Upgrading is back in fashion

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With its extensive renovation and heated pool, these designer digs look a hot prospect....

Seller Enthusiasm in property market

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Take some time to check out this 2 min video that summarises rising seller enthuasiam in Melbourne! Enjoy!

Check it out here

Featured Ideas

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Country-inspired? Gives me this warm fuzzy feeling, how comforting. soft & warm colours

So homey.. loving the olive green feature wall!

Do you get that sense of tranquility or is it just me??

Something about me and wood.. so Balinese!

Now this is just stunning!!

Amazing how nature and greenery adds extra beauty

For more, check out this link

SYD: Don't believe crazy boom theory

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WHAT'S DRIVING ECONOMY?

• Low interest rates 
• Rising confidence
• A surge in investor activity are the current drivers of the Sydney housing market together with a solid performance by the local economy - is about as close to a boom next year

WHAT'S SLOWING ECONOMY?

• Sydney’s unemployment rate is now rising towards 6 per cent and predicted to continue to rise.
• Wages and profit growth remain subdued in a low inflation economy with a stagnant stockmarket continuing to constrain growth in the prestige market.
• The prospect of sharply falling rental yields will also prove a disincentive for new investors.
• Prices growth in Sydney is likely to peak over the next six months, with continued solid growth dependent on a sustained revival in the economy and unemployment falling to or below 5 per cent. 

"There are a lot of reasons that prices will be kept in check" says Australian Property Monitor’s Andrew Wilson.

To find out more, click here

How to spot a housing bubble??

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The recent strong growth in the housing market, coupled with record-low interest rates, has raised fears about a real estate price bubble. House prices are at their highest in three years. Mortgage lending is picking up. There has been increased demand from investors!!

Last week, the Reserve Bank hosed down fears of a housing price bubble as "unrealistically alarmist", with its assistant governor Malcolm Edey saying prices were rising in line with incomes over the past decade.

But what constitutes a housing bubble? How do we know if we are approaching one, or already in one? Can a bubble only be identified in hindsight?

Previous housing price bubbles ... housing prices in Ireland prices more than tripled, while in the US, they rose by 70 per cent.

There's no definitive checklist, but here is a list of factors analysts say are central to determining whether a bubble is forming.

1. Property prices

Australia's housing market ... growing in popularity as an investment vehicle

A sharp rise in housing prices is one of the first indicators.

Figures show that the capital city house prices rose 4 per cent in the three months to August, the largest growth since April 2010.

The forecasts for housing price growth is more bullish. 

For Sydney, home prices are projected to soar by 15 to 20 per cent next year, and that's after growth of 9  to 12 per cent this year, data firm SQM Research said last week.

As a comparison, the European Central Bank estimated at between 1995 to 2005, homes prices in Ireland more than tripled while in the US they soared by 70 per cent. The prices then sank by more than 30 per cent when the financial crisis hit. With the benefit of hindsight, such steep price rises can be see as signs of a bubble about to bust.

House prices in Australia are considered to be expensive, experts agree. In a housing bubble, they also have to be seen as unsustainable.

At this stage, analysts say Australia's above-average population growth, an actual excess of demand over supply - and only a gradual lift in construction, coupled with low vacancy rates and rising rents, are legitimate factors feeding the strong rises.

2. Credit growth

Strong credit growth has been cited as a key factor in fuelling a housing bubble that would eventually burst. It can be driven by low interest rates and loose lending standards, which could then lead to mortgage borrowers being over leveraged.

Higher debt = higher leverage = sudden change in the wider economy such as a rise in unemployment could see these mortgage holders struggle to repay their debt = higher risk

Australia's cash rate is at 2.5 per cent in attempt to boost economy by growing the housing market as the economy rebalances away from mining-led growth.- a 60-year-low. 

