Sydney continues to perform very strongly in the weekend auction market, outdoing itself with each instalment and tracking towards record levels. The weekend just gone saw a fresh year high clearance rate of 81.4 per cent, topping last weeks year high 81 per cent. Consistently high rates such as these have not been seen in winter since the house pricing boom all the way back in 2002.
The auction good news is not limited to one over-performing area of the Sydney auction market but rather a robust concentration of regional strength. Last weekend the lower north shore saw a clearance rate of 92 per cent, while the city, east and south all cleared 88 per cent. The northern beaches meanwhile, converted 83 per cent of listings. Prices were also broadly ranged, going from a Munmorah house at $227 thousand, to a Randwick townhouse that went under the hammer for $1.84 million.
A lot of the steam for the prolific run is coming from investors. The Australian Bureau of Statistics last week reported a record $3.9 billion in residential investor loan approvals for NSW in May, with investor activity accounting for more than half of house purchase loans in the state.
Real Estate economic news The Australian Bureau of Statistics has released the highly anticipated consumer price index for the June quarter and the figures are slightly below expectations. The quarterly CPI rise is 0.4 per cent and the annual rise is 2.4 per cent. According the the ABS, Inflation was boosted in part bynew owner-occupier home sales and rent. The weakened figures have increased the odds of an August rate cut.
CommentaryFNN spoke to Ken Sayer from Mortgage House and asked for his tip on the RBA’s August interest rate call:
‘The cash rate will drop a further 0.25 per cent, giving the consumer more confidence. Once again, a consumer interprets low interest rates as an ability to borrow more, so the last 6 – 8 weeks I’ve noticed a shortage in price range properties, so if we’re talking about the Western suburbs (Sydney), $400 thousand properties are selling quickly, which forces the price up so the next one is $430 thousand. If the interest rates drop a further 0.25 per cent, it’ll make that $420 - $430 thousand property affordable. So I think we’ll bring more buyers back.”
That was Ken Sayer from Mortgage House.
To watch more of the interview click
here.
Australian auction resultsLooking at this week’s auction results across Australian capital cities - Sydney recorded a 81 per cent clearance rate from 240 properties for auction, Melbourne cleared 69 per cent from 200 properties, Brisbane had a 65 per cent clearance rate from 25 properties listed and Adelaide cleared 52 per cent from 20 reported auctions.
Commercial property sectorThe latest headlines from the commercial property sector:
Stockland
(ASX:SGP) is reportedly considering a takeover of Australand, with speculation heightened by a rally in the target's share price. Media reports this week said Stockland executives are weighing up a deal, tipped to be worth more than $4 billion.
Lend Lease Group
(ASX:LLC) hassold the first tranche of land at its $3.3 billion Stratford, East London site, part of the 2012 Olympics district, with joint venture partner, London & Continental Railways. Lend Lease will sell the land and be the developer of a hotel with up to 500 rooms. Analysts said the deal would help offset the weakness in the overall Australian construction industry.
Commonwealth Bank of Australia
(ASX:CBA) is proposing to bring the management of the Commonwealth Property Office Fund and the CFS Retail Property Trust
(ASX:CFX) in-house. The board of CMIL, who acts for both the office fund and CFS, said the bank’s proposal was at this stage highly conditional, indicative and incomplete.
Australand Property Group’s
(ASX:ALZ)half year net profit dropped to $88.4 million, a 1 per cent decrease on the same time last year. The result missed expectations, but the group says an uptick in leasing activity will boost full-year earnings. In the six months to June 30, revenue from continuing operations took a hit, coming in at $391.5 million, a nine per cent fall on the same time frame last year. Managing director Bob Johnston says the lower first half result was driven by falls in the residential division.
Growthpoint Properties Australia
(ASX:GOZ)is expanding its footprint in Victoria with the acquisition of three industrial properties in Melbourne. The property investor has inked a $60.2 million deal for the properties which are set to be developed in prime industrial markets.
DEXUS Property Group
(ASX:DXS) has acquired a 14.9 per cent stake in Commonwealth Property Office Fund
(ASX:CPA), an investment it expects to be accretive to earnings. The CPA portfolio comprises $3.7 billion of prime grade office properties, which Dexus says is consistent with its investment in high quality Australian office properties.
