It seems home buyers are getting more confident with more than a third of Australians who responded to a survey stating they believe now is a good time to buy. Commonwealth Bank of Australia
(ASX:CBA) and the Mortgage and Finance Association of Australia’s home finance index has shown from the 1,423 people surveyed 75.8 per cent believe property prices will grow or stay steady for the remainder of the year and 77.9 per cent believe now is a good time to buy. The Mortgage and Finance Association says the property market is all about confidence and the survey confirms good times are ahead, especially as interest rates continue to fall. The Reserve Bank of Australia cut rates to 3.25 per cent earlier this month and speculation is rising the central bank could again lower the key cash rate at its next and last board meeting of the year on the first Tuesday in November.
Industry Figures Australian Property Monitors has conducted a study for Fairfax Media revealing the top growth areas across Australia states. In New South Wales Revesby, Concord, Sylvania Waters, Rozelle and Petersham were highlighted as the top five growth spots. The study reveals New South Wales is leading the pack, with the top 100 growth areas all posting a minimum of 5 per cent growth over last year and forecast to grow by more than 4 per cent next year. In Victoria the top five growth spots include Lake Wendouree, Malvern East, Murrumbeena, Flemington and Mount Clear. In the ACT, Palmerston, Gowrie, Giralang, Macgregor and Higgins. Across Queensland, Moranbah, Minyama, Collinsville, Blackwater and Clermont came in as the top five growth spots.
Commentary As talk of the end of the mining boom continues is a housing recovery the answer to underpin our future growth? The Federal Treasury is hoping a surge in construction activity will give a boost to Australia’s economy as mining investment pulls back in years to come. The Treasury’s head economic forecaster David Gruen noted signs of a housing recovery when addressing a parliamentary committee last week. Dr Gruen says housing is one of the most obvious sectors to contribute to growth given there is under-supply.
Interview CommSec Chief Economist, Craig James has stated a bounce back in the property sector would have a series of knock-on effects for the Australian economy:
Click here to watch full interview: Auction Results Australia’s largest capital cities are continuing to show signs of strength but some commentators have questioned, is the market is recovering or are sellers dropping price expectations? Australian Property Monitors has reported Sydney’s auction clearance rate rose to 64 per cent from 301 properties for auction last week, Melbourne recorded a 57 per cent clearance rate from 253 properties listed, Brisbane posted a 38 per cent clearance rate from 18 properties listed and Adelaide reported a 56 per cent clearance rate from 30 properties listed.
Commercial Property Softness in the housing market is eating into company earnings: Property developer Stockland
(ASX:SGP) has blamed a weak housing market for an expected 10 per cent drop in annual earnings. CEO Matthew Quinn has warned earnings could fall an extra 5 per cent if conditions do not improve in Victoria where Stockland’s profit per lot is significantly higher than the rest of its portfolio.
GWA International Limited
(ASX:GWA) has flagged a cost review as it revealed first quarter trade earnings have slumped 41 per cent. The supplier of building fixtures and fittings has blamed lower demand, a strong Australian dollar and increasing import competition for the result. GWA believes continuing weak conditions among new dwelling construction and renovation, and low consumer confidence levels have hit activity levels.
Charter Hall Retail REIT
(ASX:CQR) has confirmed it plans to reweight its portfolio to Australia by recycling equity from offshore assets. The confirmation of strategy comes as the property group launches a $100 million equity raising to fund the acquisition of three mid-sized shopping centres in regional New South Wales. Supermarket giants Wesfarmers Limited
(ASX:WES) and Woolworths Limited
(ASX:WOW) account for more than 50 per cent of the trusts’ Australian base rent.
