Video – Tim Lawless examines the Indices
Last week saw the release of the latest RP Data-Rismark Home Value Index. This week, RP Data research director, Tim Lawless, looks at the results in detail and what they mean to you.
The number of new properties advertised for rent last week fell by -1.3% last week however, they are 3.6% higher than at the same time last year. The total number of properties advertised for rent fell by -0.4% last week and are now 8.9% higher than at the same time last year. RPData
The weighted average capital city auction clearance rate fell to 50.0% last week following a clearance rate of 51.6% during the previous week. Although clearance rates fell there is still a large volume of stock being taken to auction with more than 2,000 capital city auctions last week. In the nation’s largest auction market, Melbourne, clearance rates eased to 56.1% from 57.4% the week prior. Sydney’s auction clearance rates fell from 52.5% to 50.2% last week. It will be interesting to see how clearance rates fare this week in the lead up to Easter. RPData
Over the last week there have been very few data flows. The most important which we are yet to touch on is the Australian Bureau of Statistics (ABS) quarterly dwelling commencements data which was released on Thursday of last week. The data showed that during the December quarter 37,897 new dwellings commenced construction. The number of starts represented a -5.3% fall during the quarter following a decline of –13.0% over the September 2010 quarter. Despite the recent falls, dwelling commencements during 2010 were the strongest they had been since 2002.
The worrying sign is that commencements and approvals are now beginning to soften at a time when it is essential that the increased level of housing construction is maintained to cater to our growing population and to make-up for the ongoing shortfall in new housing supply that has become evident over recent years.
The RP Data-Rismark Home Value Index results for February 2011 will be released next Thursday. These results should provide much greater clarity surrounding the current state of the residential property market than the January results did. We expect there to potentially be significant revision to the January numbers and would not be surprised to see a further negative read nationally during February given the high volume of listings, below average auction clearance rates, weakening consumer confidence and the ongoing affects of floods, cyclones and other global events during recent months.
Outside of the economic data the biggest talking point is the natural disasters and Japan and what they will mean for Australia. In a ministerial statement to the house on Wednesday the Federal Treasurer, Wayne Swan, stated, ‘Treasury expects lower demand for steel making inputs from the closure of some large Japanese steel mills but expects LNG demand to be stepped up. That’s all before reconstruction kicks in and subject to Fukushima reactor risks. Treasury has increased its estimate of the likely hit to Australian coal and farming to $8 billion, holding to their estimated ½% hit to growth this financial year. Treasury expects higher food prices from the floods/ Cyclone Yasi to add 0.5% to Q1 CPI, “perhaps more”. Getting the budget back to surplus by 2013-14 remains the Government’s “right economic strategy”.’ It appears that over the short-term the Japan disasters will have an impact on Australia however, they are unlikely to persist which is important given that Japan is Australia’s second largest trading partner.
RPData
During the past 10 years, average annual dwelling sales volumes have been recorded at 324,396 within the capital cities and 507,245 sales across all regions. Given this, 2010 sales volumes are -18.0% below average within the combined capital cities and -20.2% below average across all regions of the country.
Across individual capital cities, dwelling sales were below the 10 year average in all cities. Sales volumes in Sydney were only -11.4% below the 10 year average followed by: Adelaide (-14.2%), Melbourne (-14.4%) and Perth (-23.7%). At the other end of the spectrum, sales volumes in Darwin were -30.3% below average followed by: Brisbane (-29.3%), Hobart (-28.1%) and Canberra (-26.6%).
Undoubtedly 2010 was a sluggish year for sales activity in the residential property market with volumes at their lowest level in a decade. Although we are not anticipating much in the way of property value growth during 2011 some indicators suggest that sales volumes will improve. Housing finance commitment volumes have levelled and are now improving slightly, unemployment is at 5.0%, wages are growing at a level above inflation and limited growth in property values coupled with wage growth is likely to improve housing affordability. Although we are anticipating an improvement in sales volumes, it seems unlikely that volumes will revert to 10 year average levels. Importantly, any improvement will be relative to the weakest year for sales activity in more than a decade.
