It has been in the news recently that the banks in Australia are refusing to finance loans to people who are interested to buy flooded homes. Banks are snubbing and refusing to finance loans of shrewd would be buyers who are desperate to snap up a bargain in the post-flood Ipswich property market.

According to Brett McGrath, the Herron Todd White senior valuer, in spite of the recorded 3300 homes being written off and the 1700 house plans designs needing repair which were all affected by January’s disaster, there are still plenty of shrewd and desperate buyers who want to purchase these damaged and flooded houses.

Mr. McGrath said in his statement during a luncheon for more than 120 people at The Ipswich Club that there are still many buyers who are eager to purchase flooded homes. However the banks are refusing to finance these loans.

House land packages sold by home builders and purchased via cash by people who have a spare $150,000 in the bank are the only properties moving off the market.

However, those people who want to borrow in order to buy these flooded properties are not having any success at all in their loans approval for banks are refusing to them.

According to The Queensland Times May 5th edition, major banks in the country have been choking the region’s property market for they have refused loans to people who want to purchase Australia houses for sale across huge swathes of Ipswich and other flood-hit communities.

Lenders were accused by real estate agents of blacklisting entire suburbs that were affected by flood in January.

With these worsening development, would be house buyers of these flooded properties are facing difficulties with banks and lenders alike refusing to finance loans.

Peter Mendoza, the Ipswich chairman for the Real Estate Institute of Queensland, said that would be home buyers could only purchase home for sale by using cash which had led prospective home buyers to be furious.

According to Mr. McGrath, the property market has already reached its worst in almost 20 years before the floods hit.

Mr. McGrath expounded that the property market has been affected by more than just floods. In addition to the worsening market due to the floods, the brutal infrastructure costs and the end of the first home owner’s grant have also added to the property market crisis.

These three causes have lead to the worsening condition of the property market.

Mayor Paul Pisasale commented that during this worsening crisis banks and insurance companies are needed to show compassion.

Banks and insurance companies should show compassion instead of refusing to finance such loans applied by these would be buyers of flooded homes. The people need these banks and lenders to be more agreeable for a loan in order for the property market to thrive.

Mayor Paul Pisasale stated during the luncheon held this week that there would not be any more hidden clauses.

Mayor Pisasale further added that the floods have made them stronger with Ipswich challenging the problems of the GFC, with more than 240 new businesses starting up during that time, now they will do the same with the flood recovery, there will be no fence around their global city.

With the increasing number of first-home buyers snatching up apartments and townhouses that may otherwise have been bought by investors, first-home buyers are now acquiring the benefits brought about by the sluggish Perth housing market.

According to the Real Estate Institute of WA, investors had lost interest in buying house & land packages due to the city’s over-priced properties; thus, decreasing competition and forcing down prices of house plans designs, particularly for multi-residential properties which usually attract investors.

March quarter figures released by REIWA’s this week has showed that the median price for a grouped dwelling that includes apartment, unit, townhouse or villa in Perth has dropped by about $7000 to $402,000, while outside the capital it fell about $2000 to $325,000.

REIWA president Alan Bourke said in his statement that investors often preferred multi-residential properties but they are thin on the ground.

Recent property market conditions appear to be in favor of first-home buyers who have been reasonably active and represented about 23 per cent of buyers during the quarter.

According to the latest state government data, the median purchase price in Perth for first-time buyers was $415,000 and $325,000 for those in regional areas.

The statistics follow Premier Colin Barnett’s controversial comments this week which persuades first-home buyers of home designs to lower their expectations to enter the market.

During the March quarter, healthy first-home buyer activity was in disparity to existing home owners looking to trade-up.
According to Mr. Bourke, many of them were “caught in a bind”, unable to commit to selling before buying, causing the property market to stall.

This week, WAtoday.com.au revealed that the state’s property market had fallen into the worst fall in nearly two decades.
According to the government’s official land information authority, Landgate, in just 12 months, activity in the housing market has declined by 15 per cent while more than one-third since the height of the boom in 2005-06.

