Hilton Parkes Real Estate
17th March 2018


NIMBYs Are Costing Australia Billions


So-called “nimby-ism” is stunting the growth of Australian cities and remains at the centre of the housing affordability debate.
The Reserve Bank says big price rises are caused by the zoning laws preventing suburban development. Government zoning of residential areas has pushed the average property price up 40% in our biggest cities, the RBA has found. In a research paper that calls for a policy rethink, the RBA says zoning “has driven prices substantially above the supply cost,” as home-owners fight to stop medium-density projects in their suburbs.
Home-buyers in Sydney pay $489,000 above the marginal cost of their property – what the house costs to build and how the market would otherwise value the land – not because of a physical land shortage, but an “administrative” scarcity of land caused by restrictive zoning.
Zoning restrictions have raised house prices by $324,000 in Melbourne, $159,000 in Brisbane and $206,000 in Perth.




Big Four Cut Lending Rates In Loans War





Big four banks continue to cut their mortgage rates in a bid to boost profits and squeeze out smaller lenders who have been grabbing market share because of APRA’s lending caps.
ANZ and NAB have followed Commonwealth Bank and Westpac by cutting key rates by up to 50 basis points. The big four banks have room for additional interest-only cuts because they have now undershot APRA’s 30% limit on new lending.
“It’s war,” said Sally Tindell, of RateCity.com.au, which monitors product rates and fees. “The big banks are opening their books again.”
NAB has cut its three-year fixed investor interest-only deals, making it the cheapest of the big four. The five-year fixed owner-occupier principal and interest has been cut from 4.59% to 4.09%. Three-year, interest-only fixed deals for investors have dropped from 4.49% to 4.19%.
All the changes apply only to new fixed rates deals and not for existing borrowers.





Global Ultra Wealthy Keen To Buy In Australia




The number of ultra wealthy people in Australia is tipped to jump to 1,720 over the next five years and more of the world’s rich could soon be snapping up prestige Australian homes, a new report has found.
The number of people with net assets of $US50 million or more in Australia rose 9% last year to a total of 1,260, according to Knight Frank’s 2018 Wealth Report.
The figure is expected to jump 37% to 1,720 ultra wealthy people over the next five years.
Australia is the third most favoured country in the world for the ultra wealthy to move to, after Britain and the US, the research found.
And Australia was one of the top five countries where the world’s wealthiest plan to buy prestige homes this year, with particular interest from residents of Malaysia, Singapore, China, Hong Kong and the Philippines.




Sydney And Melbourne Among Top 15 Cities



Sydney and Melbourne are among the top 15 fastest-growing prestige property markets in the world, a new report shows.
Despite an easing of price growth across Sydney generally, the city’s top-end property market recorded double-digit annual growth in 2017, according to Knight Frank’s 2018 Wealth Report.
Of 100 cities analysed, Sydney ranked 9th in the report’s Prime International Residential Index, beating Melbourne which placed 14th – down from 12th place last

Topping the list was Guangzhou, China, where luxury property prices increased 27%, followed by Cape Town (20%) and Aspen (19%).
Sydney’s prime market – the top 5% – recorded 10.7% annual growth, which saw it jump from last year’s 11th place ranking. By comparison Sydney’s median house price grew just 4% over the 12 months to December, according to Domain Group data.
Meanwhile, Perth, the only other Australian city analysed, came in equal 55th
place with Tel Aviv, thanks to 1.3% annual growth.




Big Banks Face Grilling Over Loans





Australia’s major banks face a public grilling over cases where they have engaged in unsuitable lending for mortgages, cars and credit cards. A public hearing is beginning in Melbourne as the financial services royal commission tries to find out why the problems happened.
The commission will hear evidence that consumers have not always been treated honestly and fairly in Australia’s $1.6 trillion home loan market, senior counsel assisting the inquiry Rowena Orr QC told its opening hearing last month.
NAB, Commonwealth Bank, Westpac and ANZ all feature in a list of case studies to be covered by the inquiry, which will also examine the banks’ arrangements with their intermediaries.
The cases have already been addressed by the banks and the Australian Securities and Investments Commission, often resulting in fines and refunds to customers.
The royal commission will use the cases to find out why the conduct occurred and what was and should have been the response.



Quote of the Week


“It’s war. The big banks are opening their books again.”

Sally Tindell, of RateCity.com.au, which monitors product rates and fees