REAL ESTATE – PRICES – AUSTRALIA

Rate cuts, not supply, the key to house prices

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Original article by Matthew Cranston
The Australian Financial Review – Page: 5 : 12-Mar-19

Reserve Bank of Australia analysts Trent Saunders and Peter Tulip have concluded that monetary policy has the biggest impact on house prices and the level of construction activity. They argue that historically low interest rates have been the major driver of rising house prices in recent years, while factors such as construction costs and population growth have had a smaller impact. In contrast, RBA governor Philip Lowe recently suggested that housing supply has been the major influence on prices.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Gillespie predicts RBA will trim rates as house prices fall

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Original article by Natasha Gillezeau
The Australian Financial Review – Page: 28 : 21-Feb-19

Brett Gillespie of Ellerston Capital estimates that there is a 30 per chance that the Reserve Bank of Australia will reduce official interest rates in April. In contrast, financial markets are currently pricing in a six per cent chance of a rate cut. Gillespie expects a further downturn in house prices in the near-term, which may prompt the central bank to ease monetary policy prior to the federal election. The RBA adopted a more dovish tone on interest rates at its February meeting, after signalling in December that rates were more likely to go up than down.

CORPORATES
ELLERSTON CAPITAL PTY LTD, RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD

Reality bites for million-dollar club

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Original article by Mackenzie Scott, Remy Varga
The Australian – Page: 1 & 6 : 15-Feb-19

New data shows that just 649 suburbs across Australia now boast a median house price of $1m, compared with 741 in January 2018. There are now 366 suburbs in New South Wales where the median price exceeds $1m, while there are 129 such suburbs in Victoria. Nerida Conisbee, the chief economist at realestate.com.au, says price rises in recent years were unsustainable and some suburbs simply did not belong in the million-dollar price bracket.

CORPORATES
REALESTATE.COM.AU, CORELOGIC AUSTRALIA PTY LTD

Housing bust, lower wages hit retail sales

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Original article by David Uren
The Australian – Page: 2 : 6-Feb-19

Data from the Australian Bureau of Statistics shows that retail sales fell by 0.4 per cent in December, while sales grew by just 0.1 per cent in the December quarter. The figures also show that Western Australia is the only state that did not experience a decline in retail sales during December. Gareth Aird of the Commonwealth Bank says consumer spending is being affected by the downturn in the housing market. He notes that this is particular evident in New South Wales, where house prices have fallen the most and retail sales were down 1.1 per cent in the December quarter.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESERVE BANK OF AUSTRALIA

Banks, rules to blame for house prices

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Original article by Michael Bleby, Su-Lin Tan
The Australian Financial Review – Page: 5 : 1-Feb-19

Chris Richardson of Deloitte Access Economics claims that both the banks and regulators are to blame for the current decline in house prices. He says that regulators were too slow to realise that record low interest rates were causing the housing market to overheat, while the banks suddenly went from being too generous with their credit to being too stingy. Figures released by the Reserve Bank on 31 January show that lending to owner-occupier borrowers grew by just 6.5 per cent in 2018, the weakest annual rate since 2014.

CORPORATES
DELOITTE ACCESS ECONOMICS PTY LTD, RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC

Housing faces year of downturn

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Original article by Turi Condon
The Australian – Page: 17 : 25-Jan-19

National Australia Bank now expects dwelling prices in Sydney and Melbourne to fall by 15 per cent from peak to trough. NAB’s latest survey of property industry professionals shows that respondents generally expect New South Wales and Victoria to incur the biggest fall in housing prices over the next several years, although prices are also tipped to fall or remain flat outside of the two largest capitals. NAB’s separate survey of consumers shows that they are more upbeat about the outlook for the housing market than property professionals.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, CREDIT SUISSE (AUSTRALIA) LIMITED, CORELOGIC AUSTRALIA PTY LTD, AMP CAPITAL INVESTORS LIMITED

Prices of big city houses to fall 25pc

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Original article by Melissa Yeo
The Australian – Page: 26 : 24-Jan-19

Shane Oliver of AMP Capital says residential property prices in Melbourne and Sydney could fall by up to 25 per cent from peak to trough. Oliver had previously flagged a potential fall of up to 20 per cent, and he has warned that the downturn in the housing market could impact on Australia’s economic growth. Oliver also expects the Reserve Bank to reduce the cash rate by 25 basis points in August and November, although he says weak economic data could prompt it to move sooner.

CORPORATES
AMP CAPITAL INVESTORS LIMITED, RESERVE BANK OF AUSTRALIA, CORELOGIC AUSTRALIA PTY LTD, KPMG AUSTRALIA PTY LTD, DEMOGRAPHIA

The great Aussie dream severely unaffordable

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Original article by Ben Wilmot
The Australian – Page: 17 : 23-Jan-19

Demographia’s latest International Housing Affordability survey shows that residential property in Australia’s five largest capital cities remains expensive, relative to income. Sydney now ranks third behind Hong Kong and Vancouver among the least affordable housing markets of the 91 that were surveyed; Sydney’s median house multiple is 11.7, ahead of Melbourne with a median multiple of 9.7. Gladstone and Rockhampton are now the most affordable housing markets in Australia, with median multiples of 3.2 and 3.9 respectively.

CORPORATES
DEMOGRAPHIA

Open loan books, banks told

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Original article by Michael Roddan
The Australian – Page: 1 & 4 : 3-Jan-19

The national dwelling price fell by 4.8 per cent in 2018, according to data from CoreLogic, with prices in Sydney and Melbourne falling by 8.9 per cent and seven per cent respectively. Federal Treasurer Josh Frydenberg says the nation’s banks must continue to provide home buyers with access to credit, adding that Labor’s proposed negative gearing reforms would deepen the downturn in the housing market. Meanwhile, Shane Oliver of AMP Capital expects house prices in Sydney and Melbourne to fall by another 10 per cent in 2019.

CORPORATES
CORELOGIC AUSTRALIA PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, AMP CAPITAL INVESTORS LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF AUSTRALIA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, FINDER.COM.AU, BANKWEST, WESTPAC BANKING CORPORATION – ASX WBC, ST GEORGE BANK LIMITED, BANK OF MELBOURNE LIMITED, BANK OF SOUTH AUSTRALIA LIMITED

Leading researcher pours cold water over link between property prices and the economy

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Original article by
abc.net.au – Page: Online : 12-Dec-18

Australian house prices have fallen 9.5 per cent from their peak in July 2017, and some economists have forecast a peak-to-trough decline of up to 15 per cent. Roy Morgan CEO Michele Levine discusses the outlook for residential property prices on Radio National. She says the recent downturn in house prices is primarily due to stricter lending criteria rather than a decline in demand for housing. Levine also discusses issues such as mortgage stress and whether a fall in house prices has an impact on consumer confidence.

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ROY MORGAN LIMITED