In any negotiation, the more knowledge you have about your opposition, the more likely you are to reach a favorable outcome. However, much of this vital information is not directly communicated; you have to know how to read it. Here are some tips to see these hidden signals, and understand the importance of what messages we send with our own body language.
Negotiating effectively is no easy task, but it can become nearly impossible when your opponent is lying. A study carried out recently by the University of Virginia in the United States shows that lies are part of one in every five ten-minute conversations. Here’s how to spot the liar.
1. Touching of the face, nose – It is an expression of “assuring oneself”. We most often do it when we are lying or when we are very insecure. One of the best-known and “famous” cases of this is Nixon when he said in a TV speech “I know nothing about the tapping of Watergate”. He touched his nose and covered his mouth.
2. Rubbing of eyes – It buys us time and at the same time it no doubt also says that we are not particularly happy about what we are about to say.
3. Ears, neck, hair – Touching of the ear in the way of rubbing may indicate stress in relation to the statement. Touching of neck most often also signals nerves, just as frequent contact with your hair also expresses anxiety, confusion, or stress.
4. Biting of nails – This as well as contact with watches, jewelry, buttons, or nervous use of items such as coins or keys in your pocket are also indicators. Folding of arms over chest can express a need for self-affirmation. The use of a pen as a pointing instrument indicates irritation or anxiety.
5. No eye contact – Eye contact is often lacking with the untrained liar. When lying or being insecure you look away. Other signals are frequent blinking which is a sign of nervousness, widening of your eyes, or a profound stare, which is a conscious attempt to accommodate to the first point. By lifting your eyebrows you try to act surprised over the fact that you do not trust the person. The eye can in some cases be directed at the liar’s top right corner as a sign of a constructed thought creation, i.e. not actual events but created scenarios
Upon meeting somewhat new, we automatically make judgments about them within 7 seconds. This is particularly pertinent when it comes to interviewing for a job. According to a study published by the Carnegie Institute of Technology, “15% of your success is based on your technical/specialist knowledge and approx. 85% is based on knowledge of human behavior.” In other words, regardless how qualified you are for the job, if you can relate well with the interviewer and build up a good rapport, you’ll have a good chance at getting the job.
If you are feeling stress about a job interview, negotiation, or any important interaction, it is important to control this and not exhibit its symptoms. Many of these same nervous twitches or touching that occurs while lying also manifests itself during stress. Here are a few stalling techniques to get yourself under control and ready to make the right impression.
— Cleaning your glasses with a silk cloth while you think.
— Removing your glasses.
— Searching for a piece of paper in your bag.
— Asking questions which are irrelevant to you but which require the opponent’s concentration and answer but not yours.
Body language is subconsciously controlled for the most part, so that would imply that we have no control over it. However, if you are conscious of what can occur subconsciously, you can be the master of your own actions and have a window into the minds of others. Body language is just another component of the emotional experience of TRUST that can so readily influence the economic transaction. How readily do you feel business corporations evoke a sentiment of trust? Take the “STATE of TRUST” survey, now available at http://www.keldjensen.com/research
Quoted from http://www.vision6.com.au/em/message/email/view.php?a=9640&id=741164:
Listings Eclipse GFC Levels
Through spring the number of properties advertised for sale has been mounting as sales volumes fall and buyers are spoilt for choice. The number of properties being advertised for sale nationally has risen sharply during the spring selling season of this year and the current volume of stock on the market is higher than those levels recorded during the depths of the GFC.
Typically as the spring season arrives there is a ramp up in listings. An analysis undertaken in an earlier Property Pulse detailed that over the past five years spring has recorded the greatest number of listings whilst autumn has actually been the busiest season for property sales. During this spring, the number of properties available for sale has risen sharply at a time when housing finance volumes have been trending lower since September of last year and property value growth has been flat since June of this year. The result of these conditions have been that at a time when fewer people have been actively looking to buy properties, a substantial amount of new stock has entered the market. Ideally, these vendors should have listed their properties earlier in the year when property values were still increasing and buyers were more active rather than waiting for spring.
Since the last week of August 2010, the total number of listings nationally has increased by 16.5%, in the capital city market listings have climbed 21.9% higher.
