National Property Market Update

Please see below an update on the National Property Market by Mark McLeod.

Want to know what is happening in your area? Email me for an in-depth analysis of your suburb over the last 12 months. - Complimentary service :)

As always, buyer sentiment continues to be influenced by both the macro-economic environment and localised market conditions. In terms of the general media, last week saw more talk of further house price declines, as well as fears of mass job cuts as administrators were called in to the Hasties Group and its 44 Australian subsidiaries.

A news.com.au report said up to 2000 positions are at risk as 2700 workers were stood down without pay for 28 days pending the sale of the Hasties’ businesses. According to the article, the big four banks are set to take a hit with an expected $250 million in write-downs. The Hasties group are currently estimated to owe more than $650 million to lenders, including $150 million to ANZ.

The Hasties’ losses are likely to impact consumer interest rates further, with Mark Bouris from Yellow Brick Road warning during the week that the days of banks passing on official cash rate cuts in full are over. He says although many variables, including increasing funding costs, are weighing on the bank’s decisions, he believes they get away with “hoarding” the cuts because the big four banks effectively act as an oligopoly with 92% market share.

Meanwhile, a Sydney Morning Herald article said high Australian house prices will challenge credit growth more than a mortgage crisis, according to a Credit Suisse report. Conversely, independent banking expert Martin North says banks are beginning to relax lending ratios, creating a small but significant risk of default. He says the average mortgage is now twice what it was in 2005, calling 25-30% of borrowers “pretty stretched”.  A separate Herald article cited the latest OECD Economic Outlook as saying real estate prices are very high compared to rents and incomes and are under threat from the high Australian dollar along with confidence and jobs. The report suggests further falls in property prices, but predicts the Australian economy will grow at the fastest pace in the developed world.

Locally, consumer confidence continues to be shaky – an article in the Age reported Boston Consulting’s annual global sentiment survey shows Australians are gloomier than they were a year ago and in some ways, in worse psychological shape than consumers in countries where the global financial crisis has wreaked havoc.

Weekly National Market Update

Please see below the update from Ray White's CEO of Growth, Mark McLeod

As always, buyer sentiment is heavily influenced by the dual factors of local market conditions and the overall macro-economic environment. Global woes continued to dominate the media last week, as fears mount that Greece will leave the Eurozone and default on its debt.

An article in the Sydney Morning Herald said the Commonwealth Bank has been preparing for a possible Greek exit from the Eurozone for some time.  Chief Executive Ian Narey said the current volatility and strains on global money markets will be felt throughout the Australian economy, hurting confidence and pushing up bank funding costs. AAP reported that global equity markets plummeted during the week as the Australian dollar fell below parity, marking the first time the dollar has been below 100 US cents since December 2011.

Domestically, a Property Observer article said minutes released last week from the May 1 Reserve Bank (RBA) board meeting show that weak housing, construction and mortgage industries were the factors behind the recent decision to cut the official cash rate by .50%. According to the article, the minutes also show that the latest data indicates housing prices have continued to decline, albeit with tentative signs that the rate of decline may be slowing.  Further, a Herald Sun article interpreted the RBA’s minutes as saying the board slashed the official cash rate partly as a response to the higher home loan interest rates being charged by the commercial banks, as well as being influenced by “fragile” conditions in international economies.

Meanwhile a Sydney Morning Herald article quoted APM’s Dr Andrew Wilson as saying prices in Sydney’s prestige market are back to 2007 levels, with the wider Sydney market still below where it was a year ago. The article suggests the current over-supply issue has been worsened by a demographic “blimp” of baby-boomers wanting to downsize.

New Website for Canning Vale Area.

http://canningvaleliving.wordpress.com/

I have created a new website for both residents and local buyers wanting to know more about this lovely pocket of Perth.

Canning Vale Living is completely for this purpose. Understand what work is underway, what is currently happening and some reviews or feedback on local places that you may like.

I have only recently started this site so keep an eye out for more information. Buyers will be able to use this in future to research the lifestyle, schools, shops and transport this area offers.

I look forward to providing more information on both this site and the other one to give you a complete overview of this area that I am both lucky enough to live and work in.

Silent Homes For Sale

Looking to buy a home in Canning Vale, Southern River, Thornlie, Huntingdale, Harrisdale or Piara Waters?

As a local agent, we meet many sellers who are looking to move or relocate but don't want to place their home on the market as yet. This is where getting to know your local agent becomes an advantage. We currently have a few homes that can be sold but the owner is not quite ready for photos and home opens. Why not tell your agent exactly what you are looking for so we can keep an eye out for you.

