Free webinar: an introduction to BuyersBuyers.com.au

Intro to BuyersBuyers.com.au

We've had a rush of registrations for our Thursday night webinar, but luckily there's no limit on how many we can have in attendance.

Watch the short promo video here: 

I'll be covering a range of subjects from property market mistakes, buying tips for 2020 and 2021, how to get affordable access to buyer's agent services, and much more. 

We'll also be discussing the nascent housing market rebound and how best to position for it. 

Collect your free tickets here (or by clicking on the image below):

Canberra property webinar with Claire Corby

Canberra property update

Tune in at the video below (or click here to watch):

Check out more about the Canberra market using our free WeIntelligence tools here. 

Liar loan deferrals concern (paywall)

Liar loan deferrals

A piece we did for The Australian (paywall) - click here or the image below:

I wrote about what the so-termed 'liar loans' survey actually meant back in 2017 here.

For more about BuyersBuyers.com.au see here.

Building approvals levelling out; 29pc below peaks (Perth rental shortage)

Perth heads for rental shortage

Unit approvals continued to decline, down to a total of just 4,206 in August, with further trend declines in Sydney, but Brisbane now bottoming out after a 4-year slowing of supply. 

Only Melbourne is still really going for it in terms of unit approvals and supply, perhaps anticipating a strong market rebound in 2021. 

Houses approvals are now likely to be supported by the generous HomeBuilder package and other stimulus measures.

Approvals for houses are flat over the year, with strength again in building approvals most evident in Melbourne. 

Annual approvals across Australia have now bounced off the lows to 173,000 over the year to August 2020, but remain 29 per cent below the 2016 peaks (when annual approvals were close to 243,000). 

A final observation is to take note of Perth: after half a decade of dwindling supply the city is now potentially heading for a dramatic rental shortage, and perhaps even a rental crisis, with open homes for rentals reportedly packed out.

We'll be discussing this further in our forthcoming BuyersBuyers.com.au webinar for Perth and Western Australia. 

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Further and more in-depth analysis as always from data whizz James Foster here. 

God's country... (Sunny Coast boom)

Sunny Coast

I chatted on Sunshine Coast Radio yesterday about the local real estate boom, and my goodness isn't it going off...

Naturally I'm biased, but the lifestyle is absolutely second-to-none. 

An online version of what we discussed can be found here: (or click on the image below):

Canberra property webinar tonight, with Claire Corby

Canberra property update

I'll be hosting a Canberra and ACT webinar tonight with the top local buyer's agent, REBAA member Claire Corby of Capital Buyer's Agency. 

The video below has some of the details:

And you can register for the event for free here (or by clicking on the image below).

It's a live Q&A event, so please feel from to join and asking your questions. 

This has been a very popular webinar series - look forward to seeing you there!

Cheap Aussie apartments

Unit affordability 

Interesting findings, via Scutty and Citi Research:

Source: Citi

Second wave?

Second wave

A critical few weeks lie ahead for Europe as the colder winter months approach.

A number of European countries have seen a huge surge in reported cases of COVID-19, but to date hospitals have not been overrun, and there have been relatively speaking very few deaths.

The recent surge in cases most notably includes France, where the second wave of cases has utterly dwarfed the initial phase of the epidemic.

France deaths have increased a little, but not nearly as much.

In Britain the deaths numbers have long been clouded by the murky confusion between deaths from COVID-19, and deaths where a positive COVID test has been established. 

But by July and August the worst was clearly over, at least according to the NHS hospital data.

Similar patterns have apparently been playing out to date in Sweden, the United Kingdom, Germany, Italy, and a range of other countries and global cities besides (e.g. New York, New Jersey, etc.). 

What then, comes next?

All this presumably means one of two things.

Either there's a large number of deaths in the post, following on from the surge of cases, due to a lag effect.

Or the lockdown sceptics were right, and serious cases have followed a Gompertz curve, with the damage already having been done months ago, and immunity building up in much of the remainder of the population.

Let's hope it's the latter.

