Housing market stalls in spring

Real Estate


The nation’s auction clearance rate improved by one per cent to 75 per cent for the first selling weekend of spring, not the huge improvement that traditionally heralds the warmer selling season. Eyes are now turning to the outlook for rural property. Record cattle prices and low interest rates are combining to provide some momentum there Some real estate experts are warning that sale of some of the major pastoral companies including a deal that could see Australia’s largest private landholding Kidman & co change hands might inspire some buoyancy. Several big Chinese buyers have also snapped up big cattle stations as other buyers look to secure cattle production. 
 
This month, the Reserve Bank once again left the official cash rate on hold at 2 per cent at its September board meeting. The bank pointed towards the lower dollar and a steady unemployment rate for the reasons behind the decision. 
 
Housing prices are still showing growth albeit at a slower place. The CoreLogic RP Data survey showed prices were up by 0.3 per cent in August after gaining 2.8 per cent in July. Sydney was up 1.1 per cent for the month to be 17.6 per cent higher than 12 months ago. Prices were also up in Adelaide and Darwin, flat in Melbourne and Brisbane, whilst Perth, Canberra and Hobart saw falling house prices for August.
 
Building approvals have bounced back from their 5.2 per cent fall in June. Figures from the Australian Bureau of Statistics show Australian building approvals rose by 4.2 per cent in July. Multi unit approvals surged by 11.7 per cent offsetting a 2.6 per cent dip in house approvals. New South Wales led the way with a 27.1 per cent increase in July to be 68 per cent up for the year. Tasmania was down by 24 per cent whilst Queensland dropped 17 per cent. National approvals are now 13.4 per cent up on the year. 
 
Commentary

FNN spoke to Geordan Murray, Economist with the Housing Industry Association about the impact new home building is having on the latest GDP figures. 

“The growth in new home building over the past two years has provided a very strong contribution to the new home building over that period. With new home building reaching a cyclical peak, around the middle of this year it is difficult to see how new home building can make further contributions as it has done over the past two years.” 

Australian auction results
 
Looking at this week’s auction results across Australian capital cities - Sydney recorded a 75 per cent clearance rate from 817 properties for auction, Melbourne cleared 76 per cent from 878 properties, Brisbane had a 49 per cent clearance rate from 100 properties listed and Adelaide cleared 70 per cent from 46 listed auctions. 
 
Commercial property sector
 
Cromwell Property Group (ASX:CMW) says members of the Cromwell Box Hill Trust have voted in favour of selling the land and ATO building at 913 Whitehorse Road, Box Hill in Victoria.          
 
National Storage REIT (ASX:NSR) will pay $9.9 million for a self-storage facility in Cairns, Queensland. 
 
Lend Lease (ASX:LLC) says managed funds in Asia have taken out the top five spots two categories of the 2015 Global Real Estate Sustainability Benchmark survey. 
 
And Dexus Property Group (ASX:DXS) has used recent weakness in the share market to initiate an on-market share buy-back of up to 5% of securities on issue.