Latest news with #Conisbee
Sydney Morning Herald
5 days ago
- Business
- Sydney Morning Herald
The type of housing cost that just soared 75 per cent in five years
The cost of land for housing development has skyrocketed by 75 per cent over the past five years, pushing homeownership further out of the hands of average potential buyers. The median development site cost has risen from $4.8 million in 2020, to $8.5 million this year, Ray White analysis of Real Capital Analytics data shows. It comes as construction costs remain elevated from their pre-COVID-19 levels, putting further pressure on affordability. Ray White Group chief economist Nerida Conisbee said it would take considerable time before building costs fell enough to make new housing genuinely affordable for average buyers. 'Land costs haven't come back down and what's happening is developers want to build, but they can't do it affordably,' Conisbee said. 'We're not seeing the crashes in the market we previously saw so we're in a kind of holding pattern.' In past economic downturns, rising interest rates would put pressure on some owners of development sites, forcing them into distressed sales at reduced prices. But this time was different, and Conisbee said many had built financial buffers while interest rates were at record lows, and developers have been in a better position to hold onto land. They were also entering into joint ventures when finances were squeezed. Changes to how lenders operated were also helping developers hold on to their assets, banks were holding off on forced sales for struggling developers, and were more likely to offer relief measures. It comes as the federal government aims to deliver 1.2 million homes in five years to address the housing affordability challenge.
The Age
5 days ago
- Business
- The Age
The type of housing cost that just soared 75 per cent in five years
The cost of land for housing development has skyrocketed by 75 per cent over the past five years, pushing homeownership further out of the hands of average potential buyers. The median development site cost has risen from $4.8 million in 2020, to $8.5 million this year, Ray White analysis of Real Capital Analytics data shows. It comes as construction costs remain elevated from their pre-COVID-19 levels, putting further pressure on affordability. Ray White Group chief economist Nerida Conisbee said it would take considerable time before building costs fell enough to make new housing genuinely affordable for average buyers. 'Land costs haven't come back down and what's happening is developers want to build, but they can't do it affordably,' Conisbee said. 'We're not seeing the crashes in the market we previously saw so we're in a kind of holding pattern.' In past economic downturns, rising interest rates would put pressure on some owners of development sites, forcing them into distressed sales at reduced prices. But this time was different, and Conisbee said many had built financial buffers while interest rates were at record lows, and developers have been in a better position to hold onto land. They were also entering into joint ventures when finances were squeezed. Changes to how lenders operated were also helping developers hold on to their assets, banks were holding off on forced sales for struggling developers, and were more likely to offer relief measures. It comes as the federal government aims to deliver 1.2 million homes in five years to address the housing affordability challenge.
Sydney Morning Herald
27-05-2025
- Business
- Sydney Morning Herald
The locations where houses make more money than their owners
Sydney's house prices jumped $52,006, compared to annual earnings of $78,512. In Brisbane, there was just a $2411 difference in house price gains and wage income, while in Adelaide the gap was only $227. The last time wages outstripped house prices was during the market slowdowns in 2023 and 2019, senior data analyst with Ray White Group Atom Go Tian revealed. Ray White chief economist Nerida Conisbee said the Sydney and Melbourne markets had been a lot more sensitive to interest rate rises than out west. Sydney and Melbourne had been hit by affordability issues, meaning house price gains fell behind wages, especially in more expensive areas. Loading 'The top end of the market is definitely seeing a slowdown,' Conisbee said. 'We normally think of people buying expensive houses not needing big mortgages, but some do, and interest rate rises now mean it's harder to get finance.' But Perth's housing market seemingly shrugged off the challenges as a lack of new housing created more competition over properties for sale in Perth, meaning prices kept booming, she said. Perth's market was also buoyed by its recovery after the mining boom and bust, she said. 'There is a lack of houses in Perth because of the really big construction problems,' Conisbee said. 'Construction costs have continued to increase … and there have been a lot of competing demands. 