Housing market comes off the boil
There are signs the Sydney property market is coming off the boil with clearance rates dropping there for four consecutive weekends. Moves by the Australian Prudential Regulatory Authority to cool the market now seem to be taking effect as the latest figures show a sharp drop in the number of investor loans across the country. However record low interest rates are here for a while yet providing plenty of fuel for prices to continue to grow, just at a lower pace.
Real Estate figures
The RBA has kept the official cash on hold at 2 per cent saying monetary policy needs to be accommodative. While rising Sydney house prices were highlighted the RBA says trends have been more varied in a number of other cities. The likelihood of the US Federal Reserve raising rates later this year was also mentioned but it was qualified with a suggestion that other countries are still pushing rates lower. But for now the RBA says the current cash rate is appropriate and it will assess conditions in the period ahead before making any changes.
The latest housing construction figures from the ABS show that dwelling approvals are up 2.4 per cent in May following a fall of 5.2 per cent in April. The seasonally adjusted total units approved jumped 17.6 per cent over 12 months. Over 200,000 homes with a value of $57.6 billion have been given building approval since this time last year. This means a huge pipeline of homes are expected to come online in the next 12 months and this could see downward pressure on prices.
Meanwhile the number of property investor loans has seen a big slump during the month of June. The nation’s largest mortgage broker Australian Finance Group says investment loans fell from 40.9 per cent of total property loans in May to just 36.9 per cent in June. The biggest fall was in NSW where investor loans dipped to 41.6 per cent from 49.8 per cent. Loans to investors were also down in South Australia, Queensland, Victoria and Western Australia.
Australian auction results
Looking at this week’s auction results across Australian capital cities - Sydney recorded an 83 per cent clearance rate from 548 properties for auction, Melbourne cleared 79 per cent also from 548 properties, Brisbane had a 55 per cent clearance rate from 92 properties listed and Adelaide cleared 80 per cent from 47 listed auctions.
Commercial property sector
Goodman Group (ASX:GMG)
says its industrial fund and joint venture partner Brickworks have agreed to the $253 million sale of the Coles Chilled Destribution Centre at Eastern Creek in Sydney’s West.
Minrex Resources NL (ASX:MRR)
will pay $6.75 million for 100 per cent of Hello Real Estate Limited. Upon completion of the transaction Minrex will change its name to Hello Real Estate Limited.
AMP Limited’s (ASX:AMP)
AMP Capital is pushing ahead with the development of the Quay Quarter Sydney precinct in Circular Quay submitting a Stage 2 Development Application for the commercial office tower within the precinct.
And Lend Lease (ASX:LLC)
is planning to pilot a new micro-style apartment of just 25 square metres in the residential stage of its Melbourne Quarter project.