Even though during the March quarter sales activity had improved, according to REIWA, the overall turnover continued to remain 25 per cent below average in Perth and 35 per cent below in the country.

It had turned out to be a buyers’ market, with 50 per cent more homes for sale than required to meet demand, Mr. Bourke said.

To get the deal done most home builders are reducing their asking price by around 7.5 per cent while sellers who need a quick sale just simply adjust their expectations and asking price before going to market.

On the other hand, according to Mr. Bourke, the fall in median price from December 1 was expected to be only 1 per cent.

Mr. Bourke additionally stated that preliminary data suggests that for the March quarter, the median house price will be about $485,000 for Perth and $375,000 elsewhere.

The rental vacancy rate has tightened regardless of a flooded market and has led to the first increase in rental prices in 12 months.

During the March quarter, rents rose by $10 to $380 per week in Perth, while the vacancy rate remains just above 3 per cent.

Mr. Bourke explained that typically, when the market is flooded with properties, many investor-sellers decide to withdraw their listings until conditions improve and shift their properties into the rental market which relaxes the vacancy rate. However, this doesn’t seem to be happening at the moment.

Lately, it has been in the wire that the sales of new houses for sale in Australia have increased by 4.3 percent in March. This recent development is good news for the home builders who are offering house and land package.

Boosted up by the solid gains in detached house sales due to the increase demand for detached houses in March, the number of new homes sold all over Australia has increased for the third consecutive month.

The number of new homes sold rose by a seasonally adjusted 4.3 per cent in March, subsequent to a 0.6 per cent rise in February as shown in the latest Housing Industry Association New Home Sales Report.

HIA said that detached house sales propelled the positive results which show a rise of 5.8 per cent in the month; however, the multi-unit sales dropped considerably by a “concerning” 10 per cent.

Harley Dale, HIA chief economist, welcomed the results; however, he said that there was still a long way to go for new home sales to arrive at healthy levels.

Dr. Dale stated that the result for new home sales in March mirrors an ongoing break in the interest rate hiking cycle as well as some abatement of the severe weather conditions witnessed in early 2011.

According to Dr. Dale, before we can look ahead to healthy levels of residential building activity, a sustained period of improvement is still required for new home sales as well as a raft of other leading indicators.

With the increased sales volumes by 5 per cent for the March quarter, the three-month profile for detached house sales was said to be encouraging, HIA reported.

However, HIA additionally said in the report that due to the weak starting point in the final quarter of 2010 and the volumes remaining below the long-term average, the increase in home for sale sales volumes is said to be exaggerated.

Meanwhile, the sales volumes for multi-units homes plans for the three months to March were down by 5.9 per cent.

In the March quarter, the total new home sales were down by 9 per cent as compared with the same period a year ago.

HIA also reported that they found out that NSW new home sales had increased by a “very encouraging” 13.5 per cent in the month, for a 20.7 per cent increase in the first quarter of the year.

According to the HIA report, sales are on somewhat of a barnstorming run in NSW, from an awfully low base; however, the real feather in the cap of the state’s new home building industry is the strength displayed by the labor market.

Queensland’s new home sales, just recovering from a lull in February, is up by 11.1 per cent for the month of March; however sales were still down by 8.1 per cent in the March quarter.

According to the HIA report, Queensland’s housing market has still remained in a position of serious weakness and the government’s plans for a revival appear inadequate.

According to the Australian Bureau of Statistics (ABS), the house price index of  eight capital cities have fallen 2.1 per cent in the first quarter of 2011 compared with an upwardly revised 0.8 per cent increase in the house price index for the December quarter.

Brisbane, Perth, and Darwin have suffered the biggest declines.

The fall was said to be the biggest since the financial crisis of September quarter of 2008.

Property analyst RP Data-Rismark’s report has discovered that the March capital city houses for sale prices were relatively flat as compared with the month of February, which has fallen with just 0.2 per cent, though house prices were down 0.6 per cent from a year earlier. The report pointed to a cooling in the housing market.

