Australian Property

Canada may well be presaging the Australian property market with buying conditions in May falling well below expectations.

From the AFR: “Broke” real estate agents are quitting British disrupter Purplebricks in droves as the fixed-fee agency’s low-margin, high-turnover business struggles to achieve enough sales amid a slowing Australian housing market.

Meh: Home Values Across Australia Will Continue To Diverge Into 2019, Based On The CoreLogic-Moody’s Analytics Australian Home Value Index Forecast Moody’s Analytics has developed an econometric model to forecast the direction of Australia’s residential property market down to the Statistical Area 4 level, using historical data from CoreLogic’s Hedonic Home Value Index.

  Ruh roh.

Via Morgan Stanley on macroprudential 3.0: An estimated 18 per cent of mortgage customers have a debt-to-income (DTI) ratio that is above six times, an analysis of 1836 mortgagors shows, which is unacceptable when seen through the lens of new lending rules.

Via the ASX: Aqualand just got itself a captured realtor cheap as chips!

Via the ABC: As property prices in Australia have climbed over the past few years, thousands of Australians desperate to get a foothold on the property ladder have used interest-only loans.

The critical point for me is that the RBA does not see rates ever falling below 1%.

By Leith van Onselen The ABS yesterday released its property price data for the March quarter, which valued Australia’s dwelling stock owned by households at $6.57 trillion, whereas the total housing stock was valued at a record $6.91 trillion.

Macquarie joins the party: Despite almost daily negative headlines in the mainstream media, the rate of adjustment has also been relatively orderly.

Via ANZ: We now expect to see peak-to-trough price declines of around 10 per cent in Sydney and Melbourne, with smaller declines elsewhere.

As we know, Victorian opposition leader Matthew Guy yesterday hosed mega-Melbourne: Melbourne can’t afford to be an unlivable city of seven-plus-million people,” said Mr Guy, who was planning minister from 2010 to 2014.

More credit crunch porn at the AFR today: Mortgage brokers and buyers agents’ claim million-dollar property sales are collapsing as increasingly risk-averse lenders reassess their exposure and pull out, causing deals to collapse.

Via CoreLogic: Auction volumes more than doubled week-on-week across the combined capital cities Auction volumes increased significantly over the week with 1,991 homes taken to auction across the combined capital cities, up from just 904 last week when auction volumes were lower due to the Queen’s Birthday long weekend.

Via S&P: Arrears on the mortgages underlying Australian residential mortgage-backed securities (RMBS) increased during the past year, according to S&P Global Ratings’ first-quarter 2018 edition of “RMBS Performance Watch: Australia.” Mortgage arrears continued to rise in resource states, where conditions for mortgage performance have remained more challenging.

By Leith van Onselen We wrote last week how home values have fallen fastest across the top 25% of properties by value.

Via Domainfax: Banks would have to bluntly warn parents planning to guarantee their children’s business debts that they risk losing their home, and that many small businesses end up failing, under proposals to the royal commission.

By Leith van Onselen With the release this week of the ABS lending finance data for April, it’s an opportune time to once again chart how capital city house prices are tracking against both investor and total housing finance.

By Leith van Onselen Back in October, REA chief economist, Nerida Conisbee, penned a self-serving article claiming that “cutting immigration won’t help housing” and would erode living standards: There’s no doubt that the more people there are living in Sydney and Melbourne, the higher property prices go.