Latest news with #Cotality
The Guardian
an hour ago
- Business
- The Guardian
‘Repeatedly outbid': readers share stories of housing despair as Australia's prices reach record highs again
Dozens of Guardian Australia readers have shared their experiences of trying to buy a home in a rising market, as fear-of-missing-out fervour takes hold. After a short reprieve, property prices have surged to record highs across large parts of Australia, making a family home even more unaffordable for prospective buyers. One Melbourne reader, a nurse, said she felt like cattle herded from one home open to the next. 'Multiple times I went to inspections of properties I liked, only to be told on the way out that there was already an offer of $30-50k over asking and if I was interested I needed to submit a better offer within a few hours,' said the reader, who eventually secured a property. 'The market was so competitive I felt really rushed into making a decision a lot of the time.' Auctions are heating up across the country, with six straight weeks of preliminary clearance rates holding above 70%, according to Cotality data, in a clear sign sellers are in control. Clearance rates refer to the percentage of properties sold at auction compared with the total number of properties listed to go under the hammer, with results above 70% viewed as an indicator of strong buying demand. Bidding is expected to become even more fierce amid expectations of further interest rate cuts and an enduring lack of supply of homes. Property prices in Sydney, Brisbane, Adelaide and Perth are at peak levels, while Melbourne, Canberra and Hobart are also rising. A reader in Western Australia's south-west said she and her partner bought far from their family and friends in Perth 'not because we were seeking a lifestyle change but because we simply couldn't compete in the city or suburbs any more. 'We went to countless inspections and put in offer after offer, but were repeatedly outbid, ignored by real estate agents or told homes were under offer before we'd even had a chance,' the reader said. 'At the same time, we were grappling with housing instability, facing no-ground evictions and repeated rent increases.' The couple aged in their early 30s are now so financially stretched with their new mortgage they've made the decision not to have children. 'We simply can't afford to raise a family,' the reader said. 'That's not something we ever imagined we'd have to sacrifice, but this housing crisis has forced people like us to choose between stability and the future we once hoped for.' Many readers commented on the presence of investors bidding up prices at auctions. Over the past five years, investors have increased their share of new home loans from 28% to 37%, according to Australian Bureau of Statistics data. One Canberra resident said she wanted to buy a home to provide stability for her family after moving between rentals eight times in nine years. The public servant went to two auctions where the same investor bid up prices, with his teenage son filming. Sign up for Guardian Australia's breaking news email 'I saw the same guy at an open house for the house we purchased and gave him a filthy look of recognition,' said the reader, who was pleased the investor didn't lodge a bid for her eventual home. A Melbourne reader said while it wasn't always possible to identify who he was bidding against, 'it was always obvious at auctions who were the first home buyers as they bowed out first'. Most market watchers attribute the growing influence of investors to favourable tax settings, including the Howard-era decision to halve the rate of capital gains tax. Those settings are particularly helpful to investors when many prospective first home buyers are being priced out of the market. Australia's intense housing problem, whereby Sydney, Adelaide, Melbourne and Brisbane are all in the top 10 least affordable global cities, has a knock-on effect across society, with foster care agencies reporting a fall in the number of applicants given many people can't afford the time and don't have the spare room to be a carer. Some readers have turned to 'rent-vesting', a strategy of renting a home to live in while buying a more affordable property elsewhere, in the hope that capital growth will pay for a future deposit. A Sydney reader said he and his wife tried to buy a home for 15 years. 'The most frustrating thing was watching our rent, continuously being raised, go to pay someone else's mortgage,' he said. 'We had to become part of the problem to beat the system. We had to rentvest for five years to accumulate enough equity to pay for our own home.'