These grim developments in the property market would surely affect the prices of house and land packages and houses for sale in Australia and the homes builders of display homes in Australia.

The market analysts have also predicted a drop of 0.5 per cent in the March quarter, for a year-on-year climb of 1.6 per cent, according to Bloomberg data.

The quarterly prices as well as the annual price moves were both worse than expected.

As compared to last year, the Australian housing market has cooled significantly in 2011. This may due to the higher interest rates, worries about the economy, banks tightening credit, and affordability problems which had put off would-be buyers.

During its board monthly meeting this week, the Reserve Bank is broadly expected to leave interest rates on hold, keeping its rates at 4.75 per cent.

Except for Perth and Hobart, every capital city has recorded a decline in the March quarter, with the drop in Melbourne’s house prices of 2.5 per cent in the quarter matching flood-hit Brisbane, which has also experienced the same pull back, according to the ABS data.

According to RP Data research director Tim Lawless, the flooding that happened across southeast Queensland has probably increased Brisbane’s weak market conditions that lead to the 4.6 per cent drop in Brisbane house prices.

Meanwhile, ABS said that Sydney prices index has dropped to 1.8 per cent, Adelaide has 1 per cent decline. However, in Perth, prices climbed to 0.5 per cent and in Hobart, it rose to 0.4 per cent in the quarter.

The national median dwelling price in the first quarter was $455,000.

Mr. Lawless said that the drop in house values following the sharp rise in interest rates in 2010 are probably going to revive first-home buyer demand, which is fraught with low affordability.

Furthermore, Mr. Lawless stated that the market would favor buyers with the income growth across the economy at 6 per cent per year and the interest rates close to their cyclical peak.

Currently, property prices are under close scrutiny for some market analysts says that the property prices have been over-inflated for some years and are ready for a correction while others disagreed that a strong income growth will sustain the market.

A rise in rents is also shown in the RP Data figures which is said to offset the effect of property value drop for landlords.

Reserve Bank figures this week showing Australians taking out 6.6 per cent more in loans than a year earlier shows that the growth in home lending has not entirely flat lined.

Recently, it has been in the news that according to a recent rental market survey, seven out of ten tenants are looking to buy home for sale but until their dream of owning new houses for sale in Australia comes true, most want to stay in their present accommodation and are willing to pay more in rent to do so.

Michael Matusik, Property commentator, reported that two-thirds of the renters surveyed say that they are prepared to pay up to 5 per cent more in rent to stay put in their rental spaces, with a further 30 per cent saying they would accept an even bigger increase in rent just stay put.

It was found out from the survey that those who live in apartments seem more willing to accept a steeper increase than those renting detached dwellings.

Out of every five renters surveyed, two renters think that the rental market in their area is balanced; with another one-third that were surveyed saying that it is undersupplied.

When asked what they would do to avoid an increase, 43 per cent of the respondents  said that they would move to a less expensive area, 37 per cent said that they would move to a lesser property in the same area, and 19 per cent said that they would sub-lease or share to meet the costs.

Matusik says that just like the owners, renters don’t really move that far when it comes to finding new houses for sale even if made by the best homes builders.

The survey also revealed that close to one-third of the respondents find new accommodation in the same suburb they already live in, while nearly one-half move to a neighboring suburb.

While the same survey last year found a strong move towards the inner areas; however, this year’s survey has found out that more renters are choosing to move a bit farther out.

Predictably, number one of the seven most important things tenants consider with regard to rental accommodation is the dollars forked out in rent.

Recently in the news, it has been reported that the number of loans from people who want to buy new houses for sale have dropped.

According to the report, residential property prices have increased in 2010 and will continue declining in the next six months as big mortgage brokers report a 20 per cent plunge in loan numbers.

Many home for sale will be affected by this situation.

