The National Australia Bank says it doesn’t expect the RBA to make a cut in interest rates next month... Stockland boss foresees “golden decade” of housing growth… Renovations set to struggle this year… Foreign investment is important to Aussie property industry…
Stockland boss foresees “golden decade” of housing growth
The chief executive of one of Australia’s biggest builders of homes says that we are entering a “golden decade”. Stockland’s Mark Steinert said it would be five or six years before enough homes are built on Sydney to meet demand. Steinert was speaking at an event held by the Committee for Economic Development of Australia and said that tackling the undersupply of homes in Sydney was critical and that Melbourne also needed more building. As the new president of the Property Council of Australia the Stockland boss will be keen to move the process of new development along faster; he told the CEDA meeting that opposition to proposed housing developments delayed proceedings but until supply issues can be addressed then affordability will continue to be a problem.
Renovations set to struggle this year
The Housing Industry Association says that while new home building picked up in the last year, renovations struggled and while do so for the rest of this year. HIA Senior Economist Shane Garrett said of last year’s sluggish renovations activity: “This represented a continuation of the slump which has blighted the sector since 2011. Over the past three years, the volume of renovations activity has dropped by 15 per cent.” Economic uncertainty and slow wages growth are among the factors keeping renovations lower. The autumn edition of HIA’s Renovations Roundup envisages a further decline of 2.8 per cent in renovations activity during 2015. However it forecasts an 8.2 per cent uplift between 2015 and 2018, as a result of low interest rates and the gradual recovery of economic activity.
Foreign investment is important to Aussie property industry
Foreign investment is an essential ingredient in Australia’s property industry that helps drive new residential supply and ease pressure on housing affordability, according to the latest ANZ/Property Council Survey. The poll asked more than 1800 developers what proportion of residential property sales were to foreign investors and revealed that 22 per cent were. Property Council of Australia chief executive Ken Morrison commented: “The only way to improve housing affordability is to get more housing on the ground earlier, and foreign investment is a key ingredient in making this happen.” ANZ Chief Economist Warren Hogan said the foreign investment was playing a key role in boosting housing construction: “Low interest rates, increasing home prices and solid population gains, look to be buoying expectations of increased housing construction activity in the coming year.”