Viewing by month: October 2013

New home sales regather lost ground

 

New home sales regathered some lost ground in August 2013 due to an encouraging lift in detached house sales according to the Housing Industry Association’s New Home Sales report.

“Detached house sales experienced a synchronised increase across the five surveyed states in the month of August 2013, a positive update for the new home construction outlook,” said HIA Chief Economist, Dr Harley Dale. “Strong increases were evident in New South Wales and Western Australia – areas we expect will drive continued recovery in the coming months – as well as South Australia.”

The report, a survey of Australia's largest volume builders, showed that total seasonally adjusted new home sales increased by 3.4 per cent in August 2013 following a decline of 4.7 per cent in July. The rise was driven by a 5.8 per cent increase in detached house sales. Conversely, multi-unit sales fell by 11.2 per cent in August.

“There is clear upward momentum in both new home sales and building approvals for detached houses in 2013, which is being countered to an extent by a significant downward trend for multi-units,” commented Dr Dale.

In another encouraging sign for the Australian property market, housing approvals in August rose by 7.7 per cent over the same month in 2012, according to the latest building approval figures released by the Australian Bureau of Statistics.


0 comments | Posted by Charles Tarbey on 28/10/2013 at 12:00 AM | Categories:

Property Bubble ‘unlikely’ according to CENTURY 21

 

CENTURY 21, the largest real estate sales organisation in the Asia Pacific region, believes that it is unlikely that the Australian residential market is in, or developing, a housing bubble.

 

“Recent growth in national dwelling values could more be seen as a correction rather than a bubble,” said Chairman and Owner of CENTURY 21 Australasia, Charles Tarbey.

 

“While property values nationally have grown by 8.7 per cent since June 2012, commentators often overlook the fact that values have dropped in several regions recently, and sit only 0.7 per cent higher than their October 2010 peak.”

 

According to CENTURY 21 Australasia, the Australian market has a number of unique characteristics and drivers that by and large keep the market safe, resilient and strong.

 

“Projected shortages in housing stock, stable government, a strong economy, centralised society, coastal living, and the fact that Australians tend to live in larger houses than other people around the world – are all factors that bode well for resilient ongoing house prices,” continued Charles Tarbey.

 

Last month the Reserve Bank’s Assistant Governor, Dr Malcolm Edey, described talk of a housing bubble as ‘‘unrealistically alarmist.”

 

While a projected shortage of housing stock in certain areas means that prices are likely to grow with demand, CENTURY 21 Australasia believes that developers will also be working to capitalise on this shortage by developing more housing.

 

“While dwelling value growth and a low interest rate environment has started to encourage activity, CENTURY 21 believes that any bubble talk is premature at best and alarmist at worst,” concluded Charles Tarbey.


0 comments | Posted by Charles Tarbey on 25/10/2013 at 12:00 AM | Categories:

ABS confirms positive year for New Housing construction in 2012/13

 

Recently released ABS housing data includes crucial information regarding dwelling commencements, and confirms a modest increase for 2012/13 following two consecutive yearly declines.

Dwelling commencements increased by 11.2 per cent over the two year period, and according to Housing Industry Associations Chief Economist, Dr Harley Dale, this is an encouraging recovery following declines during 2010 and 2011.

“A substantial upward revision to the March 2013 quarter contributed to housing starts surpassing the 160,000 mark in 2012/13, reaching a level of 161,043,” noted Dr Dale. “That is a healthy figure by recent standards and certainly a promising first round recovery for new home building.”

“What is less encouraging is that all the growth occurred in the first half of the year, following which housing starts declined in the March 2013 quarter and held steady in June.

“We now need to see an acceleration of growth in 2013/14 reflective of a broad-based recovery in housing starts. That outcome will require further upward momentum in New South Wales and Western Australia, together with a re-emergence of sustained growth in other markets,” continued Dr Dale.

“A sustained improvement in confidence, together with low interest rates, would assist the prospect of the recovery gathering legs. The current regulatory and taxation environment combined with ever tightening credit conditions for residential development significantly dilutes the chances of securing this outcome,” added Harley Dale.

The June 2013 quarter data shows healthy gains in dwelling commencements in Queensland (up by 8.0 per cent), South Australia (up by 6.0 per cent), Western Australia (up by 11.3 per cent), Tasmania (up by 15.6 per cent), and the ACT (up by 107.6 per cent). Quarterly declines were recorded in NSW (down by 8.0 per cent), Victoria (down by 2.2 per cent), and the NT (down by 15.1 per cent).


0 comments | Posted by Charles Tarbey on 18/10/2013 at 12:00 AM | Categories:

Consumer sentiment declines slightly in September

 

The Westpac Melbourne Institute Index of Consumer Sentiment fell by 2.1% in October from 110.6 in September to 108.3 in October. Once the fall is taken into account, the Index still sits 2.5% above August levels and 9.2% above its level a year ago.

According to Westpac’s Chief Economist, Bill Evans this is a solid result as it follows the 4.6% jump in the Index in September – a result largely influenced by the expected election result.

“The modest fall in the Index is probably due to an expected retreat following the positive expectations around the election result. Other factors that might have weighed on the Index were the steady fall in the share market and the steady rise in the Australian dollar,” commented Mr Evans.

“There has been undoubted improvement in the sub-index tracking views on ‘whether now is a good time to buy a major household item’, improving by 6.9% in September and a further 3.2% in October. However, in this cycle, this index component has been consistently strong without any pick-up in consumer spending.

