Rural industries create Qld regional housing boom

Posted 20 minutes ago

The mining, cattle and sugar industries have triggered a housing boom in Queensland's regional centres.

The ANZ Regional and Rural Quarterly Report shows house prices in Gladstone have jumped 25 per cent in the past 12 months, followed by Ipswich on 22 per cent, Gympie and Bundaberg on 16 per cent and Toowoomba on 8 per cent.

Economist Paul Deane says things are looking good for the sunshine state.

"I guess what it's really a reflection of is generally how well economic conditions are in Queensland," he said.

Mr Deane says while there may be some slowing in the next quarter, investment is expected to remain strong which will continue to support house prices.

"Perhaps there will be some slowdown, but signs are that certainly investment will remain strong in the area which will certainly help support house prices moving forward," he said.

The report also says the unemployment rate in southern Queensland fell to 1.4 per cent in July.

source: Rural industries create Qld regional housing boom
ABC Online, Australia - 11 minutes ago

Gloom over house price figures

News of a double-digit annual fall in house prices has been greeted with dismay by the industry.

The Nationwide said that, on average, houses in the UK in August were worth 10.5% less than a year ago.

The building society added that there was unlikely to be a major turnaround in the market in the near future.

This view is shared by many across the housing industry.

PETER BOLTON KING, NATIONAL ASSOCIATION OF ESTATE AGENTS

"The housing market is in a very serious position and we need serious action.

"We have continually called on the government to hold a round-table discussion to find real solutions to stamp duty, the liquidity issue, first-time buyers and repossessions. However, disappointingly we have had no feedback.

"There is no point in trying to target one area in the hope of a quick fix. We need a coherent package of measures that will ease problems throughout the housing market."

Mr Bolton King said a NAEA survey had found that 98% of agents believed consumer confidence had been damaged by the stamp duty confusion, with 56% of them saying they had lost at least one sale as a result.

OLIVER GILMARTIN, ROYAL INSTITUTION OF CHARTERED SURVEYORS

Mr Gilmartin said prices would continue to fall while there was a squeeze on lending.

The property market has pretty much ground to a halt Daniel Lee, Globrix House prices 'fall 10.5% in year'

"Government incentives to revitalise the mortgage market need to be enacted sooner rather than later to contain the wider impacts of falling house prices on the economy," he said.

"With unemployment and repossessions expected to rise further, tackling the problems head on could limit the extent of the downturn."

PETER SMITH, SAVILLS

Mr Smith said that the credit squeeze was affecting transactions in country properties and the London housing market.

Savills said on Thursday that profits in its estate agency business had slumped 88% during the first half of the year.

"2008 continues to be a challenging year for the real estate industry worldwide," said Mr Smith.

DANIEL LEE, GLOBRIX PROPERTY SEARCH ENGINE

Mr Lee said Globrix's research suggested the number of properties remaining unsold for more than 90 days had more than doubled since the beginning of 2008.

In January, only 25% of properties listed on Globrix had been on the search engine for more than 90 days, in July this figure had risen to 53%.

"The property market has pretty much ground to a halt," he said.

"Transaction levels are exceptionally low and a significant percentage of properties are just languishing unsold.

"We can only hope that, as prices and mortgage products become more attractive to buyers, the wheels of the property market start to turn again."

ALAN CLARKE, UK ECONOMIST, BNP PARIBAS

Mr Clarke said that there was a direct link between the housing market and the economy in general.

He said it was the economic slowdown that was driving house prices down, rather than self-perpetuating gloom from commentators.

House prices in the past four or five years had dictated other spending, he added, with consumers less likely to spend on furniture and less likely to buy cars or other major purchases when house prices were falling.

source: Gloom over house price figures
BBC News, UK

The Villains of the Housing Crisis Are Denying All Responsibility

The housing crisis is a result of reckless deregulation by specific individuals

The central bankers of the world gathered last weekend for their annual meeting at Jackson Hole, Wyoming. This was an opportunity to talk about the major issues confronting the world economy, as well as an opportunity to spend some time in a very beautiful vacation spot.

When they met in Jackson Hole in 2005, the meetings were devoted to an Alan Greenspan retrospective, honoring his 18-year tenure as Federal Reserve Board chairman, which was due to end the following January. A number of papers were presented analyzing his record at the Fed, including one that raised the question of whether Mr. Greenspan was the greatest central banker of all time.

The elite Jackson Hole crew did not debate whether Greenspan was the greatest central banker of all time this year. The world is now facing the most serious financial crisis since the Great Depression. At least, that is the assessment of Alan Greenspan. With house prices plunging, unemployment and inflation rates rising and banks failures mounting, Greenspan has a pretty good argument.

How did we get here? The centerpiece in this story is the United States allowed an $8 trillion housing bubble to grow unchecked. Between 1996 and 2006, house prices rose by more than 70 percent, after adjusting for inflation. In the previous century, from 1896 to 1996, house prices had just kept even with the overall rate of inflation.

When there is suddenly a sharp divergence from a long-term trend like this, it is reasonable to look for an explanation. Was there some fundamental factor on either the supply or demand side that was suddenly causing house prices to skyrocket?

A quick investigation revealed no obvious suspects. On the supply side, there were no major new constraints that were impeding construction. In fact, housing starts were at near record levels over the years 2002 to 2006, so there was no reason to believe any developments on the supply side could explain skyrocketing house prices.

The demand side also didn't feature any obvious culprits. The rate of population growth and household formation had slowed sharply. If demographics could explain a sharp rise in house prices, then we should have seen the surge in the 70s and 80s. That was when the huge baby boom cohort was first forming their own households. In the current decade, the baby boomers are preparing for retirement.

There also was no plausible income story. Income grew at a healthy but not extraordinary rate in the years from 1996 to 2000, but income growth has been very weak throughout the current decade.

Finally, if the run-up in house prices could be explained by the fundamentals of the housing market, then we should expect to see a comparable increase in rents. But there was no unusual run-up in rents. They did slightly outpace inflation in the late 90s, but they actually were falling behind inflation by the early years of this decade.

source:The Villains of the Housing Crisis Are Denying All Responsibility AlterNet, CA