Scott Picken, CEO of International Property Solutions (IPS) believes a paradigm shift is occurring: 8 years ago, people would only invest in property in their own neighbourhood. Now, investors are starting to seek the best investments globally. IPS was created 5 years ago to facilitate international investments and provide an end-to-end solution to ensure that investors can invest with confidence!

Thursday, March 19, 2009

Lower rates helps kickstart Australian housing affordability

(Foreign) DEAKIN WEST (March 13) - The Real Estate Institute of Australia (REIA) has released the REIA/Deposit Power Housing Affordability Report; a comprehensive assessment of the ability of Australians to meet the cost of home purchase.

The report, released on March 6, notes a record change is evident for the December quarter in the proportion of family income required to meet mortgage repayments. This percentage of family income needed decreased nationally from 38,8% in the September quarter 2008 to 32,4% in the December quarter 2008.

“This is the largest quarterly change recorded by the REIA since calculations of this affordability measure were first made in 1995”, said REIA President, Noel Dyett.
Housing affordability nationally improved significantly during the December quarter 2008 as the result of a combination of interest rate reductions, Government incentives and a changing market.

“Our data shows that average Australian households were paying in excess of $300 a month less for their home loan at the end of December than they were three months earlier at the end of September. This is tremendous news for homeowners who struggled throughout most of 2008 with rising interest rates and increasing loan repayments”, continued Dyett.

The December quarter 2008 is also significant because it starts to reflect the impact the Boost to the First Home Owners Grant has had on first home buyer activity.
ABS data included in the Housing Affordability Report, indicates that the Boost to the First Home Owners Grant, coupled with lower interest rates, is having a positive effect on the housing market.

The number of first home buyers increased by over 25% from the September quarter to the December quarter 2008, but the percentage of first home buyers is still 3% less than for the December quarter 2007.

“Market statistics highlight that first homebuyers make up an increased proportion of the total homebuyer market – a sign that the Boost to the First Home Owners Grant is making new home purchases more realistic for those who may not have been in a position to buy 12 months ago”, said National Manager for Deposit Power, Keith Levy.

“Housing is an important sector of the Australian economy and consequently will play a key role in helping the nation try to avoid severe recession. That is why housing has featured so prominently in the two economic stimulus packages delivered by the Government to date”, concluded Dyett.

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