“The shutdown of the US government and media speculation around a US government default would also have unnerved respondents, and this adjustment [to the index] probably reflects a little ‘cooling off’ following the anticipation around the election result,” concluded Mr Evans.


0 comments | Posted by Charles Tarbey on 17/10/2013 at 12:00 AM | Categories:

Construction sector growth hits three year high

 

The national construction sector recorded its strongest reading in almost three and a half years according to the latest Australian Industry Group/Housing Industry Association Australian Performance of Construction Index (Australian PCI). This strong reading was driven by a return to growth in the house building and apartment building sub-sectors.

According to Australian Industry Group Chief Economist, Julie Toth, the construction sector is close to stabilising.

"The construction sector is closer to stabilisation than at any time since mid-2010. The housing and apartment sectors are driving the industry's improved performance on the back of lower interest rates and a lift in buyer sentiment.”

“With new orders increasing for the first time since May 2010, there are grounds for cautious optimism that the current improving trend can be sustained in coming months,” Ms Toth said.

Housing Industry Association Chief Economist, Harley Dale, added, "the move into positive territory for the detached house and apartment sub-indices of the Australian PCI is a very encouraging development, and the rise above the 50 mark for new orders is an important outcome.”


0 comments | Posted by Charles Tarbey on 15/10/2013 at 12:00 AM | Categories:

Capital city home values rise 1.6 per cent in September

 

Australia's capital city dwelling values grew by a further 1.6 per cent over the month of September, taking RP Data-Rismark’s Hedonic Home Value Index results to a record high, driven by strong gains in Sydney and Melbourne.

The September results took the change in capital city dwelling values to 8.7 per cent since the market started recovering in June 2012. RP Data research director and analyst Tim Lawless has described this as a ‘technical’ recovery in the housing market with the index moving to a position 0.7 per cent higher than the previous record high in October 2010.

According to Mr Lawless, the September gains were fuelled primarily by Australia’s two largest housing markets, Sydney and Melbourne, where residential property values in each city were up by more than 2 per cent over the month.

"Sydney home values were 2.5 per cent higher over the month and are up 5.2 per cent over the September quarter while Melbourne values have seen a similar 2.4 per cent month-on-month gain and a 5.0 per cent quarterly lift. We haven't seen market conditions this strong since April 2009 for Sydney and May 2010 for Melbourne," Mr Lawless said.

According to RP Data, an important factor to note when considering the current rate of capital gains is to look at the longer history of capital gains.

"Sydney dwelling values have appreciated by just 2.5 per cent per annum over the past decade which is less than annual rates of inflation and wages growth over this period. Sydney’s annual average rate of capital gain over the past ten years is actually the lowest of any capital city," concluded Mr Lawless.

While Sydney and Melbourne dwelling values powered higher in September, most other capital cities are recording much more subdued housing market conditions. Dwelling values moved lower in Brisbane (-0.3%), Perth (-0.1%), Hobart (-2.0%), Darwin (-2.5%) and Canberra (-0.7%), whilst Adelaide values posted a 1.1 per cent capital gain over the month.

 


0 comments | Posted by Charles Tarbey on 14/10/2013 at 12:00 AM | Categories:

WestConnex to provide new development opportunities

 

The NSW Government has lodged the initial planning application for the WestConnex motorway, after approving the business case showing the project will deliver major benefits for the NSW economy.

 

WestConnex is the largest infrastructure project in Australia, and will link western and south-western Sydney with the city, airport and port in a 33 kilometer continuous motorway.

 

NSW Premier and Minister for Western Sydney, Barry O’Farrell, said the motorway would ease congestion, deliver liveable and connected communities, and create jobs across Sydney.

 

"WestConnex is a game-changer for Sydney – it will save motorists time by making travel between Sydney’s west and the east easier,” he said.

 

“WestConnex will help motorists avoid up to 52 sets of traffic lights, creating a saving of 40 minutes on a trip from Parramatta to Sydney Airport and halving the travel time from Parramatta to the CBD to 25 minutes.”

 

Mr O’Farrell said the motorway would also inject $20 billion into the NSW economy including 10,000 construction jobs and hundreds of apprenticeships for young people.

 

The NSW Government confirmed the $11.5 billion (2012 dollars) project will be built in three stages with the M4 widening to start first and be completed in 2017.

 

In terms of how the motorway could affect the property market in and around western Sydney, Roads Minster, Duncan Gay, said the project would “enable urban revitalisation to occur along the 20 kilometer-long corridor between Broadway and Parramatta, creating new jobs, stimulating productivity and delivering new homes in this key growth area of Sydney.”

 

"This is similar to the revitalisation of Surry Hills and parts of Redfern following the construction of the Eastern Distributor [Motorway],” he explained.

 

Urban Taskforce CEO, Chris Johnson, pointed to the project’s potential to drive urban renewal.

 

“The best time to drive major urban renewal is when large infrastructure projects like WestConnex are under way,” he said.

 

“The Urban Taskforce believes that this corridor can accommodate 100,000 new apartments and 100,000 new jobs and that there are many sites available for redevelopment now.”

 

For more information about the residential property market in your areas of interest, please feel free to stop by your local CENTURY 21 Real Estate office for clear and expert advice.


2 comments | Posted by Charles Tarbey on 01/10/2013 at 12:00 AM | Categories: