Home Sellers Boosting Asking Prices - SQM Research

Vendors have been lifting their asking prices throughout the months of January and February 2013, according to the new vendor sentiment index released this week by SQM Research.

This index has revealed that capital city asking prices have risen by 0.4% for units and 1.5% for houses over the past ninety days, with some cities recording rises in excess of 3%.

A rise in asking prices suggests home sellers are becoming more confident of market conditions and that buyers are bidding more aggressively for real estate that is been offered at fair market value.

Perth, Darwin, Sydney and Adelaide are now all recording increased asking prices, suggesting that the downturn is well and truly over in these cities. However, Hobart and Canberra have continued to record weakness overall since the start of the new year. Vendors have not yet begun to lift their asking prices in Brisbane and Melbourne, which suggests buyers are still largely in control of the market in these cities.

Coolangatta and Palm Cove have revealed some of the steepest declines within the new index, in circumstances where vendors have had to lower their asking prices by as much as 49% over the past three years.

The findings are part of SQM Research’s newly released Weekly Vendor Sentiment Index (as measured by asking sales prices). The index gages the sentiment of vendors selling their properties, split into the categories of: all houses, 3 bedroom houses, all units and 2 bedroom units. This data will be made available on a national, capital city, regional and postcode basis.

The data from this index will be accessible for free in graph form on our website www.sqmresearch.com.au.

SQM Research believe that these indexes will be a superior leading indicator of the Australian Bureau  of Statistics (ABS) Housing Price Series – as the correlation between the two has already proved to be astoundingly close – 0.97% correlation

Louis Christopher, Managing Director of SQM Research says “I am actually surprised at how closely this new index correlates with the ABS house price series. Of course, we have built the index on similar geographical composites plus we have stratified the index in a similar way to the ABS. Overall I am very excited to bring this index to the market. It is a step forward in delivering timeliness and transparency to the property market and a step forward for SQM in making it the most respected authority on the housing market.”

Louis Christopher, Managing Director of SQM Research says “I am actually surprised at how closely this new index correlates with the ABS house price series. Of course, we have built the index on similar geographical composites plus we have stratified the index in a similar way to the ABS. Overall I am very excited to bring this index to the market. It is a step forward in delivering timeliness and transparency to the property market and a step forward for SQM in making it the most respected authority on the housing market.”

www.sqmresearch.com.au

Do government handouts work, or do they artificially inflate the property market?

source: SMH http://tinyurl.com/c7m4ypk

The number of people in NSW looking to buy their first home fell to its lowest level in 21 years in December, showing that the government's bid to encourage first-timers to buy new homes still has some way to go.

The senior economist at Australian Property Monitors, Andrew Wilson, said there were just 998 loans (for both new and existing homes) taken out by first-timers across the state, compared with 2217 in Victoria and 1556 in Western Australia.

The fall coincides with changes to first-home buyer incentives. The First Home Owner Grant was withdrawn on October 1 for purchasers of existing homes. It was replaced with a $15,000 grant to buy a new house or apartment priced below $650,000.

"It's the lowest number of first-home-buyer home loans approved in a month since January 1992," Dr Wilson said.

"And the proportion of first-home-buyer loans to total loans is 8.1 per cent in NSW, the lowest proportion ever recorded.

"The average over the 20 or so years is 18.7 per cent.

"We've seen a significant collapse . . . this shows that first-home buyers have not been activated to buy new homes."

A year earlier, in December 2011, 4256 first-home buyers took out loans. At that time first-home buyers were rushing to beat the end-of-year deadline on stamp duty savings of $22,490 which applied to all properties under $650,000. They also got the $7000 grant.

Fast forward to December 2012 and buyers had the same stamp duty exemptions, and a $15,000 grant, but only for new properties. They have until the end of this year to take up the O'Farrell government's carrot.

The decision to withdraw the stamp duty incentives for existing properties was announced in September 2011 as part of the state budget. Back then real estate agents were scathing. The Raine & Horne chief, Angus Raine, had urged the government to reconsider its decision because first-home buyers wouldn't go for new property, primarily as it was more expensive.

"This is not going to help young people jump off the rental market treadmill and into their own homes," Mr Raine said. The chairman of Ray White, Brian White, said the decision to cut the incentives wasn't "quality thinking".

Yesterday the BresicWhitney principal Shannan Whitney was surprised at the extent of the first-home buyer collapse. "Those numbers are quite dramatic," he said.

Mr Whitney said it showed that first-home buyers had rejected the government's goodies. "Frankly I think existing stock is a better-value option for them because you pay a premium for new."

Nationally the proportion of first-home buyers taking out home loans was 14.9 per cent. After the 8.1 per cent rate in NSW, the next lowest proportion of first-time loans was in Queensland at 12 per cent. "That was the lowest ever recorded in Queensland, too," Dr Wilson said.

The Master Builders Australia chief economist, Peter Jones, urged the Reserve Bank to cut interest rates at its March board meeting. "The decline in first-home buyers that continued in December is a concern, given the various incentives across several states to entice them into the market," Mr Jones said.

So what do you think? Do governments hand outs still work? Or are they designed to artificially inflate the property market?

I was in a writing mood, but SOOS Vs WARGENT have done all of the work for me!

Firstly, I really do need to thank Pete Wargent for saving me a hell of a lot of time in forming my own opinion regarding the recent article written by Philip Soos. I have a great deal of respect for the views and commentary Pete Wargent publishes on a regular basis.
Philip Soos is a Masters research student at the School of Humanities and Social Sciences, Deakin University, working towards a doctorate in political economy. He holds MBA and IT degrees from RMIT University and Swinburne University of Technology, respectively.
Here is where you will find his recent article http://www.macrobusiness.com.au/2013/02/the-history-of-australian-property-values/. Now, I do need to mention that back in July 2012 I did report on some of the findings from the cencus data that was collected in August of 2011 on Real Estate News - Sky Business. In fact Philip Soos said at the time "the 2011 census revealed Australia had 7.8 million households, 900,000 fewer than the NHSC’s figure, with population also growing by 300,000 fewer than previously estimated. These figures have come as such a shock that the NHSC chairman has reported that an undersupply could be incorrect".
  http://www.realestnews.com/html/ep185_7.html
 However, I have always said and I firmly believe that common sense will always be the best barometer there is. With findings that suggest there are 900,000 fewer dwellings than previously estimated, we would have seen a huge correction in the property market by now. Of course, this has not happened.
Enough from me. Take it away Pete Wargent! http://petewargent.blogspot.com.au/

Enjoy,

Iggy 

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