Newsweek
7 hours ago
- Climate
- Newsweek
Texas Floods Could Worsen Housing Market Issues
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. The flash floods that claimed the lives of at least 135 people in Texas Hill Country on July 4 also impacted thousands of properties that stood along their path of death and destruction, according to estimates by researchers at data-driven tech company Cotality. Using rainfall, stream gage, and property data, Cotality experts recreated the footprint of the flash floods in central Texas, finding that over 38,600 homes in nine counties deemed eligible for individual and public assistance by the Federal Emergency Management Agency (FEMA) are likely to have been damaged during that tragic weekend. "Now, that is a model number, but we stand by it and feel very confident in this number. And that's everywhere from Kerr County to Travis County, in and around the Austin area," Jon Schneyer, Cotality director of research & content, told Newsweek. While not all of these homes are likely to have been damaged by the floods, all of them were at least impacted, with properties in Tom Green, Travis, Kerr, Williamson, and Burnet counties identified as the most at-risk. For homeowners impacted by the floods and for anyone living in this particular part of central Texas already grappling with the immense loss of life caused by the extreme weather event, the coming months are likely to bring new challenges, experts say, and additional financial burdens. A damaged house is seen near the Guadalupe River in Hunt, Texas, on July 8 following severe flash flooding over the July 4 holiday weekend. A damaged house is seen near the Guadalupe River in Hunt, Texas, on July 8 following severe flash flooding over the July 4 holiday weekend. RONALDO SCHEMIDT/AFP via Getty Images What the Floods Could Do to Home Insurance Premiums The cost of home insurance has skyrocketed in recent years in Texas, reaching an average annual cost of $4,585 this year—117 percent more than the national average of $2,110, according to NerdWallet. Premiums are so expensive that many homeowners cannot afford them, and some are choosing to renounce paying extra for flood coverage, which is not included under the standard homeowner policy. "Remember, flood insurance is not offered as a standard homeowners insurance policy. You usually go and get your flood insurance through the National Flood Insurance Program through FEMA," Schneyer said. "Now, that is not required unless you have a mortgage and you're in the special flood hazard area or the 100-year flood zone." He added: "A lot of those homeowners, especially as you get outside of Kerrville or outside of Austin, might have already paid off their home, they are no longer required to have flood insurance." Cotality expects only a few homeowners to have flood insurance in this part of Texas. "They'll be able to apply for assistance through FEMA, but a majority of that damage, if they don't have flood insurance, it's going to be on the home and business owners to foot that bill," Schneyer said. "If your home cost $500,000 to rebuild entirely, that could be a pretty expensive recovery, not to mention the emotional and psychological damage from friends and neighbors losing their homes and livelihoods." Home insurance premiums could further rise as a result of the recent floods, exacerbating homeowners' existing struggles to protect their homes and even purchase properties. Bill Baldwin, board member of the Houston Association of Realtors (HAR) and a broker with 90 agents under his direction, told Newsweek that the biggest challenge he faces in the industry today is insurance. "It's the unaffordability of insurance, the inability to get insurance," he said. Baldwin and his colleagues at HAR have spent "a ton of effort, money and cooperation on providing flood notices" in recent years, but despite all of this, he said, they have not observed any increase of people securing flood insurance in Houston. "We have fewer people today with flood insurance than had at the day Harvey hit," Baldwin added. "The year after Harvey hit, we saw an increase in flood insurance policies. The cost of the flood insurance policy went up. Now it's been five years, six years, seven years, and the homeowners today are different from the ones back then—half of the people weren't here when Harvey hit." It is a "constant battle" to convince local homeowners that they need insurance, Baldwin says, even if they live in flood-prone areas. "We're Texans, we are hard-headed, we have a mindset of our own," he said. "We think we're supermen when we're not, necessarily. And we often don't experience or expect the intensity of the extreme weather events that we're now seeing," Baldwin explained. "We feel like we're not as vulnerable as we perhaps are." Texas Floods Could Worsen Housing Market