New dwellings are a positive influence on Aussie economy
While the latest figures show a slowdown in the Australian economy at the end of last year, the property industry is doing what it can to boost growth. The Housing Industry Association says that investment in new dwellings grew by 5.3 per cent in the December 2014 quarter and 12.4 per cent during the year. HIA chief economist Harley Dale says this had an impact wider than just the building industry: “The strength in national new home construction has fed through to other parts of the economy – household consumption, for instance, would be weaker if not for a strong new housing sector.” Spending on alterations and additions to properties in contrast fell by 2.3 per cent in the last quarter of 2014 and annually increased by a moderate 0.8 per cent. Harley Dale commented: “Alts and adds investment is an accurate barometer of the current economic climate where a subdued mood and ongoing concerns about the labour market are restraining growth in household demand.”
Source: HIA
Billionaire mansion sale could affect foreign investment in homes
The forced sale of the $39 million mansion owned by Chinese billionaire Xu Jiayin may dissuade other Chinese investors from buying homes in Australia. That’s the message from migration agent Simon Wu who says that Xu’s high profile in China means that his case is being closely watched by many, especially potential property investors. The billionaire’s Sydney harbour mansion was bought last year but found to contravene FIRB regulations and Beijing-based investment agent Nina Li told The Australian that the case sends a clear message to potential Chinese buyers that Australia has tough laws: “Those who break the law are going to be subject to the justice system no matter who they are. As a result, I think some Chinese investors are going to be cautious about what property they buy in the future.”
Source: The Australian
Low rates will help the economy… eventually
The RBA’s deputy governor says that the lower interest rates and weaker dollar will help the economy; it’s just taking a while. Philip Lowe also hinted that there could be another rate cut on the cards if necessary. He said that economic growth had not been picking up as was hoped, which led to the rate cut, however it was not because things had worsened. Dr Lowe pointed out that economic conditions overseas were a big part of the story with low rates in the Eurozone and Japan, and the US Federal Reserve’s plans for its interest rates having a strong effect on the Aussie.
Source: The West Australian