Established House Prices Fall

Dec 04
2008
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Is this the start of a trend?

Maybe Australia is not as insulated from the world wide property bubble as we would like to think?

A Second consecutive quarterly fall in the Established House Price index may well be the precursor for more dramatic falls in 2009, despite the Federal Governments interest rate cuts and First Home Owner Boosts.

The Australian Bureau of Statistics provides quarterly estimates of changes in housing prices in each of the eight capital cities of Australia.

The information is presented in the form of price indexes and is published quarterly.

The following is an exert from the ABS July to September 2008 quarter paper released 3rd November 2008.

“SEPTEMBER KEY POINTS

ESTABLISHED HOUSE PRICES

Quarterly Changes
Preliminary estimates show the price index for established houses for the weighted average of the eight capital cities decreased 1.8% in the September quarter 2008.

The capital city indexes fell this quarter in Brisbane (-3.3%), Canberra (-2.5%), Melbourne (-1.9%), Sydney (-1.8%), Perth (-1.1%), and Adelaide (-0.1%), and rose in Hobart (+0.7%), and Darwin (+0.1%).

The movement in the preliminary established house price index between March and June quarters 2008 has been revised from an estimated decrease of 0.3% to a decrease of 0.2%.

ANNUAL CHANGES (SEPTEMBER QUARTER 2007 TO SEPTEMBER QUARTER 2008)

Over the year to September quarter 2008, preliminary estimates show that the price index for established houses for the weighted average of the eight capital cities rose 2.8%.

Annually, house prices rose in Adelaide (+9.7%), Melbourne (+8.1%), Darwin (+6.4%), Brisbane (+5.6%), and Hobart (+2.4%), showed no change in Canberra (0.0%), and fell in Perth (-4.1%), and Sydney (-0.4%).

The movement in the preliminary established house price index between June quarters 2007 and 2008 has been revised from an estimated increase of 8.2% to an increase of 8.6%.”

This information is generally hidden away and scantly reported by the popular media. I find it interesting as it contradicts the reports by most media outlets. The information is useful If you are buying an established house.



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Written by Jeremy in: First Home Owners Grant, Subdivide your property, first home buyers grant, investment property | Tags: , , ,

Demolish, Subdivide and Build

Dec 01
2008
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Time for a back flip!

In my previous blog I intimated there was a shortage of quality property in Australia. I stand by this statement. I also said that stamp duty was not a major cause of the property bubble. Well on reflection, the statement about stamp duty was off the mark. Stamp duty and other government charges have led to a reluctance of certain citizens of our great land to move to smaller or more practical dwellings. Maintaining a huge property is hard work and expensive, yet many prefer this to forking out mega bucks for stamp duty and other fees. This reluctance has led to short supply in most areas near popular schools and infrastructure.

How do we solve this problem? I think the only way is to promote subdivision.

As I have previously endorsed, the ability to subdivide the land that your house occupies and build two or more townhouses is the ultimate value in property investing. You can’t subdivide a flat or unit generally.

Tax breaks for principle place of residence owner developers is the answer. Allow them to roll the profits into their super tax free. Allow it as a once off per person in their life time. Makes more sense than the first home owners grant, creates some liquidity in the market and it may give the Government some savings on pensions etc. We all know an elderly lady who has lost her husband but still lives in the grand mansion and gets a pension don’t we? Why not help her into a better equipped, up to date townhouse that is virtually maintenance free?

Demolish, subdivide and build! That’s my motto.




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