Housing shortage bites as supply fails to keep up (Post 1 of 2, Part 3 of 3)

Posted to The Age (21/12/2011) on 22/12/2011 at 6:05 PM (Not published by Newspaper)
Commenting on "Housing shortage bites as supply fails to keep up"
http://theage.domain.com.au/real-estate-news/housing-shortage-bites-as-supply-fails-to-keep-up-20111221-1p55v.html

I cannot speak on behalf of other places, but my personal contacts reveal that the rental market for December in Melbourne has been the quietest in memory. According to one property manager, there was surge of 17% more properties listed for rent, and another told me that the telephone she had plenty of time to catch up with her paper and filing. These two areas are in different suburbs, at least 100 kilometre apart.

Although there are not many international students in these two suburbs mentioned above, this is real problem for many investors who own properties in CBD or near colleges, providing student accommodation. Those students who have completed their studies in December of 2011 have packed their bags, leaving the rented properties vacant. The once very profitable student accommodation industry is now officially dead.

The increased in number of properties for rental may also be due to increased number of previous tenants have purchased their own homes and move into new premises due the holiday season. There is another possibility that many new investment properties which offered rental guarantee are no longer in their honeymoon period, and these investment property owners now have to seek new tenants actively.

Under normal circumstances, December is busy for many estate agencies. Since very few internationally students come to Australia for next year enrolment, there is drastic drop in enquiries and demand for rental accommodation.

Another possible explanation is that interstate migration movement for job transfer is not happening, or speaking pessimistically job opportunity is dwindling in Victoria. If the underlying reason is about employment, people will feel insecure to move from job to another, leading to reduced tenancy movement.

Part 3 of 3

Jump in US housing starts points to recovery

Posted to The Age (21/12/2011) on 21/12/2011 at 11:55 PM
Commenting on "Jump in US housing starts points to recovery"
http://theage.domain.com.au/real-estate-news/jump-in-us-housing-starts-points-to-recovery-20111221-1p4tt.html

"US housing starts and building permits jumped to a 1-1/2 year high in November as demand for rental apartments rose."

Excuse me, Sir, can you tell me who is investing in the building construction? Is it similar to Australia, in particular Sydney, which the Asians are pouring in the money?

Does demand of rental apartments mean tenants looking for rental apartments, or investors looking to buy rental apartments? What's the vacancy rate in apartments at present?

"It will still take two to three years to work off the excess inventory ..."

Why do people keep building more apartments when there is excess inventory not cleared?

Oh, Sir, do people still believe in Stock fundamentals? Are people getting too gullible believing in just one set of rather ambiguous data?

Housing shortage bites as supply fails to keep up (Post 1 of 2, Part 2 of 3)

Posted to The Age (21/12/2011) on 21/12/2011 at 10:58 PM (Not published by Newspaper)
Commenting on "Housing shortage bites as supply fails to keep up"
http://theage.domain.com.au/real-estate-news/housing-shortage-bites-as-supply-fails-to-keep-up-20111221-1p55v.html

Thanks to the Government policies that our population has dropped substantially. The 300,000 population estimated growth was largely due to internationally students coming to study in Australia. The policies close the golden doors resulting in not only drop population, but also 18.8 billion worth of export income, second (or third) after mining. This resulted in the State and Federal budget shortfalls, which require businesses and taxpayers to fill the financial void.

Such substantial drop in population leads to similar drop in demand of housing, and all related service industries. While this drop may free up the rental market, it creates a dilemma for investors buying or owning properties to cater for this demand.

I would like to alert readers of the government's National Housing Supply Council (NHSC) report, including developers and investors alike, to digest it with a grain of salt. The report reveals information as at end of June 2010, while the Government policies became effective from 1July 2010. The impact is felt all across the education industries; multi-storey commercial buildings once used as campus have been posted with “For Lease” sign, many TAFE and private college teachers and administration staff have become unemployed, etc.

Part 2 of 3

Housing shortage bites as supply fails to keep up (Post 1 of 2, Part 1 of 3)

Posted to The Age (21/12/2011) on 21/12/2011 at 10:58 PM (Not published by Newspaper)
Commenting on "Housing shortage bites as supply fails to keep up"
http://theage.domain.com.au/real-estate-news/housing-shortage-bites-as-supply-fails-to-keep-up-20111221-1p55v.html

The content of the title is in conflict with that of first paragraph. Furthermore, "…high prices kept many would-be buyers out of the market …" is incongruent to housing shortage.

The root of high real estate price can be traced back to one of the previous Prime Ministers who encouraged many young Australians to be degree holders rather than trade-qualified. Australia is confronted with big shortage of qualified tradespeople; consequently, large component of the total cost of construction is gobbled up by the tradespeople, not the material costs. The costs of tradespeople have sky rocketed literally, their earning is probably as much as, if not more than, a rocket scientist.

It is also rather unfortunate that the many buyers demand more than a house, be it new or renovated; they want a show case or a house equipped with expensive kitchens installed with brand named mod-cons, luxuriously finished bathroom, etc.

While new estates have sprung out further away from the CBD, businesses or employment opportunities have not been created by the same rate and proportion in those areas. Many potential buyers have come to the realisation that they need to live in areas with job offers and close to public transport. These criteria fit properties which command higher prices. In other words, the new entrants just cannot afford.

Part 1 of 3