Property News

There are five reasons to expect a further slowing in the national average home price growth next year, which will follow by a peak in prices sometime in the second half of 2022, and then falling prices in 2023, according to Dr Shane Oliver, Head of Investment Strategy and Chief Economist at AMP Capital.

"We remain of the view that we may be getting closer to the end of the 25-year bull market in property prices," he said.

He suggests firstly worsening affordability is constraining more buyers. Affordability has long been an issue in the Australian property market, he noted.

"While interest rates are still low the surge in house prices relative to wages has gone hand in hand with a surge in the level of debt relative to incomes. 

"That now means that it takes 8 years to save for a deposit in Sydney and 7 years in Melbourne.

"This is now squeezing out first home buyers yet again (which has seen their share of new housing finance fall from 25% to 18% since December) and increasingly existing owners looking to trade up are being squeezed out as well. 

"This is particularly an issue in Sydney and Melbourne and partly explains their slowing relative to other cities.

Secondly Oliver noted the supply/ demand balance is starting to improve. 

"Supply is on the rise again reflecting pent up selling, the end of lockdowns and high prices. 

"This could start to reverse the chronically low level of listings seen over the last 18 months. 

"More fundamentally strong levels of home building over the last two years following the unit building boom since 2015, combined with the absence of immigrants - which has resulted in a slump in underlying housing demand - have started to see the underlying supply/demand balance come under control," he noted. 

Thirdly Oliver noted rising interest rates will reduce the amount new borrowers can borrow and hence pay for dwellings. 

"Fixed mortgage rates are already on the rise (with several banks increasing them by 0.5% or more) and the RBA is expected to start raising the cash rate (and hence variable mortgage rates) from late next year. Rising interest rates are likely to be a big dampener. 

"The collapse in fixed rates to 2% or less played a big role in the recent boom. 

"Fixed mortgages have accounted for 50% or so of new loans recently, so are far more significant than they used to be in impacting new buyer demand (even though there is no impact on existing fixed borrowers until they roll off current terms which may become an issue next year)," he noted.

Fourthly Oliver noted macro prudential tightening is reducing the amount new borrowers can borrow and pay for homes. 

"So far APRA has told banks to increase the interest rate serviceability buffer they apply to borrowing rates in assessing borrowers from 2.5% to 3% and are now moving to require banks to hold more capital for higher risk loans. 

"The former will reduce the amount borrowers can borrow and the latter will raise the interest rate on or reduce the supply of higher risk loans. 

"Further tightening measures are possible."

Finally Oliver noted a rotation in consumer spending back towards services as reopening occurs (covid and the Omicron variant permitting) may reduce housing demand.

He noted there had been a "sharp loss of momentum since March" as a result of worsening affordability, rising supply, rising rates, macro prudential tightening and some eventual rotation in spending away from housing. 

"We expect a further slowing in home price gains to 5% in 2022, with prices likely to start falling from around September/October next year resulting in a 5 to 10% decline in prices in 2023," he said.



Oliver said the anticipated gradual recovery in immigration may take pressure off capital city prices.

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Five reasons to expect a cooling in the property market: Shane Oliver

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There are just the six houses on what's become known around the world as Ramsay Street, Erinsborough.

And despite all the comings and goings of the residents on the television show, only four of the six at the Vermont South setting have actually been sold over the past 30 years during which the internationally broadcast series, Neighbours has been broadcast.

Two of the four sold on the tightly held Pin Oak Court cul de sac have been bought by an expatriate Neighbours fanatic living in the UK who most recently paid $867,000 in early 2013 to secure his second 'Ramsay Street' house.

Andrew Whitney, who directs a private jet and helicopter charter flight company in the UK, outbid seven for the Pin Oak Court, Vermont South offering.

Also known as 30 Ramsay Street, the home of Jarrod 'Toadie' Rebecchi, it was offered through <a href="https://www.barryplant.com.au/property.cfm?propertyID=2272561" target="_blank">Barry Plant Real Estate</a>.

