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Poll Fixing Crisis

Hotspotting

Release Date: 08/29/2024

Approvals V Construction show art Approvals V Construction

Hotspotting

Two very different headlines have summed up the problems for Australia’s ongoing housing shortage. One of the recent media headlines declared that building approvals were at a two-year high and that things were improving for the nation’s housing shortage.  The other described why building approvals are almost irrelevant – it said that project deferrals are occurring at a record rate. The reality of the current crisis is this: it doesn’t matter how many houses and apartments are approved for construction – and it doesn’t matter how many re-zonings state governments push through...

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Webinar Replay: Reflections & Projections - A Deep Dive into Real Estate Trends & Forecasts show art Webinar Replay: Reflections & Projections - A Deep Dive into Real Estate Trends & Forecasts

Hotspotting

In this insightful webinar, Terry Ryder, founder of Hotspotting, and Tim Graham, Hotspotting’s General Manager, analyze the surprises and trends of 2024 in the Australian property market and share their projections for 2025. With decades of combined experience, they provide investors with actionable advice on navigating the coming year. Key Highlights 2024 in Review Defying Predictions: Despite high interest rates and inflationary pressures, property prices rose by an average of 5.53% nationally in 2024. Perth led with an astonishing 18.7% growth, followed by regional Western Australia,...

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Best Buys Result show art Best Buys Result

Hotspotting

You don’t have to be super rich or invest $1 million to make big capital gains in residential real estate: you just need to follow Hotspotting’s signature report, the National Top 10 Best Buys report. Those who followed the tips in our report of a year ago could have made close to $100,000 in capital gains spending as little as $400,000 – or $180,000 in gains after investing $630,000. In December 2023 we published our National Top Best Buys reports for Summer 2023-34. Our top 10 locations for investors to consider covered a wide range of price points, from less than $300,000 and above $1...

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Listings Rise show art Listings Rise

Hotspotting

The greatest complaint heard most often in real estate across Australia is that there are plenty of buyers, but a shortage of listings.   The number of properties for sale has been well short of the levels needed for a balanced market, particularly in the boom cities of Adelaide, Brisbane and Perth.   But that is steadily changing. According to SQM Research, total listings of properties for sale nationwide grew 7.6% in November and are now more than 10% higher than a year ago.   Perhaps most significantly, there were major rises in November in those three boom cities, with the...

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Media Absurdities show art Media Absurdities

Hotspotting

Things are constantly changing in real estate nationwide but the one factor that never changes is this:  we can always rely on news media to distort the facts and deliver a steady flow of misinformation to Australian consumers, all in the interests of attracting readership, with little regard for accuracy, honesty or fairness. The past week or so has been chockful of media nonsense. If you can believe the headlines, the national property boom is over, house prices are plunging, the rental boom is over and the North Queensland city of Townsville is a mining town. One of the constants of my...

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2025 Predictions show art 2025 Predictions

Hotspotting

Rumours of the death of ‘the national property boom’ are greatly exaggerated – especially since we didn’t have a national property boom in 2024. Rather, over the past 12 months, we have seen differing market cycles in many locations - as is the usual state of play in real estate throughout Australia. Strong property price growth was recorded in Perth, Adelaide, and Brisbane in 2024, but not in Melbourne, Sydney, Canberra, Darwin or Hobart.    Similarly, in the regional areas, there were declining and stagnating markets, as well as some where prices were showing good price...

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Regional Investment Boom show art Regional Investment Boom

Hotspotting

Victoria’s real estate market is witnessing a significant shift as young first-home buyers increasingly seek affordable housing in regional areas.   According to recent data from the Australian Bureau of Statistics (ABS), first-home buyer loans in Victoria soared to 4,202 in July – the highest number in nearly two years.    This surge reflects growing confidence among young buyers and a trend towards exploring housing options beyond Melbourne.   Nationally, the Commonwealth Bank of Australia and the Regional Australia Institute report that the flow of people from cities...

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Units Beat Houses show art Units Beat Houses

Hotspotting

Hotspotting was among the first to identify and highlight the most significant change in the Australian real estate scene – the emerging trend which we document in the quarterly editions of the report titled The Rise and Rise of Apartments., published in association with Nuestar.   This trend has turned upside down the dominant paradigm in real estate, that houses out-perform apartments on capital growth. There is now growing evidence that attached dwellings are mounting a strong challenge to houses.   It has long been believed that land content was the big thing in driving...

