Welcome to this week’s edition of the Good News Bulletin.

And, as always, there’s no shortage of positive and uplifting news to talk about. It’s just that you won’t be reading about most of it in mainstream news media, which continues to be focused on assaulting you with everything negative they can find.

A new survey has found that the home-buying intentions of Australians have risen as pandemic restrictions have eased.

They’re now close to levels seen in March, before the full impact of Covid-19 on consumer sentiment was felt.

The Commonwealth Bank’s latest household spending intentions index showed a 6% rise in home-buying intentions last  month, after falling in the early part of the Covid-19 restrictions.

CBA’s chief economist, Stephen Halmarick, says the recovery in the past month coincided with the partial reopening of the Australian economy. He also says, rather strangely, that the revival was inspired by record low interest rates. This is fairly typical nonsense from economists who don’t understand real estate market dynamics.

We’ve had record low interest rates for a long time and they haven’t changed recently. So why would the level of interest rates suddenly inspire people to want to buy real estate, when they didn’t in April or May?

The answer is that the improved sentiment has nothing to do with interest rates – it’s about the easing in restrictions – not including Melbourne, obviously – and the general revival in consumer confidence as more and more people reopen businesses and go back to work. Stephen Halmarick may be the chief economist of the Commonwealth Bank, but he clearly knows very little about real estate markets and what drives them. And in that regard, he has a lot in common with most of the chattering economists who clog up the airwaves with their misinformation and inaccurate predictions.

The Federal Government’s new homebuyer grant has triggered what some reports have termed “a land rush” – with demand for vacant residential property surging in the last two months.

According to figures from realestate.com.au, inquiries with real estate agents about land sales rose by nearly 60% in the month following the announcement of the HomeBuilder scheme which provides a grant of $25,000 to people building a new home.

First-time buyers in particular have responded strongly to this, coupled with other incentives available from federal and state governments. It’s a great time to be a first-home buyer in Australia, with so much government assistance around plus cheap finance. The realestate.com.au figures suggest that enquiries from new buyers looking for vacant land rose nearly 180%, compared to homeowners rising by 35% and investors just 26%.

REA Group director of economic research Cameron Kusher said: “It’s obviously going to be very positive for the construction sector.”

One thing though – the question remains about how many of these young buyers will be able to follow through. Will they be able to get the finance they need? Hopefully, most of them will, but some of them have just put up a small deposit bond and may not have the capacity to go through with the bigger deal.

There’s lot of government incentives for people to invest in real estate at the moment – and the NSW State Government has provided another boost.

It says it will, temporarily, abolish stamp duty on new homes, worth less than $800,000, for first home buyers. It’s all about boosting construction and creating jobs in difficult times.

NSW Premier Gladys Berejiklian says she expects 6,000 first-home buyers will benefit from the changes, which will save them many thousands of dollars. She says: “It will help get more keys, into more front doors, of more new homes. It will also boost housing construction across NSW and support jobs in the building industry at a time when we need them more than ever before.”

Under the changes, the threshold for stamp duty being charged on new homes, for first home buyers, will increase from the current $650,000 to $800,000. The stamp duty threshold on vacant land will also rise from $350,000 to $400,000 and will phase out at $500,000. The change to the thresholds will apply only to newly-built homes and vacant land, not to existing homes, and will last for 12-months, starting on August 1.

Data published by Domain indicates that property prices are rising across much of regional Australia.

The regions are generally doing a lot better in the pandemic than the biggest capital cities and many regional markets are thriving at the moment.

According to the latest Domain House Price Report, median dwelling values — combining both houses and units — for regional Australia edged up slightly over the June Quarter – but individual markets did better than that. Some regional areas in Tasmania have had annual price rises of 20% or more, and there have been double-digit annual price rises in regional centres in Victoria, New South Wales, Queensland and South Australia.

