Andrew Bell’s Market Wrap: Lots of Interesting Reports

Issue 18 | August 29th | Lots of Interesting Reports

Hi, Andrew Bell here and coming to you today with a number of reports that often are missed by people but are certainly indicators about what is happening in the real estate market.

We, of course, have had two interest rate drops and there are predictions for another one coming perhaps around November of this year, but we are starting to see the impact of that with a seasonally adjusted value of new lending commitments to households increasing by 1.3 percent in June; according to the Australian Bureau of Statistics. They said the new lending commitments are going to both owner-occupiers and investors but if you look at owner-occupiers alone, those loans have risen by 2.4 percent. Not everyone sees a drop in interest rate and applies for a loan within the next week or two, so we do expect to see further increases in that lending.

To match that, we see Core Logic’s latest stats confirming that auction clearance rates have risen sharply over the past couple of months following the election. They predominately follow capital cities and the figures released showed that an average 70.4 percent of the 1,107 auctions held across Australia last Sunday week had sold. That was a jump from 66.4 percent the week before. As the Gold Coast’s largest auction company, we are also seeing a huge rise in sales happening before and under the hammer at auction. Overall, our auction results have been showing success rates varying from the high 80 percent into the early 90 percent range through the course of the entire auction programme and it is proving to generate sales in a much quicker time frame for sellers, but also, in most cases, generating the best sale prices.

There has been quite a bit of talk about housing affordability and we see in the latest figures from the Adelaide Bank/REIA Housing Affordability Report, that they found in the March quarter improvement in housing affordability, in particular in New South Wales with a 1.3 percent decrease in home loan repayments.

The housing affordability in Queensland improved and the proportion of income required to meet loan repayments decreased to 27.5 percent, which is a 0.6 percent improvement over the quarter.

This marries into a report by the Reserve Bank’s Jonathan Kearns who commented on loan arrears and said that they remained well down on the arrears that were seen in the early 1990’s and that Australia’s arrears were actually low compared to other countries. There had been a slight increase in arrears however they partly reflected issues around mining related areas, and he said that tighter lending standards since 2014 certainly appear to have led to lower arrears. The key to seeing movement in arrears is unemployment and you normally see higher arrears as unemployment rises or lower arrears as unemployment falls, so with our 5.2 percent employment rate it is not surprising to see arrears are not significantly higher.

The last bit of news for today is that the Gold Coast has now been rated 27 out of 46 cities in the world as a top global location for price growth in the luxury residential housing market. There is an index which tracks the movement of luxury residential prices across global markets. That report reflects some stability in our marketplace now and that our established luxury home market, with a solid pipeline of new projects, catered towards affluent locals and interstate downsizers which of course means we are strengthening that activity in our city. Great to see we are on the map internationally in this space.

I should mention we have a very special spring auction which is about to get underway and it is to be able to offer a wide variety of Gold Coast property to buyers who always surface in greater numbers in the spring season. If you are thinking of selling, please get in contact with us straight away as I am sure you will benefit enormously from being part of this programme.

Only two weeks until our Ray White Surfers Paradise Muscular Dystrophy Ball and it is not too late if anyone wants to confirm a seat for themselves or indeed a table. We have some amazing items up for auction including three night’s accommodation at the completely refurbished Hayman Island Resort in the Whitsunday’s, return airfares to Melbourne including accommodation to get a behind-the-scenes tour of The block, a Seadoo Jet ski, and a return trip for six on a private jet to Melbourne with return helicopter transfer from the Airport to Melbourne’s Crown Casino, and return helicopter transfers from Crown Casino to a boutique winery in the Yarra Valley for an 8-course degustation experience just to name a few. Some one-of-a-kind experiences that you can’t normally buy, so do not miss this special occasion. We are also giving away one of Australia’s most renowned bottles of wine that sells for over $200 per bottle for those who buy $50.00 worth of raffle tickets. So many great aspects to this year’s Ball.

For more information visit the website or contact Selena Carson (s.carson@rwsp.net or 0410 650 185)

That is it for this fortnight. I look forward to being with you in two weeks time.

Kind regards,

Andrew Bell, OAM
Chief Executive Officer
The Ray White Surfers Paradise Group

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