Google is rumoured to be in talks with British estate agents to add UK property listings to its maps service, according to a report in the Financial Times.
Such a move would increase the threat Google poses to property portals that was first created when the search engine launched a similar service for Australia in August. The UK version will reportedly launch in early 2010 and follow a similar model to the Australian site, which allows estate agents to list properties for free.
UK agent Douglas & Gordan has been in discussions with Google about the service and commercial director Ed Mead told the Financial Times: “It looks very simple. If it stays free, then Google has a massive winner on its hands as it will get the backing from estate agents currently paying for rival sites.”
Google has so far refused to comment.
Shares in the market leading UK portal Rightmove fell 9.6% after the Financial Times report was published Wednesday 2 December. However, Rightmoves's commercial director, Miles Shipside, downplayed the situation.
“As a pure search engine, Google’s offering would appear to differ to the full service we have established for our users and agents," he said. "This can be seen in the property site that Google have already launched in Australia.
“Google is pre-eminent as a way of searching for information. But when people know what they want and want to source see quality information clearly presented they turn to websites such as Amazon for books and CD’s, Ebay for auctioned collectibles, Autotrader for cars and Rightmove for property. There is no conflict between what these sites do and what Google does. Google have not launched a property portal in Australia. They have simply allowed properties to be searched on a map.”
This is what Scott Picken from IPS has to say - http://www.youtube.com/watch?v=4p6bP6Saf-g
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Sunday, December 13, 2009
Tuesday, December 8, 2009
Where will property be in 10 years?
IPS CEO Scott Picken decided to do something different and give his personal view on how and where property will look in 2019 (10 years time). Exploring things such as property becoming an international commodity, estate agents in their current capacity becoming extinct and how the internet is going to revolutionise the industry. Let's have some fun and look into the future!
http://www.youtube.com/watch?v=4p6bP6Saf-g
http://www.youtube.com/watch?v=4p6bP6Saf-g
Friday, December 4, 2009
IPS is looking for the best 3 Sales People in South Africa!
International Property Solutions (IPS) is looking for the best 3 sales people in South Africa. Please do not reply to this opportunity unless you are the best!
Although there are challenges in both the local and the international property markets, IPS has some fantastic and exciting opportunities and thus more demand than we can handle. Depending on your ability, the range you can earn:
• Average performer = R30 000 a month
• Great performer = over R200 000 a month or more!
Young or Old if you have the stuff we will know.
Location not a problem – ability is what we are looking for. Most importantly is the ability to work with High Networth Individuals and even better is if you have your own network!
Either Full time, or if you have your own company, we can become strategic partners!
If you are interested, please email to salesmen@ipsinvest.com. Please tell me why should we choose you & why you are the best?
We have our first International Training Academy of the year on the 16th and 17th of Feb 2010 and we are looking for the best to be part of this!
This is what you can expect:
Value to you – 10 Items which are vital to your future!
1. Ability to earn foreign income.
2. Ability for great cashflow.
3. Ability to grow your international business part time, while running your successful business.
4. Ability to provide real value to your clients and offer them a differentiated product which they want.
5. Ability to learn the latest trends in property. South Africa is directly affected by what is happening international and this will position you as a market leader when you can speak with you clients with experience about the global market and how it will affect them locally.
6. Ability to learn the latest techniques being used internationally to provide your client with the best service and therefore get the most profitable use of your time (make more sales).
7. Ability to learn the latest techniques and methods to get the maximum returns from your Internet, Google, your website, email and social networking strategies.
8. Ability to be part of an International Network which provides you with credibility, but also the benefit of using it for securing local mandates.
9. Ability to be part of the International Network where you will be able to benefit from the mutual partnerships, constant information sessions for your clients and quarterly and yearly events to keep you abreast with the latest international trends. This will ensure you remain the leader in your industry.
10. Ability to remain being the Number One Player in your market and take your business to the next level!
Key Benefits of the International Training Academy
Scott Picken, IPS CEO, is constantly travelling the world and attending courses to understand the latest trends and techniques. On his latest course in USA, there was an intensive 4 day course (60 hours and a cost of R150 000) from 12 of America’s Leading Businessman on how to deal with the current market, take advantage of it and grow your business by 300% in 2010! Scott wants to try and share everything he learnt and some of these are:
1. Vision – what do you ultimately want for your business?
2. What season are you in?
3. The life cycle of business – how to get to the next level?
4. Power of Strategic Innovation
5. 3 ways to grow your business
a. New methods for marketing in the 21st century
b. New ways to get clients to take action
6. Defining your business process
7. 12 skills of all great companies
8. Direction of Influence – the Rugby Field Communication Model
9. 7 steps for implementing everything in your business
a. RPM
b. Your master action plan to implement
Please also pass onto to anyone who you think would relish this opportunity.
I look forward to working with the best.
Scott Picken
IPS CEO
Although there are challenges in both the local and the international property markets, IPS has some fantastic and exciting opportunities and thus more demand than we can handle. Depending on your ability, the range you can earn:
• Average performer = R30 000 a month
• Great performer = over R200 000 a month or more!
