It seems to depend on who you chat to and which articles you read at the moment as to whether interest rates are moving up or staying put, when the reserve bank meets on the 4th of May.

On one hand, a recent online survey of 3500 people shows that over 70 are expecting an increase again next month.

With headline inflation rising by 0.9% in the March quarter, there is argument for another rise now, before pausing to monitor how the Australian economy performs back at the lower level of ‘neutral interest rates’.

On the other hand, there is a level of uncertainty which may prompt the Reserve Bank to keep the cash rate at 4.25%, particularly in light of the instability in the European Union and the repercussions of Greece’s crumbling economy, as an article in yesterday’s Daily Telegraph “Greece rates gift” suggests.

Some turbulence is being felt in the financial markets with the news of Greece’s credit rating being moved to “Junk” status with a $430 billion national debt. Portugal & Spain are also in the firing line with fear of the debt crisis spreading.

Realistically, whether the bank increases the cash rate this month or they wait a little longer, our feeling is that the trend will continue with a couple more eventual increases to push interest rates firmly back into the Reserve Bank’s ‘neutral territory’.

Meanwhile, mortgage stress seems to be coming back into the popular media vernacular. It is more likely to be felt by the first home buyers who extended themselves to purchase their first home & who are feeling for the first time the extra pressure created by the upward jolts of interest rates. For seasoned property market players who have been through the rate cycle before, it is familiar territory where interest rates are required to trend up significantly before the ‘mortgage stress’ term starts to truly become appropriate – particularly for our lovely part of the world.

Confidence continues to be strong, as seen in the ‘Consumer Sentiment & Business Confidence’ graph below.

With many savvy buyers having already factored in interest rate increases when setting their budget, and with confidence levels remaining in very positive territory, we see no reason for the market not to continue on its current positive trend.

Till we meet again, wishing you all the best in your property search!

The Team at R&W Seaforth/Balgowlah.

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See you at the open for inspections: Click Here for our open times

To keep an eye on this week’s reported Seaforth real estate, Clontarf real estate, Balgowlah real estate, Balgowlah Heights real estate and North Balgowlah real estate Click Here*

*Sales are as reported by Australian Property monitors on 29/04/2010

30.04.10

Tags: Australian economy, Australian Property monitors, Balgowlah, Balgowlah Heights, Balgowlah Heights real estate, Balgowlah real estate, Business Confidence, cash rate, Clontarf, Clontarf real estate, credit rating, European Union, financial markets, Greece, headline inflation, inflation, interest rates, mortgage stress, neutral interest rates, North Balgowlah, North Balgowlah real estate, open for inspections, property search, R&W, R&W Seaforth, R&W Seaforth/Balgowlah, Reserve Bank, Seaforth, Seaforth real estate  •  

Posted in Real News

Wishing you all the best for the ANZAC long weekend!

In recent weeks the media have found a new ‘favourite’ topic associated with predictions of major population growth in the coming decades for Sydney & Australia in general.

What we have found interesting is the recent reports that Manly & the North East area of Sydney are predicted to experience the lowest growth rate. According to the Department of Planning, the population growth in Manly over the next 26 years is expected to be lower than almost every other part of Sydney, as reported in yesterday’s Manly Daily (22/4/10) “Projected Population Growth Low” by John Morcombe.

Manly’s current population is 41,200 and is expected to grow to 46,600 by 2036 or 13.1% while  South West Sydney is expected to increase by 113% and North West Sydney increasing by 52%.

Pittwater & Warringah council are expected to increase by around 18% – still substantially lower than the Sydney average.

Warringah are currently planning a community forum “Talk of the Town 2010 Community Summit” on the 23rd of May to start developing a plan for Warringah’s Housing Future to cater for the significant growth expected. Have your say on how an extra 10,300 dwellings should be incorporated in to the Warringah area – register here.

Till we meet again, wishing you all the best in your property search!

The Team at R&W Seaforth/Balgowlah.

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See you at the open for inspections: Click Here for our open times

To keep an eye on this week’s reported Seaforth real estate, Clontarf real estate, Balgowlah real estate, Balgowlah Heights real estate and North Balgowlah real estate Click Here*

*Sales are as reported by Australian Property monitors on 22/04/2010

23.04.10

Tags: Australian Property monitors, Balgowlah, Balgowlah Heights, Balgowlah Heights real estate, Balgowlah real estate, Clontarf, Clontarf real estate, Department of Planning, John Morcombe, Manly, Manly Daily, North Balgowlah, North Balgowlah real estate, Pittwater, population, population growth, population growth in Manly, Projected Population Growth Low, Seaforth, Seaforth real estate, Sydney, Talk of the Town 2010 Community Summit, Warringah, Warringah Council, Warringah’s Housing Future  •  

Posted in Real News

An article in last weekends Financial Review caught my attention “Positive Credit Ratings – Will You Make The Grade?”.

Delving into what this is all about the article talks about the 22 year old privacy laws being swept aside & allowing individuals to receive ratings in a similar way to the way government bonds are rated.

