Sydney real estate continues to surge with a lack of supply pushing prices higher making it even more difficult for first home buyers to enter the market. Meanwhile it's a different situation in Melbourne as some analysts warn that an impending oversupply of inner city apartments could lead to a lengthy downturn of depressed prices. The recent decision of the RBA to leave interest rates on hold shows the central bank is still hoping the February rate cut will filter through to some effect before deciding whether to lower rates again.
High prices keep first home buyers out of market
ABS figures show that dwelling construction loans to owner occupiers dipped in January whilst loans to investors saw a slight increase. Loans to owner occupiers for construction and purchase of new homes was down by 5.3 per cent while loans for owner occupiers to buy existing homes slipped by 7.9 per cent. The value of lending to investors was up by 1.6 per cent for the month. The figures are still a little early in the year to determine if the prudential spotlight on risky lending is having an effect.
Research from BIS Shrapnel says that the Sydney property market could achieve growth of 20 per cent over the next two years. BIS expects annual growth of around 13 per cent for the remainder of this financial year with another 7 per cent forecast next financial year. That would take the median Sydney house price over the $1 million dollar mark. Brisbane prices are also expected to boost by about 6 per cent to July with Melbourne and Adelaide price growth expected to slow whilst Perth could go backwards.
Australian auction results
And auction clearance rates have hit their highest levels in six years. The weighted average clearance rate of 78.3 per cent last week across the capital cities was up from 74.5 per cent the previous week.
Looking at Saturday’s auction results across Australian capital cities - Sydney recorded an 84 per cent clearance rate from 641 properties for auction, Melbourne cleared 80 per cent from 1048 properties, Brisbane had a 45 per cent clearance rate from 117 properties listed and Adelaide cleared 61 per cent from 64 listed auctions.
Commercial property sector
Abacus Property Group (ASX:ABP)
have announced an entitlement offer to raise $121 million that will be used to reduce debt from the settlement of the Oasis Shopping Centre on Queensland’s Gold Coast.
Mirvac Group (ASX:MGR)
have put the Hinkler Central shopping Centre in Bundaberg, Queensland up for sale, hoping to capitalise on strong growth in the region. The centre was last valued at $93 million 9 months ago.
Nine Entertainment Company Holdings Limited (ASX:NEC)
has secured development approval for 400 apartments on its Willoughby studios site in Sydney’s lower north shore. The TV station plans to sell the site under a leaseback deal so it doesn’t have to move just yet.
GPT Metro Office Fund (ASX:GMF)
says they have completed building the new 13,000 square metre 5 storey national headquarters for Samsung Australia at Sydney Olympic Park.