Thursday, November 19, 2009

Heatwave, Jobs and Rates.

Heatwave... still rolls on. I had a theory that internet enquiries would go through the roof with buyers electing to do their research from air conditioned comfort... not the case. The internet stats are HUGE & growing, but no actual hot weather spike. We did also discovered that the FHOG wind back on October 1st had no impact on web traffic.
Gardens; a sigh of relief as commonsense prevails on watering restrictions, well done Pollies, you got it right & headed off a tragedy for our housing environment.

An 8% lift in the number of open inspections advertised last weekend remains a whopping 40+% below last spring! The heatwave may be effecting numbers but my guess is that last weekend’s additional 115 opens are a result of the hectic pace of sales beginning to slow over the past week.

A reminder that the first home owners boost (FHOB) finishes at year end & that rates are widely tipped to be going up for the 3rd consecutive month in December! Given the Reserve Bank do not meet in January it seems almost inevitable that we’ll see another 0.25% rise (or approx $21 per month per $100,000) in December. This represents $14 per week for the average housing loan.

We have previously talked a lot about CONFIDENCE being the big driver of the property market. Confidence is directly impacted by job security. No job, no money, no confidence, & so the latest news on employment is important.

This week we posted CommSec’s report headed JOBS, JOBS & more JOBS. Here are some excerpts from the report.

- A solid increase in employment has put another rate hike a step closer, with 24,500 new jobs created in October.
- The unemployment rate rose from 5.7% to 5.8%. CommSec expects the unemployment rate to peak at around 6% a far better result than in previous downturns.
- Importantly the improvement in job security will not be lost on consumers. Less fear about losing their jobs...
- It appears almost certain that the Reserve Bank will break tradition & raise rates for the third consecutive month in December.

Interest rates remain at historic lows, unemployment is peaking & there is a shortage of property... mmmm, have to say these are good symptoms for real estate. Rob Chapman MD of Bank SA released their Trends report this week stating “SA has the lowest debt to income ratio of any mainland state”.

We have always recognised that we are a conservative lot; well our conservatism has given us a payback it would seem.

Week in Summary... the heat has impacted open numbers; sales remain strong; prices are stable; overpriced property is not selling; multiple offers are common; off market sales are strong; time is running out to list & sell in 2009!

Don’t forget Wednesday live & interactive www.toop.tv, with podcast available Thursday. This week Mark Lewis gave his InsideStory into finance, plus we had great footage in ‘Behind the Blinds’. If you have any real estate questions send them to www.asktoopie.toop.com.au & we will reply live each week.


Anthony Toop, Managing Director.


www.toop.com.au


© Toop Real Estate Group

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