Issues Texas Floods Could Worsen Housing Market Issues Newsweek Illustration/Canva/Getty/AP Newsroom ...To Home Prices All of these upward pressures on the cost of homeownership will reduce the desirability of living in flood-prone areas, putting downward pressure on housing demand, Cameron LaPoint, real estate expert and assistant professor of finance at the Yale School of Management, told Newsweek. "We are already seeing similar out-migration trends in places like coastal Florida, where there are similar problems of severe natural disaster risk, unraveling insurance markets, and evidence of post-pandemic overbuilding," he said. "A lack of affordable insurance may push prospective homeowners to look elsewhere, such as in climate haven cities in the northern U.S. which are among the few housing markets growing right now." LaPoint believes the areas directly impacted by the flash flood are likely to face "a continued decline in house prices and rents, which was already in progress after the recovery from the pandemic." Other experts, however, are skeptical about the idea of people choosing to live elsewhere because of the floods. "It might temporarily influence some homebuyer decisions, but the appeal of those counties will not likely change," Dr. Daniel Oney, research director at the Texas Real Estate Research Center at Texas A&M University, told Newsweek. "There may be some outside investor interest, but with mortgage rates currently high, investor activity is down overall—they rely on cheap credit to make their business models work." Baldwin is sure that Texas Hill Country will remain a popular vacation spot despite the risk of flash floods. "If you're from here, you've grown up going to the Guadalupe, or the Frio, or the Trinity. And it's a time-honored tradition to go to these places," he said. "Despite the tragedy, people will keep vacationing there, as we've seen people build after a hurricane or after other disasters. Houston is very hurricane-prone, but we added 75,000 people last year to the greater Houston area. They're not deciding against moving here because of the hurricane. They're learning to live with the new intensity of weather-related events." A Texas state flag flies in a yard filled with debris on July 6 in Hunt, Texas. A Texas state flag flies in a yard filled with debris on July 6 in Hunt, Rent Prices According to Oney, rent prices are likely to jump up in the short term in the areas affected by the floods. In the long term, it would be the "overall demand for those properties that will play a role," he told Newsweek. "Those communities have been popular for retirees and vacation homes because of the natural amenities," Oney said. "People's perceptions of risk are curious. In a few years we would expect the market dynamics to return to something like they were. Though rebuilding may try to avoid high flood risk areas." Baldwin fears the short-term impact that the communities along the Guadalupe River could suffer as tourism dries up and relocate to different parts of the state this summer, rather than any long-term impact. "Many of the people who are still on vacation around the greater Houston, Dallas, Austin area are gonna go to Fredericksburg or Round Top or Wimberley or one of these places that aren't necessarily related to the river, but they're still in the Hill Country and they have the same climate," he said. The greatest impact of this temporary exodus of tourists will be felt by working-class people, Baldwin added. "It's the maid who can't work in that deal, it's the lawn guy who doesn't have a job, it's the waitress who doesn't have anyone to wait on because the restaurant was closed for two weeks and did not have any unemployment insurance." These people, Baldwin said, need Texans' help—and he thinks locals will be rushing back to support them. "Because that's what Texans do," he said. ...And to Property Taxes LaPoint expects property tax revenues for the region affected by the flash floods to potentially shrink in the coming months, as homeowners impacted would either not be able to afford it or benefit from exemptions passed by appraisers as a form of relief. For example, Travis County, in Austin, is offering exemptions if the property suffered damages of at least 15 percent of its value, with up to a 100 percent exemption for those who suffered a total loss of their property. "More appraisers in flood-impacted counties are following suit," LaPoint said. At the same time, property tax bills could fall as a result of lower property values—at least in the short-term. "There is research showing that house prices fall in neighborhoods recently experiencing severe flooding, whether due to flash flooding or hurricanes. If price declines persist, this would also reduce future property tax revenues," LaPoint said. He added: "However, changes in house prices