Low volumes for ANZAC day
It was a quiet weekend on the auction front with most real estate offices observing Anzac Day traditions and not holding auctions or open houses on Saturday morning. However there were a few homes under the hammer in Sydney and Melbourne. Melbourne has recently seen rental prices increase to an all time high. Low supply of housing in the two biggest real estate markets in the country is driving prices ever higher. Meanwhile economists are downplaying the likelihood of a further interest rate cut from the Reserve Bank which earlier in the year had been widely anticipated to happen in May.
Real Estate figures
The Housing Industry Association is saying that home renovations will continue to struggle in 2015. The volume of renovations activity has slumped 15 per cent in the past three years. The deceleration of wages growth coupled with higher unemployment has badly affected the renovations market with HIA forecasting a further decline of 2.8 per cent in renovations activity in 2015.
Meanwhile home rental prices in Melbourne have climbed to an all-time high. The Domain Group Rental Report shows the median asking price for houses climbed 2.5 per cent in the March quarter to $390 per week whilst units rose 1.4 per cent to $365 per week. This is still far below the median Sydney prices of $520 per week for a house and $500 per week for a unit.
And the recent figures from the Australian Bureau of Statistics shows that consumer price index rose just 0.2 per cent over the March quarter to an annual rate of 1.3 per cent. The underlying rate of inflation, once we strip out some of the more volatile elements, shows a rise of 0.6 per cent on the quarter for an annualized rate of 2.35 per cent.
Commentary
Turning to commentary and FNN spoke to John Flavell, CEO of Mortgage Choice about whether he feels there is room for the RBA to cut interest rates at its May meeting.
“Looking at inflation itself, it sits right between the band of 2-3 per cent the RBA sets for itself and in itself we dont see that as being any catalyst or trigger for a cut to the cash rate or in fact an increase to the cash rate.
If we couple then, unemployment rates which fell by 0.1 per cent last month to 6.1 per cent. If we look at unemployment and inflation together than at Mortgage Choice, we don't believe the RBA has the triggers in front of it that would require it to make a change to the cash rate”.
Auction Results
Looking at this week’s auction results across Australian capital cities and the Anzac Day public holiday saw low volumes - Sydney recorded a 79 per cent clearance rate from 50 properties for auction, Melbourne cleared 86 per cent from 92 properties and neither Brisbane nor Adelaide returned a reading.
Commercial property sector
AVJennings Limited
(ASX:AVJ) has entered a joint venture with AustralianSuper in a land deal in Victoria which is set to develop some 2,000 lots over its life.
Lifestyle Communities Limited
(ASX:LIC) has paid $11.45 million for a parcel of land in Australand’s Berwick Waters estate in Victoria.
Charter Hall Group’s
(ASX:CHC) Core Plus Industrial Fund will buy the 8 hectare Wetherill Park property of GWA Group Limited
(ASX:GWA) for $33 million.
And APN Property Group Limited
(ASX:APD) has launched a $30 million capital raising to invest in the expansion of listed property trusts and pay down debt.