Young or Old if you have the stuff we will know.
Location not a problem – ability is what we are looking for. Most importantly is the ability to work with High Networth Individuals and even better is if you have your own network!
Either Full time, or if you have your own company, we can become strategic partners!
If you are interested, please email to salesmen@ipsinvest.com. Please tell me why should we choose you & why you are the best?
We have our first International Training Academy of the year on the 16th and 17th of Feb 2010 and we are looking for the best to be part of this!
This is what you can expect:
Value to you – 10 Items which are vital to your future!
1. Ability to earn foreign income.
2. Ability for great cashflow.
3. Ability to grow your international business part time, while running your successful business.
4. Ability to provide real value to your clients and offer them a differentiated product which they want.
5. Ability to learn the latest trends in property. South Africa is directly affected by what is happening international and this will position you as a market leader when you can speak with you clients with experience about the global market and how it will affect them locally.
6. Ability to learn the latest techniques being used internationally to provide your client with the best service and therefore get the most profitable use of your time (make more sales).
7. Ability to learn the latest techniques and methods to get the maximum returns from your Internet, Google, your website, email and social networking strategies.
8. Ability to be part of an International Network which provides you with credibility, but also the benefit of using it for securing local mandates.
9. Ability to be part of the International Network where you will be able to benefit from the mutual partnerships, constant information sessions for your clients and quarterly and yearly events to keep you abreast with the latest international trends. This will ensure you remain the leader in your industry.
10. Ability to remain being the Number One Player in your market and take your business to the next level!
Key Benefits of the International Training Academy
Scott Picken, IPS CEO, is constantly travelling the world and attending courses to understand the latest trends and techniques. On his latest course in USA, there was an intensive 4 day course (60 hours and a cost of R150 000) from 12 of America’s Leading Businessman on how to deal with the current market, take advantage of it and grow your business by 300% in 2010! Scott wants to try and share everything he learnt and some of these are:
1. Vision – what do you ultimately want for your business?
2. What season are you in?
3. The life cycle of business – how to get to the next level?
4. Power of Strategic Innovation
5. 3 ways to grow your business
a. New methods for marketing in the 21st century
b. New ways to get clients to take action
6. Defining your business process
7. 12 skills of all great companies
8. Direction of Influence – the Rugby Field Communication Model
9. 7 steps for implementing everything in your business
a. RPM
b. Your master action plan to implement
Please also pass onto to anyone who you think would relish this opportunity.
I look forward to working with the best.
Scott Picken
IPS CEO
IPS Challenge - Sponsor a Child & Teacher for 2010!
IPS is setting a challenge to the entire IPS Community to raise R32 000 and this will enable us to sponsor both a child and a teacher in 2010. Education will determine the future of South Africa and we believe passionately that it is time to give back, be thankful for everything there is in South Africa and try and help mould a better future!
Scott Picken, IPS CEO says, "I love the saying - 'For every school door that opens, a prison door closes' - it epitomizes South Africa. If we want to sort out crime and the future of the country, we need to focus on education and this is a fantastic opportunity.
There are two charities we support:
• TREE which trains teachers in Early Childhood Education. Basically you learn 85% of your knowledge before the age of 6 and yet government spends less than 1% of the Education budget on this sector. They aim to train teachers and facilitate the training of teachers to make sure that South Africa’s children get the right start! - (www.tree-ecd.co.za) Click here to watch a video!
• Leisure Trust – they screen children from disadvantage backgrounds and find children with potential. They then offer them the opportunity to go to the Model C schools like Rondebosch, SACs or Wynberg Girls for High School. Want an opportunity to give a child the best start in Life! - (www.leisuregroup.co.za/education.html)
Scott says, “For now I want to be thankful for everything we have and give back. I want to raise a Challenge to the IPS Community - We would like to continue to contribute to this amazing country we have and so our aim is to sponsor One Teacher and One Child in 2010!”
• R18 000 per teacher to be trained - (www.tree-ecd.co.za)
• R14 000 per child per year - (www.leisuregroup.co.za/education.html)
"For every school door that opens, a prison door closes!"
Kelly, my fiancé, and I will be personally sponsoring a Child for 2010. What can you do? Please email me if there is anything you can do to help us reach the IPS Challenge target – scott@ipsinvest.com
Thanks, have a great Christmas and New Years and celebrate everything there is about South Africa!
Scott Picken
IPS CEO
Scott Picken, IPS CEO says, "I love the saying - 'For every school door that opens, a prison door closes' - it epitomizes South Africa. If we want to sort out crime and the future of the country, we need to focus on education and this is a fantastic opportunity.
There are two charities we support:
• TREE which trains teachers in Early Childhood Education. Basically you learn 85% of your knowledge before the age of 6 and yet government spends less than 1% of the Education budget on this sector. They aim to train teachers and facilitate the training of teachers to make sure that South Africa’s children get the right start! - (www.tree-ecd.co.za) Click here to watch a video!