House wins

House wins

Me involved in a bit of a yarn here in The Australian today (paywall), wherein Wealth Editor James Kirby discusses the differential in performance between houses and units this year:

Victoria moving to 'Stage Two' measures

Virus cases in single digits

A significant day for Victoria, with just 5 newly confirmed cases of COVID-19, only 1 of which came from an unknown source.

There has been but a small smattering of returned traveller cases across the rest of the country lately, but reported cases in the community have completely dried up over recent days, even in Sydney and New South Wales. 

7 positive cases came to light today in a ship offshore from the Pilbara, but as such these won't show up in the official figures until tomorrow. 

Australia is also now heading into its warmer spring and then summer months, which seems likely to help contain further spread of the coronavirus, based on reports from overseas.

Restrictions eased

Attention is now turning towards  the easing of restrictions, with an estimated 127,000 workers now able to return to work in Victoria under the newly-implemented 'Stage Two' measures. 

The 9am to 5pm curfew will now be lifted, but in order to proceed to 'Stage Three' measures, the average for new cases will have to remain at under 5 for a sustained 14-day period. 

In Victoria it's now become possible for realtors to schedule private inspections again.

Stock listing levels in Melbourne are understandably very low, so it's reasonable to expect there to be a rush of activity over the coming weeks. 

According to CoreLogic's index, Melbourne home values have declined by about 6 per cent since peaking in the early part of April. 

At the weekend Sydney's auction market continued to strengthen, with a preliminary clearance rate of 74.8 per cent from 630 reported auction results this week, with Sydney prices apparently bottoming out only a couple of per cent lower than where they were sitting pre-COVID.

Source: CoreLogic

With a dozen lenders cutting interest rates further this week in anticipation of further easing the bottom is probably just about in for housing prices at the 5-capital city aggregate level, inclusive of Gold Coast.

At the capital city level, home values fell by 3 per cent over a 5-month period, having peaked on 11 April.

Rental vacancies normalising

Rental market normalising

Louis Christopher of SQM Research updated the latest total rental listings figures to late September today. 

Rental listings are finally beginning to rise again, with vacancies in and around Melbourne CBD running at relatively high levels until tenants are willing and able to sign leases again.

Source: SQM Research

It's been a very interesting year for rental vacancies. 

Total listings peaked at a heady 105,517 on May 1 this year, after an initial surge driven by COVID uncertainty.

But listings then fell continuously for four consecutive months, to the extent that listings were actually 8 per cent lower than a year earlier at just 85,514.

Things now appear to be normalising at 87,099, at least in aggregate, with total listings only 2 per cent lower than at the same time last year. 

At the local level different patterns have emerged and are emerging. 

High-rise and inner-city units have been far less in favour this year, notably with double-digit vacancy rates in Melbourne CBD, but elsewhere the rental stock is being taken up relatively speaking much more quickly. 

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A dozen lenders have cut their mortgage rates for owner-occupiers and investors this week, ahead of expected easing.

12 lenders now offer mortgage rates from under 2 per cent.

More from RateCity here.

Podcast episiode #25: Static versus dynamic: This is the best stock market model

Podcast Episode #25

Tune in to Episode #24 of the Low Rates High Returns podcast, where we discuss dynamic market models, and what that actually means in practice. 

It's all well and good to say markets aren't always efficient - but how can we actually deal with that in reality?

Tune in here (or click on the image below):

You can also tune in at Soundcloud, Stitcher, or Spotify.

Don't forget to leave us a friendly review, as it helps us to get the word out. 

You can also order a copy of our new book here, and download a free chapter here.

Yields suggest easing may not be over

Easing to come

Bill Evans of Westpac has called further monetary easing, expecting interest rates to fall from 0.25 per cent to 0.10 per cent. 

Economists from at least five other major institutions had joined the chorus by the end of the week, and there may be more to follow. 

Any such move may well involve reducing the target for the 3-year yield, being a key funding benchmark for Australia, and the rate charged to lenders for accessing the Term Funding Facility. 

The upcoming Monetary Policy Decision falls due at 2.30pm AEST on Tuesday October 6.

Financial markets aren't totally convinced, but the 3-year bond yield has certainly made a noteworthy move in that direction since the beginning of last week.  

