Property strength continues into 2015

Real Estate

RBA cuts rates
One month into the New Year, analysts who were eyeing off interest rate cuts have been proven correct as the RBA lowered the cash rates by 0.25 basis points at its February meeting. The RBA said lower petrol prices had little effect on an economy with a rising unemployment rate and with growth was continuing below trend, some stimulus was needed. 
Meanwhile, the latest economic figures are showing that property prices and building approvals continue to rise as residential building proves one of the top performers in the current economic climate. 
Economic news
The CoreLogic RP Data Home Values Index shows combined capital city house prices continue to rise, up 1.3 per cent in January. Melbourne house prices lead the way up 2.7 per cent, dark horse Hobart posted a 1.6 per cent increase whilst Sydney was also a standout, up 1.4 per cent. Darwin, Adelaide and Perth reported declines over the month. 
ABS building approvals remained elevated in December after reaching their highest ever monthly level during November. The December figures showed new home approvals were 3.3 per cent lower that the November record however they were 8.8 per cent higher than December last year. Multi-unit approvals continue to be the main driver and detached house approvals are steady, up 1.1 per cent in December. New South Wales remains the best performing state for building approvals. 
Turning to commentary and The Housing Industry Association has welcomed the release of a free building code online. The online release of the National Construction Code and changed to the code are moving from an annual to a three year review cycle also freeing up red tape for home builders.
FNN spoke to HIA’s Executive Director of Building, Development and Environment, Kristin Brookfield about what the changes mean and how they will benefit the industry.  
“The changes that have occurred now mean that the Building Code of Australia which is part of the National Construction Code is free online, the BCA has been online for several years but people have had to pay $385 to get a copy and now they will be able to access that 24 hours a day by just being a subscriber. Having to buy the BCA every year has meant that builders have had to spend that money and keep their businesses buying this annual copy of the code. Now they won’t need to do that, they can save the money and they can keep up to date as quickly as they need to in their own business to check that their plans and their designs meet the National Building Code and they are going to be able to get their approvals from council”
Australian auction results
Auctions got into the swing of 2015 across Australian capital cities this past weekend albeit with greatly reduced volumes from the pre-Christmas rush- Sydney recorded a 71 per cent clearance rate from 97 properties for auction, Melbourne cleared 59 per cent from 59 properties, Brisbane had a 60 per cent clearance rate from 60 properties listed and Adelaide cleared 65 per cent from 69 listed auctions. 
Commercial property sector
Federation Centres Limited (ASX:FDC) and Novion Property Group (ASX:NVN) have outlined plans to merge into a single entity with a combined $22 billion of assets under management. 
According to a market report from Credit Suisse, Mirvac Group (ASX:MGR) is set to benefit from improving office markets in Sydney and Melbourne over the next three years. 
Australian Industrial REIT (ASX:ANI) has upped its distribution guidance for the 2015 financial year by 5.8 per cent after a recent restructure. 
Ingenia Communities Group Limited (ASX:INA) has forked out $12 million for the Sydney Hills Holiday Park in the growing residential Hills district in Sydney. Surrounding land has been recently rezoned for medium density residential. 

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