Expectations for an upbeat spring season are high after the housing market posted its strongest winter gains since 2007. RPData's report showed Sydney and Melbourne continue to drive property price growth and have pushed total price growth to double digits over the past year.
Record low interest rates remain
The Reserve Bank of Australia has moved in line with expectations and kept interest rates at historical lows for the thirteenth meeting and fourteenth straight month. Australia's key cash rate continues to sit at 2.5 per cent and many predict rates will continue to remain at the current level for the foreseeable future. The Housing Industry Association's Chief Economist Harley Dale has welcomed the outlook for rate stability and says a broader strength in domestic demand is required, including in the renovations segment of residential construction yet to show sustained recovery from a decade low.
Housing sector stays warm over winter
Australian house prices have posted the biggest winter gain in seven years. RP Data and CoreLogic’s Hedonic home value index shows capital city dwelling prices climbed 1.1 per cent in August, 4.2 per cent in the three months to the end of August and 10.9 per cent in the year to August. RP Data Research Director Tim Lawless says high auction clearance rates, a generally rapid rate of sale and low interest rates are likely to support dwelling values lifting even further over the next three months.
New dwelling approvals gain ground
New dwelling approvals have gained more than expected and continue to be at historically high levels. The Australian Bureau of Statics reports 16,320 dwellings were approved in July, rising 2.5 per cent from the month before and jumping 9.4 per cent from the year before. Westpac Banking Corporation
(ASX:WBC) says the result was better than expected but also broadly consistent with its view of a modest cooling in activity coming from a high starting point.
Commercial office market outlook
GPT Group's
(ASX:GPT) Chief Investment Officer, Carmel Hourigan provides an outlook for Australia’s commercial office market: "
Our view at GPT would be Melbourne is probably in the best position at the moment. And that is reflective of the tenant demand base in Melbourne and also the level of supply coming on, which if you look out for the next five years, is much lower than what we’ve seen on average over the last 20 years. So, the fundamentals are very much in balance in Melbourne. And, when you compare that to Brisbane for example we’ve got more supple coming on, and potentially Sydney with a bit of issue in terms of some supply, it really does put Melbourne in the best light."
Australian auction results
Sydney recorded an 82 per cent clearance rate from 583 properties for auction
Melbourne posted a 78 per cent clearance rate from 770 properties for auction
Brisbane booked a 37 per cent clearance rate from 98 properties for auction
Adelaide saw an 81 per cent clearance rate from 56 properties for auction
Commercial property
Diversified property group GPT Group
(ASX:GPT) has just partnered with the GPT Wholesale Office Fund to buy CBW in Melbourne for $608.1 million.
West Australian focused Finbar Group Limited
(ASX:FRI) has scored the green light for a joint venture residential development in West Leederville.
Payce Consolidated Limited
(ASX:PAY) has bought more industrial sites in Sydney's western suburbs and begun a joint operation with Sekisui House.
Property investor Aspen Group Limited
(ASX:APZ) expects to gain $20.8 million after selling an industrial property at Browns Road in Victoria.
