THE number of new homes sold has fallen 20 per cent in New South Wales but surged 45.6 per cent in Western Australia in less than a year.
In a tale of two states, NSW has been hit by high land costs and a population bleed to “cheaper” states, while the mineral boom and acceleration of the seachange phenomenon has boosted the number of new homes sold on the other side of the country.
In other states – Victoria (down 0.3 per cent) and Queensland (up 2.8 per cent) – new home sales were reasonably stable in the seven months to August compared with the same period last year.The Housing Industry Association said sales in South Australia also suffered, falling 34.9 per cent.
While most states bounced back for the month of July, new home sales in NSW continued to slide diving 12.5 per cent, the HIA said.
Nationally, new home sales fell 0.6 per cent in July.
Developers have responded by abandoning Sydney’s first-home buyer market and urban fringe as rising green field land costs make it more profitable to build in the established middle suburbs.
In NSW, the median land price rose 15 per cent to $260,000 in the June quarter, according to property researcher Residex. Sydney’s median land price was $394,000, up 7.9 per cent in the quarter.“Ten years ago, 100 per cent of our product was house and land packages (in outer suburbs), now it’s 20 per cent of production,” Australand’s managing director Brendan Crotty said.
Australand, one of Australia’s biggest residential developers producing 1000 homes and 1000 land lots annually, has also fled the troubled apartment market and by the beginning of next year will only have four projects under construction nationally. Mr Crotty said the majority of the company’s residential construction, particularly in Sydney and Melbourne, was “infill” housing – developing townhouses and villas in established middle ring suburbs.
“We have been able to sell every house we produce in those areas.
“We are delivering what the market wants at a price point it accepts,” Mr Crotty said.
Yesterday Queensland developer Devine said rising land and building costs had cut profits from its new housing division from $18 million last year to $9.5 million for 2004-05.
Last month new home sales improved in the lower priced states, rising by 7.5 per cent in Queensland, 17.4 per cent in South Australia and 10.5 per cent in Western Australia, the HIA found. But Victoria also showed some weakness with sales for the month down 5 per cent.
“To put it simply, there is more than enough evidence to show that the alarm bells are ringing in some cities and regions, while the rest of Australia enjoys the renewed confidence of buyers who haven’t been priced out of the market, and investors taking advantage of tight rental markets and high rent returns,” HIA chief economist Simon Tennent said.
“Stable interest rates and impending tax cuts may inject some hope into these depressed markets, but this will by no means be the tonic that will turn the affordability equation around for thousands of families and individuals,” he said.
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorI think a drop in new home sales in NSW in July had a lot to do with the intruduction of Basix on 1/7. Everyone was getting their plans in council before june 30, i know we did. Coffs council had double the amount of plans this june compared to last year, and not one for july.
What aboput rising fuel prices, do you think that will have a effect? They are talking 160 a litre?
Man thats a 60% increase in less than 12 mths.
RoboMight have to start playing the commodities markets..
Lucky work pays for my fuel or i’d be on a bike..
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow Calculatori just heard somehting on the news to suggest fuel prices could halve in 12 months. can’t see it but interesting.
when the new basix codes come in in WA I expect we will see a jump in construction costs and a decline in approvals.
http://www.megapropertygroup.comINVESTMENT SALES * RENTAL SOLUTIONS * STRATA MANAGEMENT
I believe that to be something of a mis-quote by the media. Steve Forbes was pointing out that oil had risen from $25/barrel 3 years ago to $70 today, and that te increased supply would account for only an extra $10/barrel. The next significant factor he pointed to was inflation (I think I beat him to it – refer to the CRASHHH!!!! thread) – to paraphrase “The Federal Reserve Bank has been pumping too much money”, and the remainder, speculation.
I think he may underestimate the impact of demand outstripping supply, particularly when oil is so incredibly cheap. As in, prices could double from where they are now, and the world would not collapse, it would just be a more expensive place to live. While unleaded petrol has hit the mid AU$1.20 range here in Australia, US drivers are paying closer to AU90c (and whinging as much as we are), while in the UK, drivers are complaining now that they are paying close to AU$2.30 per litre… It’s the change in costs that hurts, not the actual price.Cheers, F.[cowboy2]
Petrol to hit $1.60 ???
