Household wealth in Australia rose by $232 billion in the March quarter... Investors could be in for rental drought... House prices on the rise in Australia...
Household wealth rises in Australia
Household wealth in Australia rose by $232 billion in the March quarter, topping $8 trillion for the first time, according to an article in the Australian. However the article also says that unless you own lots of shares, have plenty stashed away in super, or are invested in housing, chances are you didn't get a slice of it.
The rise in wealth - or net worth as the Australian Bureau of Statistics calls it - was the result of a $262 billion increase in the value of household assets, offset by a $30 billion rise in liabilities, mostly debt. It took household net worth to $8.09 trillion.
The ratio of mortgage debt to house and land values stood at only 16.5 per cent in the mid-1990s and reached 20 per cent for the first time in mid-2000 before topping 25 per cent in the June 2008 quarter, according to the article.
Investors could be in for rental drought
Figures released earlier this month by CoreLogic RP Data show rents growing at their slowest rate on record, at 1.5 per cent per year, with gross rental yields in hot-spot capitals Melbourne and Sydney falling to 3.3 and 3.6 per cent respectively, according to the New Daily.
While the government doesn’t have much control over the end of the investment phase of the mining boom, which has hit Perth (rents down 4.5 per cent year-on-year) and Darwin (down 5.5 per cent year-on-year), it is likely, though, that its public service cuts are helping to drive Canberra rents down – they fell 0.6 per cent year-on-year, according to the article.
Those low rates have failed to boost genuinely productive investment, but have helped pump up the Melbourne and Sydney property bubbles. And as dwelling prices rise, rental yields, by definition, fall.
There are currently 1.2 million negatively geared investment properties in Australia – a giant cottage industry in which mum-and-dad investors run their businesses at a loss, the article suggests. Vacancy rates are edging up and credit-squeezed investors who try to raise rents quickly – and remember the US Federal Reserve is likely to set debt markets alight this coming September – will be competing with other worried investors who might even be dropping rents.
House prices on the rise in Australia
Australian house prices have risen for the 10th straight quarter led by another outsized gain in Sydney, adding to concerns about an overheating market and diminishing affordability in the city, according to an article from the Irish Examiner.
Figures published this week from the Australian Bureau of Statistics showed prices across all the major cities rose 1.6 per cent in the three months to March, lifting annual growth to 6.9 per cent.
The heat was again very much concentrated in Sydney where prices were up over 13 per cent, and that was before the Reserve Bank of Australia cut interest rates to a new low of two per cent in May, according to the article.
Average values across the state capitals rose one per cent, from the previous week, with Sydney alone up 1.6 per cent and Melbourne by 1.4 per cent. Annual growth in prices picked up to 9.1 per cent nationally and a frothy 15 per cent in Sydney. Demand was also strong with almost 84 per cent of home auctions in Sydney proving successful, and 79 per cent in Melbourne.
Household wealth in Australia rose by $232 billion in the March quarter, topping $8 trillion for the first time, according to an article in the Australian. However the article also says that unless you own lots of shares, have plenty stashed away in super, or are invested in housing, chances are you didn't get a slice of it.
The rise in wealth - or net worth as the Australian Bureau of Statistics calls it - was the result of a $262 billion increase in the value of household assets, offset by a $30 billion rise in liabilities, mostly debt. It took household net worth to $8.09 trillion.
The ratio of mortgage debt to house and land values stood at only 16.5 per cent in the mid-1990s and reached 20 per cent for the first time in mid-2000 before topping 25 per cent in the June 2008 quarter, according to the article.
Investors could be in for rental drought
Figures released earlier this month by CoreLogic RP Data show rents growing at their slowest rate on record, at 1.5 per cent per year, with gross rental yields in hot-spot capitals Melbourne and Sydney falling to 3.3 and 3.6 per cent respectively, according to the New Daily.
While the government doesn’t have much control over the end of the investment phase of the mining boom, which has hit Perth (rents down 4.5 per cent year-on-year) and Darwin (down 5.5 per cent year-on-year), it is likely, though, that its public service cuts are helping to drive Canberra rents down – they fell 0.6 per cent year-on-year, according to the article.
Those low rates have failed to boost genuinely productive investment, but have helped pump up the Melbourne and Sydney property bubbles. And as dwelling prices rise, rental yields, by definition, fall.
There are currently 1.2 million negatively geared investment properties in Australia – a giant cottage industry in which mum-and-dad investors run their businesses at a loss, the article suggests. Vacancy rates are edging up and credit-squeezed investors who try to raise rents quickly – and remember the US Federal Reserve is likely to set debt markets alight this coming September – will be competing with other worried investors who might even be dropping rents.
House prices on the rise in Australia
Australian house prices have risen for the 10th straight quarter led by another outsized gain in Sydney, adding to concerns about an overheating market and diminishing affordability in the city, according to an article from the Irish Examiner.
Figures published this week from the Australian Bureau of Statistics showed prices across all the major cities rose 1.6 per cent in the three months to March, lifting annual growth to 6.9 per cent.
The heat was again very much concentrated in Sydney where prices were up over 13 per cent, and that was before the Reserve Bank of Australia cut interest rates to a new low of two per cent in May, according to the article.
Average values across the state capitals rose one per cent, from the previous week, with Sydney alone up 1.6 per cent and Melbourne by 1.4 per cent. Annual growth in prices picked up to 9.1 per cent nationally and a frothy 15 per cent in Sydney. Demand was also strong with almost 84 per cent of home auctions in Sydney proving successful, and 79 per cent in Melbourne.
