The Reserve Bank of Australia’s (RBA) April policy meeting minutes have affirmed the central bank’s neutral bias following its decision to keep rates at a record low of 2.5 per cent earlier this month. Commenting on the housing market the RBA noted strong conditions with Australian housing prices rising in March to be 10.5 per cent higher over the year. The central bank also observed higher dwelling investment in the December quarter a pick-up in renovation activity and dwelling approvals.
Underpinning the positive outlook the latest figures on housing finance rose more than expected in February. The Australian Bureau of Statistics reports home loans granted gained 2.3 per cent to 52,460 in February against expectations for a rise of 1.5 per cent. Total housing finance by value gained 2.9 per cent to $27.644 billion in the same month. Meanwhile, as part of the total figures - loans to investment housing gained 4.4 per cent while loans to first home buyers sank 12.5 per cent – indicating the difficulty of entering into Australia’s housing market.
Commentary
UBS Investment Bank, Chief Economist Australasia, Scott Haslem shares is outlook for the housing sector in 2014:
“So the outlook for the housing market I think is pretty strong. I would anticipate we will continue to see house price gains into the middle of the year. I am hoping that we’ll start to see the market settle down by the middle of the year or it is going to raise the risk that the RBA [Reserve Bank of Australia] is going to be sufficiently uncomfortable that it might take away some of those very stimulatory interest rates. But, I do think that we will see some house price gains into the middle of the year then see the market settle down a bit.”
Australian auction results
Sydney recorded a 78 per cent clearance rate from 1,118 properties for auction.
Melbourne posted a 72 per cent clearance rate from 1,285 properties for auction.
Brisbane booked a 33 per cent clearance rate from 142 properties for auction
Adelaide saw an 86 per cent clearance rate from 91 properties for auction.
Commercial property sector
Westfield Group
(ASX:WDC) proposed $70 billion restructure has been deemed fair and reasonable by two independent experts.
The proposal with Westfield Retail Trust (ASX:WRT) has been found to be in the best interests of securityholders and will be put to a vote on May 29, 2014.
Real Estate Investment Trust Growthpoint Properties Australia Limited
(ASX:GOZ) has bought a $19.85 million industrial property in Laverton North in Victoria.
Property developer Watpac Limited
(ASX:WTP) has won a $114 million contract to build the new Southpoint commercial tower in Brisbane’s South Bank.
