Work is poised to start on demolishing buildings to make way for a $2.6 billion fast train to the Gold Coast, in time for the 2032 Olympic and Paralympic Games. A former restaurant on the corner of Logan River Rd and Hammel St at Beenleigh, which is owned by the State Government, will be removed for the project and the site will be used for transport infrastructure for the rail corridor and as a construction site base. The joint State and Federal Government project will duplicate the track on the Gold Coast Beenleigh line between Kuraby and Beenleigh. “Additional tracks will require a wider corridor and track straightening in some areas,” the transport department says. This means that further property resumptions will be required to make way for the project. “Property owners who have been informed they are directly impacted by this project are eligible to apply for a strategic purchase of their property by the Department of Transport and Main Roads,” the department says.
Help Needed For Housing Crisis
The Queensland Premier has attacked the Reserve Bank of Australia for raising interest rates once again and is calling on the Federal Government to help solve the current housing crisis. Premier Annastacia Palaszczuk says cost-of-living pressures are huge and she has never seen financial pressures which are “so far reaching” in her lifetime. She is calling for the Federal Government to provide funding to help find wider solutions to the housing and rental crisis. She says rising interest rates mean many household budgets are feeling the squeeze and that homelessness is a major issue in Queensland. “I absolutely acknowledge it is very difficult out there for people at the moment. The Reserve Bank continuing to increase those interest rates – I’ve never seen anything like it.” “We have to get to the root cause of that – what is actually causing it and what is driving it?” she says. “I don’t know how people are meeting their mortgage repayments and that’s adding stress to their family.”
Quote of the Week
“The lift in interest rates could act to dampen some of the recent housing exuberance, although a range of other factors are likely to support the continued stabilisation in home values, including low available supply, extremely tight rental conditions and higher demand via net overseas migration.”
Tim Lawless – CoreLogic Research Director
Rates Won’t Hurt Value
The latest interest rate rise has done little to dampen enthusiasm in the property market with CoreLogic figures showing auction clearance rates are actually on the rise. Nationally the clearance rate hit 75.1% on the weekend, the highest level since mid-February 2022. There were 1750 properties taken to auction last weekend across the capital cities compared with 1739 properties the previous week. Melbourne performed well with a clearance rate of 76%, which was the fourth consecutive week it achieved a clearance rate above 70% and its best result since October 2021. Adelaide was the best performer in the smaller capital cities with a clearance rate of 72.1% followed by Brisbane, 68.2%, and Canberra, 66.2%. In Perth, two of the six results reported sold under the hammer. While clearance rates are rising so too are property prices according to Domain. It says combined capital city values are up 1.8% in the past quarter, with Sydney leading the charge with a 3.4% increase.
Mortgage War Surrender
After months of fighting for market share through cash backs and reduced rate offers, banks are taking a step back from the mortgage wars. In April Ubank ceased its cash back offer, which at one point was $6000, and the Commonwealth Bank will stop its $2000 cashback offer to new borrowers from June 1. Instead of offering sweeteners to attract new customers, Westpac says it has been focusing on offering deep discounts to retain existing customers. Westpac Chief Executive, Peter King, says as a result it has retained 84% of its borrowers who have been coming off fixed-term rates. Milford Asset Management portfolio manager Jason Kururangi says a stop to cash back offers will be a “welcome relief to bank shareholders”. “It’s a really good outcome for the market structure more broadly because it’s clear that some of the new business that banks are writing is uneconomic,” he says. “Some of them have been bleeding market share.”
Housing Approvals Take A Dive
New housing approvals have fallen to their lowest levels in more than two years. Australian Bureau of Statistics figures show dwelling approvals dropped by 15% in the 12 months to March – the weakest yearly result since October 2020. BIS Oxford Economics senior economist Maree Kilroy says soaring costs, lower borrowing capacity, and growing cost-of-living pressures means many are unwilling to commit to a new home. “The start of 2023 has been poor,” she says. “A protracted downturn for dwelling approvals is forecast that extends through 2023 and into 2024. We believe the probability of government intervention to support housing supply is increasing.” The figures show approval for standalone homes fell every month in the past year and are down 17.3% on this time last year. Units, apartment and townhouse approvals rose 5.7% in March but are 11.1% below the same time last year and at their weakest levels since April 2021. The value of renovations approved also dropped by 7.4%.