Mr. John Symond, Aussie Home Loans managing director, said that its new loan volumes had dropped 20 per cent in the past four months for the reason that the housing market has become soft.

Mr. Symond added that the Aussie had kept its 5 per cent share of the market and, until December last year, usually settled $1 billion worth of new home loans a month.

Mr. Symond reiterated that the general consensus is that the market is down around 20 per cent in new loan volumes.

This makes the houses for sale market in jeopardy. Many newly formed families are now delaying to execute their house plans for their new family as the property market is down.

Many newly formed families are hesitant to take on a loan with the still on going global economic crisis which has affected first home buyers, thus reducing the number of house buyers resulting to the housing market becoming soft. This means that with the number of first home buyers risking to take on a loan, the number of first home buyers who want to pay the sellers price are also dwindling resulting in the property market favoring towards the buyers.

Mr. Symond said that in general, housing throughout the country is certainly in a cooling stage which is swinging towards a buyers’ market particularly for properties above $700,000 or $800,000.

Mr. Symond further stated that Australia’s housing market is beyond the peak of the cycle and will probably go on to soften over the next six months.

Currently, the housing market in recent months is now starting to get soft and is still estimated to get soft in the subsequent six months.

Though, property prices close to the city are still quite competitive.

Mr. Symond said that the cheaper prices close to the city, with the ranging prices up to $600,000 or $700,000, are still quite good for the reason that first home buyers and small investors are all vying for those prime properties.

Mr. Symond further added that the competition among brokers had not intensified in spite of a host of post-global financial crisis mergers and acquisitions in the sector, making the industry more concentrated.

With this development, the property value for homes for sale are now significantly decreasing with the softening of the market; however, even with these development, many first home buyers are still hesitant to take a loan due to the ongoing global crisis leading to new home  loan takers plunging.

With the softening of the market, many are commenting that it is best that the prices of houses for sale are significantly down at this time while there are still jobs around.

However, the problem is with fewer couples risking to take a loan, though the property market is down, many houses are now without buyers.

In has been in the news lately that Australian residential land sales is down 40 per cent. It has reached their lowest level in a decade after almost halving from a year earlier.

A deteriorating house for sale affordability is being experienced in Australia recently. It has been a weak year for house plan building.

According to the HIA-RP Data Residential Land Report, they found out that in the December 2010 quarter, the volume of house land package sales dropped sharply, with sales down by 40.4 per cent compared to the same quarter in 2009.

The report also found that the plunge in sales comes as the weighted median land value for Australia grew by 4.1 per cent in the quarter to $194,161.

HIA economist Matthew King said that the sharp drop in the volume of land sales indicates a very weak 2011 for new home for sale building. He also added that forced by constraints on supply, the rise in land values highlights an on-going deterioration in new home affordability.

With a median value of $269,000, Sydney continues to be the most expensive place to buy residential land.

Sunshine Coast, with a median value of $240,000 and Melbourne coming in at $220,000 are also expensive areas to purchase land.

Melbourne also recorded in the December quarter a 50.1 per cent drop in land sales compared with the same quarter in 2009.

In Melbourne and Sydney, auction clearance rates have gone down to about 60 per cent since the start of 2011, well down from the highs of 80 per cent as seen last year. This is due to the effect of higher interest rates, crumbling affordability, and economic uncertainty which took their toll.

In capital cities, the residential land values had increased by 5.9 per cent in the December quarter and 8.2 per cent higher in annual terms.

According to Enzo Raimondo, Real Estate Institute of Victoria chief, the recent residential market in Melbourne and Victoria has entered into a different phase of lower transaction numbers and reduced price growth.

According to RP Data-Rismark figures released last month, nationally, home prices were flat in February, subsequent to a revised 1.5 per cent drop, seasonally adjusted in January, with January’s fall the biggest decline since 2005 when the index began.

All throughout the capital cities, Melbourne has the highest growth in land values, increasing by 13.5 per cent in the quarter, while Sydney was up by 3.6 per cent.

