Units are proving a hot investment in the Australian property market with unit value growth trumping housing value growth over the past five years. According to RP Data unit prices increased by an annual average return of 2.9 per cent while house prices only increased 1.8 per cent. The property researcher’s senior research analyst Cameron Kusher says affordability is a key factor and while many people still aspire to live in a detached home, units present an attractive option.
Figures
Australia’s construction sector remained has contraction mode for the 31st straight month. The Australian Industry Group and Housing Industry Association’s Performance of Construction Index lifted 1.8 points to 38.8 in December but remained below 50, indicating contraction.
New home sales rose for the second straight month. The Housing Industry Association has reported new home sales lifted 4.7 per cent in November, boosted by a 7.7 per cent rise in sales of detached houses.
The Australian Bureau of Statistics (ABS) says residential building approvals increased 2.9 per cent in November from the month before and have increased 13.2 per cent from the year before.
Home loan demand has fallen, despite expectations last year’s Reserve Bank of Australia rate cuts would produce a rise: The ABS has shown the number of home loans granted dropped 0.5 per cent to 46,199 and total housing finance by value fell 0.8 per cent to $21.464 billion in November.
Commentary
FNN spoke to RP Data's Head of Research Tim Lawless about how Australia’s two largest cities, Sydney and Melbourne, compare in terms of average price and affordability:
“There is still quite a gap between Sydney and Melbourne – Sydney being the most expensive housing market in Australia with the medium house price about $630,000. Melbourne’s medium house price is about $100,000 lower, about $530,000 – So there’s still quite a gap. But interestingly, that gap has actually narrowed. So we are seeing, thanks to Melbourne’s very strong value growth, the gap between Melbourne and Sydney prices has actually gotten quite slim, comparatively speaking compared to historical measures.”
To watch more of the interview click
here.
ASX property headlines
Centuria Capital Limited’s
(ASX:CNI) wholly owned subsidiary Centuria Property Fund has entered into a conditional contract to purchase 175 Castlereagh Street in Sydney for $56 million from Stockland
(ASX:SGP).
Property trust GPT Group
(ASX:GPT) has sold two Homemaker Centres in Brisbane for $91.7 million to private investors and says it continues to look at strategic investment opportunities.
Australand Property Group
(ASX:ALZ) has advised its major shareholder, Singapore-based CapitaLand, has decided to conduct a strategic review of its investment in the company.
