Aussie house prices lift 1.5% in Q3

Real Estate

Official figures have shown residential property prices in Australia lifted 1.5 per cent over the September quarter. Growth across eight capital cities showed variance over the quarter with Sydney leading the way. The Australian Bureau of Statistics reports Australia’s largest city posted a gain of 2.7 per cent followed by 1 per cent growth in Melbourne, Adelaide, Brisbane and Hobart while Perth saw a fall of 0.1 per cent.  
 
Construction activity slows
 
Australian construction activity slowed last month from September’s record high but remained in expansion territory. The Australian Industry Group and Housing Industry Association (HIA) report the Performance of Construction Index dropped 5.7 points to 53.4 points in October, but stayed above 50 for the fifth straight month, which indicates expansion. Ai Group says residential and commercial construction continued to lead the rebalancing of the economy away from the emphasis on mining investment.
 
Official housing finance figures 
 
Official housing finance figures have shown differing outcomes across the sector with HIA claiming lending for new housing is at a 29-year high. The Australian Bureau of Statistics has shown a 0.7 per cent decrease in the volume of owner occupied housing finance in September while loans for the construction of homes rose by 3.1 per cent to a 4.5 year high. HIA says this is a healthy result in terms of the short term outlook for new home construction
 
Moderating property price growth
 
New Zealand’s central bank introduced Loan to Value Ratios (LVR) earlier this year to moderate property price growth. FNN asked AMP Capital Investors Chief Economist Dr Shane Oliver if Australia’s own central bank could be considering the move: 
 
"I have no doubt that the Reserve Back has looked at what has happened in New Zealand and their conclusion would probably be that the limits on Loan to Value Ratios has simply squeezed out first home buyers so it works against a part of the property market that you want to help and so I think the Reserve Bank if anything, probably won’t go down that path. If they do go down the path of controlling lending into housing they will probably focus on tighter capital requirements for the banks if they’re going to lend to investors making it more expensive effectively for the banks to lend to investors." 
 
Australian auction results
 
Sydney recorded a 75 per cent clearance rate from 943 properties for auction, Melbourne cleared 72 per cent from 977 properties, Brisbane had a 33 per cent clearance rate from 126 properties listed and Adelaide cleared 59 per cent from 68 listed auctions. 
 
Commercial property
 
Real estate developer Mirvac Group (ASX:MGR) has inked a deal to develop an apartment project in Sydney’s iconic Olympic Park precinct with the potential to deliver about 400 residential dwellings.
 
Land and funds manager Peet Limited (ASX:PPC) has acquired an interest in six residential development projects across Australia for $95 million. 
 
Property and funds manager GDI Property Group Limited (ASX:GDI) has inked a deal to sell a central Sydney office building, located at 233 Castlereagh Street for $156 million.
 
Commercial property manager Scentre Group Limited (ASX:SCG) has sold a stake in five shopping malls in New Zealand to Singapore’s sovereign wealth fund for $930 million.

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