• Leisure Trust – they screen children from disadvantage backgrounds and find children with potential. They then offer them the opportunity to go to the Model C schools like Rondebosch, SACs or Wynberg Girls for High School. Want an opportunity to give a child the best start in Life! - (www.leisuregroup.co.za/education.html)
Scott says, “For now I want to be thankful for everything we have and give back. I want to raise a Challenge to the IPS Community - We would like to continue to contribute to this amazing country we have and so our aim is to sponsor One Teacher and One Child in 2010!”
• R18 000 per teacher to be trained - (www.tree-ecd.co.za)
• R14 000 per child per year - (www.leisuregroup.co.za/education.html)
"For every school door that opens, a prison door closes!"
Kelly, my fiancé, and I will be personally sponsoring a Child for 2010. What can you do? Please email me if there is anything you can do to help us reach the IPS Challenge target – scott@ipsinvest.com
Thanks, have a great Christmas and New Years and celebrate everything there is about South Africa!
Scott Picken
IPS CEO
Aus Property grows 10% in 2009!
Australian House Prices Rise Strongly in October after Sluggish September
30 November 2009
RP Data – Rismark Home Value Index Release
Australian House Prices Rise Strongly in October after Sluggish September…
Australia’s growth in home values rebounded in the month of October increasing by 1.4 per cent after a relatively flat September.
Based on the rpdata.com residential property database, which is the nation’s largest with over 226,000 sales in the first nine months of 2009 alone, Australia’s housing market bounced back strongly in the month of October after little growth in September.*
According to the market-leading RP Data-Rismark National Capital City Hedonic Index—which is published by the RBA in the Statement on Monetary Policy—Australian home values rose by an indicative 1.4 per cent in the month of October after just 0.4 per cent growth in September.**
Over the first ten months of 2009, Australian home values have now risen by 10 per cent following on from their 3.8 per cent peak-to-trough falls in 2008.
According to rpdata.com’s Senior Research Analyst, Cameron Kusher, “the strong growth figures throughout October after a slowdown during September show that the market is very resilient and that the 25 basis point interest rate increase during the month has not immediately impacted market.”
Rismark International Managing Director Christopher Joye said, “Although we forecast a resilient recovery in 2009, we have been surprised on the upside by the strength of conditions, which reflects Australia’s better-than-expected employment and growth outcomes. We project that as mortgage rates normalise capital growth rates will fall back to more subdued levels.”
Cameron Kusher said the likeliness of further interest rate rises over the next 12 to 18 months is likely to result in more normal growth conditions over 2010.
“As interest rates rise over the next 12 to 18 months more normal rates of growth are likely. The removal of the First Home Buyers Grant Boost and higher loan costs are will also result in greater pressure on the rental market,” he said.
Christopher Joye commented, “According to our analysis of all home sales in Australia, which we have privately shared with the RBA, the median Australian home value is only four times average disposable household incomes. This is inconsistent with claims that Australian dwelling prices are 6-8 times household incomes. People forget that 40 per cent of the housing stock is not located in the capital cities.”
“This data implies that Australian housing is not expensive by overseas standards, and also helps explain our internationally high rates of home ownership combined with very low mortgage default rates.”
“One question exercising people’s minds is the impact of higher interest rates. The RBA has pointed out that when they cut mortgage rates by 40 per cent in the second half of 2008 most borrowers did not actually reduce their repayments. The RBA suggested that this means that borrowers should be able to absorb future rate hikes as mortgage costs normalise,” he said.
When we divide the patented RP Data-Rismark Index up into the cheapest 20 per cent of suburbs ranked by price, the middle 60 per cent of suburbs, and the most expensive 20 per cent of suburbs (see chart), we see that contrary to popular belief the least expensive areas (+8.5 per cent) have significantly underperformed the luxury markets (+11.9 per cent) in the year-to-date. This reverses out the trend in 2008, when the cheapest areas fared the best while the luxury markets performed worst.
In the month of October homes values rose in every single mainland capital city except Darwin (-0.5 per cent), which is unsurprising given it has already experienced 12.7 per cent growth in the year-to-date.
Cameron Kusher commented, “Darwin has had a tremendous run over the last 18 to 24 months seemingly unaffected by the Global Financial Crisis. With values now similar to those recorded in Melbourne an eventual slowdown in growth was inevitable. From an investment perspective the city remains extremely attractive due to the impressive yields. Any slowdown in value growth is likely to have a further positive impact on yields.”
The biggest story of 2009 has been the strong recovery in the Melbourne and Sydney housing markets. In the three months to end October, home values in Melbourne and Sydney have outperformed most other capitals rising by 4.5 per cent and 3.2 per cent, respectively (see attached summary tables for more).
Over the year-to-date, Melbourne has been Australia’s best performing capital city, delivering capital gains of +14.9 per cent. Sydney is up by nearly 1 per cent per month with cumulative growth of 9.9 per cent. In the first 10 months of 2009, most of the other capital cities have performed strongly with Darwin (+12.7 per cent) leading the way, followed by Canberra (+11.0 per cent), Brisbane (+6.9 per cent), Perth (+6.1 per cent) and Adelaide (+4.6 per cent).
