Surging Melbourne property prices are seeing the Victorian capital close the gap to Sydney as the boom property market of Australia. Suburbs such as Mount Waverley have seen home prices appreciate by over $100,000 a month in the past 8 months alone. Meanwhile Sydney has recorded its second consecutive auction clearance rate at below 70 per cent and is tracking at its lowest levels since 2012. Sydney clearance rates had been tracking at 90 per cent in May. There were public holiday weekends in both capital city markets however new October selling records are expected to be set next weekend with plenty of homes up for sale.
Real Estate figures
Home values continue to surge with capital city house prices up 0.9 per cent during the month of September lead by a 2.4 per cent jump in Melbourne home values. The CoreLogic RP Data report shows home price inflation rose 11 per cent across the nation in the 12 months to September. Sydney and Melbourne are still providing the biggest rises up 16.7 per cent and 14.2 per cent respectively. In comparison, prices in Canberra rose just 0.6 per cent.
Meanwhile the construction sector is showing huge monthly swings. Residential building approvals slumped 6.9 per cent in August, following a 7.9 per cent rise in July after a 6.9 per cent fall in June. The volatility is being mainly driven by the apartments sector down 11.4 per cent while approvals for private sector houses were up by 4.9 per cent for the month. The trend terms however, housing approvals are up 13 per cent over the 12 months to August. The falling approval rate has some economists predicting the RBA will not move on interest rates at its October meeting.
Turning to commentary and FNN spoke to Alan Oster, Chief Economist at National Australia Bank about when we might expect any upwards movement on the cash rate.
“I think basically the state of the housing market at present is its slowing a little bit but it would need to because you’ve had very strong growth recently. When interest rates start to rise I think basically you need to remember that’s at least 12 months out so it’s going to be a long time before you get increasing rates, our expectations are at the end of next year before they are going to start to increase. And then I think they’re going to increase relatively moderately so instead of going up to about 5 per cent we expect them to go up to about 3.5 per cent.”
Australian auction results
Looking at this week’s auction results across Australian capital cities - Sydney recorded a 70 per cent clearance rate from 373 properties for auction on the Labour day weekend, Melbourne cleared 56 per cent from 51 properties on the traditionally quiet Grand Final weekend, Brisbane had a 53 per cent clearance rate from 77 properties listed and Adelaide was unable to record a percentage result with only 5 homes under the hammer.
Commercial property sector
says it has settled on the $318 million sale of its 50 per cent stake in Waterfront Place office tower and Eagle Street Pier in the Brisbane CBD to Dexus Property Group.
Westfield Corporation (ASX:WFD)
says it has priced a US$1 billion 5 year debt issue in the US market.
Growthpoint Properties Australia (ASX:GOZ)
has paid $20.3 million for a 14.1 hectare industrial property in Wollongong south of Sydney.
And Lend Lease (ASX:LLC)
says it has closed on its Army Lodging program by securing $250 million in additional debt to improve conditions of hotel facilities at Army posts.