may not always translate to immediate changes in property tax bills due to the stickiness of assessed values and limits on rates. Recent amendments to property tax law in Texas increased homestead exemptions and made it more difficult for cities to raise rates. This will make it difficult for cities to close any short-run revenue gaps without aid from the state government." In its research, Cotality has found that areas that are frequently impacted by natural disasters experience a longer-term reduction in property values, while areas that are only occasionally hit experience a short-term drop. "What we have noticed is that over time, things start to regress back to normal. So especially in areas that are not impacted on a monthly or annual basis, if it's a decade in between flooding events, there's a bit of a short-term memory mentality." A person pays their respects at a memorial honoring the lives lost in the flash floods that claimed at least 135 lives on July 13 in Kerville, Texas. A person pays their respects at a memorial honoring the lives lost in the flash floods that claimed at least 135 lives on July 13 in Kerville, Changes We Can Expect the State Government to Make A majority of the experts who spoke to Newsweek expect the floods will not spur a seismic change in the state's real estate sector. "Texas is a strong property rights state. The governor [Greg Abbott] has called a special session with a few flood-related items, but they are limited to immediate relief efforts, flood warning systems, and streamlining regulations to help recovery," Oney said. "Additional property tax relief was on the session agenda before the floods. So, we don't expect the state to take any action that impacts markets long term because of this disaster." Texans who decide to stay in flood-prone areas are also unlikely to see much in the way of home improvement efforts, LaPoint said. "This is because it's difficult for individual homeowners to make these kinds of physical investments in their property—such as putting the home on stilts—given the relatively high costs involved," he said. "My research on Florida shows that publicly-backed loans can help homeowners fund hurricane-proofing projects that lower their insurance costs and increase the home's value. But projects like new window installations are much cheaper than flood prevention improvements." "Given the financial barriers faced by individual homeowners, there may be renewed calls from residents for the state to invest in key anti-flood prevention measures." Baldwin expects authorities to "probably increase the regulatory environment of a floodway" and update the maps the state is currently using to identify flood-prone areas—though that does not mean that those areas would be considered off-limits for developers, he said. "We're still going to build in these areas, we're just going to learn to build more resiliently," Baldwin added. "They will rebuild in some of these areas that some people would say you shouldn't be building in. It's probably not a practical solution. But it's how we build. People are driven to the coast, whether it's the East Coast, the West Coast, the Florida coast, or the Texas coast. So, you'll still have some development, you'll still have people willing to buy those structures." He continued: "There will be awareness for a brief period of time. But who's going to move there five years from now? They're going to be from California. They're going to be from the East Coast. They're not gonna have been there during that event. They'd have a small recollection, but no realistic experience. That's what happened in Houston. So, I still think people are gonna be at risk."
The Age
2 days ago
- Business
- The Age
Melbourne suburbs where house values rose most over 20 years
In Melbourne's outer north, Donnybrook house values jumped 294.1 per cent, to more than $722,000. Nearby Mickleham rose 289 per cent to almost $724,000. The increases have come as new house and land packages have been rolled out in Melbourne's growth corridors, and more residents have moved in. Melton's local government area had nearly 79,000 residents in 2006, ABS Census data shows, more than doubling to 178,960 a decade and a half later. But in a tale of two cities, the strongest growth was in desirable inner suburb Kew East, which flew 349.5 per cent to a median $2.12 million. Neighbouring Balwyn and Balwyn North rose more than 300 per cent each. Cotality's head of Australian research Eliza Owen said inner-city house value rises were fuelled by wealthier buyers and a lack of available properties rather than the shift of Millennials seeking family homes. 'It's the highly exclusive parts of the market that see the biggest growth in value,' Owen said. 