There are more interesting articles, commentaries and analyst reports on the Web every week than anyone could read in a month.
Each Saturday morning I like to share some of the ones I’ve read during the week.
The weekend will be over before you know it, so enjoy some weekend reading.
Value of home loans edges up following banking royal commission report
Despite a rough period, we may be seeing good news for home loan approvals.
According to an article on Domain.com.au there has been a slight increase in lending to home buyers.
Lending to home buyers edged slightly higher in February, in the first data released since the financial services royal commission’s final report.
But the value of loans granted over the month is still much lower than a year ago, official figures show.
Potential homebuyers have found it harder to get a home loan over the past two years than previously as the bank regulator clamped down on lending practices, particularly to investors and riskier borrowers.
The spotlight of last year’s financial services royal commission also exposed loans granted to borrowers whose living expenses had been under-reported.
After the hearings, banks became more stringent about checking borrowers’ expenses, with stories emerging of buyers being turned down because of their Uber Eats habits.
The value of lending to households for dwellings, excluding refinancing, rose 2.7 per cent to $17.64 billion in February, compared to January.
The slight increase comes after the royal commission’s final report was released on February 4.
But the value of loans to households is still 18.6 per cent lower than in February last year.
Loans for investment properties inched up 0.9 per cent in the month, but are still 29.1 per cent less than a year ago.
For owner-occupiers, lending lifted 3.4 per cent but was down 13.9 per cent from last year.
“[These are] very tentative signs that there is more appetite to borrow, and banks may be a bit more willing to lend,” Domain Group economist Trent Wiltshire said.
However, he cautioned against reading too much into one month of data after the falls of the past one to two years.
He also noted the slight increase comes as auction clearance rates in Sydney and Melbourne have edged up from their late 2018 lows, but warned clearance rates tracking at about 50 per cent could hint at further price falls this year.
Westpac senior economist Matthew Hassan said the figures were consistent with a slowing in the pace of dwelling price falls in recent months.
“Some of the effects of tightening credit conditions may also be dissipating,” Mr Hassan said.
“That said, the signs of improvement are still only tentative.
The market may be starting to find a base in terms of finance activity, but conditions remain weak overall.”
Commonwealth Bank senior economist Belinda Allen said trends in home loans tend to be a good leading indicator of the direction of dwelling prices.
“While one positive month is too early to suggest an end to the weakness in dwelling prices when this data is combined with the smaller falls in dwelling prices in March, it could suggest the worst of the falls are behind us,” Ms Allen said.
First-home buyer loans reached their highest share of loans to owner-occupiers in six years, at 27.1 per cent.
Read the full article here
This is where the housing pipeline is drying up… (cranes coming down)
There’s clear signs that new dwelling are headed to a stop sign.
This Blog by Pete Wargen looks at the numbers.
Housing starts crunched
New dwelling commencements crashed 16 per cent lower in the final quarter of 2018, and new attached dwelling commencements imploded by more than 27 per cent.
Even if we’re generous and use the smoothed trend figures, this looks rather like a looming recession; remember there are more than 1 million Aussies employed in construction, and probably about ¾ of them in the residential sector.
The seasonally adjusted figures look plenty worse than this, too, and it’s the sharpest construction in about 45 years. Ouch.
Read the full article here
Australians are suddenly a lot more optimistic about where the housing market is heading
Despite negative headlines and uncertain times – it would seem Australians are optimistic about the housing market.
Results from the Westpac-MI Consumer Sentiment Index, as shown in this article on Business Insider, indicate many believe things are looking up.
According to the latest Westpac-MI Consumer Sentiment Index for April, sentiment towards both prices and purchasing rose strongly, adding to a lengthening list of housing indicators that have strengthened recently.
“Sentiment around housing improved in April,” said Bill Evans, Chief Economist at Westpac Bank.
“The ‘time to buy a dwelling’ index rose a further 2.4% to 119.4 in April, a four-year high.
The index has now risen 33% from its mid-2017 low and is back around its long run average of 120.”
A reading of 100 indicates that the number of optimists and pessimists are the same.
A reading over 100 — as was seen in April — indicates that most Australians believe now is a good time to buy a home.