I'm currently working with two unique and lovely homes in Canning Vale that are for sale but not online and have no signs.  This may be the perfect home for you. Don't be afraid to tell your agent your requirements and to keep an eye out for you. This may secure you a home without having to compete against other buyers and give the owner a chance to sell without the full marketing campaign. A potential win win for both you and the owner.

12 Ambleside Way, Canning Vale

http://www.domain.com.au/Property/For-Sale/House/WA/Canning-Vale/?adid=2009709543

PRIVATE VIEWINGS MY PLEASURE

Absolutely stunning property in Ranford Estate. This lovely double storey home is perfect for the busy couple or family wanting to make the most of the lifestyle this property offers. With all the creatures comforts, space and practical layout this home offers, you know you wont regret the decision.

Featuring all the bedrooms upstairs, the downstairs remains separate for entertaining family and friends. Cook up a massive feast in your downstairs kitchen or entertain on your alfresco overlooking rear pool. More features of this stunning home include
5 bedrooms
2 bathroom ( bath tub to main and spa to ensuite )
Upstairs balcony overlooking front of property
Theatre room
Activity area or study
Massive kitchen with island bench and quality finish
Below ground pool
Rear alfresco with wood decking
Double garage
Air conditioning
Upstairs activity area/bar for the grown ups
Porcelain tiled living areas

For further information or to book your private viewing, please phone Robin Ram 0401 888 444

First home buyers, remember the extra $2000

Are you a first home buyer looking to buy your first home below $400,000?

Not only do get the $7000 Grant, the state Government in WA is putting up to $2000 towards fees and extra costs incurred by buying. These may include settlement fees, bank fees, termite or building reports etc

Some things to remember when thinking about claiming this
- You need to buy an established home or party built
- No vacant blocks, house and land packages or off the plan
- You must buy from a Real Estate Agent
- Cannot of owned property before in WA or be in a relationship with someone who has
- Need to live in the property for 12 months
- Application must be lodged within 90 days of acceptance of offer.
- Need to use an authorised lending institution


For more information on this Government Assistance, please phone Dept of Commerce on
1300 30 40 54

Meeting with Mark from Domain

Grateful for the opportunity to sit with Mark Ehlers from Domain.com.au today. This major website is providing innovation, new technology and great service to the market place. Being an even larger power in the Eastern States, we receive regular phone calls and emails for buyers looking for Canning Vale properties.
View all our properties online at http://www.domain.com.au/
Thanks Mark.

Lovely home on TRIPLEX block! WOW! - 4 Currawong Way, Thornlie

4 Currawong Way, Thornlie

http://rwht.com.au/wa/thornlie/785289/

Call or Email Agent for Price Guide. More photos coming soon. You will kick yourself if you miss this one! Investors and First Home Buyers don't miss this 3 bedroom 1 bathroom on a Triplex Block Zoned R20/40 with 24.14 frontage. Positioned in a great location across from the park and walking distance to Spencer Village Shopping Centre and having the connivance with Public Transport just minutes away. Spacious Kitchen with plenty of room to move and cupboard space, separate dining area and sunken Lounge with split system air conditioning. Out doors entertain in one of 2 areas and let the kids enjoy the large back yard with plenty of room to run around and kick the footy. Extra Features: Security Shutters to Front Access to rear though Garage Built in wardrobes 708sqm block Call Robin Ram today to arrange a viewing

Value Value Value - 4 Triefus Lane, Canning Vale

4 Triefus Lane, Canning Vale

http://rwht.com.au/wa/canning-vale/784266/

Email or Call Agent for Price Guide Great opportunity for the astute buyer ready to make a decision on an affordable and well located home in Canning Vale. Situated close to parks, schools and shops, this lovely property will appeal to both investors making the most of the tenanted property or home buyer looking to move into this popular and in demand suburb. With its 4 bedrooms, 2 bathrooms, impressive kitchen and location, this property will be a great addition to your portfolio or a lovely family home. More features include: 4 bedrooms 2 bathrooms Open plan and spacious kitchen with island bench Tiled living area Duct evap air con Great location Property currently rented at $400pw until December 2012 Council rates last financial year of approx $1400 510sqm block Private viewings only by appointment - NO HOME OPENS

Weekend Home Opens

Great numbers out again this weekend with the most popular home recieving 15 enquiries. Numbers at my home open ranged from 1 to 9 with 3 offers recieved so far. There are more genuine buyers looking and making decisions a bit faster now some confidence has returned. Want to receive our next home open list before the weekend? Email me at robin.ram@raywhite.com
Most of our home opens are in the following suburbs
Canning Vale
Southern River
Harrisdale
Piara Waters
Thornlie
Huntingdale
Gosnells

We do sell in all areas so if you are looking at selling and would like to speak with me about your options, please call me direct on 0401 888 444 or email for a prompt response.

