Australia News

The pressures impacting on housing affordability, especially for first home buyers, are likely to worsen in 2008, the Real Estate Institute of Australia (REIA) has warned. Rising interest rates, population growth and price increases caused by a shortfall in the supply of new homes are contributing to a 22-year low in affordability. As a result many home buyers are considering medium and higher density housing as more affordable options, institute president Noel Dyett said.

“In 2008, the main challenges facing the real estate market will be low home loan affordability, the possibility of more interest rate rises, the ongoing fallout from the US sub-prime problems, and an extremely tight rental market driving rents up,” he said.

During 2007 the real estate market was split between established home owners, who enjoyed a “vintage” year, and new entrants who experienced a “less fortunate” time.

The institute’s outlook for 2008 suggests house prices will continue to rise in all states except New South Wales, where the market is more subdued, and Western Australia, where activity has settled.

The Australian average median house price was $442,758 in the September quarter 2007, the REIA said.

Sydney had the highest median price at $538,400 followed by Perth ($455,000), Melbourne ($431,000), Canberra ($425,000), Darwin ($400,000), Brisbane ($383,500), Adelaide ($320,00) and Hobart ($317,00).

“Well-located property, close to employment opportunities and infrastructure will continue to perform well,” the outlook says.

“The upward movement in prices for other dwellings suggests that many home buyers are considering medium and higher density housing as more affordable options in a market where affordability is very low. It is likely that this sector will experience ongoing price growth during 2008.”

The institute says price rises are being driven by population growth, demand for newer and more environmentally-sustainable housing in areas close to employment and essential services, and a shortfall in the supply of new dwellings.

The transfer of infrastructure costs into the pricing of new homes was also pushing up prices of established homes and dwelling approvals were not keeping pace with the demand for additional housing stock.

“The prospect of higher interest rates will potentially see this continue into 2008 with an accompanying tightening of sales volume, as people become more resistant to selling,” the REIA said.

First home buyer numbers have fallen below the long-term average and the institute says the outlook does not look positive.

South East Queenslanders are being urged to continue watching their water use over this holiday period despite widespread rainfall in the region.

“We all need to remember the combined dam levels are still at around 20 per cent and sadly there’s been little real benefit to the dams from the rain we’ve had,” said Queensland Water Commission spokesman Gerald Tooth.

“Even though we will see a slight rise in dam levels over the next few days focusing on Target 140 is more important now than ever before.

“With dam levels this low we are a long way from being out of the woods yet and we all need to remain focused on saving every drop.”

Mr Tooth said with many people hosting visitors over the holiday season they should take the opportunity to pass on their water saving habits to people from outside the region.

“If you have visitors over the holidays from outside South East Queensland, tell them about all of the little things you do to save water, like taking short showers,” Mr Tooth said.

“South East Queenslanders should be extremely proud of their performance in 2007 because water use has now averaged less than 140 litres per person per day for more than 7 months.

“The community’s effort over the last year has made us one of the most water efficient urban populations in the developed world.”

“We are asking everyone to keep up the good habits they have developed during the drought because, frankly, we can never go back to the water wasting ways of the past.”

The hottest year on record in Victoria ended with the hottest day for 2007 as temperatures in many parts of Victoria soared above 40 degrees centigrade reported the Melbourne Age. In Nhill in the Wimmera and Hopetoun in the Mallee, the temperature was 43.7 degrees centigrade in mid-afternoon, a record for the year.

In Melbourne, the temperature was 41.1 degrees centigrade just before 5pm, the city’s hottest day for more than a year. Electricity use peaked as the rising temperature forced householders to switch on the air-conditioning. The scorching end to 2007 will confirm it as the hottest year on record in Victoria.

Figures from the Bureau of Meteorology show the average temperature in 2007 was about one degree above the long-term average. It was a fifth of a degree warmer than the previous hottest year in 1988.

There were no significant fires in Victoria despite the hot, windy conditions but in many parts of the state the heat was barely tolerable.

In Warrnambool, beaches were crowded with people despite a “stifling wind”, said Matilda Wills from the Lady Bay Resort. She said it was the “hottest wind I’ve ever encountered”. In Mildura, it was so hot that an electronic sign measuring the temperature outside one of the Hudak’s Bakery stores had reset in the afternoon. “It means it has gone off the scale,” said owner Michael Hudak. To encourage customers, his bakery displayed the temperature inside and outside the store. Inside was a cool 22 degrees centigrade and outside it was well over 40 degrees centigrade .

At shopping centres crowds were greater than expected as people sought an air-conditioned escape from the heat.

Across Victoria, swimming pools were also a popular option.

The total number of Australian jobs advertised in newspapers and on the Internet increased by 0.7 percent in November to a weekly average of 256,356 per week. This follows a 2.7 percent rise in total advertisements recorded in October. The total number of advertisements in November was 36.8 percent higher than 12 months ago.

Looking at the different channels for advertising jobs, the number of job advertisements in newspapers increased by 0.2 percent in November. This follows a 1.7 percent increase in October. Newspaper advertisements are now 3.7 percent higher than in November 2006.

The rise in newspaper job advertisements in November was driven by increases in South Australia; Victoria; Tasmania; Western Australia and Queensland. These increases were partially offset by sizeable falls in both the Northern Territory and the Australian Capital Territory, with a marginal decline also recorded in New South Wales.

The number of Internet job advertisements grew modestly by 0.8 percent in November to average 235,859 per week. In trend terms, Internet job advertisements increased just 0.1 percent, the slowest rate of growth since February 2003. Nevertheless, the trend estimate of Internet job advertisements still remains 32 percent higher than a year ago.

“Total Australian job advertisements have reached a new high, indicating that demand for workers remains very strong. This reflects the continued strong economic momentum of the Australian economy, as illustrated by growth in GDP of 4.3 percent over the year to the September quarter,” ANZ Head of Australian Economics Tony Pearson said.

However, the monthly trend increase in job advertisements has continued to ease, suggesting the demand for labour is not rising as strongly as it was earlier in the year. The forward nature of the relationship between the Job Advertisements series and employment suggests that employment growth will continue to slow over coming months, although it will remain positive. Although we cannot be sure of what is driving this development, it may be that recent increases in interest rates and uncertainty associated with the global financial market volatility has made businesses more cautious in putting on additional workers, even while economic activity remains robust,” Mr Pearson said.

“Looking at job advertisements by state, it continues to be the smaller states of Tasmania, the Northern Territory and the Australian Capital Territory which are showing the strongest increases in job advertisements. Queensland and New South Wales are also showing signs of improvement. In contrast, job advertisements in Western Australia and to a lesser extent in South Australia appear to be turning down,” Mr Pearson said.

The world’s biggest passenger plane loomed large over Sydney yesterday as the Airbus A380 made its first commercial flight. Carrying more than 470 passengers and crew, the plane air traffic controllers call “the big fella” touched down in Sydney from Singapore on the 25th October at 5.24pm according to a report from The Melbourne Age.

Amid much fanfare, 471 people representing 35 nationalities became part of aviation history when they boarded Singapore Airlines flight SQ380 at Changi Airport.

Hailed as a revolution in air travel, the double-decker A380 ends the nearly 37-year reign of the Boeing 747 jumbo jet as the most spacious passenger plane.

It is as tall as a seven-storey building, measures 73 metres in length and has enough room on each of its wings to park 72 medium-sized cars.

It is capable of carrying 853 passengers in an all-economy configuration, compared with the 747’s 500.

Airbus claims its jet is the most fuel efficient and quietest passenger aircraft in the world.

Top accommodation in the jet are the suites, enclosed by sliding doors and fitted with a 58-centimetre flat-screen television and laptop connections.

Suite passengers on the inaugural flight were offered Dom Perignon Rose 1996, caviar and a menu including duck breast and fish noodles.

The total number of jobs advertised in Australian newspapers and on the internet fell marginally by 0.4 percent in September to an average of 247,853 per week. This is a continuation of the consolidation in job advertisements that began in June following May’s robust 10.3 percent rise in total advertisements. The total number of advertisements in September was 33.1 percent higher than 12 months ago.

The number of job advertisements in newspapers declined by 0.7 percent in September to an average of 20,115 per week. This fall follows a 1.5 percent increase in August. Newspaper advertisements are now 1.8 percent higher than in September 2006. The fall in newspaper job advertisements in August was driven by declines in South Australia, New South Wales and Western Australia. These declines were partially offset by job advertising rises in Tasmania, Victoria, Queensland, the ACT and the Northern Territory.

The number of internet job advertisements fell slightly by 0.3 percent in September to an average of 227,738 per week. In trend terms, internet job advertisements are still growing solidly, with annual growth running at 37.7 percent, up from a rate of 25.9 percent ten months ago.

“Total job advertisements remain at high levels, but the monthly trend rate of increase is easing. This suggests some steadying in the demand for labour after a period when it has been rising very strongly,” ANZ Head of Australian Economics Tony Pearson said. “The monthly trend rate of increase in employment has also been easing. The forward nature of the relationship between the Job Advertisements series and employment suggests that employment growth will continue to slow over coming months, although it will remain positive. We view this as a consolidation in the labour market rather than a change in direction. With economic growth continuing to show considerable strength, demand for labour will remain robust and the labour market will remain very tight.”

