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Tags: Economy, Housing Crisis, FeaturedMarket Update | 16.04.11

Housing Crisis Looming for Australia: April 2011

New properties across Australia were stagnating in sales during the month of February, suggesting to industry experts that 2011 may end up as a very weak year in terms of the country's real estate.

The most recent New Home Sales Report, furnished by the Housing Industry Association-JELD-WEN, indicates that the number of new properties which were sold in February 2011 increased by only 0.6%. This figure comes despite an uptick in sales of 2.5% in the month of January. The New Home Sales Report also noted that multi-dwelling developments, which featured homes for sale, had dropped a considerable 7.6%. This stands in contrast to detached house percentages, which reveal a sales increase of 1.5% from the previous month.

Chief economist for the Housing Industry Association, Harley Dale, said that the encouraging increases in sales for January failed to spill over into the succeeding month despite the rise in detached house purchases in Victoria of nearly 3%. Dale attributes such sustained anaemic sales of residential properties this year to such factors as raised interest rates, stricter terms on credit qualifications, and the failure of governmental reform to draw down the cost of housing throughout Australia.

The current fiscal year is also estimated to see a drop of almost 15% in housing starts; a number that will reverse the bulk of the gains that were produced by the stimulus in 2010. Dale cites statistics which relegate housing starts to a positive gain in only 2 of the previous 10 years. Such facts underscore the limited affordability of new homes and rentals, which in turn drives away new home buyers as well as those with lower income needs.

Mr. Dale is also quick to point out that the extreme weather of the past few months throughout Australia may also have contributed to lagging home sales. Comparing the first months of 2011 with the months of January and February 2010, Dale describes findings that proved total sales for the current year were down 10%. Building approvals from local governments and loan approvals for new housing were both dipping in 2011 as well.

The Housing Industry Association was quick to relay that the statistics from those three months were quite positive when referencing volume of sales, a figure that shows detached housing purchases with an increase of 3.7%, albeit with individual unit sales dropping 1.4%. The Association's report notes that newly-built detached homes in New South Wales and Victoria rose by 0.9% and 2.9%, respectively.

Detached houses in Queensland, however, fell by 13.3%, although the report footnotes such plunging sales by highlighting the recent slew of natural disasters that have taken place in the state. However, natural disasters could not explain the fall of detached sales in South Australia of 4.3% and in Western Australia of 2.2%.

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11/05/2011

Queensland Floods Causing Unstability In Property Values · Money Articles***[...] It is no understatement to say that properties in the flood-ravaged Queensland region have been hit hard. In fact, current land valuations dropped tremendously, leaving many Australian homeowners with mortgages worth more than their homes. State Government valuations on approximately 23,000 homes affected by the floods have seen price decreases of 5% through 25% of the pre-flood value and resulted property crisis in Australia. [...]


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Vicky Corcoran
19/05/2011

It is really disheartening to read that detached houses in QLD have apparently dropped by 13.3% with a widespread connection to the natural disasters that happened in the State being attributed to the drop. Firstly, the "floods" in Brisbane!
Evidence is now slowly coming to the fore revealing human miscalculation and mismanagement of the Wivenhoe Dam...you could see the look on Campbell Newman's face and that of Anna Bligh the night before the "Brisbane Flood". They knew the real reason for the "flood" that was about to cost so many Queenslanders their lives, destroy thousands of peoples livelihoods and the appalling financial and emotional impact it would have on us. Throw into the mix a cyclone in Cairns, a grossly incompetent Labor Government and banks manipulating everything and everyone from 1st home buyers, to throwing money at us 3 years ago on Low Doc Loans and delivering blow by blow interest rate rises. Current "Bank Valuations" are making it impossible for people to sell and still walk away with something after losing up to hundred thousand dollars of real money and in some cases millions in borrowed money here on the Gold Coast. Win Win.... the banks always get every cent they lent back plus interest. Real Estate Agents are telling me that deals are falling over daily due to "Bank Valuations" . I have never in my life seen things as bad as this. I'm a 53 year old about to lose my super when I am forced to sell my house. Can't cover any more rate rises. Queenslanders a class action suit might be in order.


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