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.

Melbourne property price falls slowing, CoreLogic finds

It looks like Melbourne’s property market slump is slowing down.

An article from Realestate.com.au looks at the results.

Melbourne’s property market slump is slowing.

Growing buyer confidence spurred a “substantial improvement” in the rate of property value declines in May, CoreLogic’s Hedonic Home Value Index reveals.

It shows house and unit values dipped just 0.3 per cent last month, compared to falls of 0.6 per cent in April, 0.8 per cent in March, 1 per cent in February and 1.6 per cent in January.

“Experts had a view that the market would bottom out in the middle of next year, but we believe it could be earlier than that now,” CoreLogic Australian head of research Cameron Kusher said.

“We’re not seeing a change of government, negative gearing or capital tax gain changes and in combination with a predicted cut in interest rates we could start seeing a slow recovery.”

The May figure marks 18 consecutive months of home value declines across Melbourne.

There has been a 9.9 per cent drop in combined house and unit values in 12 months to a median of $619,804.

Mr Kusher said he did not expect to see property values enter positive territory until next year.

The index also showed Sydney’s market had signs of improvement last month, its decline easing from 0.7 per cent in April to 0.5 per cent in May.

The report said the two cities were driving the overall improvement in the combined capital city index, which recorded a 0.4 per cent slip in values during May.

Adelaide was the only city to avoid a slip, with a 0.2 per cent increase in dwelling values.

There were falls recorded in Brisbane (0.5 per cent), Perth (0.1 per cent) and Hobart (0.4 per cent).

Melbourne vendors Emma Hodgson and Gerard Adamsons said they were taking advantage of the downturn and buying their next family home.

The couple are selling their three-bedroom property at 1/95 Victor Rd, Bentleigh East with a $750,000-$790,000 price guide.

“When we last bought two and a half years ago getting a full-sized block was unaffordable,” Ms Hodgson said.

“But at the moment we’re looking to upsize because we might be able to nudge into the market and get something larger.”

Read the full article here

Which housing markets will turn first?

With market sentiment improving, the question remains – which housing market will turn first?

This Blog by Pete Wargen shows the statistics.

Stock pile-up

Stock on the housing market increased during May as election uncertainties (since removed) weighed on the market.

Sentiment has improved markedly since then, but Melbourne might take a while to turn given total stock on the market exceeded 40,000 by the end of May.

That’s a 21 per cent increase year-on-year for Melbourne, while in Canberra stock listings were up by 25 per cent over the year to May 2019.

Read the full article here

RBA CUTS RATES TO 1.25%

The Reserve Bank of Australia has cut interest rates for the first time in almost three years at its June board meeting.

This article from Business Insider looks at what this mean for the property market.

The bank reduced Australia’s cash rate by 25 basis points, leaving it at a new record low of 1.25%

It was the first move in the cash rate since August 2016, and the first during Philip Lowe’s tenure as RBA Governor.

The decision was widely expected by both financial markets and economists.

“Today’s decision to lower the cash rate will help make further inroads into the spare capacity in the economy,” said RBA Governor Philip Lowe.

“It will assist with faster progress in reducing unemployment and achieve more assured progress towards the inflation target.”

Suggesting today’s rate cut may not be the last, Lowe said the RBA Board will “continue to monitor developments in the labour market closely and adjust monetary policy to support sustainable growth in the economy and the achievement of the inflation target over time”.

While stopping short of acknowledging that a further reduction in the cash rate is likely, it suggests a willingness from the bank to deliver additional monetary policy stimulus should the need arise.

Explaining the decision to cut the cash rate to a new record low, Lowe admitted that despite “strong” employment growth over the past year and reports of “skill shortages in some areas”, there has been little progress in reducing spare capacity in the labour market.

“The unemployment rate had been steady at around 5% for some months, but ticked up to 5.2% in April,” he said.

“The strong employment growth over the past year or so has led to a pick-up in wages growth in the private sector, although overall wages growth remains low.”

In order to boost wage growth further and lift inflationary pressures, the RBA needs both unemployment and underemployment — where people have a job but would like to work more hours — to move lower, hence the need for additional policy support to achieve that objective.

Lowe believes that task is achievable.

“A further gradual lift in wages growth is expected and this would be a welcome development,” he said.

On inflation, something that will likely require stronger growth in wages, Lowe described recent inflation outcomes as “lower than expected”, indicating “subdued inflationary pressures across much of the economy”.

However, following the rate cut delivered today, Lowe remained optimistic that underlying inflationary pressures will slowly begin to build in the years ahead.

“The central scenario remains for underlying inflation to be 1.75% this year, 2% in 2020 and a little higher after that,” he said.

Underpinning his views on the outlook for wage growth, unemployment and inflation, Lowe expects the recent slowdown in the Australian economy is unlikely to be sustained, predicting growth of around 2.75% iboth this year and next.

Read the full article here

Sydney’s Metro North West a game changer for The Hills

Is the Sydney Metro North West Line a game changer?

In this article for Switzer, John McGrath explains what this could mean for Sydney’s property market.

