This article is out of the C Corp April news letter. C Corp is a property development company created by a friend of mine, Carly Crutchfield.
Great news if you are looking to buy..
A global economic downturn, a determined Australian Government, a robust banking system teamed with housing shortages and falling interest rates means it’s a pretty good time to be an Aussie right now….and even better to be an Aussie looking to get into the property market.
Housing Shortages Rising
Australia is getting close to having 9 million dwellings in the country by the end of this year, however this is still well short of demand. At the moment, we are building no more new dwellings than we did 40 years ago, despite having a population that has doubled since then.
In Australia, population growth is faster than the world average due to high immigration, which now exceeds the natural increase. Due to the continuing shortage state governments are being forced to create more development land and alternative opportunities such as the NSW Government’s move to eliminate
infrastructure levies.
Property prices are staying relatively strong in Australia in comparison to the hits taken by the rest of the world and the bottom hasn’t fallen out of the market as has elsewhere. ANZ recently stated that the present shortfall in residential dwellings is around 250,000 showing us an unprecedented level of under supply.
It’s not all Doom and Gloom….but is there the possibility of a BOOM?
The release of the RP Data-Rismark Hedonic Property Value Index heralds some exciting news for the Australian residential market.
According to the latest monthly indices, property values are experiencing a recovery from the modest 3 per cent falls seen in 2008. The findings confirmed that over the first two months of 2009, national dwelling values increased by 1.1 per cent with most of the capital gains coming in February.
A combination of low interest rates, softer property prices and government incentives make 2009 a great time to buy property, particularly for first-time buyers, according to mortgage broker Loan Market Group.
Capital city dwelling values for the 3 months to end of Feb ‘09 have been released by RP Data as follows;
* Sydney values up 0.5% to $509,900
* Melbourne values up 1.9% to $428,600
* Brisbane values up 2.2% to $413,700
* Adelaide values up 1.3% $389,450
* Perth values up 1.0% to $466,900
* Darwin values up 61% to $426,660
* Canberra values up 1.8% to $438,900
The average number of days on the market is at the lowest in Melbourne at 42 days and at the highest in Adelaide at 78 days for the three months until the end of February 09.
Demand for more affordable property has also helped property values in some regional areas. It is the properties at the high end of the market that are taking the brunt of the current financial situation. Properties in the $500,000 or lower price range have managed to defy the downtrend, whereas big drops have occurred in the median price of higher-end properties.
First Time Home Buyers Grant
John Kolenda, Executive Director of Loan Market Group says first homebuyers face an unprecedented opportunity and have already leapt back into the market since the Federal Government announced the doubling and tripling of the First Home Owners Grant in mid-October.
These grants have reinvigorated interest at the lower to middle end of the property market. “It is now clear that the boost to the first home owners grant has been one of the Government’s most successful policy measures – this price strength will hopefully encourage developers back into the market. – RP Data National Research Director, Tim Lawless
First homebuyers who purchased established homes received a boost of $7000 that doubled the grant to $14,000. First homebuyers who built a new home or purchased a newly constructed home received an extra $14,000 which took their grant to $21,000.
This has resulted in there being record sales to first homebuyers. Melbourne property prices fell more slowly than expected in the December quarter, thanks to lower rates and the First Home Owner Grant boost.
Stressed sellers and falling prices, housing shortages, 40 year lows in mortgage rate and government incentives make 2009 a year of opportunity by providing ideal situations for anyone wanting to enter the property market.
While the property boom of five to ten years ago may be well over for most states it is not over for property investors – not by a long shot. – Smart Investor
You can learn more about the exciting & profitable hobby of property investing by getting your hands on a FREE e-book and DVD (valued at $132) simply by following the link below.
http://www.educationforwealth.com/
