Sydney continues to see plunging auction clearance rates, now at their lowest level since February 2012 and below the 60 per cent mark for the third consecutive week. Meanwhile clearance rates in Melbourne continue to hold around the 65 per cent mark with analysts saying the boom there has not been as strong so the market is managing to hold onto its growth. Not many think there will be actual price drops in Sydney due to the lack of housing supply however the general consensus is that Sydney growth will drop into single digits for the foreseeable future.
Real Estate figures
Hobart is now posting one of the highest rental returns across the country as higher prices in Sydney and Melbourne force investment buyers to look elsewhere. The latest data from CoreLogic RP Data shows that rental yields in Hobart have grown 5.3 per cent for house and apartments with Darwin also seeing healthy rental yields. Sydney and Melbourne continue to languish which the nation’s capital enjoys stronger returns from apartments than houses. Adelaide and Brisbane continue to hold their own.
Meanwhile towns hit hard by the mining boom continue to suffer. According to figures from SQM Research Perth rental vacancies have risen by 64 per cent in the past 12 months. There were 7507 vacancies in October 2015 compared to 4567 vacancies the same time last year. Rents were down, 6.4 per cent for houses and 8.4 per cent for units. Darwin is also suffering with vacancy rates there rising by 75 per cent in just 12 months while rental prices have fallen by over 20 per cent.
Commentary
FNN spoke to Harley Dale from the Housing Industry Association about what the outlook for rental yields is.
“We are seeing in Sydney and Melbourne some considerable downward pressure on rental yields. That’s to be expected given the considerable amout of new supply that’s coming onto the market in both Sydney and Melbourne so we would expect to see a challenging yield environment to continue for some time yet. Of course bearing in mind that outside of Sydney and Melbourne we haven’t seen the same amount of supply coming on and we haven’t seen the same growth in residential property prices so it really is the Sydney/Melbourne story versus the rest of the country to an extent which is something that often gets lost when we talk about the national housing market.
Australian auction results
Looking at this week’s auction results across Australian capital cities - Sydney recorded a 57 per cent clearance rate from 872 properties for auction, Canberra posted a 64 per cent clearance rate from the sale of 73 properties for auction Melbourne cleared 66 per cent from 1231 properties, Brisbane had a 43 per cent clearance rate from 153 properties listed and Adelaide cleared 75 per cent from 109 listed auctions.
Commercial property sector
APN Property Group
(ASX:APD) announced the launch of an unlisted direct property fund, the APN Convenience Retail Property Fund focused on long lease term properties in the convenience retail sector.
Growthpoint Properties Australia
(ASX:GPT) has announced it has entered into $51 million joint venture for the acquisition of land and development of an office building in Mulgrave Victoria.
Goodman Group
(ASX:GMG) says it is on track to deliver 6 per cent growth in full year earnings of 39.4 cents per share.
And ALE Property Group
(ASX:LEP) says that its discussions with Caledonia Private Investments Limited regarding an all cash takeover offer of ALE have come to an end and Caledonia has withdrawn the proposal.
