Aussie home prices high on global rank

Real Estate

In what may be of little surprise to local home hunters Australian houses have been ranked among the most expensive in the world. The International Monetary Fund has placed Australia third on the ladder for unaffordable housing, coming in only under Belgium and Canada. The figures have been compiled by considering household incomes and rents and show Australian house prices are still outpacing earnings. According to the report global house prices have now gained for seven quarters in a row following a period of post-crisis stagnation after the GFC in 2008. 

FNN asks the Housing Industry Association’s Chief Economist, Harley Dale if Australia is at risk of a property bubble: 
“I don’t think it’s at risk and it’s partly because it’s a wide ranging set of markets. You know there are thousands and thousands of property markets within the overall Australian property market in Australia. 
Two are firing at the particular point in time if you like, Melbourne and Sydney but Sydney is really just firing after a period of about ten years where it really just flat lined. In real terms you actually didn’t see any gains in property prices at all. 
I just don’t think we’re in an environment where we have this broad based growth if you like to a property investment that is widely driven right around the country by lots of speculative frenzy. That’s not the dynamic of our market and perhaps we are slightly overvalued relative to household incomes for example but certainly nowhere near bubble territory.” 
To watch more of the interview click here
Real estate figures
The property market has continued to show signs of cooling down in April with home loans remaining unchanged. The figures from the Australian Bureau of Statistics came against expectations for a rise of 0.2 per cent and following a fall of 0.8 per cent in March. Mortgage Choice says these statistics were relatively unsurprising given recent research from RP Data showing property values started to flat-line in April.
The Australian construction sector has been shown to have improved in May but still stayed in contraction territory for the fifth straight month. Though home building remains strong it was offset by weakness in engineering and commercial construction. The Australian Industry Group (AiG) and Housing Industry Association’s (HIA) Performance of Construction Index (PCI) rose 0.8 points to 46.7 last month, from 45.9 in April but remained below 50 which indicates contraction from expansion above the 50 level. 
Australian auction results
Sydney recorded a 74 per cent clearance rate from 393 properties for auction
Melbourne posted a 70 per cent clearance rate from 257 properties for auction
Brisbane booked a 44 per cent clearance rate from 65 properties for auction
Adelaide saw a 92 per cent clearance rate from 53 properties for auction 
Commercial property sector
Property investor Abacus Property Group (ASX:ABP) and its Abacus Diversified Income Fund II have sold a portfolio of 10 industrial assets for $106.75 million.
Property and fund manager Cromwell Group (ASX:CMW) has bought a 50 per cent stake in New Zealand property and fund manager Oyster Group.
Construction company Watpac Limited (ASX:WTP) has inked a $34 million contract to build the first stage of Charles Sturt University’s permanent campus at Port Macquarie.
Investment trust CFS Retail Property Trust Group (ASX:CFX) will sell its interest in The Entertainment Quarter in Sydney for $80 million.
Real estate funds manager and developer Folkestone Limited (ASX:FLK) has had a revamp of its brand, logo and fund names to represent innovation and partnership.  
Land developer and home builder Devine Limited (ASX:DVN) has boosted its full year earnings guidance after completing more than $110 million in major assets sales over the past six months.