The RP Data-Rismark National Home Value Index results show that in the month of October, detached houses (+1.5 per cent) have once again shaded units (+1.1 per cent).
Over the three months to end October, house values (+3.3 per cent) have also outperformed units (+3.0 per cent). But in the year-to-date, units (+10.4 per cent) have generated slightly higher capital gains than houses (+9.8 per cent).
Mr. Joye said that the greater rate of growth for units over the year is likely due to the fact that in the first half of the year there was strong unit demand driven by first time buyers.
In the RBA’s October Board Minutes, the Bank noted:
“[M]any households with home loans had not sought to lower their monthly payments when mortgage rates had fallen and had instead paid down their loan balances ahead of schedule. This would reduce the vulnerability of that part of the household sector to rising mortgage rates.”
In a speech last week, the RBA’s Deputy Governor reiterated concerns that we have previously raised about international interpretations of house-price-to-income ratios. He commented:
“International comparisons of the relativity between house prices and income have been the subject of considerable research over the years. One of the complications faced by people working on this topic is to ensure consistency in the data that underlie the comparisons. Do the figures relate to capital city prices, or the prices across the whole country? Do they cover all dwellings or just detached houses? Is income measured as average weekly earnings or average household income? It is not always possible to get entirely consistent data across countries, so we need to be careful in interpreting the results of these comparisons.”
Based on RP Data-Rismark estimates, Australia’s national dwelling price-to-income ratio of 4x is a bit higher than the US metric of 3x, which is lower than most developed economy peers. Here the Deputy Governor of the RBA offered an explanation for the differences:
“There are a couple of reasons why Australian households seem to be able to sustain a higher ratio of house prices to incomes. First, Australians seem to spend less of their income on non-housing consumption than is the case for US households, with a significant part of this difference explained by lower health costs in Australia. Australian households therefore have greater capacity to service housing loans. Second, the level of gearing in the United States housing market is noticeably higher than in Australia. This may reflect the fact that Australian households are more active in paying down their loans after buying a home, possibly because owner-occupied mortgage interest rates are not tax deductible here as they are in the United States. The faster pay-down of mortgage debt in Australia reduces the risk of borrowers subsequently getting into financial difficulty. Overall, the experience of the last few years suggests that the Australian household sector as a whole appears to have the financial capacity to sustain a relatively high ratio of housing prices to income.”
On the subject of whether Australian housing is unduly expensive, the IMF commented in its October 2009 World Economic Outlook Report: “In the case of Australia, if the impact of long-term migration on housing demand is taken into account, the results do not produce evidence of a significant overvaluation of house prices.” The IMF also concludes that: “If past is prologue, these estimates suggest that…the [housing market] corrections in Australia and the United States are close to complete…”
In a recent presentation to the Melbourne Institute Rismark’s CEO examined IMF’s estimates of changes in real house price-to-income ratios from 13 OECD countries including Australia over the period 1997 to end 2008. It is noteworthy that the more recent period arguably disadvantages Australia since home values here fell only modestly in 2008 whereas they suffered precipitous falls elsewhere. On the basis of this benchmark, changes in Australian housing costs over time have been demonstrably ‘middle-of-the-road’. More precisely, between 1997 and 2008 Australia’s house price-to-income growth was lower than the following peers:
* The UK;
* France;
* Sweden;
* Spain;
* The Netherlands; and
* Ireland.
Australia’s house price-to-income growth between 1997 and 2008 was only slightly higher than that which was realised in Italy, New Zealand and Norway. (The two clear international laggards were Canada and the US.)
IPS has some great opportunities in Australia with a 10 year leaseback. Go to www.ipsinvest.com for more information.
*RP Data-Rismark’s previous “indicative” estimate for the month of September of +0.1 per cent has revised up to +0.39 per cent based on the latest data.
** In any given month the indicative index results will usually represent around one third to one half of the total population of sales transactions that are executed in the residential property market. RP Data ultimately collects roughly 100 per cent of all property sales via its licence agreements with every State and Territory Government Valuer General and Land Titles Office. These data
30 November 2009
RP Data – Rismark Home Value Index Release
Australian House Prices Rise Strongly in October after Sluggish September…
Australia’s growth in home values rebounded in the month of October increasing by 1.4 per cent after a relatively flat September.
Based on the rpdata.com residential property database, which is the nation’s largest with over 226,000 sales in the first nine months of 2009 alone, Australia’s housing market bounced back strongly in the month of October after little growth in September.*
According to the market-leading RP Data-Rismark National Capital City Hedonic Index—which is published by the RBA in the Statement on Monetary Policy—Australian home values rose by an indicative 1.4 per cent in the month of October after just 0.4 per cent growth in September.**
Over the first ten months of 2009, Australian home values have now risen by 10 per cent following on from their 3.8 per cent peak-to-trough falls in 2008.