Across the major states, total listings are at the highest levels within Queensland. Across the state there are currently 75,655 properties advertised for sale which is the highest volume since RP Data started tracking listing volumes in 2007. This result highlights the challenges for real estate professionals and peripheral industries as well as the competition vendors are being faced with across much of the state.
Despite Queensland being the country’s third most populous state, the number of property listings in Queensland are 15% higher than what is being recorded in New South Wales and 61% higher than Victorian listings. Since September 2009, Queensland has consistently recorded a greater volume of stock advertised for sale than that within New South Wales.
Whilst the amount of available stock on the market nationally has been increasing and is at historically high levels, across the combined capital cities total stock levels remain below their 2008 peaks. Within the individual capital cities the total number of listings for the final week of spring are, in all instances, higher than last year. Darwin (74.7%) and Perth (38.0%) have recorded the greatest increase on last year’s listing volumes whilst Melbourne (12.8%) and Sydney (14.1%) have recorded the slightest increases amongst capital cities.Within Brisbane and Hobart the number of properties advertised for sale are at their highest level since the beginning of 2007. In all cities except for Sydney, Perth and Canberra advertised stock is currently less than 5% below the peak during the past three years.
On a national basis, total listings are currently at their highest level since the beginning of 2007. Also of interest is the quantity of stock being advertised for sale during the last month: 126,858 or approximately 51% of listings are within capital cities whilst the remainder lie outside these regions.
In recent years approximately 65% of dwelling sales nationally have occurred within the capital cities. With the capital cities accounting for a significant majority of sales, these regions are currently only responsible for 51% of listings. This result highlights the ongoing struggles within regional areas of the country. Many of these regions are being negatively affected by a significant volume of listings and minimal demand for homes. The high Australian dollar and lack of demand from ‘sea changer’ and retirees is seriously hampering these markets.
As we draw closer to the Christmas / New Year period many vendors have historically chosen not to advertise their property during the festive season. It may be the case this year that many vendors will choose simply to keep their home off the market until market conditions improve.
The real test for the property market will be around February of next year. Last time listings mounted to similar levels as they are currently the number of properties advertised for sale did not return to the pre Christmas levels. During the other two post Christmas periods detailed the volume of listings rapidly returned to pre Christmas levels in February. Should listings return to current levels it will indicate that there are many vendors who, for one reason or another, are willing to brave the slow market conditions and press ahead with the sale of their home. If listings don’t return to their current levels around February it probably means that many vendors have reassessed their position and preferred to hold off selling until conditions improve. Overall, listings data during the early part of 2011 will provide a very timely indicator and significant insight into the overall health of the Australian residential property market. RPData
Quoted from http://blog.rpdata.com/:
House values across the capital cities
With the release of the HIA-CBA Affordability Index this week there has been plenty of focus on the fact that Melbourne has overtaken Sydney as the country’s least affordable capital city property market. Also with the residential property market recording value growth coming to a halt, there has been plenty of commentary around the lack of affordability and some suggest property values are set for a significant fall.
This week we thought we’d let you make up your own mind. Detailed below are a collection of thematic maps for each capital city. These maps highlight the median value of a house (note that units havent been included in this analysis) across each suburb within the capital cities that have recorded at least 10 sales over the 12 months to August 2010.
GREATER THAN $1,000,000
$800,000 TO $1,000,000
$600,000 TO $800,000
$500,000 TO $600,000
$300,000 TO $500,000
LESS THAN $300,000
Sydney house values
Melbourne house values
Brisbane house values
Adelaide house values
Perth house values
Hobart house values
Darwin house values
Canberra house values
The charts clearly highlight that if you expect to purchase a house on the water or within 10 kilometres of most capital cities you are going to need to spend a substantial amount of money. Most people aspire to live close to the city centre and for this reason we expect demand to remain strong for inner city properties.
The maps also indicate that there are still affordable options in most capital cities however, some buyers may need to re-evaluate their expectations of where they can afford to live if they have limited funds. If you are looking at buying a house and have limited funds it is going to be extremely unlikely that you will be able to live within the inner city, given this these purchasers should focus on areas with ample supply of shops, restaurants, schools and quality infrastructure such as trains and major roads.
Posted in Housing affordability, RP Data Rismark Indices, Research
Louise Dean Residential Real Estate Blog 
