Property prices surged in the first part of 2009, erasing last year's losses and bucking the global trend.
According to the RP Data/Rismark Australian Home Value Index, which covers all dwelling types, prices rose by 2.8 percent in the first four months of 2009, with every mainland capital city except Perth registering gains.
Darwin was the top performer, with values up 5.3 percent in the four months to April, while Sydney and Melbourne property snared gains of 3.9 and 4.5 percent respectively.
Economists said a variety of factors were behind the rise.
"A combination of generational-low interest rates, tight rental markets, the expanded first homebuyers grant and soggy sharemarkets have caused more buyers and investors to turn their attention to the property market," said Craig James, chief economist at CommSec, adding that the price rise is good news for Australians, the Reserve Bank and the Federal Government.
"Modest gains in home prices boost consumer confidence, wealth and spending levels," Mr James said. "If confidence and spending levels lift, this will in turn boost employment and ensure that the flat spot experienced by the economy proves brief."
Sydney remains the nation’s most expensive city for real estate, with an average dwelling value of $522,797, while Perth remains the second most expensive, despite seeing falls of 5.7 percent over the past 12 months.
Rismark's international managing director Christopher Joye said values are generally rising across the board.
"Our analysis demonstrates that home values are rising in around 80 per cent of all suburbs with only the top 20 per cent of suburbs ranked by price suffering material falls," Mr Joye said.
Tim Lawless, RP Data's national research director, said that fears the government’s increased first home buyer grant, which was extended in the Federal Budget earlier this month, are fuelling an unsustainable debt boom are misplaced.
"Home values in Australia's mortgage belts, which are the prime first home buyer markets, were flat or falling between 2004-07 while the inner city and affluent markets enjoyed consistent growth. In 2008-09 we have seen a reversal of these fortunes," he said.
Commsec's Mr James added that while the rise in property values is welcome, it is not necessarily a surprise as demand continues to outstrip supply.
"Australia has been called the 'wonder from down under' because our home prices are not falling at 20 per cent annual rates like in the US and UK," he said.
"However the situation is far from remarkable. Population is rising at the fastest rate in 40 years, interest rates are super-low and we have a very tight rental market. It is simple demand and supply – demand is outstripping the supply of homes, putting upward pressure on prices."
Publication ninemsn Money Date 29 May, 2009 Author Stuart Fagg
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More dwelling approvals are needed to bring balance to market.
A recent release by the Bureau of Statistics revealed that Melbourne is continuing to experience tremendous population growth.
During the year to June 30, Melbourne's population grew by 74,600 people. To put this figure in context, Melbourne's population growth was 20,000 more than Sydney's and 57,000 more than Brisbane's.
It is no secret that Melbourne's rental market has been critically tight for several years and the strong population growth is continuing to add to the rental squeeze. There has been some easing in demand for larger, more expensive residential rental dwellings this year. But more affordable houses, townhouses, units and apartments are continuing to attract significant demand.
For most of the year, Melbourne's auction market has recorded clearance rates in the mid-to-high 70per cent bracket. While population growth is driving demand, the low interest rates are also a major factor.
These two factors, combined with a very low level of supply of dwellings, means that there is hot competition for homes for sale and auction.
There has been an undersupply of new dwelling approvals for a considerable time.
The latest ABS data for dwelling and unit approvals in Victoria points to a seasonally adjusted increase of 5.5 per cent, however this does buck a long-term trend.
Significant private-sector investment and progressive government policy are required to drive new dwelling approvals before Victoria's housing market can move to a more balanced position.
Publication: The Age Date: May 2, 2009 Author: Enzo Raimondo
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How the Taxman can help your cashflow
Why wait until the end of the year to receive a lump sum tax return
when you could be receiving it with each pay cheque.
With
the end of the financial year fast approaching, now is the time to
organise your paperwork to ensure you submit your Income Tax
Withholding Variation (ITWV) application to the ATO before the
beginning of July, as your 2008/2009 ITWV will no longer apply.
Applications for the 2009/2010 financial year can be lodged from 15th
May 2009. If you would like apsgrowth to complete an application on
your behalf (small fee is applicable), please click on the following
link to download our ITWV Checklist. Once complete forward to either
admin@apsgrowth.com or PO Box 582, Brookvale NSW 2100.
Download our Income Tax Withholding Variation (ITWV) Checklist Here
The Income Tax Withholding Variation can be used by investors to gain
the benefit of your annual tax refund cheque during the year, averaged
over each pay period (whether it be weekly, fortnightly or monthly).
Having these extra funds throughout the year assists with the cashflow
of the property by minimising your 'out of pocket' expense, instead of
waiting for the lump sum payment upon submitting your annual tax return.
Click here to read media article on How the taxman can help your cash flow
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What property is HOT in Sydney
APS Growth is constantly identifying and sourcing high quality
opportunities for our clients in the key markets of NSW, VIC and Qld.
Recently we have scrutinised over 15 projects in Sydney alone and have
decided to recommend only 4 of these, as most fall short of our due
diligence procedures and selection criteria.
As always, we are looking for well located, well built projects that offer value and a point of difference.
We are often able to negotiate favourable discounts and other
incentives that allow us to pass on genuine savings to our clients that
aren't normally available to individual purchasers.
In Sydney, we are currently recommending projects in high performing
locations such as the lower north shore, inner west and western
corridor where we have been able to secure great deals for our clients.
Similarly, we are currently assessing several projects in traditionally
high performing locations in and around the Melbourne CBD where we
expect we will recommend 2 or 3 of these as high performing
opportunities.
"Our core goal is to save our clients time, money and risk. We are
passionate about this mantra." David Conner, apsgrowth Property Mentor
and Researcher believes.
If you are interested in discussing our current opportunities we are
available at a time of your choosing. We very much look forward to
hearing from you and assisting you in securing your financial future
through thoughtful property selection and investment.
If you would like to sit with David Conner or another Property Mentor at apsgrowth call 1300 881 402 or send an enquiry now.
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The Group of Seven major economies expects global economic activity to begin to recover later this year after the worst global slump in decades.
"Recent data suggest that the pace of decline in our economies has slowed and some signs of stabilisation are emerging," the G7 finance officials said in a statement at a summit in Washington on Friday.
"Economic activity should begin to recover later this year amid a continued weak outlook and downside risks persist." The G7 members - Britain, Canada, France, Germany, Italy, Japan and the United States - said they were "committed to act together to restore jobs and growth to prevent a crisis of this magnitude from occurring again".
As part of efforts to tackle the crisis, the G7 said they would continue to provide and increase resources for the International Monetary Fund and other multilateral institutions to ensure they could help restore global financial stability.
"We will take whatever actions are necessary to accelerate the return to trend growth [rates] while preserving long-term fiscal sustainability," the G7 said.
They also agreed to continue "as needed to restore lending, provide liquidity support, inject capital into financial institutions, protect savings an deposits, and address impaired assets".
The crisis was "the deepest and most widespread economic downturn and financial stress witnessed in decades", the G7 said.
The seven nations agreed on the need to avoid new barriers to trade or investment. They also welcomed China's continued commitment to a flexible exchange rate system, which should promote more "balanced growth in China and the world economy".
The United States has long complained that it's domestic market has been far too open to countries, such as China, which have largely built their economy around export industries, with their domestic consumption secondary.
The G7 statement concluded with the need to boost financial sector regulation "to include all systematically important institutions, markets and instruments" so as to avoid a repeat of the crisis.
PUBLICATION: The Sun-Herald, 26 April, 2009
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