The residential land sale report for the December quarter released by the Housing Industry Association this week has indicated a shortfall in policy makers expectations, highlighting only a gradual recovery in residential land sales. While the 13.6 per cent lift in sales was a significant swing from a near 20 per cent drop in the September quarter, the HIA says the overall trajectory for land sales remains inconsistent for a strong, broad based new residential recovery this year. RP Data’s research director Tim Lawless says rises in dwelling values in the first quarter of this year, as well as consistent improvement in transaction volumes will see a repeat dose of healthy vacant land sales in the next quarter, and the formation of an upward trend.
Real Estate figures
The Australian Bureau of Statistics says home loan demand saw its first increase in five months in February, lifting 2 two per cent to 45,423, up from 44,547 in January. Total housing finance by value climbed 1.4 per cent to $21.8 billion.
In the minutes from its April 2 board meeting, the Reserve Bank of Australia says conditions appear to be improving in weaker parts of the economy such as housing and retailing. Low interest rates are boosting underperforming sectors of the economy, but further rate cuts may still be needed, according to the RBA, although it believes the full effects of recent rate cuts may take some time to flow through the economy.
Commentary
Turning to commentary and FNN asked Paul Smith, spokesman for Loan Market, what he thinks it would take for first home buyers to enter the market and rejuvenate that market segment:
“The government can’t afford to discount the entirety of stamp duty, they should look at discounting at least 50 per cent of it. It’s too hard for first home buyers to come up with the same savings as existing home owners with quite a bit of equity. I also think mortgage insurers and lenders need to start passing on some kind of concession for first home buyers that are at a lower risk, say, first home buyers that have been secure in their job for a long time. I think the last point is there just needs to be more education about the home loan market and more confidence needs to be instilled into the property market.”
Australian auction results
Looking at this week’s auction results across Australian capital cities - Sydney recorded a 73 per cent clearance rate from 193 properties for auction, Melbourne cleared 72 per cent from 118 properties, Brisbane had a 36 per cent clearance rate from 34 properties listed and Adelaide cleared 67 per cent from 6 reported auctions.
Commercial property sector
Mirvac Group
(ASX:MGR) and Keppel REIT say QBE Insurance Group Limited
(ASX:QBE) has signed an agreement to lease 8 Chifley Square in Sydney. The 10 year lease will cover the top four floors of the tower, which is on track for completion in August 2013.
James Hardie Industries
(ASX:JHX) has confirmed the New Zealand Ministry of Education has commenced a representative action against two of its subsidiaries in the New Zealand High Court. The Ministry is claiming weather-tightness defects relating to several thousand New Zealand school buildings and claiming repair costs as well as damages.
National Australia Bank Limited
(ASX:NAB) chief economist Alan Oster is adamant that stronger state economic growth and improved performance in the local share market could underpin renewed interest in the property market.
