Housing affordability issues grow

Real Estate

Housing affordability issues grow
 
There are just on two weeks to go before the traditionally strong spring selling season and Sydney has already shown signs of increasing activity with auction clearance rates tipping over the 80 per cent mark for the first time in over five weeks. Melbourne also continues to see strong growth however the story is very different across the rest of the nation with declines continuing in some states. Housing affordability remains an issue across the board with strong prices in Sydney and Melbourne shutting some buyers out while an antiquated tax system puts pressure on others. 
 
Real Estate figures
 
Minutes from the latest Reserve Bank meeting earlier this month show the central bank thinks the regulatory crackdown on banks is expected to ease risks in the housing market. The RBA noted that housing market conditions remain strong in the low interest rate environment with Sydney and Melbourne seeing the strongest inflation. Outside these cities growth remained weak with some areas in decline. Looking ahead the RBA expects further strength in dwelling investment in coming quarters. 
 
Elsewhere, the Housing Industry Association convened its annual Building Better Cities Summit with a focus on getting the tax off housing. The industry body is calling for an end to stamp duty citing the NSW government which reaped in a massive $7.29 billion in stamp duty across residential and commercial properties in the 2015 financial year. The summit explored different alternatives to the tax including lifting the GST or replacing stamp duty with a ‘well-designed land tax’. 
 
And Melbourne has been named by The Economist magazine as the World’s Most Liveable City for the fifth year in a row. The Victorian capital beat out Vienna, Vancouver, Toronto, Adelaide and Calgary with a near perfect score of 97.5. Adelaide came in fifth with a score of 96.6. The survey creates a score out of 100 based on a city’s access to healthcare and education as well as geopolitical and economic stability, culture, environment and infrastructure. 
 
Australian auction results
 
Looking at this week’s auction results across Australian capital cities - Sydney recorded an 80 per cent clearance rate from 726 properties for auction, Melbourne cleared 80 per cent from 785 properties, Brisbane had a 90 per cent clearance rate from 56 properties listed and Adelaide cleared 67 per cent from 52 listed auctions.
 
Commercial property sector
 
Mirvac Group (ASX:MGR) has posted a 36 per cent lift in full year net profit to $609.9 million.
 
Federation Centres (ASX:FDC) has agreed to sell four properties located in Goulburn and Broken Hill NSW, Mount Gambier in South Australia and Katherine in the Northern Territory for a total of $153.1 million. 
 
Goodman Group (ASX:GMG) says operating profit is up 9 per cent on last financial year and forecast a 6 per cent rise in earnings per share for 2016. 
 
And Investa Office Fund (ASX:IOF) says it has agreed to a period of exclusivity with Mirvac Group for Mirvac to potentially acquire the fund.