Super Saturday delivers strong clearance rates

THE national housing market went into overdrive on Saturday with the highest volume of auctions on a single day since 2010.

The biggest auction day of the year, known in the industry as Super Saturday, typically falls between the football grand finals and the Melbourne Cup.

More than 2400 properties went under the hammer over the weekend, resulting in high clearance rates and signalling a return of confidence to the market.

While the spring season normally generates higher sales, national president of the Real Estate Institute of Australia Pamela Bennett told The Australian that the results were evidence of underlying improvements in the market.

"This weekend is one of the best indicators that confidence is gaining momentum." Ms Bennett said the strong sales were driven by improving affordability and confidence after the Reserve Bank this month cut the cash rate to 3.25 per cent.

The clearance rate in Melbourne pressed up to 63.7 per cent from 48 per cent on the same week last year, according to Australian Property Monitors.

In Sydney, the rate was 67.4 per cent, up more than 12 per cent from the same week last year and about 6 per cent higher than the week before. Similarly, Adelaide gained strongly to 57.1 per cent from 40 per cent on the same week last year, although Brisbane dropped to 23.3 per cent against 30.4 per cent this time last year.

In Melbourne it was the fifth-consecutive week with clearances above 60 per cent and was described as "very strong" by Real Estate Institute of Victoria spokesman Robert Larocca.

"Since June, there has been an improving trend in the market and today shows that it is a very strong trend and wasn't simply a result of a lower volume of auctions compared to last year," Mr Larocca said.

"It shows that both vendors and buyers are clearly both more confident, and the market has been able to absorb this significant increase in homes."

Melbourne has always dominated Sydney in auction numbers but this year the gap has widened with the owners of upper-end properties in Sydney sitting on their hands.

In Sydney Super Saturday isn't as super as it used to be. Not only is the number of listings the lowest since the same day in 2008, it is also less than half of the number in the auction capital.

Source: http://www.dailytelegraph.com.au/realestate/buying/super-saturday-delivers-strong-clearance-rates/story-fndbpo91-1226505082459

Perth's real estate boom

Perth, the capital of Western Australia, is benefiting from one of the biggest mining bonanzas in Australia's history and housing prices there are set to boom.

Situated nearly as far from Singapore as it is from Sydney, Perth is the fourth-largest city in Australia with a population of 1.7 million. It has the highest population growth rate of all Australian capital cities as a result of the wealth from the mining boom in recent years.

The industrial expansion in China, the world's second-largest economy, is generating a huge demand for high-grade iron ore and Western Australia has more than 90 per cent of Australia's total identified resources, most of it in the north of the state.

Large-scale iron ore mining began in 2004 and, within two years, housing prices in Perth doubled. Since then, rents have been rising steadily as there is still a huge shortage of homes.

Perth's housing shortage is due to a lack of skilled construction workers. Mining companies offer high wages to entice builders, carpenters and other construction tradesmen away from Perth to move to Western Australia's northern mining towns and ports. As a result, not enough are left behind to build new dwellings that the city's rapidly growing population needs.

The people of Perth receive other benefits to compensate for the housing shortage - the royalties from iron ore exports flow through the entire community and make Perth the most affluent city in Australia.

Average incomes are the highest in the country and many of the international mining companies have offices in Perth which provide excellent employment prospects. Perth, the administrative centre for an area that covers nearly one third of the continent, has consistently achieved an unemployment rate lower than other Australian capital cities.

Rents in the mining boom towns and ports in the north are becoming prohibitive. No mining company wants to pay rental subsidies that can cost over a thousand dollars per employee weekly, so they construct temporary camps near their mines and fly the workers in and out at rostered changeovers. The mining families live in Perth while the companies subsidise their rent and pay the costs of flying workers to and from the mining towns and ports in the north. This practice is growing rapidly and rents have been rapidly rising in many of Perth's inner suburban areas as a result.

There are many reasons why Singaporeans should consider investing in Perth's housing market.

First, Australian housing prices had demonstrated resilience during the global credit crisis, surviving the sub-prime market crash without any fall in prices. Overall prices are now higher than they were before 2008. Second, Perth's housing shortage is becoming worse, leading to high price growth and rent increases of more than 10 per cent in the last year.

Third, the types of accommodation most sought after by renters in Perth are precisely those most suited to Singapore investors - new and off-the-plan units in desirable suburbs located near the airport, along the transport corridor to the CBD, along the Swan River and near the popular entertainment precincts of Perth.

Perth has the brightest future among the capital cities in Australia and property investors stand to reap the benefits.

John Lindeman is chief property consultant at Australian housing market consultancy, Property Power Partners. He is keynote speaker at the Australian Property Symposium 2012 to be held on June 23. For details, visit www.propertysymposium.com.

Source: http://www.todayonline.com/Business/Property/EDC120525-0000039/Perths-real-estate-boom