House Prices may go up by up to 20% in next 3 years..Perth, Sydney & Adelaide are set to boom !

AUSTRALIAN house prices may rise by up to 20 per cent over the next three years, despite interest rates possibly reaching 9.1 per cent, but Melbourne will miss out on most of the price growth, according to a respected business forecaster.
A QBE Housing Outlook 2010-13 survey compiled by BIS Shrapnel forecasts house price growth of between 9 and 20 per cent in Australia's capitals over the next three years, the result of a stronger economy and undersupply of housing.
Prices in Perth, Sydney and Adelaide are forecast to grow by up to 20 per cent and Brisbane and Hobart are expected to rise 15 and 13 per cent respectively. Melbourne, Darwin and Canberra will grow the least.

Strong growth in Melbourne house prices last year and early this year combined with a higher level of housing construction - more than in any other state - and worsening housing affordability would slow the city's price growth over the next three years to 9 per cent, below that of all other capitals, the BIS report said.
The forecast follows concern voiced by some economists and international investors that Australia's housing market is overpriced and may be verging on a property bubble.
Investment bank Goldman Sachs recently dismissed suggestions that Australia was experiencing a housing bubble, but said property prices were overvalued by as much as 35 per cent.
Last August, the national median house price dropped 0.2 per cent in seasonally adjusted terms to $457,000, knocking $8000 off the median price for July.
But BIS Shrapnel said strengthening economic conditions and an undersupply of housing in most states should provide substantial upward pressure on house prices.
''Economic growth is also forecast to continue to accelerate, fuelling employment and income growth,'' the report said. ''Price growth is expected to generally peak in 2012-13 as economic growth also peaks.''
Demand for housing from first home buyers was not expected to improve until next year.
Australia's housing market has so far proved more resilient than most other developed nations, partly because of population growth and commodity exports.
In the report, BIS Shrapnel forecasts that variable interest rates will peak at 9.1 per cent in 2013.
''This will ultimately have a slowing effect on the economy and prices, although there may be one last gasp for price growth in some cities in 2012-13 where there is a large deficiency, or affordability is not strained,'' the report says.
''We expect price rises will be underpinned by a deficiency of dwelling stocks across most capital cities, which in turn will lead to tight vacancy rates and solid rental growth, flowing through to increased investor demand,'' said QBE chief executive Ian Graham, who commissioned the report.
Another report released yesterday shows mortgage stress is being felt most in the middle to outer suburbs, but there were fewer delinquencies - defined as failing to pay one or more mortgage payments - in Victoria than other states.
A survey by Moody's Investor Services of residential mortgage-backed securities suggests that most areas in Melbourne have performed reasonably well in terms of loan arrears.

Cheers,
Rashesh Bhavsar
Financial Planner
Fortune Wealth Creation Group
www.fortunewealth.com.au


Source:http://www.smh.com.au/business/property/house-prices-up-20-20101012-16hr6.html

Property Report for September Quarter 2010

I have herewith attached a Property Report for September Quarter. This is a snapshot for Melbourne West. Read Page 3 for to read full report on Melbourne Property outlook. Click here to access the report.

Melbourne West:

Melbourne’s west remains relatively affordable, especially when taking into account proximity to the CBD. And although a levelling of the market is expected in the coming months, there will be no dramatic drop off as demand for suburbs in the west continues.

Vacant allotments in the west represent an especially strong segment with supply not meeting the significant demand. In particular, land with development potential is highly sought. 

There will be an increase in medium density housing as land costs gradually increase in response to the lack of supply. Although clearance rates are high, sale by auction isn’t traditionally the top method of sale in many of Melbourne’s western suburbs due to a stable supply of similar properties within designated regions. 

Deer Park supports this trend with only 11 per cent (REIV) of property sales resulting via auction in the last 12 months. However, this trend is slowly changing as demand for western suburbs’ property increases. Properties in Melbourne’s west continue to be supported by developments in infrastructure such as the additional rail links to the west, new shopping facilities and industrial warehouses on Derrimut Road, and the ongoing construction of Watervale Shopping Centre on the corner of Taylors Road and Calder Park Drive.


Please do not forget to feed my fishes by clicking your mouse on the water and hungry fishes will follow your mouse and eat the food !! 

Cheers,

Rashesh :)

Financial Planner, 

Fortune Wealth Creation Group

www.fortunewealth.com.au

Industry funds have a lot to answer for, says AFA

The millions of dollars spent on “anti-adviser advertising campaigns” by the industry fund movement would be better spent on restoring confidence in superannuation and advice, according to the national president of the Association of Financial Advisers (AFA) Jim Taggart.

Responding to recent Roy Morgan research that revealed a low level of consumer trust in advisers, Taggart said industry funds had a lot to answer for.

“Such campaigns only stoke and prolong the crisis in consumer confidence brought about by the global financial crisis,” he said. “Members’ money could be better spent on campaigns which set about restoring confidence in superannuation and advice, so that consumers are better positioned to grow their wealth and protect their assets.”

Taggart called on advisers to fight back.
“The future of advice is now up for grabs and the only people who can fight this battle are those of us who truly believe in the value of advice.”
Referring to the Roy Morgan research that found that a ban on commissions may make financial advice unaffordable for those that need it the most, AFA chief executive Richard Klipin said it supported AFA’s Back to Basics Consumer Research, conducted by CoreData/brandmanagement earlier in the year.
“The Roy Morgan analysis says what the AFA has been saying for some time now, and that is that the current proposed ‘reforms’ may actually limit consumer access to advice,” he said.

Source:http://www.moneymanagement.com.au/news/industry-funds-have-a-lot-to-answer-for-says-afa