Equity Finance Solutions

Australia not building enough homes: Housing minister Federal housing minister Clare O’Neil has delivered strong words about housing supply and affordability. “Australia is in the middle of a housing crisis which has been decades in the making,” she said in a speech to the AFR Property Summit. “This chart shows us that incomes and house prices were diverging in the 1980s, and that this problem accelerated acutely from the late 1990s. At the turn of the century, the median household price was about 4 times average incomes. Today it is nearly 8 times. “Why have prices gone up in this way? Because for a long, long time in our country, we have not been building enough homes.” Minister Clare O’Neil said Australia has less housing per person than comparable countries, such as Canada, the UK and France. “Fewer homes means less affordable housing. Because the same number of buyers and renters are spread across fewer homes. It sounds trite – but what happens when we build more homes? Housing becomes more affordable.” The federal government is aiming to facilitate the building of 1.2 million homes in the five years from July 2024, but many experts believe it will struggle to achieve its target. #property #realestate #homeloans

Rents remain unchanged for second straight month At first glance, rents appear to be booming, given that many markets have experienced strong rental increases over the past year, as the graphs show. However, more recent data suggests the tide appears to be turning. August was the second straight month in which the national median rent was unchanged, according to CoreLogic. “While monthly results are subject to seasonality, the annual growth trend also shows a consistent slowdown in rent rises. Nationally, rent values were up 7.2% in the year to August, which is the lowest annual growth rate since May 2021. Annual rent growth is now slowing in every capital city market, except for Hobart, which is coming off a dip in rent values through 2023.” The rental slowdown appeares to be the result of: * Lower demand – net overseas migration has decreased * Higher supply – average household size has increased, thereby freeing up rental space * We are getting close to affordability constraints l, which is defined as 35% of gross family income in even the most affordable cities. * Yet on a micro level there are gems 💎 to be found #property #realestate #homeloans #EFS

Homebuilding approvals rising, but remain below average While the supply of new housing continues to remain quite low, homebuilding approvals numbers have now increased for the fifth time in six months. * approvals have risen from a recent low of 12,877 in January to 14,797 in July, according to the most recent data from the Australian Bureau of Statistics. * That's an increase of 14.9%. * approvals increased 20.2% for houses and 5.5% for other dwellings (such as apartments, townhouses and semi-detached homes) during that time. However, two notes of caution need to be sounded. 1) despite the upwards trend in approvals, they're still below the 10-year average. 2) approvals don't automatically translate into completions, because a percentage of owners and developers always decide not to proceed with their project after securing permission. Especially with increased building costs of c.60% across two years. #property #realestate #homeloans

Another amazing 5* review to kick off Monday, it's going to be a huge week! Likely our biggest week since we started in business.... and it's all thanks to our clients.

Residential construction falls 2.9% Homebuilding activity continues to decline, as the supply of property struggles to keep up with demand. A total of $18.2 billion of residential construction occurred in the June quarter, which was 0.1% less than the previous quarter and 2.9% less than the previous year, according to the Australian Bureau of Statistics. By contrast, Australia's population is growing at close to record levels. The federal government is trying to facilitate the building of 1.2 million new homes in the five years from July 2024, but the data suggests it will find it very hard to achieve that target. If demand for homes and rental accommodation increases faster than supply, that will place upward pressure on prices and rents. As a result, the next 10 years present a life changing opportunity to create wealth in real estate. #property #realestate #homeloans

The property market is going to CRASH!! Remember those economists during COVID? Or the media outlets that pumped the doom and gloom? All those guest speakers that got the limelight and chanted the rhetoric? Did any of it come true? Do they all still have their jobs? Are they still chanting to the tune of the day? Ask yourself these questions. I am asking you to hold yourself to account. Forget getting your news from the mass media. Get it from more reliable sources. Someplace that can back up statements with data and economics… We spend tens of thousands every quarter purchasing the most up the date and reliable raw data. This data doesn’t lie or have a story to spin. It is what it is. We don’t always say the markets will boom. We acknowledge through data science that there are multi speed markets in the country. Many do well, many do poorly. We just chose to invest where the numbers work. Where there is a good chance to create wealth over the next 10 years and where it doesn’t cost an arm and a leg to hold a negatively geared property. Forget blue chip, forget evergreen, forget those that say just invest in suburbs that show long term growth, these are all mistruths from people that simply don’t understand or have their heads in the clouds (many do). A lot of successful people now created their wealth in one market, and through it’s boom. So while it was great for them, it may not be great for you, and it often sqews their view on a strong market. It’s not their fault, you can see their bias. Ask someone who has (and holds - this is key) a dozen or more properties all across the country and has experienced several cycles. These opinions I find have more real truth to them and more accurately reflect the state of play across the country. Invest when it makes sense for you, and pls - don’t wait for interest rates to drop! Don’t be that person… Have a fantastic week!

A lot of thought, planning and execution went into our client's property portfolio planning, including 5 property purchases, home renovation goals, clearing all their personal debt, 4 banks, multiple financial restructures, incorporating their superfund strategically and thinking about today 4+ years ago, watching the masterplan unfold has been a privilege. We now also look after some of their family who are also well on their way to financial freedom.

Vacancy Rates: Australia's rental markets remain exceptionally tight, with vacancy rates falling below 2% across seven of the nation's eight capital cities, leaving Canberra as the sole outlier, according to SQM Research data. In such conditions, landlords wield considerable power, often driving up rents as tenants compete fiercely for limited housing. Historically, vacancy rates below 2% have signaled a landlord's market, while rates above 3% favor tenants, with a balanced market emerging between 2% and 3%. However, after significant rent increases since 2021, affordability constraints are now curbing the rapid annual rent hikes of 10-20%.

Unemployment rises but remains low The national unemployment rate rose from 4.1% in June to 4.2% in July, according to the Australian Bureau of Statistics, partly because a record 67.1% of the working-age population were participating in the workforce (up from 67.0% the month before). This is significant because a person is regarded as unemployed only if they have a job or are looking for one. So when new people enter the workforce, the unemployment rate automatically rises unless a proportionate number of new jobs are created at the same time. Despite the weak economy, the unemployment rate remains low by historical standards. The Reserve Bank of Australia (RBA) recently forecast that the unemployment rate would reach 4.3% at the end of this year and 4.4% at the end of next year, which would still be quite low. Low unemployment has pros and cons. On the one hand, it’s great that so many people have jobs. On the other hand, it means more people are spending money, which is putting upward pressure on inflation and forcing the RBA to keep interest rates higher for longer. #economy #jobs #homeloans

SA reigns supreme – again For the third consecutive quarter, South Australia has topped CommSec’s quarterly State of the States ranking. * South Australia scored highest with three of the eight economic indicators – unemployment, home building starts and construction work. * Western Australia (ranked 2nd) scored highest with two indicators – home lending and population growth. * The ACT (ranked 4th) scored highest with the other three indicators – economic growth, retail spending and equipment investment. CommSec ranks the states/territories by comparing their current performances on the eight key indicators with their long-term averages. “Across the country, the economic performance of Australia’s states and territories is being supported by both strong employment and population growth, at a time of higher-than-desired price inflation,” said CommSec senior economist Ryan Felsman. “While South Australia retains first place, Western Australia is seeing the strongest annual economic momentum, so it will be interesting to see how this plays out in the coming quarters.” #economy #homeloans #property