Hobart also saw a 14.5 per cent slump in land values in the month.

Southern Tasmania, Murray Lands in South Australia, and northern South Australia, all of which had median lot prices of $80,000 or less, are the three most affordable land markets in the country the report said.

According to HIA’s Mr King, quite apart from the substantial damage produced by the interest rate hikes of last November, new housing remains to slump under the weight of the excessive cost of serviceable land.

The high regulatory costs, planning and zoning delays, disproportionately high taxation, deficient land release strategies, user pays infrastructure charges, and an on-going credit squeeze may cripple land values, Mr. King say.

Last November, the Reserve Bank increased its key cash rate to 4.75 per cent, a move that was followed by even larger rate increase for borrowers in the days afterwards.

Almost all are of the same opinion that buyers of house for sale need to sort through all the large volumes on the market to find a quality property as the performance of Melbourne’s residential market is illustrated differently depending on who you ask.

According to Greville Pabst, from valuer WBP Property Group, the market has been observed to be in complete flight in March, with 2925 auctions and an average clearance rate of 63 per cent.

This year alone, there have been 5500 auctions in Melbourne, a nice improvement of 200 over this time last year. The majority of the properties passed in have sold later, while the clearance rate is lower.

Sean Thomson, one of WBP’s senior residential advisers, states that what is happening is like a textbook case of quality properties finding a buyer and compromised ones being left on the block. He also added that now is a good time to be a buyer instead of house builders for most auctions are selling close to their reserve. However, the quality of property of houses for sale being offered is lower than those offered last year.

Thomson commented that any home or house plans or apartment that isn’t correctly priced is not selling on the day.

Buyers need to be selective in this current market. Investors are likely to be sorely disappointed in their belief that they are getting a bargain when they see the performance of their asset.

With just under 3000 auctions scheduled, this April appears to be one of the busiest. Vendors looking for to cash in on what they observe as a plateau in Melbourne real estate are motivating this activity.

According to Thompson, though this reaction is characteristic for this stage in the property cycle, however it is not a sound advice.

He commented that the last time he has seen this type of market was in the period of March to May of 2008 when the stock was high and clearances were in the 60 to 69 per cent range. He further said that astute investors who bought during this period will have seen an average 33 per cent growth in the value over the last 20 months.

The market is treading water, and there is still a lot for sale come Easter, which has been noted to be slowly selling when vendors meets the market, says Buyer agent JPP.

The market is falling to pieces as JPP describes, with the sector over $1.5 million beginning to soften. Several properties are failing to be sold at auction, and there is no shortage of vendors still happy to try their luck. However, overpriced properties are struggling, while the top properties are still selling with multiple bidders.

This trend in the market results to an increased supply than demand and having vendors in bigger difficulty than they have been for the past six months, says JPP in his market overview.

He commented that the $400,000 to $1 million sector is by a long way the strongest as it is the investors’ marketplace of choice. This sector has been the strongest performing segment over the past decade and should hold the least risk for investors going into the next decade.

Meanwhile, valuer Landmark White commented that while the volume of sales held up during much of 2010 in the inner Melbourne apartment market, anecdotal evidence suggests that sales rates have slowed over the first quarter of this year. However, he has noted that low vacancies have significant rental levels increase, with two-bedroom apartments showing the best growth followed by three-bedroom apartments.

Nevertheless, an oversupply and its knock-on effect to prices could be threatening with close to 13,000 apartments in the development pipeline in Melbourne.

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Australia has had its hard times recently. It has experienced different challenges which shook its people a little. It has made people realize that nature sometimes shows us things we can’t imagine happening. Nature sometimes gives us a wake up call for people to change. Thus, mother nature showed its rage on Queensland and brought forth flood into the land. It was a devastating thing to happen. It was a horrific unforeseen event for everyone even for those away from the scene. It is such a tragic thing that most people can’t imagine trying to be in that situation. Yet survivors are brave enough to conquer such reality. This situation really affected the economy. It has brought about some hesitations and doubts regarding opening up businesses and buying houses for sale in Australia.

