House prices are likely to remain stable for the foreseeable future, according to Housing Industry Association. HIA says that Australian property market is in a relatively steady state. While the association concedes prices in capital cities has been weak, it has noted the relationship between house prices and earnings is now close to its long term level. HIA says this relationship suggests any significant prices movements are unlikely and Australian property investors should get set for some steady returns in the future.
Real Estate figuresThe latest inflation gauge has increased the chance of a cut to the cash rate from the central bank by June, according to analysts.
The TD Securities Melbourne Institute monthly inflation gauge increased by 0.2 per cent in March, on the back of a flat result in February. The gauge has risen by 2.1 per cent over the year to March. The reading was the lowest annual inflation outcome for eight months, renewing expectations of another official interest rate cut by June.
CommentaryFNN asked UBS Investment Bank’s Chief Economist of Australasia, Scott Haslem if the RBA should be doing more to propel growth in the property sector
“I think one of the issues for policy makers around the world and the RBA in particular is we want to get a little bit more growth in housing but we want growth in housing construction. We don’t really want house price inflation and it’s not quite and it’s not quite clear how to generate housing construction growth without house price growth on the monetary side; there’s lots of issues around government’s increasing supply and helping that process but I don’t think the RBA is going to be too excited about cutting interest rates to try and drive construction growth at the risk of creating asset price bubbles.”
That was UBS Investment Bank’s Chief Economist of Australasia, Scott Haslem
To watch more of the interview click
here.
Australian auction resultsLooking at this week’s auction results across Australian capital cities - Sydney recorded a 71 per cent clearance rate from 485 properties for auction, Melbourne cleared 66 per cent from 369 properties, Brisbane had a 32 per cent clearance rate from 56 properties listed and Adelaide cleared 50 per cent from 5 reported auctions.
Commercial property sectorThe latest headlines from the commercial property sector:
Charter Hall Retail REIT
(ASX:CQR) has announced the sale of its interest in its last US joint venture, with property developer Regency Centers, for $US49 million.
Shopping centre giant Westfield Group
(ASX:WDC) is to sell off its stake in six separate malls in Florida. In a deal worth nearly $US700 million Westfield will offload the stakes to New York based O'Connor Capital Partners.
Construction company Leighton Holdings Limited
(ASX:LEI) has appointed Bob Humphries as its new chairman, taking over from Stephen Johns following his departure at the end of last week.
