Economist says pessimism about housing market is misplaced… Did construction peak in the July quarter?... Property sector shows its value to Victoria’s economy…895 apartments snapped up in just two weeks …
Economist says pessimism about housing market is misplaced
There are plenty of analysts and organisations willing to say that the housing market is out of control and that we are in a bubble but a senior economist says that’s not the case. Frank Gelber, chief economist at BIS Shrapnel says that what we actually have is the upswing part of a property cycle. Writing in The Australian he notes that the years leading up to the current situation of high prices and escalating building were filled with low investment and undersupply. Investment, including the much maligned foreign input, is now underpinning the construction of badly-needed property. Gelber acknowledges that prices are too steep for many, especially those with low incomes; and that it can be hard for first-timers to get on the ladder; however he says that government costs play an important part in this. While there is continued debate about how, why and when things will change Gelber advises that we should let the cycle run its course.
Did construction peak in the July quarter?
New figures show that construction of new homes declined by 1.6 per cent in the September quarter from the quarter before; although it was up 8.6 per cent on the same time in 2013. Renovations were unchanged over the quarter but up 2.8 per cent over the year. Reacting to the preliminary ABS figures, Shane Garrett, chief economist of the Housing Industry Association says: “These figures provide further evidence that the upturn in new home building activity may have peaked during 2014. Australia needs to build about 180,000 homes per year over the longer term to meet its requirements. We have only recently reached this threshold, and the fact that we are moving below it again bodes poorly for the country’s housing prospects.”
Property sector shows its value to Victoria’s economy
The property and construction industry has claimed the title of Victoria’s largest employer and biggest taxpayer in a new report highlighting the importance of the industry to the Victorian economy. The information comes from the Property Council’s Economic Significance of the Victorian Property and Construction Industry Report and executive director Jennifer Cunich says: “Few Victorian industries can claim such a wide array of economic benefits. In fact, no other industry impacts as many areas of the economy as the property and construction industry does.”
895 apartments snapped up in just two weeks
A Melbourne apartment development is almost sold out, having found buyers for 895 apartments in just two weeks. The Aurora Melbourne Central complex comprises 941 residential apartments and 210 serviced units over 92 floors and construction will begin next year. The demand for the apartments was driven by foreign investors who snapped up 75 per cent. Malaysian developer UEM Sunrise says that the intensity of interest was unprecedented but was the result of Melbourne’s reputation as a great place to live and its relative affordability compared to other major cities in the world.
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