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Is 2016 the year for property in Ipswich?



Affordable house prices are driving a recovery in Ipswich as first-time buyers and investors take advantage of a market that has struggled since the 2011 floods.

Local agents are reporting an urgency from buyers not seen in recent years; sales volumes are up and days on the market are down.

Neil Mundy, agent at Ray White Ipswich, said this was so far the best year he’d had in 11 years as a real estate agent.

4 Birdwood Street, North Ipswich, is set to go to auction in August.

4 Birdwood Street, North Ipswich, is set to go to auction in August. Photo: Supplied

“The momentum is certainly back in the market. There’s a lot of people from either interstate or Brisbane who have realised what you can get for your money here … only 27 minutes from Brisbane,” he said.

“I recently listed a three-bedroom house at Eastern Heights for $450,000 – and sold it 90 minutes later for $450,000.”

LJ Hooker agent Richard Bird described Ipswich as a “sleeper” and predicted significant rises in house prices by the end of this year or mid-next year.

24 Frederick Street, Newtown is for sale for $569,000.

24 Frederick Street, Newtown is for sale for $569,000. Photo: Supplied

“I can remember when investors were pushing this much in 2006; that’s what it feels like now. There’s pressure in the market,” he said.

“I’m not going to say there’s a boom coming but I do think we’ll see significant increases by the end of the year.”

Ipswich is renowned for its abundance of beautiful period properties and according to Adam Horth, principal at Johnson Real Estate Ipswich, it’s these homes that many buyers are targeting.

20 Cranes Road, North Ipswich, is for sale for $349,000.

20 Cranes Road, North Ipswich, is for sale for $349,000. Photo: Supplied

“Anything pre-1960 is very popular – and that’s where the growth is. Suburbs like Newtown and Eastern Heights are selling hand over fist,” he said.

“Twelve months ago, a great value property would sit there for weeks on end. Now, a well-priced property gets sold within days.

“We’re really yet to see prices go up but our sales volumes are certainly up – and volume is always a sign that prices are on their way up.”

Domain Group data showed house prices in Ipswich had only moved by 0.1 per cent over the past 12 months and in the five years since the floods, by only 7 per cent. However, in suburbs such as Eastern Heights, prices have gone up by as much as 17.7 per cent.

RealWay principal Geoff Giles said most of his new activity was being driven by first-time buyers.

“Affordability is key. There seems to be a new wave of first homebuyers entering the market again and they’re most active in the $300,000 market. Anything over $400,000 they’re not interested,” he said.

But while the affordable house prices are drawing first time buyers to Ipswich, most are unable to touch properties that flooded in January 2011, even if they’re willing.

Mr Horth said because most of the affected suburbs were deemed to be a 1 in 25-year risk, the lender’s mortgage insurance companies would not lend to flood affected properties.

Lenders mortgage insurance (LMI) is often taken out by buyers who have less than a 20 per cent deposit.

“These limitations are really hindering the market because first homebuyers all love the flooded properties; they’re so affordable and they’re nearly brand new inside,” Mr Horth said.

“But if they’re looking at a $230,000 home, they have to have a $46,000 deposit. Buyers in Brisbane may be able to afford that but here in Ipswich, they often can’t.”

It’s made the property market recovery in Ipswich infinitely more difficult than in Brisbane, Mr Giles said.

“They’re still very difficult to sell. First homebuyers love them; they love the price point and they always want to buy them. When it comes to getting a loan though, they’re nine times out of 10 knocked back because of mortgage insurance,” he said.

“Also, the cost of insurance is often prohibitive. Someone who pays $250,000 for a house in Ipswich isn’t going to want to spend $6000 a year on insurance, whereas someone buying a multimillion-dollar riverfront home in Brisbane probably still will.

“It’s going to take a lot longer to recover than Brisbane yet.”

Original article published at by Ellen Lutton  01/8/16

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Experts warn of ‘debt bomb’ as housing downturn worsens



debt bomb
AUSTRALIA is facing a “debt crisis” — and the property market and our entire economy are at risk as a result.

