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ISCOVER
The weekly round-up of the biggest news stories from across Momentum Media’s property titles for the week ending 4 September.
Welcome to The Adviser’s weekly round-up of the stories that are getting big reads across Momentum Media’s property titles: The Adviser, Mortgage Business, Real Estate Business, Smart Property Investment and nestegg.
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We hope it helps inform you of the biggest issues shaping the mortgage and property markets.
Economy officially in recession as GDP sinks
According to the latest national accounts data from the Australian Bureau of Statistics, the country’s GDP plunged 7 per cent in the three months to 30 June 2020 – the sharpest contraction since records began in 1959.
This follows a 0.3 per cent decline in the March quarter, thus meeting the definition of a technical recession – two consecutive quarters of negative GDP growth.
Calls mount for HomeBuilder reform
There are growing concerns that the utility of the HomeBuilder scheme is being undermined as the current structure is not giving lenders the confidence to accept the grant as funds to complete.
Connective director Mark Haron said part of the issue is that if lenders are not accepting this grant as part of the funds to complete, it affects ability to buy and build a home.
Brokers dominate FHLDS originations
Analysis by the National Housing Finance and Investment Corporation has revealed that mortgage brokers originated the largest share (46.1 per cent) of First Home Loan Deposit Scheme placements over the first six months of the scheme.
This was followed by bank branches (38.4 per cent), mobile lenders (10.4 per cent) and “other” channels (5.1 per cent).
RBA reveals September cash rate
Despite some economic woes, the central bank has acted as most economists previously predicted, holding the official cash rate at 0.25 of a percentage point for the sixth straight month.
‘Kick in the guts’: REIV slams rental moratorium extension
The REIV said it is seeing growing evidence that commercial and residential landlords are “being left behind and all but forgotten”.
“Tenants have been provided with substantial financial support from the government as well as mandated rent reductions at the expense of property owners. While residential property owners had steeled themselves for the six-month moratorium with compassion, empathy and a good dose of trepidation, this extension has been a ‘kick in the guts’… Of equal concern to the REIV is the disproportionate burden that is being asked of commercial property owners and their agents.”
Investors have been warned against panic selling, with Canstar’s finance expert, Steve Mickenbecker, saying it’s important for home owners not to succumb to pressure to put their home on the market.
“September is the turning point for many home owners and investors hoping to see the year out in better shape and avoid selling their property under duress,” Mr Mickenbecker said.
High-rise apartments lose their lustre
Propertyology’s Simon Pressley is predicting demand for inner-city apartments to significantly diminish in the future, as the “fried egg” town planning model falls out of favour with the workforce.
Given the intense restrictions COVID-19 has placed on both lifestyles and earning capacities, Mr Pressley has conceded that “before too long, there will be a big enough critical mass of people who will work and/or live at a different address to cause a structural shift in property markets”.
InvestorKit director Arjun Paliwal has said the first sign investors should watch out for is stock relevant to sales as a sign the market is cooling off: “If stock levels are rising faster than sales are occurring. It is a sign that there are too many listings coming on or not enough transactions in comparison to those listings. That’s the first sign.”
Agency shakes up senior leadership team
Ouwens Casserly Real Estate has responded to continued growth in the South Australian market by expanding its senior leadership team with the appointment of John Thompson, who joins the team in the newly created role of chief operating officer.
For more analysis and insight into these stories, tune in to Momentum Media’s new live talk show on Facebook, What’s Making Headlines, featuring Momentum Media’s executive editor - real estate, Phillip Tarrant, and business coach and Real Estate Gym trainer Tom Panos on Thursday afternoons.
