First Home Owner’s Grant

Australia’s Prime Minister Kevin Rudd said “The First Home Owner’s Grant Boost as you know we’ve indicated that that will conclude within a very fixed and finite time frame.”  “We’re still measuring the full effect but I think it’s very important that as a community we understand that deadlines are imposed for a particular purpose. It’s had strong, useful results so far but I’ve got to say, all good things must come to an end”

There has been no formal decision made on whether or not the FHOG Boost will be extended beyond 30 June 2009.

Source: Real Estate Institute of Australia

NSW and Australian Government Social Housing Stimulus Plan

Over the next three years the Commonwealth and NSW Government will invest approximately $3 billion to build around 9000 social housing homes across NSW.

Housing NSW is seeking tenders to deliver new dwellings in NSW which will create jobs, stimulate the NSW economy and provide more social housing for people in need.

Source: Housing NSW Homepage

Australia’s Low interest rates increase interest!

The adjustment of 3.75% in the last five months is significant but not as high. However, in percentage change terms it is close to 50% of the peak rate of 7.25% in March 2008.

The auction clearance rates for the week ended 14th were significantly improved with some markets reporting a clearance rate of something in the order of 70%.

Australia’s growth rate in the year from Jan 07 to Jan 08 was 11.86% and this has reduced to -1.8% in the year ended Jan 09. This decrease looks significant and is, but looking at the monthly trend it would seem that we may have reached the low point as the rate of adjustment is slowing. The correction in December 2008 was -1.1% and is similar in January being -1.15%.

There was more activity and interest in the lower half of the market where 54% of all sales occurred.

In the last 12 months, Australia has experienced rental increases of 9% and 13.3% for houses and units respectively. This increasing rental yield will continue to occur and compensate investors for the lower capital growth which is occuring. In cash flow terms, investment is and will continue to become easier.

Source: Residex Newsletter - February 2009