That’s according to the sobering 60 Minutes segment Bricks and Slaughter which aired last night, revealing the country’s property downturn was just the tip of the iceberg.

According to reporter Tom Steinfort, the current slump is actually “more like falling off a cliff”, with a number of real estate and finance experts claiming houses could plummet in value by up to 40 per cent in the next 12 months.

If that happens, it would also cause an economic “catastrophe”.

Mr Steinfort spoke with data scientist Martin North from Digital Finance Analytics, who said Australia was uniquely vulnerable when it came to an economic crash tied to a property downturn.

“At the worst end of the spectrum, if everything turns against us we could see property prices 40-45 per cent down from their peaks, which is a huge deal,” he said.

“There’s $1.7 trillion held by the banks in mortgages for owner-occupies and investors. And that’s about 65 per cent of their total lending.

“That’s higher than any other country in the Western world by a long way.

“There’s probably no country in the world more susceptible to the ramifications of a housing crash than Australia. We are uniquely exposed at the moment.”

Mr North said Australia was now in the same position as the US was back in 2006 and 2007 — a position which triggered an economic collapse.

“As a society, and as a government, and as a regulatory system, we’re all banking on the home price engine that just goes on giving and giving and giving. It’s not going to,” he said.

“We’ve got a debt bomb, we’ve got a debt crisis and at some point it’s going to explode in our face.”

debt bomb

Melbourne homeowner Mohammed Souid told 60 Minutes his family was experiencing mortgage stress. Picture: 60 MinutesSource:Supplied

It’s a sentiment shared by Laing and Simmons real estate agent Peter Younan, who said the median house price in his patch in Granville in Sydney’s west had dropped from $1.2 million to $1 million in just one year — a shocking $200,000 plummet.

He said foreclosures had also risen by 600 per cent in the region.

“The mortgage stress is definitely being felt especially in this area,” he said.

60 Minutes also spoke with several Aussie homeowners who gave harrowing details of the stress they faced trying to pay off their mortgages, including having their power turned off and being “hounded’ by their banks.

What does a million dollars buy in Aussie capital cities?

debt bomb

Market analyst Louis Christopher of SQM Research said the market had been “clearly overvalued”, labelling the downturn as the “correction we had to have” — at least in Sydney and Melbourne.

“On our numbers, Sydney was effectively over 40 per cent overvalued. And Melbourne was overvalued by about the same amount,” he said.

But property investor Bushy Martin said the blame lay squarely at the feet of buyers who “mortgaged themselves up to their eyeballs” in a bid to snap up dream homes before being able to afford them.

debt bomb

Property investor Bushy Martin says homeowners are to blame for the crisis. Picture: 60 MinutesSource:Supplied

However, the segment has also sparked backlash online, with some claiming the situation had been exaggerated.

One Reddit user branded the report as an example of “alarmist journalism and scare tactics”, while another said it was “dramatic and cringe-worthy”.

Others also criticised the segment for making it seem like all homeowners would be affected, when the downturn was actually mainly focused in the NSW and Victorian capitals.

And some said it was unfair to blame the banks for the situation, and that homeowners needed to take responsibility for their own decisions.

That was in response to comments made by one homeowner on the program, who said the bank had “suddenly switched the mortgage to interest and principal”, raising his repayments by 57 per cent.

“The interest only part annoyed me the most. The bank didn’t ‘suddenly change’ your repayment from (interest only) to (Principal and interest) your IO term expired. You a) knew this would happen and b) assumed the bank would renew it when it expired. I hope this speculator gets burnt first,” one Reddit user said.

Related article: Experts warn of ‘debt bomb’ as housing downturn worsens


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Queensland is the next property hotspot, experts say



Queensland is the next property hotspot, experts say

As New South Wales and Victoria continue to experience weakness. Queensland is expected to take the lead, a National Australia Bank (NAB) poll of property professionals revealed.