The former Blackburn North resident bought another Pin Oak Court house 17 years ago before moving to the UK for $238,000.

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Mr Whitney once told the Herald Sun that he knows the street better than anyone.

"I record every episode of Neighbours," he said.

It was sold by the downsizing vendor Faye Pierce, with the buyer able to join the other court residents who are paid a substantial annual fee by the show's producers in agreeing to avoid changes to their facades without consultation and allowing external regular filming. It has been reported that even a letterbox change could be catastrophic for continuity.

<a href="/property-observer" target="_blank">The four-bedroom home was built with her husband in 1973</a> with its expansive covered rear deck having elevated views over Billabong Park.

Marketed as the 'Neighbours House' at 3 Pin Oak Court, the property's marketing won a 2013 real estate marketing award for the Barry Plant Monash Group.

It was advertised as "Your chance to own a piece of Australian television history!"

The most traded on the street sold at $126,000 in 1984, just before the show began; then in 1999 at $312,580 and then in 2007 at $630,000.

The home of the Robinson family, where much of the early action in the soap took place, is number 6. 

[smartcode_project:default project_id=2772]

The original characters included plumber Max Ramsay (Francis Bell), after whose family the street was named, his migrant wife Maria (Dasha Blahova) and their sons Shane (Peter O'Brien) and Danny (David Clencie).

Widower Jim Robinson (Alan Dale) lived next door with his kids, Paul (Stefan Dennis), Julie (Vikki Blanche), Scott (Darius Perkins/later Jason Donovan) and Lucy (Kylie Flinker), and mother-in-law Helen Daniels (Anne Haddy).

It was launched by the Seven Network on March 18, 1985, but struggled for four months before cancellation, only to be reborn at Channel Ten to then become Australia's longest-running prime time soap, and the second longest in the world behind Britain's Coronation Street.

Neighbours was repackaged debuting on Ten in January 1986 with huge credit to Ten's director of publicity, Brian Walsh, who toured the cast across shopping centres, generating unprecedented interest in afternoon newspapers, with the likes of The Daily Mirror's David Brown securing regular front page exclusives on the latest for Scott and Charlene (Jason Donovan and Kylie Minogue), which television critic Michael Idato once described as one of Australian television's iconic romances, on and off screen.

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One story line through the years was changing the name of the street to Ramsbottom Street. Harold Bishop led a protest against the name change and won.

The median price currently listed by <a href="https://www.urban.com.au/property-observer" target="_blank">CoreLogic RP Data</a> for houses in Vermont South is $815,000. Back in the mid-1980s it was around $119,000.

The last sale prices on Pin Oak are:

<ul>
<li>3 Pin Oak $867,000 2013</li>
	<li>2 Pin Oak $630,000 - 2007</li>
	<li>6 Pin Oak $238,000 - 1998</li>
	<li>1 Pin Oak $235,000 - 1991</li>
	<li>4 Pin Oak $66,950 - 1981</li>
	<li>5 Pin Oak $62,000 - 1978</li>
</ul>
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Not much movement among Neighbours on Pin Oak Court as Ramsay Street celebrates 30 years

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The former NAB banker Lukas Kamay has been sentenced to jail for seven years, three months. The minimum served with be four years, six months.

Kamay was accused of using insider Australian Bureau of Statistics (ABS) information to make over $7 million by trading in the Australian dollar online over 10 months.

Police alleged Kamay, of Melbourne, used confidential ABS statistics to trade online, betting against foreign exchange derivative movements in the Australian dollar after allegedly being in receipt of national economic, retail trade and labour-force statistics before the normal 11.30am release.

Kamay plead guily to the charges. His accomplice, former ABS analyst Christopher Hill, was sentenced to three years and three months, to serve a minimum of two years.

