L67 Property Operators and Real Estate Services

No housing crash, just a slowdown say economists

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Original article by Michael Bleby
The Australian Financial Review – Page: 28 : 8-Nov-23

PEXA’s chief economist Julie Toth says the latest increase in the cash rate is likely to result in a pause in house price growth, as was the case at the start of the current monetary policy tightening cycle. However, Toth does not expect house prices to fall, adding that the rate rise is likely to trigger a new wave of mortgage refinancing. Tim Lawless of CoreLogic says the 13th interest rate rise since May 2022 is likely to further dampen consumer sentiment; he notes that consumer confidence has been at "very pessimistic" levels for nearly 18 months and has a close correlation with housing activity.

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PEXA GROUP LIMITED – ASX PXA, CORELOGIC AUSTRALIA PTY LTD

WeWork cuts space despite staying open

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Original article by Nick Lenaghan
The Australian Financial Review – Page: 27 : 8-Nov-23

Co-working pioneer WeWork has advised that its 15 hubs across Australian will remain open, despite its US parent company’s move to file for Chapter 11 bankruptcy. WeWork indicated that it will further rationalise its commercial lease portfolio while it is in bankruptcy, although this process will exclude its locations outside the US and Canada. However, WeWork will scale back the size of two co-working hubs in Sydney and its only site in Perth. A spokesman says it will be "business as usual" for WeWork in Australia. WeWork was estimated to be valued at around $US47bn at its peak, but its market capitalisation has fallen to less than $US50m following a 98 per cent fall in its share price in 2023.

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WEWORK

Star hopes to fetch $200m for Brisbane casino and hotel

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Original article by Larry Schlesinger
The Australian Financial Review – Page: Online : 4-Oct-23

Casino operator Star Entertainment has put its Treasury Casino complex in Brisbane up for sale, with the complex including the Treasury Casino building and the Treasury Hotel building. Both the hotel and the casino will be offered with the potential for vacant possession , with Start to vacate the casino in 2024 when it starts operating its new casino in the nearby $3.6 billion Queen’s Wharf development. Sam McVay from McVay Real Estate and Paul Noonan from JLL have been appointed to handle the sale, with Star hoping to fetch upwards of $200 million.

CORPORATES
THE STAR ENTERTAINMENT GROUP LIMITED – ASX SGR,[SPACE]McVAY REAL ESTATE PTY LTD,[SPACE]JONES LANG LASALLE AUSTRALIA PTY LTD

REAL ESTATE – QUEENSLAND – COMMERCIAL]

Developers scoff at 1.2m homes target

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Original article by Michael Bleby
The Australian Financial Review – Page: 1 & 8 : 13-Sep-23

Housing Minister Julie Collins has told a property summit that the federal government’s target of building 1.2 million new homes in five years is "ambitious but achievable". However, Western Australian property developer Nigel Satterley says that at best about 600,000 to 650,000 dwellings are likely to be completed within this time-frame, citing a labour supply shortage. Melbourne-based developer Tim Gurner agrees that the target will be difficult to achieve, noting that high costs and poor planning laws are also a challenge for the sector.

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First home deposit sizes soar as more parents step up

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Original article by John Collett
The Age – Page: Online : 30-Aug-23

A report from the National Housing Finance & Investment Corporation and the Commonwealth Bank highlights the growing cost of entering the housing market. It shows that average gross household income for first-home buyers with the CBA was about $117,000 in early 2023, while the average purchase price was almost $629,000. Meanwhile, the average deposit for first-home buyers was $159,000; this compares with just $108,400 at the start of 2020. SQM Research MD Louis Christopher says the figures suggest that many people are getting financial help from their parents to buy their first home. This in turn means that people who cannot rely on the so-called ‘bank of mum and dad’ are being locked out of the housing market.

CORPORATES
NATIONAL HOUSING FINANCE AND INVESTMENT CORPORATION – ASX NFI, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, SQM RESEARCH PTY LTD

Homes in 33pc of Sydney now twice the price

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Original article by Nila Sweeney
The Australian Financial Review – Page: 32 : 23-Aug-23

Data from CoreLogic shows that the prices of homes in 12.1 per cent of suburbs across Australia have doubled over the last decade. However, the value of units has increased by a similar amount in just two per cent of suburbs nationwide. CoreLogic’s figures also show that house prices in 163 suburbs in Sydney have more than doubled in the last decade, led by South Turramurra with a gain of 151 per cent in the last 10 years. Meanwhile, Melbourne house prices have doubled in the Mornington Peninsula suburbs of Dromana, Frankston North and Sorrento.

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CORELOGIC AUSTRALIA PTY LTD

New home approvals fall to weakest in four years

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Original article by Michael Bleby
The Australian Financial Review – Page: 30 : 2-Aug-23

Data from the Australian Bureau of Statistics shows that there was a 7.7 per cent decline in new housing approvals in June. A total of 175,790 new dwellings were approved in the year to 30 June, with approvals for detached dwellings falling by 13.8 per cent and attached homes down by 10.5 per cent. Maree Kilroy of Oxford Economics Australia says demand and supply for housing are moving in opposite directions, which will result in a sizeable dwelling deficiency over the coming years. Separate data shows that new home loan commitments fell by 22.1 per cent to $298.4bn in 2022-23.

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AUSTRALIAN BUREAU OF STATISTICS, OXFORD ECONOMICS AUSTRALIA PTY LTD

Housing market on knife edge despite rate pause

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Original article by Nila Sweeney
The Australian Financial Review – Page: 29 & 32 : 5-Jul-23

SQM Research MD Louis Christopher expects sentiment in the housing market to remain cautious in the near-term, despite the Reserve Bank’s latest interest rate pause. He is of the view that sentiment will not improve until there is a longer pause. Shane Oliver from AMP Capital anticipates that any upturn in housing market activity arising from the second interest rate pause since April is likely to be temporary. He adds that further interest rate increases could put renewed downward pressure on house prices.

CORPORATES
RESERVE BANK OF AUSTRALIA, SQM RESEARCH PTY LTD, AMP CAPITAL INVESTORS LIMITED

Higher rates are unlikely to erase house price gains

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Original article by Nila Sweeney
The Australian Financial Review – Page: 30 : 15-Jun-23

Data from CoreLogic shows that house prices rose by 2.3 per cent nationally over the last three months, including 1.2 per cent in May. HSBC’s chief economist Paul Bloxham says factors such as rising interest rates and a slowing economy may affect the pace of growth in house prices but are unlikely to see the market retreat. The ANZ Bank’s senior economist Felicity Emmett notes that factors such as limited supply and strong demand due to immigration is putting upward pressure on housing prices, and this is likely to continue in the near-term.

CORPORATES
CORELOGIC AUSTRALIA PTY LTD, HSBC AUSTRALIA HOLDINGS PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

‘Scary’: Mortgage costs reach critical threshold

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Original article by Nila Sweeney
The Australian Financial Review – Page: 9 : 7-Jun-23

SQM Research’s MD Louis Christopher says the probability of a ‘double dip’ downturn in Australia’s housing market has increased to more than 60 per cent following the Reserve Bank’s decision to increase the cash rate to 4.1 per cent. He notes that SQM’s research in late 2022 found that loan book managers identified a cash rate of about four per cent as the ‘line in the sand’ where many homeowners may be forced to sell. Christopher notes that the number of distressed listings is still quite low, but cautions that this may change as the full impact of the recent rate rises flows through to mortgage holders.

CORPORATES
SQM RESEARCH PTY LTD