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…and please forward to your friends by clicking the social link buttons.
Developers using the power of celebrity and social media to market apartments
Celebrity endorsements have been known to sell many products for as along as anyone can remember.
But now it would seem that the power of celebrity and social media has entered the property world – particularity within new apartments.
An article on Domain.com.au looks at the how developers are using the new wave of ‘influencers’ to make a sale.
Social media marketing is now common practice for B-list celebrities with Instagram accounts, where they spruik everything from almond milk to egg-freezing under newly mandated hashtags such as #ad or #sponsored.
But writer, actress and feminist it girl Tavi Gevinson recently took sponsored content to a new level when she posted Instagram photos of herself moving into a luxury apartment in Brooklyn.
Her posts sometimes featured her address, 300 Ashland.
A spokesperson for the property told New York Magazine’s The Cut that while Gevinson paid rent on the apartment, she was also paid by the management company to talk about where she lived and to host special events for the building’s residents.
Gevinson’s decision to take compensation for moving into an apartment and willingness to advertise her address online prompted questions about whether she had tapped into a new future for property marketing on social media.
Social media “influencers” – celebrities or non-celebrities with sizeable followings on Instagram, Snapchat and other sites – already hawk relatively inexpensive and disposable items such as lipstick and protein powder. They are a popular and growing component of brand marketing strategies.
But what does it look like when you are selling something as dear and long-term as an apartment building – even one that you live in?
In Australia, some developers have used celebrities as ambassadors for their larger projects.
Former cricketer Michael Clarke and model Jennifer Hawkins, who have more than a million Instagram followers between them, have both promoted the $388 million Trinity Point development in Lake Macquarie on their social media accounts.
Hawkins has a contract as a brand ambassador, while Clarke has actually purchased a $1.3 million apartment at the estate.
Trinity Point project director Natalie Habib says celebrity sponsorships raise the profile of the brand, though property is too expensive for people to buy just because they want to live near a famous person.
“People do not spend a million or two million because Jennifer’s there,” Nabib says.
“Maybe selling shoes is different but not for a huge investment.”
“But people do follow what other people do,” she adds.
Read the full article here
Bedlam in Melbourne
A population rise in Melbourne is causing an even higher dwelling boom.
The third in the traditional trifecta of population growth posts concerns the rate of new dwelling supply.
At the end of 2016 there were nearly 217,000 dwellings under construction in Australia, including some ~152,6000 attached dwellings, leading to intensified interest in how the housing market might cope with the deluge.
The property market downturns in resources towns since 2012 have been spectacular, but from a policy maker’s perspective housing markets in regional areas are of little interest.
Sydney and Melbourne, on the other hand, have joined the major banks in the “too big to fail” category, absorbing by far the greatest share of net overseas migration over the past five years, and together accounting for the bulk of growth in the economy.
Yesterday’s demographic figures derived from the 2016 Census showed that Greater Melbourne’s population was growing at a truly extraordinary pace in 2016, probably somewhere in the region of ~128,000 based on the state level data.
I’m not too sure how useful the concept of an oversupply actually is while the population growth is tracking at that rate, since even a construction industry operating at full capacity will have a heck of a job keeping pace.
One thing we do know from international experience, however, is that as and when the local market or economy suffers a downturn then population growth tends to follow south.
For what it’s worth, dwelling completions in Victoria rose to nearly 60,000 in 2016, although only 56 per cent of completions were detached houses, suggesting that the average number of persons per dwelling housed in the newly-completed stock may be a notch lower than in decades past.
Read the full article here
‘Parental guidance not recommended’: Don’t fall for the first homebuyer parent trap, report warns
It’s no secret that saving for a deposit has become significantly more difficult for first home buyers.
But while the idea of parental help seems like the obvious choice in some families – it may cause more harm than good.
According to an article on News.com.au parents who obtain more debt to help their kids could end up losing much more than they bargained for.
House prices have again lifted in Sydney and Melbourne, with the median price of a house sold in the Harbour City now at $1,000,500.
In Melbourne, the median house price was $715,549, according to the latest data from property information group CoreLogic.
Sydney’s home values rose slightly more than Melbourne’s – up one per cent compared to its southern rival’s 0.8 per cent – in the week to June 25, from the previous week.
But the value of homes eased in Brisbane, Adelaide and Perth, with Adelaide dropping one per cent, the Queensland capital losing 0.3 per cent and Perth declining 0.2 per cent compared to the week before.
The median house price of properties sold in Brisbane was now $513,000, in Adelaide it was $443,500, and in Perth it was $505,000.
Hobart was the cheapest capital city with a median house price of $359,500.
The pattern is similar for units with Sydney top of the board at $738,000 and Hobart at the bottom on $286,500.
In the year to date, Sydney home prices have lifted by 5.4 per cent, Melbourne’s are 4.8 per cent higher while prices in Brisbane and Adelaide have risen also risen, but by less, and in Perth they have contracted.