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Supreme Court Justice Elizabeth Hollingworth said it was "the worst instance of insider trading to come before the courts in this country".

Kamay spent some of the proceeds on an apartment in The Block Albert Park.

His headline grabbing Albert Park purchase was the luxury apartment decorated by the runner-up Adelaide twins, Alisa and Lysandra which sold at its April auction for $2,375,000 —<a href="https://www.dinglepartners.com.au/index.cfm?pageCall=property&amp;propertyID=2618525" style="line-height: 1.3em;" target="_blank"> a massive $616,000 above the reserve of $1,759,000</a>. 

The Sunday Herald Sun <a href="https://ow.ly/i/5wuz5/original" target="_blank">uncovered Kamay's $2,375,000 purchase</a>.

<img alt="HS_cover_SUN.jpg" src="https://static.ow.ly/photos/original/5wuz5.jpg" title="HS_cover_SUN.jpg">

Source: Ow.ly

The three bedroom apartment was marketed for Alisa and Lysandra, the former SA police officers, by the Melbourne CBD agents, Anton Wongtrakun and Rochelle Wilson from Dingle Partners.

Apartment 3 at 47 O'Grady Street (feature picture above) was resold mid-2014.

Investors paid $2,375,000 to buy after the televised initial purchase did not proceed to settlement.

The replacement buyers had the apartment advertised for rent at $2,500 a week through Dingle Partners.
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Seven years jail for The Block Albert Park-buying ABS insider trader Lukas Kamay

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GUEST OBSERVER
Moves by regulators and banks to curb the growth in investment lending in response to spiralling Sydney and Melbourne property prices could cool the investment market nationwide.
The decision by lenders to raise interest rates on investor loans and other changes to tighten up investment lending was penalising investors.
Changes aimed at trying to simmer the property hot spots of Sydney and Melbourne would needlessly harm investors in other parts of Australia
Not only have there been interest rate rises for investors but also changes to loan servicing calculations and Loan to Value Ratio (LVR) requirements, with the Australian Prudential Regulation Authority (APRA) encouraging the crackdown.
Our economy is in a two speed cycle with the big property price increases focussed on Sydney and Melbourne.
Regulators and lenders need to be careful with how they deal with this as they risk hindering the market in others parts of the country where real estate is not booming.
The lending landscape is changing with a mixed bag of LVR requirements which are now causing a great deal of uncertainty in the market.
Investors in places such as Brisbane and Perth are being unfairly targeted over the property boom in Sydney and Melbourne.
 
Kent Leicester is managing director of Cigna Wealth and can be contacted <a href="https://www.cignawealth.com.au" target="_blank">here</a>.
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Investor lending changes could backfire: Cigna Wealth's Kent Leicester 

