Global reports confirm this, with the 2010 Housing Affordability Index from The Economist putting Australian real estate as the most unaffordable in the world (at over 60% over-valued).

It is, of course, easy to prove ones own argument by finding information and statistics that support it.

So, we set out to disprove ourselves, by finding current expert opinion from reputable sources.

ANZ, one of Australia’s largest banks, has recently released The Australian Housing Update.

It argues that the general methodology behind the (numerous) global reports is inaccurate as, in measuring ratio’s between house prices and relative income, the outcomes fail to take interest rates into account.

So far, so plausible.

The ANZ report states that housing affordability is ultimately dependent on debt servicing costs of which interest rates are a key driver.

The report shows that mortgage interest rates in Australia in the 1980’s averaged around 14%, however, since 2000 the average has been close to 7%.

This is where I take issue.

Whilst the figures they use are accurate, ANZ (no doubt quite keen for Australian’s to continue borrowing and not get cold feet about their debt levels) fail to take stock of the bigger picture.

Australian household debt has skyrocketed since the 1980’s (yes, I’m using a time period they introduced) and has indeed risen much faster than household disposable income.

In the 1980’s the average Australian household held debts totaling around 40% of their disposal income. To be specific, in December 1986 the ratio was 44.1% and just twenty years later in December 2006 the ratio had accelerated to 158%. This represents an increase of 258%. According to the Reserve Bank of Australia, household debt in 2010 is 166% of income.

The ratio of personal debt to income in Australia is indeed one of the highest in the world – higher even than America and the UK. For every $100 we earn, we owe $130. Credit and charge cards account for $40 billion of the debt.

The 1980’s are often referred to, particularly by baby boomers, as being the most difficult period in recent times as interest rates were in excess of 18%.  In saying that, think of today’s credit card interest rates, some exceeding 20% and the purchasing of more general goods on credit is far more prolific today than it was 20 years ago.

As such, whilst in 1989-90 about 6% of an Australian’s wages were used to service a mortgage, today it is around the 9.3% mark. This is an increase of 55%.

So, we remain of the opinion that household debt levels cannot be pushed up much further and housing affordability remains a major concern.

As household debt remains at such dramatic levels, the pressure on housing affordability and thus real estate prices will not simply retreat.

Let us know where you think the market is heading!

Simon Turner

Article originally published on Marquette Turner Luxury Homes

Australian Housing Affordability and Household Debt

AUSTRALIA: Housing prices fall flat in Melbourne – The Herald Sun

BRAZIL: World Cup and Olympics ‘could create Brazilian property boost’ – Property Showrooms

CANADA: Canada Still Loves The Real Estate Bubble – Business Insider

CHINA: Chinese Real Estate: How to Enjoy the Year-End Rally – Investing Daily

COSTA RICA: Top 10 Reasons to Invest in Costa Rica – Stock Markets Review

FRANCE: Tax agreement with France introduces real estate tax exemption – International Law Office

INDIA: Trajectory of Flourishing Real Estate in India – Stock Markets Review

INDONESIA: Indonesia To Reissue Tender On Mega Resort Project – Bernama

IRELAND: Irish Show Greeks Suffering Is Price of Admission to Euro Union – Bloomberg

ISRAEL: Fischer Raises Key Israel Rate to Prevent Real Estate Bubble – Bloomberg Businessweek

JAPAN: Real Estate News: Home Prices Rise, But Expectations Fall – Wall Street Journal

MALAYSIA: Shariah Loans Reach Five-Year Low on Property: Islamic Finance – Bloomberg Businessweek

MEXICO: Mexico Real Estate Gets Unlikely Boost From CNBC’s ‘Mad Money’ Host – Real Estate Channel

NEW ZEALAND: New Zealand Raises Benchmark Rate for Second Month – Bloomberg Businessweek

PHILIPPINES: Philippines ripe for real estate investment trusts — experts – Business World Online

ROMANIA: Rate Swings Sting Europe’s Borrowers – The Wall Street Journal

RUSSIA: Russia is the Most Attractively Valued BRIC Market – Hemscott

SINGAPORE: SMART buyers and sellers will be heading to Singapore – Property Report

THAILAND: Bangkok hotspots revealed in new report – Property Report

TURKEY: Property and Real Estate in Turkey – Why it is a Good Investment – Tom Wilt News

VIETNAM: Problems ahead for Vietnam’s housing market? – Global Property Guide

UNITED ARAB EMIRATES: Dubai Marina is the Top Choice for Property Investment – PR-USA

UNITED KINGDOM: House prices fall as buyers stay home – This is Money

UNITED STATES OF AMERICA: Number of USA homes for sale rising – Property Showrooms

Do you have an article to share, or would you like your country included in the list? Let us know!

