Australia’s Property Values See Highest Rise Since 2016



According to new government data, property prices are rising again.  However, static wages mean the growth may not be for long.

In the September quarter, national property prices had the largest increase since the end of 2016 as shown in the latest ABS data. Prices grew a weighted average of 2.4% across the eight capital cities, with faster gains seen in Sydney and Melbourne, at 3.6%.

The statistics back previous reports from CoreLogic, a property analytics firm, which showed the property market reached its bottom in June. The primary factor responsible for the fast price rebound was improved borrowing capacity.

Changes to mortgage serviceability laws under APRA in July lifted the borrowing capacity of potential purchasers by about 11% overnight. As a result, they were able to bid and  raise prices at auctions.

And a further rate reduction in October allowed them to make more borrowing.

Change in Property Value

Residential property prices June quarter 2019 to September quarter 2019 %change June quarter 2018 to September quarter 2018 %change
Weighted average of eight capital cities 2.4 -3.7
Sydney 3.6 -4.6
Melbourne 3.6 -3.5
Brisbane 0.7 -2.6
Adelaide -0.3 -1.0
Perth -1.2 -4.6
Hobart 1.3 2.1
Darwin -1.2 -5.4
Canberra -0.5 -1.4

*Source: Australian Bureau of Statistics

But how long will this boost last?

The market is expected to regain at least 11 to 13 percentage points of the price declines reported in Sydney and Melbourne during the 18-month slump. However, with wages rising at only 2.2% annually and unemployment tracking upwards, it is not easy to forecast whether prices would increase much past that.

Sydney’s market has declined 18% from peak, suggesting one cannot claw it all back simply on a buying perspective. And with income growth remaining quite sluggish, that implies what people are experiencing at the moment is a little sugar hit, because people have more money and can pay those higher prices.

The fast increase in past months could soon turn modest – not least since the number of properties for sale has been at low levels for years.

The number of properties on the market in November was the lowest year-on-year level since 2009. As supply rises, the monthly increases in house prices are expected to moderate in Sydney and Melbourne. In addition, low consumer sentiment and shrinking affordability will also dull growth.

Although some economists think the housing recovery shows a reflating of the debt-driven property bubble. They said that APRA and the RBA should initiate rules designed to slow down the housing market, since Australia is already seeing record-high levels of household debt.

Australians currently have $2.02 in debt for each dollar they earn, according to NAB. This means the country’s increasing property values would be of little help to the economy.

According to the RBA, housing price increases should back wealth effects and confidence, so the metrics on retail sales and sentiments should be intensely monitored for this.

The effect should be negligible at best, while the upside risk to credit growth is much more highly probable.



It’s the People; Not the Presents

Christmas Day and the holidays is such a magical, joyous and blessed time and we cherish the moments we can spend with all our family, friends, coworkers and neighbours.  After all, that’s what Christmas is about….it’s the people, not the presents, that make life worth living.

Many of us reflect on and embrace those relationships as we prepare to welcome in the New Year too.  Some of us even look over the previous 12 months at our challenges, accomplishments and successes and begin to dream and create new goals.

For me, the past year at One Agency Pinkerton Properties has seen all of these.  There were some big challenges this year as buyers disappeared from the market, properties took longer to sell and home owners found it difficult to acknowledge the cooling off of strong sale prices.  So, I just wanted to acknowledge my gratitude for all my clients who used my services, had faith in my abilities and stuck by me during this time.  Because of you, One Agency Pinkerton Properties was able to enjoy many accomplishments and successes too and we were glad to help your realise yours.

You may or may not know that One Agency Pinkerton Properties is solely built on repeat business and referrals.   I want to thank those who keep coming back to me and who referred me to your friends, family and acquaintances.  Because of you my business has turned over sales of almost $40 million.

My goals for the New Year and future is to keep helping you.  May 2020 be everything you are dreaming about and wishing for.

Merry Christmas & Happy New Year, Sincerely Annette!


Newsletter #5 for 2019

Tips to Avoid Going Over Budget on your Kitchen Renovations

There is no doubt that the kitchen is the heart of the home. But when you have guests, have you struggled to get them out of your kitchen and over to your beautifully decorated outdoor patio?

It is also true that kitchens sell houses. This is why it makes sense for you to invest in this particular space in your home.

However, you don’t need to spend big to upgrade the look and functionality of your kitchen. Here are some important tips to avoid a budget blow up for your kitchen renovation project.

  1. Exchange wood for laminate

It is not easy to dislike the look of wooden kitchen cabinets, whether it’s a veneer or solid board. It’s classic and is perfect for any style of home.

It also brings warmth to inside the home, but it is also an easy way to blow your budget for kitchen renovation.

Years ago, a timber grain laminate would have looked just like that – a laminate. It would not have been a great alternative to timber, but that is not true anymore.

You can now easily find a timber grain laminate with an organic-looking grain instead of a streaked appearance that can destroy the look as a whole.

I recommend visiting showrooms to ensure you have covered all your bases instead of depending on your cabinet manufacturer to provide you with samples. Not all cabinet manufacturers stock samples of the latest products.

  1. Way up your overhead cabinets

People’s interior spaces are getting larger and larger and our need and preference for big kitchens is one of the reasons why.

During the design process, ask yourself what you really need. You may find that you want more bench space, but do you really need additional storage above the bench space.