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In our Purchase or Pass segment this week with Charles Tarbey and Tom Panos we see if it was still possible to get a great investment, close to the city, for a reasonable budget at the end of last year.
Location: 8.5kms from CBD
Beds: 1
Bath: 1
Parking: 1
SQM: 68m
Price: $625k
Rent: $550-600/wk
Chris: It’s a 1 bed, 1 bath unit with parking 8.5km’s from the CBD and <a href="https://www.realestate.com.au/property-apartment-nsw-coogee-121217178" target="_blank">less than a km to the local action</a>. It’s a 68 sqm first floor unit, with courtyard off the lounge for outside dining and entertaining. It’s located at the back of the building in a well maintained security block. The property sold for $625k, has a rental estimate of $550-600/wk and has strata fees of $633/qtr. I thought we’d look at some of the information on the advert and decipher how we’d read into that. So when you hear something that’s maybe 8.5km from the CBD and less than a km from the heart of the suburb, what does that mean to you Charles?
Charles: Well, as we’ve always said the western suburbs start at Centennial Park for most people. It’s nice and located close to the city and if you’ve brought it up or you’ve raised it as a property for purchase or pass it’s likely to be in the eastern suburbs somewhere and you’ve likely bought it off one of your mates who work near the eastern suburbs. That’s what I got out of there. What have you got out of that Tom?
Chris: What about for you Tom, 68sqm?
Tom: It says to me that it’s not tiny, it’s the sort of unit that’s liveable. So they’re happy to talk about the size there. And on that previous point, 8.5ks to the city. Anything within 10ks of the city you think it’ll suit a city dweller. So it feels like you might not be right in the heart of it, but you’re close to it. That’s the initial impression.
Chris: Charles, for some of the listeners in the Blue Mountains who like fresh air, how does the courtyard suit?
Charles: Well, I had a look at the photo it looked pretty nice. It looked like I was looking at a wall but was that right, are you looking at a bit of wall?
Chris: Potentially, yeah
Charles: So we’d call that privacy, right, so you get no neighbours looking at you. So that’s what I’d get from that. Tell me, 68sqm does that include a patio?
Chris: That’s including the patio, yeah
Charles: and not the car space
Chris: Yeah, I think car space is maybe 15 on top or something. So again it’s not massive.
Charles: No, it’s a great price for that size
Chris: Backward block Tom?
Tom: Backward block to me, straightaway the initial feeling is that it’s quiet, that you’re not going to be hearing lots and lots of noise. That’s the suggestion on why the agent would write that in the marketing literature.
Chris: Maybe the block’s the other way around and the backs the freeway, you never know so you’ve also got to go and check it out at the same time. But in this case that’s right. North facing Charles?
Charles: Well, that’s an important part of it, you know, the sun, making sure it’s not facing the west where you’ve just got to have your air conditioning on at a certain time. Facing north always is an appealing thing and every agent will use it when they can.
Chris: 22 end block Tom?
Tom: 22, it’s basically saying it’s not one of these big Meriton complexes, where you won’t know everyone. 22, you’ll get to know who the people are there. It’s also not as good as say 6, 8, 10 or 12, but 22 says that it’s not a monster of a building. 
Chris: Yeah, reasonable size. 633 a quarter for the strata fees Charles?
Charles: Yeah, I thought that was really excellent. Actually, and I would have promoted that as probably one of the first points because some of those buildings down there can cost you a great deal more and a lot of people are very concerned about strata fees and they should be.
Chris: Yeah, and I’ll do the final one, 5-600 a week for the rent, 4 and a half to 5 per cent rent this market it’s pretty superb so purchase or pass for you guys?
Charles: Definitely purchase based on the price
Chris: And what about you Tom?
Tom: Purchase, whether it’s 625 or 650 I’m not quite sure what it was, but it’s a good buy.
(Chris) I think this is an almost text book purchase for someone that has a limited budget and still wants to stay in a blue chip suburb. Everything ticks the boxes for me so I would PURCHASE
To watch the discussion in full, <a href="https://www.youtube.com/watch?v=eKMvn0Pu9nc" target="_blank">click here</a>.
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Purchase or Pass: Property investments on a reasonable budget with Chris Gray

