The Reserve Bank of Australia (RBA) has lowered rates to GFC (Global Financial Crisis) lows, cutting Australia’s key cash rate by 25 basis points to 3 per cent at its last board meeting of the year. So far the Bank of Queensland Limited
(ASX:BOQ) and National Australia Bank Limited
(ASX:NAB) are the only ones to follow suit, lowering rates by 20 basis points each.
Commenting on the cut RBA Governor Glen Stevens cautioned investment outside the resources sector remains relatively subdued but noted indications of improvements in dwelling investment. Governor Glen Stevens says dwelling prices are moving a little higher, rental yields are increasing and building approvals have turned up.
The cut comes after data showing Australian residential building approvals slumped more than expected in October. The Australian Bureau of Statistics has reported residential building approvals fell 7.6 per cent in October while the total value of approvals dropped 6.7 per cent. Victoria recorded the largest drop for the month of 14.2 per cent, followed by Queensland falling 7 per cent and South Australia dipping 0.1 per cent. While building approvals rose in Tasmania (11 per cent), New South Wales (3.2 per cent) and Western Australia (0.1 per cent).
RP Data-Rismark has reported Australia’s eight capital city dwelling prices remained steady at a median price of $472,500 in November after falling 1 per cent the month before. Looking across the country, Canberra rose 1.3 per cent, Darwin was up by 1.1 per cent and Perth was up 1 per cent. Adelaide and Brisbane both rose by 0.5 per cent while Sydney and Hobart remained steady at 0.1 per cent. Melbourne fell by the steepest amount in November, with median prices dropping 1 per cent to $486,000.RP Data senior research analyst Cameron Kusher says the latest data reinforces Australia’s housing market, at least at a macro level, is moving past the correction phase which saw values fall by 7.5 per cent between the end of October 2010 and the end of May this year.
Auction Results Australian Property Monitors has reported Sydney’s auction clearance rate declined from 60 to 55 per cent from 372 properties set for auction last week, Melbourne recorded a decreased 60 per cent clearance rate this week with only 201 properties sold compared to 204 last week, Brisbane posted a better 34 per cent clearance rate from 49 properties listed this week and Adelaide reported a higher 48 per cent clearance rate from 37 properties listed, better than last week.
Commercial Property Sector Stockland
(ASX:SGP) has warned investors annual underlying earnings will fall to the lower end of guidance range due to ongoing difficulties in the Victorian residential market. The property developer expects full year earnings to fall 10 per cent to 15 per cent below last year’s result but remains confident earnings will improve from the next financial year as contributions from major retail and residential developments begin to be realised.
Dexus Property Group
(ASX:DXS)has confirmed it is in negotiations to sell off the remainder of its US assets with a prospective buyer. Dexus says it is aiming to exit the US market in the next 1-2 years and has recently launched a marketing campaign to divest what remains of its portfolio.
Sunland Group Limited
(ASX:SDG) expects to settle the $68.5 million sale of its Palazzo Versace hotel on the Gold Coast by the end of this year. The property development company has inked a deal to sell the hotel to private investors as part of its strategy to focus on residential and commercial properties.
