Australian Property

By Leith van Onselen Following on from Houses & Holes’ post earlier this morning on the CBA’ pump and hike strategy, I want to focus on the claim made by chief Ian Narev that Sydney and Melbourne house values would continue to be supported by an imbalance of demand and supply.

By Leith van Onselen They are only 18 years too late, but it has finally dawned on the Reserve Bank of Australia (RBA) that Australia’s obsession with housing is not actually healthy for the economy and has merely robbed younger Australians of their future.

From the AFR: Mr Hockey’s announcement about the properties in Sydney’s Eastwood, Fairfield and Mosman, Brisbane’s Eight Mile Plains and Perth’s Kewdale….But the Treasurer could actually be making those owners money.

By Leith van Onselen The Housing Industry Association (HIA) has today released its Winter 2015 National Outlook, which once again forecasts the peak of Australia’s dwelling construction boom this year before recording a 7.0% decline in dwelling starts next year followed by a further decline of 8.6% in 2016/17.

The sudden deflation of the Chinese yuan is throwing up all sorts of questions around asset classes and one of them is what it will do to the Chinese trade in Australia’s existing housing stock both legal and illegal.

By David Collyer, cross-posted from Prosper Australia: The Australian people are being distracted from the main game by a mad side-show over foreign nationals buying our land.

Says John McGrath: I’d be concerned if Sydney sees another double-digit growth.

I noted last week an unusual break in the RPData leading mortgage index and it has been born out this week with further sharp falls: As I noted last week, the seasonal pattern is for the winter dip in activity to level out above the early year dip around Easter.

By Leith van Onselen Sydney’s speculator frenzy has grown to truly monstrous proportions, with today’s Lending Finance data for June, released by the ABS, once again obliterating all records, with both the value and proportion of mortgages going to New South Wales investors surging to another all time high.

From Joe Hockey yesterday: Press conference, Sydney CPO TREASURER: Ladies and gentlemen, Australia welcomes foreign investment and Australia needs foreign investment but at all times foreign investors must comply with Australian laws.

Core Logic-RP Data released its auction market report yesterday, which revealed a rise in the national auction clearance rate.

By Leith van Onselen Friday’s housing finance data for June showed more clear signs that the dwelling construction cycle is approaching its peak, with the number of commitments for construction and new dwellings slumping by a combined 0.5% in June to be down by 9.1% over the year (see next chart).

By Leith van Onselen The mining bust in Western Australia continues to morph into a housing bust.

By Leith van Onselen The RBA’s Luci Ellis appeared before the parliamentary inquiry into home ownership yesterday and demolished the myth perpetuated by the Property Council of Australia (PCA) and the Abbott Government that negative gearing was being utilised primarily by middle income earners.

From the AFR: The tightening of credit by big banks for apartment developers will prevent an oversupply in the residential market, which might have ended with crashing values, Deloitte Australia’s real estate practice says.

By Leith van Onselen In the week ended 6 August 2015, the Core Logic-RP Data 5-city daily dwelling price index, which covers the five major capital city markets, rose another 0.22% – the eighth consecutive week of rises (see next chart). However, values only rose in Melbourne and Perth (see next chart).

From The Australian: Billionaire James Packer has sold his sprawling Vaucluse mansion for more than $60 million, the highest price ever paid for a property in Australia.

By Leith van Onselen The Business Council of Australia (BCA) has hit the radio waves this morning urging the Government to unwind the 50% capital gains tax (CGT) discount implemented by former Treasurer, Peter Costello, in 1999.