Wanted: More High-Rise Purchases Willing To Play Russian Roulette!

Well, finally, the problems in Australian high-rise construction are getting airtime, but many households are caught up with these rolling disasters, as estimates suggest well more than half of recently built apartments are defective.

It frankly remains a game of “Russian roulette” when buying off-the-plan apartments and consumers could be forgiven for asking themselves if it is safe to buy an apartment off the plan with issues frequently emerging in Sydney’s building developments. The current legislation is not effective, and of course the question is who would foot the bill for repairs.? Yet the industry keeps making empty promises, and is claiming things are now fixed. No surprise there.

Lets look back at some of the issues so far in NSW. In recent years building developments such as Opal Towers and two buildings owned by Toplace have hit the headlines for all the wrong reasons, leaving some owners and occupiers out of pocket and traumatised. Last year NSW regulators issued work rectification orders across building sites, including The Laneways Rosebery, which has serious structural defects, and Toplace’s Vicinity complex in Canterbury over “potential serious defects”.

At Mascot Towers in Sydney’s inner-south, residents were offered a settlement at the start of January after being forced to evacuate their defect-ridden apartment building years prior.

Less than a fortnight later, NSW Building Commissioner David Chandler has moved to reassure residents there was no immediate threat to an apartment and retail development in Macquarie Park after concerns about concrete were identified in the building’s basement and ground floor.

“What we have done so far is we’ve told the developer, ‘You are responsible and you are going to fix this under the powers of the NSW [Residential Apartment Buildings] Act’,” Mr Chandler said last Thursday.

But Lachlan’s Line is just one of many, with building work rectification orders “issued all the time” by Building Commission NSW. “We’re probably issuing four or five orders a week at the moment,” Mr Chandler said.

The ABC writes, In December, the NSW Building Commission was given extra powers to order fixes during construction, aimed at boosting public confidence in buying homes off the plan.

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Wanted: More High-Rise Purchases Willing To Play Russian Roulette!
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Its Edwin’s Monday Evening Property Rant!

Our latest review of the latest property market, as the new year gets into gear. According to the WeeChats, “buy now”, but on the other hand, listings in Melbourne continues to build.

But things are not that straight forward. Perhaps we should review “Three Monkeys And An Elephant”, to misquote two parables…

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Its Edwin's Monday Evening Property Rant!
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Kiwi Home Prices Wobble!

We got the latest on New Zealand Property for December 2023 from the Real Estate Institute of New Zealand.

I love how they spin the release, saying that the December 2023 figures show a notable increase in sales activity, median prices lifting, lower days to sell, and a clear sense of more confidence overall (year-on-year).

This is despite the fact that actually New Zealand house prices edged lower in December, down around 0.3% mom on a seasonally adjusted basis,
though trends diverged across the country, ranging from a 1.9% mom fall in Northland to a 4.2% lift in Tasman.

The national average was weighed down by a 0.9% mom price fall in Auckland. Among other big regions, Wellington prices lifted 0.6%, while prices in Canterbury eased 0.1%.

ASB’s commentary on the REINZ figures are helpful here. They say the NZ housing market has struggled to establish a clear direction since the last housing market correction came to an end in around March/April last year. Monthly price movements have usually been modest in either direction, with the market oscillating between small lifts and even slighter falls over most of the year (see our chart above for the contrast between 2021’s large price rises and 2022’s decent falls with 2023’s more meagre movements).

All-up, prices managed a bounce of only about 1.2% over H2 of last year.

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Kiwi Home Prices Wobble!
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Actually, In Some Areas Home Prices Are Falling!

I get very tired of the high-level reporting of home prices, because as you know I believe we have many discrete markets, which are behaving very differently across locations, states and types of property. Averages mask.

But in some areas, prices are indeed continuing to drop. And drop fast.
For example, in my old stomping ground, Thirroul, median house values rose significantly from 2019, peaked in 2021 at over 2 million dollars, that’s double their 2019 levels, then fell away to a new trough of $1.68 million in March 2023, before rising a little, but then moved down to around $1.78 million. And Units in the same area are still descending and on average are just now over $1m.

Similar patterns are showing up elsewhere.

Last year I did a number of “antispruik” shows where we did deep dives at a post code level and looked at how vendors were cutting their asking prices to get a sale.

And actually, as the AFR reported home values in 27 coastal towns have plummeted by more than $200,000 from their pandemic highs two years ago, while 56 towns lost more than $100,000, analysis by CoreLogic shows.

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Actually, In Some Areas Home Prices Are Falling!
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Record Broken After A 25% Round Trip!

This is our latest weekly market update.

Well, in another volatile week, the S&P 500 posted a record high close on Friday of 4839.81 for the first time in two years erasing the last of a nearly 25 per cent between its record high close of 4,796.56 on Jan. 3, 2022 and its low in October 2022.

The S&P 500 has been in a bull market since it closed at its low on Oct. 12, 2022, fueled by a rally in chipmakers and other heavyweight technology stocks on optimism around artificial intelligence.

The Dow Jones Industrial Average, which also hit a record closing high on Friday, had already confirmed on Dec 13, 2023 that it had been in a bull market since Sept. 30, 2022.

Meanwhile, while the Nasdaq composite recovered 43% in 2023, it would need to rise another 4.8% to return to its record high close of 16,057.4437, reached on Nov. 19, 2021.

On Friday, the S&P 500 jumped 1.23% The Nasdaq jumped 1.70%, while Dow Jones Industrial Average rose 1.05%.

But the questions of Central Bank rate cuts, QT, and whether stocks are still over valued hangs over the market like a bad smell. Volatility will remain the main game for some time to come.

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Record Broken After A 25% Round Trip!
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Put Interest Rates Up, And Reform Taxes Now!

The IMF just dropped a bombshell on Australia, saying that Interest rates should be hiked even higher and the Australian governments should slash spending to avoid stoking inflation. And proper tax reform was essential as an optimal tax package for growth and equity should rely more on the GST, take pressure off personal income tax paid by workers and crack down on capital gains tax breaks.

Now, let me say the IMF has a particular free-market neo-liberal western economic spin, but their comments are pretty damming and need to be taken seriously. Yet of course the Australian polies were quick to claim the IMF somehow endorsed their current policy settings – what – read the report Albo!

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Put Interest Rates Up, And Reform Taxes Now!
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Stupid Promises Collide With Reality As Housing Targets Won’t Be Met!

The NSW government has already announced plans last month to build more than 200,000 homes and focus on higher density living by building up, not out. But now NSW Premier Chris Minns says the state will not meet its housing target, but is doing its best to boost supply.

The plan includes 138,000 new homes at rezoned sites in 31 suburbs, and 47,800 homes near eight major transport hubs, with the latter to be completed over the next 15 years.

Those suburbs include Bankstown, Bays West, Bella Vista, Crows Nest, Homebush, Hornsby, Kellyville and Macquarie Park.

The government will offer developers in those zones a fast-tracked approvals process, called a state significant development, to ensure apartments are built quickly.

It will be offered to developments over $60 million, and construction must start within two years of approval.

The government also intends to relocate Rosehill Racecourse and replace it with 25,000 homes as part of the plan.

But Housing industry insiders say they are not surprised by the NSW premier’s admission that the state will not meet its housing targets agreed to just last year.

The target, which was set out by the federal government in August, would see an average of 75,000 new dwellings a year over the next five years. It is part of a broader plan to build 1.2 million homes across Australia during that period.

Premier Chris Minns said the government would fall short of the goal but was working on building as many houses and units as possible to alleviate housing shortages and skyrocketing costs.

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Stupid Promises Collide With Reality As Housing Targets Won’t Be Met!
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Falling Trend Hours Worked May Signal Interest Rate Peak!

Economists got a surprise today as employment fell 65,100 in the month, compared with an average expected rise of 15,000, as hours worked and participation both fell. That said, the prospect of the RBA delivering one final rise in February appears over. Only a big surprise in the December quarter inflation numbers, which will be released on January 31, could force economists to revise their near universal forecast for rates to remain on hold next month. And the monthly inflation data doesn’t point to a shock.

The ABS Labour Force statistics for December was based on surveys run from Sunday 26 November to Saturday 9 December, and collected over the period from Sunday 3 December to Wednesday 20 December. They also rotate the sample, with the new incoming group showing a higher unemployment rate than the outgoing group.

The results from the survey showed that in seasonally adjusted terms with employment dropping by 65,000 people, along with a small fall in the number of unemployed people (1,000), the unemployment rate remained steady at 3.9 per cent in December.

Actually, the falling participation rate stopped the Unemployment rate from climbing as hiring eases, though perhaps most concerning is the trend in hours worked, which has been falling for the better part of a year. How much of this is summer holiday related is an open question, but it seems more structural to me. We also need to note the loss of 106,000 full time jobs, compared to 41,000 part time roles, especially among part-time women. And remember given the current migration settings we need more that 30,000 additional jobs just to stand still.

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Falling Trend Hours Worked May Signal Interest Rate Peak!
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DFA Live Q&A HD Replay: The People Versus Financial Tyranny: With Robbie Barwick

This is an edited version of a live discussion with Robbie Barwick from the Citizens party.

The Senate will be delivering their report on Regional Banking, and it will be important to ensure access to cash is protected in an era of CBDC. And we need to ensure the Government does not outsource its fiscal and monetary authority to the Reserve Bank. Behind these issues is the question of power, and tyranny. Who is setting the agenda, and who is in control?

Original stream with chat replay here: https://youtube.com/live/7Or8ais2WxI

https://citizensparty.org.au/

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DFA Live Q&A HD Replay: The People Versus Financial Tyranny: With Robbie Barwick
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Its Edwin’s Monday Evening Property Rant!

Another thought provoking chat with our Property Insider Edwin Almeida, as we look at the latest trends and news. Looks like 2024 will be quite a year!

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Today’s post is brought to you by Ribbon Property Consultants.

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Its Edwin's Monday Evening Property Rant!
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