Evans said falling home prices in New South Wales and Victoria, Australia’s most populous states which also have the highest median property prices nationally, have been behind the recovery in the index, helping to improve affordability levels for potential buyers.
“Improving affordability continues to see a lift in buyer sentiment in New South Wales and Victoria, although, in both cases, there is still some way to go before buyer sentiment returns to long run average levels,” he said.
The lift in the ‘time to buy’ index also coincided with a significant improvement in views towards the outlook for home prices in the latest survey, especially in New South Wales.
“The ‘House Price Expectations’ index posted a strong 11.9% rise to 95.6 in April, boosted by a sharp increase in New South Wales,” Evans said.
“The index is coming off a March reading that was the lowest level since we began compiling this index in 2009.”
While pessimists still outnumber optimists when it comes the outlook for prices, it’s clear from the latest survey that sentiment is now looking a lot more balanced.
The Westpac survey also fits with a number of other housing indicators that have improved recently.
Auction clearance rates are slowly creeping higher, albeit from depressed levels, while home price declines have moderated in recent months, according to data from CoreLogic.
Housing finance also increased in February, according to the ABS, snapping a recent downtrend, as did building approvals over the same period.
Like clearance rates, the bounce in both of these series came from low levels.
Now, the disclaimer.
One month should not be relied upon to gauge a turn in market conditions, with similar results in the coming months required to solidify that view.
However, evidence is mounting to suggest that trend change may be in the offing.
Upcoming data will help to evaluate whether the downturn in the market may be close to bottoming.
As for the the reason behind the recent lift in housing indicators, there’s unlikely to be a definitive answer.
But the improvement did take place in the same month the RBA stopped talking about lifting interest rates, adopting the view instead that the next move in Australia’s cash rate could be both up or down.
That subsequently lead to financial markets pricing in further rate cuts from the bank, something that has been widely written about in the Australian media.
In the past, Australians have become accustomed to RBA rate cuts being associated with higher property prices.
This time may be no different, even before a possible rate cut is delivered.
The federal budget may have also played a role in the latest lift in housing sentiment the Westpac survey.
“The survey detail suggests the Budget was well-received,” Evans said.
Read the full article here
More young women buying property
When it comes to buying a property – the girls seem to have the upper hand.
In this article for Switzer, John McGrath looks at why more young women are buying property.
When I started in real estate in the 1980s, it was very rare to conduct an auction and have a 28-year-old female on her own buy the property.
Today, it’s normal and right now it seems that falling prices are inspiring more young women than men to buy their first home or investment.
Many young women today are independent, financially secure and career-oriented.
They have no plans for a family before age 30 and buying a property is often their priority ahead of what can be an expensive wedding.
Women equate property with security and are increasingly viewing home ownership as a sign of their success.
More women than men intend to buy a home or investment property over the next five years, according to Westpac’s 2018 Home Ownership Report.
The report revealed that a survey of 1,047 home owners and first home buyers found 28% of all women were looking to buy a home for themselves over the next five years, compared to 20% of men; and 16% were looking for an investment property compared to 13% of men.
The report mirrors long term trends revealed in the ABS Gender Indicators report published in 2017, which shows 60% of all Australian women live in homes they own either outright or with a loan compared to 56% of all men.
The gender gap is slightly wider amongst younger Australians, with 26% of women aged below 35 years having a mortgage compared to 20% of men in the same age bracket.
Young female buyers are often well educated and clued in on the economy.
They’re looking to make smart decisions with their money.
With Sydney and Melbourne property values down 10-15%, I think it’s an especially great time to buy in our two biggest markets.
Looking ahead, I have no doubt that capital growth will continue in these two cities due to the many unique fundamentals supporting home values, including the undersupply of housing and ongoing population growth.
The Australian economy is in good health, with very low unemployment and the first federal budget surplus in 12 years forecast for 2019-20.
Economic health is inextricably linked with the property market.
A good economy creates confidence to invest in assets.
Young women are increasingly recognising what property can do for them.
The Westpac survey found 43% of female first home buyers strongly believed that owning your own home was a ‘reflection of your success in life’, up from 34% the year before.