Australia has a sound and credible macroeconomic policy framework: Glenn Stevens

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GUEST OBSERVER
One of Australia’s biggest comparison sites finder.com.au reveals ‘lifestyle renting’ is sweeping the housing market, and warns the trend is putting some under dangerous housing stress.
According to the new research, Australians are shelling out up to 38 percent of their weekly income to rent in desirable locations – well above the 30 percent threshold for housing stress.
The finder.com.au analysis showed across the capital cities, renting a house in Sydney takes a staggering 37.9 percent of the NSW average wage. On average, Melbourne renters are handing over 30.7 percent of their weekly earnings on rent. Brisbane rent was also a potential source of stress, requiring 28.4 percent of the average Queensland wage. Renting an inner-city property that is close to trendy bars, cafes and work trumps the home ownership dream for a growing number. This new generation of renters are not renting while they save for their dream home – they are renting their dream home instead. It’s alarming that they are overstretching themselves. It’s a case of ‘keeping up with the Joneses’ for some who are living in properties they can’t afford. Interestingly Sydney renters spend a higher proportion of their weekly income paying rent than what some people are committing to their mortgages.
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If you’re forking out more than 30 percent of your income to pay for housing, then you are considered to be in housing stress. The old real estate belief that people rent because they couldn’t afford to buy was not the case anymore. Some have just become accustomed to the ‘good life’ of being close to everything and are not prepared to give that up to get onto the property ladder. ‘Rentvesting’ is also becoming a more popular option for Australians – this is where people buy an investment property in a more affordable suburb as a way to enter the property market sooner, and proceed to rent in their desired location. Data from the Australian Bureau of Statistics shows an increase in households who are renting over the past two decades. In a 2013-14 report on Housing Occupancy and Costs, the ABS noted that 25.7 percent of households were renting their home privately, up from 18 percent in 1994-95. The proportion of private renters will likely continue to increase, with renters avoiding the hidden costs of homeownership, which include maintenance, council rates and insurance, Ms Hassan says. Hobart was identified as the most affordable capital city to rent where you will sacrifice 25.2 percent of your weekly wage on rent. Ms Hassan says renters could be forced out of capital cities with rents between 4.9 and 15.5 percent higher than regional areas in those states. The biggest gap was in New South Wales where the proportion of the average weekly wage to rent in the capital city (37.9 percent) was 15.5 percent higher than regional areas (22.4 percent). Renting in areas outside of the capital cities was much more affordable with the percentage of weekly earnings ranging from a modest 19.9 percent (in Victoria and Tasmania) up to 23.1 percent (in Queensland). Queenslanders pay the highest proportion of their average weekly salary on renting a home outside of the capital cities, where the average weekly salary is $1512.20 and median rent is $350. But even then, this is well within the housing stress threshold making regional living, unsurprisingly, an attractive option for some renters.
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Top 5 tips on how to reduce housing stress
Rental costs increase almost exponentially the closer you get to the city centre, so moving a couple of train stops further away could save you hundreds of dollars a month.
If you have a good relationship with your landlord, it's always worth asking for a rent reduction if you're prepared to sign a longer term lease.
Put more aside for rent than the required amount. This will give you a buffer if you are faced with challenges.
Be in the habit of budgeting before you start a tenancy. Know what you can afford and only rent what’s reasonable. 
Give yourself a financial makeover. Go online and compare what you're paying for things like contents insurance and utilities to make sure you aren’t paying too much.
Bessie Hassan is consumer advocate at <a href="https://www.finder.com.au/" target="_blank">finder.com.au</a>.
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Lifestyle renters suffering ‘housing stress’, new research reveals: Finder.com.au's Bessie Hassan

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A historic family mansion at Fulham has been sold for $2.5 million.
The property was offered for sale for the first time since it was built 135 years ago. 
The mid-Victorian sandstone villa at <a href="https://www.realestate.com.au/property-house-sa-fulham-116598235" target="_blank">12-14 Weetunga Street, Adelaide</a> and an adjoining dwelling, were sold through Ray White Henley Beach.
<img src="/images/2015/09/01/1508132012-1420Weetunga20St20Living20Room.jpg" alt="" width="864" height="576">
The buyer plans to extend the 5113sqm home and open it to the public for functions and tours.
“The sellers are delighted that this historic, state heritage home, which was built by Samuel White, will continue to be treasured”, said Ray White's Patrick O’Flaherty.
Over three generations of the White family have lived in the home, which took three years to build.
The property included a six bedroom villa with three bathrooms, and a detached museum with attached storage and greenhouse. 
There is also the three-bedroom mid-1980s built home on the site adjoining the original villa.
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Historic Fulham mansion sells for $2.5 million

