Housing affordability – a cone of silence!

Housing affordability – a cone of silence!

It is official! Recent data revealed that in the March quarter, new home construction was just 38,811 – down 3.3 per cent on the December quarter. Property market commentators rang alarm bells, announcing that the housing market was well and truly in the doldrums. The current shortfall is now projected at 30,000 per annum and growing, yet property prices keep falling. A direct result of high interest rates, where private ‘new house starts’ also fell 6.3 per cent in the March quarter. New apartment construction did rise by 3 per cent which is hardly a great yardstick. For new housing starts, ACT was down 16.9 per cent, Tasmania posted a 13.3 per cent decline, Queensland down 9 per cent, Western Australia 7.3 per cent and Victoria down 4.8 per cent. South Australia posted a 24.7 per cent increase, NSW up 9.3 per cent and the Northern Territory up 14.9 per cent.

The combined number of new houses and apartments under construction in NSW (The State of Decay) has slumped to the lowest level in 38 years – so we are now actually going backwards (thanks Morris). The number of new dwellings being constructed in NSW has all but halved since construction peaked in 2002.

NSW remains the real estate basket case posting 12 of the 20 highest mortgage default areas which explains why new home construction remains on the decline.

Delinquency rates reached historical highs in the first quarter of 2008.

Home delinquents – worst performing areas
State … Region ……………………………….. Rate (%)
NSW … Sydney-Liverpool ………………….. 1.43
NSW … Sydney-Parramatta ……………….. 1.21
NSW … Sydney-Canterbury-Bankstown … 0.95
NSW … Sydney-Other western ……………. 0.93
NSW … Sydney-South West ………………. 0.90
NSW … Central Coast ………………………. 0.80
NSW … Wollongong …………………………. 0.77
QLD …. Mt Isa & North West QLD ……….. 0.70
NSW … Sydney-Inner West ……………….. 0.68
NSW … Central Tablelands ………………… 0.63
NSW … South Coast ………………………… 0.62
TAS ….. Tasmania-North East …………….. 0.61
TAS ….. Tasmania-North ……………………. 0.60
VIC …… Melbourne-North West …………… 0.59

This explains why NSW has (today) more departures than any other State or Territory which is more a reflection on elected government’s policies where transient residents (better known as tax payers) have simply had enough. The opportunity to give more to their respective families and less to the governments of the day, is statistical evidence that is most alarming. NSW posted the Top 7 which actually surrounds the Sydney CBD from Wollongong to the Central Coast.

When one removes government incompetence with a population that is growing at the fastest rate in twenty years (1.5 per cent predicted) it comes as no surprise that BIS Shrapnel predicted that Sydney would post the nation’s highest median price. Predictions of a median house price of $650,000 by mid 2011 (up by $200,000)is an absolute nonsense and with the Reserve (Reverse) Bank slowing the economy, recession is more likely than recovery. Employment fell by 20,000 in May and this trend will continue. Current market sentiment is that it will get harder before it gets better. An oversight by the Reserve Bank of Australia, when it injected $2 billion into our banks between January and April 2008?

On the flipside, in June (to date) we have posted $30,000,000 in sales and yes, it is a harder market. The Westpac Institutional Bank’s (Melbourne Institute), lending index of economic activity, slowed to 2.8 per cent in April, which was well below the long term trend of 4 per cent.

Now if the Reserve Bank of Australia is totally independent, why is it not critical of the taxation policies and initiatives of respective governments, that crucify markets and consumer confidence?

That is simply *NOT* politically correct! Cheers ^__^

Apologies to all those prospective renters and purchasers who recently sent an email inquiry recently from www.realestate.com.au

Having brought this problem to their attention, we are now receiving email inquiries that are up to six weeks old. An absolute disgrace and we apologise on behalf of our owners to those who made inquiries that remained unanswered.

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