Simon Turner

Article originally published on Marquette Turner Luxury Homes

Real Estate News Making Headlines Around the World: 24-30 July 2010

AUSTRALIA: Melbourne is expected to lead a cooling of the Australian real estate market – Property Wire

BRAZIL: Land acquisition laws ’should not put people off Brazil real estate – UV10

CANADA: Canadian Interest Rates Rise – Now What? – BiggerPockets.com

CHINA: 14 Charts That Show China’s Dangerous Housing Bubble Is Far From Over – Business Insider

COSTA RICA: Costa Rica Real Estate Expected to Grow – SMR

FRANCE: Real estate transactions grow in Europe despite sovereign debt crisis – IPE Real Estate

INDIA: Delhi emerges as the most sought after location in India for real estate buyers – Property Wire

INDONESIA: Bali Resists Foreign Ownership Changes – International Property Journal

ISRAEL: Attracted by Israel’s strength – Montreal Gazette

IRELAND: Real Estate and Private Equity Funds in Ireland – Mondaq

JAPAN: Update: BOJ Shirakawa: Upside, Downside Risks Up Slightly – Automated Trader

MEXICO: Right Time to Buy Real Estate in Mexico – Live PR

NEW ZEALAND: Median house price ‘up in NZ’ – SMH

PHILIPPINES: Tapping the potentials of real estate and tourism – Philippine Star

RUSSIA: Hot Russian Spy worked as…a Real Estate Agent? Go figure… – Examiner

SOUTH AFRICA: Interest in property ‘sustained’ during World Cup – eProp

SPAIN: Spain’s Housing Market Slide Adds to Europe’s Economic Troubles – PBS

THAILAND: Property tops consumer complaints in Thailand – Property Report

TURKEY: Turkey’s housing stock reaches 16.8 million, data show – Today’s Zaman

UNITED ARAB EMIRATES: Lack of Sales Leaves Dubai Property Buyers Guessing on Prices – Bloomberg

UNITED KINGDOM: Watch out, the great £50bn property unload is about to begin – Telegraph

UNITED STATES OF AMERICA: Real estate agents want oil spill compensation – Associated Press

VIETNAM: Vietnam’s castle in the sand – Property Report

Simon Turner

Article originally published on Marquette Turner Luxury Homes

Real Estate News Making Headlines Around the World: 13-23 July 2010

With a Time Share, you are not actually buying a property but buying the right to spend time in a home. So if the property increases in value you have no right to any of that capital gain and, with the ease of finding cheap accommodation on travel websites these days, the benefit of paying for time share has been very much eroded.

Fractional Ownership, on the other hand, means that owners purchase a freehold title in a particular residence. This presents an excellent opportunity to purchase a second/vacation home in a cost-effective manner.

Think of it like this – if you only plan to spend 10% of your time at the property, why be saddled with 100% of the costs? There is little reason to pay 100% of the cost of the vacation home when you will only get the benefit from it for a fraction of the year.

Or, to look at it another way, you may not have the capacity to live full time in a $10million home but you might be delighted to spend 35-36 days each year and pay $1million to enjoy the benefits. With the National Association of Realtors in the United States reporting that the average use of second homes in the United States is approximately four weeks annually, such a concept makes great sense.

You then have access to use any residence of the same type, providing greater flexibility and availability as well as benefitting from any capital increase in the value of the property. And, with such ownership, you can of course sell your deeded interest at any stage. The added plus point of this is that, with a lower price point, there is a larger pool of potential purchasers.

A recent survey stated the top 5 most important benefits of a Fractional property to be:

• ‘appreciation of property values’
• ‘no maintenance hassles’
• ‘access to beach’
• ‘quality fitting and furnishings’
• ‘ability to exchange weeks for holidays in other destinations

Fractional ownership is certainly the future of luxury property ownership. Buyers are presented with a way to own a luxury vacation home, without the astronomical price tag.

To see our properties throughout the world where Fractional Ownership is available CLICK HERE – link coming soon…

To find out more about the Fractional Ownership model, or make a general enquiry, please use the form below.

CONTACT

Michael Marquette on    +61 433 170 170

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Article originally published on Marquette Turner Luxury Homes

Fractional and Co-Ownership of Real Estate

Once again, Australia is the most over-priced, and thus least affordable country in the study, with five of the top six cities surveyed also being Australian.

