New home sales in Australia rose last month thanks to strong improvements in housing markets in New South Wales, Victoria and Queensland markets, figures show.
The latest Housing Industry Association's (HIA) new home sales survey shows sales of new homes and units by Australia's largest builders and developers rose by 1.3 per cent in October to 7434 dwellings.
That followed a fall of 3 per cent to a 21 month low of 7342 dwellings in September.
The survey also found that new house sales increased by 4.6 per cent in October while sales of multi-unit fell by 16 per cent.
HIA executive director of economics and housing Simon Tennent said the results reflected the dual nature of the nation's economic growth and housing affordability across the states.
"New home sales were resilient in the eastern states as house prices continue to grow in line with consumer prices," he said.
New South Wales, Victoria and Queensland detached housing sales were up strongly, while the accelerating house prices and land constraints in Western Australia meant the new home sales market continued to struggle, he said.
In October, detached house sales fell by 21.9 per cent in WA and 0.9 per cent in South Australia but rose by 16.7 per cent in NSW, 15 per cent in Victoria and 8.5 per cent in Queensland.
"The real test will be in the first quarter of 2007 when the combined affect of three interest rate rises start to squeeze household budgets, particularly in the resource-poor states," Mr Tennent said.
The Reserve Bank of Australia lifted interest rates this month by 25 basis points to 6.25 per cent.
That followed hikes by the same amount in May and August.
Economists say it is not likely that the RBA will lift rates again at the first board meeting of the year in February as the RBA will want to see how the three hikes have trickled through the economy.
Source: AAP
Sunday, December 03, 2006
Monday, October 30, 2006
Mortgage shoppers tipped that rents to skyrocket
Mortgage shoppers and first time home buyers have been warned that rents will skyrocket over the next five years due to a housing shortage across the country, an economic forecaster said.
Research firm BIS Shrapnel said it expects national building commencements to fall for a third straight year, dropping five per cent to 142,500 new homes in 2006/07 following a four per cent drop in 2005/06.
BIS Shrapnel senior project manager Jason Anderson said such a result would inflame the country's already tight rental market, which is meeting increased demand from a growing population. "Rental markets throughout Australia are as tight as a drum, with vacancy rates in all capital cities below 2.5 per cent as at June 2006," he said. "With the supply of new dwellings decreasing, rental markets are set to tighten even further in 2007 and 2008."
Mr Anderson said strong population growth supported by increased overseas migration would push demand for new homes, particularly for rental property use, up to about 165,000 in 2006/07, leaving a shortfall of about 22,500 homes.
As a result, rents in Sydney are forecast to rise five per cent this year and by as much as 40 per cent in the next five years."
The extreme undersupply in the Sydney market will trigger a substantial and extended adjustment to residential rentals," he said. New housing starts are expected to fall in all states across the country as a result of limited land supply for new housing development and a predicted rise in interest rates.
Housing starts are tipped to drop nine per cent in both Victoria and South Australia, eight per cent in the Northern Territory, six per cent in Tasmania, five per cent in the ACT, four per cent in Western Australia, and three per cent in both NSW and Queensland.
But while the shortage of housing will squeeze those in the rental market, Mr Anderson said a rise in rents, particularly in Sydney, is needed to encourage investors back into the market. "A very large increase in rents is required to improve yields on residential property in order to draw investors back into the market and push up the number of new dwellings back towards underlying demand," he said.
Source: AAP
Research firm BIS Shrapnel said it expects national building commencements to fall for a third straight year, dropping five per cent to 142,500 new homes in 2006/07 following a four per cent drop in 2005/06.
BIS Shrapnel senior project manager Jason Anderson said such a result would inflame the country's already tight rental market, which is meeting increased demand from a growing population. "Rental markets throughout Australia are as tight as a drum, with vacancy rates in all capital cities below 2.5 per cent as at June 2006," he said. "With the supply of new dwellings decreasing, rental markets are set to tighten even further in 2007 and 2008."
Mr Anderson said strong population growth supported by increased overseas migration would push demand for new homes, particularly for rental property use, up to about 165,000 in 2006/07, leaving a shortfall of about 22,500 homes.
As a result, rents in Sydney are forecast to rise five per cent this year and by as much as 40 per cent in the next five years."
The extreme undersupply in the Sydney market will trigger a substantial and extended adjustment to residential rentals," he said. New housing starts are expected to fall in all states across the country as a result of limited land supply for new housing development and a predicted rise in interest rates.
Housing starts are tipped to drop nine per cent in both Victoria and South Australia, eight per cent in the Northern Territory, six per cent in Tasmania, five per cent in the ACT, four per cent in Western Australia, and three per cent in both NSW and Queensland.
But while the shortage of housing will squeeze those in the rental market, Mr Anderson said a rise in rents, particularly in Sydney, is needed to encourage investors back into the market. "A very large increase in rents is required to improve yields on residential property in order to draw investors back into the market and push up the number of new dwellings back towards underlying demand," he said.
Source: AAP
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