Paul Castran

The middle price range of the Australian property market has become very competitive as empty nesters and families under financial stress compete with first home buyers, investors and younger families. This has come about through job losses, family separations, the GFC and simple lifestyle changes. However with increased demand comes increased prices, often wiping out much of the expected savings.

Empty-nesters and retirees, in particular, are now often faced with little or no extra cash left over after selling the family home and downsizing.

Ana Bennet, a property adviser from Lachlan Partners has advised that the strategy of freeing up equity from larger homes and downsizing does not always pay off.

“One problem with downsizing is that, while prices may have risen such that it is tempting to sell and unlock money, the prices for the kinds of properties you might want to downsize to have also risen,” Bennett says.

“In theory, it is a good idea but it only works if the new property gives the downsizers both the kind of swap in lifestyle and finances they are looking for,” Bennett says.

The Australian property market is cooled again in May, with most capital cities recording their second straight month of single digit growth. The RP data-Rismark Hedonic Home Value Index grew by a seasonally adjusted 0.5 per cent in May. This follows 16 months of strong price growth up until April. According to Mark Forytarz and Paul Castran “in the month of May the showing house prices in capital cities grew by 12.1 per cent”.

Melbourne was one of the stronger performers, with a 3.3 per cent per cent growth, while Perth fell by 2.1 per cent, and Hobart by one percent.

While majority of investors are waiting for the effect of relentless rises in property prices and increasing interest rates, Ric Battellino, the deputy governor of RBA stated today that the housing prices in Australia were affordable in relation to the income.

“People feel that house prices in Australia are quite high and that’s quite often because the ratio of house prices to income that are published for Australia tend to focus mainly on prices in the cities, and they are quite elevated,” Mr Battellino said in response to a question at a business function in Sydney.

“But, if you look across the whole country, the ratio of house prices to income is not that different from most other countries.”

Mr Battellino was having a conversation with the Financial Executives International of Australia at the law firm Clayton Utz.

Mark Forytarz and Paul Castran, the two eminent personalities from Castran Gilbert have years of experience in the real estate market of Australia. The two have presided over a number of real estate sales. Paul Castran and Mark Forytarz continuously share their views about the existing situation in real estate sector.

What will you relatively have: a new 911 Porsche or a parking spot?

This is not a resolution that most Australians face. But, two garage places near Bondi Beach in Sydney are likely to position an Australian record for most costly parking spaces under the beat this week. The garages situated at the southern end of Bondi Beach, are estimated to vend for over $240,000 and one of the spaces, on a 48-year rent, is supposed to sell for $180,000. Vendors expect the second space, with a 78-year lease, in surplus of $250,000 that is more than a new Porsche 911. Raine & Horne Double Bay manager Mr. Ric Serrao, who has sold $240,000 Brighton Boulevard parking place, said that he had two clients who are eager to pay $300,000 for a garage, but at North Bondi. He said, the parking locations in the CBD varies from $60,000 to $70,000 south of Town Hall and it is estimated to reach $140,000 in the financial region towards Circular Quay. The offensive prices are being determined due to the shortage of car parking in the area.

Eoin Blackwell, associated with the AAP wrote an informative article that gives a ray of hope to the home owners amidst despair. An extract is as under:

The Reserve Bank has indicated that the continued increase in interest rates is likely to discontinue from June1. During the beginning of May, the RBA had increased its benchmark interest rate. This helped in bringing back the borrowing rates to average level despite an increasing concern about the impact of European debt crisis. However, the central bank also indicated that it may not increase the cash rate again for a certain time-period. Therefore, the borrowers can possibly heave a sigh of relief.

As per the proceedings of its meeting in the month of May, the RBA stated that it had increased that cash rate from 4.25% to 4.5% during its board meeting held on May 4. Subsequently, the borrowing rates were brought back to the average levels that existed a decade ago.

“On balance, members judged it prudent to undertake some further monetary policy tightening at this meeting,” the minutes said.

“They noted that, if lenders responded as expected to another rise in the cash rate, interest rates faced by most borrowers would then be at around average levels over the past decade.”

This was for the sixth time that bank had increased the cash rate since the month of October during the previous year.

Mark Forytarz and Paul Castran, two eminent persons from the renowned real estate enterprise Castran Gilbert have many years of industry experience. The two have presided over several real estate sales. Paul Castran and Mark Forytarz continuously share their views about the developments taking place in real estate sector.

Bronwen Gora, associated with Sunday Telegraph wrote an interesting article about the market conditions in Sydney. It seems that the situation is heading towards a normal. An extract from the article:

THE Sydney housing market gave an indication of some slowdown as continuously increasing prices and rising interest rates drive away prospective buyers. During the last week, Residex figures confirm that auction clearance rates decreased from 73.5% to 62.5%, exhibiting a fall of above 10%. Although the real-estate year witnessed an optimistic start, the slowdown soon followed as clearance rates averaged to 80% during the first three months.

John Edwards, the managing director of Resided urged that interest rates, economic crisis of Europe, high domestic prices and nervousness were responsible for a drastic fall.  “It’s normal for clearance rates to slow at this time of year, but we’ve suddenly had a 10 per cent fall since the last interest rise,” he said.

The buyers woes were further aggravated as the property prices in Sydney witnessed an increase of 17% during the last 12 months to April this year, an “astonishing” figure as stated by Mr Edwards. The average yearly growth rate for Sydney is 6.7%.

Independent auction house Cooley Auctions noticed that the clearance rates decreased from 80% to 50% during the first week of May itself.

Mark Forytarz and Paul Castran, the two pillars of Castran Gilbert have years of experience in the real estate marketplace of Australia. The two have presided over several real estate sales during their careers. Paul Castran and Mark Forytarz actively express their views about the existing situation in real estate market.