CoreLogic said the national auction clearance rate among Sydney, Melbourne, Brisbane, Adelaide and Perth remained below 70 per cent for the week to June 25
Click here for the full article
Sydney and Melbourne property prices look set to fall
They are said to be the two most impossible housing markets to get into – but that may soon change.
This article from Business Insider indicated that prices in Sydney and Melbourne may see a fall.
THE time it takes a first homebuyer to save a 20 per cent deposit has blown out to eight years, according to a new report highlighting the deepening housing affordability crisis in Australia.
In the first quarter of 2017, Sydney’s median house price to income ratio reached 13.7, while a median-priced home in Melbourne will now take 10 full years worth of wages, according to research firm LF Economics.
The report, “Parental Guidance Not Recommended”, argues affordability in terms of the price to income and mortgage payments to income ratio are the highest on record. Mortgages issued today will consume a greater proportion of first homebuyers’ incomes over the lifetime of the loan than ever before.
It argues that despite record low interest rates, the rise in dwelling prices has more than offset that fall, and there will be “no future period” in which interest rates can be significantly cut to assist first homebuyers in maintaining mortgage repayments.
“Although interest rates were higher during the 1980s and 1990s, deposits and mortgage payments relative to income were smaller, resulting in more affordable housing for previous generations,” LF Economics founder Lindsay David writes.
“As deposits and mortgage payments are larger today, FHBs and other buyers will have to commit an increasingly large proportion of their lifetime incomes to mortgage payments in an environment of fleeting employment security and low nominal wage growth.
“Purchasing property amid Australia’s largest housing bubble on record (particularly when it bursts) carries significant risks via negative equity, unemployment, underemployment and even bankruptcy.”
Mr David warns that due to the difficulty saving for a deposit, parents are increasingly assuming “large, open-ended liabilities” to help their children enter the housing market, with informal loans and mortgage guarantees.
“This spreads the risks but does not reduce it; which extends the links in the chain of Ponzi finance,” he writes.
“If FHBs experience difficulty in maintaining mortgage repayments and perhaps face foreclosure, asset-rich but income-poor parents will suffer financially.”
Mr David, who has previously called for a complete ban on interest-only lending, said governments and regulators had “neglected the welfare” of first homebuyers by providing grants and incentives such as stamp duty discounts which provide the “illusion of easy access to home ownership”, but simply inflate prices.
“While dwelling prices inflate, risks appear quite manageable but meeting mortgage repayments for decades thereafter is the most difficult task of all,” he writes.
Click here for the full article
Why Australian coffee is the best in the world – and where to drink it
Australia is famous for a lot of great things; beautiful beaches, adorable native animals, friendliest people – and now the world’s best coffee.
An article on theworlds50best.com has revealed not only why Australia has the world’s best coffee – but exactly where you can enjoy it.
Why not try one of these great cafes this weekend and let us know what you think.
Thought New Zealand was home to the best flat white on the planet?
Coffee in Australia, as you may have heard, is a thing. Just ask us.
“The great new coffee bores of the world,” was how the late British restaurant critic AA Gill once characterised Australians.
It’s fair to say, though, that wherever you find Australians, coffee can’t be far from hand.
There’s no documentation of indigenous Australians consuming coffee before colonisation, and the British convicts who were first transported to the Australian colonies in 1788 had tea shipped along with them, not coffee.
Espresso culture in Australia grew from cafés owned by Greek and Italian migrants, from small beginnings in the post-war immigration boom of the 1950s and 60s to the nationwide obsession that’s part of the cultural fabric of the country today.
In the last decade, says Fleur Studd, founder of Melbourne’s Market Lane, coffee has been lifted to another level entirely, thanks to access to higher-quality green coffee and a proliferation of micro roasters who have redefined what coffee is and can be.
Australians demand coffee that is distinctive and memorable, she says.
“When you walk into many cafes now, the barista will be able to tell you where your coffee was grown, who produced it, and what variety it is. You will often be offered coffee brewed as filter as well as espresso.
The menu will showcase coffees that are in season and specialty grade, and the labels on retail bags of beans will tell you when it was harvested and roasted.”
It’s this culture of cafes, not just coffee, that’s at the heart of the question. Ben Bicknell, a coffee educator and strategic projects manager for the Five Senses group, says that while the scene is diverse, there’s also an Australian style of café as well as an Australian style of coffee.
Where to drink it….
1. Market Lane, Melbourne
2. Patricia, Melbourne
3. The Kettle Black, Melbourne
4. Barrio Collective, Canberra
5. Gumption, Sydney
6. Neighbourhood by Seán McManus, Sydney
7. Single O, Sydney
8. Reuben Hills, Sydney
9. Exchange, Adelaide
10. John Mills Himself, Brisbane
Click here for the full article