'There's been a bit of catch up as well because for 10-15 years house prices fell in Perth, so prices have jumped to get back to where they should have been.' The last time Sydney and Melbourne were in a property boom three years ago, data showed some wealthy neighbourhoods recorded house price rises of more than $1 million, earning more than 10 times pay packets. But the opposite was now happening, with home owners most likely to earn more than their houses in affluent suburbs such as Victoria's Toorak and South Yarra, and Sydney's Balmain, the Ray White research showed. House price gains also trailed incomes in regional areas in NSW, Victoria, Queensland and Western Australia. Loading Regional NSW's house prices jumped $26,712 while wages sat at $60,073. Regional Victoria's house prices were up by a more subdued $11,920 with wages at $62,300. AMP chief economist Dr Shane Oliver said property markets in Sydney, Melbourne, Hobart and Canberra had been weaker over the past 12 months as they had hit their peaks much earlier than Perth. With 13 interest rate increases between May 2022 and September 2023, and only two decreases this year so far, it was unclear whether any further cuts would have a big enough impact for house price gains to eclipse wages there over the next 12 months, he said. House prices had kept rising due to a lack of supply and strong population growth, albeit at a slower pace than during the COVID boom, he said. But he had a warning for the still relatively affordable west coast market. 'Affordability was already worse in these [east coast] capitals so it left them more vulnerable to higher interest rates,' Oliver said. 'Perth will start to run into trouble as affordability issues hit.'
The Age
27-05-2025
- Business
- The Age
The locations where houses make more money than their owners
Sydney's house prices jumped $52,006, compared to annual earnings of $78,512. In Brisbane, there was just a $2411 difference in house price gains and wage income, while in Adelaide the gap was only $227. The last time wages outstripped house prices was during the market slowdowns in 2023 and 2019, senior data analyst with Ray White Group Atom Go Tian revealed. Ray White chief economist Nerida Conisbee said the Sydney and Melbourne markets had been a lot more sensitive to interest rate rises than out west. Sydney and Melbourne had been hit by affordability issues, meaning house price gains fell behind wages, especially in more expensive areas. Loading 'The top end of the market is definitely seeing a slowdown,' Conisbee said. 'We normally think of people buying expensive houses not needing big mortgages, but some do, and interest rate rises now mean it's harder to get finance.' But Perth's housing market seemingly shrugged off the challenges as a lack of new housing created more competition over properties for sale in Perth, meaning prices kept booming, she said. Perth's market was also buoyed by its recovery after the mining boom and bust, she said. 'There is a lack of houses in Perth because of the really big construction problems,' Conisbee said. 'Construction costs have continued to increase … and there have been a lot of competing demands. 'There's been a bit of catch up as well because for 10-15 years house prices fell in Perth, so prices have jumped to get back to where they should have been.' The last time Sydney and Melbourne were in a property boom three years ago, data showed some wealthy neighbourhoods recorded house price rises of more than $1 million, earning more than 10 times pay packets. But the opposite was now happening, with home owners most likely to earn more than their houses in affluent suburbs such as Victoria's Toorak and South Yarra, and Sydney's Balmain, the Ray White research showed. House price gains also trailed incomes in regional areas in NSW, Victoria, Queensland and Western Australia. Loading Regional NSW's house prices jumped $26,712 while wages sat at $60,073. Regional Victoria's house prices were up by a more subdued $11,920 with wages at $62,300. AMP chief economist Dr Shane Oliver said property markets in Sydney, Melbourne, Hobart and Canberra had been weaker over the past 12 months as they had hit their peaks much earlier than Perth. With 13 interest rate increases between May 2022 and September 2023, and only two decreases this year so far, it was unclear whether any further cuts would have a big enough impact for house price gains to eclipse wages there over the next 12 months, he said. House prices had kept rising due to a lack of supply and strong population growth, albeit at a slower pace than during the COVID boom, he said. But he had a warning for the still relatively affordable west coast market. 'Affordability was already worse in these [east coast] capitals so it left them more vulnerable to higher interest rates,' Oliver said. 'Perth will start to run into trouble as affordability issues hit.'