According to rpdata.com’s Senior Research Analyst, Cameron Kusher, “the strong growth figures throughout October after a slowdown during September show that the market is very resilient and that the 25 basis point interest rate increase during the month has not immediately impacted market.”
Rismark International Managing Director Christopher Joye said, “Although we forecast a resilient recovery in 2009, we have been surprised on the upside by the strength of conditions, which reflects Australia’s better-than-expected employment and growth outcomes. We project that as mortgage rates normalise capital growth rates will fall back to more subdued levels.”
Cameron Kusher said the likeliness of further interest rate rises over the next 12 to 18 months is likely to result in more normal growth conditions over 2010.
“As interest rates rise over the next 12 to 18 months more normal rates of growth are likely. The removal of the First Home Buyers Grant Boost and higher loan costs are will also result in greater pressure on the rental market,” he said.
Christopher Joye commented, “According to our analysis of all home sales in Australia, which we have privately shared with the RBA, the median Australian home value is only four times average disposable household incomes. This is inconsistent with claims that Australian dwelling prices are 6-8 times household incomes. People forget that 40 per cent of the housing stock is not located in the capital cities.”
“This data implies that Australian housing is not expensive by overseas standards, and also helps explain our internationally high rates of home ownership combined with very low mortgage default rates.”
“One question exercising people’s minds is the impact of higher interest rates. The RBA has pointed out that when they cut mortgage rates by 40 per cent in the second half of 2008 most borrowers did not actually reduce their repayments. The RBA suggested that this means that borrowers should be able to absorb future rate hikes as mortgage costs normalise,” he said.
When we divide the patented RP Data-Rismark Index up into the cheapest 20 per cent of suburbs ranked by price, the middle 60 per cent of suburbs, and the most expensive 20 per cent of suburbs (see chart), we see that contrary to popular belief the least expensive areas (+8.5 per cent) have significantly underperformed the luxury markets (+11.9 per cent) in the year-to-date. This reverses out the trend in 2008, when the cheapest areas fared the best while the luxury markets performed worst.
In the month of October homes values rose in every single mainland capital city except Darwin (-0.5 per cent), which is unsurprising given it has already experienced 12.7 per cent growth in the year-to-date.
Cameron Kusher commented, “Darwin has had a tremendous run over the last 18 to 24 months seemingly unaffected by the Global Financial Crisis. With values now similar to those recorded in Melbourne an eventual slowdown in growth was inevitable. From an investment perspective the city remains extremely attractive due to the impressive yields. Any slowdown in value growth is likely to have a further positive impact on yields.”
The biggest story of 2009 has been the strong recovery in the Melbourne and Sydney housing markets. In the three months to end October, home values in Melbourne and Sydney have outperformed most other capitals rising by 4.5 per cent and 3.2 per cent, respectively (see attached summary tables for more).
Over the year-to-date, Melbourne has been Australia’s best performing capital city, delivering capital gains of +14.9 per cent. Sydney is up by nearly 1 per cent per month with cumulative growth of 9.9 per cent. In the first 10 months of 2009, most of the other capital cities have performed strongly with Darwin (+12.7 per cent) leading the way, followed by Canberra (+11.0 per cent), Brisbane (+6.9 per cent), Perth (+6.1 per cent) and Adelaide (+4.6 per cent).
The RP Data-Rismark National Home Value Index results show that in the month of October, detached houses (+1.5 per cent) have once again shaded units (+1.1 per cent).
Over the three months to end October, house values (+3.3 per cent) have also outperformed units (+3.0 per cent). But in the year-to-date, units (+10.4 per cent) have generated slightly higher capital gains than houses (+9.8 per cent).
Mr. Joye said that the greater rate of growth for units over the year is likely due to the fact that in the first half of the year there was strong unit demand driven by first time buyers.
In the RBA’s October Board Minutes, the Bank noted:
“[M]any households with home loans had not sought to lower their monthly payments when mortgage rates had fallen and had instead paid down their loan balances ahead of schedule. This would reduce the vulnerability of that part of the household sector to rising mortgage rates.”
In a speech last week, the RBA’s Deputy Governor reiterated concerns that we have previously raised about international interpretations of house-price-to-income ratios. He commented:
“International comparisons of the relativity between house prices and income have been the subject of considerable research over the years. One of the complications faced by people working on this topic is to ensure consistency in the data that underlie the comparisons. Do the figures relate to capital city prices, or the prices across the whole country? Do they cover all dwellings or just detached houses? Is income measured as average weekly earnings or average household income? It is not always possible to get entirely consistent data across countries, so we need to be careful in interpreting the results of these comparisons.”
