Clearance rates in both the Sydney and Melbourne markets show no signs of cooling as we head into the traditionally quieter winter months. In fact, the Melbourne weekend clearance rates have been averaging over 81 per cent for the past seven weeks with the market now tracking at its highest levels in over 5 years.
Meanwhile in NSW, revisions to the state’s 50-year-old strata laws have hit another speed hump with the revolving door of four fair trading ministers over the past 12 months provoking further delays in bringing the changes into force . The latest Fair Trading minister Victor Dominello is continuing consultation with major stakeholders with the proposed reforms now nearly two years behind schedule.
Real Estate figures
According to the ABS – construction work in the March quarter fell by a seasonally adjusted 2.4 per cent, well below expectations of a 1.4 per cent drop. Residential work was up by 4.8 per cent in the March qtr and 11.4 per cent on the year to March. Total building work on building rose 3.3 per cent over the three months. Engineering work on projects such as mines, roads and bridges was down 7.3 per cent. The figures for the 12 months to the end of March show an 8.8 per cent reduction in total construction.
And in minutes of its May interest rate meeting released by the Reserve Bank the RBA indicated that it is open to the possibility that it may have to reduce interest rates further. The members agreed that the statement on the decision to cut rates ‘...would not contain any guidance on the future path of monetary policy.’
‘Members did not see this as limiting the board’s scope for action that might be appropriate at future meetings”.
Commentary
Turning to commentary and FNN spoke to Geoff Grady, the CEO of property management company Aveo Group
(ASX:AOG), which is now fully focussed on the retirement village sector and has seen a welcome transformation in the company as a result . We asked Mr Grady about how recent record property prices are impacting purchase decisions on acquiring retirement property.”
“’We’ve got a pipeline of about 2,800 units at the moment, and we’re soon to announce some acquisitions that will add fairly significantly to that. We’re steadily stepping up our production from 60 units in the current year, to over 500 by the time we get to FY18. And so by the time even when we get to FY18 we’ve delivered those 500, we’ve still only exhausted about a third of our existing pipeline and about a sixth, after the new acquisitions.
So with the strength of our balance sheet, what that opens up is the ability to acquire properties in a counter-cyclical way. So we very much want to be in New South Wales, we’re not at all or more strongly in New South Wales. We’re not at all in Western Australia, those will be two of our focuses. But the counter-cyclical opportunities is really the one that we’re focused on.’’
Australian auction results
Looking at this week’s auction results across Australian capital cities - Sydney recorded an 84 per cent clearance rate from 750 properties for auction, Melbourne cleared 83 per cent from 995 properties, Brisbane had a 38 per cent clearance rate from 108 properties listed and Adelaide cleared 81 per cent from 65 listed auctions.
Commercial property sector
Sunland Group
(ASX:SDG) has acquired its third luxury housing development site in Brisbane for $11.1 million with development potential of over $45 million.
Lend Lease Group
(ASX:LLC) says that all 581 apartments at its new Darling Square project in Sydney’s Darling Harbour sold out within 5 hours on the weekend.
Axiom Properties Limited
(ASX:AXI) has entered into a joint venture agreement with a South Australian family to develop 50 hectares of land in Mount Barker in the Adelaide Hills.
Federation Centres Limited
(ASX:FDC) has scored a green light from the ACCC to merge with Novion Property Group (ASX:NVN.
