Tag Archives: australia
New home building sector in Australia sees three years of growth
The new home building sector is the star performer of the Australian economy having seen three years in a row of growth, according to the Housing Industry Association (HIA), the voice of Australia’s residential building industry. The latest data from the Australian Bureau of Statistics show that despite a modest decline in new dwelling commencements in the June 2015 quarter, there was still a record number of 211,976 new homes started in 2014/2015, an increase of 16.9%. ‘That is a phenomenal result which caps three consecutive years of growth for new home building, only the fifth time in the last 60 years that this feat has been achieved,’ said HIA chief economist Harley Dale. ‘Through its broad reach the new home building sector has delivered a strong economic dividend to Australia during a period when many other sectors of the economy have struggled,’ he pointed out. He also explained that while new dwelling commencements will fall in 2015/2016 they should remain elevated at what would still be the second highest level on record. ‘The key to the short term prospects for new home building is how much work in the pipeline is converted into actual activity and it’s not coming through as quickly now. An orderly decline in commencements in 2015/16 remains the most likely outcome,’ Dale added. A breakdown of the figures shows that there were 53,314 dwellings commenced during the June 2015 quarter, a decline of 3.2% from an upwardly revised March quarter. Detached house commencements fell by 2.9% to 28,046, while ‘other dwelling’ commencements declined by 4.9% to 24,482. But there are regional differences. New dwelling commencements increased in South Australia by 12% in the quarter, by 54% in Tasmania and by 76.4% in the Australian Capital Territory. But they fell by 1.6% in New South Wales, by 0.5% in Victoria, by 9.6% in Queensland, by 10.5% in Western Australia and by 36.1% in the Northern Territory. Meanwhile, the latest data shows that prices growth for land for building new homes has eased off slightly. The latest HIA-CoreLogic RP Data Residential Land Report shows there was some relief from the tight conditions in Australia’s residential land market in the June 2015 quarter. National residential land sales increased by 17.6% while the weighted median residential lot price increased by 0.6% over the quarter to 5.2% higher than 12 months earlier. ‘A rise in land sales was accompanied by an easing off in the pace of price increase in Australia’s residential land market. This compares with previous quarters which saw strong price increases amid declining land sales,’ said HIA economist, Diwa Hopkins. ‘While the June quarter result is an encouraging development, what needs to occur is similar results being sustained over the longer run. That is, a larger and more consistent flow of shovel-ready land needs to be brought online,’ she explained. ‘For this to happen, policy reform needs to address the key land supply bottlenecks including unnecessarily long planning delays, slow… Continue reading
Australian capital city rents see slowest annual growth ever
Weekly rental rates in Australian capital cities were unchanged in September but in the last three months have risen at their slowest annual pace ever. Indeed, the latest CoreLogic RP data report shows that the annual pace of rental growth across all capital cities is at a new record low of 0.5% in the year to September. Despite recording the strongest growth, Melbourne rents rose just 2.1% over the year and rents have fallen over the year in Perth and Darwin. They have increased by just 0.3% over the first three quarter of the year. Overall the combined capital city rental rates are recorded at $487 per week for houses and $462 per week for apartment units and the firm says that it is anticipated that the rate of rental growth will continue to slow over the coming months due to increased supply of housing and rental stock and slower migration rates. The report points to an ongoing softening of rental growth and explains that the construction boom across the capital cities coupled with slowing population growth, low mortgage rates and the heightened level of activity from investors are the major contributing factors to the slowing rental growth. Three of the cities which have seen the largest growth in new housing supply and investor activity over recent years; Sydney, Melbourne and Brisbane, have continued to record rental rises over the past year however, each city is seeing a slowing in the pace of rental growth. ‘It is clear that the increase in investment stock is providing landlords with little scope to lift rental rates while the low mortgage rate environment provides little incentive to push yields higher,’ the report says. Looking across the individual capital cities, over the past year, Sydney and Melbourne have recorded the greatest increases in weekly rents however, their rates of growth have slowed relative to a year ago. Over the past month, weekly rents have moved lower across every capital city except Sydney where they were unchanged and in Melbourne and Hobart where they rose. Continue reading
More foreign developers are entering the Australian apartment market
Foreign buyers are fuelling higher density development sites sales across major Australian cities, according to a new analysis report. As state governments have encouraged higher density living by re-zoning key sites around infrastructure hubs, opportunities for developers have been ample over recent years, according to the report from Knight Frank. With the outlook for the Australian Dollar lower than originally forecast, more foreign developers are now taking this opportunity to enter the Australian market, it adds. Sales of major sites likely for higher density residential development in the four major capital cities of Australia totalled $7.30 billion in the year ending August 2015, down 5.7% on the previous year’s volume. However, Greater Sydney is still experiencing upward growth in sales volume, although the prior steep upward trajectory achieved in the year to 31 August 2014 is flattening out. A total $4.61 billion sales were recorded over the year to August 2015, when almost 63%, by value, was sold to foreign purchasers. Across Greater Sydney, development sites sales with potential for higher density ranged from $60,000 to $400,000 per apartment, excluding the Central Business District, while the range extended out significantly in the CBD to $350,000 to $1,000,000 per apartment. Site sales volumes have fallen over the course of the past year for the remaining major capital cities after strong results over the two years to August 2014. Sales volume in Greater Melbourne totalled $1.79 billion in the year to August 2015. Site sales averaged $35,000 to $200,000 per apartment, excluding the CBD, where 47.6% of these sales, by value, were sold to foreign purchasers. The volume of site sales in Greater Brisbane at $685.85 million and Greater Perth at $213.36 million saw foreign investment, by value, at 58.6% and 64.6%, respectively. Both cities have a similar sales rate range when excluding the CBD starting from $30,000 to $110,000 per apartment for Greater Brisbane, while Greater Perth ranges slightly wider from $20,000 to $120,000 per apartment. Since January 2011 some 123,815 new apartments have been added to the major capital cities residential stock, led by Greater Sydney with 46,490 and Greater Melbourne with 41,045. In total across the major cities, there are currently 80,135 apartments under construction, with another 125,060 with DA approval which have the potential to be online by the end of 2018. The report suggests that apartment numbers could grow further when approval is granted for the additional 86,430 apartments currently submitted in these cities. ‘As determined by pre-sales, the market dictates when new apartment projects get underway, so for most local developers, there is a strong chance that these projects may be pushed beyond this timeframe, the report explains. Prices for new apartments can vary considerably, with the most disparity seen in Greater Sydney with a range from $9,000 to $22,000 per square meter for a standard finish up to $32,000 to $45,000 per square meter for prime. A standard finish apartment in Greater Melbourne will range from $6,500 to $13,500 per… Continue reading