The survey, which covers 272 markets in Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States, is now in its 6th year, and determines affordability by the “Median Multiple”, which is quite simply the median house price divided by gross annual median household income.

LEAST UNAFFORDABLE
There were 61 severely unaffordable markets this year, down from 64 found in the previous survey. The least affordable markets were concentrated in Australia (22) the United Kingdom (19) and the United States (11).

As for cities, the top six are Vancouver being the least affordable, followed by Sydney, Sunshine Coast, Darwin, Gold Coast and Honolulu.

click the tables to enlarge

MOST AFFORDABLE
There were 103 affordable markets, 98 located in the United States and 5 located in Canada.

6th Annual Demographia International Housing Affordability Survey - read here

The results of this latest edition are very much in line with a recent and broader index compiled by The Economist which showed Australia to be in excess of 50 times over-priced/valued.

Simon Turner

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Article originally published on Marquette Turner Luxury Homes

The Most Unaffordable Real Estate Markets

Moving funds around the world to purchase these properties can often be expensive, once fees and currencies are taken into account.

In recognising this, Marquette Turner Luxury Homes, having properties listed for sale on five continents, are excited to form a global strategic partnership with Realty-FX.

Realty-FX monitor key economic and market data to stay abreast of market movements, trade formations and patterns. The company is an industry specific service provider for Foreign Exchange, specializing in International Real Estate for Private and Wholesale clients purchasing Resorts, Spa’s, Luxury Homes, Businesses and Property globally in both commercial and residential markets.

They are based in Sydney, Australia with alliances with major banks around the world covering the United States, Europe, the Middle East, Asia, Australia and other markets delivering fast, reliable Foreign Exchange services.

Co-President of Marquette Turner, Michael Marquette, comments:

“Marquette Turner Luxury Homes and Realty-FX recognise the importance of providing our clients with corporate rates for foreign exchange transactions and lower fees. We’re very excited to have formed this partnership and we’re confident that our clients throughout the world will benefit significantly.”

Advantages of using Realty-FX over major banks:

- No fee’s

- Most competitive Exchange Rates

- Opening an account is free and there’s no obligation to trade

- A dedicated, experienced dealer will guide you expertly and ‘hold your hand’ throughout the entire currency transfer process. There is one point of contact throughout, who will take time to understand your situation and requirements.

- Meticulous, individual planning and strategic guidance

- Complete understanding of clients unique requirements

By dealing with experts that do not have the overheads of major banks, Realty-FX can provide the client’s of Marquette Turner Luxury Homes with far better personal service and rates, essential when it comes to property transactions.

To see how Realty-FX can assist you, please contact Jarrad Slowik on 1300 417 225 (Australia), +61.1300.417.225 (international) or use the contact form below:

[contact-form]

You can also click on the image below to go to the Realty-FX website:

Article originally published on Marquette Turner Luxury Homes

Marquette Turner Forms Partnership with Foreign Exchange Service for Cheaper International Property Transactions

AUSTRALIA: Clearance rates fall under 50% in Sydney, as market cools – Sydney Morning Herald

BRAZIL: Restrictions to Brazilian land ownership ‘will not affect property investors’ – Property Showrooms

BAHAMAS: Foreclosure ‘sham’ leads to loophole plug strategy – The Tribune

CANADA: Drop in home sales may be sign of peak – Financial Post

CHINA: China’s frothy property market falters in June – BBC News

COSTA RICA: Costa Rica Real Estate Project Recognized as a Top Ten Best Home Deal – PR Web

DUBAI: Dubai developer’s overseas expansion grinds to a halt with Malaysia sell off – Property Wire

FRANCE: Buying an investment property in Paris – Stuff

INDIA: Find out: How to pick the best real estate asset? – Money Control

INDONESIA: Building beyond Singapore: Local real estate businesses venture overseas – International Business Times

IRELAND: Ireland’s Bad Bank Sees Losses in ’Stressed’ Scenario (Update1) – Bloomberg Businessweek

ISRAEL: Businessman to buy Israel’s most expensive flat – YNet News

JAPAN: The Real Housewives of Japan: Shopping for Bargains … Driving Deflation? – Money Morning

MEXICO: Right Time to Buy Real Estate in Mexico – Live PR

NEW ZEALAND: Is the ‘property bubble’ about to burst? – 3 News

PHILIPPINES: Is the Philippines, the Next Phuket? – Pittsburgh Post Gazette

ROMANIA: Reasons for the freeze – The Diplomat

RUSSIA: Russia’s richest woman defends business reputation in court – Ria Novosti