Based on RP Data-Rismark estimates, Australia’s national dwelling price-to-income ratio of 4x is a bit higher than the US metric of 3x, which is lower than most developed economy peers. Here the Deputy Governor of the RBA offered an explanation for the differences:
“There are a couple of reasons why Australian households seem to be able to sustain a higher ratio of house prices to incomes. First, Australians seem to spend less of their income on non-housing consumption than is the case for US households, with a significant part of this difference explained by lower health costs in Australia. Australian households therefore have greater capacity to service housing loans. Second, the level of gearing in the United States housing market is noticeably higher than in Australia. This may reflect the fact that Australian households are more active in paying down their loans after buying a home, possibly because owner-occupied mortgage interest rates are not tax deductible here as they are in the United States. The faster pay-down of mortgage debt in Australia reduces the risk of borrowers subsequently getting into financial difficulty. Overall, the experience of the last few years suggests that the Australian household sector as a whole appears to have the financial capacity to sustain a relatively high ratio of housing prices to income.”
On the subject of whether Australian housing is unduly expensive, the IMF commented in its October 2009 World Economic Outlook Report: “In the case of Australia, if the impact of long-term migration on housing demand is taken into account, the results do not produce evidence of a significant overvaluation of house prices.” The IMF also concludes that: “If past is prologue, these estimates suggest that…the [housing market] corrections in Australia and the United States are close to complete…”
In a recent presentation to the Melbourne Institute Rismark’s CEO examined IMF’s estimates of changes in real house price-to-income ratios from 13 OECD countries including Australia over the period 1997 to end 2008. It is noteworthy that the more recent period arguably disadvantages Australia since home values here fell only modestly in 2008 whereas they suffered precipitous falls elsewhere. On the basis of this benchmark, changes in Australian housing costs over time have been demonstrably ‘middle-of-the-road’. More precisely, between 1997 and 2008 Australia’s house price-to-income growth was lower than the following peers:
* The UK;
* France;
* Sweden;
* Spain;
* The Netherlands; and
* Ireland.
Australia’s house price-to-income growth between 1997 and 2008 was only slightly higher than that which was realised in Italy, New Zealand and Norway. (The two clear international laggards were Canada and the US.)
IPS has some great opportunities in Australia with a 10 year leaseback. Go to www.ipsinvest.com for more information.
*RP Data-Rismark’s previous “indicative” estimate for the month of September of +0.1 per cent has revised up to +0.39 per cent based on the latest data.
** In any given month the indicative index results will usually represent around one third to one half of the total population of sales transactions that are executed in the residential property market. RP Data ultimately collects roughly 100 per cent of all property sales via its licence agreements with every State and Territory Government Valuer General and Land Titles Office. These data
Wednesday, December 2, 2009
UK House Price rises - Nationwide
House prices edge up further in November
• House prices rose by 0.5% in November, the same rate as in October
• Year-on-year house price inflation increased from 2.0% to 2.7%
• Labour market has so far held up better than expected
Commenting on the figures Martin Gahbauer, Nationwide's Chief Economist, said:
“The monthly rate of house price inflation was unchanged in November at a seasonally adjusted 0.5%, leaving the average price of a typical property 2.7% higher than a year earlier. At £162,764, the average house price is at a similar level to where it was in early 2006. The 3 month on 3 month rate of change – generally a smoother indicator of the near term trend – dropped to 2.8% from 3.5% in October and 3.8%
in September. This suggests that house prices are now rising at a more moderate pace than in the spring and summer months, when they experienced a very strong bounce from the early 2009 lows.
Labour market has held up better than expected but uncertainties remain “The outlook for the housing market remains crucially dependent on labour market conditions, and here recent developments have been somewhat more encouraging than might have been expected. With the UK experiencing its longest and deepest recession since WWII, most economists expected unemployment to increase very sharply in 2009, perhaps breaching the psychologically important three million mark by the end of the year. While unemployment has indeed increased noticeably, the rise has not been as rapid
and pronounced as previously feared. Based on the latest labour market figures from September, it now looks unlikely that the jobless total will reach three million before the year is up.
“Part of the explanation for why unemployment has not risen to the levels implied by the recession’s depth is that in many cases employers have opted to reduce working hours and pay rather than make employees redundant. This is reflected in rising part-time employment at the expense of full-time employment (chart 1) and record low growth in average earnings (chart 2). The strategy of cutting hours and pay rather than headcount probably reflects a fear among many employers that they could find
themselves short of labour when the economy recovers, thus leaving them less competitive in the longer term. Whether this strategy is sustainable will depend on how quickly the economy recovers. If output is too slow to recover, then firms may find it necessary to reduce their payrolls further in order to improve productivity and profitability. Another reason to remain cautious about the future outlook for employment is that the public sector has not yet experienced any significant job losses, but presumably will begin to do so when fiscal policy is tightened from next year onwards.
“Despite continued uncertainties about the future, the better than expected performance of the labour market has probably contributed to the surprise
rebound in house prices this year. Even though workers who have been forced
from full-time employment into part-time work will have experienced a reduction in
income, the impact has been less severe than it would have been if they had lost
their jobs completely. Together with the fact that mortgage rates have fallen
sharply as a result of base rate cuts, this has meant that far fewer borrowers have
fallen into arrears than would normally be the case in such a deep recession. In fact, the percentage of borrowers in arrears across the mortgage industry has even edged down slightly in the most recent quarterly figures (chart 3). As such, the
downward pressure on house prices from distressed sales has so far been ignificantly lower than expected.”