The more cabinets you add in the space, the higher your budget gets – and there are other options. These are:

  • Reduce the number of overhead cabinets
  • Leave out all overhead cabinets
  • Swap overheads with open shelving

I recommend gathering quotes for all options. It might shock you to learn how much you can save.

  1. Exchange natural stone for composite

The look and feel of natural stone is simply amazing. Each slab is different and brings an immediate luxurious feel. However, these benefits can be expensive.

Since people are building bigger kitchens, it makes sense to determine whether the cost of using natural stone bench tops (for example, marble or granite) to cover the length of your kitchen cabinets is worth it.

If you don’t want to go over budget, I recommend using composite stone as an alternative. It is significantly cheaper but can look similar to natural stone.

Another benefit is that a composite stone is more durable compared to some natural stone and easier to clean and care for.

If you don’t want to change your mind about natural stone, I recommend it for the island and a composite or timber for the back benches. This way the island becomes the focal point of your kitchen.



Why is the Christmas Season the Investment Season?

Do you know that the Christmas holiday period is the best time to purchase an investment property? Yeah, who has the time, right? With the Christmas rush, shopping for presents and going to all sorts of Christmas-related events, who has time to sneak in a purchase of a property? Virtually all people can relate to the holiday season as the time for family, reflection of the past yes, and food!

So what makes this festive season the best time to buy?

Here are the six reasons why:

  1. Determined sellers

If your home has been in the market for a few months, would you really want it to remain unsold through Christmas, and then possibly into January or February?  The reason why sellers put up their property for sale before Christmas is because they want it sold before Christmas.

This is a great opportunity to take advantage of this type of seller!

  1. No person likes tax

Another compelling factor for vendors in December is the coming land tax date, which falls at midnight on 31 Dec in NSW and Victoria. The land tax threshold covers any property owned or jointly owned on this period, so sellers who have surpassed the limit may be eager to sell quickly.

If you are seriously considering making a purchase and don’t care about the threshold, then you may have an advantage on price negotiations.

  1. Less competition

Other buyers in the market stop looking, which means less competition. During this time, most people are in the “deal with it later” mood. This means the property market is an “all you can eat buffet” of investment properties, and you’re one of the few partaking in it. 

  1. Sales agents are gearing up for Christmas, too

Like other people who are rushing to complete their business before the year concludes, sales agents are also preparing to wrap up their sales for vendors. This not only benefits sellers, who can have the peace of mind knowing they have finally sold their home, but sales agents too are working to bring in those final commissions for the year.

With determined sellers, hardworking agents and keen buyers, the end-of-year deadline can deliver positive results for all parties.

  1. No one likes homes that are already on the market for months

Listings tend to increase at the end of January. People who had been delaying selling finally made the move to put their properties on the market. This results in new properties for people who are looking to buy.

Ask yourself, if you put a property on the market in November and it remained on the market come February and it was regarded as “old stock” in a marketplace full of new listings, do you believe this is a good thing?

The answer is, NO. For this reason, sellers are determined to avoid having their property put on the old-stock list and maximize their chances of successfully offloading their home.

  1. Using the terms to negotiate the price

For a majority of the people, December to January is that period when they have time. For owner occupiers who are considering to sell, this may be the right time to act. And for a person who has just purchased, the burden to sell can rapidly intensify.

With many services, such as solicitors’ offices closing, banks closed for public holidays, slowing down for the holiday season, sellers in this situation may agree to say yes to a lower price for more flexible settlement terms.

This is an advantage you would have failed to benefit from if you delayed until February to purchase.

If you want to put together a property portfolio; or maybe if you prefer to remain focused on your long-term goals; or if you want to give your family the gift of wealth, talk to a buyers agent, and  allow them to do all the work for you.

Newcastle House Prices Increase, Interest Rates at Historic Low

Newcastle homeowners have begun to recoup some of their on-paper losses following a 0.6% increase in property prices in September 2019.

On the day the Reserve Bank of Australia slashed official interest rates to its lowest ever of 0.76%, CoreLogic released figures in October showing the house median price in Newcastle and Lake Macquarie increased to $543,000.

Apartment prices declined 1% following an increase of 0.7% in August 2019.

Beyond Newcastle, the rest of the Hunter area saw a 1% in median house values, to $433,000, following a 0.8% drop the month before. Unit values declined 0.2% to $334,000, or down 20% from their peak.

Across Australia, the market improved 0.9% in September, its highest monthly growth since March 2017 and its third successive month of increase, thanks mostly to a 1.7% monthly increase in Sydney and Melbourne.

Median values in Sydney and Melbourne have climbed over 3% during the winter months – July, August & September.

According to CoreLogic, population growth and the jobs market stayed more robust in NSW and Victoria compared to other states.

Other factors driving price increases are lower interest rates and better access to credit. There are indications that a lot of the larger regional hubs are beginning to mend with Geelong, Illawarra and of course our Newcastle-Lake Macquarie region.  All posting an increase in prices over the September quarter.

In other CoreLogic data, 6% of homes sold in Newcastle in the June quarter did so at a loss to sellers. The number of houses and units selling at a loss increased twofold in Newcastle over the year of June 30 and was at its peak since October 2013.

In the remainder of Hunter, the percentage of houses and homes that was sold at a loss in the June quarter was 7.1%.

To know more about your home and the market conditions of your suburb, call Annette for a free appraisal or a copy of her postcode report.