Tweets This Week
- here’s another edition of the success tips newsletter - getting ready for the financial year - http://bit.ly/SGdDB #
Housing Affordability - Westpac Property Analysis
Here’s the summary of the housing affordability study done by Westpac, its worth a ready but I think the below sums it all up. I’ve attached the pdf so you can read more about it and look at the pretty graphs.
it gives an indication of what is most likely to happen and also a ‘likely worse case’ scenario. Definitely an interesting read if you have a couple of minutes
Affordability has been an issue since 2002, sitting below the 10-year rolling average, however during this time house prices have still shown periods of strong growth.
The current forecast by Westpac Economics is for interest rates to fall a further 100bps by end 2009. If passed through to mortgages this would help improve affordability further. However the improvement will continue to be driven by interest rates remaining low rather than price falls.
If, as currently expected, job losses accelerate between 2H 2009 and 2H 2010, sentiment and purchasing activity is likely to fall further. Falling sentiment, coupled with a decrease in housing activity and rising job losses, could result in house price falls as forced sales filter through from late 2009. Such a scenario in a historically low interest rate environment would provide further relief to affordability in 2009 and 2010.
However, as the economy improves from 2011 and interest rates begin to rise to a more neutral level, affordability issues will re-emerge if loan size (and thus price?) falls are not high enough between 2009 and 2011. In order for affordability to revert to long-term average levels by end 2011, the average loan to purchase a dwelling needs to fall 10%, nominally.
REIA data from 1980 suggests that national house price falls of 10% have never occurred. Current house prices are down around 5% nationally, which is the highest on REIA records since 1980. Westpac Property are of the view that prices are likely to remain stable until accelerated job losses bring confidence down in late 2009, after which further price falls are likely to occur through to early 2010. However, as the economy and employment numbers recover and interest rates rise in 2011, house prices are likely to enter a period of stabilisation.
Despite the expectation of further house price falls, Westpac Property expects that the declines will not be large enough to assist housing affordability as the economy recovers. As such, affordability will remain constrained well beyond 2011 as interest rates revert to a more neutral level.
There is the possibility that the economy performs better than expected. As such, if job losses are limited this could potentially place upward pressure on prices in an environment of low interest rates and low housing supply. Should this occur, housing affordability would be a much greater issue than suggested above, once interest rates start to rise.
Attachment: home-affordability-q1-2009
Tweets This Week
- waiting for a summary from the # wwdc … somebody must have some information #
- messing around with slideshows on iphoto… very cool #
- Just bought myself one of these baby…. my personal blood pressure monitor - http://bit.ly/QCHnE #
Tweets This Week
- Just finished my income tax withholding variation - http://bit.ly/HzwCo #
- in a very ‘tax’ mood… been sorting out my accounts for the closing financial year #
Tweets This Week
- getting my financials ready to do my Income Tax Withholding Variation # ITWV - http://bit.ly/d4IL3 #
Tweets on 2009-05-30
- getting my financials ready to do my Income Tax Withholding Variation # ITWV - http://bit.ly/d4IL3 #
Tweets This Week
- Free # Seminar to Topher Morrison - Winning the Game of Money - For people in the UK - http://bit.ly/ndfc1 #
Tweets on 2009-05-24
- Free # Seminar to Topher Morrison - Winning the Game of Money - For people in the UK - http://bit.ly/ndfc1 #
Free Insulation for Your Home
Free Insulation for Your Home? It doesn’t get any better than this… the Australian Government has decided to go green. One way they are going to do it is by giving people a rebate of up to $1,600 if they put insulation in their home. This will not only save us on our heating and cooling bills, but save the environment through the reduction of electricity generation and mining of coal or gas to actually generate the electricity. Maybe it’s just the Government’s way to delay building another power plant? either way, its free insulation for your home(Unless you have a huge home, then it might cost you a bit)
As everybody is affected by the global financial crisis, it is not surprising that everybody is doing their part to save a penny or two…
Remember the saying… “Penny Wise, Pound Fooling”, Well, here is an opportunity to save both pounds and pennies… so read carefully.
For people who live in their own homes:
Go get a quote or two to have your house insulation checked out by a professional to see if you are eligible for the $1,600 government rebate. This will obviously save you $1,600 (be pound wise) and also save you ongoing heating and cooling cost in your home (be penny wise) - For Home Owners
For people who are renting or land lords:
About the same as above, except you only get $1,000 rebate, so don’t miss this opportunity to add value to your investment and save your tenant future heating and cooling cost! - For Renters
Read the links above for more information, there’s actually different eligibility for owner occupiers and renters/landlords. So spend a bit of time to find out how to get Free Insulation for your home… beat’s paying your electricity bill..
Tweets This Week
- airasia $0 tickets Jan-Apr 2010 - 115AUD return (Perth to KL) you have to search for it! - http://bit.ly/6Ybg3 #
- getting ready for lunch - yum cha/dim sum time… #
- i can’t believe the day light savings results, there’s just too many baby boomers in West Australia - http://bit.ly/pIMze #
