In the second part of our series on March 2024 results from our surveys, we deploy our mapping tools to display the hot spots across the country for mortgage, rental and investor stress, as well as defaults and net rental yields.
For a description of our approach, watch our earlier show here: So Who Is Really Feeling The Pinch? https://youtu.be/xvE-jPsGQUk
On Tuesday at 8pm Sydney we will deep dive on the post code level analysis. DFA Live Q&A: A Deep Dive On Post Codes Feeling The Pinch https://youtube.com/live/GmSKvYYQI1k
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https://digitalfinanceanalytics.com/blog/dfa-one-to-one/ for our One to One Service.
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Today’s post is brought to you by Ribbon Property Consultants.
Wherever you look, the news is not good for those wishing to see housing affordability relief.
First demand for rentals continues to be powered by the overseas influx. New data from the Department of Home Affairs shows that at the end of February, the number of international students in Australia hit a record high of 713,144, whereas the number of temporary migrants in Australia hit a record high of 2.8 million (nearly 2.4 million excluding visitors).
Or put it another way, the number of student visa holders in Australia is running around 80,000 above the pre-pandemic peak, while the number of temporary visa holders excluding visitors is around 400,000 above the pre-pandemic peak.
Then we can turn to the question of new housing supply. I have covered before the fact that the country is littered with half-completed construction projects, many of which are competing for labour and resources with the large number of government and commercial projects also currently running. This crowded out home builders as the major projects sucked in labour and drove up its cost.
But we also continue to see more building firms going under. In the light of this, perhaps we should not be surprised that the total number of dwellings approved fell 1.9 per cent in February (seasonally adjusted), after a 2.5 per cent fall in January, according to data released on Thursday by the Australian Bureau of Statistics (ABS).
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Today’s post is brought to you by Ribbon Property Consultants.
More from our Property Insider, Edwin Almeida, as we look at the latest property news, and also discuss dummy bidding, and how changes in China are impacting property here.
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Today’s post is brought to you by Ribbon Property Consultants.
This is an edited version of a live discussion with Cameron K. Murray, Author of The Great Housing Hijack which reveals how vested interests pull the strings on the property market in Australia, and offers a solution for genuinely affordable housing for those who need it.
With 120,000 people homeless each night and one in five low-income private renters spending more than half their income on rent, it is clear Australia urgently needs a housing policy change.
For anyone who wants to truly understand the housing market in Australia, The Great Housing Hijack is essential reading. Drawing on the best housing policies around the world, Murray shows how Australia could create a genuinely affordable housing program without compromising the interests of existing property owners.
Murray argues that even if more housing were built, the average household would not end up spending any less on housing.
Murray proposes bypassing the private market altogether with a scheme called HouseMate. The federal government would buy or repurpose land, build homes, then sell them at a discounted price to Australians who do not own property.
Perhaps the most controversial argument in The Great Housing Hijack is that planning and zoning rules do not change how much new housing is built, just the location.
Join the debate – you can ask a question live.
https://www.fresheconomicthinking.com/
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Another important discussion with Edwin Almeida, our property insider. Not only has the price of coco tripled ahead of Easter, but listings are down, despite more property investors listing, while the gap between property demand and supply widens, as more migrants seek to buy.
Last week has turned out to be an important one in terms of household finances and mortgage rates. The RBA this week said households are generally weathering the record run of interest rate rises but one in twenty owner occupied mortgage holders are in a dire financial position because of the higher interest rates and cost-of-living increases.
On average, debt servicing costs have risen about 30-60% since the RBA started hiking its cash rate in May 2022. That said, less than 1% of all housing loans were 90 or more days in arrears, through loans with payments overdue for less than 90 days have “continued to tick up gradually” and are expected to continue to increase in part because of weak household consumption.
Despite the trajectory of interest rates, on-going strength in the labour market enables most people to keep up with rising debt repayment levels, the Reserve Bank said in its quarterly financial stability report. These challenges would intensify if economic conditions were to deteriorate by more than expected or if inflation is more persistent than forecast in the out of date RBA’s February Statement.
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Journalist Tarric Brooker and I deep dive on the Australian Housing Crisis, as conclude that there is no easy fix, thanks to generations of bad policy and active intervention. So who are the winners and losers?
Tarric slides are here if you want to follow along: https://avidcom.substack.com/p/dfa-chart-pack-22nd-march-2024
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Property owners from Sydney’s infamous, evacuated and faulty Mascot Towers development have until March 20th to react to the NSW government’s multi-tier approach to compensation.
The 132 residential and nine commercial owners of the inner-south apartment block have a chance to walk away from the legal and financial nightmare since the towers were evacuated in June 2019 due to structural cracking.
But owners will lose hundreds of thousands of thousands of dollars if they choose to sell their defect-riddled apartments.
There will also be two support packages available to both owner-occupiers and investors, as long as they meet the means-tested criteria.
But owner occupiers and property investors are in different lanes. And the approach tabled could also have ramifications for owners of apartments in other faulty buildings. This is significant, given that up to half of all new units built could have “serious” defects.
But it also shows how the NSW Government are separating property investors from owners, arguing that investors are taking a commercial risk, and potentially can offset losses from other investments.
Clearly there are no winners here, other than perhaps the original developers, but more broadly this is another warning to anyone considering buying into a high-rise development, either off the plan, or in a subsequent sale purchase. With limited Government capacity to solve the problem, many risk losing hard cash, remember Caveat Emptor, Let the Buyer Beware!
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Today’s post is brought to you by Ribbon Property Consultants.
The ABS says the total value of residential dwellings in Australia rose by $196.8 billion to $10,397.1 billion in the past quarter.
But these gross values are misleading because they are not equally distributed across all households. To illustrate this, I extracted current value data from my household surveys and created a distribution chart across all households, including both investment and owner-occupied holdings, based on a mark to market at end February 2024.
So we can see, standing back, that while some households will be feeling wealthy and celebrating the massive rise in home prices in recent years, many others are excluded, will be paying more for a rental, and will have very little or no financial assets at all.
So, it seems that Australia’s egalitarian roots have been sacrificed on the property population Ponzi. No wonder, those is charge do not want to rock the boat – the truth is there is a majority of potential voters benefiting from the property game. Its all a bit of a mess.
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Today’s post is brought to you by Ribbon Property Consultants.