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GUEST OBSERVER
It’s 8am on a 10 degree winter morning and all you can hear is the heavy rainfall outside.
You cannot think of anything better than to forgo your house hunting plans and stay in bed for the day; after all, it’s the weekend. But just yesterday you were sunbathing in the park, planning your list of inspections for this very day and daydreaming of what your new home would be like. Now you decide that you will do this next week, when you can view properties in more comfortable conditions. 
It's amazing how the weather can alter your mood and even what you decide to do for the day. What better way to welcome the month of Spring than with a report about weather! Temperature plays a key role in this report. We are all looking forward to the next few months as mornings become brighter earlier and the days hit temperatures over 20 degrees celcius again. 
When it comes to selling and buying houses, Melbourne's favourite method is still the auction. On a sunny Saturday morning, many houses being auctioned can draw quite the crowd. In this report, Secret Agent looks at the impact of the weather, in particular temperature, on auction results. Does temperature have an impact on price or does a cold day merely weed out the number of onlookers? 
Weather and Mood 
Weather can affect our mood in various ways and, through this, influence our behaviour and decisions. Rainy days can make us feel sad and dull. Sunlight can diminish tiredness and boost positive moods. Simply thinking about the warm Spring days ahead makes Secret Agent happy. 
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An investigation into the relationship between morning sunshine and market index stock returns each day at 26 stock exchanges internationally found that there is a strong positive correlation. (Hershleifer and Shumway, 2001) Other weather conditions such as rain or snow were not found to have any relationship with returns. 
Sunny weather is better for forging new relationships too. A psychologist in France performed an experiment in which he approached women on sunny and cloudy days and asked them for their phone number. The women were more receptive to his flirtatious behaviour on sunny days with 22% giving him their number, as opposed to cloudy days where only 13% were happy to. (Gueguen, 2013) 
Temperature can also impact our behaviour independent of sunshine or rain. One study looking at the relationship between weather and helping behaviour found that a moderate temperature of about 20 degrees celsius is said to be ideal for most people. (Cunningham, 1979) Once you deviate from this happy medium, people felt a greater degree of discomfort and were less likely to help. 
Heat is said to bring out the worst in people. Rates of aggression and violence are higher on hotter days of the year. A Dutch experiment involved placing police officers in a simulated burglary in hot and cold conditions. They found that police officers were more likely to draw their weapons and shoot the suspect in the hot environment than in a colder one. On a baseball field, pitchers are more likely to hit batters on a hot day. (Anderson, 2001) A study analysing the content of news reports filed out of Beijing during the Olympics found that the Air Pollution Index and daily temperatures had an impact on the negativity of the reports, with more negative words used as temperature and air pollution rose. (Zhong and Zhou, 2012) 
This prompted us to think that temperature may also have an effect on auction results that is independent of seasonal factors. Secret Agent decided to test this out to determine if daily temperature influences property prices in an auction environment. 
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The study collected the auction sale results of all townhouses and houses sold in inner Melbourne in the past year from August 2014 up until August 2015. For this purpose, inner Melbourne was defined by the suburbs listed in the Quarterly Turnover section of this report (page 10). 
There were 1740 houses sold with disclosed sale prices and these were incorporated into a comparative analysis with average daily and monthly temperatures. These results were then checked using hedonic regression techniques to isolate the temperature variable and determine its true effect on a property sale price. This was performed on properties where there were records of the land area, number of bedrooms and number of bathrooms. The model included 1032 properties and accounted for the size of the house (land area and number of bedrooms/bathrooms), inflation, geographical location (South, North, East or West as well as distance to the nearest beach or CBD) and seasonality (Summer, Autumn, Winter, Spring sale date). 
Temperature and Sale Price 
The analysis aimed to find a correlation between the average daily and monthly temperatures with auction sale prices. Figure 1 shows the comparison between the average sale price with the highest temperature reached on that day. Here there seems to be no real connection. While temperatures increase from August to February and then decline again throughout 2015, the average sale price on auction weekends moves more sporadically, with the overall trend a slight increase in average prices over time. 
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Note that on some weekends, especially in the January period, there were not enough sales to get an accurate average estimate. Statistically speaking, the correlation coefficient between the daily temperature and sales price found was 0.1. The correlation coefficient tells us how interdependent two variables are and always falls between 1 and -1. A measure of correlation between daily sale price and temperature of 0.1 is considered a very weak, positive correlation. Positive in this case means that, as temperature increases, average sale price increases as well, but it is weak because it is close to 0, at which point there is no relationship. 
 