The RBA's Debelle has posited that a further cut in target rates is one of the four potential options for the central bank to pursue, given that the outlook for inflation and employment isn't presently consistent with the Bank's objectives. 

And two of those options have seemingly been dismissed as unworkable, and one the Bank seems to be lukewarm on at best (i.e. buying further bond maturities).

Which by default appears to leave a further cut in the interest rate target as the most likely option. 

The Federal Budget for 2020-21 is also due for release on October 6, which may or may not serve to factor into the timing of further easing being announced. 

Buy versus rent equation

Buy versus rent

We did a full-pager for Sydney's Daily Telegraph at the weekend on the shifting buy vs rent equation:

There's an abridged online version of the article at REA here.

Weekend reads (rental demand)

Weekend reads

This weekend a look at where rental demand has shifted to - check it out here (or click on the image below):

You can also subscribe for free for the excellent Yardney podcast here.

Responsible lending laws to be wound back

Credit taps set to loosen

A significant day for bank stocks as it was announced that the responsible lending laws that have been in place since 2009 will likely be wound back. 

All of the major lenders saw a significant jump in their stock prices. 

This will no doubt act to speed up the pace of loan approvals and bank lending, albeit probably not for 6-12 months, with less of the forensic poring over household expenditure for mortgage applications, which has at times made the lending process more akin to an audit than a credit approval.

Most likely there will be an easing of some of the existing HEM restrictions as the legislation is passed, and less scrutiny of household expenditure line items. 

The responsibility will more so fall back on to borrowers to declare complete and accurate information, instead of looking for lenders or brokers to blame wherever a loan goes bad. 

This may also increase the availability and capacity for some individuals to borrow, though it remains to be seen how much.

Offsetting this to some extent will be the introduction of the best interests duty for brokers, effective 1 January 2021.

The Reserve Bank had previously noted that lending had become excessively risk averse, and this move will slash approval times assuming it is legislated on a timely basis.  

Symbolic shift

Moreover, the announced planned changes are symbolic, suggesting that the credit pendulum is now likely set to swing back in the other direction, after half a decade of tightening which reduced the total borrowing capacity of some borrowers by half.

The announcement will also foster more competition between banks, with one large lender immediately offering lower variable rates, including on investment loans. 

There are still significant headwinds for the economy to be navigated, of course, but the combination of record low mortgage rates and the signaling of a simplified approval process should bring the housing market back to life in 2021. 

New homes sales boom in the US

New home sales boom

Witness the power of ultra-low interest rates.

US new home sales crushed Wall Street estimates, rising to over 1 million annual rate in August for the first time in nearly 15 years since the Great Recession. 

The result was miles above expectations of around 900,000 seasonally adjusted annual rate.

That's a thumping +43.2 per cent year-on-year increase for the biggest year-on-year increase in almost three decades. 

This is the biggest result for new home sales since 2006.

The results for the previous 3 months were significantly revised upwards too.

Supply is now down 40 per cent year-on-year, and sits at an all-time record low for months of supply.

There's bound to be some volatility in the numbers this year, but this was a monster result that has astonished analysts...

Adelaide property market update with Jess Ellam

Adelaide property outlook

Check out my webinar with the top Adelaide buyer's advocate Jess Ellam of Jess Ellam Property here:

You can check out more about South Australia and its property market using our WeIntelligence tools here. 

ASX eases

XJO eases

Haven't looked Aussie stocks for a while.

3-month lows, but still only down 20 per cent from the February highs. 

Wednesday webinar with Jess Ellam: Adelaide property update

Adelaide/SA set for lift off?

I'm excited to be joined by top Adelaide buyer's advocate Jess Ellam from Jess Ellam Property for this week's Wednesday webinar. 

We'll be discussing the Adelaide and South Australian property market risks...

...and, of course, the opportunities, including where and what Jess is buying for her clients right now...

...and where it has now become cheaper to buy than rent. 

For the capital cities this has tended to be a positive indicator for housing market activity and supportive of prices historically. 

We'll ask be discussing what Jess recommends her clients to buy across various budgets and price ranges.

The event details are below and you can subscribe for free here (or by clicking on the image below):

It's an interactive event, so do have your questions ready.

Look forward to seeing you there!