Issue 20 | September 13th, 2018 | Good News As We Move Into Our Spring Selling Season
There is some great news about the economy which is now growing at its fastest rate in 6 years and back at levels last seen during the years of the mining boom. Growth at 3.4% is very impressive and there is even talk of the budget being announced as in surplus as early as next month.
GDP is one of the 5 key factors that drive the real estate market and this, together with interest rates and population growth, are all components that are performing well. Unemployment is also a significant one. There has been a big surge in employment growth with seasonably adjusted unemployment rate falling to 5.3% in July. Even more significant in the unemployment space is that we saw the growth of 19,300 people in fulltime jobs. The numbers are certainly all heading in the right direction across the wide spectrum of the key drivers of real estate, and all of this is good news as we move into our spring selling season and should give buyers the confidence they need to know that the real estate market is set on solid foundations.
We know there is softening of prices in some markets throughout Australia, such as Sydney and Melbourne, and this is particularly due to a switch in the most fundamental component of real estate; that is, the supply and demand equation. There is currently an increasing supply of properties in those markets which is softening prices but one would understand after nearly 5 years of price growth that there had to be an easing and even a minor correction.
It is certainly different here on the Gold Coast where we continue to have a shortage of stock which is resulting in a more balanced market, and as I mentioned last fortnight, one indication of the market was the 26% of our last auction properties selling prior to the auction. That is the highest number in over 10 years and it was certainly triggered by buyers concerned that they might miss out on the properties and so they moved earlier in the auction campaign to secure the properties.
Some other interesting news is that over 78,000 finance applications were declined last month alone. That is 78,000 across the country. This is certainly a clear indication that the days of just walking into your own bank branch to get a loan is pretty much done and dusted. It is now clear that without a broker working across a range of financiers and helping prepare a good loan application, you put yourself in a high risk category of having a loan application declined. Don’t be mistaken that there is not plenty of finance out there, as there is. However, the requirements to get those loans have increased substantially and so you need a professional to help you prepare your loan application. On screen now are details of Phil Rogers ( 61 401 022 182 or firstname.lastname@example.org) who heads up our Loan Market operation here at the Ray White Surfers Paradise Group. Being the third largest aggregator of housing finance in the country, Loan Market is beautifully positioned to assist you. If you are in the market to buy, reach out to Phil early to ensure you get your finance through in as quick a timeframe as possible.
That is it for this fortnight other than to say stay safe and be kind to one another. See you in a fortnight’s time.
Andrew Bell, OAM
Chief Executive Officer
The Ray White Surfers Paradise Group