about the requirements of the new Code.  

The redrafting of the rules brings the new Code in line with modern legislative requirements and includes new rules requiring agents and sales representatives to:
• disclose to the purchaser if they are related to the vendor;
• where an agent gives an opinion as to a property’s current market price, the agent must provide information supporting that opinion;
• communicate all offers including verbal offers to their client; and
• comply with any fiduciary obligations that may arise in their role of agent.

It is important to note that despite the introduction of a new Code, the underlying duties and responsibilities for industry members remain the same.

The new Code is available on the Department’s website.  For further information please refer to the Frequently Asked Questions webpage.

CoreLogic Pain and Gain Report, September Quarter 2016

Over the September 2016 quarter, 9.4% of resold dwellings (those dwellings which have been sold at least once prior) transacted at a price lower than the previous purchase price. The proportion of resales at a loss was higher than the 8.1% a year earlier as well as being higher than the 9.3% over the previous quarter. Homes reselling at a loss are becoming more regular however, a substantial majority of dwellings resold continue to sell at a price in excess of the price at which they were purchased for.

Dwellings resold across a capital city are much more likely to sell for a profit than those across regional areas of the country. Over the September 2016 quarter, 7.1% of capital city dwellings resold transacted for less than their previous purchase price compared to 13.3% across the combined regional markets. The proportion of resales at a loss increased over the quarter across the capital city markets but fell across regional areas of the country. Both capital cities and regional areas are seeing the instances of dwellings reselling at a loss well below recent peaks, however capital city loss making resales have been gradually drifting higher since late 2015, while regional loss making resales have trended lower since peaking in early 2013.

Click image for full Report







CoreLogic Pain and Gain Report, June Quarter 2016

CoreLogic’s Pain and Gain Report is a quarterly analysis of residential properties which were resold over the quarter. It compares the most recent sale price to the previous sale price in order to determine whether the property sold at a gross profit or gross loss. It provides a proxy for the performance of each housing market and highlights the magnitude of profit or loss the typical seller of a home makes across those regions analysed.

Over the June 2016 quarter, 9.5% of all dwellings resold recorded a gross loss when compared to their previous purchase price. This figure was higher than the 9.3% at the end of the first quarter this year and the highest proportion recorded since March 2014. Across those dwellings which resold at a loss over the quarter, the total value of loss was $459 million with an average loss of $73,009.

Given less than 10% of homes resold at a loss over the quarter, more than 9 out of every 10 homes resold for more than their previous purchase price. Across these sales, the total profit was recorded at $15.7 billion and an average profit of $262,550 per resale. Also important to note is that over the quarter, 29.4% of resold homes transacted for more than double their previous purchase price.

Click image for full Report







Maquarie Bank Interest Rate Report, February 2016

The members of the Reserve Bank Board met for the first time this year on Tuesday 2 February and after considering December and January’s economic data, kept the official interest rate on hold at 2%.

Despite recent financial market ructions over concerns on global growth, the RBA would have drawn on this data to ascertain if growth is at risk.

Watch Martin Lakos, Division Director, Macquarie Private Wealth, discuss the RBA’s decision.

Corelogic RPData Media Release, January 2016

Move over Sydney, Melbourne takes over as the best performing capital city over the past twelve months