REAL ESTATE – AUSTRALIA – RESIDENTIAL

Most economists got house prices wrong last year

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Original article by Larry Schlesinger
The Australian Financial Review – Page: 29 : 4-Jan-23

Data from CoreLogic shows that national dwelling values fell by 5.3 per cent in 2022, while combined capital cities dwelling values were down 6.9 per cent. Leading economists failed to predict the downturn in the housing market; the majority had forecast at the start of the year that there would be at least modest growth in house prices during 2022. Westpac’s Bill Evans had forecast eight per cent growth, while the Commonwealth Bank had anticipated seven per cent growth. National Australia Bank’s chief economist Alan Oster had forecast that house prices would end the year flat.

CORPORATES
CORELOGIC AUSTRALIA PTY LTD,WESTPAC BANKING CORPORATION – ASX WBC,COMMONWEALTH BANK OF AUSTRALIA – ASX CBA,NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Rough year ahead for housing as rates climb

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Original article by Nila Sweeney
The Australian Financial Review – Page: 31 & 32 : 7-Dec-22

The average standard variable interest rate for an existing mortgage loan will rise to 5.86 per cent after the Reserve Bank of Australia increased the cash rare by 25 basis points to 3.1 per cent on Tuesday. Shane Oliver of AMP Capital says the current monetary policy tightening cycle is likely to peak in early 2023, but he cautions that the negative impact of eight rate rises since May will continue to weigh on the housing market well into next year. He expects house prices to fall by another 9-10 per cent, while the number of distressed sales will rise as more borrowers’ fixed-interest rate loan periods expire.

CORPORATES
AMP CAPITAL INVESTORS LIMITED

Housing affordability set to worsen despite falling house prices

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Original article by Nila Sweeney
The Australian Financial Review – Page: Online : 24-Nov-22

The latest ANZ/CoreLogic Housing Affordability report shows that rising interest rates saw the cost of servicing a mortgage surge in the September quarter. The proportion of income needed to repay a new mortgage rose by 4.4 percentage points nationwide, to 43.3 per cent. This metric rose to a record high of 51.1 per cent in Sydney, while it increased by 4.3 per cent to 42.4 per cent in Melbourne. Eliza Owen of CoreLogic says mortgage serviceability is likely to worsen given that further increases in the cash rate are expected.

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

Brisbane house prices set to fall 15pc: ME Bank

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Original article by Nila Sweeney
The Australian Financial Review – Page: 33 : 28-Oct-22

ME Bank now expects dwelling prices across Australia’s capital cities to fall by a larger margin than it had forecast in June. House prices in most capital cities have fallen sharply since the Reserve Bank started tightening monetary policy in May. ME Bank’s chief economist Peter Munckton says Brisbane house prices in particular have fallen more quickly than expected in recent months. ME Bank expects house prices in the Queensland capital to fall by 15 per cent from peak to trough, compared with its June forecast of an eight per cent decline.

CORPORATES
ME BANK, RESERVE BANK OF AUSTRALIA

Homeowners rush to refinance their loans

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Original article by Patrick Commins
The Australian – Page: 4 : 5-Oct-22

Data from the Australian Bureau of Statistics shows that a record $19bn worth of home loans were refinanced in August. This is five per cent higher than in July, and 10 per cent higher than a year ago. Owner-occupiers refinanced some $12.8bn worth of home loans, while property investors refinanced $6.1bn worth of loans. The figures also show that new mortgage loan commitments fell 3.4 per cent to $27.4bn in August; there has been a 15 per cent decline in housing loan commitments since the Reserve Bank started increasing the cash rate in May.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS

Inner-city suburbs fall to pre-COVID levels

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Original article by Nila Sweeney
The Australian Financial Review – Page: 35 : 24-Aug-22

CoreLogic has identified 11 inner suburbs of Sydney in which the median house price is now lower than prior to the COVID-19 pandemic. The list is headed by Darlinghurst and Surry Hills, where the median price has fallen by 6.7 per cent and 6.5 per cent respectively since March 2020. The median house price in 46 inner suburbs of Melbourne has also fallen since the onset of the pandemic. This includes a 14.2 per cent decline in South Melbourne and a 12.3 per cent fall in St Kilda. Eliza Owen of CoreLogic says prices in more suburbs are likely to fall below pre-COVID levels as the housing market downturn gathers pace.

CORPORATES
CORELOGIC AUSTRALIA PTY LTD

One in five mortgagors will struggle to pay 3pc rate rise

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Original article by Nila Sweeney
The Australian Financial Review – Page: 29 & 30 : 10-Aug-22

Comparison site Finder estimates that the average mortgage interest rate would rise to 5.85 per cent if the cash rate reaches 2.5 per cent. Finder’s Richard Whitten says recent home buyers in particular will struggle to make mortgage repayments if the cash rate continues to rise. A survey by Finder has found that one in five people with a mortgage would find it hard to make repayments if their interest rate increased by three per cent, while many would consider selling their home. SQM Research MD Louise Christopher cautions that selling in a downturn would be an added challenge for distressed home owners.

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FINDER.COM.AU, SQM RESEARCH PTY LTD

House prices going south at record rate

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Original article by Nick Lenaghan
The Australian Financial Review – Page: 29 & 32 : 16-Jun-22

Investment bank Jarden is bearish about the outlook for Australia’s housing market. The firm says house prices could fall by 15-20 per cent from peak to trough, including a decline of around five per cent by the end of 2022. Chief economist Carlos Cacho says the prospect of higher interest rates will accelerate the downturn in the housing market, and he warns that Melbourne and Sydney are likely to experience an even large decline in dwelling prices. Cacho also anticipants a sharp decline in building approvals.

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JARDEN AND COMPANY

Housing market hits record $9.9 trillion

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Original article by Nila Sweeney
The Australian Financial Review – Page: 39 : 16-Mar-22

The Australian Bureau of Statistics estimates that the total value of the nation’s housing stock rose to a new high of $9.9 trillion in the December quarter. This is $512.6 billion higher than in the previous three months, with growth of 4.7 per cent in national dwelling values. Brisbane recorded 9.6 per cent growth in housing values during the December quarter, while Adelaide and Melbourne recorded growth of 6.8 per cent and 3.9 per cent respectively; however, growth in Sydney slowed to 4.1 per cent. Meanwhile, dwelling prices rose by 23.7 per nationally in the year to December.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS

Construction costs rise at fastest pace since 2005

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Original article by Michael Bleby
The Australian Financial Review – Page: 29 : 9-Feb-22

CoreLogic has warned that residential construction costs are likely to rise further in the March quarter, citing factors such as ongoing supply chain disruptions. The firm’s Cordell Construction Cost Index rose by just 1.1 per cent in the final three months of 2021, compared with 3.8 per cent in the September quarter. The index rose by 7.3 per cent in the year to December, its highest annual increase since March 2005. Tim Lawless of CoreLogic says the big rise in annual construction costs might increase the cost of new homes and renovations, which may in turn put upward pressure on inflation.

CORPORATES
CORELOGIC AUSTRALIA PTY LTD