Credit growth has lifted off its historic lows from earlier this year, but remain very soft relative to previous years. Housing credit growth lifted by 4.7 per cent in the 12 months to August. Part of the reason why credit growth is growing at a slower pace is that about half of households, according to anecdotal evidence, are not reducing their regular mortgage payments as interest rates fallen, the RBA said.

However, this slow growth should be viewed together with Australia's high household debt-to-income ratio, which the RBA has warned about. It is at 147.3 per cent, lower than the record-level of 153 per cent which it reached before the financial crisis, according to data from the central bank.

3. Lending standards

Closely linked to a strong rise in credit growth are banks' lending standards. As we noted earlier, the availability of easy credit to US homebuyers who usually wouldn't be granted loans fuelled a housing boom that was ultimately unsustainable.

Looser lending standards are also expected to spark strong growth in the volume and turnover of property, meaning that more people are buying and selling homes to make a profit. Volume growth remains light in Australia.

Housing turnover has lifted from low levels, the RBA noted in its September board meeting minutes. But they remain relatively low compared to the previous decade.

However, the modest growth in credit poses a difficulty for mortgage lenders, and could entice them to loosen lending standards to draw in more clients. RBA warns to "maintain prudent risk appetite and lending practices, especially in the current low interest rate environment".

4. Speculation

One sector of the housing market that has attracted the attention of the RBA is the growth in the number of investor-owners. The RBA has warned such investors not to expect the same strong growth in house prices that Australia experienced in the 1990s and early 2000s.
The analysts warned that Australian banks have more investment property in New Zealand and the UK - 32 per cent compared to 20 per cent and 12 per cent respectively.

"significant growth in negatively geared investment property over the last 20 years should be of concern"

Australia's large exposure to a very highly leveraged landlord population is a significant systemic risk. ... We do not believe that these implications have been fully considered by the banks, regulators or market participants.

The RBA has also been keeping a close eye on the self-managed superannuation fund (SMSF) sector, which it warned "represents a vehicle for potentially speculative demand for property that did not exist in the past".

The sector has increased its property holdings, after legislative changes allowed super funds including SMSFs to borrow to invest in assets such as property.

Further reading:

• European Central Bank: Asset price bubbles: how they build up and how to prevent them?
• RBA: How should central banks respond to asset-price bubbles? 

High-rise rush threatening city's liveability

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A high-rise housing ''gold rush'' is eroding Melbourne's edge as a liveable city, with an extra 39,000 apartments planned for the next three years!!

 Uncontrolled housing growth would be a blow to Melbourne's reputation as an attractive city in which to live and work -- More than 22,000 inner-city units were constructed between 2010 and 2012, and another 39,000 have been released for sale by the end of 2015 in towers where construction or off-the-plan marketing has already begun.

The city is heading towards becoming a dormitory rather than a centre for knowledge-intensive industries = UNSUSTAINABLE (research by Monash Uni)

Looking high and low for a good investment

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DECISIONS DECISIONS DECISIONS!!!

Choosing the right floor in a high-rise apartment is crucial - determines how much you pay and future cash flows. Research is a must but your due diligence is waaaaayy more important when you sign a contract with a developer before it is even built!

• Lower floor - could be easier to get a respectable rate of return

• Higher floor - could get premium returns but risk when there are larger projects and the view from an apartment can be fundamentally the same on the 12th and 30th floors. You might miss out on the cachet of being on the top floor, but you'll pay a lot less on the 12th.

The off-the-plan market relies on the perception you can pay today's prices for an apartment that will be worth more when it is finished - the theory is that the market will have moved up a gear by then.

That can be the case, but there have been situations in which unit owners have lost views because another building has gone up next door. Such an eventuality can pull down values even before you get the keys.

It is vital to talk to the relevant council, not just the developer, before buying off the plan.

Open plan dining area ideas!!

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So much character without being messy! Magnificent!

Contemporary and modern - almost like a story book

Very elegant.

Very chic!!

Country inspried kitchen - LOVE IT - homey and bursting with personality