Australian Property

While most sectors of the Australian economy are being hit hard by COVID-19, Australia’s protected property development industry are grinning with both the Victorian and New South Wales governments relaxing planning rules and ‘red tape’ to spur development.

With stamp duty revenues collapsing and a renewed focus on productivity, political support is building to swap stamp duties for land taxes: Australian Greens leader Adam Bandt said the COVID-19 crisis had revealed the flaws behind stamp duty.

Last month, Geoff Hanmer – Adjunct Lecturer in Architecture at UNSW – claimed that proposed NSW Government reforms to building certification will let dodgy developers off the hook: The News South Wales government is struggling to implement building industry reforms recommended by the Shergold-Weir report over two years ago.

A survey of property professionals conducted on CoreLogic’s RP Data platform over the past two weeks found that 82% of residential property managers have seen a rise in requests from tenants wanting to defer rent payments because of COVID-19.

Here it comes.

Here’s the base case: Bartho has the less sanguine version: The differences in outcomes between the scenarios are stark…the losses of output will be unpalatable if the worst-case scenario plays out.

Via CoreLogic comes the weekly leading indicators: Auctions awful, except for Sydney where breaking the law is OK.

CoreLogic has released its Quarterly Rental Review, which reveals that rental growth decelerated over the March quarter prior to the coronavirus lockdown: National rents increased 0.3% over the month of March, and 1.2% on a quarterly basis to be 1.4% higher over the year.

Via S&P: The Standard & Poor’s Performance Index (SPIN) for Australian prime mortgages increased to 1.41% in February from 1.36% a month earlier.

Via Moody’s: “We changed our outlook for the broader Australian banking system to negative in early April, reflecting our view that the economic impact of coronavirus-related disruptions will strain banks’ loan performance,” says Tanya Tang, a Moody’s Analyst.

CoreLogic’s head of research, Eliza Owen, has penned an interesting report looking at the “relative resilience of property values”: So far, the COVID-19 downturn has had a dramatic impact on agent activity and listings volumes in residential real estate.

A good piece from Gottiboff today: Meriton’s Harry Triguboff say apartment rents have fallen 10 per cent because people simply can’t pay.

The Liberal Party’s chief Senate whip, Dean Smith, has called for property investor mortgages to be converted to interest-only in order to free up disposable income and prevent the property market from falling into a tailspin: [Smith] said up to 730,000 interest-only loans will expire this year and be converted to principal and interest.

Via Martin North: In our surveys we asked two questions.

For years we witnessed “experts” try to gaslight the population into believing that the epic boom in house prices in Sydney and Melbourne was not driven, to a large extent, by mass immigration.

Frickin awesome, at the AFR: In Sydney, listings jumped 15 per cent while Melbourne notched up a 14 per cent rise.

Via HIA: “New home sales fell sharply in March as consumer confidence declined to be down 23.2 per cent compared to the previous month,” stated HIA’s Chief Economist, Tim Reardon.