Australia’s central bank has decided to keep the nation’s official interest rate unchanged at 3.5 per cent at its September board meeting yesterday. The move was in line with expectations and is the third straight month where rates have been left on hold. Other key economic data released by the RBA over the last week, was inflation which remained within its target band in August, adding to its case for interest rates to be left on hold, at least for now.
Late last week saw the RBA release financial aggregates for July, recording a 0.2 per cent rise in private borrowing and a 4.2 per cent lift on total credit for the month. Housing credit was consistent with a 0.3 per cent increase as was also recorded in June.
Real estate industry figures House prices have fallen 2.4 per cent in the year to date suggesting low interest rates have done little to entice potential home buyers. According to the RP Data-Rismark Home Value Index, Sydney and Melbourne saw slight improvements, up 0.1 per cent in August but Brisbane retreated 0.2 per cent. House prices in Perth and Hobart dropped 1.2 per cent for the month, whilst Adelaide and Canberra saw some growth increasing more than one per cent. Darwin home values fell 0.5 per cent for the month but rose 5.2 per cent during the quarter.
source: RP Data-Rismark
The Australian Bureau of Statistics has reported residential building approvals plunged more than 17 per cent in July, 10.6 per cent lower than the year before. Economists has forecast a 4 per cent fall.
Residential property market
Australian Property Monitors has posted the results of auction clearance rates across Australia’s capital cities at the weekend. Sydney recorded a solid 64 per cent clearance rate from 228 properties for auction, Melbourne had a 55 per cent clearance rate from 193 properties, Brisbane 28 per cent from 40 properties and Adelaide lifted clearing 55 per cent from 32 reported auctions.
Commercial property sector
Leighton Holdings Limited
(ASX:LEI) has scored a $US68 million contract to construct reservoirs in Qatar. The contract is the fourth awarded to the property developer’s Middle Eastern division.
As a way of funding infrastructure projects, the NSW government is considering whether it can sell its $320 million a year NSW Lotteries royalty business. Macquarie Capital is said to be acting on behalf of the state government to investigate its options. Media reports suggest other assets could also be up for sale, including electricity generators and long-term leases of various assets.
Commercial property news
Lend Lease Group
(ASX:LLC) has posted a 2 per cent rise in its full year net profit of $501 million. The global property developer’s result was impacted by $5.8 million worth of property investment write downs. CEO Steve McCann has forecast continued earnings growth in fiscal 2013, backed by its construction backlog and urban regeneration pipeline, plus profits from two commercial towers in Sydney’s CBD.
Aspen Group Limited
(ASX:APZ) has swung to a full year net loss after it posted a net profit of $17.4 million the year before. Aspen booked an annual net loss of $99 million. The news follows the company’s announcement that alerted the market it had written down its residential projects by $95 million. Looking ahead, Aspen says it will limit its funding to its residential and development syndicates and focus on organic growth and acquisitions to boost its successful Aspen Parks Property Funds.
UGL Limited
(ASX:UGL) is aiming to expand its property services division through targeting acquisitions. The engineering company says it has won more than $650 million of new work across its property division since acquiring real estate business DTZ last year. Looking ahead UGL sees opportunity to gain market share in Europe, continued momentum in Asia and an improving US outlook, in regards to its property order book. The company says its DTZ business will operate as a new single brand to reflect the creation of a fully integrated, global company with a unique platform.