As an example, the Huon Valley in Tasmania has risen 22% and Brighton near Hobart is up 20%. In NSW, Byron Bay has increased 21% and humble Parkes out west has risen 18%. In Victoria, LGAs close to Melbourne like Baw Baw (which includes Warragul and Drouin), the Central Goldfields and the Golden Plains LGA, have risen 10-12-15% in the past year. And there have been large increases in some of the mining-related areas of Queensland, with rises above 20% in some cases, not that I’m suggesting you buy in such locations, because they are high-risk and very volatile markets.

But, the central message is that house prices are growing in many parts of regional Australia – and you’re not hearing much about in the news media, because they’re obsessed with Sydney and Melbourne.  I always like to remind people that there are 17 million Australians who don’t live in Melbourne or Sydney.

Vacancy Rates: Research conducted by Propertyology, which is a good source of quality information about real estate, has shown that only four out of 52 major Australian cities and towns has a residential vacancy rate of 3% or higher. This confirms data on vacancies from another good source, SQM Research, which reported that vacancies fell in seven of the eight capital cities during June – and that most of the major cities have vacancy rates well under 2%.

Simon Pressley of Propertyology suggests that Australia has a serious shortage of rental properties. Pressley says: “The only thing currently preventing an official declaration of an Australian rental crisis is the sedation effect of the coronavirus containment measures.  “Mark my words, sharp rent price rises are inevitable!”  According to his research, 39 out of the 52 largest Australian towns  and cities – or 75% of them – have an undersupply of properties, while nine locations have a balanced market and just four are oversupplied. Oversupplied means a vacancy rate above 3%. Sydney currently is the only capital city in that category.

What is causing this shortage? Pressley says mum-and-dad property investors haven’t been buying much lately, whereas home buyers have been busy.

He says this will cause rents to rise.  Pressley says: “Large parts of Australia have seen several consecutive years of low volumes of properties purchased by investors. As local demand continues to rise, the pressure continues to push rents (and yields) higher.” He says: “This week, the principle of a property management business told our buyer’s agents that they only have nine vacancies among a rent roll of 1,700 properties. This situation is not unusual for most of Australia.”

I can confirm most of that. Every day I’m looking at vacancy rates in different locations around Australia – and often a local area will have vacancies of just 1% or 1.5% – and sometimes less than 1%. Many regional cities are in this category and so too are some of the smaller capital cities, including Adelaide, Hobart and Canberra. Many parts of Perth and Brisbane also have low vacancies.

One of the things that’s happening out there is that more and more Australians are opting to “fix” their mortgage rates.

The  Commonwealth Bank says the portion of borrowers deciding to lock in rates at current levels has nearly tripled to a record-high 40%. This major shift in borrowing patterns at the nation’s largest home lender is expected to be matched across the sector – because fixed rates are often lower than variable rates at present. With rates at record lows, many homeowners are clearly seeking security in knowing in advance how much they will have to pay each month in the years ahead. Stephen Halmarick, chief economist at the Commonwealth Bank: “It’s more than a spike in fixed rate applications. It’s deeper than that – there is an expectation that monetary policy will be at these settings for some time to come.” Fixed rate investors were still running at just 14% of all borrowers as recently as early March – and now it’s 40%.

Finally, the latest price data – out today from SQM Research – confirms what I reported earlier in this bulletin. And that is that markets in regional Australia are doing better than those in the biggest cities.

SQM’s weekly prices index shows that there was a small rise for both houses and apartments nationally in the past month – but a decline for the capital cities.

The other thing today’s figures from SQM Research shows is that prices remain considerably higher than they were a year ago, despite all the impacts of Covid-19. In annual terms, national house prices are up 7% and apartments prices are up 4.5%. All the capital cities except Darwin have house prices higher than a year ago. Sydney, despite recent falls, is still 10% higher than last year and Melbourne remains 9% higher than a year ago. And in Hobart, house prices are still 12% higher than they were this time last year.

And that’s a good positive note on which to end this week’s Good News Bulletin.