The hope of a cut in interest rates tomorrow may be premature. Despite some reports suggesting that the Reserve Bank of Australia may take action this week most economists are continuing to forecast that any cut would not be until later in the year. That could still only be a matter of a month or so and what is perhaps likely tomorrow is the RBA giving a clue to its plans. Although there would be benefits to parts of the economy from a rate cut there are also concerns specifically about the residential property market; Paul Bloxham a chief economist from HSBC told Yahoo that the RBA would have to “weigh the benefits of lower rates against the potential costs of over-inflating the housing market. We think this trade-off will see the RBA sit still with its 2.5 per cent cash rate.”
Pricing gap between houses and units expands
The gap between the cost of a house and that of a unit has extended across many of Australia’s capital cities. According to figures from CoreLogic RP Data in the December quarter the median house price was 20 per cent higher than the median unit price with houses costing $100,000 more than units. When individual capital cities are examined the differential is even greater. In Sydney you would pay $245,000 more for a house than a unit while Melbourne ($170,000), Brisbane ($102,000), Perth ($110,000) and Canberra ($172,000) all show a gap of more than $100,000. In the other capitals the gap is less than $100,000.
Source: CoreLogic RP Data
Sydney auctions heat up
As the property auctions begin to gather pace following the Christmas slowdown one property in Sydney attracted 100 potential buyers over the weekend with families interested in its location just 350 metres from a popular primary school. There were around 100 properties listed according to the Domain Group and initial figures suggested a clearance rate of above 70 per cent. Chief economist Andrew Wilson is expecting price growth in Sydney of between 7 and 10 per cent this year following a 14 per cent increase in 2014.
Source: Domain Group
Queensland developers nominated for innovation
Seventeen developers of property in Queensland have been nominated for the annual Property Council of Australia/Rider Levett Bucknall Innovation and Excellence Awards. They include the developer that has breathed new life into the iconic Brisbane City Hall. Chris Mountford of the Property Council says that those creating affordable housing in the state are also well-represented: “Brisbane's Fitzgibbon Chase community, which will comprise around 1,350 homes on completion, is up for four awards, while The Pines Townhome Collection at the Gold Coast has been named a finalist in the newly-minted ‘Best Affordable Housing Development’ category.”
Source: Property Council of Australia
Collections: Mortgage News