Australian Property

Yesterday we saw some pretty stark divergence between property doyens.

And so it begins.

Following Tuesday’s dwelling approvals data for the June quarter, it’s time once again to plot Australia’s various measures of dwelling construction against population growth, namely: Dwelling approvals to June 2019; Dwelling commencements to March 2019; Dwelling completions to March 2019; and Population change to December 2018.

APRA is out with monthly banking statistics for June, the first clean post-election month.

Via UBS: Implications: house prices set to rise modestly, but activity still set to drop Optimism has returned to housing following the surprise election result, and coordinated policy easing from APRA & the RBA.

In a taste of things to come, residents from Sydney’s Opal Tower, which was evacuated on Christmas Eve amid severe structural cracking, have launched a multi-million dollar class action lawsuit against the NSW Government.

Via CoreLogic, stock on market has fallen right back now: Mortgage issuance is firm though not tearaway, roughly flat year on year: Still looks OK for the L-shaped recovery thesis.

Amid the proliferation of faulty and flammable high-rise apartments across Sydney, it is hard to fathom that the slum lords at the Urban Taskforce want even more: Suburbs across Sydney are scarred with “big, fat, dumb” apartment buildings that provide poor living spaces for residents, according to two of the city’s leading architects.

In the wake of Queensland’s unprecedented apartment construction boom: The faults crisis has now spread to Brisbane, with an owner facing bankruptcy after a serious defect in her new $1.7 million luxury apartment caused thousands of dollars worth of damage.

From the HIA: “New home sales in the June quarter were up by just 0.8 per cent on the preceding quarter.

Via BISOxford: The 2019/20 financial year should represent the trough for total building, with a strong rebound anticipated from 2020/21 onwards as interest rate cuts, easing mortgage serviceability tests and first-home buyer stimulus help facilitate a broad recovery.

From our Chris today: When the RBA slashed its cash rate from 4.75 per cent to 1.5 per cent between 2011 and 2016, it repeatedly argued that this would not trigger a re-leveraging of household balance-sheets and/or a new double-digit house price boom, which is exactly what happened.

CoreLogic Research Analyst, Cameron Kusher, has released analysis examining total investment returns (i.e. value growth and gross rental returns) across Australia’s housing market in 2019-19: Over the 2018-19 financial year, total returns from residential property recorded a fall of -3.3%.

Via S&P: Genworth Australia Ratings Lowered To ‘A’ Under Revised Criteria; Outlook Stable • We view that Genworth Australia’s constrained business diversity and challenging market conditions make it increasingly susceptible to competitive pressures, as reflected in a decline in revenue and earnings over recent years.

From the Q&A yesterday with Phil Lowe: “There has been a significant tightening in lending standards.