L67 Property Operators and Real Estate Services

Sydney house prices fall 3.1pc over March quarter

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Original article by Ingrid Fuary-Wagner, Michael Bleby
The Australian Financial Review – Page: 3 : 30-Apr-19

Domain Holdings analyst Nicola Powell says Sydney’s residential property market downturn is close to being the longest on record. She adds that the median house price in Sydney will fall below $1m if prices continue to fall at the current rate. The median house price has fallen from $1,161,083 to $1,027,962 in the last year. Data from Domain shows that house prices in Sydney have fallen by 14.3 per cent since peaking in mid-2017.

CORPORATES
DOMAIN HOLDINGS AUSTRALIA LIMITED – ASX DHA, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC

Rate cut could aid housing recovery

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Original article by Michael Bleby
The Australian Financial Review – Page: 3 : 29-Apr-19

Preliminary data from Domain Holdings shows that the national residential auction clearance rate was 52.9 per cent on the weekend of 27-28 April, with a total of 1,019 properties going under the hammer. Sydney and Melbourne recorded preliminary clearance rates of 52.2 per cent and 56.6 per cent respectively. Shane Oliver of AMP Capital says the bottom of the housing market’s cyclical fall could occur sooner if the Reserve Bank reduces official interest rates in May. Oliver has forecast two rate cuts in 2019.

CORPORATES
DOMAIN HOLDINGS AUSTRALIA LIMITED – ASX DHA, AMP CAPITAL INVESTORS LIMITED, CORELOGIC AUSTRALIA PTY LTD

Lendlease and Vicinity both takeover targets, says JPM

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Original article by Nick Lenaghan
The Australian Financial Review – Page: 31 : 23-Apr-19

JP Morgan’s Global REIT Radar report suggests that a sharp fall in the share prices of Lendlease and Vicinity Centres could make them potential takeover targets. Ben Brayshaw of JP Morgan says both stocks are currently trading well below the firm’s estimate of their net asset value. The report also notes that real estate investment trusts have delivered a total return of 18.5 per cent over the last year, while global equities have returned just 7.6 per cent.

CORPORATES
LEND LEASE GROUP LIMITED – ASX LLC, VICINITY CENTRES – ASX VCX, JP MORGAN AUSTRALIA LIMITED, CROWN ESTATE, MAURICE BLACKBURN PTY LTD, SUPREME COURT OF NEW SOUTH WALES

Tax Office to ramp up audits of landlords

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Original article by Joanna Mather
The Australian Financial Review – Page: 9 : 18-Apr-19

The Australian Taxation Office has signalled that it will audit about 4,500 taxpayers who claim deductions for rental properties in 2018-19. The ATO undertook 1,500 such audits in 2017-18, after random sampling of tax returns showed that 90 per cent of claims for rental deductions contained errors. Assistant commissioner Gavin Siebert says the ATO uses data analytics and information from a range of third-party sources in its audits. It imposed penalties totalling $1.3m for incorrect rental deductions in 2017-18.

CORPORATES
AUSTRALIAN TAXATION OFFICE

Record 1.3 million landlords cash in on negative gearing as shake-up looms

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Original article by Ben Butler, Michael Roddan
The Australian – Page: 19 & 26 : 17-Apr-19

Data from the Australian Taxation Office shows that the number of property investors who use negative gearing rose from 631,000 to about 1.3 million between 2000 and 2017. In contrast, the number of investors who broke even or made a profit rose from 532,000 to around 856,000. The figures also show that the proportion of investors who are aged 60+ rose from around 15 per cent to about 23.5 per cent. Robert Deutsch of the Tax Institute does not expect Labor’s proposed negative gearing reforms to have much effect on housing prices.

