Morgan Stanley: Housing boom doomed without rate cuts
You missed the boat. So say Morgan Stanley analysts, who counseled investors in a note Tuesday that the boom is over without further interest rate cuts. The number of apartment units coming onto the market will undermine near-term property price values in inner city areas. The last year has seen 81,000 new approvals, nearly double the average Read the full story here.
Rental vacancy rates creep higher
The national vacancy rate hit 2.2 per cent in SQM Research’s latest report. Rental supply tightened slightly in Melbourne to 2.4 per cent, while Canberra (2.3 per cent) and Darwin (1.4 per cent) also posted monthly drops in vacancies. The market may begin to favor tenants over landlords as the trend continues. The average house rents for $528 in capital cities, and $416 for units. Read the full story here.
The perils of buying property through a SMSF
Fraudsters have been targeting SMSF trustees with property investment scams, warns Australian Crime Commission executive director David Lacey. Confusion about property investment regulation in SMSFs bears some blame, along with attractive incentives up-front – like vacations or dinners -- at the expense of good retirement outcomes. No, you can’t live in a house you bought through your SMSF, nor can other trustees or anyone related to the trustees, no matter how distant the relationship. And no, you can’t use SMSF money to fix a dilapidated home for resale. Read the full story here.
A call to cut stamp duty after states reap tax gains
Stamp duty on sales is strikingly volatile, but NSW, Victoria and Queensland expect to gain $12.5bn in stamp duties between them in 2013-14, rising 25 per cent over four years to $3.16bn, to $15.7bn in 2017-18. The $12.5bn this year comes from dramatic price increases which may not be sustainable over time. Housing Industry Association senior economist Shane Garrett has called for the states to reduce their reliance on stamp duties, which inhibit economic mobility. Read the full story here.
Macquarie chasing cash in the United States for loans in Australia
American investors lent $1.5 billion to Macquarie in five-year bond sales this week; $1 billion at a 2.6 per cent coupon and $500 million more in floating-rate notes. While Macquarie has been expanding its mortgage book aggressively, it’s also moving into the retail lending space and will start offering consumer credit at Coles and Woolworths
. Australians have been reveling in historically-low interest rates, but U.S. rates have been even lower for AAA-grade paper with a five-year Treasury note trading at 1.7 per cent, leading to a robust carry trade. ANZ sold $2.25 billion in bonds in the U.S. last week. Read the full story here.
Sale of the week: zoning changes net eagle-eyed Melbourne homeowners $1 million windfall profit
Three homeowners on Bent St., near the Centre Rd shopping strip and the train station in Melbourne’s Bentleigh area, sold their homes as a package to a Chinese developer after noting recently changed zoning laws. The off-market sale for $5.76 million was about $1.8 million more than could have been expected from separate individual sales. The developer can use their property to build a multifamily building under the changed zoning rules. Read the full story here.
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