SAUDI ARABIA: Sixty percent of Saudis don’t have own houses – Arab News

SWITZERLAND: Finma warns of real estate bubble – Swiss Info

THAILAND: Affordable in demand, but foreigners “off the radar” in Bangkok – Property Report

TURKEY: Buying Property to Turkey – Tom Wilt

VIETNAM: Rate hike weighs on debtors, homeowners – The Korea Times

UNITED KINGDOM: Top U.K. real estate investments – Helium

UNITED STATES: The Rich are Defaulting on Mortgage Payments in USA – Shuttervoice

Simon Turner

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Article originally published on Marquette Turner Luxury Homes

Real Estate News Making Headlines Around the World: 7-12 July 2010

Whilst still down from the lofty heights of 2007 when 32% of agents reported contact with foreigners, figures were up 5% to 28% in the 12 months surveyed. Furthermore, actual purchases in the period jumped 6% to 18% which represented $66 billion USD of property, or approximately 7% percent of the total market. Just four states, Florida, California, Arizona and Texas, accounted for 53% of all purchases.

Canada remains the source of the most overseas buyers, whilst Mexico moved into second place with 10% of the buyers, replacing the UK, which fell to 9%.

Additionally, the median price paid for property fell from $247,000 to $219,000 USD.

The figures suggest that foreign buyers, witnessing a depressed US housing market, were bargain shopping, and there were plenty of bargains to be had. And with credit being harder to come by, with more hoops to jump through, there’s no surprise that with 55% of foreign buyers purchasing in cold, hard cash, that they managed to squeeze bargains.

To read the report CLICK HERE

Austin, Texas

Simon Turner

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Article originally published on Marquette Turner Luxury Homes

Increase in Numbers of Foreign Investors in US Real Estate

New home loan approvals are at the lowest level in almost a decade and there is strong evidence emerging that home prices may be already falling around the country. Demand for high-end, Luxury real estate has deceased sharply in the last quarter, as has auction clearance rates throughout Australia.

First home buyers have abandoned the market in droves and the number of buyers attending open homes has decreased sharply. Indicators appear to show that interest rate increases have slowed the economy and decreased confidence. Some economists are predicting flat or negative price growth for the remainder of 2010.

CONTACT

Michael Marquette on +61 433 170 170

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Article originally published on Marquette Turner Luxury Homes

Reserve Bank Keeps Australian Interest Rates on Hold – July 2010

AUSTRALIA: Housing Shortage Makes Australian Home Prices Almost Twice U.S. – Bloomberg Business Week

ARGENTINA: Research and Markets: Argentina Real Estate Report Q3 2010 – Business Wire

BRAZIL: Progress being made in Brazilian property transparency – UV10

CANADA: First time B.C. homebuyers are the most thorough in Canada – News 1130

CHINA: China Real Estate Market Due For Correction: Minister – Nikkei.com

COSTA RICA: Costa Rica – Tourism Converts to Real Estate Prosperity – iNewswire

FRANCE: French property market to benefit from weak euro – Property Showrooms

INDIA: India’s property scoop- a take on how real estate is flourishing in India – Stock Markets Review

INDONESIA: Regulation of Property Ownership by Foreigners – Bali Discovery

IRELAND: Weaker Euro Set to Spur Irish Turnaround – Wall Street Journal

JAPAN: Property Bonds Slump Most Since ’09 on Slowdown: Credit Markets – Bloomberg Business Week

LITHUANIA: Top banker: property prices not to peak any time soon – Baltic Business News

MEXICO: Right Time to Buy Real Estate in Mexico – Stock Markets Review

NEW ZEALAND: Auckland residential property marks time – Sydney Morning Herald

QATAR: Qatar’s real estate sector ‘recovering’ – Gulf Times

ROMANIA: Study : Sales in Romania, the most affected by the crisis in Central and Eastern Europe – ACT Media

RUSSIA: Russian Spies Had U.S. Real Estate Connections – Real Estate Channel

SOUTH AFRICA: Celebrities targeting South African property investment – Property Showrooms

THAILAND: Property demand in Thailand likely to recover in second half of 2010 – Thailand Business News

TURKEY: Brits flocking to Turkish property market – Property Showrooms

VIETNAM: How to raise capital for real estate projects – VOV News

UK: UK Real Estate Market Sees Influx Of Upscale Properties For Sale – NuWire Investor

USA: The Realities of Real Estate: Liberty and property rights – Hometown Annapolis

Simon Turner

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Article originally published on Marquette Turner Luxury Homes

Real Estate News Making Headlines Around the World: 30 June – 6 July 2010