REAL ESTATE – PRICES – AUSTRALIA

Value of housing takes a $70bn hit

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Original article by Turi Condon, Mackenzie Scott
The Australian – Page: 2 : 12-Dec-18

Official data shows that the mean value of an Australian home fell by about $9,700 in the September quarter, to $675,000. The total value of the 10.1 million dwellings in Australia declined by $70.1bn in the quarter, to $6.8trn. The Australian Bureau of Statistics data also shows that dwelling prices in Melbourne fell by 2.6 per cent in the quarter and by 1.5 per cent year-on-year, while Sydney recorded falls of 1.9 per cent and 4.4 per cent respectively.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, GOLDMAN SACHS AUSTRALIA PTY LTD, CORELOGIC AUSTRALIA PTY LTD, ERNST AND YOUNG

Affordability issue persists in spite of falls

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Original article by Su-Lin Tan
The Australian Financial Review – Page: 33 : 7-Dec-18

The proportion of income needed to meet mortgage repayments fell by 0.8 per cent Australia-wide in the September quarter, according to the latest Adelaide Bank/REIA Housing Affordability Report. However, despite falling house prices, particularly in Sydney and Melbourne, housing affordability is down when compared to 2017. UBS has suggested that a looming credit crunch and more stringent lending conditions could restrict future buyers to loans that are no more than six times their household income; this means housing affordability may not improve even if house prices continue to fall.

CORPORATES
UBS HOLDINGS PTY LTD, MIRVAC GROUP – ASX MGR, STOCKLAND – ASX SGP, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, THE REAL ESTATE INSTITUTE OF AUSTRALIA LIMITED, ADELAIDE BANK

House prices to dive 10pc more: Ellerston

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Original article by Yolanda Redrup
The Australian Financial Review – Page: 27 : 5-Dec-18

Brett Gillespie of Ellerston Capital is bearish about the outlook for Australia’s residential property market, forecasting that house prices will eventually fall by an additional 10 per cent. He adds that this could occur much more rapidly if Labor wins the 2019 federal election and implements its proposed changes to the negative gearing regime. Gillespie says a 4-5 per cent fall in house prices would be necessary to 4 to 5 per cent to offset the impact of the negative gearing reforms.

CORPORATES
ELLERSTON CAPITAL PTY LTD, AUSTRALIAN LABOR PARTY, CORELOGIC AUSTRALIA PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD

Housing drop near worst on record

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Original article by Turi Condon
The Australian – Page: 3 : 30-Nov-18

Data from CoreLogic shows that residential property prices in Sydney have fallen by 1.3 per cent so far in November, the biggest monthly decline in 14 years. The firm now expects Sydney house prices to fall by 15 per cent from their peak. Tim Lawless of CoreLogic says the outlook for the housing market is unlikely to improve in the near-term, although he does not anticipate an increase in distressed sales. Meanwhile, Housing Industry Association data shows that sales of new homes fell by 10 per cent year-on-year in the three months to October.

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

Perth tipped to top house price growth

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Original article by Ingrid Fuary-Wagner
The Australian Financial Review – Page: 30 : 29-Nov-18

Domain economist Trent Wiltshire is upbeat about the residential property market in Perth, forecasting a five per cent increase in house prices during 2019. He cites factors such as a growing economy, a rising population, the development of new mines in the state and stronger commodity prices. Domain also forecasts that house prices in Melbourne will decline by one per cent in 2019 and Sydney prices will remain flat; prices in both cities are then tipped to rise by four per cent in 2020.

CORPORATES
DOMAIN HOLDINGS AUSTRALIA LIMITED – ASX DHA, RESERVE BANK OF AUSTRALIA, SQM RESEARCH PTY LTD, QBE INSURANCE GROUP LIMITED – ASX QBE, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

House prices could fall 20pc: ANZ

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Original article by Turi Condon
The Australian – Page: 27 : 23-Nov-18

The ANZ Bank is bearish about the outlook for the residential property market in Melbourne and Sydney, forecasting that house prices will fall by 15-20 per cent from their peak. ANZ expects increased lending restrictions to weigh on the property market, while other potential headwinds include the federal election due in 2019 and the final report of the financial services royal commission. ANZ also expects official interest rates to remain on hold until 2020.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF AUSTRALIA, HSBC AUSTRALIA HOLDINGS PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, MACQUARIE SECURITIES PTY LTD

Negative gearing changes would create distortions

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Original article by Ingrid Fuary-Wagner
The Australian Financial Review – Page: 34 : 13-Nov-18

RiskWise CEO Doron Peleg contends that Labor’s proposed negative gearing reforms would create a two-tiered property market. Economist Stephen Koukoulas believes that concerns about Labor’s proposals are unwarranted, as any fall in house prices that might result will make it easier for first-home buyers to enter the market. Tyrone Hodge of JLL thinks the proposed changes could have a negative impact on housing supply.

CORPORATES
RISKWISE, AUSTRALIAN LABOR PARTY, JONES LANG LASALLE AUSTRALIA PTY LTD, RESERVE BANK OF AUSTRALIA

Australia most exposed to a downturn

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Original article by John Kehoe
The Australian Financial Review – Page: 3 : 31-Oct-18

Morgan Stanley has warned that Australia is at greater risk of an economic downturn than other Group of 10 nations due to rising household debt. The household debt-to-income ratio in Australia has risen to nearly 200 per cent amid the surge in house prices in recent years. Meanwhile, although house prices have fallen over the last 12 months, the Reserve Bank’s assistant governor Michele Bullock says a regulatory crackdown on lending to investors has not resulted in a significant downturn in the property market.

CORPORATES
MORGAN STANLEY AUSTRALIA LIMITED, RESERVE BANK OF AUSTRALIA, HSBC AUSTRALIA HOLDINGS PTY LTD, DELOITTE ACCESS ECONOMICS PTY LTD, AUSTRALIAN LABOR PARTY

Alarm bells in housing as losses widen

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Original article by Elizabeth Redman
The Australian – Page: 17 & 21 : 30-Oct-18

UBS has reported that the percentage of capital city apartments that are being resold at a loss when compared to their previous purchase price has risen to 14.3 per cent, the highest since the 1990s. UBS also notes one in three homes sold off the plan in Sydney have a lower valuation at settlement when compared to the original sale price. Meanwhile, Fragrance Group has abandoned plans for an apartment project at 555 Collins Street in Melbourne. The site has been sold to a Charter Hall fund with the expectation that it will now be used for an office tower.

CORPORATES
UBS HOLDINGS PTY LTD, FRAGRANCE GROUP LIMITED, CHARTER HALL GROUP – ASX CHC, MOODY’S ASIA-PACIFIC LIMITED, AMP CAPITAL INVESTORS LIMITED, MORGAN STANLEY AUSTRALIA LIMITED

House prices about 30pc inflated with a loan cap

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Original article by Su-Lin Tan
The Australian Financial Review – Page: 38 : 16-Oct-18

Modelling by LF Economics suggests that house prices in Sydney and Melbourne could be "overinflated" by up to 30 per cent if mortgage loans were capped at 30 per cent of household income. Other capital city house prices are not as inflated under LF Economics’ modelling, which used data from CoreLogic and the Australian Bureau of Statistics. The modelling is line with other forecasts that Sydney and Melbourne house prices are set to continue to decline.

CORPORATES
LF ECONOMICS, CORELOGIC AUSTRALIA PTY LTD, AUSTRALIAN BUREAU OF STATISTICS, BRONTE CAPITAL MANAGEMENT PTY LTD, VARIANT PERCEPTION