As the first Home Buyers Grant is heading

towards a wind back, many buyers in the

market are second and third home buyers

as opposed to first home buyers. 

Non-first home buyer loan commitments increased over the month of August

this year as upgraders stepped up their activity. Consumer confidence and

business confidence hit new highs this week with both of these key indicators

increasing over the last month. In data released this week, housing finance

commitments fell over July as first home buyer showed the first evidence of

pulling back on purchases. Interestingly, despite total housing finance volumes

declining, the value of both owner occupier finance and investor finance increased

for the sixth consecutive month; reinforcing the idea that buyer activity is rippling

through into the middle and upper end of the price line.

The improvement is likely to have a positive effect on both the residential and

commercial property markets as there is strong correlation between confidence

and market activity. Rental rates across the country increased by 36% over the

last three years up to March 2009. Since this time weekly rents have peaked,

with every capital city apart from Darwin recording declines in weekly rental rates

over the last three months. The recent fall in rental rates can be attributed to a

decrease in demand as more renters looked to buy, taking advantage of low

interest rates and the boost to the First Home Buyer Grant. Such low vacancies

as well as the low supply of dwellings across the nation will continue to place

upwards pressure on rents over the longer term. With vacancy rates across the

nation’s capital cities generally below 5%, it is highly likely the recent fall in weekly

rents will be short lived.

Locally we are finding there are still many applications on vacant rentals, but are

seeing the quality of those applications are poor. Many applicants are listed on

tenant databases and are not showing affordability for the property they are applying for.

It is becoming more difficult for landlords to find good tenants that can demonstrate

that they can pay the rent and look after the property.

 

 

 

www.nobullrealestate.com.au

 

11/09/2009