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Looking at the monthly averages (Figure 2), a connection between the average temperature and sale price of houses and townhouses starts to emerge: as temperature increases, so does the average sale price. The measure of correlation between monthly sale price and temperature in this case is 0.46. This correlation coefficient is weak, positive. While it is larger than the daily average correlation, implying the monthly data is more strongly interconnected, the number is still closer to 0 than it is to 1, making it a weak correlation.
The results of the hedonic analysis support the above comparisons. Holding all other variables constant (size of house, inflation, geographical location and seasonality), Secret Agent found that the average temperature does not have a statistically significant impact on the average sale price of a house or townhouse at an auction in inner Melbourne.
One of the limitations to our study was the fact that data was only analysed for the past year. Results may have been more profound if more sales were included, however there is some external evidence to support our findings. Other research has found that temperature and weather affect people differently depending on what type of weather they prefer. (Klimstraet al, 2011) This could mean that the effects are balanced out in an auction environment since a number of people with different weather personalities would be present each Saturday. 
Research has also shown that whilst men responded to unexpected weather by changing their plans, women tended to stick to their plans even if they did so disgruntled. In other words, weather may affect mood but this does not necessarily change someone’s behaviour. (Connolly, 2008)
Conclusion
Our results show that there is a small chance that temperature may influence auction sale prices in inner Melbourne. A weak positive correlation was found in our comparative analysis of monthly average temperatures and property prices.
When these results were tested using a hedonic regression model, no statistically significant result was found between temperature and property price. Results could become more significant with a larger sample size.
While you might spend hours trying to choose the right weekend of the year to put your house up for auction, it seems you might not need to worry so much. The eventual sale price will be largely unaffected by temperature. Rain or shine, those who are really interested in buying your home will still show up and place their bids. On the other hand, if you are in the market to buy a house, don’t expect to find a bargain simply because the weather is bad. Other buyers who are just as savvy will also be undeterred by bad weather to find the right home. 
Traditionally, August is a very important month for Melbourne property. It’s the prime season for many vendors to scrutinise results to guide their decision making around a potential sale. With interest rates low and pressure to sell minimal, conditions need to be strong to encourage vendors to throw their hat in the ring and go to market.
Overall, results for prime property passed the test with many precedent-creating sales occurring. However, auction clearances started to trend downwards, perhaps a reflection of the larger volume of stock on offer. 
The big challenge that remains is the uncertain global conditions. The Australian sharemarket recorded its worst month since the financial crisis of 2008, falling in the order of ten percent. The sharemarket is a reminder that assets can drop in value very quickly should valuations become too far stretched from historical levels. Whether equity or property, in today's market conditions one needs to be very careful around valuations, and operate on a margin of safety in case of sudden changes that occur within a chosen asset class. Our concern is that, of recent nose-bleed auction results, some of these properties could be worth far less in a year's time should the Australian economy falter, or the availability of cheap and easy credit starts to become scarce.
The Australian Prudential Regulation Authority (APRA) which oversees banks and credit unions has recently enforced tighter lending standards for investors, which is starting to have a flow-on impact on the market. We are noticing that investors, who operate with a slight delay from their pre- approval assurances, are starting to down-gear their budgets to accommodate these changes. The Spring market will be challenged with investors winding back their bidding limits. The countering force to this is to be expected with further demand coming from international buyers, especially those from China.
The other worry at the moment is the dwindling strength of the Chinese economy. The sharemarket has collapsed with a sharp correction, resulting in large losses for many investors. The weakening Chinese sharemarket conditions may actually continue to drive Melbourne and Sydney markets higher as nervous investors from China seek a safer place to park funds.
In terms of sale performance for the month, houses in the inner suburbs were the best performing according to Secret Agent's research, with houses in Brunswick, Brunswick East and Northcote on the boom list. In August 2015, houses and townhouse prices in the inner North were 20% higher in real terms than in August 2014. This is a remarkable change within a 12 month period.
However, the rate of price growth is slowing, which suggests that our market is peaking. Townhouses have started to show a general decline in price with exceptions within certain pockets of Melbourne. Apartments are faltering, with Brunswick, Kensington, Flemington, North Melbourne, Port Melbourne, Prahran, Southbank and Travancore in recession, with two consecutive quarters of falling values.
While we are still witnessing record prices paid, our data suggests that conditions are slowing and its effects may be felt more deeply in the later half of spring. 
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Quarterly Scorecard JUN, JUL &amp; AUG 2015 
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The Secret Agent report is authored by Jodie Walker, Richard Rossman and Ken Premtic. They can be contacted <a href="https://secretagent.com.au" target="_blank">here</a>. 
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The impact of spring weather on Melbourne auctions: Secret Agent

