Рубрика: realty

Advice and Services for the Expatriate Buyer of Australian Real Estate

Exfin provides access to a number of services associated with the purchase of real property in Australia, a including general information about the buying, selling and renting of property. Information and resources include the following.

Residential Property Pricing Information

Access to residential property data and charts from the Australian Bureau of Statistics (ABS) and RBA regarding Australian house prices since 2013 in relation to all major capital cities, and to other market commentary.

Australian Mortgages

Access to almost all Australian mortgage products for the purchase of Australian real estate purchases, provided by mortgage brokers who are experienced in dealing with offshore purchasers; both Australian and other nationalities.

Australian real estate is quite similar to New Zealand but Australia is so much bigger, so the Australian property market is more competitive than NZ for both renting and buying.

Like New Zealand there are positives and negatives to each city and each suburb and it is important to do research before you leave New Zealand, especially before you make any fixed arrangements.

What you will find in this post:

After a lengthy period of rapid price and sales growth, the Australian housing market sales rate in the spring has begun to grow more slowly. Home Sales fell 10% in August, new home listings are down and new dwelling construction approvals have dropped as well.

Credit tightening along with some Covid lockdowns has suppressed sales from June to August, even though mortgage rates continue to fall.

Home prices in Sydney, Perth, Melbourne and Brisbane continue to climb (see below) even as sales and listings diminish. The recent home price growth rate for Australia is very steep comparable to the record rates back in the late 1980s. Given foreign students and other immigrants coming in are well down due to lockdowns, it seems the market is still suppressed by the pandemic.

Australian property is one the widest and deepest asset bubbles in the history of capitalism. Any objective assessment of this market can lead to no other conclusion.

With a long history of commitment to home ownership, Australians have always been prepared to structure their finances around property. This showed up in a total dwelling stock to GDP ratio that persisted around a very high 150% from 1960 to 1990. In the late 1990s that shot up to 200% and then embarked on near ceaseless climb to 360% today.

There are many other guides to the extreme overvaluation of Australian property. The ratio of household debt (overwhelmingly mortgages) to disposable income is the highest in the world at 186%. Median price to income multiples are anything from 12x in Sydney, to 10x in Melbourne, down to still immensely unaffordable 6x in smaller capitals, up from 3-4x times in all over the long run for all. The extent of overvaluation is plain.

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Data released by the Australian Bureau of Statistics (ABS) indicate that the housing market in Australia is starting to cool. Dwelling approvals in Australia fell by 6.7% month-on-month in June, the third consecutive month of a decline.

The value of new housing loan commitments also fell 1.6% month-on-month in June, according to the ABS. However, it remains at a “historically elevated level” of A$32.1bn, according to the ABS.

The Reserve Bank of Australia noted the strength of the housing market. “Given the environment of rising housing prices and low interest rates, the [central] Bank is monitoring trends in housing borrowing carefully and it is important that lending standards are maintained,” said RBA governor, Philip Lowe.

The Australian real estate market is in the grip of the biggest housing bubble in the nations history and Melbourne will be at the epicentre of an historic "bloodbath" when it bursts, according to two housing economists

Lindsay David and Philip Soos, who have written books on the overheated housing market, have berated the housing industry and politicians who refuse to acknowledge the existence of a bubble due to a perceived shortage of housing in the major capitals.

In a blunt submission to the upcoming parliamentary inquiry into home ownership, the pair claim there is actually an oversupply of housing, just as there was in the US before the market collapse that precipitated the global financial crisis.

Australia’s housing market is surging, thanks to record-low interest rates.

House prices in the country’s eight major cities soared 13.4% during the year to Q2 2021 (9.2% inflation-adjusted), to an average of AU$ 727,427 (US$537,983), according to CoreLogic Australia, up from the previous year’s 8.7% y-o-y increase and the highest growth recorded since Q2 2010. It was the seventh consecutive quarter of y-o-y house price growth.

Quarter-on-quarter, house prices in the eight major Australian cities rose by 4.8% (4.1% inflation-adjusted) in Q2 2021.

I recently watched the federal treasurer, Scott Morrison, proudly proclaim that Australia was in “surprisingly good shape”. Indeed, Australia has just snatched the world record from the Netherlands, achieving its 104th quarter of growth without a recession, making this achievement the longest streak for any OECD country since 1970.

Australian GDP growth has been trending down for over forty years
Source: Trading Economics, ABS

I was pretty shocked at the complacency, because after twenty six years of economic expansion, the country has very little to show for it.

Australia’s housing market is facing a “triple crisis”, with one unexpected consequence of the rising home prices.

ASX rallies after 10-month low

ASX plunges to 10-month low

Huge changes afoot for pay options

Australia’s economy is in a “triple crisis”, prompting calls for a royal commission into the future of housing.

The reason why? Because Australia’s property market is going so well.