According to the survey, industry experts project house prices in Queensland to increase by 0.7% next year and 1.3% in two years.

Some areas seen to perform strongly over the next year include Brisbane, Cairns, the Gold Coast, and the Sunshine Coast. Out of the suburbs, Coomera and New Farm are expected to realize robust gains.

Meanwhile, Queensland’s rental market is also poised to enjoy an upward boost, growing by 1.3% next year and 1.9% in two years. This is despite the stricter rules on housing investment.

The respondents of the survey also expect Queensland to retain foreign buyer interest. In fact, the share of foreign sales hit a four-year high of 22.8% over the previous quarter.

The results of the survey go against NAB’s own projection of the market. For instance, the bank expects house prices to remain flat in Brisbane over the next three years. Unit prices, on the other hand, is seen to fall by 4.5% over the next year.

NAB chief economist Alan Oster said Brisbane’s housing market seemed to be going sideways and its unit market still creates concern.

“It hasn’t peaked yet, so that’s good. We’re seeing quite strong economic activity in Queensland, so that always helps,” Oster said, as quoted by The Courier-Mail.


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Gold Coast house values record the biggest growth in Queensland



Gold Coast house values record the biggest growth in Queensland

The Gold Coast has recorded the strongest growth in house prices in Queensland over the past 12 months.

GOLD Coast house prices are leading the way in Queensland, up six per cent in the past 12 months to an average $620,000.

The latest figures by the Real Estate Institute of Queensland show homes on the Glitter Strip are $35,000 more on the same time last year.

Unit prices are up 1.9 per cent to $428,000.

Gold Coast house values record the biggest growth in Queensland
REIQ data reveals houses on the Glitter Strip are worth $35,000 on the same time last year.

REIQ’s Queensland Market Monitor for March said the strong population growth came on the back of infrastructure projects such as the $550 million Gold Coast Health and Knowledge Precinct and M1 upgrades.

“The property market has been one of the big winners from the sporting event as the $1.5 billion infrastructure investment has boosted confidence and demand for housing in the region,” the report stated.

“We expect house prices will show an upward path in 2018. However, this growth will most likely be more moderate.”

A quiet real estate period leading up to, and during, the Commonwealth Games likely contributed to a slight drop (-0.3 per cent) in the March quarterly median sales price, the report reveals.

Gold Coast house values record the biggest growth in Queensland
Andrew Henderson says a growing population and employment opportunities were contributing to a strong property market. Picture: Jerad Williams

REIQ Gold Coast zone chairman Andrew Henderson said he expected interstate migration to continue to benefit the city.

“I expect the market to remain strong,” he said.

“There is a heavy amount of interstate buyers moving here.

“I was at an auction recently where the winning bidder was from Sydney and the underbidder was from Melbourne.”

Mr Henderson said growing employment opportunities were also attracting homebuyers to the city.

Gold Coast house values record the biggest growth in Queensland
The Gold Coast property market is expected to remain strong.

“We have some of the best health facilities in the country and our universities are world recognised.

“Those two things alone complement the tourism industry and the lifestyle aspects that the Coast offers.”

The report found the fastest-selling suburbs on the Coast included Worongary, Merrimac, Highland Park, Mudgeeraba and Carrara.

It also revealed the rental vacancy held tight throughout the first quarter of the year at 1.1 per cent.

Gold Coast house values record the biggest growth in Queensland
Andrew Bell says the Coast had evolved from a tourist town into a vibrant city with an expanding economy. Picture Mike Batterham

Ray White Surfers Paradise Group CEO Andrew Bell said the Games heralded the next chapter for the Coast, as it evolved from a tourist town into a vibrant city with an expanding economy.

“The city’s property market is riding the irreversible momentum that has now come to the Gold Coast in terms of economic diversity and with more employment options we will need more housing options for people,” Mr Bell said.

“We are no longer going to be subject to tourism upsides and downsides as we were in the past because our economy has well and truly diversified beyond just tourism.”


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