MOTORISTS are warned to brace themselves as petrol prices reach at least $1.30 a litre this week.
And economists said yesterday prices could reach $1.60 by the end of the year.
AMP Capital chief economist Dr Shane Oliver said he believed $US100 a barrel was now a probability and could be reached within a year.
That would translate to $1.60 a litre here — as every $1 rise on the barrel price translates to 1c at the bowser.Wholesale petrol prices have increased by 10c a litre from the beginning of August.
The impact is now being felt on the economy with retail sales figures released yesterday below expectations.The average family is now spending $20 a month more on fuel. “Six months ago I would have said we’d get US$100 within five years,” Dr Oliver said. “But now we are touching US$70, it could be in the next year. The models used to predict prices are not working at the moment.”
NSW Service Stations Association chief Rod Bowde, said simple “supply and demand” for crude oil was driving the price increases at the pump.
He said demand was the underlying reason for price increases. “There has been a long-term sustained increase in energy prices. The world is using more than it can produce and it’s been like that for years,” Mr Bowden said.“Crude oil prices go up and down for no other reason than that people are trading in the market and if trade prices go up, the people who use these commodities have to pay more.
“There is nothing Australia can do to reduce the price of petrol,” he said.According to fuel watchdog MotorMouth, unleaded petrol prices yesterday ranged from $1.15 to $1.32, with the average price at $1.19 in Sydney.
FUELtrac chief Chris Kable said the pricing cycle could show a jump of up to 12c per litre from Thursday. “Sydney motorists could see petrol prices as high as $1.34,” he said. At $1.30 a litre, it would cost $78 to fill a 60 litre tank.
The Australian Bureau of Statistics (ABS) said yesterday retail sales were unchanged at seasonally adjusted $17.134 billion in July from a downwardly revised $17.136 billion in June.
The retail trade numbers were weaker-than-expected as rising petrol prices – which rose 5 per cent over July – and falling house prices halted spending, analysts said. This is expected to cap economic growth and interest rates.
The central bank last raised interest rates in March to 5.50 per cent but rates have not moved since then. Lenders add a margin for profit to the cash rate to set standard variable interest rates, which sit at around 7.3 per cent.
ABN AMRO economists said falling house prices especially in NSW had caused consumers to close their wallets.“The weakness in sales is not that surprising given that petrol sales rose sharply in the month (up 5 per cent), while house prices are flat to down in most regions,” said ABN AMRO economists Kieran Davies and Felicity Emmett.
“The impact of the weak housing market is most apparent in New South Wales, where (retail) sales were down by 1 per cent in the month and up only 1 per cent over the past year,” they saidREDWING[blink]
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorBring it on – go the oil price…fantastic.
Two big pay rises in the past 3 months…without even asking for them, gotta be good for my micro-economy.
The higher the oil price – the lower all goods and services are for our family…relatively speaking.
100 $ oil here we come….
I agree with F, it’s the rapid change that people have a mild hissy fit over, not the absolute number. But then our disposable income is so high in Oz that the price is generally not affecting our driving behaviour. Other things will be sacrificed at the economic alter well before anyone dares to dictate to Ozzies what and where and how we drive.
The cheapest petrol I can recall is 18c a litre back in ’76 when our family went on a vacation to “always pouring with rain” Melbourne. Who can personally remember anything cheaper ??
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
“Other things will be sacrificed at the economic alter well before anyone dares to dictate to Ozzies what and where and how we drive. “
I don’t think what is happening supports the theory that Aussies won’t change. I read the article on The Australian website yesterday discussing the decline of the Commodore’s popularity and they pretty much said it is a dinosaur waiting to be buried… big cars are just too expensive to run now. Holden is just scared of dumping the big fanily car as this has been it’s identity since meat pies and football were invented.
http://www.megapropertygroup.comINVESTMENT SALES * RENTAL SOLUTIONS * STRATA MANAGEMENT
and what happened in Tassie?
More stuff on the voigtstr at http://users.bigpond.net.au/voigtstr
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