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Prime property prices only increased by 1.9% in the year to September 2015 around the world, according to Knight Frank’s Prime Global Cities Index with Vancouver and Sydney leading the rankings with standout performances. 
The index, which monitors and compares the performance of prime residential prices across key global cities, reports an increase of 20.4% in Vancouver in the year to September 2015. A shortage of supply and strengthening local demand alongside foreign interest are the reasons behind the strong performance. 
Sydney ranks not far behind with an increase of 13.7%, while Melbourne sits in fifth place with an annual increase of 9.4%. The weak Australian dollar, an undersupply of new homes and a strong local economy are behind Sydney’s accelerating values, and to an extent Melbourne as well. In addition, Melbourne has been named ‘The Most Liveable City in the World’ for the fifth time in a row by the Economist Intelligence Unit. 
Michelle Ciesielski, director of residential research, at Knight Frank Australia said the lower Australian dollar had influenced the number of ex-pats buying back in Sydney and Melbourne, taking advantage of buying a prime property in these ideal conditions.
Shanghai also recorded double-digit annual price growth, up 10.7% in the year. The reversal of strict housing policies and the introduction of new fiscal measures, including tax and interest rate cuts, have fuelled demand in Shanghai. 
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Looking beyond the top rankings, the overall performance of the index was less than robust, Knight Frank noted.
The index now stands 34.1% above its low in Q1 2009 but its annual rate of growth is slowing. 
Kate Everett-Allen, residential researcher at Knight Frank noted the index’s annual rate of growth had slowed significantly from 7% two years ago to 1.9%.”
Some 73% of cities recorded positive annual price growth in the year to September down from 91% two years ago.
Singapore was the weakest performing prime market tracked by the index for the seventh consecutive quarter, but the rate of annual decline has slowed from -15.2% at the end of Q2 to -7.9% this quarter. 
Analysis by world region highlights that Australasia leads the Prime Global Cities Index, with an average annual price growth of 11.6%, followed by North America at 8.5%. Europe has entered positive territory this quarter with an increase of 0.8%. However, performance here varies from an increase of 9.4% in Monaco to -5.1% in Zurich. 
As QE unwinds and a US rate rise draws near, prime assets will remain on the radar of investors and HNWIs. The big question mark surrounds not Greece and the Eurozone but the slowdown in the Chinese economy. Wealth from China will continue to flow into overseas property markets with the UK, US, Canada and Australia being key target destinations. 
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