the real estate bandwagon..everyone's joining in

  1. bbm
    2,264 Posts.
    From the AFR.

    Housing's endless boom
    Jul 17
    Robert Harley

    When he lost the final bid, the would-be buyer walked across the Woollahra street and drove off dejected. But the real drama was in the $3.91 million price.

    It was $760,000 more than the owner paid in March last year, and he had not spent a cent since then.

    The capital gain could happen only in Sydney, but similar stories of property profits are rolling in from around the country, confirming that the property boom is still going strong.

    A Brisbane investor who bought a townhouse on the Sunshine Coast's Peregian Beach last September for $350,000 has just been offered $600,000.

    And in Perth's Peppermint Grove, the boom has finally arrived. One 1,800 square metre block of land with no views has just sold for $1.8 million, compared with $765,000 five years ago.

    Clearly, the housing market has not stopped. But what is emerging is a sense that after a pause at the end of last year, prices are once again moving upwards, and the pace of growth is increasing.

    "The data is telling us that the housing market has rebounded," John Edwards, managing director of real estate statistician Residex, said.

    Across Australia, loans to owner-occupiers jumped in May and loans to investors soared by 12 per cent to a record $6.3 billion.

    "There are no signs of slowing in the housing sector," CommSec senior analyst Craig James said.

    And why? The Housing Industry Association's senior economist, Caroline Lemezina, said the traditional triggers of residential slowdown - rising interest rates, rising unemployment, and a large oversupply of dwellings - simply did not exist.

    The house price numbers for the June quarter are only just coming in, but the early figures have been stronger than many expected.

    On Residex's preliminary numbers - estimates of capital gain not medians - house price growth accelerated in the June quarter in both Sydney and Brisbane.

    In Brisbane, the figure was 5.4 per cent compared with 5.1 per cent in the March quarter. For Sydney, the figures are 1.93 per cent for the June quarter against 0.35 per cent in March.

    (Similar figures are not yet available for Melbourne.)

    In Adelaide, where prices have been rising almost as long as in Sydney and Melbourne, the median house price jumped another 10 per cent in the June quarter, according to the Real Estate Institute of South Australia.

    Tony White from the real estate office of Toop & Toop in the Adelaide suburb of Glenelg, would not be surprised. Two weeks ago he sold a 60-year-old, two-bedroom deceased estate in Plympton South for $279,000. When he first inspected the property earlier in the year, he thought $210,000 would be the mark.

    "At the moment we are enjoying a real lift," he said. "Valuers ring me and say the sales evidence does not support the price, but it is happening."

    In the Adelaide suburb of Westbourne Park, two small unrenovated bungalows have been sold in recent weeks by Toop & Toop Norwood for $340,000 and $347,000. Both have shown price growth of more than 80 per cent in the past year.

    The chairman of Ray White Real Estate, Brian White, said that on the June numbers, this winter would be the strongest the group had experienced.

    "In Queensland and Western Australia, June was the strongest month we have ever had - and we never set records in winter.

    "Everyone says that listings are short, but they are not as short as they have been in the past."

    In the Ray White heartland of Brisbane, one Queenslander in Welwyn Crescent, Coorparoo, bought two years ago for $507,000, has just been resold for $1.1 million.

    "I think it has kicked again," sales consultant Kay Smith of Ray White Coorparoo said.

    To a degree, Queensland, Western Australia and regional centres in NSW are in catch-up mode. They missed the boom for four years and the prices are moving fast and hard.

    Moreover, not everyone is enjoying such spectacular price increases. Some who have bought near-city apartments, particularly in inner Melbourne, have lost value.

    The real surprise is at the epicentre of the boom, in Sydney's eastern suburbs. If prices are rising again, they could, in the absence of interest-rate rises, set off another round of catch-up increases across the city and the country.

    It's not unlike filling a bucket of water again and watching the overflow slosh out across an already water-logged surround.

    Last September, with the nerves beginning to show about house prices, one waterfront home in Vaucluse was passed in for $4.65 million. In May it went to auction again and sold - this time for $4.95 million.

    The agent who sold the Woollahra home, the sales director of McGrath Residential, James Dack, said the property - a high-quality Tuscan townhouse but with no view - had been bought well last year.

    But he acknowledged that the market had become more aggressive - "had gained more momentum post-Iraq" - particularly because supply was short.

    It's a shift that Reserve Bank governor Ian Macfarlane will be watching very closely.

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