HOUSE BUYING – AUSTRALIA

First-timers, low earners in housing crunch

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Original article by Nila Sweeney
The Australian Financial Review – Page: 31 : 17-Apr-24

A report from the ANZ Bank shows that the average proportion of income that is needed to service a new mortgage rose to 48.9 per cent nationwide in the March quarter; this compares with 43.1 per cent during the same period in 2023. The ANZ Housing Affordability report also reveals that it now takes an average of 10.3 years to save enough money for a house deposit. Meanwhile, ANZ found that the average renter must now allocate 32.2 per cent of their income to rent; this rises to 54.3 per cent for low-income earners.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Rate pause could lure home buyers back

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Original article by Nila Sweeney
The Australian Financial Review – Page: 30 : 20-Mar-24

Tim Lawless of CoreLogic says the Reserve Bank of Australia’s decision to leave the cash rate unchanged on Tuesday is likely to boost the confidence of prospective home buyers. He notes that there has tended to be a close relationship between consumer sentiment and the volume of home sales. Meanwhile, SQM Research MD Louis Christopher expects mortgage stress to continue to rise while interest rates remain high, while the number of distressed listings is also likely to rise.

CORPORATES
CORELOGIC AUSTRALIA PTY LTD, SQM RESEARCH PTY LTD, RESERVE BANK OF AUSTRALIA

Lending malaise as home loans retreat

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Original article by Megan Neil
The Australian – Page: 19 : 8-Mar-24

Data from the Australian Bureau of Statistics shows that the value of new housing loans fell by 3.9 per cent to $25.12bn in January; this followed a 4.1 per cent decline in December. The general consensus of economists had been for two per cent growth in home loans during January. The value of new owner-occupier loans fell by 4.6 per cent to $15.91bn, and lending to property investors was down 2.6 per cent to $9.21bn. Meanwhile, lending to first-home buyers was down 6.9 per cent, and the value of those loans fell by six per cent.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS

Labor’s housing plan panned as a trivial side issue

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Original article by Tom McIlroy
The Australian Financial Review – Page: 8 : 6-Mar-24

The Centre for Independent Studies’ chief economist Peter Tulip appeared before a Senate committee on Tuesday. He expressed support for the federal government’s target of building 1.2 million homes in five years. However, Tulip contended that the government’s Help to Buy shared equity scheme is a "trivial distraction" from real solutions to address the housing affordability crisis; he warned that the scheme will only benefit 40,000 home buyers, while increasing house prices and rents for all Australians. The Coalition opposes the scheme, while the Greens are demanding a number of concessions to gain their support.

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THE CENTRE FOR INDEPENDENT STUDIES LIMITED, AUSTRALIAN GREENS

Negative gearing change can win support: Greens

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Original article by Tom McIlroy
The Australian Financial Review – Page: 4 : 28-Feb-24

Prime Minister Anthony Albanese has told a meeting of Labor’s caucus that legislation to establish the Help to Buy shared equity scheme for home buyers is expected to be passed by the lower house this week. However, the said the bill is likely to be blocked in the Senate by the Liberal Party and the Greens. Meanwhile, the Greens have signalled that they are open to a compromise on negative gearing in return for supporting the Help to Buy scheme. The party has proposed restricting negative gearing to existing investment properties, and progressively scrapping the regime for people who buy additional properties.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN GREENS, LIBERAL PARTY OF AUSTRALIA

Albanese slaps down Greens over juvenile negative gearing demand

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Original article by Phillip Coorey
The Australian Financial Review – Page: 4 : 13-Feb-24

Prime Minister Anthony Albanese has ruled out making changes to the negative gearing regime and the capital gains tax discount in order to secure the Greens’ support for its Help To Buy shared equity scheme for first-home buyers. Albanese says the federal government will not be open to negotiation, and he has criticised the Greens’ "juvenile approach" to the issue of negative gearing. The government was previously forced to make concessions in 2023 to secure the Greens’ support for its Housing Australia Future Fund. The Opposition intends to vote against the shared equity scheme.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN GREENS

Cooling inflation, stable rates may encourage buyers

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Original article by Nila Sweeney
The Australian Financial Review – Page: 29 & 30 : 7-Feb-24

Tim Lawless of CoreLogic says the Reserve Bank’s decision to leave the cash rate unchanged on Tuesday could prompt an upturn in house buying activity. He notes that house prices remain below their peaks in Sydney, Melbourne, Hobart, Darwin and the ACT; Lawless says that some buyers may capitalise on this to buy into the market before interest rates fall. Judo Bank’s chief economic adviser Warren Hogan says the rental housing market is still a major concern, while SQM Research MD Louis Christopher warns that rising rents could put upward pressure on inflation.

CORPORATES
CORELOGIC AUSTRALIA PTY LTD, JUDO BANK PTY LTD, SQM RESEARCH PTY LTD

RBA rate cuts a double-edged sword for first-home buyers

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Original article by Matt Bell
The Australian – Page: 19 : 6-Feb-24

The Reserve Bank of Australia is widely tipped to leave the cash rate unchanged at 4.35 per cent on Tuesday. Sally Tindall of RateCity says the key focus will be on whether the central bank removes its tightening bias. Meanwhile, money markets now expect the RBA to reduce the cash rate by 25 per cent in both August and November. Ray White’s chief economist Nerida Conisbee notes that interest rate cuts will increase the borrowing power of first home buyers, but can also be expected to further boost house prices.

CORPORATES
RESERVE BANK OF AUSTRALIA, RATECITY PTY LTD, RAY WHITE GROUP

First home deposit sizes soar as more parents step up

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Original article by John Collett
The Age – Page: Online : 30-Aug-23

A report from the National Housing Finance & Investment Corporation and the Commonwealth Bank highlights the growing cost of entering the housing market. It shows that average gross household income for first-home buyers with the CBA was about $117,000 in early 2023, while the average purchase price was almost $629,000. Meanwhile, the average deposit for first-home buyers was $159,000; this compares with just $108,400 at the start of 2020. SQM Research MD Louis Christopher says the figures suggest that many people are getting financial help from their parents to buy their first home. This in turn means that people who cannot rely on the so-called ‘bank of mum and dad’ are being locked out of the housing market.

CORPORATES
NATIONAL HOUSING FINANCE AND INVESTMENT CORPORATION – ASX NFI, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, SQM RESEARCH PTY LTD

Rate pause to spur buyers back into market

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Original article by Nila Sweeney
The Australian Financial Review – Page: 31 : 5-Apr-23

SQM Research MD Louis Christopher says the firm believes that the cash rate has peaked following the Reserve Bank’s decision to leave it on hold at 3.6 per cent on Tuesday. He adds that the widely-anticipated rate pause could prompt buyers to return to the housing market, including renters and investors. Christopher adds that house prices could rise by 3-7 per cent nationwide in 2023 if the cash rate remains on hold. Tim Lawless of CoreLogic agrees that the rate pause could encourage vendors and buyers to return to the market.

CORPORATES
SQM RESEARCH PTY LTD, CORELOGIC AUSTRALIA PTY LTD, RESERVE BANK OF AUSTRALIA