Update on the market

Below is the weekly update from Ray White's CEO of Growth, Mark McLeod

As always, buyer sentiment is influenced by the combination of local area market conditions and the overall macro-economic environment. Although a cut in the official interest rate was widely expected last week, the announcement of a 50 basis points reduction to 3.75% came as a surprise to many. The decision represents the first outsized cut since the height of the Global Financial Crisis in 2008.

Prior to the news, an article in the Daily Telegraph said major industry groups were pleading for a cut after new home figures showed sales have collapsed to their lowest levels in more than a decade. After the announcement, RBA Governor Glenn Stevens said a lower inflation rate provided the scope for the RBA to cut interest rates to help stimulate the economy. But a News.com.au article said most economists believed the banks would not pass on the cut in full, despite the Herald suggesting the major four banks are expected to report a combined first-half profit of $12billion by the end of the next week.

National Australia Bank was the first of the major lenders to make a move, dropping their variable rate by .32%. Commonwealth was next, upping the ante to pass on .40%, but still holding back 10 points from the RBA cut. By the end of the week, Westpac had announced at .37% cut and ANZ was holding steadfastly to its out-of-cycle review schedule, with their next rates decision not due until the second Friday of the month.

Meanwhile globally, a Herald article reported that the earnings season in the US has featured regular negative commentary about Australia’s “weak” economy. Chief executives from major companies including Kellogs and McDonalds singled out the Australian market as being “difficult” and experiencing ongoing tightening. Locally, a separate Herald article said business insolvencies have reached an all-time high since insolvency statistics were introduced in 1999.

Statement by Glenn Stevens, Govenor : Monetary Policy Decision

At its meeting today, the Board decided to lower the cash rate by 50 basis points to 3.75 per cent, effective 2 May 2012. This decision is based on information received over the past few months that suggests that economic conditions have been somewhat weaker than expected, while inflation has moderated.
Growth in the world economy slowed in the second half of 2011, and is likely to continue at a below-trend pace this year. A deep downturn is not occurring at this stage, however, and in fact some forecasters have recently revised upwards their global growth outlook. Growth in China has moderated, as was intended, and is likely to remain at a more measured and sustainable pace in the future. Conditions in other parts of Asia softened in 2011, partly due to natural disasters, but have recently shown some tentative signs of improving. Among the major countries, conditions in Europe remain very difficult, while the United States continues to grow at a moderate pace. Commodity prices have been little changed, at levels below recent peaks but which are nonetheless still quite high. Australia's terms of trade similarly peaked about six months ago, though they too remain high.
Financial market sentiment has generally improved this year, and capital markets are supplying funding to corporations and well-rated banks. At the margin, wholesale funding costs have declined over recent months, though they remain higher, relative to benchmark rates, than in mid 2011. Market sentiment remains skittish, however, and the tasks of putting European banks and sovereigns onto a sound footing for the longer term, and of improving Europe's growth prospects, remain large. Hence Europe will remain a potential source of adverse shocks for some time yet.
In Australia, output growth was somewhat below trend over the past year, notwithstanding that growth in domestic demand ran at its fastest pace for four years. Output growth was affected in part by temporary factors, but also by the persistently high exchange rate. Considerable structural change is also occurring in the economy. Labour market conditions softened during 2011, though the rate of unemployment has so far remained little changed at a low level.
Recent data for inflation show that after a pick up in the first half of last year, underlying inflation has declined again, and was a little over 2 per cent over the latest four quarters. CPI inflation has also declined, from about 3½ per cent to a little over 1½ per cent at the latest reading, as the weather-driven rises in food prices in the first half of last year have, as expected, now been fully reversed. Over the coming one to two years, and abstracting from the effects of the carbon price, inflation will probably be lower than earlier expected, but still in the 2–3 per cent range.
As a result of changes to monetary policy late last year, interest rates for borrowers have been close to their medium-term averages over recent months, albeit tending to increase a little as lenders passed on the higher costs of funding their books. Credit growth remains modest overall. Housing prices have shown some signs of stabilising recently, after having declined for most of 2011, but generally the housing market remains subdued. The exchange rate remains high even though the terms of trade have declined somewhat.
Since it last changed the cash rate in December, the Board has maintained the view that the setting of policy was appropriate for the time being, but that the inflation outlook would provide scope for easier monetary policy, if needed, to support demand. The accretion of evidence over recent months suggests that it is now appropriate for a further step in that direction.
In considering the appropriate size of adjustment to the cash rate at today's meeting, the Board judged it desirable that financial conditions now be easier than those which had prevailed in December. A reduction of 50 basis points in the cash rate was, in this instance, therefore judged to be necessary in order to deliver the appropriate level of borrowing rates.