Hilton Parkes Real Estate
2nd February 2019

FHB Numbers Reach 6yr High
Almost 10,500 first-home buyers took out a home loan in November, just off the highest number in nine years, according to CommSec chief economist Craig James. The proportion of first-time buyers in the home loan market rose to 18.3%, the highest level in six years. “Clearly these buyers are celebrating the greater choice of properties on the market, more attractive prices and super-low interest rates,” says James. James says too much focus is placed on Sydney and Melbourne when housing markets in many other parts of the country are doing well. Over the year to November, almost $238 billion in loans were taken up by owner-occupiers, just below the all-time high of $240 billion in the year to August. “While investors have retreated from the market, budding homeowners are still out in force,” he says. “The number of owner-occupier home loan borrowers in Tasmania stands at 6½-year highs, with ACT borrowers at record highs, South Australian borrowers are at 18-month highs and WA borrowers at 10-month highs.”

Aussies Bullish On Prices

Despite headlines about falling prices in Sydney and Melbourne, a new survey shows many Australians remain optimistic about property prices. A survey of 2,100 people by comparison site Canstar, found 5% of Australians expect prices to “skyrocket”, with an additional 33% expecting steady growth and around 25% predicting prices will remain stable. People are most optimistic in Brisbane, where house prices have been broadly steady, and in Tasmania, where prices have been rising strongly. About 50% in both areas expect prices to rise. However, a third of survey respondents in Sydney and Melbourne also expect price growth. More than 5% expect prices to skyrocket, while 9% of Brisbane residents think the same. The findings come after a NAB survey of more than 2,000 consumers last week found 5% expect prices to rise at least 10% in the next year – and 25% expecting price growth. When asked their plans for the year ahead, most consumers want to sit tight, says NAB chief economist Alan Oster. “They’re not going to buy or sell, but about 20% are going to renovate,” he says.

Big Cities To Bottom In March

Sydney and Melbourne’s housing markets will hit bottom by the second quarter of this year, Ray White chairman Brian White says. There has been a healthy adjustment after the boom market, White says, and there is now evidence of more people attending open homes and auctions as potential buyers assess the state of the market. “My expectation is that by the end of March, it will be the bottom of the market,” says White. “No one ever gets it exactly right, but by the activity that is happening, we expect good evidence over the next few months. More people are at auctions, not necessarily to buy but to gauge what’s happening, which has always been an important indicator of the market. Our recent sales activity shows us that the buyers are now making acquisitions and expressing the view that they don’t want to miss the bottom of the market.” Housing values in Sydney rose 75% (on avg) in the five years to July 2017 and Melbourne’s housing prices rose 58%, according to CoreLogic. Measures of Melbourne price movements from various research sources in the past 12 months range from a rise of 1.4% through a decline of 2% – 9%. For Sydney, different research entities report declines ranging from 5% to 10%.

Record Sales In Tassie Market

Tasmania’s property market has reached new heights and broken records — again. For the first time, over $4 billion worth of property was sold in the state in a calendar year. In the Real Estate Institute of Tasmania’s 2018 review, it was revealed that property worth $4.067 billion was sold — 5% more than the previous record-breaking year. At the top end of the market, 181 properties were sold above $1 million, most of which were bought by Tasmanians. Activity in the first home-buyer sector increased by almost 20%. Overall, purchasers from interstate bought 2,348 properties, about 20% of all transactions. Last year was the seventh in a row and the 14th out of 15 years where Tasmania set a new benchmark for the number of residential transactions. At 11,394 in 2018, it was just 41 sales more than 2017. REIT president Tony Collidge says that, with the state of the market and demand still high, there is “currently no end in sight” for the current property cycle. “I can’t see anything in the near future that will change things for our market,” he says.

Jobless Rate Down To Low 5%

The Federal Government will go into this year’s election campaign riding the strongest jobs market in seven years, with new figures showing unemployment falling and giving a boost to cash-strapped households. The Australian Bureau of Statistics reported the jobless rate edged down to 5% in December after the creation of 21,600 jobs. Victoria’s jobless rate fell to 4.2%, its lowest level since the ABS started measuring unemployment on a monthly basis in 1978. In NSW, unemployment edged down to 4.3%, its lowest level since before the Global Financial Crisis in 2008. WA’s unemployment rate is the highest in the nation at 6.3% while it is 6.1% in Queensland and 5.9% in both Tasmania and South Australia. A strong employment market is seen by many analysts as the key to underpinning real estate markets around the nation. The overall tight jobs market is still to translate into strong wages growth. When unemployment last averaged 5%, the wage price index was at 3.6%.

Quote Of The Week
“Too much focus is placed on NSW and Victoria when housing markets in many other parts of the country are doing well. While investors have retreated from the market, budding homeowners are still out in force. The number of owner-occupier home loan borrowers in Tasmania stands at 6½-year highs, with ACT borrowers at record highs, South Australian borrowers are at 18-month highs and WA borrowers at 10-month highs.”


CommSec chief economist Craig James.