Written by Nathan Thomas on August 5, 2004
Written by Nathan Thomas on August 5, 2004
The robust housing market in America has broken records once again as the homeownership rate rose to an all-time high of 69.2 percent and sales of existing single-family homes rose 2.1 percent in June to a [seasonally adjusted annual rate] of 6.95 million units.
But while real estate agents in the U.S. are enjoying the wealth of business, agents in Australia are struggling to keep up their sale numbers as hesitant Aussie buyers wait to see how the market pendulum swings. Home loan affordability declined across Australia in the first quarter of 2004 to its lowest level in 13 years, according to the Real Estate Institute of Australia.
Some agents in the U.S. are grumbling that the healthy market has made them too busy. If you're feeling overwhelmed by today's hot market, consider what agents and homebuilders in Australia are going through to drum up new business. Many have resorted to offering a range of incentives and strategies to attract buyers such as discounts, free air conditioning units, chocolates and chauffeur service to and from prospective homes.
Pablo Moray, an agent for Starr Partners in Wetherill Park recently told The Daily Telegraph his staff is putting in long hours dealing with hard-nosed buyers who are trying to beat the prices down. Often agents like Moray cold call renters and try to persuade them into buying a home.
Homebuilder Bellevale Homes offers to pay deposits of up to $20,000 for anyone buying in the Warnervale/Blue Haven area of Australia's Central Coast, The Daily Telegraph reports. The company also implemented a "home-to-home loan" that allows a buyer to move to their new property without requiring them to make any payments until they sell their previous home.
Australia isn't the only country to experience a slow-down in spite of the thriving U.S. market. Farther north in the United Kingdom, the number of homebuyers on the books fell 13.6 percent in April, according to a survey by the UK's National Association of Estate Agents. Further, new applicant inquiries fell 24.1 percent during March, April and May.
UK buyers are reluctant to commit to a market they fear may be slowing, theorizes Richard Hair, president of NAEA. But many agents say the sluggish UK market is due to the rise in interest rates and home prices over the past few months.
The Netherlands will also likely face a housing market crisis as the boom dies down, fueled by the combination of over-priced properties and high household debt. Homes in the Netherlands are overvalued by some 20 percent, according to a study by the Dutch central bank, De Nederlandsche Bank. In fact, average prices in Amsterdam have jumped from US $65,000 in 1985 to US $270,000 in 2002. As home prices rose and demand went up, homeowners began taking out additional loans based on home equity, putting the money into home improvements, entertainment, vacations, and durable goods.