About a third (31%) strongly believed that property was ‘a pathway to wealth’, up from 28%.
One in five young female first home buyers (22%) were also considering buying an investment property over the next five years compared to one in 10 male first home buyers (11%).
This trend is reflected in new tax statistics released in March by the ATO, which gives a comparison of the number of female property investors compared to male investors earning less than $100,000.
– In NSW, 209,254 females reported rental income compared to 195,291 men
– In VIC, 158,231 females reported rental income compared to 150,621 men
– In QLD, 144,722 females reported rental income compared to 106,506 men
Read the full article here
Feng shui basics for your home
If you’ve ever wanted to give your home a touch of the positive Feng shui vibes, you’re in luck.
An article on Realestate.com.au looks at the best ways to make your home Feng shui friendly.
Ever wondered how a feng shui house is actually structured or what feng shui in Australian homes actually looks like?
Follow or expert advice and feel happier in your home today.
We caught up with feng shui master, Philip Wong, who has worked with homeowners around the world, and asked him to share some insights on creating a feng shui house.
To kick us off, he’s given us a rundown on the basics of feng shui and some of its key teachings.
What is feng shui?
Feng shui is all about the balance of energies (also known as Qi).
Through the placement of feng shui elements, we can gather positive energy to assure health and good fortune; at the same time, we can channel out negative energy to create harmony in our space.
You can draw on aspects of feng shui that you feel you want or need to improve the way your property feels and functions.
Central to feng shui is what’s called a Bagua (bagua means eight-sided) map that lays out the nine separate areas of energy and intention in feng shui.
In arranging a room, these translate to nine areas to note. Divide your room into those areas then overlay the map to see which parts might need correcting or attention.
When the structure of an area cannot be physically changed to suit the ideal energy that’s desired in a feng shui house, you can use a ‘cure’.
This is usually in the form of objects like mirrors, running water (like a fountain), plants or pets (like goldfish).
Cures help us fend off negative energies.
Feng shui tips for your home
A feng shui house is all about good home design, the arrangement of internal living spaces and integrating aesthetically pleasing decorative elements which promote harmony and a sense of wellbeing.
But it’s easy to get wrong.
Here are some common sources of negative energy in feng shui around our homes.
Bowing or blade-shaped curves
Bending roads shaped like curved blades are considered bad feng shui for Australian homes (and those all over the world!).
The blade-liked curves are said to bring bad luck on health.
When your building or house is located across the curve, you can use broad leaf plants to shield your home from the negative energy.
Plants, such as pothos, canes or bamboos are commonly used for shielding purposes and are easy to keep around the house.
If your window is facing a curved road, such as an overpass or curved highway, you should look at blocking and redirecting the possibility of negative energy.
A combination of curtains and convex mirrors (a fisheye mirror or a curved mirror) can do the trick.
Curtains should be kept down at all times, while convex mirrors should be placed outside the window, facing the curve, to divert the energy. (Mirrors are commonly used in feng shui to manipulate space and guide energy).
Street lights
For individual houses or low-rise apartments, you might find you look directly at a street light.
Looking straight at a lamp post is also bad feng shui.
The obstructed view is said to bring bad luck to your career; bright lights from the lamp posts are said to also affect sleeping quality.
Aim to keep curtains down at night, blocking the lamp post from view and keeping its bright light from shining into your home.
Pointy objects
Any point, such as antennas or building corners, pointing into your home can lead to bad feng shui.
Points introduce ‘sha’ into your living space.
Feng shui teaches that ‘sha’ can bring bad luck to health and an imbalance in relationships or legal worries.
Again, the simplest way is to avoid or to block the energy.
Curtains, mirrors, or other cures in the Bagua map are the best tools to keep the home safe and harmonious.
Feng shui affects members of the household more effectively, depending on the direction of energy source.
This ‘family and directions’ table shows how negative energy can affect members of your family.
Living in dense urban environments (like Hong Kong, Sydney or Melbourne), some negative feng shui elements are often unavoidable, but the most important thing to keep in mind is how you feel in your living space.
Read the full article here
Weekend video: Amazing Facts to Blow Your Mind
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