A record 882 cranes were operational across Australia during the September quarter, according to Rider Levett Bucknall (RLB).

Of those 882 cranes, 554 were residential, which was a new record, and 328 non-residential, which was close to record levels. That included 77 cranes for mixed-use developments, 64 for commercial projects and 56 for civil projects.

RLB said the large number of cranes operating around the country correlated with robust economic activity.

“Total construction activity across Australia for the 2022 calendar year was up by 1.8%, or $3.9 billion, compared to 2021, according to the Australian Bureau of Statistics. Construction activity in Q1 2023 continued this trend, rising 3.9% or $2.1 billion year-on-year.”

The cities with the most cranes in the September quarter were:

Sydney, the Gold Coast and the Sunshine Coast all recorded record numbers of cranes in the September quarter. 

Since the start of the pandemic in March 2020, total cranes within Australia have increased by 22% or 160 cranes. This has been driven by increases in Sydney (102) and south-east Queensland (Brisbane 27, Gold Coast 28, Sunshine Coast 11).

The federal government’s Home Guarantee Scheme (HGS) is helping an increasing number of Australians break into the market, research from Housing Australia has found.

According to the Federal Government, more than 32,500 guarantees were issued in the 2022–23 financial year, an increase of around 39% on 2021-22, when 23,300 guarantees were issued. That included:

The HGS includes three separate programs. The First Home Guarantee and Regional First Home Buyer Guarantee help first-time buyers purchase a property with just a 5% deposit, while the Family Home Guarantee helps single parents enter the market with a 2% deposit. Crucially, participants don’t have to pay lender’s mortgage insurance, because the government guarantees the difference between their deposit and a standard 20% deposit.

One standout feature of the HGS is how many young people are using government assistance to buy their first home. In 2022-23, 51% of First Home Buyer Grant participants were aged 18-29 years, while 60% of Regional First Home Buyer Grant participants were in that age bracket.

Another is the ultra-low arrears rate – for the two first home buyer programs, arrears were under 0.1% last financial year.

It’s also noteworthy that since the HGS started in 2019-20, a total of 9,730 participants – or 12% of the total – have transitioned out of the scheme by increasing their equity to at least 20%. 

 

How to qualify for the HGS

Not all first home buyers and single parents are eligible for the HGS. Criteria apply.

That includes income caps: buyers can earn a maximum of $125,000 for singles and $200,000 for joint applicants.

It also includes property price caps, which differ from location to location, ranging from $400,000 for homes on Christmas Island and Cocos Islands to $900,000 for homes in Sydney, Newcastle, Lake Macquarie and Illawarra.

Also, not all lenders participate. There are 33 lenders that are able to offer HGS loans, including three of the big four banks and a range of smaller lenders.

Get in touch if you’re a first home buyer or single parent and you’re wondering if you’re eligible for the HGS. I’ll let you know if you qualify and work with you through the next steps to get you on the property ladder.

When you buy your next vehicle, there are three different ways you can get a loan.

The first is through your car dealer. This can be convenient, because the dealer can sell you a car and arrange a loan at the same time. But there are a few things to consider when it comes tobig problems with dealer finance. First, dealers generally work with just one lender, so they won’t compare the market for you. Second, dealers are experts in cars, not loans, so it would be risky to rely on their advice. Third, dealers are incentivised to sell you a car, not find a loan that matches your long-term financial goals.

The second way to get a car loan is to go directly to your bank. On the plus side, bank staff know more about loans than car salespeople. But there’s a massive downside, which is that banks will only tell you about their own products, even if they know other lenders are offering better loans with lower rates.

The third way is to get a loan through a finance broker. Many consumers regard this option as the best, because your broker will:

 

Finance first, vehicle second

Before you start looking for a car, motorbike or any other vehicle, get in touch with me to discuss your loan. 

I’ll calculate your borrowing capacity and present you with a range of options, so you’ll know, ahead of time, how much you can borrow and how much your loan will cost.

I look forward to helping you.

There’s been a big increase in the number of properties being listed for sale, which should please anyone in the market for a home or investment property.

Throughout Australia, the number of new listings (defined as those less than 30 days old) was 14.3% higher in September than August, according to SQM Research. That included increases of:

Some sort of increase was to be expected, given that listings generally rise as winter ends and spring begins. So it’s noteworthy the increase in new listings not only occurred month-on-month but also year-on-year – by 5.7% nationally, and in every capital city except Perth.

