Auction blitz
Firstly, auctions, and coming up against its biggest auction day on record the Sydney market maintained its fighting form on Saturday to record a solid clearance rate of 76.1 per cent. Although this was the lowest weekend clearance rate recorded by Sydney since June, it came against an enormous 995 listed auctions and the rate could have gone south if not for strong performances from a few standout regions.
The top performer on the big day was the lower north shore with a clearance rate of 85.4 per cent. The inner west also clocked a strong clearance rate on the day with 82.7 per cent, while Sydney’s city and east recorded a strong clearance rate of 85.1 per cent. The Canterbury-Bankstown region came in behind that at 78.9 per cent.
Though the upper north shore/northern districts recorded a lower clearance rate of 74.1 per cent, the region hosted the weekend's top sale. The Sydney spring auction market has finished on a high with record sales from record listings at record prices. But it's not over yet – next weekend Sydney is set to host 300 auctions just four days before Christmas, marking the end of a remarkable year for Sydney's home auction market.
RBA December meeting minutes
Meanwhile, RBA Governor Glenn Stevens has this week confirmed what property watchers already know. The central bank’s two-year easing cycle is boosting home prices. According to the RBA’s December board meeting minutes:
‘‘There had been further signs of the stimulatory effects of low interest rates, most notably in the housing market, and additional effects were still likely to be coming through.’’
This is backed by statistics, with RP Data’s home value index for November revealing an 8 per cent rise in average house prices from a year earlier. This is the largest annual gain since the end of 2010, and an all time high average value of $606,003. Meanwhile Sydney house prices jumped 14 per cent in the 11 months to the end of November, hitting an all time peak of $724,629.
Australian auction results
Looking at this week’s auction results across Australian capital cities - Sydney recorded a 76 per cent clearance rate from 995 properties for auction, Melbourne cleared 72 per cent from 956 properties, Brisbane had a 50 per cent clearance rate from 9 properties listed and Adelaide cleared 75 per cent from 4 reported auctions.
Commercial property sector
The latest headlines from the commercial property sector:
Leighton Holdings Limited
(ASX:LEI) and Mirvac Group
(ASX:MGR) have been selected by the West Australian government to develop a 5.1 hectare land holding in the Perth CBD, accounting for roughly 40 per cent of the estimated $5.2 billion City Link project. The development will include a new hotel, offices, shops, cafes, bars and apartments, with around 16,500 people expected to live or work in the area once it's completed. Leighton Properties managing director Mark Gray said the project fitted with the company's focus on major urban projects, fittings perfectly with its strategic focus of developing urban infrastructure that is high quality, innovative and sustainable.
GPT Group
(ASX:GPT) is being tipped to sweeten its $4 billion takeover proposal for the Commonwealth Property Office Fund
(ASX:CPA), as the bidding war with DEXUS Property Group
(ASX:DXS) rages on. Dexus is currently offering $1.27 per CPA share and it is expected that GPT could boost the cash proportion of its offer to equal that, from its current value of $1.23. This news comes despite Dexus and CPA signing a new management agreement last week. The agreement does not prevent GPT from offering a revised offer. Dexus, which made its initial offer for CPA in October, only to be outbid by GPT in early November, upped its offer last Wednesday and changed it from a scheme of arrangement to an indicative off-market takeover with no minimum acceptance. GPT has a minimum acceptance of 50.1 per cent.
Real estate classified service REA Group Limited
(ASX:REA) shares took a hit after announcing the departure of CEO Greg Ellis. Mr Ellis has been with REA since 2008 and seen its value grow from $500 million to more than $5.3 billion, while it’s stock has doubled its value this year. He will pursue an opportunity overseas in a non-competitive organisation, remaining on as REA chief until a successor is appointed and will assist the board in implementing a transition plan.