• House prices rose by 0.5% in November, the same rate as in October
• Year-on-year house price inflation increased from 2.0% to 2.7%
• Labour market has so far held up better than expected
Commenting on the figures Martin Gahbauer, Nationwide's Chief Economist, said:
“The monthly rate of house price inflation was unchanged in November at a seasonally adjusted 0.5%, leaving the average price of a typical property 2.7% higher than a year earlier. At £162,764, the average house price is at a similar level to where it was in early 2006. The 3 month on 3 month rate of change – generally a smoother indicator of the near term trend – dropped to 2.8% from 3.5% in October and 3.8%
in September. This suggests that house prices are now rising at a more moderate pace than in the spring and summer months, when they experienced a very strong bounce from the early 2009 lows.
Labour market has held up better than expected but uncertainties remain “The outlook for the housing market remains crucially dependent on labour market conditions, and here recent developments have been somewhat more encouraging than might have been expected. With the UK experiencing its longest and deepest recession since WWII, most economists expected unemployment to increase very sharply in 2009, perhaps breaching the psychologically important three million mark by the end of the year. While unemployment has indeed increased noticeably, the rise has not been as rapid
and pronounced as previously feared. Based on the latest labour market figures from September, it now looks unlikely that the jobless total will reach three million before the year is up.
“Part of the explanation for why unemployment has not risen to the levels implied by the recession’s depth is that in many cases employers have opted to reduce working hours and pay rather than make employees redundant. This is reflected in rising part-time employment at the expense of full-time employment (chart 1) and record low growth in average earnings (chart 2). The strategy of cutting hours and pay rather than headcount probably reflects a fear among many employers that they could find
themselves short of labour when the economy recovers, thus leaving them less competitive in the longer term. Whether this strategy is sustainable will depend on how quickly the economy recovers. If output is too slow to recover, then firms may find it necessary to reduce their payrolls further in order to improve productivity and profitability. Another reason to remain cautious about the future outlook for employment is that the public sector has not yet experienced any significant job losses, but presumably will begin to do so when fiscal policy is tightened from next year onwards.
“Despite continued uncertainties about the future, the better than expected performance of the labour market has probably contributed to the surprise
rebound in house prices this year. Even though workers who have been forced
from full-time employment into part-time work will have experienced a reduction in
income, the impact has been less severe than it would have been if they had lost
their jobs completely. Together with the fact that mortgage rates have fallen
sharply as a result of base rate cuts, this has meant that far fewer borrowers have
fallen into arrears than would normally be the case in such a deep recession. In fact, the percentage of borrowers in arrears across the mortgage industry has even edged down slightly in the most recent quarterly figures (chart 3). As such, the
downward pressure on house prices from distressed sales has so far been ignificantly lower than expected.”
UK House prices in October rose by 0.7%
House prices in October rose by 0.7%
The average price of all residential property transactions completed in England & Wales in October 2009 was 0.7% higher than in September. This is the sixth month in succession in which FTHPI has recorded positive, though modest, growth in the prices at which homes were sold.
Prices are now just 2.4% lower than a year ago
On an annual basis, the average price of all residential property transactions in England & Wales in October is 2.4% lower than a year ago. The trough in the house price decline, on an annual basis, was reached in April 2009 at minus 13.3%.
Q3 Housing transactions are higher than the same quarter in 2008
To date there were 166,319 housing transactions recorded by the Land Registry for third quarter (Q3) 2009, a 12.9% increase over Q3 2008. The Q3 2009 total is however 46% lower than the 10 year average for the period 2000–2009.
Dr Peter Williams, Chairman of Acadametrics said “The average price of a home has continued to rise modestly and, at £208,401, is back to where it was in September 2006. “The monthly price rise of 0.7% contrasts markedly with the 1.8% price drop recorded for October 2008. The data clearly support the view that the sharpest falls are now behind us and that the market has made a modest recovery, even if it is too early to talk of a sustained upturn.”
Dr Peter Williams, Chairman of Acadametrics, comments, “The average price of a home in England & Wales is now £208,401. At this level, it is still down £23,401 from its peak in February 2008 of £231,802 but clearly prices have stabilised and some of the more damaging outcomes of house price falls - losses on sales, negative equity and reduced mobility - are beginning to diminish. This is encouraging given the scale of the downturn over the last 18 months. Clearly affordability has improved marginally as has mortgage supply, but the market remains weak.
“The other main feature of the current slow recovery in sales transactions is that there is a clear split in the rate of recovery between property types. In Q3 2009 the sale of detached and semi-detached houses has increased by 33.2% and 21.0% respectively over Q3 2008 levels. This contrasts markedly with the Q3 2009 sale of flats which are 11.4% down on the same quarter in 2008.
“This divergence in recovery rates between the sale of detached properties and flats and terraces applies to the whole of England and Wales, irrespective of region. The current “weak” sector in the market would thus appear to be the sale of flats. These are traditionally associated with „First Time Buyers‟ and the „Buy to Let‟ market, with both having been impacted by the limited supply of mortgages and tighter loan terms.”
“As we move into the last months of the year, we must now consider what might happen in 2010. Current prices are being reported on the basis of limited transaction numbers which are substantially down from long term averages. The lack of homes on the market is creating competition amongst buyers (with the added stimulus of the stamp duty holiday). As listings increase and more supply comes to market we might expect this to affect the prices being achieved. Taken together with continuing unemployment/underemployment, a still partly faltering economy and possible interest rate rises later in 2010, we might well see prices stabilise or even fall during the coming year. This may further discourage some owners from putting their homes on the market, thus contributing to a continuing „thin‟ market. Indeed with a General Election in the next few months leading to uncertainty around HIPS and taxation, a probable peak in arrears and possessions, albeit at a relatively low base, and mortgage supply remaining constrained there are many reasons to expect a muted market in 2010.”
HOUSING TRANSACTIONS
“In terms of transactions the table below shows that the recovery in sales transactions is not uniform across England & Wales. The three northernmost regions in England are showing negative growth in terms of Q3 2009 sales compared to Q3 2008, with the volume of transactions being less than half of the 10 year average for Q3 2000–2009. The region with the highest recovery in sales is the South West, where transactions in Q3 have increased by 31.0% over Q3 2008, although even here the level of sales in Q3 2009 is only 63% of the 10 year average.
The average price of all residential property transactions completed in England & Wales in October 2009 was 0.7% higher than in September. This is the sixth month in succession in which FTHPI has recorded positive, though modest, growth in the prices at which homes were sold.
Prices are now just 2.4% lower than a year ago
On an annual basis, the average price of all residential property transactions in England & Wales in October is 2.4% lower than a year ago. The trough in the house price decline, on an annual basis, was reached in April 2009 at minus 13.3%.
Q3 Housing transactions are higher than the same quarter in 2008
To date there were 166,319 housing transactions recorded by the Land Registry for third quarter (Q3) 2009, a 12.9% increase over Q3 2008. The Q3 2009 total is however 46% lower than the 10 year average for the period 2000–2009.
Dr Peter Williams, Chairman of Acadametrics said “The average price of a home has continued to rise modestly and, at £208,401, is back to where it was in September 2006. “The monthly price rise of 0.7% contrasts markedly with the 1.8% price drop recorded for October 2008. The data clearly support the view that the sharpest falls are now behind us and that the market has made a modest recovery, even if it is too early to talk of a sustained upturn.”
Dr Peter Williams, Chairman of Acadametrics, comments, “The average price of a home in England & Wales is now £208,401. At this level, it is still down £23,401 from its peak in February 2008 of £231,802 but clearly prices have stabilised and some of the more damaging outcomes of house price falls - losses on sales, negative equity and reduced mobility - are beginning to diminish. This is encouraging given the scale of the downturn over the last 18 months. Clearly affordability has improved marginally as has mortgage supply, but the market remains weak.
“The other main feature of the current slow recovery in sales transactions is that there is a clear split in the rate of recovery between property types. In Q3 2009 the sale of detached and semi-detached houses has increased by 33.2% and 21.0% respectively over Q3 2008 levels. This contrasts markedly with the Q3 2009 sale of flats which are 11.4% down on the same quarter in 2008.
“This divergence in recovery rates between the sale of detached properties and flats and terraces applies to the whole of England and Wales, irrespective of region. The current “weak” sector in the market would thus appear to be the sale of flats. These are traditionally associated with „First Time Buyers‟ and the „Buy to Let‟ market, with both having been impacted by the limited supply of mortgages and tighter loan terms.”
“As we move into the last months of the year, we must now consider what might happen in 2010. Current prices are being reported on the basis of limited transaction numbers which are substantially down from long term averages. The lack of homes on the market is creating competition amongst buyers (with the added stimulus of the stamp duty holiday). As listings increase and more supply comes to market we might expect this to affect the prices being achieved. Taken together with continuing unemployment/underemployment, a still partly faltering economy and possible interest rate rises later in 2010, we might well see prices stabilise or even fall during the coming year. This may further discourage some owners from putting their homes on the market, thus contributing to a continuing „thin‟ market. Indeed with a General Election in the next few months leading to uncertainty around HIPS and taxation, a probable peak in arrears and possessions, albeit at a relatively low base, and mortgage supply remaining constrained there are many reasons to expect a muted market in 2010.”
HOUSING TRANSACTIONS
“In terms of transactions the table below shows that the recovery in sales transactions is not uniform across England & Wales. The three northernmost regions in England are showing negative growth in terms of Q3 2009 sales compared to Q3 2008, with the volume of transactions being less than half of the 10 year average for Q3 2000–2009. The region with the highest recovery in sales is the South West, where transactions in Q3 have increased by 31.0% over Q3 2008, although even here the level of sales in Q3 2009 is only 63% of the 10 year average.
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