Meanwhile, the number of total listings – which includes both new listings and older listings – throughout the country also rose, by 9.3% month-on-month and 1.4% year-on-year.

 

Asking prices reach record levels

Generally, an increase in listings puts downward pressure on prices, as more supply should mean less demand.

But in September, national asking prices – which refer to the prices initially being asked by vendors, rather than final selling prices – rose 0.9% and reached a new record high. Asking prices also hit record levels in Sydney, Brisbane, Perth and Adelaide.

In other words, buyer competition is strong in many parts of the country.

That makes it even more important to get a pre-approval before you start your property search, because vendors tend to favour buyers who are ready to do business. If you want to buy a property in late 2023 or early 2024, my strong recommendation is to contact me now so I can compare home loans for you and get your finance in place.

Outgoing Reserve Bank Governor Philip Lowe has used a farewell address to deliver some insightful remarks about inflation, unemployment and productivity.

Before Dr Lowe became governor, inflation was quite stable. But during his seven-year stint in the top job, inflation ranged from a low of -0.3% to a high of 7.8%. 

“My view is that it will be difficult to return to the earlier world in which inflation tracked in a very narrow range,” he said.

“The increased prevalence of supply shocks, deglobalisation, climate change, the energy transition and shifts in demographics mean either steeper supply curves or more variable supply curves. While this doesn’t mean that the inflation target can’t be achieved on average, it does mean that inflation is likely to be more variable around that target.”

Unemployment

During Dr Lowe’s governorship, unemployment fell from a range of 5.5-6.0% to about 3.5% – the lowest rate in nearly 50 years.

“The share of Australians with a job has never been higher than it is today and the number of people with a job has increased by more than 2 million since mid-2016,” he said.

“The current cycle still has a way to run, but it is possible that Australia can sustain unemployment rates below what we have had over the past 40 years. If so, this would be very good news for both the economy and our society.”

Productivity

Dr Lowe said it was vital for Australia to increase its productivity growth, because that was “central to our future prosperity”. Unfortunately, though, our recent record on productivity had been poor.

“There have been many investigations into the underlying causes and what to do about this. So, there is no shortage of ideas, including in the areas of tax, human capital accumulation, energy and infrastructure, the design of our cities, the approach to regulation and competition policy, industrial relations and the provision of government services,” he said.

“There are improvement opportunities in all these areas. The problem is not a lack of ideas. Instead, it is in building the consensus within society to implement some of these ideas. This is, fundamentally, a political problem, and it is a major problem. If we can’t build a consensus for changes, the economy will drift and there is a material risk that our living standards will stagnate.”

The tourism sub-sector of the commercial property market has been an outlier over the past three years – for worse during the pandemic and now for the better.

“For the rest of the commercial property market, volumes hit new highs as interest rates fell in 2020 through to 2022, with a range of new investors looking to diversify their portfolios,” according to Ray White Commercial Head of Research Vanessa Rader. 

“However, lockdowns, border closures and a halt to international travel saw interest in tourism assets fall to long-term lows, with annual turnover of $1.4 billion in 2020 and limited sales during the subsequent quarters.”

Since then, investment has fallen in the wider commercial market, in part due to rising interest rates, but skyrocketed in the tourism sub-sector.

“Turnover saw a swift increase during 2022 in response to improving tourism data, showing increased air travel, hotel occupancy and growth in average daily room rates. Interest in smaller regional hotels and motels also increased as domestic travel rebounded due to a strong driving market which improved further after restrictions eased regarding interstate movements,” Ms Rader said.

“With both domestic and international travel showing these improvements, investment levels in hotel assets across the country has now increased. During 2022-23, volumes reached $4.1 billion, a growth of 56.7% on the prior year, highlighting the improved confidence across the tourism industry.”

At the same time as tourism transaction volumes have increased, there’s been a change in the type of buyer purchasing tourism assets, according to Ms Rader.

“Historically, offshore buyers have been the major purchasers of hotel assets, however, we have seen a reduction this year in activity from this buyer group. Private and institutional buyers are representing the greatest net acquisition in 2023 with foreign investors representing the largest seller group,” she said.