There is talk of the banks changing their lending model so that the less / more risky you are then the more / less you will pay for your mortgage. Obviously this is already a reality with the way banks segment and charge a higher interest rate on what they deem higher risk loans. Soon we may have higher margins for those with a few missed payments.

The Australian Government has already indicated the go ahead on this new set of rules which will allow credit bureaus to compile a much more detailed ‘credit history’ and share this with the lenders for each & every one of us.

As with all changes there will be the winners and the losers. Those with a squeaky clean credit record should, in theory, be rewarded for this & enjoy a lower interest rate payable on their mortgage. In reality with a longer term relationship with an institution or a solid balance sheet borrowers are probably negotiating the discount that they would supposedly get from this new system.

In reality this is more likely to be a system for the banks to identify and significantly penalize those who pose a greater risk.

Up until now the privacy laws have kept credit bureaus like Dun & Bradstreet and Veda Advantage on a very tight leash as to what they can collect & share – essentially only being able to compile a relatively bare bones history, currently your name, address, employer, any loans you have defaulted on, cheques that bounce of $100 or more & any filings for bankruptcy.

With all this information soon to be at their fingertips the banks are gleefully rubbing their hands in anticipation of what might soon be unleashed.

The main change will realistically be that those that have been able to hide their mortgage stress or poor financial management will soon have no where to hide & will be additionally punished for getting themselves into their current situation.

If your credit rating is going to come up as “AAA” then there is no need for concern about this. Very little will probably change and perhaps you might even get a slightly better deal. If you’re slipping down the grades then the effect is likely to be a lot more noticeable & expensive.

There will be some buildin protection mechanisms into these changes in that banks will only be able to access the extra information once a consumer applies for a loan – they can’t get information from the credit bureaus for their targeted marketing campaigns.

Our thoughts are that with this increased information about to start being compiled it is probably time to automate some of your payments, if you haven’t already, and ensure that you are paying the bills on time. BIG BROTHER IS WATCHING!

Till we meet again, wishing you all the best in your property search!

The Team at R&W Seaforth/Balgowlah.

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See you at the open for inspections: Click Here for our open times

To keep an eye on this week’s reported Seaforth real estate, Clontarf real estate, Balgowlah real estate, Balgowlah Heights real estate and North Balgowlah real estate Click Here*

*Sales are as reported by Australian Property monitors on 16/04/2010

16.04.10

Tags: Australian, Australian Government, Australian Property monitors, Balgowlah, Balgowlah Heights, Balgowlah Heights real estate, Balgowlah real estate, Big Brother, Big Brother Is Watching, Clontarf, Clontarf real estate, credit bureaus, credit history, Dun & Bradstreet, Financial Review, interest rates, lending model, North Balgowlah, North Balgowlah real estate, Positive Credit Ratings, privacy laws, Seaforth, Seaforth real estate, Veda Advantage  •  

Posted in Real News

With a barrage of articles & contradictory information on the real estate market, economy and interest rates this week, it’s tough to get a feel of what is actually happening out there!

We have a general consensus, as discussed in previous editions of “Real News”, that NSW is thousands of homes under supply & the current demand is forcing prices up. While one article in yesterday’s Daily Telegraph suggests that  new housing builders are doing it tough – “Taxes shut door on new housing” – with Monarch homes losing $20,000 per home built & sold in 2009. Last weekends Financial Review’s feature article was back to “What’s Driving Property Prices” and talking about how bullish prices are.

What is going on?

RP Data’s Tim Lawless (National Research Director) felt the need to state that “We are not in a housing bubble”. Mr Lawless reveals that a housing ‘bubble’ suggests housing values increased too rapidly and are set to experience a rapid decline, a fate not likely to come to be experienced in Australia. “Across Australia’s capital cities, home values have increased by just 6.2 percent per annum over the last five years – a rate of growth that is in line with wages growth which has been 6.0 per cent per annum over the same time frame” An interesting point!

The Financial Review Easter weekend edition, explored the buoyant market being experienced throughout Australia (with auction clearance rates remaining above 70%) and delved into some of the forces driving the market.

Further on this topic – Rod Cornish of Macquarie Capital Advisers, points out that although first-home buyer numbers have been in decline since they peaked at 30 per cent of the market in May last year, the market has been driven for the past six months or more by repeat buyers or upgraders.

Real Estate Institute of Australia President David Airey, backs this up stating that upgraders now account for almost 60 percent of the market and many have sold their previous home to first-home buyers

Building on the demand side of the equation, Richardson & Wrench Seaforth/Balgowlah (R&W) have however, been experiencing an increase in foreigners securing property as the Foreign Investment Review Board relaxed purchasing requirements last March – with a number of buyers flying in for a week to 10 days to secure a home on their trip.

Reviewing the market, selling conditions remain buoyant and our feeling is that the market has moved past the uncertainty of the GFC & has now found steady ground.

