Tag Archives: economy

Homebuyer confidence rises. 2013 outlook is promising

5 Years from now

The number of Australians who believe it’s a good time to buy a home surged 11.5 per cent over the December quarter, reaching highs not seen in three years.

CommSec chief economist Craig James says the Westpac/Melbourne Institute’s latest index shows more people are keen to park their money in bricks and mortar.

“Real estate was regarded as the second wisest place to put new savings, with that reading just below seven-year highs,” James says.

Housing finance commitments slid slightly by 0.2 per cent in October, new data shows, but total home lending for the year is up four per cent.                                   Loans for land blocks rose by 17.5 per cent over 2012, which is the strongest pace of growth in three years.

“All the pointers suggest there are better times ahead for the housing market, representing good news for builders, tradespeople, material suppliers and a raft of retailers.”

On the wider economy, James says there’s good momentum moving into the New Year. In particular, forecasts for the resources sector show Australia is set to “reap extraordinary earnings” over the coming year. James says the outlook is far brighter than the “doom and gloom school would have you believe”.

Export volumes are predicted to increase substantially and the reason for a forecast drop in export values is due to the drop in commodities prices.        While general consumer sentiment fell by 0.2 points to 100 on the index, loans to buy new or used cars hit a record 1.23 billion in October.

James says the drop is disappointing at first glance but digging deeper shows “sharp divisions across the country” are to blame.  “In short, conditions are very mixed and how you feel depends on where you live and your housing status,” he says.

He believes the data suggests the Reserve Bank may opt to stay on the interest rate sidelines in the early part of 2013, preferring to see how the economy responds to rate cuts.

Source: Australian Property Investor


Are the RBA cuts finally beginning to change consumer sentiment ?

Australians are beginning to respond to interest rate cuts earlier in the year, with consumer sentiment surging to its highest point in 19 months.
The Westpac Melbourne Institute Index of Consumer Sentiment for November, released on Wednesday, rose 5.2 per cent to an index level of 104.3 – its highest point since April 2011.

A reading below 100 indicates more consumers are pessimistic than optimistic about the economy.
Westpac chief economist Bill Evans said the result was unexpectedly positive, given sluggish performance of the previous readings.
“After a long 16-month period when it held below 100 for 14 of those months, we are finally starting to see that the Reserve Bank (of Australia)’s 150 basis points of interest rate cuts is having an impact,” he said.

He added, though, that the index was still only 0.9 per cent above its level of this time last year.
Mr Evans said the uptick in sentiment was most likely based on global factors, as well as the RBA’s rate-cutting decisions in May, June and October.

However, a desire to boost conditions in the economy could prompt the RBA to consider easing rates at its board meeting on December 4.
“The Australian economy is facing uncertainty around the mining sector and with contractionary fiscal policy and a punishingly high Australian dollar,” Mr Evans said.
“We need further rate cuts to help build on these early signs that lower rates are having an impact on households’ confidence.”

All components of the data improved in November, with a rise of 11.1 per cent on the sub-index measuring views on family finances compared to a year ago, and a rise of 1.3 per cent on the measure of expected family finances over the next 12 months.

Australians were also positive about economic conditions over the next 12 months and five years, with the relevant sub-indices improving by six per cent and 3.4 per cent respectively.
The sub index tracking whether now was a good time to purchase a major household item rose 5.1 per cent.

However, state-by-state results suggested there was still some concern about the longevity of the mining boom, with confidence falling 5.2 per cent in Western Australia, and 8.7 per cent in South Australia, perhaps as a result of the Olympic Dam project being cancelled.

Commonwealth Bank senior economist John Peters said the survey suggested Australians were generally more positive about domestic and global conditions in November.
“It appears that the cumulative interest rate cuts over 2012 have finally propped up consumer attitudes and improved family finances,” he said.
“As well, a stable unemployment rate over November and the decisive re-election of Barack Obama in the US presidential election are likely to have had some positive influences on consumers.”
Source: Nine News Finance

First-home buyers told to build or miss out on first-home buyers grant. Source : Brisbane Times.

The $7000 first home buyers’ grant will be axed in favour of a boost for the ailing construction industry, the government has revealed.

In tomorrow’s budget, the Newman government will scrap the current First Home Owner Grant and replace it with a $15,000 handout to first-time buyers purchasing off-the-plan or newly-constructed properties.

First-time buyers, who purchase an established property, will still qualify for the $7000 grant if they sign contracts by October 11.

But the re-shaped First Home Owner Construction Grant will kick-in on September 12 for properties valued up to $750,000.

Premier Campbell Newman said the government had responded to industry concerns in “changing” the original First Home Owner Grant.

“The Master Builders Association has lobbied on behalf of the sector for changes to the grant and the Government has responded in a constructive way,” he said.

“This First Home Owner Construction Grant will provide a targeted and sustainable injection of confidence to the construction sector.

“The previous Labor government’s Building Boost scheme was a short-term sugar hit which benefited property investors outside of Queensland.”

More than 5400 First Home Owner Grants were paid in Queensland in the June quarter, compared with 4000 in the same period in 2011.

Treasurer Tim Nicholls said the government had already wiped up to $7,000 off the cost of buying a home by reinstating the principal place of residence transfer duty concession.

The Property Council of Australia had called upon Mr Nicholls to undertake a wide-ranging review of state stamp duty for off-the-plan residential sales and the land tax surcharge, in the hope the LNP’s first budget will reinvigorate the embattled property and construction sector.

However, at a Property Council of Australia luncheon last week, Mr Newman remained coy when asked about the possible extension of stamp duty concessions to Queenslanders buying house and land packages.

The changes:

$15,000 for first home buyers of new and off-the-plan properties applies from September 12
$7000 grant for first home buyers of existing properties to be scrapped from October 12
New $15,000 grant applies to newly constructed homes, or properties bought off the plan

To be eligible, first home buyers must:

Make the property the principal place of residence within one year of taking ownership and live there for at least six months
Not sell the property within a year of moving in
Buy or build at a property worth less than $750,000.

Read more: http://www.brisbanetimes.com.au/queensland/newman-to-scrap-7000-first-home-owner-grant-20120910-25mvu.html#ixzz2620aTNDS