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Why a Buyer’s Agent Is a Game-Changer for Property Investors | Featuring Chris Graham show art Why a Buyer’s Agent Is a Game-Changer for Property Investors | Featuring Chris Graham

Hotspotting

Thinking of buying property on your own? 🏡 In this episode of The Property Playbook, host Terry Ryder is joined by Chris Graham, Senior Property Advisor at Australian Hotspot Advocacy, to explore why engaging a buyer’s agent could be the key to securing your next winning investment. What You'll Learn: What a buyer’s agent does and how they work exclusively for the buyer’s interests. The value of off-market properties and how buyer’s agents can provide access. Why having a professional on your team ensures due diligence and avoids costly mistakes. How to identify a trustworthy...

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Melbourne Market Myths show art Melbourne Market Myths

Hotspotting

Melbourne’s property market remains the great under-achiever of the nation but that may be about to change.   A number of key indicators suggest better performance by the Melbourne property market is imminent.   One pointer to better times is the latest Property Sentiment survey by API magazine, which recorded a major turnaround in investor attitudes towards the Victorian property market.   The survey asked: Which state or territory do you regard as having the best property investment prospects for the next 12 months?   Mid-year Melbourne and Victoria attracted only 8.6...

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Top economists are unanimous in believing Australia's housing market is in crisis, according to a new poll.

And I have to say, Wow, we had to go to a group of “top economists” to achieve that startling revelation.

It comes from a survey in which the Economic Society of Australia offered these top economists a choice of 14 measures identified by as likely to restrain prices for buyers and renters – in other prevent property prices and rents from continuing to rise.

Therein lies the first problem: they polled economists rather than real estate experts.

If there’s one thing we’ve learnt in the past four or five years of observing real estate analysis and commentary is that economists, generally and collectively, have a very poor understanding of real estate markets, which is why they are so incredibly bad at predicting outcomes.

But, ignoring that reality, the survey asked 49 people described as “leading economists” to respond to this question:

"Here is a list of measures governments could take to increase housing affordability (to reduce the cost of purchasing or renting relative to wages). Which would you most support? Pick up to three."

Among them, apparently, are former heads of government agencies, a former Reserve Bank board member, and former Treasury, International Monetary Fund and Organisation for Economic Co-operation and Development officials.

Sadly, but rather typically, the poll didn’t include any property experts. Just a group of individuals who have typically occupied ivory towers a long way from the coal face of property markets.

And here’s the next problem with this process:

the tick-box options presented to the leading economists did NOT include the only measure likely to ease the rental shortage and therefore restrain rental increases – providing incentives for people to become landlords.

You have to wonder why not.

So, whoever designed the poll – yes, a group of economists – failed to understand the problems they were exploring.

Of the options the panel of non-experts were given to choose from, two-thirds of them picked "ease planning restrictions" as most important fix. Almost as many picked "provide more public housing".

So, most believe that creating more dwellings will fix everything. Which, again, shows a fundamental lack of understanding of the problems, how they were created and where the solutions lie.

But it gets worse.

About one-third wanted to "tighten negative gearing and capital gains tax concessions".

You have to wonder about the thought process here. How does causing a major deterioration in the financial position of the people who provide the homes tenants occupy cause rents to fall?

And given that investors are less than 20% of the buyers competing in the market, how does this stop prices from rising.

Surely you would have to introduce measures to curtail home buyers, who comprise almost 80% of buyers competing in the market, if you wanted to stop prices from rising.

Back to the survey: about a third of the respondents wanted to "replace stamp duty with land tax applying to family homes".

Okay, so that’s a measure that might slow down home buyers a little.

Also popular were removing barriers to building prefabricated homes (31 per cent), fast-tracking the training of h ome builders (18 per cent) and fast-tracking the immigration of home builders (14 per cent).

Again, all are measures to increase housing supply and this appears to assume that building more dwellings will stop prices and rents from rising.

Ten per cent of those surveyed wanted to include the family home in the age pension assets test, 8 per cent wanted to remove first homeowner grants and concessions, and 6 per cent wanted to apply capital gains tax to family homes.

So, those measures at least at targeted on home buyers and appear to recognise their part in causing prices to rise, but these were the least popular of the tick-box choices.

The most popular were all measures which assume that building more homes and curtailing property investors will fix all problems.

But doesn’t explain how clamping down on the providers of rental homes will cause rents to fall – or stop prices from rising