“Looking at job advertisements by state, it is in the largest states – New South Wales, Victoria, and Queensland - where demand for workers appears to be stabilising. In Western Australia, job advertisements are now actually trending down after five years of exceptionally strong growth. This has been associated with a gentle rise in the rate of unemployment through 2007 and suggests the strong population growth in that state may now be overwhelming the demand for labour. In contrast, in the smaller states and territories – South Australia, Tasmania, Australian Capital Territory and the Northern Territory – job advertisements are showing a marked upturn, pointing to an acceleration in the demand for workers. In South Australia and Tasmania this would seem to be associated in part with specific large investment projects,” Mr Pearson said.

The Australian minerals industry has begun a recruitment drive for 27,000 skilled tradespeople in the southern Australian industrial hubs according to a report from The Melbourne Age. The total numbers sought comprise the estimated extra skilled workforce needed for mining over the next eight years.

The Now Hiring campaign is targeting skilled tradespeople in Geelong, Adelaide and Wollongong as the rapidly expanding industry seeks to meet its skills shortfall.

Set up as a pilot program targeting skilled trades people, the campaign is part of the Minerals Council of Australia’s (MCA) broader national strategy to promote career opportunities in the minerals industry and meet the estimated 70,000 additional workers needed in the industry by 2015.

MCA chief executive Mitchell Hooke said the minerals industry was at present experiencing a global supercycle of growth.

“We must attract skilled tradespeople if the industry and, indeed, Australia, is to fully capitalise on the opportunities of the strongest global market growth in a generation,” he said in a statement.

“We are not only offering well paid jobs, we are offering exciting career prospects.

“The minerals industry is at present experiencing double the wages growth of the all-industry average and has the most substantial on-the-job training expenditure per employee of any industry.”

Mr Hooke said specific tradespeople being sought were boilermakers/welders, metal fitters - mechanical, diesel and plant, mechanical engineering - diesel, heavy and light plant, and electrical trades.

Welfare recipients living in some beach areas will be the focus of a new crackdown by the Australian government according to a report from the BBC. The Australian Government says that some coastal towns have “stubbornly” high unemployment where people refuse to work and choose instead to surf and relax on the beach.

The Australian Government is concerned that jobless rates in some seaside towns are way above the national average.

Education Minister Andrew Robb said, “We’ve got areas where there aren’t any jobs, and we’ve got other areas where they’re desperate for workers. There is a high correlation between high unemployment and coastal areas. We need to put some pressure in some of those areas.”

“We’ve got too many jobs chasing too few people, yet there are still pockets of potential labour around the country,” Andrew Robb said. He continued, “We’ve got areas where there aren’t any jobs, and we’ve got other areas where they’re desperate for workers. ”

Australia’s official unemployment rate is just over 4%.

Tenants in New South Wales, Australia face swift eviction if they fall behind in their rent under the first big overhaul of New South Wales’s tenancy laws in 20 years. With the rental vacancy rate in Sydney just 1.5 per cent, the State Government is introducing changes to try and lure more investors into the rental market.

Under the changes, tenants who fall behind in rent would have “the onus placed on them to apply to the tribunal” if they wished to contest their eviction - rather than landlords having to justify their case. The tribunal could make a decision on the application swiftly without need for a hearing.

But the laws will also protect tenants who become victims when landlords default on their mortgages. The planned 30-day eviction warning follows horror stories of tenants arriving home to find the locks changed.

Other planned changes include:

• A right to a reduced rent if a landlord puts the property up for sale and prospective buyers traipse through;
• Greater rights for tenants to put up pictures or paint properties;
• Water charges to be levied on all tenants in properties with separate meters to provide “uniformity”. A similar move in public housing resulted in a 29 per cent cut in water use;
• Powers for the tenancy tribunal to remove tenants from databases that real estate agents use to reject applicants;
• Cancelling eviction notices if a tenant can pay their rent arrears before the eviction date.
• Stopping the payment of interest to tenants on their bond money.

The State Government has released its plans for public comment and legislation will be introduced early next year.

The skills shortage in New South Wales, Australia could be alleviated if the State Government stopped charging temporary residents $5000 for each child they enrolled in a public school, reports the Sydney Morning Herald.

Mervyn Bryant, the managing director of Lismore Diesel Service, said that after an Australia-wide search for a tradesman he finally found one in South Africa. “It’s nearly impossible finding a diesel fuel-injection fitter,” he said. “We found a tradesman in South Africa…but he is very concerned about the high cost of schooling his three children here.”

Mr Bryant said the cost per child was $4500 plus administration fees, which had to be paid before school started. “The fees are discouraging some prospective employees from coming,” he said.

Australia is facing a shortage of about 240,000 skilled workers in trades such as plumbing and motor mechanics.

Brendon Boyce, the director of the migrant recruitment agency Recruitglobal, said a family with three school-aged children moving to Australia and living in New South Wales could have to pay up to $14,500 in advance in school fees while receiving a wage of $41,850 a year.

A spokeswoman for the Education Minister said 457 visa holders could apply to have school fees waived.