Prices Have Taken A Hit Due To A So-Called ‘Glut’
A report from the Australian. “The direction of interest rates next year is in question, as house prices grow at the slowest rate in more than three years and business conditions remain uncertain. During the past year, Darwin property values slumped by 7.2 per cent while Perth fell by 4 per cent after the mining boom. There are now 9.755 million residential dwellings in Australia that house an average of 2.5 people per property. The data showed the average median house price in the capital cities was now $631,000, a record high and an $8000 increase on the previous quarter.”
“‘We are becoming increasingly concerned about the underlying momentum in the economy as evidence mounts that the non-mining economy is losing steam,’ said National Australia Bank chief economist Alan Oster. ‘Soft outcomes for employment conditions are a concern, and suggest that the labour market is only barely generating enough jobs to keep the unemployment rate steady.’”
The Daily Mercury. “From the great heights of building 72 homes worth a combined $22.33 million in one year, Mackay builder Paul Steven Zammit has confirmed he failed to steer his company clear of a ‘cash crisis.’ In a statement emailed to the Daily Mercury, Mr Zammit revealed River City Homes had run out of funds, despite ‘pouring every cent I have and every cent I could’ into it. ‘I have no excuses for what has occurred beyond my genuine belief that we could have traded through this,’ he wrote.”
“In his statement, Mr Zammit apologised to those creditors to whom the company still owed money and wrote ‘it (was) with deep regret that creditors have been hurt in the process.’ He wrote that he faced ‘the worse economic climate (he had) seen, with the crashing of the mining industry leaving an oversupply of housing in the region, increased unemployment, the tightening of the lending policies from bank(s), devaluations of properties and the length of the downturn has made it extremely difficult to trade through it.’”
From The Age. “No government ever asked the people of Melbourne if they wanted their city to become a high rise metropolis. No plan set such a goal. Governments decided for us. Halfway through its term, Victorian Labor has joined the big-city development camp. Labor’s strategy is to side with vested interests while pretending to listen to rising resident concerns about rampant development. One explanation for Labor’s approach is its addiction to land-related tax revenue – currently at about $7.6 billion annually – and its desperation to maintain the construction industry share of 7 per cent of state production.”
“The construction industry wields enormous influence through its multi-layered development, business and service elements. Peak development groups lobby effectively. Unions are a powerful lobby group with Labor. There is no lack of infill land and other development sites. In the central city, apartment supply equals projected residential demand until 2031. By early 2016, about 100 high rise apartment buildings were under construction, planned or had gained recent permits, potentially doubling the number of high rise buildings in the central city. Some densities are over four times those of Hong Kong and Tokyo.”
From SBS News/AAP. “Brisbane home prices have taken a hit as a slide in demand and a flood of new units impact the city’s property market, according to the latest data from Real Estate Institute Queensland. Property analysts have been warning of price falls in unit and apartments for months due to a so-called ‘glut’ of new buildings coming onto the market.”
From Domain News. “A Sydney buyer looking for a holiday home has snagged a bargain on the Gold Coast, settling on one of the most exclusive addresses in Queensland for $4.8 million — $1.9 million cheaper than what the vendors paid almost 10 years ago. Selling agent Tolemy Stevens said the situation could have been much worse. ‘If we had sold this property two years ago it would have only been half of what the seller paid for it in 2007,’ he said. ‘We’ve made significant ground in the past few years.’”
“The global financial crisis was to blame for the cheap sale price, Mr Stevens said. The market was at its peak in 2007 when the penthouse was bought and property owners on the Gold Coast suffered greatly during the crash, he said. ‘We genuinely believe that it’s a great result for the area,’ he said. ‘The property is only 29 per cent away from the peak from the market in 2007. No one has a crystal ball, I don’t know if we’ll be able to recreate the boom time that we had at the moment; a lot of things have changed.’”