In this market, particularly for prestige homes – vendors need to be accurate with their anticipated price to achieve a sale in a favorable timeframe. Purchasers will also need to act or you are likely to miss out with someone else moving in ahead of you.
 
Cutting through all the information – What’s our advice?

If you like a property, you can afford it and are planning for the longer term – jump in now and secure it. We enjoy a fantastic lifestyle on the gateway to the Northern Beaches – its time for you to spend your time enjoying it in your “castle”!

 
We look forward to your posts on the blog with any additional thoughts & comments from our readers.

Please feel free to email us if you have any further questions about the market or real estate in general – it would be great to hear from you.

Till we meet again, wishing you all the best in your property search!

The Team at R&W Seaforth/Balgowlah.

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See you at the open for inspections: Click Here for our open times

To keep an eye on this week’s reported Seaforth real estate, Clontarf real estate, Balgowlah real estate, Balgowlah Heights real estate and North Balgowlah real estate Click Here*

*Sales are as reported by Australian Property monitors on 9/04/2010

9.04.10

Tags: Auction, auction clearance rates, Australian Property monitors, Balgowlah, Balgowlah Heights, Balgowlah Heights real estate, Balgowlah real estate, Clontarf, Clontarf real estate, Financial Review, Foreign Investment Review Board, GFC, interest rates, Monarch homes, North Balgowlah, North Balgowlah real estate, Northern Beaches, R&W, Real News, Richardson & Wrench Seaforth, RP Data, Seaforth, Seaforth real estate, Telegraph Taxes shut door on new housing, Tim Lawless, What’s Driving Property Prices  •  

Posted in Real News

First & foremost – Happy Easter from the team at Richardson & Wrench Seaforth (R&W)

Looking through the long weekend with the economic data at hand it would appear a safe bet that interest rates will continue the upward trend next Tuesday with the markets pricing a better then 60% chance of an increase.

The rate increase curve may be levelling out as we move back to the neutral cash rate. Last week Assistant Governor of the Reserve Bank of Australia (RBA), Philip Lowe has stated that the underlying inflation has “moderated significantly” and is expected to decline from 3.25 per cent to about 2.5 per cent during 2010.

Dr Lowe has reinforced that the central bank’s view that the Australian economy had “relatively limited spare capacity” and that it was likely interest rates would move towards “more normal” levels.

Depending on who you listen to we may be looking at another 3 interest rate increases over 2010 (up a total of 75 basis points) if you take the Commonwealth Bank (CBA) suggestion then the rate increases could be a more aggressive with 5 increases up a total of 125 basis points.

RBA Governor Glen Stevens, stated this week that house prices are “getting quite high” and suggested that interest rates may need to be increased further to contain inflation.

On the coal face we have seen buyers factoring in interest rates, returning to historical levels since the economy started to turn around last year. So the strong demand we feel will continue as interest rates increase as there should be no surprises as to what is happening.

We feel that if the variable interest rates move above 7.5% then we will see interest rates having an impact and providing downward pressure on the local housing market. In the past we have seen other parts of Sydney show signs of housing slowing before there is any noticeable impact on the Northern Beaches. Looking across Sydney we are not seeing signs of the market cooling off with auction clearance rates sitting around 70%, the market is looking quite solid.

First & foremost – Happy Easter from the team at Richardson & Wrench Seaforth (R&W)

As shown in the above diagram while auction clearance rates sit substantially over 50% then the market should continue to move strongly.

Over the past month we have seen an increase in the number of homes selling within the first week on the market, selling off our database previews before moving to a more aggressive marketing campaign. Talking to a number of buyers this week the frustration has been building as our database keeps growing at a much faster rate than properties are selling. With a number of new listings hitting the market after Easter we hope to be able to satisfy some of the current demand.

We look forward to your posts on the blog with any additional thoughts & comments from our readers.

Please feel free to email us if you have any further questions about the market or real estate in general – it would be great to hear from you.

Till we meet again, wishing you all the best in your property search!

The Team at R&W Seaforth/Balgowlah.

.

See you at the open for inspections: Click Here for our open times

To keep an eye on this week’s reported Seaforth real estate, Clontarf real estate, Balgowlah real estate, Balgowlah Heights real estate and North Balgowlah real estate Click Here*

*Sales are as reported by Australian Property monitors on 1/04/2010

1.04.10

Tags: Auction, auction clearance rates, Australian economy, Australian Property monitors, Balgowlah, Balgowlah Heights, Balgowlah Heights real estate, Balgowlah real estate, CBA, central bank, Clontarf, Clontarf real estate, Glen Stevens, Governor Glen Stevens, Happy Easter, inflation, interest rates, local housing market, neutral cash rate, North Balgowlah, North Balgowlah real estate, Northern Beaches, Philip Lowe, property search, R&W, R&W Seaforth/Balgowlah, RBA, Reserve Bank of Australia, Richardson & Wrench, Richardson & Wrench Seaforth, Seaforth, Seaforth real estate, Sydney, underlying inflation, Variable interest rates  •  

Posted in Real News