'And it's these parts of the inner city that represent the most desirable and most scarce properties because there is no more developable land.' Loading Owen said the pandemic and remote working prompted a shift in where buyers are purchasing, allowing them to live further from CBD offices. 'It's really not so much of a surprise to see house values in outer suburbs grow, because of this normalisation of remote work and the Millennial shift – but I think there will be limitations to how far it can go, as higher interest rates and affordability issues bite,' Owen said. The Demographics Group co-founder Simon Kuestenmacher said Millennials – born between the early 1980s and mid-1990s – are now the largest generation ever in Australia, and were already changing the face of some of Melbourne's outer suburbs. Those who once lived in trendy inner-city enclaves, but were priced out, are moving to outer suburbs to buy. He said it meant the outer suburbs are 'hipsterising', with trendy places to have a coffee. With substantial greenfield development in Melbourne, prices will remain cheaper than other capital cities, although he noted the lack of infrastructure being built like schools, supermarkets and public transport. Even so, Millennials are expected to keep moving to the fringes for at least the next 12 years, he said, as they couple up and have a family. Kuestenmacher said new migrants are also driving the trend to the affordable outer suburbs. Loading 'They want large homes so they move to areas like Point Cook,' he said. 'Migrants don't have the backing of the bank of mum and dad so they choose to live somewhere affordable.' Investors are catching on. Ray White Melton's Martin Mintoff, the Horster-Haarburgers' agent, said investors were becoming a larger part of the outer suburban buying market, pushing up values. 'At the moment we're seeing a massive shift. Investors were cashing out, but now we're seeing investors from Perth, Sydney and Brisbane in particular,' Mintoff said. 'A lot of them are paying figures that were unheard of for four-bedroom houses.' Buyer's advocates were looking for off-market deals for their interstate clients, he said, and the outer west market has shifted from 80 per cent owner-occupier buyers and 20 per cent investors, to 50-50. It was similar in outer northern suburbs like Donnybrook. Harcourts Mernda's Vanny Bains said while prices had been rising, the past 12 months were challenging, given the rises in interest rates – before the recent reductions. 'It's all doing OK now,' Bains said. 'We're expecting things to go back to normal as interest rates keep dropping this year.' Local investor Sarbjeet Singh hopes to see the market pick up again. Over the past six months Singh has listed three houses in Donnybrook for sale, building them over the past few years through volume builders. All have sold to various buyers – the latest to a young family. Last year he sold to a Sydney investor who had not seen through the house. 'Price-wise, houses are 40 per cent cheaper than Sydney,' Singh said. 'The same house up there would cost $1.1 million to $1.2 million.' Singh agreed prices had risen, but the past 12 months had been challenging for investors. 'In 2018 it was very good, you could sell within two weeks sometimes – at the moment it's taking around three months,' Singh said. 'I'm pretty much breaking even at the moment so that's what I'm waiting for is interest rates to fall.'
Sydney Morning Herald
2 days ago
- Business
- Sydney Morning Herald
Melbourne suburbs where house values rose most over 20 years
In Melbourne's outer north, Donnybrook house values jumped 294.1 per cent, to more than $722,000. Nearby Mickleham rose 289 per cent to almost $724,000. The increases have come as new house and land packages have been rolled out in Melbourne's growth corridors, and more residents have moved in. Melton's local government area had nearly 79,000 residents in 2006, ABS Census data shows, more than doubling to 178,960 a decade and a half later. But in a tale of two cities, the strongest growth was in desirable inner suburb Kew East, which flew 349.5 per cent to a median $2.12 million. Neighbouring Balwyn and Balwyn North rose more than 300 per cent each. Cotality's head of Australian research Eliza Owen said inner-city house value rises were fuelled by wealthier buyers and a lack of available properties rather than the shift of Millennials seeking family homes. 'It's the highly exclusive parts of the market that see the biggest growth in value,' Owen said. 'And it's these parts of the inner city that represent the most desirable and most scarce properties because there is no more developable land.' Loading Owen said the pandemic and remote working prompted a shift in where buyers are purchasing, allowing them to live further from CBD offices. 