Thus, it has been noted that new homes for sale in Australia went only a little up high in their sales this February but this growth is still considered weak for the market.

The Housing Industry Association – JELD-WEN new home sales said that there was a 0.6 per cent rise in February, following a 2.5 per cent rise in February. House sales also went up by 1.5 per cent in the month. On the other hand, apartment units and townhouses decreased by 7.6 per cent in the month.

According to the HIA chief economist Harley Dale, new houses for sale are in volumes now but it is nothing compared to the periods of 2009 and 2010. It is also sad to note that both local government building approvals and new housing loan approvals are less granted.

Other problems which arise in the housing market is the Auction clearance rates in Sydney and Melbourne which went down from 80 percent to 60 percent.

Another big issue here is the overpricing of the home for sale in Australia which brings about hesitations in most first time buyers. The tendency of these buyers is they will be willing to wait for these prices to go down. However, it would take a long time before these buyers will take action by buying a house for sale. Thus, it is expected that this 2011, it will be a little weaker this year for the housing market.

But signs of optimism are shown in New South Wales. Sales rose up to 0.9 percent in February while in Victoria, it rose as high as 2.9 percent. In Queensland, they dropped 13.3 percent due to the recent flood. Another 4.3 per cent decrease is seen in South Australia and 2.2 per cent in Western Australia.

These are just but the outcomes of the recent calamities hitting Australia. It really affected the whole community. But there is no time for grieving and depression anymore. It is already time to stand back on their feet and try put things back the way they were before. It is time to restore what has been broken and let those bad memories be a thing of the past. In this way, Australia will be another nation we look forward to shine and flourish again.

Australia is one of the countries who did not stop in providing consumers with new homes for sale with its new house plans. Thus, this is done to lure future clients to have no hesitations in buying these new houses. Some clients will end up applying for mortgages in order to avail their house easily and paying their houses by installments with little interest rates.

According to a major ratings agency, there has been an increase in the number of Australians who failed to pay their home loans on time. It has been shown by the Fitch ratings quarterly Dinkum index that delinquent mortgages rose up to 1.37 percent from a mere 1.3 in the last 3 months of the year 2010. This rise was attributed to the increasing number of people falling into arrears of more than 90 days. It has been noted that 0.48 percent of people who haven’t paid their home loans for more than 90 days went up to 0.54 percent recently. This will put a household to face foreclosure once the mortgage is not being settled promptly.

Though this is not a good picture for the housing industry and for the financing industry still, the associate director of Fitch’s structured finance team James Zanesi optimistically declared that a number of mortgages in arrears is likely to increase in the first three months of 2011. But mortgage performance may not be upbeat during the 1st quarter due to the Christmas holiday season.

The interest hike and Queensland floods may also affect the index. Some may have lost their source of income or may have lost their jobs due to the flood; thus, contributing to not being able to cope up with the household expenditures and mortgage loans.

According to Fitch Ratings analyst Natasha Vojvodic, she said that while mortgage delinquency is expected to increase in the first quarter, everything will improve as long as the Reserve Bank will keep official interest rates on the same level for a while for people to be able to comply with the payments.

Vodvojic said that despite the increase in arrears, still the economy is strong and will be able to withstand this downfall. She noted that the unemployment is still low and this is not the main reason for the increased arrears. She pointed out that the main reason for the arrears is the interest rates and thus, everything will depend on the interest rates that will be given in the remaining year.

Mr. Zanesi contradicted that despite these increasing interest rates, still Australians are able to cope with these changes and are still able to pay the mortgages due to them.

All in all, this is just a minor setback and as the year continues, it is hoped and expected that the people will be able to find ways and will be able to fulfill their responsibilities in paying their debts one way or another. Both the consumer and the banks will have to enter into some agreement so that both will not end up at a loss. Chances are to be given and everything will run smoothly. No one will lose a home.