97pc of deferred loans back on track

Repayments resume

22,480 housing loans remained on deferral as at February 2021, and some will need to go on to hardship arrangements as the JobKeeper stimulus is soon to be snapped off. 

Still this is a vast improvement., and the improvement has been accelerating. 

From the ABA here (or click on the image below):

Good news for those needing to refinance: mortgage rates continued to decline in January, according to the Reserve Bank's indicator lending rates. 

More to come in February too. 

Spark your FIRE podcast

Interest rates, cash, and investing

Great to be back on the Spark your FIRE podcast with Jas Sidana and John Comino.

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

You can also track it down on the lads' website here.

Housing market rebounds in Q4

Property recovery

Capital city dwelling prices rebounded in the December quarter, rising by +3 per cent (to be up by +3.6 per cent over the calendar year), mainly driven by houses more so than attached dwellings. 

Sydney, Melbourne, Canberra, and Hobart led the way, with all of these markets recording +3 per cent rises or greater over the December quarter, though in fact all capital cities saw significant increases.

The surprise best performing market since the inception of the data series in 2003 has been...Hobart (Sydney was coming to the end of its post-Olympics boom in 2003). 

We normally tend to think of 'median' dwelling prices, but average or mean prices did hit a fresh high of $728,500 in the December quarter, driven by the premium end of the housing market.

At 10.6 million dwellings, that values all of the housing stock owned by all sectors at around $7.7 trillion.

The media talk has rapidly about-faced from a likely housing market crash to the need for intervention to slow the Sydney market, though in reality prices were still below 2017 levels in December, and especially so for units and other attached dwellings. 

With the government incentivising first homebuyers and the Reserve Bank encouraging the flow of credit via the provision of a term funding facility, the likelihood of an intervention to cool the market in Sydney seems fairly remote at this stage. 

Brisbane's rental vacancy rate tightens (Sydney healing)

Rental trends

Interesting rental vacancy rate figures from SQM Research.

Brisbane's vacancy rate is now tightening along with the rest, and this is bullish for the Queensland capital's burgeoning housing market.

In fact Brisbane's rental vacancy rate is the lowest since all the way back in 2012, and is becoming decidedly tight away from the CBD.

In Melbourne, where normally you'd expect to see vacancy rates declining in the month of February, there was another increase.

As noted elsewhere, Melbourne is still delivering a relatively high number of city and city-fringe rental units, at a time when nobody really wants to live in them. 

If you live in Sydney you'd know this already from the traffic queue pain, but life is quickly returning to normal there. 

The Sydney CBD vacancy rate continues to decline, according to SQM Research.

The death of the CBD might hold true in some parts of the world, but not so in Sydney - unlike elsewhere, Sydney CBD and its immediate surrounds are superb places to live and work (I've even lived on Pitt St. in my earlier years, and it's great...as long as you have a quiet apartment). 

Overall, the national vacancy rate was steady at 2 per cent in February, the same as a year earlier.

That equates to approximately 71,000 rental vacancies, but 28,000 of them are in one city - Melbourne - largely relating to units around the CBD.

Around the country, says SQM, it's a landlord's market.

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Weekly payrolls return to their pre-pandemic levels in February, and housing prices rebounded by +3 per cent., having slumped in 2020. 

The Reserve Bank hosed down any expectations of any end to the yield control target in its latest Minutes. 

More detail from the data wizard James Foster here. 

Credit restrictions are possible later in 2021

Intervention?

See here for more (or click on the image below):

Podcast: Buffett mini-series, Episode 1

Rule #1: Don't lose money

Here's the first episode in our mini-series on Warren Buffett.

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

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You can download our new e-book here.

You can listen to the whole podcast series here.

You can tune in to the full podcast series at Soundcloud, Stitcher, or Spotify.

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Unit prices rise

Recovery begins

There's been a lot of housing market hype this week, though truthfully prices in the main capitals are only just getting back to where they were 43 months ago in 2017, and remain below that for units.

This weekend, just the first sign that unit prices are now rising:

Source: Domain

Lol @ fund managers  rushing to make 'recommendations' to regulators a few weeks after housing prices started rising, by the way. 

Property Risk Report

Property Risk Reports

Check out our new Property Risk Report tool for free here (or click on the image below):

Have a great weekend!