News.com.au
05-05-2025
- Business
- News.com.au
Homeowners face ‘tough' debt decision after Albo election win
Newly re-elected Prime Minister Anthony Albanese has been urged to make cost of living support an urgent priority as alarming new polling shows debt problems have pushed many Aussies to the edge. The study showed mortgage repayments were swallowing more than half the monthly income of about one in five Aussie homeowners, who now face tough financial decisions to keep their homes. About three quarters of mortgage holders surveyed in the research were spending over a third of their household income on repayments – defined as 'mortgage stress'. This was despite the February cut to interest rates and a recent frenzy of refinancing activity as homeowners sought to cash in on cheaper loans. Mortgage stress levels were now at a 'crisis point', according to Finder, which pointed to additional research that showed about one in 10 homeowners had missed a repayment in the last six months. Finder home loans expert Richard Whitten said many households would need a lot more support than just another interest rate cut to stay afloat. 'The loan to income ratio has blown way out with millions teetering on the edge due to mortgage stress,' Mr Whitten said. 'Unexpected costs could spell serious financial trouble for many homeowners.' Mr Whitten said recent rate cuts and the prospect of another cut in May would offer much-needed reprieve for millions of Australians, but most households needed more cuts to make a real difference. 'Many families will still face tough financial choices to keep their homes,' he said. Nerida Conisbee, the chief economist at Ray White Economics, said the Albanese government's re-election could deliver mixed outcomes for the housing market. She pointed out that much of the housing policy announced in the lead up to the election was about supporting first-home buyers getting into the market. This included the government's flagship shared equity scheme, which will allow first-home buyers to snap up homes with deposits as low as 5 per cent. This policy, while aimed at improving accessibility for first-home buyers, was 'likely to drive prices higher in the near term before supply-side measures can take effect,' Ms Conisbee said. Much of the rise in prices would come at the most affordable end of the market, she added. '(That's) not great for affordability. But it will be a positive for people that already own property in those areas.' More interest rate cuts would help, Ms Conisbee said. 'Albo can't control those obviously. But they will be coming through now because of the global slowdown and inflation under control. 'A global slowdown, however, may come with rising unemployment so that is a risk factor … The real challenges come if people lose their jobs so it's really crucial they remain employed.' A possible financial lever the Albanese government could pull would be allowing a freeze on mortgage repayments, like those ushered in during the Morrison government's tenure during Covid. This step wouldn't be necessary unless unemployment went up markedly from current levels, Ms Conisbee explained. Finder money expert Rebecca Pike said some promised Labor policies may help if the government can deliver on them. 'The election of the Labor government means that Australians get the budget promises of tax cuts, energy rebates, student loan discounts and childcare subsidies, to name a few,' she said. 'This will be a huge help for so many struggling Aussies who have been battling rising costs. 'There may be some concern around what impact the budget measures might have on inflation, but for now people can breathe a little easier. And for the everyday Aussie, that's all they really need right now.' Housing Industry Association managing director Jocelyn Martin said the Albanese government should also prioritise home building. She also pushed back against any suggestion that the housing crisis lies outside the Federal Government's remit. 'We've heard it too often — that housing and planning is a state issue, or that the Commonwealth has limited levers to pull. That excuse simply doesn't stack up anymore. 'The Federal Government has the influence, the resources and the leadership role to bring all levels of government together. It can drive the co-ordinated policy, funding and reform needed to move the dial on supply and affordability — not just tinker at the edges. 'This was reinforced in yesterday's election results and with voters outlining housing as a key issue to be addressed as a matter of priority. We urge the new Government and the entire parliament to work together to implement the solutions already on the table. 'Housing Australians must not become a casualty of politics-as-usual. We can't afford more years of delay and stalling of key policies being implemented – we need action within weeks not years.'
