Emerging trends in Australia's property market

MLC Retirement Survey
Some of you may have seen in the news during the week that MLC (part of NAB) released the results of a retirement survey they completed, with some sobering findings:

1. Women are the biggest worriers when it comes to superannuation, with their biggest fears being; inadequate funds for retirement, losing money, fees and inflation. More than one third (36%) of women indicated they will have not have nearly enough money at retirement.
2. Less than one in 20 Australians expect to maintain their current standard of living into retirement with excess savings
3. One in three (31.7 per cent) envisage a sizable financial shortfall and one in four expect some retirement gap
4. Just 3.5 per cent think they will have more than enough money for their remaining years
5. Meanwhile, almost 70 per cent said they did not have a fall-back plan for unexpected events such as major illness or sudden unemployment
Thank goodness for property, providing a safer environment for people to have a different and more secure retirement!

The Commonwealth Bank's first-half profit has surged 16 per cent to $4.2 billion!

Australia's biggest bank is set to break through the full-year net profit threshold as early as next year, meaning it will make $1 in profit every day for each man, woman and child in Australia! It will be the first time an Australian-listed company other than mining giants BHP Billiton and Rio Tinto has hit the mark.

CBA has leading market share in home loans, personal loans, retail deposits and discount stockbroking, and is one of Australia's largest credit card issuers; so they are obviously very comfortable with the property market as it stands today.

The Australian Bureau of Statistics (ABS) has published its estimated total value of residential properties in Australia, which hit $5 trillion for the first time, up from $4.8 trillion in the September quarter! The average price of Australia’s 9.3 million residential properties is also $539,400, up from $496,800 in the December quarter of 2012. This means that Australian housing is currently around 3.2 times the size of our economy, as measured by GDP (Gross Domestic Product).

NAB Residential Property Survey
NAB reported that housing market sentiment lifted in the last quarter of 2013, supported by faster house price growth in all states (bar SA/NT), with house prices expected to keep growing in the next 1-2 years. Demand improved for all types of new and established property, with local and foreign investors significant players in the market.

Highlights of the survey included:

• NAB Residential Property Index up +4 to +36 in Q4 – the highest result since the survey began
• VIC and QLD looking the most optimistic in the next 1-2 years
• Expectations lower in all states except QLD which is now expected to provide the biggest returns in next 1-2 years
• Demand for established property stronger in all market segments in Q4, led by houses in the inner city and middle/outer ring
• Capital growth expectations for established houses and apartments higher at all price points

As you can see with these survey results, we’re still experiencing very positive conditions for property – it’s never been a better time to look at the options available!

Troy Gunasekera, national manager, The Property Club

Troy Gunasekera is the National Manager of The Property Club, Australia’s largest independent property group guiding members of all ages to become financially independent through investing in property.

With his wife, Troy has an impressive portfolio of properties worth over $5m diversified across Australia. His own investments are the result of his continual research into the latest developments in property finance, interest rates and property markets Australia wide.