'It's really not so much of a surprise to see house values in outer suburbs grow, because of this normalisation of remote work and the Millennial shift – but I think there will be limitations to how far it can go, as higher interest rates and affordability issues bite,' Owen said. The Demographics Group co-founder Simon Kuestenmacher said Millennials – born between the early 1980s and mid-1990s – are now the largest generation ever in Australia, and were already changing the face of some of Melbourne's outer suburbs. Those who once lived in trendy inner-city enclaves, but were priced out, are moving to outer suburbs to buy. He said it meant the outer suburbs are 'hipsterising', with trendy places to have a coffee. With substantial greenfield development in Melbourne, prices will remain cheaper than other capital cities, although he noted the lack of infrastructure being built like schools, supermarkets and public transport. Even so, Millennials are expected to keep moving to the fringes for at least the next 12 years, he said, as they couple up and have a family. Kuestenmacher said new migrants are also driving the trend to the affordable outer suburbs. Loading 'They want large homes so they move to areas like Point Cook,' he said. 'Migrants don't have the backing of the bank of mum and dad so they choose to live somewhere affordable.' Investors are catching on. Ray White Melton's Martin Mintoff, the Horster-Haarburgers' agent, said investors were becoming a larger part of the outer suburban buying market, pushing up values. 'At the moment we're seeing a massive shift. Investors were cashing out, but now we're seeing investors from Perth, Sydney and Brisbane in particular,' Mintoff said. 'A lot of them are paying figures that were unheard of for four-bedroom houses.' Buyer's advocates were looking for off-market deals for their interstate clients, he said, and the outer west market has shifted from 80 per cent owner-occupier buyers and 20 per cent investors, to 50-50. It was similar in outer northern suburbs like Donnybrook. Harcourts Mernda's Vanny Bains said while prices had been rising, the past 12 months were challenging, given the rises in interest rates – before the recent reductions. 'It's all doing OK now,' Bains said. 'We're expecting things to go back to normal as interest rates keep dropping this year.' Local investor Sarbjeet Singh hopes to see the market pick up again. Over the past six months Singh has listed three houses in Donnybrook for sale, building them over the past few years through volume builders. All have sold to various buyers – the latest to a young family. Last year he sold to a Sydney investor who had not seen through the house. 'Price-wise, houses are 40 per cent cheaper than Sydney,' Singh said. 'The same house up there would cost $1.1 million to $1.2 million.' Singh agreed prices had risen, but the past 12 months had been challenging for investors. 'In 2018 it was very good, you could sell within two weeks sometimes – at the moment it's taking around three months,' Singh said. 'I'm pretty much breaking even at the moment so that's what I'm waiting for is interest rates to fall.'
The Age
3 days ago
- Business
- The Age
‘You'd be silly to sell': The Melbourne suburbs no one wants to leave
Melbourne buyers looking for a suburb where they can find a forever home, surrounded by others who want the same, have options in both prestige and affordable neighbourhoods. Cotality (formerly CoreLogic) figures show properties change hands the least in the blue-chip Mornington Peninsula suburb of Portsea, statistically part of greater Melbourne, where the median dwelling value is $2.64 million. Those who sold during the 12 months to April had held on to their properties for a median period of 21.9 years. It was followed by Vermont South in the leafy outer-east, which had a median hold period of 20.6 years and Tootgarook at 18.9 years. Their median values were $1,488,000 and $897,000, respectively. Cotality head of Australian research Eliza Owen said the top suburbs all recorded median hold periods – the time between sales of a property – longer than the city's median of 9.6 years. 'What we usually see with suburbs associated with long hold periods is they tend to be associated with areas that are long-held family suburbs,' she said. 'Suburbs that have a relatively low portion of renters … they're often suburbs where young couples with kids were buying 10 to 20 years ago.' A cluster of suburbs in the Brimbank council area, west of Melbourne, fit into this category and were relatively affordable, Owen said, despite being among the longest-held neighbourhoods across the city. Keilor Downs, Delahey and Taylors Lakes were sixth, seventh and eighth on the list and had median hold periods between 16.2 years and 16.7 years. Their median values ranged from about $700,000 to almost $1 million. Lifelong residents there aren't surprised. Dimitra Mouyis said she rarely had to leave the area when living there.
