Theresa Worrell: Weekend reads – Must read articles from the last week

There are more interesting articles, commentaries and analyst reports on the Web every week than anyone could read in a month.

Each Saturday morning I like to share some of the ones I’ve read during the week.

The weekend will be over before you know it, so enjoy some weekend reading.

Millennials still strive for Great Australian Dream, cost of living their greatest election issue

It looks like Baby Boomers and Millennials are not so different when it comes to the Great Australian Dream of owning a property.

Millennials still strive for the Great Australian Dream of owning property yet fewer are able to achieve it, a new report has found.

The cost of living is the single most important issue ahead of the federal election this year for Australians aged 19 to 36, according to The Australian Millennial Report 2019.

It was closely followed by concerns about the economy, housing affordability and saving for a house, the report found, which surveyed more than 1200 Millennials across the country.

The traditional path of finishing university and starting full-time work no longer helped Millennials achieve success, according to Tom McGillick, Millennial demographer and co-author of the report.

“That’s not a straightforward path to prosperity any more … showing up every day doesn’t mean you’re going to make progress in this economy,” he said. “We’re experiencing much greater job insecurity.”

Older Millennials, aged 30 to 36, struggled with the cost of living compared to their younger counterparts, which was the surprising-yet-worrying trend, Mr McGillick said.

“You’re no more likely to have disposable income at 36 than at 24.

There’s not anything to suggest that people in their mid-20s now are going to be that much further ahead in five years’ [time] either,” he said.

The prospect of owning property was a Millennial’s single most predictor of personal optimism, the report found.

All Millennial age groups associated success with increasing personal wealth, yet trying to save money or a home deposit was one of their greatest financial challenges.

“You were much more likely to rate your prospects of success if property was attainable,” Mr McGillick said.

“It is a huge deal in terms of the life of a young person and a young family.

“Millennials are like every other generation,” Mr McGillick added.

“They want the same thing. The idea of the Great Australian Dream is still there.

We have seen our parents’ generation, the Baby Boomers, focus on property investment as wealth [creation] and security in retirement.”

Millennials in the ACT, Victoria and the Northern Territory were the most optimistic in attaining their goal of purchasing property for the first time.

Millennials in Queensland and NSW were the least optimistic.

But falling prices in the housing market over the past year meant Millennials became more focused on saving for a property, which was encouraging, Mr McGillick said.

There was a marginal increase of 1.58 per cent of Millennials who took out a mortgage with a partner and 1.37 per cent increase for those who took out a mortgage on their own.

Seven per cent of Millennials returned to live at home with parents in order to save a deposit, up 5.31 per cent from 2018.

And some 13 per cent of Millennials were renting and saving for a deposit this year, up from 4.1 per cent in 2018.

Read the full article here

RBA inches closer to folding

Could we be seeing an interest rate cut sooner than expected?

This Blog by Pete Wargen t looks at what could drive an early 2019 cut.

Housing prices down 5pc in 2018

The ABS released its residential price indexes this morning for 2018.

With all the usual disclaimers about there being markets within markets within markets, detached house prices across the eight capital cities fell 6 per cent over the calendar year, and attached dwellings (including units, townhouses, and terraces) fell by 4 per cent.

Overall, median prices were 5 per cent lower.

In Sydney, prices peaked in mid-2017 on this index (there’s clearly a bit of a lag effect, as prices were seen to be on the way down a few months sooner than that) and detached house prices have fallen 9.8 per cent since that time.

Read the full article here

Do auctions still work in this soft market?

As results from each auction weekend appear slower – the questions remains – do auctions still work?

In this article for Switzer, John McGrath looks at what we need to consider.

It’s not unusual to see a reduced number of homes listed for sale by auction when the market is cooling.

It reflects two trends – fewer owners selling overall and less confidence in the auction method amongst those who are.

CoreLogic’s latest quarterly auction report shows 25,894 homes were taken to auction across the combined capital cities in the December 2018 quarter compared to 32,408 in December 2017.

This trend has carried on into 2019 with the most acute change in auction volumes in Sydney and Melbourne.

Weekly auction volumes are down about 30% in February/March 2019 compared to November 2018.

The prospect of going to auction causes anxiety for many sellers, even in the best of market conditions, so of course we expect to see fewer home owners choosing the auction method when the market is challenging.

But in my view it’s still the best way to sell, especially if you own an ‘A grade’ property that ticks a lot of boxes for buyers.

I have long advocated the auction process as the fairest and most transparent way to buy property.

Choosing the best sales method for your property comes down to property type, local market conditions and your personal preferences so, of course, you and your agent need to discuss this and come to a decision together.

However, there are many benefits to the auction process and they’re the same in both hot and cold markets.

Benefits of auction for sellers in hot and cold markets

Auctions create a transparent forum for committed buyers to battle it out, enabling you to truly flush out the very best price in today’s market.

Auction gives you a better chance of a sale in a shorter timeframe compared to private treaty.

The normal 3-4 week campaign timeframe creates urgency and forces buyers to focus and prepare. Lending restrictions mean some buyers need more time to secure their finance these days, so agents are responding by postponing auctions 1-2 weeks, when necessary, to maximise competition

You have three opportunities to sell – prior, at auction or post-auction. An experienced agent with expert negotiating skills knows how to approach all three situations to draw out the best price.

The competition of an auction naturally heightens buyers’ emotions and their desire to ‘win’.

A skilled auctioneer will make the difference between a good sale and an exceptional one.

While it’s typical to see just one or two registered buyers at Sydney and Melbourne auctions today, a skilled agent and auctioneer can work with this. You’d be surprised how many homes are selling for good prices at auction with just one bidder. The auction method has worked – it has forced that bidder to do all their checks and make an offer in the timeframe you’ve dictated.

If you’re going to sell by auction, it’s not only important to find the right agent, you also need the right auctioneer.

Just as you would shop around for your agent, you need to do the same with your auctioneer.

Read the full article here

Relax, Australian housing bears. Financial regulators think they have this downturn covered

Things in our property market are not as bad as they seem according to financial regulators.

An article on Business Insider delivers notes from a recently quarterly statement explaining why there’s no need to panic.

That’s the broad message from Australia’s Council of Financial Regulators (CFR) latest quarterly statement with members expressing little concern about recent weakness in the housing market.

A day after ABS data revealed that Australian home prices fell at the fastest pace in at least 15 years in the December quarter, the CFR, containing representatives from RBA, ASIC, APRA and the Australian Treasury, described the recent pace of price declines as “orderly”, suggesting there’s little concern at this point in the housing cycle.

“The adjustment in housing prices and activity has been orderly,” the CFR said.

“Housing prices nationally have fallen by 6.5% over the past year, but this has followed a period of large price gains in some areas.”

The Council also expressed little concern about a potential lift in financial stability risks as a result of the downturn in prices, suggesting that it “does not raise material financial stability concerns”.

“The improvement in banks’ lending standards — including a lower share of high loan-to-valuation ratio lending — means that households and lenders generally are less vulnerable to falling housing prices than in the past,” it said.

“Despite historically high household debt, signs of financial stress remain relatively contained given a strong labour market and low interest rates.

“The Council noted that while mortgage arrears rates remain low, they have reached a post-financial crisis high. This largely reflects regional conditions.”

On the slowdown in housing credit growth over the past year or so, a major factor behind recent price falls, the CFR continued to suggest it was a result of weaker demand, rather than the impact of tighter lending standards from Australian lenders.

“Members agreed the evidence from data and consultations with banks indicated that the slowing in credit largely reflects weaker demand, particularly from investors,” it said.

“There has also been some tightening of credit supply over the past year as lenders have applied their lending policies more stringently and undertaken more detailed scrutiny of borrowers’ expenses and other liabilities.”

While the comments from the CFR reflect little concern at this point, it added the caveat that the outlook for housing market activity and prices remained “uncertain”.

Read the full article here

What your coffee says about you

Are you an espresso or latter drinker?

According to an article on Executivestyle.com.au the kind of coffee you drink says a lot about you.

Are you an espresso, cappuccino or flat white and one type? A new book reveals what your choice in coffee says about you.

Coffee snobs can find more than froth and sugar at the bottom of their cups – personality lives there as well.

While strolling out of a cafe on the way to work, that cup of coffee in your hand is actually emitting hidden meanings to passers-by.

In their new book, The You Code, body language experts Judi James and James Moore decipher what our caffeine preferences reveal about our self esteem, stress levels and even sex life.

THE ESPRESSO DRINKER – James and Moore describe the espresso as “the unfiltered cigarette of the coffee drinking world”.

Espresso drinkers tend to be moody, hard-bitten and hard working.

They are into leadership and fast goals.

They don’t suffer fools but are hard living and prone to “night-time shenanigans, followed by a rather louche attempt at day time repair”.

The espresso drinker can be an experienced, exciting and consummate lover but is not known for reliability or unswerving loyalty.

THE BLACK COFFEE DRINKER – This type is all about minimalism and takes a no-frills, direct approach to life.

The black coffee drinker can be quiet and moody but prone to brief bursts of extroversion.

“A difficult but potentially rewarding friend, colleague or partner,” James and Moore conclude.

THE LATTE DRINKER – Typically metrosexuals or cuddly-toy collectors, latte drinkers are pleasers with an overwhelming compulsion to be liked.

A latte drinking boss will use a baby voice to tell you off.

By taking a dark and dangerous drink and turning it into a comforting milky bedtime beverage, James and Moore say, latte drinkers reveal that while they may want to come across as hot shot contenders, they have an immature side.

THE CAPPUCCINO DRINKER – What’s not to like about the extroverted, optimistic cappuccino drinker?

Like their drink, cappuccino drinkers are all froth and bubble, bored by detail and liking – but not obsessed with – material objects.

“Freud would have a field day here,” write James and Moore. ”

Cappuccino froth gives the tongue the mother of all workouts and is all to do with the physicality of the experience rather than the basic consumption of the beverage.” The cappuccino drinker enjoys sex but is easily bored by an unimaginative partner.

THE INSTANT COFFEE DRINKER – These are cheerful, straight forward types, who like a laugh and live by the maxim “if it ain’t broke, don’t fix it”.

But instant coffee drinkers can be unadventurous in their careers and need to let others see the hidden depths in their personality. The no-nonsense instant coffee drinker is allergic to pretentious behaviour, say James and Moore, and they are likely to keep their socks on during sex.

THE DECAF SOY MILK DRINKER – A self-righteous eco-worrier and attention seeker with a tendency to be picky, fussy – and squeamish in the bedroom.

What’s more, this faux choice implies a pretentious, high-maintenance type who wants what they can’t have and is disguising their true personality. “If caffeine gives palpitations and cow’s milk brings you out in spots there’s little hope for you in the cockroach society that is city dwelling”, James and Moore conclude.

THE FRAPPUCINO DRINKER – Flighty and shallow, the frappucino drinker will try anything once – especially if a celebrity has done it first.

They fancy themselves trend setters but send out the message that they are someone who favours style over substance. The frappucino drinker’s relationships often last as long as their drink choice, according to James and Moore.

THE NON-COFFEE DRINKER – Unfortunately, the verdict isn’t good.

Frightened of coffee equals frightened of life, say James and Moore. If the taste of coffee puts you off you really are a child, they say, and it’s time to join the world of grown ups. But there’s hope.