Why hotels are likely to remain in demand

Ms Rader said tourism had experienced a wild ride over the past decade, but that the future looked bright.

“The five-year average returns of just 3.0% highlights the difficulty for this sector during the pandemic era, while assets such as office recorded 6.6% returns. However, over the longer 10-year period, we can see despite these difficulties that returns continued to achieve outstanding levels at 9.2% per annum, closely aligned to office at 9.4% and well ahead of the retail sector which only represented a 5.7% annual return,” she said.

“Looking ahead, the outlook for the hotel sector is strong. While inflationary pressures have been elevated, reducing discretionary spending levels, we continue to see demand for travel high domestically. The current state of the Australian dollar will further enhance the attractiveness of Australia as a destination, improving the demand for accommodation, growing occupancy and returns for this commercial investment class.”

There are a range of tourism assets available to investors, from B&Bs and campgrounds to hotels and convention centres. If you’d like to add a tourism asset to your portfolio, contact me and I’ll arrange the finance for you.

The Payment Times Reporting Scheme, which aims to improve payment times for small businesses, needs to be updated to better serve the small business sector, according to an independent review of the Payment Times Reporting Act 2020.

Craig Emerson, who conducted the review, said the federal government should ban unfair payment practices, increase the powers of the Payment Times Reporting Regulator and increase the importance of prompt payment in the Commonwealth procurement supply chain.

Dr Emerson also recommended that the government “foster a culture of prompt payment” among businesses by taking advantage of their desire to protect their reputation. “Paying small-business suppliers quickly should be part of the environmental, social and governance (ESG) obligations of large businesses,” he said, adding that there should be public reporting on “worst and best payers to small businesses”.

Small businesses should be helped to recognise and act against unfair payment-related contract terms, according to Dr Emerson. “Introduce examples of unfair terms relating to payment of small-business suppliers into updated regulatory guidance on unfair contract terms,” he said.

Dr Emerson also said that maximum payment times from big to small businesses should not

be mandated, “given the perverse outcomes” that could result.

Minister for Small Business Julie Collins said the government would consider the review’s findings and recommendations.

 

Ombudsman supports report

The small business ombudsman, Bruce Billson, supported Dr Emerson’s report.

“Finance is the oxygen of enterprise. Cash flow is vital to the survival of small and family businesses, yet this sobering review by Dr Craig Emerson finds there has been no significant improvement by big business to pay their small business customers in a timely way. The original intention of the Payment Times Register was to improve the performance of big business but it has so far failed. Dr Emerson has produced a thoughtful road map to get this ambition back on track,” he said.

“Almost 40% of the requests for assistance to our office relate to payment times and payment disputes and, as Dr Emerson has noted, late payments are a major source of financial and emotional stress for small-business owners and have flow-on consequences throughout the economy. Sadly, Dr Emerson’s key finding aligns with what we have been saying, that the performance of many big businesses in paying small businesses has been woeful.”

Mr Billson also endorsed Dr Emerson’s plan to publicise the worst and best payers.

“A similar system operates in the UK and has been highly effective and has made paying small-business suppliers quickly part of positive corporate reputations and the environmental, social and governance obligations of large businesses,” he said.

As Mr Billson said, finance is the oxygen of enterprise. Contact me if you want to know aboutdifferent cash flow lending solutions to make breathing a little bit easier.

Over the past three years, there’s been a significant increase in the number of new businesses, which may translate into increased demand for commercial property.

Between the 2019-20 and 2022-23 financial years, the number of actively trading businesses in Australia rose 11.9%, from 2,314,448 to 2,589,873, according to the Australian Bureau of Statistics.

Focusing just on the most recent year, the industries that experienced the largest increase in business numbers were:

Ray White Commercial Head of Research Vanessa Rader said the strong growth in the healthcare & social assistance industry matched “the strong demand for healthcare assets, be it hospitals, medical centres and suites, and integrated facilities”.

Ms Rader also said the growth in transport, postal & warehousing was being driven by a rise in fuelling activity. “While low vacancies remain across most industrial markets, the requirement for distribution and storage facilities is not expected to wane, however a reduction in manufacturing businesses may assist in opening up some industrial assets,” she said.

Meanwhile, despite the poor performance of many office markets across the country, “new business starts in the professional sectors, including finance, insurance and real estate, may see the office market turn a corner”.

 

What is the outlook for different asset classes?

Data from Morgan Stanley Capital International (MSCI) showed that demand remained for investors in the healthcare and industrial sectors looking to take advantage of the long-term capital gains associated with these asset classes, according to Ms Rader.

“Strong and stable income returns are also a feature of these asset classes, while the mismatch between demand and supply to occupy has ensured income certainty. Over the

last 10 years we have seen annual total returns for industrial and healthcare at 14.2% and 13.8% respectively, ahead of both retail and office assets,” she said.

For the office sector, Ms Rader said the high vacancy environment would take some time to play through, keeping returns subdued and investor demand levels dampened until substantial price corrections were achieved. While there had been an encouraging number of new business starts among professional services industries, “the shift in workplace behaviours around working from home the greater stumbling block for this asset class,” she said.

 

“Retail assets are also grappling with the changing consumer sentiment towards bricks-and-mortar retail,” according to Ms Rader, and “while income returns remain stable, this uncertainty has seen limited positivity in capital returns over the last 10 years”.

 

Commercial real estate can provide diversity to an investment portfolio. Another benefit of commercial property is that it features a range of asset classes, catering to investors’ different goals and risk profiles. Get in touch if you’re thinking about investing in commercial property. I’ll explain how to finance the deal and compare different loan options for you.

 

The Reserve Bank of Australia’s new Chair Michelle Bullock today announced the central bank would hold the nation’s cash rate at 4.10%.

Despite the cash rate sitting four percentage points higher than its all-time low in 2022, we are still seeing the typical springtime boost in properties going to auction. The week ending 24 September saw an estimated 2,725 properties go under the hammer, up from 2,314 the week prior and 2,275 from the week before, according to CoreLogic. This is more than double the auctions seen this time last year.

And so it looks like flowers are in bloom, birds are chirping (and swooping) and auctioneers have truly warmed up their gavels. That’s right, we’re in spring selling season. Are you prepared?

Whether you are just beginning your property-purchase journey, or adding to your portfolio, it is a good idea to come have a chat to understand your borrowing capacity and whether pre-approval could help you have more confidence when bidding.

Some quick tips to help you on your bidding journey.

    1. Keep an eye on the market. See what other, similar properties in the area are selling for.
    2. Reach out for a property report. I can provide this free of charge, showing the approximate value of the property you are interested in.
    3. Attend open homes. Even if you don’t think you want to bid for that property, it can help to understand demand in the area.
    4. Create a shortlist. By having a few homes on the radar you could be less likely to develop an emotional tie to one, which can lead to bidding higher than you were comfortable with.
    5. Have a support team. It’s a good idea to have a conveyancer/solicitor ready to go and aware of your intention to buy. You may also consider getting a building inspector to have a look before the auction and of course, your mortgage broker.

If you are heading to auction, some important things to keep in mind include:

Consumers snapping up cars in “unprecedented” numbers

Australian car buyers have set their second consecutive monthly record.

After consumers purchased 96,859 new vehicles in July – the highest number ever for July – they followed up by purchasing 109,966 new vehicles in August – a record for the month, according to the Federal Chamber of Automotive Industries (FCAI).

FCAI Chief Executive Tony Weber said these record results were positive news for both car manufacturers and consumers.

“The Australian automotive sector continues to demonstrate its strength, with August recording unprecedented sales figures, reflecting both a high level of demand from Australians and improved supply of vehicles,” he said.

“Year-to-date sales have increased 9.9%, which is a better indicator of the underlying strength of the market.”

The latest vehicle sales data also shows Australians’ rising interest in alternative vehicles.

Electric vehicles accounted for 6.4% of sales in August and hybrid vehicles 10.5%.

“As consumers continue to embrace low-emissions technologies we are seeing growth in electric, plug-in and hybrid vehicle sales. More than one in six vehicles sold in the month of August featured low-emissions technologies,” Mr Weber said.

 

Find the right finance

Whether you’re in the market for a traditional vehicle or an electric vehicle, getting the right finance could save you time and money. That’s why it is a good idea to speak to a broker. We can compare a panel of lenders to find the right one for your goals and circumstances. 

Compare this to a dealership that often offers a limited number of products that may not actually be in your best interest.