More than 100,000 people lined up to try out the Sydney Metro North West Line on opening day on Sunday, May 26.

About 36km long with 13 stations between Tallawong Station at Rouse Hill and the Chatswood Interchange, the ‘turn up and go’ service provides an easier commute to the CBD within 1 hour from Rouse Hill, about 50 minutes from Kellyville and Bella Vista and 45 minutes from Castle Hill.

The north west is a crucial growth area for Sydney’s long-term future. It’s got the land we need to service ongoing population growth and the development of new communities, housing, schools, recreation areas, shops and job centres.

The NSW Government has rezoned large swathes of land to make way for this growth.

The north west region is expected to contribute about 12% of the new homes needed in Sydney to meet demand over the next 20 years.

Major transport projects such as the Sydney Metro are critical to service the 250,000 people who will live in the north west once the region is fully developed.

Developers are proactively acquiring large parcels of land for residential development, particularly around Tallawong Station, not far from Rouse Hill Town Centre.

About 18,000 new homes are expected to be built by 2021 and 33,000 new homes by 2026. A lot of new apartments have already been built in close proximity to the stations.

Major business hubs are situated along the new train line, including Norwest Business Park and Rouse Hill Town Centre, both of which have their own stations.

Our McGrath Rouse Hill office is situated in the Rouse Hill Town Centre and we think the Metro will be a game-changer for the area.

Agent Phillip Nicholas of McGrath Rouse Hill says 90% of today’s buyers ask him about the new train network.

Many of them say they would never have considered buying in the north west without it.

Although there are growing job centres in the region, access to Sydney’s CBD remains important.

The Metro North West will remove a major barrier for aspiring home buyers who would love to take advantage of the value out there but until now have perceived the city commute to be too difficult.

It’s a fantastic time to buy, with local property prices dropping in line with the rest of Sydney over the past couple of years.

No doubt, the new train line will provide a boost to price recovery across the north west once the bottom of the market has passed.

Family homes, in particular, that are walking distance to brand new train stations will benefit the most.

Here’s what’s happened to house prices in the suburbs that now have train access for the first time ever on the Sydney Metro North West Line.

Median house prices

Rouse Hill: $1,031,000 (down from $1,160,000 at peak in 2018)

Kellyville: $1,102,500 (down from $1,230,000 at peak in 2017)

Bella Vista: $1,508,500 (down from $1,736,000 at peak in 2017)

Castle Hill: $1,360,000 (down from $1,620,000 at peak in 2017)

Cherrybrook: $1,450,000 (down from $1,550,000 at peak in 2017)

Source: realestate.com.au

Read the full article here

How to design your home for good fortune

Could the design of your home change its fortune?

This article from Domain.com.au explores the art of Feng shui and how it can change the good fortune in your home.

From herringbone tiles to fiddle-leaf figs, trends come and go.

While some styles fall out of fashion in a single season, one design principle has shown remarkable staying power.

Feng shui has been used for 6000 years to promote harmony and good fortune.

Translated as “wind-water”, feng shui approaches architecture through the lens of qi – the invisible energy that binds the universe together.

Followers believe the flow of energy can affect people’s mood, health and careers.

Hattie Kirchengast is a senior design consultant with the high-end interiors brands Coco Republic and Max Sparrow.

The Beijing-born designer helps Chinese clients create their dream homes, often using feng shui to select layouts and colour schemes.

“Feng shui is an ancient Chinese philosophy that seeks to find balance and harmony between elements,” Kirchengast says.

Early practitioners examined the orientation of buildings using astrology and, later, compasses.

Contemporary interpretations shifted the focus to interiors and landscaping, relating different rooms to a range of aspirations, including wealth, fame, health, family and wisdom.

Colour is crucial.

Red (or fire) symbolises luck, happiness and joy.

Blue (wood) is popular for its associations with immortality.

White (metal) is supposed to bring brightness and purity.

Yellow (earth) is regarded as an imperial tone and isn’t generally splashed around in the bedrooms of non-royals.

Black (water) tends to be used sparingly because of its solemn overtones. Gold, the universal symbol of wealth, is applied liberally.

Mirror placement is considered carefully because reflective surfaces are thought to multiply whatever is in a space – for better or for worse.

“The best room in your house to hang a mirror is the dining room, representing your capacity to hold wealth,” Kirchengast says.

According to feng shui principles, mirrors also work in living rooms but are generally avoided in bedrooms.

Round tables are favourable over other shapes.

“Ideally, households should be free of dust and clutter, as they’re known to store old energy and deplete your vitality,” Kirchengast says.

“It is also common to incorporate natural elements into the household, such as wood, stone or metal, which suggest vitality, comfort and richness.

“Whether it’s superstition or pseudo-science, once the idea of feng shui has entered one’s mind when decorating a home, it’s difficult to ignore.”

It’s not just in private homes that feng shui is being used to promote harmony and good luck. Developers are also tapping into the practice.

Some buildings even omit unlucky numbers – especially four – from their floor count.