CORPORATES
AUSTRALIAN TAXATION OFFICE, THE TAX INSTITUTE, AUSTRALIAN LABOR PARTY, BIS OXFORD ECONOMICS PTY LTD, UNIVERSITY OF NEW SOUTH WALES

Negative equity feared as house prices plunge

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Original article by Michael Roddan, Luke Griffiths
The Australian – Page: 2 : 11-Apr-19

The Reserve Bank of Australia’s deputy governor Guy Debelle says the number of homeowners with negative equity has increased, although he notes that it remains largely confined to Western Australia and mining regions. He adds that it is unusual for house prices to fall sharply at a time when the economy is continuing to grow and the unemployment rate is low. Debelle says the outlook for the labour market is likely to determine whether there is a further increase in negative equity and mortgage arrears.

CORPORATES
RESERVE BANK OF AUSTRALIA, S&P GLOBAL RATINGS, INTERNATIONAL MONETARY FUND, WESTPAC BANKING CORPORATION – ASX WBC

Nation’s residential building boom well and truly over: BIS

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Original article by Michael Bleby
The Australian Financial Review – Page: 31 : 11-Apr-19

BIS Oxford Economics is bearish about the near-term outlook for Australia’s housing construction market. The firm has forecast that the sector will be hit by a two-year correction, with the number of new dwelling starts tipped to fall to 161,000 a year. This compares with between 220,000 and 230,000 annually over the last four years. Meanwhile, official data shows that there was a 16.3 per cent decline in housing starts during the December quarter, which is the largest quarter-on-quarter fall since September 2000.

CORPORATES
BIS OXFORD ECONOMICS PTY LTD, COMMONWEALTH SECURITIES LIMITED, AUSTRALIA. DEPT OF THE TREASURY, BROOKFIELD MULTIPLEX LIMITED

House values expected to fall sharply

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Original article by Ingrid Fuary-Wagner
The Australian Financial Review – Page: 3 : 10-Apr-19

Moody’s Analytics forecasts that house prices will fall by 9.3 per cent in Sydney during 2019, and apartment prices will decline by 5.9 per cent. The ratings agency expects the prices of houses and apartments in Melbourne to fall by 11.4 per cent and five per cent respectively. Moody’s economist Katrina Ell says factors such as stricter lending conditions in the wake of the Hayne royal commission and Labor’s proposed negative gearing reforms could weigh on the housing market. Moody’s expects the cash rate to remain on hold until mid-2021, although it says further housing market weakness could see a rate cut before the end of 2019.

CORPORATES
MOODY’S ANALYTICS AUSTRALIA PTY LTD, RESERVE BANK OF AUSTRALIA, CORELOGIC AUSTRALIA PTY LTD

Top 10 housing stress seats all held by Labor

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Original article by Matthew Cranston
The Australian Financial Review – Page: 8 : 1-Apr-19

Labor is hoping to make housing more affordable if it wins the federal election by implementing changes to the negative gearing and capital gains tax regimes. Analysis conducted by the National Centre for Social & Economic Modelling indicates that the 10 electorates with the highest level of housing stress are all held by Labor, while Digital Finance Analytics estimates that the number of households facing mortgage stress now exceeds one million. The NATSEM analysis also indicates that Labor holds eight of the 10 seats with the highest level of poverty.

CORPORATES
AUSTRALIAN LABOR PARTY, UNIVERSITY OF CANBERRA. NATIONAL CENTRE FOR SOCIAL AND ECONOMIC MODELLING, DIGITAL FINANCE ANALYTICS, LIBERAL PARTY OF AUSTRALIA, AUSTRALIAN GREENS

SQM urges phasing in of gearing reforms

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Original article by Michael Bleby
The Australian Financial Review – Page: 35 & 38 : 21-Mar-19

SQM Research MD Louis Christopher says Labor should implement its proposed negative gearing and capital gains tax reforms gradually if it wins the federal election, to avoid a "shock" to the broader economy. Research by SQM suggests that Labor’s reforms could potentially result in a 12 per cent decline in residential property prices over three years, while rents could rise sharply as supply is reduced. SQM adds that two official interest rate cuts by January 2020 would see housing prices fall by just 4-8 over three years, as well as lower rent increases.

CORPORATES
SQM RESEARCH PTY LTD, AUSTRALIAN LABOR PARTY, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY