Australian Property Information (1 - 748 of about 748)

Commercial Market Update – Brisbane Cityscope

The latest research from Brisbane Cityscope shows property sale numbers have decreased in the past three months. The last three months to the beginning of February 2016 recorded 16 sales for a total of nearly $428.3 million, with $394.4 million for commercial, $300,000 for commercial strata, $12.9 million for retail, $1.2 million for retail strata and $17.6 million for other. In comparison, the three months to the beginning of November 2016 recorded 23 sales for a total of $209.9 million, with $131 million for commercial, $700,000 for commercial strata, $53.7 million for retail, $5.7 million for retail strata and $13.5 million for other. The 12 months leading up to the beginning of February 2016 recorded 74 sales for a total of over $1.93 billion, significantly higher than the recorded figure for the same time period the year before. The table below shows sales recorded for the past eight updates of Brisbane Cityscope: The three most significant sales recorded this quarter were: Mineral House, 41 George Street, was sold by QIC Investments No. 3 Pty Ltd and QIC Infrastructure Management No. 2 Pty Ltd for $159 million. The sale represented an initial yield of 8.77% on an advertised passing income of $13.93 million net . Shaun Douglas and Ken Lucht of Chesterton International negotiated the sale in conjunction with Tom Phipps and Jason Lynch of Colliers International. Mineral House is a 27 storey office building which was built in 1979. 313 Adelaide Street was bought for $114 million by Gref Brisbane Pty Ltd on behalf of a German fund managed by Deutsche Asset & Wealth Management. Flint Davidson and Bruce Baker of CBRE Brisbane negotiated the sale with Seb Turnbull and Geoff McIntyre of JLL Brisbane. The sale represented an initial yield of around 7% on passing income of $7.98 million. 201 Charlotte Street was bought for more than $81.5 million by Perpetual Corporate Trust Limited on behalf of Fortius Funds Management Pty Limited and BlackRock Investment Management Australia Limited. Shuan Douglas and Ken Lucht from Chesterton International negotiated the sale in conjunction with Evolution Capital. Properties currently listed for sale include: Unit 3, Qantm House, 138-140 Albert Street – a 369 sqm unit, comprising the entire first floor. For sale with an asking price of $2 million; agent, K2 Private Stuart Moody . Unit 1 and unit 2, Northpoint, 239 North Quay – a 153 sqm commercial unit on the ground floor. For sale with an asking price of $2.5 million; agent, Tewksbury Commercial Real Estate Peter Tewksbury and Darren Lucchese . Unit 6, 183 North Quay – a 572 sqm commercial unit, comprising the entire fourth floor. For sale with an asking price of $2,300,000; agent, Blocksidge Christopher Finn and Paul De Luca . Properties under contract conditionally or unconditionally include: 51 Edward Street – four storeys, forming part of Spencers Building. Under contract; agent, LJ Hooker Commercial Ben Armstrong and Manoli Nicholas . 545 Queen Street – a 10 storey office building. Under contract for around $82 million; agent, Savills Brisbane. 103-105 Elizabeth Street – a two level retail building. Due diligence is being conducted; agent, CBRE Brisbane Mike Walsh, Peter Court and Andrew Adnam . The property was advertised with a fully leased net income of around $384,827. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe

Commercial Market Update – Brisbane Fringe Cityscope

The latest research from Brisbane Fringe Cityscope shows property sale numbers have decreased in the past three months. The last three months to the beginning of February 2016 recorded 29 sales for a total of $305.5 million, with $145.4 million for commercial, $6.7 million for commercial strata, $115.3 million for retail, $1 million for retail strata and $37.2 million for other. In comparison, the last three months to the beginning of November 2015, recorded 39 sales for a total of $133 million, with $74.5 million for commercial, $14.9 million for commercial strata, $1.8 million for retail, $16.2 million for retail strata and $25.7 million for other. The 12 months leading up to early February 2016 recorded 144 sales for a total of more than $859.6 million, over $361.6 million more than the same time last year. The table below shows sales recorded for the past eight updates of Brisbane Fringe Cityscope: Together the top three sales recorded this quarter total over $176 million, these sales include: 108 Wickham Street, Fortitude Valley sold for $79 million to a subsidiary of Centennial Property Group Pty Ltd. Bruce Baker and Flint Davidson of CBRE Brisbane negotiated the sale which represented an initial yield of 7.66% on passing income of just over $6 million. 108 Wickham Street is a six storey office building which was completed in 2008. 100 Wickham Street, Fortitude Valley sold for $50 million to 100W Pty Ltd, as trustee for the 100W Property Trust. Justin Bond and Ben McGrath of Knight Frank Brisbane negotiated the sale in conjunction with Jason Lynch and Tom Phipps of Colliers International Brisbane. 100 Wickham Street, formerly known as Communication House, is a 14 storey office building which was built in 1973. Carrington Chambers 143 Wickham Street, 145 Wickham Street, 147 Wickham Street, 149 Wickham Street and 153 Wickham Street and China Town Car Park 31 Duncan Street , Fortitude Valley were bought together for $47.8 million by AM Valley Heart Pty Ltd. TCB on Brunswick 315 Brunswick Street was also purchased by AM Valley Heart Pty Ltd for $31.2 million. Jason Lynch and Tom Phipps of Colliers International Brisbane negotiated the sales. Properties for sale include: 436 Upper Roma Street and 444 Upper Roma Street Brisbane – a two storey bed and breakfast and a two storey office building set above ground floor car parking. For sale by negotiation; agent, Harcourts Solutions Inner City Diana Mitchell . 16 Baxter Street to 28 Baxter Street, Fortitude Valley – a two storey office/warehouse building and a single storey office/warehouse building. For sale by expressions of interest; agent, Elders Commercial Brisbane Carl Charalambous . 40 Astor Terrace, Spring Hill – Punthill Brisbane Apartment Hotel building with ground floor retail space. For sale by expressions of interest; agent, JLL Hotels and Hospitality Group Sydney Paul Fraser and Peter Harper . This property was advertised in late 2015 with a net income of around $1.53 million per annum. Properties under contract conditional or unconditional include: 31 Hope Street, Spring Hill – a small, single storey, brick house converted for office use and a two-storey brick extension to the rear. Under contract unconditionally in mid-2015, with settlement expected in early 2016; agent, Wright Property James Ralph and Matthew Holloway . 21 McLachlan Street, Fortitude Valley – a two storey office building. Under contract unconditionally; agent, Ray White East Brisbane Garry Price . 375 Wickham Terrace, Spring Hill – Industry House, a two storey plus basement office building. Under conditional contract; agent, JLL Brisbane Sam Byrne and Seb Turnbull . Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe

Commercial Market Update – Melbourne Units Cityscope

Sales recorded for Melbourne Units Cityscope for the three months to February 2016 totalled $315.2 million, an increase from the $229.4 million recorded to November 2015 and from the $178.6 million recorded to August 2015. The latest data brings the twelve month sales total to $1.136 billion, a decrease from the previous twelve months, which saw sales of $1.598 billion. The table below shows sales recorded for the past eight updates of Melbourne Units Cityscope. Some notable sales featured in the February 2016 update of Melbourne Units Cityscope include: Unit 6, known as 6/2 Exhibition Street, a two bedroom apartment on level 1 of Herald Living including two car spaces, which sold for $2.3 million Unit 20 of 50 Bourke Street, Melbourne, a two bedroom penthouse apartment of 242 sqm with a roof garden plus two car spaces, which sold for $2 million; and Unit 82 at 51 Spring Street, Melbourne, a 182-sqm apartment on level 8 with one car spaces, which sold for $1.815 million. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe

New residential property listings are ramping-up quickly in 2016

Across the country there were 47,483 unique new property listing over the 28 days ended 7 February 2016. The number of new property listings is 11.0% higher than at the same time last year. If we look back over recent years it is the highest number of new property listings at this time of year since 2010. If we look at the combined capital cities we have also seen a large ramp-up in new listings with 27,430 new listings which is 5.4% higher than at the same time last year. Again it is the highest number of new property listings over the corresponding period since 2010. The first chart shows that over the Christmas / New Year period there is typically a sharp fall in new listings. If history is any guide new listings are likely to continue to rise until the middle of March. Total residential property listings experience a seasonal fall each Christmas / New Year period however, the slowdown is nowhere near the magnitude of the slowing in new listings. The most recent data in the chart also indicates that total listings are actually starting to decline. Across the country there are 239,398 total unique property listings which is -1.6% lower over the week but 0.2% higher relative to the same period in 2015. For the combined capital cities there are 99,137 total unique property listings which is -1.0% lower over the week but 2.6% higher year-on-year. Much like new listings, total listings typically continue to rise up until the middle of March each year. Given this it will be interesting to see if the fall in total listings over the most recent week will be short lived or whether there are some different factors at play. If we look at the number of listings across the individual capital cities there are some rather interesting differences across the cities. While new listing overall are higher than a year ago they are lower in Sydney and Darwin. In fact new listings in both Sydney and Darwin are at their lowest level for this time of year since 2012. Elsewhere new listings in Melbourne and Brisbane are at their highest level on record since 2007 for this time of year. In Adelaide and Perth new listings are at their highest levels for this time of year since 2010 and in Hobart and Canberra they are at their highest levels at this time of year since 2014. Whether the surge in new listings in most capital cities is in response to a belief that housing demand is improving or trying to beat a potential slowdown remains to be seen. The rise in Perth new listings in particular is counterintuitive considering it has been the weakest capital city housing market over the past twelve months and you would expect given those conditions fewer people would be looking to sell. Turning to total listings, although they are 2.6% higher year-on-year across the combined capital cities, Sydney, Perth and Darwin are the only cities in which total listings are higher than a year ago. This seems more in-line with market conditions with concerns the Sydney market is slowing and values falling in Perth and Darwin it appears that total listings reflect the slowdown in sales activity in these markets. If we look at the other capital cities relative to the same time of year previously, Melbourne listings are at their lowest level since 2011, Brisbane its lowest since 2008, Adelaide and Hobart listings are at their lowest levels since 2010 and Canberra listings are at their lowest level since 2014. The relatively low level of stock across these cities has the potential to spark competition for the available stock and lead to increasing values. Of course this would only occur if buyer demand is also rising and it is a little too early in the year to tell if that is occurring. The CoreLogic RP Data Listings Index tracks pre-listing activity by real estate agents across our proprietary platforms. The index points to properties about to be listed for sale and correlates with new listings data. At a national level, the listings index is at its highest level since early October of last year however the seasonally adjusted data still shows the seasonal slowdown. In terms of a comparison to the current reading compared to the comparable week in past years, the Index is at its highest level for this time of year on record. Looking at the Listings Index across individual capital cities shows some varied trends when we compare the current value to the value over the same week in previous years. The Index is lower relative to a year ago in Sydney -8.9% and Adelaide -3.1% . In Melbourne, Brisbane, Hobart and Darwin the Index is at a record high for this time of year. In both Perth and Canberra the Index is at its highest level for this time of year since 2011. Based on this data we can expect over the coming weeks new listings to be higher than they were across most capital cities. The listings data and Listings Index will be interesting to track over the coming weeks. The capital city housing markets were showing softer value growth conditions over the second half of 2015 however, early indicators for 2016 have showed a bit of a rebound in the CoreLogic Home Value Index and improved auction clearance rates. It is important to note that the indicators early in the year are based on a thinner number of sales so it will be important to track the trends as they are updated week to week. What we do know is that the amount of properties listed for sale both in terms of new listings and total listings is high and it will be interesting to see how well these properties are absorbed by the market over the coming weeks and months. Particularly as auction volumes and buyer activity typically starts to pick-up between now and Easter.

A strong start to the year, with 71 per cent of capital city auctions selling

The first week of February shows auction market activity continuing to bounce back from the festive period slowdown, with almost twice the number of auctions held this week compared with last week. CoreLogic RP Data was tracking 854 auctions this week, compared with 987 auctions over the same week one year ago. The lower number of auctions was mostly due to a low auction numbers in Sydney where there were only 255 auctions held over the week compared with 421 at the same time last year. The lower number of homes put up for auction highlights that vendors haven’t been as willing to put their homes into the auction market as they were a year ago. Auction numbers were actually higher than a year ago across Melbourne, Brisbane, Adelaide and Perth. Despite the lower number of auctions compared with last year, the preliminary auction clearance rate, based on the 621 auction results reported so far, was recorded at 71.0 per cent across the combined capital cities. This week’s clearance rate was higher than at the same time last year 67.3% however the clearance rate in Sydney continued to track lower than at the same time last year. All cities recorded a stronger preliminary clearance rate than what was recorded at the end of 2015, however, with auction numbers still gathering pace over February we should get a better gauge over the coming weeks as to whether the auction market is truly staging a rebound on higher clearance rates. This week, 262 Melbourne auctions were held and so far 206 results have been reported. The preliminary auction clearance rate of 80.1 per cent is higher than last week, when across just 151 auctions, 69.9 per cent were successful. One year ago, Melbourne’s auction clearance rate was 60.7 per cent across 255 auctions. Across Melbourne, the busiest region for auctions this week was the Outer East, where 40 homes went under the hammer. Of the 30 reported results so far, 83.3 per cent have been successful. Melbourne’s Inner East recorded the strongest preliminary clearance rate at 93.8 per cent, however there were only 19 auctions held within the region and 16 results reported so far. The Sydney auction market was substantially weaker over the final months of last year when compared to earlier in 2015. Clearance rates fell from the high 80 per cent mark to the mid-50 per cent mark towards the end of the year. Given this, it is likely that a lack of vendor confidence is currently being reflected with only 265 auctions held this week, compared to 421 at the same time last year. Although auction volumes across the city were low, this week Sydney’s preliminary clearance rate was 70.2 per cent, a strong result compared to 44.9 per cent last week across just 61 auctions , but not reflective of the 80.6 per cent last year. The best performing Sydney sub-regions this week were Inner South West 85.7 per cent across 21 results and North Sydney and Hornsby, with a clearance rate of 80 per cent across 35 results. In Brisbane the preliminary clearance rate was 55.8 per cent this week across 77 auction results. There were 111 auctions held in Brisbane this week, compared to 60 last week, with a clearance rate of 52.7 per cent and 109 last year when 47.6 per cent of auctions were successful. Further south, across the Gold Coast there were 33 auctions reported this week with 13 sales. Adelaide’s preliminary clearance rate was 79.4 per cent this week, higher than last week at 61.1 per cent and also higher than one year ago 58.2 per cent . There were 104 Adelaide auctions this week, 97 last week and 94 held over the comparable week last year. In the westernmost city, Perth’s preliminary clearance rate was 35 per cent this week and there were 37 auctions held. Last week, 29 Perth auctions were held and 44.9 per cent were successful, while one year ago 31 Perth auctions were held with a clearance rate of 40 per cent. Across Canberra 67 auctions were held this week, compared to 27 last week and 69 one year ago. Based on preliminary results this week’s clearance rate is 72.9 per cent, higher relative to last year 67.9 per cent . CoreLogic RP Data has recorded just 2 auction results across Tasmania this week with one sale.

CoreLogic RP Data National Auction Preview, week ending 7 February 2016

Upcoming auctions: So far this year, auction volumes have been rising at a slower rate than last year which may be due to a softening in vendor confidence as housing market conditions settle down after more than three years of strong capital gains. So far 718 auctions have been held this year, compared to 921 at the same time last year. The final week of December through to the end of January is typically seen as a seasonally quieter period across the housing market with both auction and private treaty numbers falling sharply. As buyers and sellers start to become more active CoreLogic RP Data will then have a much better gauge on how the housing market is set to perform over the first quarter of 2016. This week, CoreLogic RP Data is tracking 760 auctions to be held across the capital city markets, with Sydney and Melbourne accounting for 60% of all scheduled auctions. The Brisbane and Adelaide auction markets are remarkably close in numbers to Sydney and Melbourne, given the low volumes across Australia’s two largest auction markets. Below is a summary of this week’s activity and a comparison with the same week one year ago: Sydney: 224 auctions compared to 421 last year Melbourne: 232 auctions compared to 255 last year Brisbane: 99 auctions compared to 109 last year Adelaide: 98 auctions compared to 94 last year Perth: 36 auctions compared to 31 last year Canberra: 66 auctions compared to 69 last year Each week CoreLogic RP Data monitors the suburbs with the highest volume of auctions. These suburbs are usually located within the capital cities, however this week, given the number of auctions being held is still low, two out of the three suburbs with the highest volume of auctions are outside of the capitals. Nelsons Bay located in New South Wales’ Hunter region, Buderim in Queensland’s Sunshine Coast and the Melbourne suburb of Lalor will each host 6 auctions this week. Last year, clearance rates across the combined capital cities finished December around the high 50% mark after having stayed above the 70% mark for 31 consecutive weeks 71.3% of all auctions held last year were successful . With the softening trend in auctions clearance rates seen over the final quarter of 2015, it will be interesting to see if the trend deteriorates any further.

Commercial Market Update – Eastern Melbourne Cityscope

The latest research from Eastern Melbourne Cityscope shows property sales have decreased in the past three months. Sales recorded in the quarter ending January 2016 totalled $187.2 million, a decrease from the $188.8 million recorded in the three months to October 2015, but an increase from the $44.3 million recorded to July 2015. This data brings the 12-month total to $585.2 million, an increase from the $505.5 million recorded over the previous year. The table below shows sales recorded for the past eight updates of Eastern Melbourne Cityscope. Recent standout sales in Eastern Melbourne include: 590-606 Orrong Road, Armadale, an office building of four and five levels with parking for 270 cars, which was bought for $58.29 million 6 Nexus Court, Mulgrave, a six level office building, part of Nexus Corporate Park, which was bought for $26.3 million in a related party transaction, and 31 Vision Drive, Burwood East, a two and three storey, 6,389 sqm office and storage building, purpose-built for the Commonwealth of Australia in 1994 as an archives repository, which was bought for $24.25 million in a sale handled by CBRE Canberra and CBRE Mulgrave. Properties for sale in Eastern Melbourne in January 2016 include: Satellite Corporate Centre at 350 Wellington Road, Mulgrave; three office buildings of four and five storeys with a total building area of 21,433 sqm and parking for 1,361 cars, available through JLL Melbourne, JLL Glen Waverley and Colliers International Clayton. The property last traded at $8.144 million in January 2001 and was valued at $76.4m in June 2012. A buyer has been reported to be in due diligence regarding this property 2-6 Glenferrie Road, Malvern, a three storey, 2,394-sqm office building with parking for 69 cars, through Rosin Smyth. The building last traded at $4.5 million in November 2007; and Unit 1 at Monash Corporate Centre at 10 Duerdin Street, Clayton, a two-storey, 952-sqm office/warehouse unit with parking for 20 cars, available through Sutherland Farrelly. The building last traded at about $2.727 million in October 2007. Significant leasing opportunities in Eastern Melbourne in January 2016 include: Australian Taxation Office at 990 Camberwell Road, Box Hill, a nine level, 21,760 sqm office building with parking for 403 cars, which has office space of 800 to 16,000 sqm through Colliers International Adidas Building at 759-767 Springvale Road, Mulgrave, a two-storey office building with a large high clearance warehouse at the rear, and parking for 130 cars, which has office and warehouse space of 10,661 sqm through CBRE Mulgrave and Colliers International, and Ferntree Business Park at 310 Ferntree Gully Road, Notting Hill, a complex of six self-contained office/warehouse/laboratory buildings, and four separate two, four and five storey buildings, which has office space of 2,000 to 10,000 sqm in the redevelopment of the property, available for pre-lease through Colliers International and Goodman. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe

Commercial Market Update – Adelaide Cityscope

The latest research from Adelaide Cityscope shows that commercial property sales in Adelaide have increased substantially for the quarter to January 2016, largely due to the sale of Rundle Place. The latest quarter shows total sales figures of $526.2 million from 18 sales, as compared with $68.6 million from 24 sales in the quarter to October 2015 and $75.5 million from 18 sales in the quarter to July 2015. The year to January 2016 shows total sales of $1090.3 million from 82 sales, a significant increase on the previous year, which had $521.9 million from 71 sales. The table below shows sales recorded for the past eight updates of Adelaide Cityscope. Notable sales in the January 2016 update of Adelaide Cityscope include: Rundle Place at 81 Rundle Mall, Adelaide, a four storey retail building of 22,500 sqm and a 12 storey office building of 30,000 sqm plus parking for 100 cars, which sold for $400 million, and 100 Waymouth Street, Adelaide, formerly known as Henry Waymouth Centre, a 13 storey office building with 12,305-sqm net lettable area and parking for 146 cars, which sold for $73 million. Properties for sale in the January 2016 update of Adelaide Cityscope include: 30 Flinders Street at 30 Flinders Street, Adelaide, formerly the Police Headquarters of SA. A 12 storey office building with 13,954 sqm lettable area and 22 under cover car spaces, available through Knight Frank, and Young Street Chambers at 25-29 Young Street, Adelaide, a four storey office building of 1,780 sqm including basement parking for 19 cars, through JLL Adelaide. Leasing opportunities in the January 2016 update of Adelaide Cityscope include: Grenfell Centre at 25 Grenfell Street, Adelaide, a 26 level office building with a retail plaza level and 23 office floors with a net lettable area of 25,244 sqm, which has office space of up to 7,000 sqm available through CBRE Adelaide and JLL Adelaide; Australian Central Building at 60 Light Square, Adelaide, an eight storey office building of 9,350 sqm with basement parking for 27 cars, which has office space of up to 6,956 sqm available through Colliers International and Knight Frank, and Allianz Centre at 55 Currie Street, Adelaide, a 9 and 12 storey office building of 25,726 sqm with underground parking for 96 cars, which has office space of up to 6,277 sqm available through Knight Frank. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe

Commercial Market Update – Norwest Cityscope

The latest research from Norwest Cityscope shows a substantial increase in the total value of sales over the last quarter, primarily due to the sale of the Woolworths headquarters at 1 Woolworths Way, Bella Vista. For the three months to January 2016, there were 20 sales at a total value of $348.2 million, compared to the 38 sales at a total value of $73.5 million for the three months to October 2015, and the 44 sales at a total value of $24.8 million for the three months to July 2015. This data brings the 12 month total to $511.8 million, a considerable increase from the $203.3 million recorded the same time last year. The table below shows sales recorded for the last eight updates of Norwest Cityscope. Notable sales recorded in the January 2016 update of Norwest Cityscope include: The Woolworths Corporate Headquarters at 1 Woolworths Way, Bella Vista, three large interconnected four storey office buildings with basement level parking for 2,341 cars, sold for $336.45 million; and Unit 218 and unit 219 in Nexus Norwest, 4 Columbia Court, Baulkham Hills, a five storey office building with ground level and basement parking. The two units comprise a net lettable area of 266 sqm and a combined 10 car spaces, sold together for $1.01 million. Significant properties for sale in the January 2016 update of Norwest Cityscope include: Suite 307 in The Solent Centre at 1-3 Burbank Place, Baulkham Hills, a group of three office buildings of two to three storeys and on-grade parking; the unit comprises 147 sqm and 6 car spaces and is for sale through Coutts Real Estate – North West; Suite 705, suite 706 and suite 707 in 12 Norwest Central at 12 Century Circuit, Baulkham Hills, a seven storey office building above ground level retail shops and basement car park; the three units comprise a net lettable area of 921 sqm and a combined 23 car spaces and are for sale through Hills Commercial Real Estate; and Unit B41 in Lexington Corporate Stage 1, at 24-32 Lexington Drive, Bella Vista, a complex of seven commercial buildings of one to six storeys, with on-grade and basement car spaces; the unit comprises a net lettable area of 201 sqm and 9 car spaces and is for sale through Coutts Real Estate – North West. Significant leasing opportunities in Norwest Cityscope include: The Vantage Building at 7-9 Irvine Place, Bella Vista, a 5-storey commercial building with a cafe at ground level and undercover parking, with a net lettable area 12,760 sqm, has office space of 3,319 sqm for lease through Coutts Real Estate – North West and Norwest Commercial and Industrial Real Estate; and Norwest Quay at 21 Solent Circuit, Baulkham Hills, a four-storey office building above three levels of basement parking, with a net lettable area of 10,836 sqm, has 1,014 sqm for lease through Colliers International Sydney West and Norwest Commercial and Industrial Real Estate. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe

Market activity resumes with stock being added to the market at a much faster rate than last year … everywhere but Sydney

As they do each year, the number of homes advertised for sale around the country fell over the end of year period, however the number of residential properties available for sale is starting to climb again, and this year at a much faster rate than last year. In fact, the number of new listings being added to the market is currently higher in all capital cities with the exclusion of Sydney, where new listings over the four week period ending 31 January 2016 were -5.1% lower than at the same time last year. To put this into perspective, that represents 272 less residential properties being added to the stock pool this year compared to last. On the other hand, the total number of homes available for sale currently 18,442 is 15.3% higher than one year ago, when 15,994 Sydney homes were listed for sale, essentially meaning the buyers have around 2,500 more properties to choose from. Towards the end of last year, Sydney listings peaked with just over 25,000 properties available for sale. Given affordability constraints that may result in a slow-down in stock absorption, it will be interesting to see if listing volumes surpass this in 2016, to levels not seen since 2012. Across each of the other capital cities, both new listings and total listings are higher than one year ago in all cities with the exception of Hobart total listings are -4.0% lower relative to last year . In each of Melbourne, Brisbane and Adelaide, new listings are over 20% higher this year compared to last year, indicating that vendor confidence in these markets is strong and suggesting that for prospective buyers there is quite a lot of stock to choose format this time of year. On a national basis, both new listings and total listings are higher than one year ago. New listings being added to the market nationally are 22.8% higher year-on-year, significantly higher when compared to the combined capital cities 15.0% . The number of South Australian listings newly added to the market over the most recent four week period was 4,024, more than double the volume of new listings added over the same period last year. CoreLogic RP Data has been monitoring listings data since 2007 and for this time of the year, this is the largest volume of South Australian new listings to be added to the market over the time of the series. Following South Australia, the other states where new listings being added to the market are substantially higher than last year are as follows: Queensland – 12,101 new listings over the past four weeks +33.2% higher than the 9,083 last year Tasmania – 1,335 new listings over the past four weeks +30.4% higher than the 1,024 last year Victoria – 10,996 new listings over the past four weeks +27.0% higher than the 8,659 last year

Dwelling approvals rose in December but remain below their recent peak.

The Australian Bureau of Statistics ABS released building approvals data for December 2015 earlier today. The results tend to be somewhat volatile on a month-to-month basis, largely due to the more ‘lumpy’ unit approvals. Following a -12.4% monthly fall in dwelling approvals in November, approvals rose by 9.2% to 18,868 approvals in December 2015. The 18,868 dwelling approvals in December 2015 consisted of 9,968 house approvals and 8,899 unit approvals. Both house and unit approvals recorded a large jump in December, up 5.7% and 13.5% respectively. Year-on-year, house approvals are 3.4% higher while unit approvals are -8.3% lower resulting in a -2.5% fall in total dwelling approvals. Despite the year-on-year fall in approvals they remain at close to record high levels although they are -8.7% lower than their recent record high recorded in June 2015. Looking specifically at the types of units being approved over the 2015 calendar year, 27.0% were townhouses, a record-low 8.7% were low-rise units less than four storeys and 64.3% were high-rise units four storeys or higher . The above chart highlights the rising prevalence of high-rise approvals over the past few years, largely at the expense of townhouses. Of course this is reflective of the large volume of in-fill development taking place, particularly in inner-city areas. From a developer’s perspective the returns are much higher building to high-densities than there are constructing medium density properties such as townhouses. More recently the chart shows that there has been a slight easing of high-rise unit approvals however, developers are still overwhelmingly seeking more high-rise approvals than approvals for low-rise or townhouses. The above two charts show the six month average number of house approvals across each of the capital cities. The charts show that in most cities the number of house approvals have recently started to trend lower. In particular this downwards trend is now most prevalent in Perth, Darwin and Canberra. Despite the recent downwards trend in approvals, they remain well above average levels in Sydney and Perth, are at about average levels in Melbourne, Adelaide and Hobart and Darwin and are well below average in Brisbane and Canberra. Unit approvals have also generally started to trend lower over recent months however, the notable exception is Sydney where they are still increasing. Despite the recent slowdown of unit approvals they have been at record highs in Sydney, Melbourne and Brisbane and remain at extremely high levels. The challenge now will be to see how many of these recent approvals end up constructed. With sales volumes slowing, offshore demand reportedly slowing, investor activity reducing, value growth slowing and concerns of an oversupply in certain areas it will be interesting to see how many of these projects go ahead. We anticipate that despite the month-to-month volatility in the data, building approvals will most likely trend lower through 2016. This will be driven in large by the market due to an expectation of slowing value growth and sales volumes. Furthermore, many are concerned about oversupply in certain markets and developers may find it harder to achieve their pre-commitment targets, particularly for units. The recent slowdown in investment lending will also impact units more than houses with the last Census showing that units are more than twice as likely to be rented as houses are. The fact that rental yields have pushed to record lows and rents are unchanged over the year is also likely to act as a further deterrent for buyers of new off-the-plan property. While the trend in dwelling approvals appears to have peaked, there are still a large number of projects that are either under construction are due to start construction, which implies building activity probably has some way to go before we see a similar easing trend that is visible with approvals.

Sydney and Melbourne are the only capital cities with any significant increase in inflation adjusted home values over recent years

Yesterday the Australian Bureau of Statistics ABS released its quarterly Consumer Price Index CPI data for the December 2015 quarter. The data showed that inflationary pressures remain very low with headline inflation rising 1.7% over the year and core inflation underlying inflation increasing by 2.0% over the past year, which is right at the lower end of the Reserve Bank’s RBA target range for inflation of 2% to 3%. Of course across most developed nations there are very few inflationary pressures currently despite record low interest rates. As a follower of the residential housing market I always like to have a look at the impact of inflation on Australian capital city home values by adjusting the CoreLogic RP Data Home Value Index for the impact of inflation. As you’d expect with inflation so low it is having minimal impact however, over the longer term it has had an impact on the real increase in capital city home values. With nominal home values increasing by 7.8% in 2015 across the combined capitals, when adjusted for inflation growth is somewhat lower at 6.0% over the year. In terms of the individual capital city performances the four cities which recorded nominal value increases have still seen values rise in real terms albeit the rate of growth is lower. Alternatively, the cities which recorded value falls have seen larger value falls in real terms. The trends across the capital city housing markets have shifted substantially since the financial crisis after home values declined during 2008. Since the financial crisis home value growth has surged in Sydney and Melbourne, while elsewhere the rate of value growth has generally been comparatively modest. The chart above shows nominal and real home value changes over the seven years from December 2008 to December 2015. While Hobart was the only capital city to record a nominal value fall over that time, in real terms values are lower over the past seven years in Brisbane, Adelaide and Perth while they have barely moved in Darwin and Canberra. To further highlight the previous point, the above chart shows the change in real home values across each capital city since their previous cyclical peak. Sydney and Melbourne are the only two capital cities in which home values are higher than their previous peak. After Sydney home values hit a previous peak in March 2004 they are currently 21.1%, in Melbourne home values peaked in September 2010 and are currently 6.5% higher. Elsewhere home values are -11.0% lower than the March 2008 peak in Brisbane, -9.8% lower than their June 2010 peak in Adelaide, -13.5% lower than their September 2007 peak in Perth, -21.8% lower than their December 2007 peak in Hobart, -19.3% lower than their September 2010 peak in Darwin, and -8.5% lower than their June 2010 peak in Canberra. Despite historic low mortgage rates over recent years, home value growth in real terms over recent years has been soft. Of course most people don’t think about the ‘real’ growth in home values, we tend to operate in a nominal world. We see the value of our assets rising and we are generally quite happy with that however, it is important to at times consider the impact of inflation and if our asset values are rising at a faster pace than prices more broadly. The data shows that even with historic low mortgage rates, real home value growth has failed to show any substantial or sustainable pick-up outside of Sydney and Melbourne. This suggests that other economic factors are impacting on demand for housing. Furthermore, the drivers of housing demand in Sydney and Melbourne are somewhat different to the rest of the country. Some suggestions as to what these factors are would be the rise in demand from overseas purchasers, greater demand due to better jobs growth and employment prospects as well as the fact that these cities already have more than 4 million people compared to our next largest city at around 2 million people. The much higher population results in substantially more housing demand than elsewhere in the country.

Housing finance demand is still growing, driven by owner occupier demand

Housing finance data for November 2015 was released today but the Australian Bureau of Statistics ABS . The data showed that on a seasonally adjusted basis, the value of housing finance commitments rose by 1.8% in November to $33.3 billion. Looking at the different components of mortgage lending, it shows that the value of commitments to owner occupier non-first home buyers subsequent buyers who are generally either upgrading or downgrading is now greater than the value of commitments to investors. With mortgage rates remaining low and competition from lenders being fierce, refinance activity continued to trend higher while demand from the first home buyer segment of the market remains quite weak. As investment demand has faded, this demand has been replaced by demand from owner occupiers, mainly those upgrading or downgrading. In November 2015 there was $21.8 billion worth of housing finance commitments to owner occupiers. These commitments were split between $1.9 billion for construction of dwellings, $1.2 billion for purchase of new properties, $7.1 billion for refinances and the remaining $11.6 billion for purchase of established properties. As the chart shows, demand for new properties construction and purchase of new is fairly flat while refinance commitments and those for the purchase of established homes continues to rise strongly. Interestingly after its recent low of $17.6 billion in commitments in May 2015, the value of owner occupier commitments has increased by 23.3% to November 2015. If you look at the actual number of owner occupier housing finance commitments over the same period they have increased by a much lower 11.8%. This would suggest that although the number of commitments to owner occupiers is rising, the increase in the value of commitments is being exacerbated by borrowers taking out larger mortgages. The value of investor housing finance commitments was recorded at $11.5 billion in November 2015. Investor mortgage demand has fallen sharply since peaking at $14.2 billion in April 2015, down -18.7% to November 2015. Although investor mortgage demand has slowed sharply over recent months, it actually rose by 0.7% over the month. It is important to remember that the Australian Prudential Regulation Authority’s APRA guidelines aim to limit housing credit total value of outstanding mortgages to investors at 10% per annum. Investor credit growth was recorded at 9.1% over the year to November 2015, comfortably within these guidelines. Given this, it is no surprise we have seen a small bounce in investor mortgage demand and we may see further moderate increases over the coming months as lenders aim to grow investor credit at close to the 10% threshold. Demand remains for mortgages despite the fact that banks have lifted mortgage rates independently of the Reserve Bank cash rate and have increased mortgage rates to investors. Understandably this has seen a slowing of demand from the investor segment of the market however, demand from owner occupiers is rising and currently filling the space. As previously mentioned demand from the investment segment may actually start to pick-up a little due to the fact investor credit growth is now comfortably below 10% per annum. With home value growth in Sydney and Melbourne now showing signs of slowing it will be interesting to see over the coming months whether mortgage demand continues to grow. If it does it may indicate that although demand in Sydney and Melbourne is slowing it is picking up elsewhere.

Will new housing approvals follow the trend in capital gains and continue to ease through 2016?

The November 2015 building approvals data show a sharp fall in dwelling approvals led by the volatile unit segment. Seasonally adjusted total dwelling approvals were -12.7% lower over the month, their largest monthly fall since July 2012. Year-on-year dwelling approvals are -8.4% lower and approvals have retracted to be -16.8% lower than their recent record highs. The data indicates a slowing in developer appetite for approvals and, given the slowing demand for mortgages from investors and slowing home value growth, it is a trend which is likely to continue over the coming months. The decline in approvals in November was led by units however, house approvals, which haven’t seen the same level of acceleration as units, also recorded a fall over the month. House approvals were -0.6% lower over the month and -2.2% lower year-on-year. Meanwhile, unit approvals declined by -24.0% in November and were -15.0% lower year-on-year. Although the unit approvals series is much more volatile series than houses, it has now started trending lower with approvals -30.3% lower than their recent record high of 11,084 approvals in July 2015. House approvals are also trending lower, albeit at a more moderate pace, down -9.4% from their recent peak of 10,376 approvals in April 2015. The most recent Census in 2011 shows that 21.2% of detached houses are rented compared to 56.0% of units. The recent sharp fall in investor housing finance commitments is much more likely to impact on demand for new units than new houses and we may be seeing developers starting to react to this market shift. The data on unit approvals by type further highlights the recent boom in high-rise 4 storeys and greater unit approvals. Historically townhouses have been the product of choice for medium and high density developers however, over the past four years we have seen record high levels of high rise construction. Both monthly and annual data points to demand for high-rise approvals starting to fall although it should be noted that high-rise approvals still account for a majority of unit approvals. High-rise approvals could be considered a bit of a double-edged sword for developers, in one instance they are considered the highest and best use of land in areas of strategic significance eg along transport spines and in areas closed to major working nodes like the CBD however, they are heavily reliant on achieving a particular level of presales. From an economic sense they take longer to build so the economic benefit of the construction is stretched over a longer period of time however, they are ultimately less likely to end up constructed because much more financing is required and they are so dependent on adequate levels of presales. It is likely that given units are much more likely to be purchased by investors and investor demand is now falling that a larger than normal proportion of these units will not end up constructed in this new phase of the housing cycle. Historically around 98% of units approved are constructed compared to around 85% of units. Much like home sales, values and investment related mortgage demand, we are now also seeing early signs of a slowing in dwelling approvals. Although approvals are slowing there is still a large number of unit projects under construction which should continue to provide a high level of economic benefit as the recent record high number of dwelling approvals continues for a few years. Of course the huge surge in housing construction at a time when population growth is slowing means that there is a better balance between housing supply and demand. In fact in certain areas there are now concerns about oversupply, particularly in inner city unit markets. This is going to be a key theme to watch during 2016 particularly considering that we are already seeing investor demand falling and record low levels of rental growth. The next challenge will be when these units come to settlement will their initial valuation hold up and will the changed lending landscape mean that some purchasers will have to find larger deposits in order to settle. Furthermore, if they purchased for investment purposes the next challenge may just be finding someone to rent the property.

Final week of auctions for 2015 sees preliminary auction clearance rate recorded at 60.5 per cent

After clearance rates peaked at 82.3 per cent over the Easter weekend in April this year and remained in the high 70’s for the following six weeks, CoreLogic RP Data’s preliminary auction clearance across the combined capital cities was recorded at 60.5 per cent this week, a slight increase from the previous week’s final auction clearance rate of 58.2 per cent, but coming in lower than the clearance rate recorded one year ago 63.6 per cent . Auction volumes remained relatively high over the last auction week of this year, when compared to last year, with 1,808 homes taken to auction this week, compared to 1,702 last year, but far less than over the previous week when 2,989 auctions were held. Overall, the final three months of the year saw 33,594 auctions held, compared to 34,016 a year ago, and with housing market conditions cooling, the proportion of successful auctions has consistently tracked lower than a year ago since late October which is likely to set the scene for more sedate auction conditions as the auction activity restarts in late January. Melbourne’s auction clearance rate remained relatively strong this week, with 66.7 per cent of the reported auctions sold up from 64.9 per cent last week and 61.5 per cent one year ago. This week, Melbourne was host to a total of 882 residential auctions, down from 1,572 last week and higher than one year ago 639 . Activity across the city this week brings the total number of auctions held across the city for 2015 7.6 per cent higher than 2014. To finish of the year, Melbourne’s best performing sub-regions for clearance rates were the Inner South region at 80.7 per cent across 57 auction results and Melbourne’s West at 73.2 per cent across a total of 112 reported auctions. Far from the heights recorded at the start of the year, Sydney’s last preliminary auction clearance rate for the year was recorded at 60.3 per cent, higher than last week 54.7 per cent but substantially lower than at the 74.5 per cent recorded over the final week of 2014. After a record breaking year, where Sydney’s auction clearance rate was recorded above the 80 per cent for 22 consecutive weeks, the market has begun to moderate and has now retracted back to 2012-13 levels. Despite the lower clearance rate, there are still pockets across Sydney where auction performance is strong. This week the Sydney’s City and Inner South region’s clearance rate was 85.3 per cent across 34 results, while Eastern Suburbs 79.2 per cent and North Sydney and Hornsby 76.7 per cent both recorded a strong clearance rate, albeit on relatively low auction volumes. Across Brisbane, 190 auctions were held this week with 114 results reported so far. The preliminary clearance rate for the city was 50.9 per cent, strengthening from 41.9 per cent last week and on par with one year ago 50 per cent . Further south, across the Gold Coast there were 59 auctions held this week, with 30 results reported so far. The preliminary clearance rate for the region was 36.7 per cent. This week, 113 auctions were held across Adelaide with the city’s preliminary clearance rate recorded at 59.8 per cent, up from 49.3 per cent last week, when the city saw its lowest clearance rate for 2015. One year ago, 129 Adelaide auctions were held with a success rate of 53.6 per cent. Perth’s preliminary clearance rate this week is just 25.9 per cent, falling from 36.2 per cent last week and lower than 43.8 per cent one year ago. There were 67 Perth auctions held this week, with 54 results reported so far. Across Canberra 95 auctions were held this week with a preliminary clearance rate of 53.1 per cent, up from 48.6 per cent last week and 47.5 per cent last year. 18 Tasmanian auction results have been reported with week with 6 sales.

Net overseas migration hits lowest level since 2006

The Australian Bureau of Statistics ABS released demographic data for the June 2015 quarter earlier today. The data is valuable because it provides insight into the size of the country’s population as well as an analysis of the different sources of population growth at both the national and state level. At the end of June 2015, the national population was estimated at 23,781,169 persons having increased by 317,083 persons over the year. The rate of population growth over the 12 months to June 2015 was recorded at 1.4% which has continued to slow. Victoria 1.7% along with New South Wales 1.4% and the Australian Capital Territory 1.4% have seen the fastest annual rate of population growth while Tasmania and the Northern Territory both 0.4% have been noticeably weaker than all other states and territories for population growth. The national rate of population growth has slowed from a peak of 2.2% per annum in December 2008 and a more recent peak of 1.8% in December 2012. Since this most recent peak the profile of population growth has changed markedly; at that time Western Australia 3.7% , the Northern Territory 2.8% , Queensland 2.0% , and Victoria and the Australian Capital Territory both 1.8% had the highest rates of population growth. All states and territories now have a lower rate of population growth, with the sharpest falls in the resource states and territories, while the slowdown in population growth across Victoria has only been moderate. Conversely, over the 12 months to December 2012, New South Wales’ population increased by 1.3%, South Australia’s by 0.9% and Tasmania’s by 0.1%. New South Wales and Tasmania are both currently recording a faster rate of population growth than they were when the national rate of population growth was peaking. In terms of the actual raw number increase in population; New South Wales leads 104,266 followed by Victoria 99,371 , Queensland 58,929 and Western Australia 33,213 . Between them, New South Wales and Victoria accounted for 64.2% of the national population increase and if you include Queensland and Western Australia the figure rises to 93.3%. The 64.2% share of all total population increase occurring in New South Wales and Victoria is a record high. Elsewhere the annual increases in population were recorded at; 13,110 in South Australia, 1,860 in Tasmania, 939 in the Northern Territory and 5,360 in the Australian Capital Territory. At a national level there are two components of population growth; net overseas migration and natural increase births minus deaths . Over the year, there was a natural increase of 148,900 persons and net overseas migration of 168,183 persons. Natural increase was -5.1% lower over the year and net overseas migration fell -11.4% and was recorded at its lowest annual level since September 2006. In fact, over the quarter there was net overseas migration of 28,498 persons which was the lowest quarterly increase since June 2006. As a result of the fall in both natural increase and net overseas migration, the annual rate of population growth has fallen by -8.6% over the year. At a state level population growth is also affected by movements between states interstate migration as well as natural increase and net overseas migration. For the purposes of this analysis we will just be looking at migration rather than natural increase. Looking at net overseas migration, New South Wales and Victoria are the major benefactors of overseas migration. In fact, 71.4% of total net overseas migration flowed to these two states with the figure rising to 91.2% if you include Queensland and Western Australia. This highlights that most of the migrants to the country are moving to the largest cities. The Australian Capital territory is the only state or territory where annual net overseas migration is higher over the year, up 22.6%. The largest annual falls in net overseas migration have occurred in the resource states and territories of Queensland -31.2% , Western Australia -31.6% and the Northern Territory -30.6% . Looking at the quarterly data across the largest states, in New South Wales net overseas migration was at its lowest level since June 2011, in Victoria it was at its lowest level since June 2010, in Queensland it has increased from a low of 1,752 in December 2014 and in Western Australia it is at its lowest level since June 2004. Net interstate migration in to Victoria was at a record high of 10,190 persons over the 12 months to June 2015 while Queensland was the only other state to record positive net interstate migration of 6,417 persons. Elsewhere, net interstate migration was recorded at: -6,639 persons in New South Wales, -3,763 persons in South Australia, -1,962 persons in Western Australia, -528 persons in Tasmania, -3,083 persons in Northern Territory and -677 persons in the Australian Capital Territory. Although New South Wales continues to lose people to other states it continues to do so at record low levels. Meanwhile net interstate migration into Queensland has improved a little but remains near historic low levels and Western Australia is losing the most people to other states and territories since 2002 with no sign of a slowdown in this trend. The last few quarters of data indicate that interstate migration into Queensland and Tasmania may be starting to pick-up while it slows elsewhere. The demographic data shows that population growth is continuing to slow however, the most market slowdown continues to occur in mining states and territories. Population growth is much greater in New South Wales and Victoria and so too is overseas migration. This would tend to indicate that people are following the stronger economies and subsequently where the job opportunities are strongest. Subsequently this has contributed to additional demand for housing in Sydney and Melbourne and been a key input to the recent value growth in these cities. Quarterly data suggests that the surge of people moving to New South Wales and Victoria is starting to slow, this may be linked to housing affordability. The next few quarters of data will be interesting to analyse to see if population trends are shifting in concert with the recent slowing of housing demand in both Sydney and Melbourne.

CoreLogic RP Data Auction Market Preview for week ending 20 December

Upcoming auctions: This week signals the beginning of the end of year auction slow down, with auction volumes falling over the week from 2,989 last week to 1,727 this week. Auction volumes are relatively similar to one year ago, when 1,702 capital city auctions were held. The number of auctions held this week will be lower in all capital city markets except for Perth, where auction volumes remain virtually unchanged from last week. Melbourne will host 872 auctions this week, down from 1,572 last week, while one year ago just 639 auctions were held across the city. CoreLogic RP Data is currently tracking 457 Sydney auctions, compared to 891 last week and 648 over the same week one year ago. This year has been the busiest year for auctions on record, with auction volumes expected to come in just over 108,500 for the year. To put this into perspective, there were 104,444 capital city auctions held in 2014, 81,473 in 2013 and just 62,713 in 2012. Capital City Auctions this week: Sydney: 470 Melbourne: 872 Brisbane: 186 Adelaide: 118 Perth: 66 Canberra: 99 The busiest individual suburbs for auctions across Australia this week are all located in Melbourne. There are 19 auctions scheduled in Craigieburn, 17 in Reservoir and 16 in Mill Park. Summary of last week’s results: The combined capital city clearance rate remained below the 60 per cent mark last week, with the final results showing 58.2 per cent of the 2,722 reported auction results sold at auction. Both Sydney and Melbourne, Australia’s two largest auction markets saw clearance rates improve marginally last week, up from 63.3 per cent the previous week to 64.9 per cent last week in Melbourne and Sydney’s clearance rate rose from 52.9 per cent to 54.7 per cent last week. Adelaide, with a clearance rate of 49.3 per cent and Canberra 48.6 per cent both recorded their lowest clearance rate for the year last week, while Perth’s clearance rate has remained virtually unchanged over the past three weeks. Brisbane’s final auction clearance rate was 41.9 per cent last week, similar to the 41.5 per cent recorded across the Gold Coast.

Commercial Market Update – Christchurch Cityscope

The latest research from Christchurch Cityscope shows that commercial sales activity in Christchurch has decreased in the past three months. Sales recorded in the three months to December 2015 totalled $20 million, a decrease from the quarter ending September 2015 when sales totalled $52.5 million and from the quarter ending June 2015 when sales totalled $38.5 million. The latest data brings the twelve-month sale total to $144.4 million, a decrease from the previous 12 months when sales totalled $251.9 million. The table below shows sales recorded for the past eight updates of Christchurch Cityscope: Recent notable sales include: 98 Victoria Street, Christchurch Central, a two storey commercial/retail building with a site area of 311 sqm, was bought for $3.3 million 55 Chester Street West, Christchurch Central, vacant land with a site area of 1,236 sqm, was bought for $3.2 million Clocktower Lane at 388 Montreal Street, Christchurch Central, a block of a two-and-three-storey buildings occupied by residential units with garages on a site of 1,512 sqm, was bought at auction for $2.9 million Worcester Chambers at 69 Worcester Street, Christchurch Central, an historic two storey brick office building with a net lettable area of 740 sqm, was bought for $2.3 million. Properties for sale in Christchurch in December 2015 include: 163 St Asaph Street, Christchurch Central, a two storey warehouse building with a showroom and offices on a site of 681 sqm, is for sale through Ray White Commercial 123 Worcester Street, Christchurch Central, vacant land with a site area of 339 sqm, is for sale through Bayleys, Ray White and MB Cook Co. Ltd. Significant leasing opportunities in Christchurch in December 2015 include: 141 Cambridge Terrace, Christchurch Central, a six storey office building, has office space of 181 – 2,500 sqm available for lease through Colliers International Christchurch. Office space of 143 – 1,862 sqm in a new development at 124-140 Kilmore Street, Christchurch Central is available for pre-lease through Colliers International Christchurch. Office space of 390 – 2,488 sqm in a new development at 287-295 Durham Street North, Christchurch Central is available for pre-lease through Colliers International Christchurch. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe

Commercial Market Update – Chatswood Cityscope

The latest research from Chatswood Cityscope shows property sales have slightly decreased in value for the quarter to December 2015. There were 39 sales recorded in the most recent quarter with a total value of $71.2 million, as compared with 30 sales recorded to September 2015 with a total value of $75.4 million and 23 sales for a total of $39.4 million for the quarter ending June 2015. The 12 months leading up to the December 2015 recorded 122 sales for a total of $243.1 million, a significant decrease from 174 sales for a total of $558.6 million recorded the same time last year. The table below shows sales recorded for the past eight updates of Chatswood Cityscope. Recent standout sales in Chatswood include: 65 Whiting Street, Artarmon, a 3 storey warehouse/workshop building divided into five units with security basement parking, situated on a 2,188 sqm parcel of land, was bought for $8 million. Unit 2, 16 Malvern Avenue, Chatswood, a 123 sqm commercial unit with 3 car parking in the basement and unit 19, 16 Malvern Avenue, Chatswood, a 170 sqm commercial unit with 9 car parking in the basement, both located on the ground floor of Malvern Court, a 2 storey commercial strata building, were bought for about $4.7 million. Unit 9, 12-14 Malvern Avenue, Chatswood, a 142 sqm commercial unit including 3 car parking spaces and unit 10, 12-14 Malvern Avenue, Chatswood, a 147 sqm commercial unit including 3 car parking spaces, both located on the first floor of Chatswood Grove, a 3 storey commercial strata building, were bought for $4.6 million. 481-483 Willoughby Road, Willoughby, a single-storey retail building with net lettable area of 563 sqm situated on a 538 sqm block of land was bought for $3.1 million. Properties for sale in Chatswood in December 2015 include: 18-26 Dickson Avenue, Artarmon, a 3 storey office building with container access and a high-clearance warehouse with a building area of 2,362 sqm and land area of 1,639 sqm, for sale through CBRE North Sydney. Unit 28, 441 Victoria Avenue, Chatswood, a 269 sqm retail unit on the second floor of Lemon Grove, a 3 level shopping complex for sale through Loyal Property Chatswood. Suite 303, 781 Pacific Highway, Chatswood ; a 76 sqm commercial suite including 2 car spaces located on level three of a 7 storey commercial building, is for sale through Degotardi Commercial Real Estate. Significant leasing opportunities in Chatswood in December 2015 include: Solitaire at 12 Help Street, Chatswood, a 14 storey office building with three levels of basemenet parking for 193 cars, has office space ranging from 250 sqm to 2,000 sqm for lease through JLL North Sydney and Cadigal Office Leasing North Sydney. 475 Victoria Avenue, Chatswood, a 13 storey office tower with a single-level retail plaza area, has office space ranging from 400 sqm to 9,000 sqm for lease through Cadigal Office Leasing and Colliers International North Sydney. 16 Dickson Avenue, Artarmon, a 2 storey warehouse building with rooftop parking, for lease through Sutton Anderson. Chatswood Interchange at 436 Victoria Avenue, Chatswood, a 4 level shopping centre comprising 9,943 sqm retail space, has 65 sqm to 200 sqm for lease through Rook Salinger. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe

Commercial Market Update – Canberra Cityscope

The latest research from Canberra Cityscope shows property sales decreased in the past three months. Sales recorded in the quarter ending December 2015 totalled $87.7 million, a decrease from the $92.5 million recorded in the three months to September 2015, and a decrease from the $149.8 million recorded in the three months to June 2015. This data brings the 12 month total to $336 million, an increase from the $314.6 million recorded the same time last year. The table below shows sales recorded for the past eight updates of Canberra Cityscope. Recent standout sales in Canberra include: The AusAID Building at 255 London Circuit, City; an 11 level, 8,972 sqm office building with parking for 134 cars, was bought for $70,025,000 in a sale handled by JLL Sydney and JLL Canberra. 33 Egan Court Belconnen, a single level, 1,725 sqm medical centre with parking for 60 cars, was bought for $8,650,000 in a sale handled by Burgess Rawson. Guilfoyle House at 151 Oakden Street, Tuggeranong; a single storey, 1,500 sqm office and warehouse with parking for 130 vehicles, was bought for $4 million in a sale handled by Colliers International. Properties for sale in Canberra in December 2015 include: 40 Cameron Avenue, Belconnen, a 5 storey A-grade office building with parking for 221 vehicles; is for sale through Colliers International Canberra. Book value of the building was at $42.5 million in December 2014. Eclipse House at 197 London Circuit, City; a 10 storey, 6,567 sqm office building is for sale through Colliers International Canberra. The building last traded at $11.8m in April 2002. 14 Wales Street, Belconnen, a 2 storey, 3,800 sqm high-clearance warehouse building with parking for 25 vehicles, is for sale through CBRE. The building was built as a secure facility for the then Commonwealth Department of Civil Aviation and last traded at $6.4m in January 2010. Significant leasing opportunities in Canberra in December 2015 include: 40 Cameron Avenue, Belconnen, a 5 storey A-grade office building with parking for 221 vehicles; has office space of 500 to 9,470 sqm through Knight Frank and JLL Canberra. 33 Allara Street, City, an 8 storey, 9,900 sqm commercial building with retail on the ground floor and basement parking for 131 vehicles; has office space of 650 to 9,215 sqm for lease through Knight Frank and Colliers International. 14 Moore Street, City, a 14 storey, 11,100 sqm B-grade office building with basement parking for 79 cars; has office space of 6,060 sqm through Colliers International and Raine & Horne Commercial Canberra. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe

Commercial Auction Results – Week ending 11 December 2015

Over the week ending 11 December the preliminary auction clearance rate was recorded at 75 per cent, the highest clearance rate since the first week of September this year. Preliminary results show that auction volumes fell last week, down to 60 from 97 the previous week. Over the previous week, the auction clearance rate was recorded at 55.7 per cent. At the same time last year, 106 auction results were reported with a success rate of 57.6 per cent. There have been 360 commercial auctions reported over the most recent four week period with 215 sales, equating to a clearance rate of 59.7 per cent over the period. Of the 215 sales reported, 159 have been reported with a sale price, totalling $297.8 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Future apartment site sells for $120 million

In the sale of part of a building not yet even built, UEM Sunrise Berhad has agreed to terms to sell the serviced apartment component of their Aurora Melbourne Central tower. UEM Sunrise Berhad is an engineering infrastructure group, established in 1966, with businesses across engineering, construction, township development and asset and facility management. The company is listed on the Bursa Malaysia exchange. The Aurora is one of UEM Sunrise’s three forays into the Melbourne market. Its confidence in the inner city residential sector is bolstered by the latest Bureau of Statistics’ figures – a growth forecast of 1,800 people per week in ‘the world’s most livable city’. The Aurora, designed by Elenberg Fraser with a floor plate that is inspired by the Malaysian national flower, the Hibiscus, will comprise 941 apartments of which all have sold off the plan. Construction has begun with completion scheduled for 2019. The 252 serviced apartments will be located between levels 10 and 32 of the 92-level building. The purchaser is the Ascendas Hospitality Trust, a Singaporean group established for investing, directly or indirectly, in income-producing real estate used predominantly for hospitality purposes located across Asia, Australia and New Zealand. Ascendas Hospitality Trust listed on the Singapore Exchange in July 2012. Ascendas Pte Ltd holds about 35% of the units in Ascendas Hospitality Trust and Accor Asia Pacific holds 6.9% of the units. Ascendas has agreed to terms at $120 million for the 252 serviced apartment rooms of the Aurora development. Ascendas’ CEO, Tan Juay Hiang, cites strong tourism growth, an expanding student population and the site’s proximity to Melbourne Central shopping centre and underground as indicators of future demand for the apartments in what will be Melbourne’s tallest building. Meredith Baume Commercial Research Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Preliminary clearance rate strengthens after last week saw the lowest clearance rate for 2015

There were 2,948 auctions held across the combined capital cities this week, with a preliminary auction clearance rate of 59.3 per cent. Last week, a clearance rate of 57.3 per cent was recorded across 3,252 capital city auctions, the lowest clearance rate since February 2013. At the same time last year, both auction volumes and the auction clearance rate were stronger, with a clearance rate of 65.5 per cent across 3,511 residential auctions. Across Melbourne, 1,561 homes were taken to auction this week, compared to 1,622 last week, while the clearance rate strengthened slightly to 65.7 per cent, up from 63.3 per cent over the previous week. Looking back at last year, a clearance rate of 68.6 per cent was recorded across 1,585 auctions. Of the 9 individual Melbourne sub-regions, this week the strongest performer, in terms of clearance rate was the Inner South region. So far, CoreLogic RP Data has collected 193 results for the region and the preliminary result shows 72.5 per cent of these auctions were successful. In Sydney, 869 auctions were held this week, down from 1,070 over the previous week. The preliminary clearance rate of 55.2 per cent is an improvement, compared to last week, when the final auction clearance rate for the city was 52.9 per cent, the lowest clearance rate Sydney has seen since December 2012. Despite the slight strengthening over the week, Sydney’s current clearance rate remains significantly lower than one year ago, when a clearance rate of 69.8 per cent was recorded across 1,357 auctions. Looking at the sub-regions of Sydney, the Inner West region recorded the strongest clearance rate of 74.6 per cent across 55 auctions, while the Inner South West region had the highest volume of auctions 126 . Brisbane was host to 180 auctions this week and so far 126 results have been reported, with a preliminary success rate of 46 per cent. Last week, auction volumes across the city were higher with 203 auctions held and a clearance rate of 42.2 per cent. Unlike Brisbane, the number of homes taken to auction this week increased across the Gold Coast with 87 properties scheduled for auction this week, compared to 66 last week. Of the 52 results reported so far, 36.5 per cent were successful. Adelaide recorded a clearance rate of 51.6 per cent across 151 auctions this week, down from a stronger 60 per cent across 138 auctions last week. At the same time last year, 171 homes were taken to auction, with 55.7 per cent recording a successful result. In Perth, 58 auctions took place this week, with 25 results reported so far. Perth’s preliminary clearance rate of 40 per cent across these reported results is higher than both last week’s result 36 per cent and the clearance rate from one year ago 22.5 per cent . Canberra’s preliminary auction clearance rate of 48.6 per cent this week is lower than last week, when the final auction clearance rate was 57.5 per cent, and also lower than the 56.9 per cent recorded last year. There were 17 Tasmanian auctions held this week. So far 10 results have been reported with 2 sales.

Commercial Market Update – Newcastle Cityscope

The latest research from Newcastle Cityscope shows that commercial property sales have increased in the three months to December 2015. The most recent quarter had 16 sales at a total value of $73.8 million, as compared to 21 sales totalling $30.4 million in the three months to September 2015 and 25 sales totalling $22.2 million for the quarter to June 2015. This latest data brings the total sales value in Newcastle Cityscope to $164.4 million for the year, an increase from the $144.8 million recorded the same time last year. The table below shows sales recorded for the last eight updates of Newcastle Cityscope. Notable sales in the December 2015 update of Newcastle Cityscope include: NIB House at 22 Honeysuckle Drive, Newcastle West, a six-storey, a-grade office building with ground floor retail space with a site area of 8,006 sqm, was bought for $50 million. Hunter Street, Newcastle West, a privately owned road used as parking; The Store at 854-868 Hunter Street, Newcastle West, a large 3-storey emporium building with a rendered brick art deco façade with a site area of 7,607 sqm; Cooper Street, Newcastle West, a private road, linking Cooper Street and Beresford Street with a site area of 1,072 sqm and 41 Beresford Street, a four-storey car park, were bought together for over $11 million. The most notable properties for sale in Newcastle Cityscope in the December 2015 update are: Newcastle Beach YHA at 30 Pacific Street, Newcastle, a two-storey brick federation building with a site area of 1,060 sqm, is for sale through Colliers International Newcastle. 37 Darby Street, Newcastle, a single-storey building with a site area of 217 sqm, is for sale through Knight Frank. 12 Wickham Street, Wickham, a single-storey rendered brick office with a workshop and loading dock with a net lettable area of 327 sqm on a site area of 353 sqm, is for sale through Castle Property. Leasing opportunities listed in the December 2015 update of Newcastle Cityscope include: Queens Wharf and Harbourview Function Centre at 150-162 Wharf Road, Newcastle, a three-storey wharf building, has retail and office space of 25 to 3,000 sqm for lease through Colliers International Newcastle. 384 Hunter Street, Newcastle, a seven-storey office building with basement parking, has office space for lease of 265 to 555 sqm for lease through Colliers International Newcastle. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe

Sydney commercial market remains strong

Further evidence of the strength of Sydney’s commercial market can be seen with the recent sale of 117 Clarence Street in the CBD. Realising a profit of $20 million over two and a half years, Altis Property Partners has sold the building for $81 million in a sale arranged by John Bowie Wilson of Knight Frank and Michael Stokes of CI Australia. Altis, founded by Paul Notaras, Shaun Hannah, Alastair Wright and Chris Packett in 2008, is an Australian private equity real estate investment group with over $1 billion under management. Purchaser is Roxy Pacific Holdings. Roxy Pacific, a property and hospitality group, was established in 1967 and listed on the Singapore Exchange SGX in 2008. Besides the ownership and running of Grand Mercure Roxy Hotel in Singapore the group is mainly engaged in the development and sale of residential and commercial properties. According to Sydney Cityscope, 117 Clarence Street is a 14 storey office building, including retail tenancy on the ground floor, a two-level hotel, 11 levels of office space and basement parking for 33 cars. With a NABERS rating of 4 stars, the building has a net lettable area of 12,571 sqm and floor plates of 1,000 sqm. Major tenants include AMEB Australian Music Examinations Board , NSW Board of Studies, Gosper Rawlings and the Office Hotel. The property last traded at $61 million in July 2013. Roxy Pacific’s price of $81 million definitely reflects the strength of the Sydney commercial market but also the building’s proximity to and views of Darling Harbour and situation of three-street frontages. Such a position always leaves open the possibility of a future residential conversion. Meredith Baume Commercial Research Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Perth Cityscope

The latest research from Perth Cityscope shows property sales have decreased in the past three months. Sales recorded in the quarter ending December 2015 totalled $146.9 million, a decrease from the $794.3 million recorded in the three months to September 2015 a result due to several large sales in the period , and an increase from the $10.7 million recorded to June 2015. This data brings the 12-month total to $1,039.4 million, an increase from the $378.3 million recorded the same time last year. The table below shows sales recorded for the past eight updates of Perth Cityscope. Recent standout sales in Perth include: 53 Ord Street, West Perth, an A-grade office building of 5 storeys with a 2 level car park and a net lettable area of 6,864 sqm, which was bought for $59 million through CBRE. St Andrew’s Presbyterian Church, 36 St Georges Terrace, Perth, a Federation Gothic-style building built in 1906 with the two storey McNess Memorial Centre to the rear, and 10-14 Pier Street, Perth, a building of 4 storeys, built in 1968, which was offered as a residential/hotel development site and was transferred twice – once at $18,832,977 and once at $23.75 million. The Victoria, 14-16 Victoria Avenue, Perth, an office building of 10 storeys plus lower ground parking with 32 bays and retail space at street level, which sold for $16,637,842. Properties for sale in Perth in December 2015 include: 81 St Georges Terrace, Perth, a building of 11,860 sqm over 14 levels available through JLL – Perth. Survey House, 18 Prowse Street, West Perth, a two storey office building with basement parking for 27 cars, through Colliers International. Geoscience House, 69 Outram Street, West Perth, three levels of offices above lower-ground parking for 40 cars, through Colliers International. Significant leasing opportunities in Perth in December 2015 include: Brookfield Place, 125 St Georges Terrace, Perth, a 5 level tower in the centre of the site with gross floor area of 86,000 sqm, and four 2 and 3-storey podium buildings to the west and south of the tower, which has up to 32,000 sqm available for lease through CBRE and JLL. 999 Hay Street, Perth, a 10 level commercial building comprising office space on levels 2 to 9, retail space on ground level and parking for 67 cars, which has office space of up to 10,800 sqm for lease through CBRE and JLL. London House, 216 St Georges Terrace, Perth, an 18 storey office building completed in 1986 and with a net lettable area of 16,615, which has up to 8,000 sqm for lease through CBRE. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results – Week ending 6 December 2015

The number of commercial auctions held last week increased from 85 the previous week to 100, with a preliminary clearance rate of 58 per cent, rising from 51.8 per cent the previous week. Last week’s preliminary result signifies the strongest commercial clearance rate in 5 weeks. At the same time last year 69 commercial auctions were reported with a success rate of 43.5 per cent. Over the most recent four week period 148 of the 272 reported auctions have been successful. Of the 148 successful results, 99 have been reported with a sale price totalling $192.84 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

The investor housing party is over for now

The Australian Bureau of Statistics ABS released housing finance data for October 2015 earlier this week. The data showed an ongoing decline in investor housing finance commitments as owner occupier demand rebounded. As we’ve commented before, the data is being influenced by many Authorised deposit-taking institutions ADIs reclassifying investor mortgages as owner occupier mortgages. This is muddying the results to some extent nevertheless, we are also seeing tighter lending criteria for investors as well as higher mortgage interest rates which is clearly also having an impact on demand and causing it to slow. In October there was $32.6 billion worth of housing finance commitments nationally which was the lowest by value since March of this year. This $32.6 billion was comprised of $21.2 billion in commitments to owner occupiers and $11.5 billion worth of investment commitments. Over the month, owner occupier commitments rose by 0.4% while investor commitments fell -6.1%. Year-on-year owner occupier commitments are 21.2% higher while investor commitments are -9.2% lower. After peaking in April this year at $14.2 billion over the month, the value of investor housing finance commitments have fallen by -18.9%. The components of owner occupier lending were recorded at $1.8 billion for construction of dwellings, $1.2 billion for purchase of new dwellings, $6.8 billion in refinancing of established dwellings and $11.3 billion worth of commitments for purchase of established dwellings. Refinancing now accounts for almost a third of all owner occupier housing finance commitments. Year-on-year the value of commitments for construction of dwellings are -4.5%, purchase of new dwellings are +32.4%, refinances are +26.9% and purchase of established dwellings are +21.9%. Investor housing finance commitments are split into two components, commitments for construction of dwellings and commitments for established housing. The value of these two categories were recorded at $1.0 billion for construction of dwellings in October 2015 and $10.5 billion for established housing. The value of investment commitments for established housing was at its lowest level since February 2014 in October 2015. Year-on-year the value of commitments for construction of dwellings is +31.8% compared to an -11.7% fall in commitments for established housing. If we look at the total split between housing finance commitments for new housing stock owner occupier construction of new dwellings, owner occupier purchase of new dwellings and investor construction of dwellings $4.0 billion was committed to in October 2015 which was a record high. In comparison, $21.8 billion was committed to over the month for existing housing stock owner occupier purchase of established dwellings and investment commitments for established housing . The $21.8 billion was actually the lowest value of commitments for new stock since May of this year. As a proportion, finance commitments for new stock accounted for 18.4% of all commitments in October 2015 which was its highest level since they accounted for 19.6% of all commitments in February 2014. Investor demand in the housing market from domestic borrowers is waning and we expect that this trend is set to continue over the coming month, particularly in light of slowing value growth in Sydney and Melbourne. Meanwhile, owner occupier housing demand is picking up however, will it be big enough to offset the slowing investor demand? Time will tell although it will be interesting to watch given you can only own one owner-occupied property but may own multiple investment homes. Demand for new stock is also climbing which is in line with the rise in housing construction taking place. While there is no doubt plenty of new properties are purchased by overseas investors it is encouraging to see that local buyers are also participating in this market. From here it will be interesting to see how much further investor demand slows and whether the pick-up in owner occupier demand eventually starts to result in more first time buyers too.

CoreLogic RP Data Auction Market Preview for week ending 13 December

Upcoming auctions: For the fifth consecutive week, CoreLogic RP Data is expecting over 3,000 auctions to be held across the combined capital cities, with 3,028 scheduled this week, down from 3,252 last week and the year’s record number of auctions the previous week 3,729 . There will be less capital city auctions this week, relative to last year, when there were 3,511 over the corresponding week. Despite auction volumes falling on a broad capital city level, the same cannot be said for Adelaide, the only capital city where auction volumes are set to rise, with 151 Adelaide auctions scheduled this week, compared to 138 last week. Melbourne auction volumes, down from 1,622 last week to 1,601 this week, have remained relatively steady, while across Sydney, auction activity will be significantly lower this week 902 , compared to last week 1,070 . Capital City Auctions this week: Sydney: 902 Melbourne: 1,601 Brisbane: 179 Adelaide: 151 Perth: 61 Canberra: 116 Summary of last week’s results: Last week, the combined capital city final auction clearance rate was recorded at 57.3 per cent, the lowest reading since February 2013. Much of the overall weakness was driven by Sydney, where only 52.9 per cent of the reported auctions were sold last week, dropping from 56.2 per cent the previous week. Melbourne’s final auction clearance rate was 63.3 per cent, over 10 percentage points higher than Sydney’s, but still lower than the cities result over the week prior 65.9 per cent . Adelaide was the only other capital city where the final auction clearance rate didn’t fall below 60 per cent. There were 130 Adelaide auctions reported from a total of 138 that were held.

The first week of summer shows the preliminary clearance rate slipping further, to the lowest reading for 2015, at 59.2 per cent

Auction volumes fell to 3,209 this week, after last week saw auction activity rise to the highest levels seen all year with 3,729 auctions held across the combined capital cities, bringing spring auction volumes to the highest on record. The preliminary auction clearance rate slipped further this week, down to 59.2 per cent, compared to 60.1 per cent over the previous week. Over the same weekend last year, 3,507 homes were taken to auction and a clearance rate of 63.7 per cent was recorded. In Melbourne, auction volumes remain high with 1,603 auctions held, despite falling from a record high of 1,876 last week. The clearance rate has fallen, with preliminary results showing a 63 per cent success rate, down from 65.9 per cent last week. This time last year, the clearance rate for Melbourne was 66 per cent across 1,733 auctions. The busiest Melbourne sub-regions this week were Melbourne’s Inner region and the Inner South region, where 323 and 264 auctions were held respectively. The best performing regions in terms of clearance rates this week were Mornington Peninsular, with a clearance rate of 69.4 per cent, albeit on a low volume of reported results 36 and North East Melbourne, where the preliminary clearance rate was 68.4 per cent across a total of 152 results. Sydney was host to 1,051 auctions this week, down from 1,306 last week, while the preliminary clearance rate has fallen for the tenth consecutive week, to 55.6 per cent, from 56.2 per cent last week. The latest result signifies the 5th week in a row where Sydney’s clearance rate has been under the 60 per cent mark. One year ago 1,294 Sydney homes were taken to auction over the week, and 66.1 per cent were successful. There were five Sydney sub-regions this week where the preliminary clearance rate was above 60 per cent including Inner West 66.1 per cent , Eastern Suburbs 65.2 per cent , City and Inner South 64 per cent and Northern Beaches and North Sydney and Hornsby both 62.5 per cent . The preliminary clearance rate in Brisbane this week was 46.6 per cent, down from 47.3 per cent over the previous week. Auction volumes were lower this week with 200 auctions held, compared to 215 last week. Meanwhile, across the Gold Coast, 41.4 per cent of the 29 reported auctions were successful. A total of 139 Adelaide homes were taken to auction this week, with a preliminary clearance rate of 70.8 per cent across 96 results, the strongest clearance rate of any capital city this week. Last week, Adelaide’s clearance rate was 58 per cent across 158 auctions. This week was Perth’s busiest of the year, with 80 auctions held this week. Perth’s clearance rate remained steady over the week, at 36 per cent. Across Canberra a total of 121 auctions were held this week, compared to 98 last week and 87 at the same time last year. Canberra’s preliminary clearance rate of 67.1 per cent is higher than it was the previous week 58.3 per cent . So far this week, 8 Tasmanian auctions were reported, with just two sales recorded, both prior to their associated auctions.

Commercial Auction Results – Week ending 27 November 2015

Preliminary results for the week ending 27 November show that 100 commercial auctions were held with a clearance rate of 58 per cent, representing a rise in both auction volumes 85 and the clearance rate 51.8 per cent from the previous week. Last week’s results are also stronger relative to one year ago, when the clearance rate was 43.5 per cent across 69 auctions. Over the most recent four week period, 272 commercial auctions have been held with 148 sales. Of these 148 sales, 99 have been reported with a price with the total value of these 99 transactions just above $192.84 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Sydney Cityscope

The latest research from Sydney Cityscope shows that Sydney CBD commercial property sales for the three months ending November 2015 have decreased significantly from the preceding quarter. There were 102 sales recorded for the most recent quarter with a total value of $671.3 million, as compared to 90 sales for a total of $3.284 billion for the quarter ending August 2015 and 99 sales for a total of $1.787 billion for the quarter ending May 2015. For the year ending November 2015, there were 377 sales recorded for a total of $6.824 billion, compared to 360 sales for a total of $5.973 billion for the year ending November 2014. The table below shows sales recorded for the last eight updates of Sydney Cityscope: Recent notable sales in Sydney include: A 10-storey commercial building at Darling Drive, to be completed on the Darling Square development site which will provide 1,556 sqm ground floor retail space, 22,773 sqm commercial floor space on levels 6 to 10 and public car park on levels 2 to 5, was bought for over $300 million. The leasehold of LG IMAX Theatre Sydney at 31 Wheat Road, Sydney, an aluminium clad building with an eight-storey-high IMAX movie screen, a 540-seat theatre and retail tenancies on lower levels, was bought for approximately $70 million. 160 Sussex Street, Sydney, a 12-storey building completed in 1992 with a net lettable area of 8,622 sqm was bought for approximately $60 million in a sale handled by Savills and Colliers International. The sale represented an initial yield of 6.67% on a passing income of $4 million net . Rendezvous Studio Hotel Sydney Central at 803-813 George Street, Sydney, a 13-storey hotel completed in 1983, was bought for $38 million in a sale handled by JLL Hotels & Hospitality Group. Properties for sale in Sydney Cityscope in November 2015 include: 319 Sussex Street, Sydney, a three-storey with a basement on a 127 sqm block, net lettable area 3,885 sqm, is for sale through Knight Frank Sydney. The car park at 109 Pitt Street, Sydney, a three-level basement public car park for 143 cars, is for sale by expressions of interest through CBRE. Unit 9 at 131 Clarence Street, Sydney, a 176-sqm commercial unit, which is to be auctioned by Cushman & Wakefield. 752 George Street, Sydney, a six-storey commercial building on a 227 sqm block, net lettable area 966 sqm, is to be auctioned by Raymond Hung Real Estate and Knight Frank Sydney. Properties with space for lease in Sydney Cityscope in November 2015 include: Telstra Plaza Building at 310 Pitt Street, Sydney, a 32-storey office tower completed in 1989 and refurbished in 2010, has office space ranging from 513 sqm to 18,035 sqm available for lease through Colliers International. 10 Barrack Street, Sydney, a 12-storey office building with parking for 15 cars and ground floor retail space, has office space ranging from 350 sqm to 1,518 sqm available for lease through Colliers International and CBRE. Governor Phillip Tower at 1 Farrer Place, Sydney, a 64-level premium grade office tower comprising 40 levels of office space and 10 basement car parking levels, has office space ranging from 120 sqm to 10,000 sqm available for lease through Cadigal Office Leasing and Office Hub – Sydney. Lumley House at 309 Kent Street, Sydney, an 18-storey office tower with 5 levels of basement parking, has office space ranging from 343 sqm to 9,400 sqm available for lease through Dexus Property Group and Colliers International. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Brisbane South Cityscope

The latest research from Brisbane South Cityscope shows property sale numbers have decreased in the past three months. The last three months to the end of November 2015 recorded 8 sales for a total of over $55.4 million; with $50.5 million for commercial, $1.6 million for commercial strata and $3.4 million for other. In comparison, the three months to the end of August 2015 recorded 20 sales for a total of over $72.2 million; with $27.4 million for commercial, $1.6 million for commercial strata, $3.5 million for retail strata and $39.7 million for other. The 12 months leading up to the end of November 2015 recorded 68 sales for a total of over $450.9 million, over $30 million lower than the recorded figure for the same time period the year before. The table below shows sales recorded for the past eight updates of Brisbane South Cityscope: The top three most significant sales recorded this quarter together totalled over $50 million. 99 Melbourne Street, South Brisbane, a five-storey office building with ground floor retail space; completed in late 2004. Primewest Funds Limited sold the property following an expressions of interest campaign which closed June 18, 2015. The property sold for $38.75 million to 99 Melbourne Street Real Estate Netherlands B.V. on behalf of Credit Suisse Real Estate Fund International. Flint Davidson and Bruce Baker of CBRE Brisbane negotiated the sale which represented an initial yield of 8.25% on a passing income of $3,197,825 net . 38 Hope Street, South Brisbane, a two-storey office building with development approval for stage 2 of Art House apartments. Sold for $9.59 million to Mirvac Queensland Pty Limited, as trustee for the Mirvac Property Trust. Sorrento development, to be a seven-storey residential building with a ground floor shop; at excavation stage in November 2015. Pamela Worthington sold the property for $2.35 million to Silverstone Enterprises No 12 Pty Ltd. A warehouse on site was demolished in 2015 in preparation for the development of Sorrento. Properties listed for sale include: Unit 1, Montague Central, 170 Montague Road, South Brisbane– a two-level unit with 357 sqm on the ground floor and 177 sqm on the first floor. Total unit area 534 sqm. For sale by expressions of interest, closing December 9, 2015; agent, Chesterton International Peter Smailes and Jim Wicks . 53 Mollison Street, South Brisbane – a single-storey brick cafe/restaurant with a courtyard to the rear. Scheduled for auction February 17, 2016; agent, First National Commercial Hiep Nguyen . 35 Merviale Street, South Brisbane – two levels of office space above ground floor car parking. For sale by expressions of interest; agent, Wright Property Andrew Gard and Nick Spiro . Numerous developments are currently underway in South Brisbane and West End, including: Sorrento Ellise Apartments Allure Apartments Citro West En Light+Co Apartments Vida West End Escent Apartments Acqua Apartments Spice Apartments Fleet Lane Brisbane Casino Towers Soda Apartments Art House stage 1 Ivy Apartments The Melbourne Residences Opera on Cordelia Menso at South Bank Southpoint Baase Apartments 190 Vulture Street, South Brisbane Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Melbourne office building sold for $118 million

A Melbourne CBD office building that has had several former lives has sold for just over $118 million. The five level building at 206 Bourke Street, which was formerly a Village Cinema and before that a Waltons department store, has been sold by its current owners, Hiap Hoe Ltd; a long established Singaporean property developer engaged with property investment, development and construction. Its other Melbourne projects include 380 Lonsdale Street and Marina Tower, 22 Pearl River Road, Docklands. Purchaser for the property is ISPT Pty Ltd. ISPT, founded in 1994, is an unlisted property fund manager which invests in commercial, retail, industrial and residential property and which currently has over $11 billion of funds under management. The sale is subject to a due diligence exercise that is currently being undertaken and ISPT has until December 18 to complete it. According to Melbourne Cityscope, 206 Bourke Street, is a five-level building comprising retail space on ground and level one and office space in the three upper levels plus one level of basement parking. It was converted from a cinema complex to commercial/retail use in 2010 and now has a net lettable area of over 11,000 sqm. The building’s major tenants include Health Skills Australia, Navitas Workforce Solutions, Michelin-starred Tim Ho Wan restaurant, JB Hi-Fi and numerous small retail tenants. Bought with approval for a 142 room residential and hotel development, Hiap Hoe paid $105 million just two years ago on an initial yield of 7.74% on passing income of $8,124,000 net . The current sales price of $118.3 million reflects the still current DA, a strengthening CBD residential market and the property’s own site area – over 3,000 sqm located in the middle of the Melbourne CBD. Meredith Baume Commercial Research Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

CoreLogic RP Data National Auction Preview, week ending 6 December 2015

Capital City auctions this week: Sydney: 1,088 Melbourne: 1,670 Brisbane: 210 Adelaide: 137 Perth: 85 Canberra: 122 Last week was the busiest week for auctions for the year with 3,729 capital city auctions held. The final auction clearance rate was 60.1 per cent. Auction volumes this week are set to fall, however the auction markets will still be busy with CoreLogic RP Data currently tracking just over 3,300 auctions across the capitals. Over the 2015 year to date, there has been 7 weeks where over 3,000 auctions have been held across the capital cities. Last week’s final auction clearance rate was recorded at 60.1 per cent, with 3,388 results reported, showing that over 90 per cent of all auction results were captured. The capital city clearance rate for Spring was 65.5 per cent, compared to 68.0 per cent for Spring 2014. Sydney’s auction clearance rate last week fell to 56.2 per cent for the 9th consecutive week and show that Sydney’s clearance rate is now much lower than last year at 70.6 per cent over the week. Despite the weaker result, there were still pockets in Sydney where the clearance rate maintained strength last week. Across the Eastern Suburbs, 73.7 per cent of reported results were successful, while Ryde 69.4 per cent , North Sydney and Hornsby 64.4 per cent and Sutherland 63.6 per cent each performed well above the city-wide bench mark. This week, Sydney is expecting to host 1,088 auctions, lower than both last week and last year 1,294 . Across Melbourne 1,670 auctions are scheduled this week, compared to 1,876 last week and 1,733 one year ago. Melbourne’s final auction clearance rate for last week was 65.9 per cent, the highest of any capital city. The best performing Melbourne sub-regions were Inner Melbourne and Outer East Melbourne, both of which recorded a clearance rate above the 70 per cent mark. For Brisbane, last week’s clearance rate was 47.3 per cent and 210 auctions are scheduled for this week. Adelaide’s final auction clearance rate was 58.0 per cent last week, falling from 64.4 per cent the previous week. CoreLogic RP Data is currently expecting 137 auctions to be held across the city this week. There are 85 Perth auctions scheduled this week, which will be the busiest week for the city so far this year. Perth’s clearance rate last week was 36 per cent, with 50 results reported and a total of 60 auctions held. Across Canberra, 122 auctions will be held this week, compared to 98 last week and 87 last year. Canberra’s clearance rate was 50.6 per cent last week, the weakest result for the city since December last year. Mount Waverley, Reservoir and Glen Waverley, all in Melbourne will each host 24 auctions this week, the most of any individual suburb nationally.

Dwelling approvals remain at near record high levels largely thanks to high-rise approvals

The Australian Bureau of Statistics ABS released building approvals data for October 2015 earlier today. Focusing just on dwelling approvals, although they were slightly lower than the recent record high levels, the overall number of dwellings approved for construction remain extremely high from a historical standpoint. There were 19,652 dwelling approvals in October which was 3.9% higher over the month and 12.3% higher year-on-year. If we look at approvals over the past 12 months there has been a record high 233,180 approvals which is 17.3% higher year on year. In October 2015, there were 9,435 houses and 10,218 units approved for construction nationally. House approvals are -2.1% lower over the month and -2.3% lower year-on-year. The more ‘lumpy’ unit approvals have increased by 10.1% over the month and are 30.2% higher year-on-year. The data highlights the rising prevalence of unit approvals and this is particularly reflected if we look at the annual approvals. For the first time ever there have been more units approved 117,072 over the past year than houses 116,111 . With the rising prevalence of unit construction there has also been a record high proportion of high-rise approvals over the past year. Looking at unit approvals over the past year, 25.5% of approvals were for townhouses, 9.1% were for low-rise less than four storeys and 65.4% were for high-rise four storeys or more . To put the rise in high-rise into context, a year ago 56.5% of unit approvals were high-rise, five years ago the figure was 38.1% and a decade ago high-rise accounted for 36.9% of unit approvals. Clearly densification and demand for inner city living is driving the rising demand for high-rise units. It’s also important to note that over recent years, Chinese and Indians have overtaken New Zealanders and those from the United Kingdom as our largest sources of migrants. While New Zealanders and those from the United Kingdom often prefer houses like most Australians, Chinese and Indians are much more accustomed to living in smaller homes and in much higher density environments. This is another driver of the growing prevalence of high-rise approvals. Turning to approvals in the capital cities, there were 17,236 capital city dwelling approvals in October which was 15.9% higher over the month and 16.9% higher year-on-year. There were 6,691 houses and 10,545 units approved for construction over the month. House approvals fell by -1.8% over the month to be -6.6% lower year-on-year while unit approvals increased 30.8% over the month and were 39.2% higher year-on-year. Across the individual capital cities, house approvals generally fell over the month however, they have for the most part been trending higher of late but are lower relative to a year ago. Over the month there were 1,373 approvals in Sydney, 2,244 in Melbourne, 945 in Brisbane, 1,410 in Perth, 540 in Adelaide, 77 in Hobart, 43 in Darwin and 59 in Canberra. Year-on-year the changes in approvals have been recorded at -3.8% in Sydney, +2.4% in Melbourne, -6.8% in Brisbane, -23.9% in Perth, +24.4% in Adelaide, +6.9% in Hobart, -30.6% in Darwin and -45.9% in Canberra. While housing approvals may be showing early signs of slowing across the capital cities, the same can’t be said for unit approvals which in most cities remain at or close to record highs. Across the capital cities there were 3,630 approvals in Sydney, 3,640 in Melbourne, 1,671 in Brisbane, 677 in Perth, 561 in Adelaide, 6 in Hobart, 215 in Darwin and 145 in Canberra. The year-on-year changes in approvals have been recorded at +73.7% in Sydney, +32.6% in Melbourne, +37.4% in Brisbane, -10.8% in Perth, +18.4% in Adelaide, -80.6% in Hobart, +83.8% in Darwin and +0.7% in Canberra. Based on the data it seems that the demand from developers to seek approvals for units, particularly high rise approvals, is continuing to climb. Countering this is the slowing in detached housing demand. As mentioned earlier, the biggest sources of migration to Australia are more comfortable with high-rise development and this coupled with the fact it is relatively more affordable than detached houses seems to be driving the demand. The challenge from here with value growth now slowing is how many of these approvals will be delivered to the market. We already have concerns surrounding potential settlement risk for projects already under construction given that banks have recently changed lending requirements to investor. Keep in mind that unit stock is much more likely to be purchased by investors than detached houses. Although there has been a slight easing of approvals over recent months they remain at near record highs. Of course population growth is winding down, particularly overseas migration, which should result in an ongoing improvement in housing supply relative to housing demand.

A high volume of Sydney stock available for sale, while broadly speaking, new listings are lower than one year ago

There were a total of 249,133 residential properties available for sale across Australia as at the week ending 29 November 2015, with 110,884 capital city properties available for sale, indicating that total stock levels are -1.7 per cent lower than last year across the combined capital cities and -2.8 per cent lower nationally. Over the most recent four week period, the majority of listings newly added to the market were within the capital cities, with 30,539 new advertisements, compared to 18,104 in regional towns, which means 63% of new listings were in capital cities, while across the total stock pool, capital city listings account for just 45% of available properties. Compared to last year, the number of new listings added to the market over the past four weeks is higher in only three cities: Melbourne – 9,477, which is 2.5 per cent higher compared to the same period last year 9,246 Adelaide – 2,537, which is 1.5 per cent higher compared to the same period last year 2,500 Canberra – 756, which is 16 per cent higher compared to the same period last year 652 While in terms of total stock, levels are higher, relative to last year, in Sydney, Perth and Darwin. While Perth and Darwin’s total stock levels have continuously been recorded at a higher volume compared to the relative period one week ago for the entirety of 2015, this has only been the case since mid-September in Sydney. At one point this month, the total available stock in Sydney was the greatest it has been since late 2011, and based on the four weeks ending 29 November, there were a total of 24,579 residential Sydney properties available for sale, the highest volume of listings since late 2013, giving buyers plenty of choice across the Sydney market. To put this further into perspective, three months ago, at the end of August, there were just over 19,000 Sydney properties listed for sale. Stock levels have been increasing due to two things, firstly the increase in new listings being added to the market each week, which has been trending upwards since May this year, likely attributed to the increase in home values across the city and associated vendor confidence, while since March sales volumes across the city have generally been slowing. Nationally, total listings are -2.8 per cent lower than they were one year ago. Across South Australia, the number of total listings is virtually the same as one year ago, while in the Australian Capital Territory, total listings are just -1.9 per cent lower. Across all the other states and territories, the difference between total stock this year relative to last year is more prominent, with Northern Territory +9.7 per cent and Tasmania -7.0 per cent showing vast differences.

Second largest auction weekend for the year sees preliminary clearance rate edge higher to 60.1%

This week marks the second busiest week for auctions across the combined capital cities this year, with 3,649 auctions held over the week, just short of the 3,668 held earlier this year, over the last week of March. This week the preliminary clearance rate is 60.1 per cent, having increased, albeit only slightly, from a low of 59.5 per cent last week, the first time the clearance rate has dipped below 60 per cent since Easter 2013. At the same time last year, both auction volumes 3,908 and the clearance rate were higher 63.7 per cent . This week in Melbourne, Australia’s largest auction market, saw the highest volume of auctions so far this year, with 1,828 auctions held across the city, up from 1,510 last week. A preliminary auction clearance rate of 65 per cent was recorded this week, rising slightly from 64.7 per cent last week. This time last year, 1,635 properties were taken to auction across Melbourne and a clearance rate of 63 per cent was recorded. The highest volume of auctions was held across Inner Melbourne this week, with 347 auctions and a preliminary clearance rate of 71 per cent, the strongest of any other Melbourne sub-region so far this week. Sydney’s preliminary clearance rate this week was 56.3 per cent across 954 auction results. There were a total of 1,284 auctions held across the city. Last week, Sydney had recorded the lowest clearance rate for the year to date 56.7 per cent , with 1,116 properties going to auction, however this week has seen the clearance rate fall even further and it will be interesting to monitor this as additional results are reported over the next few days. Looking back at this weekend last year, 1,631 auctions were held across Sydney and a clearance rate of 70.6 per cent was recorded. Sydney’s North Sydney and Hornsby region hosted the most auctions of any Sydney sub-region this week, with 185 properties taken to auction. The preliminary clearance rate for the region is higher than the wider Sydney result, at 62.8 per cent across 132 results. There were 211 Brisbane auctions this week with half of the 156 results reported as selling. In comparison, last week the final auction clearance rate for the city was 41 per cent across 226 auctions and this weeks 50 per cent clearance rate is also higher than one year ago when there were 294 auctions with a success rate of 37.8 per cent. The Gold Coast’s preliminary clearance rate was 39.2 per cent across 51 results this week. This week, Adelaide saw a preliminary clearance rate of 59.5 per cent, with 116 reported results across a total of 155 scheduled auctions. In comparison, over the previous week Adelaide’s clearance rate was 64.4 per cent and 62.3 per cent one year ago. Perth’s clearance rate of 34.4 per cent across 59 auctions is similar to the previous week, when 40 auctions were held and a clearance rate of 31.3 per cent was recorded. Over the same week last year, the clearance rate was a lower 28.3 per cent, and 62 auctions were held. Canberra’s preliminary auction clearance rate of 58.6 per cent this week is lower than last week, when the final auction clearance rate was 61.8 per cent and also lower than the 59.5 per cent recorded last year.

CoreLogic RP Data National Auction Preview, week ending 28 November 2015

With current high auction volumes at play, we’re seeing auction clearance rates trend lower. While next week is set to be a bumper auction week with 3,815 auctions currently expected for next week, there will be plenty of stock for buyers to choose from with an expected 1,890 auctions in Melbourne and 1,372 auctions in Sydney. In both cities auction volumes for this week are set to be higher than last week however, lower than a year ago when there were 1,635 Melbourne auctions and 1,631 Sydney auctions. Keep in mind of course this is the last week of Spring and auction markets are likely to start slowing in terms of auction volumes from here. Around the remaining capitals: Brisbaneis set for a busy week, with 219 auctions, slightly lower than the 226 last week Adelaide 160 compared to 145 last week Perth 58 compared to 40 last week Canberra 101 compared to 116 last week – there is set to be slight fall in auction activity over the week Busiest suburbs this week for auctions: Melbourne – Mount Waverley 30 , Reservoir 29 and St Kilda 28 Sydney – Mosman 20 , Blacktown 18 and both Strathfield and Turramurra 17 . Last week auction market wrap: The combined capital city auction clearance rate fell to below 60% for the first time since late March 2013. The combined capital city auction clearance rate was recorded at 59.5%, down from 62.3% over the previous week. Over the week there were 3,166 auctions held which marked consecutive weeks of more than 3,000 auctions. CoreLogic RP Data captured results for 2,883 of these auctions which is a collection rate of 91.1%. The two major capital city markets of Sydney and Melbourne each recorded falls in clearance rates last week. Last week Sydney had 1,116 total auctions compared to 1,510 auctions in Melbourne. Sydney’s clearance rate fell from 58.0% the previous week to 56.7% last week which was the cities lowest clearance rate since early February 2013. While Sydney clearance rates fell, Melbourne’s clearance rate was recorded at 64.7% down from 69.8% the previous week. It was Melbourne’s lowest auction clearance rate since February of this year. For 11 consecutive weeks now Melbourne’s auction clearance rate has been higher than Sydney’s. Between 2010 and mid-2013, it was common for Melbourne’s clearance rate to outperform Sydney’s, however since that time, Sydney’s auction clearance rate has been consistently outperforming until recently.

APRA data shows that investment lending is starting to slow

Earlier this week the Australian Prudential Regulation Authority APRA released its September quarter data on property exposures by Australian Authorised Deposit-taking Institutions ADIs . The quarterly data provides some very valuable insight into the domestic mortgage lending market. With this data comes a further sign that the recent lending changes from APRA are coming into effect and reducing investor related lending activity. According to the data, the value of outstanding residential term loans mortgages to households was recorded at $1.355 billion at September 2015. This figure is comprised of $840.6 million in owner occupier loans and $514.2 million in investor loans. Investor loans accounted for 38.0% of all outstanding mortgages, down from 39.0% at the end of the June 2015 quarter. This provides the first evidence since September 2013 that a slowdown in lending to the investor cohort is underway. Despite the slowing of investor mortgage demand, the total value of outstanding mortgages has increased by 9.1% over the year compared to an 8.9% increase in owner occupier mortgages. The next data set looks at mortgages by the value outstanding across those which have: offset facilities, interest-only mortgages, are reverse mortgages, are low-documentation mortgages and are other non-standard loans. Based on the data, 41.4% of loans have offset facilities, 39.4% are interest-only, 0.2% are reverse mortgages, 2.1% are low-documentation and 0.1% are other non-standard loans. The 41.4% with and offset facility is a record high while the proportion of reverse, low-documentation and other non-standard loans is at a record low. Interest only loans remain high on an historic basis however, they have eased slightly over the quarter and lenders look to reduce the number of borrowers who aren’t paying down their principal. Over the past year, the value of lending with offset facilities has risen 23.5%, interest-only mortgages are 19.1% higher and reverse mortgages are 1.1% higher. Meanwhile, the value of low-documentation loans is -14.8% lower and other non-standard loans are -14.1% lower. The average outstanding balance on a mortgage was $246,400 at the end of September 2015 with this figure having increased by 2.5% over the year. Loans with an offset facility have an average outstanding balance of $300,100 having increased by 5.3% over the year which is the fastest annual increase since June 2011. The value outstanding for interest-only mortgages has increased by 5.6% over the past year to $325,700, with the 5.6% annual increase being the largest on record. Reverse mortgages $95,000 , low-documentation mortgages $193,200 and other non-standard mortgages $193,700 each have much lower outstanding balances with the value outstanding falling over the year for low-documentation -6.3% and other non-standard loans -9.8% . The regulator APRA , the RBA and ASIC have all previously raised concerns about the magnitude of interest-only lending and the potential risks associated with it. There would possibly be some concern that the typical amount outstanding to these mortgages is historically high and rising at its fastest pace on record. Additional published data focuses on new lending over the quarter of which there was a record high $94.975 million. Of this new lending, 34.7% $32.930 million was to investors with the remaining 65.3% $62.045 million to owner occupiers. This represents a substantial fall in lending to investors over the quarter with the value down -19.9%. Meanwhile, total lending still only recorded a moderate fall of -1.4% over the quarter due to a 12.4% rise in lending to owner occupiers which has mostly offset the fall in investment lending. The fall in lending to investors is in line with the declines seen in monthly housing finance data and reflects higher interest rates and tighter lending criteria for investors from June of this year. There is also some muddying of the waters, with lenders reclassifying mortgage types which has resulted in some adjustments in the APRA data. There has also been a noticeable fall in lending for interest-only mortgages over the past quarter. While interest-only lending made up a substantial 41.1% of lending over the September 2015 quarter, it has fallen from 45.9% of all lending in the June 2015 quarter. The value of interest-only lending has fallen by -11.5% over the quarter but is still 8.4% higher over the year. It is also getting significantly harder for low-documentation borrowers looking to borrow through traditional channels. Low-documentation loans accounted for just 0.4% of new lending over the September quarter with the value of lending down -8.7% over the quarter and -33.5% for the year. As low documentation ADI’s find it harder to obtain finance through these traditional finance channels, we suspect that there are a growing number obtaining finance through less mainstream or non-bank channels, many of which aren’t encapsulated in this data. The quarterly data also highlights new lending across different loan to value ratio LVR bands. Based on the value of new lending, 22.4% of new mortgages had an LVR of less than 60% in the September 2015 quarter, 54.1% had an LVR of between 60% and 80%, 14.1% had an LVR of between 80% and 90% and 9.4% had an LVR of 90% or more. Over the quarter, the value of new lending only rose across those mortgages with an LVR of less than 60% +2.6% with falls across the 60% to 80% -0.2% , 80% to 90% -2.8% and 90% or greater -13.9% cohorts, In fact LVR lending above 80%, which is typically the type of lending where lenders mortgage insurance LMI is applicable, was recorded at a record low 23.5% over the quarter. The data shows that while investor lending, interest-only lending and high LVR lending remains prevalent, it has become harder to obtain these types of mortgages over the past quarter. This is due to many changes in lending policies having been made by most ADIs and it should assist in ensuring stability within the mortgage lending market. Low-documentation and non-standard lending is minimal and falling which once again is encouraging however, it is unclear how much of this lending is occurring outside of the traditional mortgage lending space. It seems as if the tighter lending requirements are having a positive impact with borrowers using larger deposits and being more conservative with how much they borrow.

Darling Square’s $300 million sale

Commercial sales continue to be strong in Sydney with a $300 million sale of a yet to be completed office building that is part of the Darling Square development. The vendor of the property’s long term leasehold was the Darling Harbour Authority, a NSW government authority constituted under the Darling Harbour Authority Act 1984, to promote and develop land in the Darling Harbour development area. The buyer was a partnership between Australian Prime Property Fund Commercial APPF Commercial and First State Super FSS . APPF Commercial is a core wholesale unlisted property trust established in 1994 and managed by Lend Lease Investment Management Australia . FSS, with current assets of $52 billion under management, is a not-for-profit Australian superannuation fund which was initially established in 1992 to provide superannuation benefits to New South Wales government employees, but is now open to anyone eligible to receive superannuation. The future building will be a 10-storey commercial building providing 1,556 sqm ground floor retail space, 22,773 sqm commercial floor space on levels 6 to 10 and public car park on levels 2 to 5. Designed by Woods Bagot, the new building will be constructed around a central atrium and is being built to achieve a 4.5-Star NABERS rating. The project, currently at level one, is being built by Lend Lease on the site of the former Entertainment Centre Carpark. The development is part of the wider Darling Square development which will also include three residential towers. When completed it is envisaged that the area will cater to 4,000 residents, 2,000 workers and tourists and visitors. Many of these workers will be from the Commonwealth Bank which has agreed to lease the entire building upon completion for 12 years. Meredith Baume Commercial Research Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Macquarie Park Cityscope

The latest research from Macquarie Park Cityscope shows property sales have increased in the past three months. Sales recorded in the quarter ending November 2015 totalled $473 million, an increase from the $137.1 million recorded in the three months to August 2015, and an increase from the $132 million recorded to May 2015. This data brings the 12 month total to $805.8 million a decrease from the $1.0671 billion recorded the same time last year. The table below shows sales recorded for the past eight updates of Macquarie Park Cityscope. Recent standout sales in Macquarie Park include: 78 Waterloo at 78 Waterloo Road Macquarie Park, an eight storey, 14,950 sqm, office building with parking for 288 cars, was bought for $106 million in a sale handled by JLL Sydney. 118 Talavera Road Macquarie Park; which is part of Macquarie View Corporate Park at 112-118 Talavera Road, a six level, 11,728 sqm, office building was bought for $80 million. Macquarie View Corporate Park comprises three office buildings of 4, 4 and 6 stories above a podium of 14 industrial units; with a total net lettable area of 34,001 sqm and parking for 450 vehicles. Building G, Rhodes Corporate Park, a six storey, 12,270 sqm, office building was bought for $71 million. Properties for sale in Macquarie Park in November 2015 include: 15 Orion Road Lane Cove West an eight storey office building with two warehouses and a 3-storey annexe; with total area 9,838 sqm and 237 car spaces, is for sale through Knight Frank North Sydney and CI Australia North Sydney. The building last traded at $25,050,000 in June 2004. Epson Australia House at 3 Talavera Road Macquarie Park, a three storey, 7,580 sqm, commercial/warehouse building with parking for 118 cars, is for sale through JLL Sydney. The property is for sale as part of a portfolio of properties owned by the South Australian Motor Accident Corporation. The building last traded at $11.4 million in December 1996. 4 Sirius Road Lane Cove West, a three storey, 4,269 sqm, office and warehouse building with parking for 61 cars, is for sale through Sutton Anderson. The building last traded at $9,750,000 in April 2009. Significant leasing opportunities in Macquarie Park in November 2015 include: Macquarie Technology Centre at 11-17 Khartoum Road Macquarie Park, comprising two complexes with a total net lettable area of 15,371 sqm and parking for 321 vehicles. Complex one at 11-17 Khartoum Road comprises a single and three storey office building, workshop buildings and parking; net lettable area 4,511 sqm; Complex two at 33-39 Talavera Road comprises a 5-storey office tower, a three storey office building, workshops and parking. The centre has 10,616 sqm comprising office space of 6,758 sqm, and warehouse space of 3,858 sqm through CBRE North Sydney and GJS Property. Link Business Park Building B at 22 Giffnock Avenue Macquarie Park, two buildings with a total net lettable area of 17,317 sqm and parking for 206 vehicles; a three-storey, 7,531 sqm, building to the street, a 7 storey, 9,786 sqm, office building at the rear. The centre has 9,786 sqm through Knight Frank North Sydney. Pinnacle Office Park at 2-4 Drake Avenue Macquarie Park; comprising two 8 storey office buildings, has 5,815 sqm through Goodman International and JLL North Sydney. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update â

The latest research from Southbank Cityscope shows property sales have increased in the past three months. Sales recorded in the quarter ending November 2015 totalled $242.6 million, an increase from the $147 million recorded in the three months to August 2015, but a decrease from the $517.9 million recorded to May 2015. This data brings the 12 month total to $1.275 billion, a decrease from the $1.42 billion recorded the same time last year. The table below shows sales recorded for the past eight updates of Southbank Cityscope. Recent standout sales in the Southbank area include: Both properties at 256 City Road and 260 City Road, were bought together as a residential development site for a total of $27 million in a sale arranged by Lemon Baxter The Opera Centre at 35-41 City Road and an adjoining property at 43-47 City Road, with a combined site area of1, 704 sqm were bought in two separate parcels for a total of $22.8 million in a sale handled by CBRE Melbourne Vacant land of 1,448 sqm at 127-129 Kavanagh Street was bought for $16 million. Properties for sale in Southbank in November 2015 include: 39-49 Bank Street, the former Southern Cross Broadcasting Building, a three storey concrete block building on a 1,441 sqm site is for sale by expressions closing December 3, 2015 through CBRE Melbourne. The property last traded at $5.527 million in March 2010 199-201 Normanby Road, a single storey concrete office-showroom on a 1,214 sqm site is for sale by expressions of interest closing November 26, 2015 through Knight Frank Melbourne. The property last traded at $1.53 million in May 2006 Three vacant land at 21-23 Power Street, 25-35 Power Street and at 38-48 Freshwater Place with a combined site area of 3,095 sqm are for sale by expressions of interest closing December 10, 2015 through CBRE Melbourne. Significant leasing opportunities in Southbank in November 2015 include: IBM Centre at 60 City Road, a 29 storey west tower in the Southgate Complex has office space ranging from 391 to 1,303 sqm for lease through Knight Frank Melbourne and Dexus Property Group Sydney Kings Technology Park at 111 Coventry Street, comprising of five office buildings between 4 and 9 levels high has office space of 250 to 1,300 sqm for lease through Melbourne Commercial 2 Southbank Boulevard, a 37 storeys commercial tower of Freshwater Place has office area ranging from 215 to 836 sqm for lease through CBRE Melbourne and Colliers International Melbourne. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results – Week ending 20 November 2015

Preliminary results show 70 commercial auctions over the week ending 20 November, with a clearance rate of 52.9 per cent. In comparison, over the previous week, 62 commercial auction results were reported and the clearance rate was 53.2 per cent. At the same time last year, 63 results were reported with a clearance rate of 54.0 per cent. The most recent four weeks of activity shows that 301 commercial properties have been taken to auction, with 159 sales recorded. The total value of the successfully auctioned properties was just over $324.9 million, based on 122 sales having been reported with a sale price. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Sydney’s clearance rate under 60 per cent for the third week in a row

The number of homes taken to auction remains high, with 3,087 auctions held this week, down from 3,274 over the previous week, however, the preliminary clearance rate of 60.8 per cent has fallen, down from 62.3 per cent last week, mainly due to the drop in Melbourne’s clearance rate, which is currently sitting below 65 per cent. Over the corresponding week last year, the clearance rate was a stronger 65.7 per cent and 3,315 auctions were held. Melbourne’s clearance rate remains under 70 per cent for the 5th week in a row, with this week’s preliminary clearance rate recorded at 64.7 per cent, down from 69.8 per cent last week, and weaker than the clearance rate for the city one year ago 66.1 per cent . This week, Melbourne was host to 1,477 auctions, lower than the 1,567 held last week, but higher than a year ago when there were 1,433 Melbourne auctions held over the week. Of the 9 individual Melbourne sub-regions, this week the strongest performer, in terms of clearance rate was the North East region. So far, CoreLogic RP Data has collected 153 results for the region and the preliminary result shows 71.9 per cent of these auctions were successful. Across Sydney, the preliminary auction clearance rate was 59.3 per cent this week, the third week in a row where Sydney has recorded a result below 60 per cent. Last week, Sydney’s clearance rate was 58 per cent, the lowest clearance rate seen since the week ending 10 February 2013 55 per cent ; significantly lower than one year ago, where results show that 71.8 per cent of Sydney homes taken to auction were successful. In terms of the number of auctions across the city, this week volumes were lower, down to 1,080 from 1,223 last week. One year ago 1,337 Sydney homes were taken to auction. The Eastern suburbs sub-region of Sydney has shown the strongest performance so far this week, with 82.6 per cent of the 69 reported results selling, with 33 remaining results yet to be collected. The preliminary clearance rate in Brisbane this week was 43.6 per cent, up from 39.5 per cent over the previous week. Auction volumes were higher this week with 226 auctions held, up from 198 last week. Meanwhile, across the Gold Coast, 32 per cent of the 50 reported auctions were successful. Adelaide recorded a clearance rate of 66.7 per cent across 141 auctions this week, up from 52.4 per cent across 121 auctions last week. At the same time last year, 147 homes were taken to auction, with 61.2 per cent recording a successful result. There were 39 Perth auctions this week and so far 22 results have been reported, with just 36.4 per cent selling. Last week there was a 44.4 per cent clearance rate for Perth across 39 auctions and at the same time last year, 38.3 per cent of the 55 auctions held were successful. Canberra’s clearance rate was 63.6 per cent this week across 111 auctions, compared to 63.2 per cent last week across 102 auctions. Of the 5 Tasmanian auction results reported so far this week, 1 sale has been recorded.

The different segments of the market are seeing quite different magnitudes of value changes

Housing markets show different performances geographically as well as across product types and pricing points. Across the capital cities, a useful measure of capital gain across broad price points is our stratified hedonic index. The CoreLogic RP Data Stratified Hedonic Index looks at the movement in home values across three broad value based segments of the housing market. The three segments are divided across quartiles and provide an insight about capital gains across the most affordable 25% of capital city suburbs, the middle 50% of capital city suburbs and the most expensive 25% of capital city suburbs. Over the 12 months to October 2015, dwelling values across the combined capital cities increased by 8.2% across the most affordable suburbs, 9.6% across the middle priced suburbs and 11.4% over the most expensive suburbs. The trends are somewhat different over the past three months with the most affordable suburbs recording the strongest value rises. Over the period, the most affordable suburbs have seen values increased by 1.5% compared to 1.2% growth across the middle market and a 1.3% increase in values across the most expensive suburbs. Over the current growth phase, which broadly commenced in June of 2012, combined capital city home values have increased by 26.5% across the most affordable quarter of capital city suburbs, by 32.4% across the ‘middle’ of the market and by 33.7% across the most expensive quarter of suburbs. Looking at the data across the five largest capital cities shows some quite different results. Across the most affordable capital city suburbs, home value changes over the past year have been recorded at +14.3% in Sydney, +8.8% in Melbourne, +3.1% in Brisbane, +3.4% in Adelaide and -1.4% in Perth. Looking at the middle 50% of suburbs the value changes over the past year have been recorded at: +14.8% in Sydney, +11.2% in Melbourne, +4.6% in Brisbane, +2.6% in Adelaide and -2.9% in Perth. Finally the most expensive quarter of the market recorded value changes over the past year of +17.1% in Sydney, +14.6% in Melbourne, +3.5% in Brisbane, +1.5% in Adelaide and -4.3% in Perth. Based on these results you can see that it has been the most expensive suburbs recording the greatest value rises in Sydney and Melbourne with the most affordable suburbs recording the slowest rate of growth. In Brisbane the middle market is seeing the greatest rise in values while the most affordable suburbs are seeing the slowest rate of growth. In Adelaide and Perth the best performed segment is the most affordable end of the market with the most expensive suburbs the weakest. Note that in Perth all three segments analysed have recorded value falls over the past year. Focussing on quarterly data, the most affordable suburbs have been the strongest for growth in Melbourne, Adelaide in Perth. The middle market has recorded the strongest value growth over the quarter in Brisbane while in Sydney the most expensive suburbs have recorded the highest rate of value growth. The differing performance of the segments provides a good insight into the current market dynamics as to where housing demand is strongest. In Sydney and Melbourne it is typically higher priced stock, in Brisbane it is the middle market and in Adelaide and Perth demand is largely for more affordable housing stock. As the rate of growth slows in Sydney and Melbourne we are likely to see the profile of where demand is strongest also change in those cities. Furthermore, if Sydney and Melbourne buyers look to purchase in other cities they may be able to afford more expensive stock than the local buyers in Brisbane, Adelaide and Perth. As a result we may see higher levels of value growth across the higher priced market segments.

Auction volumes are set to ease a little this week

CoreLogic RP Data National Auction Preview, week ending 22 November 2015 Last week, the combined capital city auction clearance rate increased slightly, up from 61.4% the previous week to 62.3%. Over the week there were 3,274 auctions held which was the second highest number of auctions over a week this year. CoreLogic RP Data captured results for 2,947 of these auctions which is a collection rate of 90%. The two major capital city markets of Sydney and Melbourne are both showing variations in their latest results. Last week Sydney had 1,223 total auctions compared to 1,567 auctions in Melbourne. Sydney’s clearance rate fell from 58.4% the previous week to 58.0% last week which was the cities lowest clearance rate since February 2013. While Sydney clearance rates fell, Melbourne’s clearance rate was recorded at 69.8% up from 69.0% the previous week, which is the highest clearance rate for the city in four weeks. For 10 consecutive weeks now Melbourne’s auction clearance rate has been higher than Sydney’s. Between 2010 and mid-2013, it was common for Melbourne’s clearance rate to outperform Sydney’s, however since that time, Sydney’s auction clearance rate has been consistently outperforming until recently. Auction activity across the capital cities is expected to fall this week with 3,171 auctions currently expected by CoreLogic RP Data, providing plenty of stock for buyers to choose from. Melbourne is expecting 1,518 residential auctions, which is greater than the 1,433 auctions held this week last year. In Sydney we are anticipating 1,130 auctions this week which is lower than both last week 1,248 and the same week last year 1,337 . Brisbane is set for a busy week, with 214 auctions, compared to 198 last week, while in Adelaide 141 compared to 121 and Canberra 116 compared to 102 auction activity is also expected to be higher than last week. In Perth there is set to be little change in auction activity with 38 auctions scheduled this week compared to 39 last week. Melbourne’s busiest suburbs for auction this week are: Glen Waverley 29 , Mount Waverley 29 and Reservoir 26 . In Sydney, the busiest suburbs for auctions this week are: Chatswood 20 , Marrickville 15 and Merrylands 13 .

Macquarie Park tower sold to Singaporeâ

An eight level office tower at 78 Waterloo Road, Macquarie Park, has been sold by Sydney fund manager CorVal for $106 million to Singaporean fund manager Mapletree Investments. The property sold in an off-market transaction at an initial yield of 6.3 per cent. The sale was arranged by Chris Key of JLL’s corporate finance team, and Rob Sewell and Paul Noonan of JLL’s capital markets team. The vendor, CorVal Partners Ltd, bought the property on behalf of the Value Active Fund for $72 million in September 2013. The sale of the property represents a strong return of $34 million in two years for the fund. Purchaser, Mapletree Investments Pte Ltd, is a Singapore-based real estate development, investment and capital fund manager, established in 2000, which has $28.4 billion in assets under management. Mapletree has purchased several Australian assets in the past year, including 144 Montague Road, South Brisbane, purchased for $92.750 million in November 2014; and 53 Ord Street, West Perth, purchased for $59 million in September 2015. Mapletree also purchased three office park assets at 1G Homebush Bay Drive, Rhodes, 112-118 Talavera Road, Macquarie Park, and 22 Giffnock Avenue, Macquarie Park, from the Goodman Group for a total of $250 million in early 2015. It is understood that Mapletree is looking to place the 78 Waterloo Road property into a new fund to be listed on the Singapore Exchange. It is likely that the West Perth asset and the three properties acquired from Goodman will also be placed into the new fund. According to Macquarie Park Cityscope, 78 Waterloo Road is an eight storey office building with ground floor retail space, completed in 2009. Sitting on a site area of 5,496 sqm, the building has a net lettable area of 14,950 sqm and a NABERS rating of 5.5 stars. The building has two levels of basement parking for 288 cars. The main tenant is Schneider Electric with six levels of space and a lease expiring in September 2020. Brendon Wood Data Integration Manager – Commercial Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Burke Road Cityscope

The latest research from Burke Road Cityscope shows property sales for the three months ending November 2015 have decreased from the preceding quarter. There were 3 sales recorded from the most recent quarter with a total value of $3.9 million, as compared to 3 sales for a total of $22.8 million for the quarter ending August 2015 and 9 sales for a total of $13.2 million for the quarter ending May 2015. The total value of sales for the year ending November 2015 is $112.6 million from 24 sales, an increase from the previous year, when the total value came to $78.2 million from 22 sales. The table below shows sales recorded for the past eight updates of Burke Road Cityscope. Notable sales for the November 2015 update of Burke Road Cityscope include: 933 Burke Road, East Hawthorn, an older 2 storey brick building with a glassed-in first floor balcony and a shop on each frontage with a net lettable area of 215 sqm and on a site area of 208 sqm, was sold at auction for $2.12 million through CVA Property Consultants 905 Burke Road, East Hawthorn, an older 2 storey brick building with a shop on the ground floor and a dwelling above providing a net lettable area of 110 sqm and on a site area of 127 sqm , was sold at auction for $1.50 million through Gorman Commercial Suite 105, 685 Burke Road, East Hawthorn, an office suite of 60 sqm in the 7 storey Camberwell Corporate Centre, was sold for $230,000. Properties for sale in November 2015 update of Burke Road Cityscope include: 756 Burke Road, Camberwell , 758 Burke Road, Camberwell and 760 Burke Road, Camberwell, all are parts of a 2 storey brick row of seven shops and dwellings with first floor balconies with a total site area of 630 sqm, are for sale in one line by expressions of interest closing 26 November 2015 through Savills 5 Redfern Road, East Hawthorn, a single storey former house converted to use as an office and warehouse, part of a duplex and 7 Redfern Road, East Hawthorn BK8.13 , a single storey former house, part of a duplex, with a combined net lettable area of 245 sqm and on a total site area of 384.20 sqm, are for sale by auction on 19 November 2015 through CVA Property Consultants and Melbourne Commercial. Leasing opportunities listed in the November 2015 update of Burke Road Cityscope include: 697 Burke Road, East Hawthorn , a 7 level concrete office building with a net lettable area of 2,804 sqm and parking for 54 cars, which has office space of 504 sqm on level 5 for lease though Colliers International and Gorman Kelly 610-612 Burke Road, Camberwell , a 2 storey brick building with ground floor showroom of 416 sqm for lease through Savills Melbourne 683 Burke Road, East Hawthorn, a 5 storey office block with a net lettable area of 1,535 sqm and parking for 20 cars, which has office space for lease through JLL Glen Waverley. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Chapel Street Cityscope

The latest research from Chapel Street Cityscope shows that commercial property sales have increased dramatically in the last quarter. Total sales for the quarter to November 2015 came to $187.3 million, a sharp rise from the figure of $16.9 million for the previous quarter, and up from the $111.9 million recorded for the quarter to May 2015. These figures bring the twelve month total for November 2015 to $336.4 million, a significant increase on the previous year’s total of $179.9 million. The table below shows sales recorded for the last eight updates of Chapel Street Cityscope: Notable sales in the November 2015 update of Chapel Street Cityscope include: Jam Factory, a collection of bluestone buildings originally constructed in 1876 and converted into a shopping and entertainment complex in 1979, with a building area of 20,118 sqm and a six level car park with 1,088 spaces, at 500 Chapel Street, South Yarra, which sold for around $165 million A single storey brick retail building of 440 sqm at 219 Commercial Road, South Yarra, which sold at auction for $5.22 million A two storey retail and commercial building of 500 sqm at 92 Toorak Road, South Yarra, which sold at auction for $4.1 million. Properties for sale in the latest update of Chapel Street Cityscope include: A two storey building of 445 sqm with parking for about six cars to the rear at 383 Chapel Street, South Yarra, scheduled for auction on 26th November 2015 through Fitzroys. A single storey brick retail building of 105 sqm with parking for about three cars to the rear at 78 Toorak Road, South Yarra, scheduled for auction on 9th December 2015 through Allard Shelton. Leasing opportunities listed in the November 2015 update of Chapel Street Cityscope include: A three storey brick retail building at 513 Chapel Street, South Yarra, which has 400 sqm for lease through Colliers International. A two storey retail building at 208 Chapel Street, South Yarra, which has 392 sqm for lease through Hocking Stuart Commercial. The Old Post Office, a three storey retail and commercial building with a two-storey extension at 168 Greville Street, Prahran, which has 385 sqm of retail space for lease through GormanKelly. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results – Week ending 13 November 2015

Preliminary results show 56 commercial auctions over the week ending 13 November, with a clearance rate of 55.4 per cent. In comparison, over the previous week, 22 commercial auction results were reported and the clearance rate was 45.5 per cent. At the same time last year, 49 results were reported with a clearance rate of 59.2 per cent. The most recent four weeks of activity shows that 281 commercial properties have been taken to auction, with 154 sales recorded. The total value of the successfully auctioned properties was just over $332.2 million, based on 125 sales having been reported with a sale price. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Combined capital city auction clearance rates rise, however continue to be lower than a year ago

Last week, 3,226 properties were taken to auction which was the highest number of auctions this spring and up from 2,947 auctions the previous week. Although auction volumes rose, so too did the preliminary auction clearance rate which was recorded at 63.8%, up from 61.4% over the previous week. The higher auction clearance rate was largely due to a large volume of auctions in Melbourne over the week and a slightly higher auction clearance rate as well as a moderate lift in clearance rates in Sydney. At the same time last year, there were a higher number of auctions over the week 3,360 as well as a higher auction clearance rate 68.5% . Melbourne auction volumes rose sharply over the week with 1,548 properties auctioned last week up from 1,204 over the previous week. So far, we have captured results for 1,362 of these auctions. The preliminary auction clearance rate was slightly higher last week 69.5% compared to the previous week 69.0% however, it was the fourth successive week that the Melbourne market recorded clearance rates below 70%. Over the same week in 2014, Melbourne had a lower auction clearance rate of 68.9% across a lower 1,504 auctions. Across the individual regions of the city; Inner 70.1% , Inner South 70.7% , Outer East 70.9% and West 75.2% were the only regions to record clearance rates above 70%. The Mornington Peninsula with a clearance rate of 64.8% had the lowest clearance rate across the city. The preliminary auction clearance rate for Sydney was recorded at 61.0% last week across 1,200 auctions, of which we currently have results for 880 auctions. The preliminary clearance rate has rebounded from a final clearance rate of 58.4% the previous week from a slightly higher 1,248 auctions. Sydney auction clearance rates are now below 70% for seven consecutive weeks. Over the same week a year ago, Sydney had a much higher auction clearance rate of 73.1% across a higher 1,417 auctions. The only regions of the city to record a clearance rate above 70% were: City and Inner South 73.3% , Eastern Suburbs 76.6% and North Sydney and Hornsby 71.1% . At the same time, Central Coast 34.8% and South West 34.2% each had clearance rates below 40% over the week. There were 198 Brisbane properties taken to auction last week, of which we have results for 122 auctions. The preliminary data indicates that 45.9% of these auctions were successful. Over the previous week, both the number of auctions 168 and the clearance rate 37.7% was lower. At the same time last year there were fewer properties taken to auction 142 however, the clearance rate was at a similar level 45.8% . Gold Coast had a preliminary auction clearance rate of 48.0% with results capturing for 50 of the 80 total auctions. Adelaide recorded a preliminary auction clearance rate of 49.4% last week which was lower than the 58.1% clearance rate over the previous week. The clearance rate was calculated from 81 results across 119 total auctions which is lower than the 146 total auctions for the previous week. At the same time last year there were 152 auctions with a clearance rate of 55.4%. In Perth there were 38 auctions last week with 18 results so far. The preliminary clearance rate was recorded at 50.0%, up from 16.2% the previous week. The preliminary clearance rate is slightly higher than the 45.5% at the same time last year across 57 auctions. Canberra’s preliminary auction clearance rate last week was 66.1% which was down from 76.6% over the previous week. The city had 100 auctions this week with 62 results so far which is a lower number of total auctions compared to the 122 the previous week. Of the 10 Tasmanian auction results reported so far this week, 6 sales have been recorded.

Commercial Market Update – Brisbane Cityscope

The latest research from Brisbane Cityscope shows property sale numbers have increased in the past three months. The last three months to the beginning of November 2015 recorded 21 sales for a total of nearly $2.55 billion, with $2.47 billion for commercial, $6 million for commercial strata, $53.7 million for retail, $5.7 million for retail strata and $13.5 million for other. The November total is bolstered by the inclusion of the sale of a portfolio of nine properties sold by Investa Property Group for a total of $2.45 billion to China Investment Corporation. The portfolio included 410 Ann Street, a twin tower commercial development, and eight other properties in Sydney, Melbourne, and Brisbane. The prices for individual buildings are not yet available In comparison, the three months to the beginning of August 2015 recorded 14 sales for a total of $985.4 million, with $928 million for commercial, $2.7 million for commercial strata, $22.5 million for retail, $2.7 million for retail strata and $29.5 million for other. The 12 months leading up to the beginning of November 2015 recorded 64 sales for a total of over $4.17 billion, significantly higher than the recorded figure for the same time period the year before. The table below shows sales recorded for the past eight updates of Brisbane Cityscope: The three most significant sales recorded this quarter were: The Elizabeth Arcade, 97 Elizabeth Street, with frontages to both Elizabeth Street and Charlotte Street, was sold for $28 million to El Camino Priority I Pty Ltd. The sale of the arcade was negotiated by Tom Phipps and Jason Lynch of Colliers International. 420 George Street, a 14-storey office building, was sold for $20 million to the Forza George Street Fund. The sale was negotiated by Peter Court and Mike Walsh of CBRE Brisbane in conjunction with Rick Bird of Ray White Transact. Wharf Central, 38 Wharf Street, a two level retail centre, was sold for $14 million to El Camino Priority I Pty Ltd. Mike Walsh and Peter Court of CBRE Brisbane negotiated the sale. Properties currently listed for sale include: An office and car park portfolio is for sale by expressions of interest, closing November 19, 2015; agents, JLL Geoff McIntyre, Seb Turnbull and Luke Billiau and Knight Frank Justin Bond, Ben McGrath and Neil Brookes . The portfolio comprises the freehold and leasehold outdoor dining/part basement of 300 Queen Street, the freehold of 45 Charlotte Street and the freehold of 728 Ann Street and part leasehold of the adjoining airbridge/viaduct. The properties are for sale individually or in one line. 87 Albert Street, part of the two storey CEY Building, is for sale by expressions of interest, closing November 10, 2015; agent, Chesterton International Peter Smailes and Jim Wicks . The property was advertised with a potential net income of around $237,409 per annum. 138 Mary Street, a single storey office building known as SV House, is for sale by expressions of interest, closing November 12, 2015; agent, Knight Frank Tom O’Driscoll and Justin Bond . The property was advertised with a fully leased passing income of $609,227 per annum net . Properties under contract conditionally or unconditionally include: Unit 11, 198 Adelaide Street, a 68 sqm unit in Anzac Arcade. Under contract and due to settle in December 2015; agent, Blocksidge Tom Chan . 466 Ann Street, a 486 sqm vacant block of land. Under contract with settlement due mid-December 2015; agents, CBRE Brisbane Michael Paltsis and Mike Walsh and Savills Brisbane Robert Dunne . 179 North Quay, a 15 storey office building redeveloped from the former Brisbane Central Courts Building in mid-2007. Due diligence was being conducted in October 2015; agent, Savills Brisbane Anthony Ott and Peter Chapple . The property was advertised with a fully leased net income of $3,618,220 per annum. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Melbourne Units Cityscope

Sales recorded for Melbourne Units Cityscope for the three months to November 2015 totalled $229.4 million, an increase from the $178.6 million recorded to August 2015 but a decrease from the $410.9 million recorded to May 2015. The latest data brings the twelve month sales total to $1.057 billion, a decrease from the previous twelve months, which saw sales of $1.482 billion. The table below shows sales recorded for the past eight updates of Melbourne Units Cityscope. Some notable sales featured in the November 2015 update of Melbourne Units Cityscope include: Unit 4807, an apartment on the 48th floor of Zen Tower at 23 – 37 Therry Street, Melbourne, which sold for $2.5 million. Unit 27 of 50 Bourke Street, Melbourne, a four-bedroom penthouse apartment with a roof garden, which sold for $2.12 million. Unit 6 of The Bond Store at 30 Oliver Lane, Melbourne, a 213-sqm apartment with two car spaces, which sold for $1.815 million. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Auckland Cityscope

The latest research from Auckland Cityscope shows that property sales have increased over the past three months. In the three months to November 2015, there were 51 sales for a total of $321.5 million, as compared with 58 sales for a total of $219.1 million recorded for the three months to August 2015 and 41 sales for a total of $140.1 million recorded for the three months to May 2015. This latest data brings the total sales for the 12 months to November 2015 to $1.298 billion, an increase from the $899.9 million in sales recorded to the same time last year. The table below shows sales recorded for the past eight updates of Auckland Cityscope: Recent standout sales in Auckland Cityscope include: Fonterra Centre at 7-11 Princes Street, Auckland Central, a 12 storey office tower with a three storey atrium and three basement levels of car parking space, which sold for $45 million. The New Zealand Herald premises at 46–58 Albert Street, Auckland Central, a complex of five office and warehouse buildings, with on-site parking for 165 cars and a building area of 21,540 sqm, which sold for $40 million. Properties for sale in the November 2015 update of Auckland Cityscope include: 163-165 Beach Road, Auckland Central, a single storey building consisting of two warehouse/workshops with a small mezzanine office area and a gross floor area 1,040 sqm, available by deadline private treaty closing 4 December 2015, through Bayleys Auckland. 51-53 Albert Street, Auckland Central, a two and three storey building with retail space on the ground level and parking on the upper levels, available through Ray White Commercial. The T & G Building and Elliot Stables at 15-31 Wellesley Street West, Auckland Central, a five and seven storey building with a building area of 6,290 sqm and the former Reslau House, at 37-39 Elliott Street, Auckland Central, a three storey brick building with a building area of 1,080 sqm, available through CBRE Auckland. Notable leasing opportunities in the November 2015 update of Auckland Cityscope include: 125Q and Queen’s Rise at 125 Queen Street, Auckland Central, a 30 level building undergoing refurbishment in late 2015, which has office space of 15,000 sqm for lease through Colliers International and retail space of 655 sqm for lease through Bayleys Auckland. 101 Victoria Street West, Auckland Central, a two storey building with gross floor area of 100 sqm, for lease through Bayleys Auckland. 500-504 Queen Street, Auckland Central, a six storey building with ground floor retail, offices on the upper levels and 36 covered car spaces, which has office space of up to 2,600 sqm for lease through Barfoot & Thompson. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results – Week ending 6 November 2015

Preliminary results show just 17 commercial auctions over the week ending 6 November, with a clearance rate of 47.1 per cent. The lower volume of auctions is unsurprising, given both the residential and commercial auction activity usually falls in line with the Spring Racing Carnival. In comparison, over the previous week, 143 commercial auction results were reported, the largest number of weekly auctions in over a year, and the clearance rate was 51.1 per cent. At the same time last year, 23 results were reported with a clearance rate of 56.5 per cent. The most recent four weeks of activity shows that 267 commercial properties have been taken to auction with 146 sales recorded. The total value of the successfully auctioned properties was just over $299.1 million, based on 122 sales having been reported with a sale price. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Property magnate sells Melbourne tower

Commercial property news out of Melbourne is that the 12 storey tower at 277 William Street, Melbourne, has changed hands at almost $46 million dollars. The property was sold by Harry Stamoulis, property magnate and owner of what is perhaps Australia’s dearest house, a Toorak mansion rumoured to have cost over $70 million. While the Stamoulis family fortune had its origins in the Gold Medal Soft Drink company sold to Cadbury Schweppes in 2004 , Mr Stamoulis is now firmly in the business of property investment and development. The sale was brokered by Kiran Pillai, Mark Granter and Mark Wizel of CBRE. The buyer, EG Funds Management, is one of Australia’s leading real estate fund managers, investing on behalf of industry and public sector superannuation funds. EG was founded in 2000 and currently has AU$2.15 billion in assets under management. 277 William Street is certainly an investment with little risk, being virtually next door to the Owen Dixon Commonwealth Law Courts, and other legal buildings in the area. It is currently over 90% leased with its major tenants including Shine Lawyers, Medibank, Tenix Solutions, and various small courts and legal offices. The property last traded at $7.8 million when it was bought 17 years ago by members of the Stamoulis family. Meredith Baume Commercial Research Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Auction volumes rise again, while capital city clearance rates hold steady at 61.4% and Sydney slips below 60%

CoreLogic RP Data National Auction Preview, week ending 15 November 2015 Last week, the combined capital city auction clearance rate held relatively steady, up slightly from 61% the previous week to 61.4%. Of the 2,947 auctions held, CoreLogic RP Data captured 2,683 results, equivalent to a collection rate of 91%. The two major capital city markets of Sydney and Melbourne are both showing variations in their latest results. While both cities each had a similar number of auctions, 1,204 in Melbourne and 1,248 in Sydney, Melbourne’s clearance rate rose from 65.6% the previous week to 69% last week while Sydney’s clearance rate was down to 58.4% after recording 60.2% the previous week. The clearance rate for Sydney this week is the lowest seen since the Easter weekend in 2013 and represents the 9th consecutive week where Melbourne’s clearance rate has been stronger this shift is highlighted in the graph below . Between 2010 and mid-2013, it was common for Melbourne’s clearance rate to outperform Sydney’s, however since that time, Sydney’s auction clearance rate has been consistently outperforming until recently. For the second week in a row, auction activity across the capital cities is expected to increase, with just over 3,300 auctions currently expected by CoreLogic RP Data, providing plenty of stock for buyers to choose from. Melbourne is expecting 1,563 residential auctions, reflective of conditions seen one year ago when 1,504 auctions were held, while across Sydney 1,270 auctions are being held this week, lower than one year ago 1,417 . Brisbane is set for a busy week, with 207 auctions, compared to 168 last week, while in Adelaide 121 compared to 146 , Canberra 97 compared to 122 and Perth 37 compared to 44 auction activity this week will be quieter than last week. The two busiest suburbs for auction this week are Reservoir, in Victoria with 29 auctions, and Mosman in New South Wales where 20 properties will go under the hammer.

Investor housing demand continues to fall sharply

The Australian Bureau of Statistics ABS released housing finance data for September 2015 earlier this week. The broad housing finance trends show that demand from the owner occupier segment of lending is falling while demand from investors fades. Of course since late December last year we have seen limits come into effect regarding annual investment credit growth as well as, more recently, higher interest rates for all investment borrowers and lower loan to value ratios for many. Given these changes it is no real surprise that demand from this market segment is falling; there is less investment borrowing to be had and lower LVRs mean that for many borrowers negative gearing becomes somewhat less attractive. On the other hand, demand from owner occupiers is rising, largely from upgraders and those refinancing while there is little sign that first home buyer demand is rising. Much of the recent refinance activity has subsequently translated into eventual housing investment, it will be interesting to see if the current refinance activity is just home owners shopping around for a better mortgage deal or if it will start to flow to investment in other asset classes. Looking more closely at owner occupier lending, the seasonally adjusted data shows that there was $21.0 billion worth of commitments in September 2015. This represented a monthly increase of 3.0% and a year-on-year rise of 23.1%. The $21.0 billion consisted of $1.8 billion in lending for construction of dwellings, $1.3 billion in lending for purchase of new dwellings, $6.7 billion in lending for refinances and $11.2 billion in lending for purchase of established dwellings. Each of the four components of owner occupier housing finance commitments have increased over the month with most having increased year-on-year. Year-on-year, the changes have been recorded at -1.3% for lending for construction of dwellings, +32.1% for lending for purchase of new dwellings, +30.0% for refinances and +23.0% for purchases of established dwellings. Clearly owner occupier demand is rising however, the ABS does note that ADIs are currently making changes to lending classifications which are seeing more investor loans classified as loans to owner occupiers. This will be contributing to a proportion of this rise, how big that proportion is we are unsure. In September 2015 there was a seasonally adjusted $12.3 billion worth of housing finance commitments to investors, this was the lowest value of investor lending since August 2014. The monthly value of lending to investors has fallen by -12.8% from its peak of $14.1 billion in April 2015. The $12.3 billion figure consists of $0.6 billion in lending for new construction which is the lowest level in a year and $11.7 billion in lending for established homes which is the lowest level since August of last year. Lending for new construction tends to be volatile however, it has fallen by -42.2% from its recent peak of $1.1 billion worth of commitments in December 2014. The less volatile investment lending for established homes has fallen by -11.0% from its peak of $13.1 billion in April 2015. Again, recent reclassifications of lending by ADIs will be contributing to some of the recent weakness however, a changing investment lending landscape is undoubtedly the most significant contributor. The latest housing credit data shows that the annual rate of investor credit growth still remains above 10% 10.4% so it is reasonable to expect that investor housing finance commitments will continue to fall over the coming months. With the rate of value growth slowing, higher interest rates and lower LVRs for many investors, the attractiveness of purchasing an investment property is also easing. While investment lending has been cooling down, owner occupier lending has been rising however, much of the rise is due to upgraders and refinances. We anticipate that this trend is likely to continue although probably not rising by the same magnitude as we’ve seen over recent months. Furthermore we anticipate that less of the refinance activity is going to flow back into housing in the form of investment purchasing.

Clearance rate improves after last week saw the lowest clearance rate in 73 weeks

Auction volumes remain high with 2,898 properties taken to auction this week, up from 2,547 last week, while the clearance rate has increased to 63.7 per cent, up from 61.0 per cent, the lowest clearance rate since the week ending 8th June 2014 60.6 per cent . The higher weighted average clearance rate was mainly the result of a stronger clearance in Melbourne, where, despite high volumes, the preliminary clearance rate rose to be just under 70 per cent. At the same time last year, auction volumes were comparable, with 2,942 homes taken to auction and a clearance rate of 63.5 per cent. Last week’s result brought the October clearance rate across the capital cities to 66 per cent, down from 70.9 per cent over September and lower than October 2014 68.4 per cent . Across Melbourne, volumes have increased after the Spring Racing Carnival, with 1,189 properties taken to auction, compared to 629 last week. The clearance rate was recorded at 69.3 per cent, up from 65.6 per cent last week, making it the third week in a row where the clearance rate has been below 70 per cent. Over the same weekend last year, the clearance rate was 65.5 per cent across 1,139 auctions. Of the 9 individual Melbourne sub-regions, this week the strongest performer, in terms of clearance rate was the Mornington Peninsula. So far, CoreLogic RP Data has collected 37 results for the region and the preliminary result shows 78.4 per cent of these auctions were successful. Sydney’s preliminary clearance rate this week was 61.9 per cent across 950 auction results. There were a total of 1,222 auctions held across the city. Last week, Sydney recorded the lowest clearance rate since Easter 2013 58.2 per cent with only 60.2 per cent of the 1,391 auctions recording a successful result. Looking back at this weekend last year, 1,261 auctions were held across Sydney and a clearance rate of 68.1 per cent was recorded. North Sydney and Hornsby hosted the most auctions of any Sydney sub-region this week, with 198 properties taken to auction. The preliminary clearance rate for the region is 67.1 per cent across 149 results. There were 167 Brisbane homes taken to auction this week, with 109 results reported so far. The preliminary clearance rate for the city is 42.2 per cent, down from 48.8 per cent last week and lower than one year ago, when 43.1 per cent of the 188 properties taken to auction were successful. Across the Gold Coast 34 results have been reported so far, with a success rate of 55.9 per cent 19 sales . This week, Adelaide’s preliminary clearance rate was 64.0 per cent, with 114 reported results across a total of 143 scheduled auctions. In comparison, over the previous week Adelaide’s clearance rate dipped to 57.0 per cent and 57.4 per cent one year ago. In Perth, 44 auctions took place this week, with 28 results reported so far. Perth’s preliminary clearance rate of 17.9 per cent across these 28 results is significantly lower than both last week’s result 58.1 per cent and the clearance rate from one year ago 50 per cent . Canberra’s clearance rate was 78.3 per cent this week across 119 auctions, up from 71 per cent last week across 131 auctions. Of the 9 Tasmanian auction results reported so far this week, 2 sales have been recorded.

Mirvac enters into joint venture

Mirvac has entered into a joint venture with PAYCE Consolidated to acquire a share in an almost new mixed use shopping centre in the up and coming area of Zetland for a consideration of $154.7 million. A long time industrial suburb, Zetland is undergoing a gentrification of sorts with increased levels of medium to high density accommodation being built as people take advantage of it’s close proximity to the Sydney CBD. The centre, East Village, is owned and was developed by PAYCE Consolidated, a property development group that is listed on the Australian Securities Exchange. PAYCE was founded in 1978, listed in 1979 and was heavily involved with the Waterfront buildings at Wentworth Point following the Sydney 2000 Olympics. The buyer, Mirvac, is one of Australia’s leading real estate groups involved with design, construction and managing of commercial, residential and retail property. It was founded in 1972 by Robert Hamilton and Henry Pollack, who had worked in the property industry together during the 1960’s. Completed in October 2014, East Village attempts to combine traditional market place elements with the design of a modern centre. Having an area of 33,000 sqm, the centre has anchor tenant Coles plus Virgin Active Health Club, Audi Australia Service Centre, a Medical Centre and 40 specialty stores. These include Lorna Jane, Sorrento, numerous restaurants and food outlets and a taste growers market. The centre has parking for 690 cars and is easily accessible by both bus and train. The expected population growth of the area is an obvious appeal to Mirvac. According to Mirvac CEO Susan Lloyd-Hurwitz, the purchase aligns perfectly with Mirvac’s “retail growth strategy of acquiring assets in densely populated trade areas”, an area that is in fact one of the fastest growing in inner Sydney. As part of the transaction, Mirvac will secure the management and lease rights for the centre. The sale is due to settle in the second half of 2016. Meredith Baume Commercial Research Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Brisbane Fringe Cityscope

The latest research from Brisbane Fringe Cityscope shows property sale numbers have decreased slightly in the past three months. The quarter to November 2015 recorded 39 sales for a total of $133 million, with $74.5 million for commercial, $14.9 million for commercial strata, $1.8 million for retail, $16.2 million for retail strata and $25.7 million for other. In comparison, the last three months to the beginning of August 2015 recorded 43 sales for a total of $331.8 million, with $130.7 million for commercial, $14.6 million for commercial strata, $165.5 million for retail, $7.8 million for retail strata and $13.1 million for other. The 12 months leading up to early November 2015 recorded 136 sales for a total of more than $647.9 million, over $27.4 million more than the same time last year. The table below shows sales recorded for the past eight updates of Brisbane Fringe Cityscope: Together the top three sales recorded this quarter total over $61 million, these sales include: Terrace Office Park, 527 Gregory Terrace, Fortitude Valley sold for $31 million to Kingsford Development Australia Pty Ltd. Terrace Office Park comprises two, four storey office buildings and basement level car parking. Anthony Ott and Peter Chapple of Savills Brisbane negotiated the sale in conjunction with James Walsh and Tim Winterflood of Deloitte Capital Real Estate Advisors. The sale represented an initial yield of 8.54% on a passing income of over $2.6 million net . 301 Wickham Terrace, Fortitude Valley sold for $15.5 million to 301 Wickham Street Pty Ltd. Robert Dunne and Gregory Woods of Savills Brisbane negotiated the sale. 301 Wickham Street is a two storey office building which sits on a 2,782 sqm site. 185 Wharf Street, Spring Hill sold following an expressions of interest campaign which closed April 16, 2015. CBUS Property Spring Hill Pty Ltd bought the four storey office building with vacant possession for $14.6 million. Sam Byrne and Christian Standstrom of JLL Brisbane negotiated the sale. Properties for sale include: 433 Upper Edward Street, Spring Hill – a three storey office building developed in 1990 as a joint venture between Ross Neilson Properties and FA Pidgeon and Son. For sale by expressions of interest, closing November 20, 2015; agent, First National Commercial Metro Ralph Williams . The property was advertised with a fully leased net income of approximately $161,000. 139-141 Warry Street, Fortitude Valley – a two storey office building, formerly known as Masters House. For sale by expressions of interest, closing November 19, 2015; agent, Ray White Commercial Mark Dann and Ray White Spring Hill Sam Mayes . The building is being offered for sale with vacant possession. 35 Amelia Street, Fortitude Valley – a three storey building with ground floor car parking and two levels of offices above. For sale by expressions of interest, closing November 17, 2015; agent, Chase Commercial Joshua Peake and Rod Brown . Properties under contract conditional or unconditional include: 29 Railway Terrace, Milton – a single storey, raised, weatherboard house and a large rear workshop. Under contract with settlement expected November 2015; agent, Arthur Conias Real Estate Martin Myers . 433 Boundary Street, Spring Hill – a three storey office building with basement car parking. Due diligence was conducted in late October 2015; agent, CBRE Peter Court and Mike Walsh . The property was advertised with a current net passing income of over $2.5 million. 207 Wharf Street, Spring Hill – the four storey former Australian Federal Police Building. Under contract unconditionally with settlement due on February 20, 2016; agent, CBRE Brisbane Peter Court and Mike Walsh . The property was advertised with a net income of over $1.96 million per annum. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results – Week ending 30 October

Over the week ending 30 October, a total of 90 commercial auction results were reported with a preliminary clearance rate of 51.1 per cent, down from 63 per cent the previous week and 61.2 per cent at the same time last year. In comparison to last week, auction volumes over the previous week were significantly lower at 54 while one year ago saw 116 commercial auctions take place. Over the past four weeks there have been 233 auctions held with 135 sales. Of these successful sales, 110 have been reported with a sale price totalling $218.3 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Adelaide Cityscope

The latest research from Adelaide Cityscope shows that commercial property sales have decreased for the quarter to October 2015. The latest quarter shows total sales figures of $68.2 million compared to $75.5 million recorded for the quarter to July 2015 and $420 million recorded for the quarter to April 2015. The year to October 2015 shows total sales of $673.9 million, an increase on the $452.4 million total of the previous year. The table below shows sales recorded for the past eight updates of Adelaide Cityscope. Notable sales in the October 2015 update of Adelaide Cityscope include: Wakefield 102 at 102-120 Wakefield Street, a 10 storey car park building providing approximately 671 car parking spaces, was purchased for $25 million Frome Street Car Park at 15-19 Frome Street, an 8 level car park building providing approximately 500 car parking spaces, with a 2 to 4 storey retail and warehouse building on a site of 2,955 sqm, was purchased in two separate transactions for a combined price of about $18.3 million. Properties for sale in the October 2015 update of Adelaide Cityscope include: The Santos Centre at 60 Flinders Street, a 13 storey office building with 15,500 sqm office space, The SGIC/CGU building and a car parking station at 80 Flinders Street, Adelaide, an 8 storey office building with retail space on the ground level and an 8 level car parking station comprising 700 car spaces, and The Australian Central Building at 60 Light Square, Adelaide, an 8 storey office building of approximately 9,350 sqm with basement parking for 27 cars, are for sale in one line or separately through Knight Frank Adelaide 89-91 King William Street, a combination of modern and refurbished historic buildings including the Westpac House, a 31 level office building with 54 car spaces and several other buildings providing a total of 30,615 sqm area on a site of 4,287 sqm, together with Delmont Building at 16 Anster Street, Adelaide, a 3 level office building with a net lettable area of 236 sqm, are for sale by expressions of interest closing 26 November 2015 through CBRE Adelaide, Knight Frank and Colliers International. Leasing opportunities in the October 2015 update of Adelaide Cityscope include: AON House at 63-69 Pirie Street, a 12 level office and retail building including basement parking for 40 cars with an office space from 122 to 6,858 sqm available through Colliers International and Knight Frank Myer Centre Adelaide at 14-38 Rundle Mall, a 15 storey retail and office building comprising of 6 levels of retail space and office space from level 7-12, has retail space up to 7,500 sqm available through CBRE Adelaide HP Centre at 108 North Terrace, an 11 storey office building with 20,112 sqm and 130 car spaces and an office space up to 5,686 sqm is available through Knight Frank and CBRE Adelaide. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Combined capital clearance rate at 61% while auction volumes rise

CoreLogic RP Data National Auction Preview, week ending 8 November 2015 Auction clearance rates fell for the third consecutive week across the combined capital cities, down to 61.0% last week across a total of 2,288 reported auction results. The number of auctions due to be held across the capital cities this week rose to 3,068 from 2,547 last week when there were just 629 auctions held across Melbourne as the city prepared for Melbourne Cup. This week, 1,262 auctions are scheduled for Melbourne and 1,297 across Sydney, accounting for over 80 per cent of all capital city auctions. These figures also demonstrate just how much of an impact these two auction markets results can have on the weighted average clearance rate. Last week, Sydney’s final clearance rate fell to 60.2 per cent, heightening the reality that the clearance rate could likely slip into the 50’s over the coming weeks to wrap up an otherwise strong year for the city. Brisbane, Canberra, Sydney, and Perth are all expecting fewer auctions than last week, while in Melbourne and Adelaide, the number of auctions this week relative to last week is higher. Compared to last year when there were 2,942 auctions held across the combined capitals, auction activity will be busier in Adelaide, Melbourne and Sydney this year, while volumes are expected to be slightly lower in Brisbane, Canberra and Perth as per below Sydney: 1,297 this year, 1,261 last year Melbourne: 1,262 this year, 1,139 last year Adelaide: 151 this year, 131 last year Canberra: 127 this year, 141 last year Brisbane: 173 this year, 188 last year Perth: 45 this year, 65 last year In terms of clearance rates, last week the best performing capital city auction market was Canberra, where 71.0% of the reported auctions were successful. Following this was Melbourne, where the final auction clearance rate for the week came in at 65.6%. This week, the busiest individual suburbs for auctions nationally are Mount Waverley Vic with 23, Glen Waverley Vic with 18 and Mosman NSW with 17.

Combined capital city clearance rate below 65 per cent for the second week in a row

There were 2,493 auctions held across the combined capital cities this week, with a preliminary auction clearance rate of 63.3 per cent, the second lowest clearance rate for the year. Last week, a clearance rate of 64.9 per cent across 3,143 capital city auctions was recorded. At the same time last year, auction volumes were lower than this week, with 2,033 properties taken to auction, however the clearance rate was stronger 68.1 per cent . Clearance rates have been consistently trending lower, albeit on higher volumes, since April this year. The number of auctions being held so far across the Spring season is approximately 20 per cent higher than what was recorded over the same period a year ago. Melbourne’s clearance rate fell further this week, down to 65.4 per cent, the second week in a row where the clearance rate has been below 70 per cent after slipping to 69.7 per cent last week. Auction volumes have also fallen in the lead up to Melbourne Cup, with 611 auctions held over the week, compared to 1,690 over the previous week. At the same time last year, the clearance rate was 69.6 per cent across 220 auctions. Looking at Melbourne’s sub-regions, the North East region was the best performer in terms of clearance rates, with a 74.6 per cent success rate across 72 auctions, followed by the Inner South region, where 72.9 per cent of the 52 auctions sold. In Sydney, 1,361 auctions were held this week, up from 1,024 over the previous week. The preliminary clearance rate of 63.5 per cent has increased from a low 61.3 per cent last week; however it is significantly lower than this time last year, when a clearance rate of 75.6 per cent was recorded across 1,259 auctions. Looking at the sub-regions of Sydney, the City and Inner South region recorded the strongest clearance rate of 73.9 per cent across 119 auctions, while the Eastern Suburbs had the highest volume of auctions 206 . The preliminary clearance rate in Brisbane this week was 58.2 per cent, up from 48.8 per cent over the previous week. Auction volumes were lower this week with 186 auctions held, down from 223 last week. Meanwhile, across the Gold Coast, 51 per cent of the 49 reported auctions were successful. A total of 146 Adelaide homes were taken to auction this week, with a preliminary clearance rate of 58.1 per cent across 117 results. Last week, Adelaide was the strongest performer of all capital cities in terms of the clearance rate, recording a 70.3 per cent success rate across 91 reported auctions. Perth’s clearance rate of 55.6 per cent across 49 auctions is up from the previous week, when 33 auctions were held and a clearance rate of 25.9 per cent was recorded. Over the same week last year, the clearance rate was a lower 40 per cent, and 40 auctions were held. Across Canberra a total of 130 auctions were held this week, the highest volumes have been all year, compared to 58 last week and 89 at the same time last year. Canberra’s preliminary clearance rate of 68.7 per cent is higher than it was the previous week 63.3 per cent . In Tasmania, 6 auctions were reported to CoreLogic RP Data with 2 sales. Last week, 9 auctions were reported with 4 sales.

Increase in building activity in Melbourne

As the movement to build residential apartment towers in Melbourne gains even more momentum, another property has traded as a residential development site. The properties at 256-260 City Road, Southbank reportedly changed hands last week for $27 million in a deal arranged by Lemon Baxter of Melbourne. The vendor was Apex Vic Pty Ltd, privately owned by Jamie Lu, Tang Xiong Lu and Ling Qian Huang, all of Balwyn, Victoria. Apex Vic purchased the site in 2 parcels for a total of just over $4.5 million between 2008 and 2011. The site already has an approved development application for a 61 storey tower comprising of 431 residential units and retail on the ground floor. This probably accounts for its dramatic $22.5 million rise in just 4 years. As Melbourne prepares to face a major overhaul of planning controls in the CBD and Southbank, having current and approved development applications DAs certainly adds value to a property. Victorian Planning Minister, Richard Wynne, said there had been a “massive appetite” for city apartments without any corresponding planning emphasis on controls for amenity and density. Interim controls, including height limits and stricter site plot ratios, will be imposed until the planning review is complete. The increased difficulty in gaining approval does not seem to have had any effect on those applying for DAs. Southbank Cityscope has noted several new DAs lodged in the last few months, including: 85-87 City Road for the construction of a 67 storey mixed use development comprising of 782 residential dwellings and a ground floor commercial/retail space 202-214 Normanby Road for the construction of a 40 level building consisting of 284 residential apartments and ground floor retail 131 Sturt Street for the construction of a multi-storey building comprising of 341 apartments and a podium level retail and commercial tenancies. With many other similar DAs already approved or still going through the application process, it’s easy to see the future of Southbank and other inner city suburbs evolving “from an industrial wasteland to the densest suburb in Melbourne”, the Minister said. With an estimated 5,500 new apartments to be built just next year alone, it’s a future that’s already here. Meredith Baume Commercial Research Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Eastern Melbourne Cityscope

The latest research from Eastern Melbourne Cityscope shows property sales have increased in the past three months. Sales recorded in the quarter ending October 2015 totalled $188.8 million, an increase from the $44.3 million recorded in the three months to July 2015, and an increase from the $164.9 million recorded to April 2015. This data brings the 12 month total to $577.4 million an increase from the $383.9 million recorded the same time last year. The table below shows sales recorded for the past eight updates of Eastern Melbourne Cityscope. Recent standout sales in Eastern Melbourne include: Brandon Office Park at 530-540 Springvale Road Glen Waverley; 5 office buildings in three separate structures with total building area of 16,862 sqm and 600 car spaces; was bought for $80 million. National Archives of Australia at 31 Vision Drive Burwood East; a 2 and 3 storey, 6,389 sqm, office and storage building; purpose-built for the Commonwealth of Australia in 1994 as an archives repository; was bought for $22.75 million in a sale handled by CBRE Canberra and CBRE Mulgrave. 820 Whitehorse Road a 2 storey, 1,835 sqm, office building with parking for 78 cars; was bought for $18.18 million in a sale handled by Savills. Properties for sale in Eastern Melbourne in October 2015 include: Satellite Corporate Centre at 350 Wellington Road Mulgrave; three office buildings of 4, 4 and 5 storeys with a total building area of 21,433 sqm and parking for 1,366 cars is for sale by expressions of interest closing 19 November 2015 through JLL Melbourne, JLL Glen Waverley and Colliers International Clayton. The property last traded at $8.144 million in January 2001 and was valued at $76.4m in June 2012. 2-6 Glenferrie Road Malvern, a 3 storey, 2,394 sqm, office building with parking for 69 cars is for sale through Rosin Smyth. The building last traded at $4.5 million in November 2007. Lot 17 at 56 Norcal Road Nunawading, a 541 sqm commercial / industrial unit, which is part of Eastern Gateway, an 18-unit complex of warehouse/mezzanine offices. The unit last traded at about $1.0 million in January 2008 and is for sale through CVA Property Consultants. Significant leasing opportunities in Eastern Melbourne in October 2015 include: 990 Camberwell Road Box Hill the Australian Taxation Office, a 6 storey, 21,760 sqm, office building with 3 basement levels and 403 car spaces; has office space of 1,000 to 20,000 sqm through Colliers International. Ferntree Business Park at 310-324 Ferntree Gully Road, a complex of five one and two storey office / warehouse / laboratory buildings, and two 4 and 5-storey commercial buildings, has office space of 2,000 to 10,000 sqm in a redevelopment of the property available for pre-lease through Colliers International and Goodmans. Axxess Corporate Park at 170 Forster Road Mount Waverley, a major 85,300 sqm office/industrial park comprising 12 two & three storey buildings containing about 116 two storey office/industrial units and several office buildings. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Docklands Cityscope

The latest research from Docklands Cityscope shows property sales have increased dramatically in the past three months, the result of several large sales. Sales recorded in the quarter ending October 2015 totalled $164.2 million, a substantial increase from the $11.2 million recorded in the three months to July 2015, but a decrease from the $220.5 million recorded to April 2015. This data brings the 12-month total to $658.9 million, a decrease from the $1.126 billion recorded over the previous year. The table below shows sales recorded for the past eight updates of Docklands Cityscope. The standout sales during this period in Docklands were: Spencer Outlet Centre, 237-261 Spencer Street, Docklands, a three level retail development of 23,000 sqm with a total of 115 fashion and homeware stores, plus six food courts with 16 food outlets and cafes, which was bought for approximately $125 million, brokered by McVay Real Estate 685 La Trobe Street, Docklands, vacant land of 4,411 sqm, used as a car park by TV Channel 7, which was bought for $31.5 million, brokered by CBRE. Properties for sale in Docklands in October 2015 include: 1000 La Trobe Street, Docklands, vacant land of 7,075 sqm offered for sale as a potential residential development site, available through Colliers International 35 Newquay Promenade, Docklands, a one storey building constructed in a cone shape and designed for the purveyance of ice-cream and gelato, available through Hockingstuart Commercial. Significant leasing opportunities in Docklands in October 2015 include: 850 Collins Street, Docklands, an eight storey office building with retail space on the ground floor, which has commercial areas of 550 to 6,464 sqm available for lease through Colliers International and CBRE 720 Bourke Street, Docklands, a 22 storey, 47,000 sqm A-grade office building with 70 car parking spaces, which has 650 to 6,540 sqm available for lease through Colliers International and Knight Frank. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results – Week ending 25 October 2015

Auction volumes fell over the week, with 19 commercial auction results recorded compared to 45 last week and 61 at the same time last year. The preliminary clearance rate across the 19 results was 47.4 per cent, lower than both the previous week at 55.6 per cent and one year ago at 60.7 per cent. Over the most recent four week period there has been 134 commercial auctions reported and 76 of these have been reported as sold. Of the 76 sold properties, 65 have been reported with a sale price totalling just short of $140.02 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Norwest Cityscope

The latest research from Norwest Cityscope shows a substantial increase in the total value of sales over the last quarter. This increase is primarily due to the settlement of the property at 7 Maitland Place, Baulkham Hills. For the three months to October 2015, there were 38 sales at a total value of $73.5 million, compared to 44 sales at a total value of $24.8 million for the three months to July 2015, and the 35 sales at a total value of $64.6 million for the three months to April 2015. The figures for the year ending October 2015, with 155 sales at a total value of $311 million, represents a considerable increase on those for the year ending October 2014, when there was a total of 141 sales at a total value of $82.5 million. The table below shows sales recorded for the last eight updates of Norwest Cityscope. Notable sales recorded in the October 2015 update of Norwest Cityscope include: 7 Maitland Place, Baulkham Hills, a two storey building with parking for about 140 cars and a net lettable area of 6,193 sqm, comprising of office space, warehousing and pharmaceutical manufacturing space, sold for $18 million 6 Celebration Drive, Bella Vista, a single storey building with a garden and customer parking on a site area if 3,177 sqm, sold for $13 million 17-19 Lexington Drive, Bella Vista, a two storey commercial building comprising of 4,200 sqm of office and warehouse space, as well as on-grade and basement parking, sold for $8 million. Significant properties for sale in the October 2015 update of Norwest Cityscope include: The Woolworths Corporate Headquarters, 1 Woolworths Way, Bella Vista, three large interconnected four storey office buildings with basement level parking for 2,341 cars, is for sale through JLL and Savill. Suite 108 in Alpha, 5 Celebration Dive, Bella Vista, an office suite in a 6 and 7 storey office building with basement parking, the suite has 4 car spaces and is for sale by auction on 5 November 2015 through Norwest Commercial and Industrial Real Estate Unit 319 and Unit 320 in Nexus Norwest, 4 Columbia Court, Baulkham Hills, a five storey office building with ground level and basement parking. The two units comprise a net lettable area of 194 sqm and a combined 7 car spaces. For sale through Castlecorp Real Estate. Significant leasing opportunities in Norwest Cityscope include: Unit 5 at T1 Norwest, 14 Lexington Drive, Bella Vista, a five storey office building with parking on every level, has office space of 914 sqm and warehouse space of 700 sqm available through Castlecorp Real Estate, Knight Frank Parramatta, Taylor Nicholas Hills and Norwest Commercial Industrial 8 Solent Circuit, Baulkham Hills, a two storey office and warehouse building with parking to the rear and side and a building area 4,876 sqm has up to 1,535 sqm available through Norwest Commercial and Industrial Real Estate. Commercial Research Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Sydney’s clearance rate drives down the capital city clearance rate, while Melbourne’s auction volumes show a temporary fall

CoreLogic RP Data National Auction Preview, week ending 1 November 2015 The final auction clearance rate last week fell to 64.9 per cent, down from 67.4 per cent the previous week and similarly, lower than one year ago 68.1 per cent . The fall in capital city clearance rate can be largely attributed to a weaker result across Sydney last week, the second largest capital city auction market. Last week was Melbourne’s busiest for the year, with 1,690 auctions held, however given the Melbourne cup next Tuesday, auction activity across the city this weekend is set to be somewhat quieter, with just 621 scheduled for the week. Melbourne was the strongest performing capital city market last week, with 69.7 per cent of reported auctions successful and CoreLogic RP Data estimates over 1,150 transactions took place as a result of the cities auction activity. In Sydney, last week there were 1,024 auctions with a clearance rate of just 61.3 per cent, far from the strength seen earlier this year, when for 22 consecutive weeks the city recorded a clearance rate of 80 per cent or above. Despite the weaker result last week, there are 1,450 Sydney homes scheduled for auction this week, more than at the same time last year 1,259 and the highest number of weekly auctions seen since the final week of March this year. Although auction activity is set to slow down temporarily this week in Melbourne, the same cannot be said for Adelaide, where there will be 155 auctions this week, compared to 103 last week, Canberra, with 131 scheduled compared to 58 last week and Perth, up from 33 last week to 49 this week. Brisbane is the only other capital city where auction volumes will be lower this week, down to 197 from 223 last week, which was the busiest week for auctions across the city so far this year. Despite the increased activity, Brisbane’s final auction clearance rate last week showed that less than half 48.8 per cent of the auctions resulted in a transaction. The lower volumes across Melbourne this week have added some more variety into the list of the busiest individual suburbs for auctions, as opposed to last week when each of the suburbs were located in Melbourne. – 20 auctions in Reservoir Vic – 18 auctions in Bellevue Hill NSW – 16 auctions in Paddington NSW – 15 auctions in Coogee NSW , Killara NSW and St Ives NSW

CPI came in low over the September 2015 quarter and real home values remain below their previous peak in all capital cities other than Sydney and Melbourne

The Australian Bureau of Statistics ABS released quarterly Consumer Price Index data for September 2015 earlier today. The data showed that headline inflation was recorded at 0.5% for the quarter and was 1.5% higher over the year. As the above chart shows, at 1.5%, headline inflation is below the Reserve Bank’s target range of between 2.0% and 3.0% per annum. While the headline figure is important, the RBA also likes to look at measures of underlying inflation which exclude some of the more volatile items. Both measures of underlying inflation; the trimmed mean and the weighted median were recorded at a lower 0.3% over the quarter and have increased by 2.1% and 2.2% respectively over the past year. These annual increases place underlying inflation within the lower band of the RBA’s target range, it would also indicate that if the RBA felt it necessary they have scope to reduce official interest rates. The effects of inflation are also an important factor to consider for housing markets. Although we generally talk about home value growth in nominal terms, real or inflation-adjusted home value changes are also important to consider. Over the 12 months to September 2015, combined capital city home values have increased by a nominal rate of 11.0% however, in real terms that figure drops to 9.4%. The above chart shows the annual rate of value change across the individual capital cities in both nominal and real terms. It highlights once again the significant difference in value growth conditions in Sydney and Melbourne relative to the other capital cities. In real terms home values have only increased over the past five years in Sydney and Melbourne. On a compound annual basis, falls have been recorded at -1.7%pa in Brisbane, -2.0%pa in Adelaide, -1.5%pa in Perth, -3.5%pa in Hobart, -3.9%pa in Darwin and -1.4%pa in Canberra. Real home values have increased at a rate of 4.9%pa over the past five years in Sydney and 1.7%pa in Melbourne. Over the past decade, real home values have fallen in Hobart and have risen at a rate of less than 2%pa in Brisbane, Adelaide and Canberra. To further highlight the differences across the cities it is valuable to have a look at nominal and real value growth across the capital cities since 2008. Between March and December of 2008 combined capital city home values fell by a nominal -6.1% or a real -8.3%. On the back of aggressive interest rate cuts and stimulus in the form of the Boost to the First Home Owners Grant, values began to rise from that point. Although combined capital city home values have increased since 2008, this is largely by virtue of strong value growth in Sydney and Melbourne. In fact, real home values are currently lower in Brisbane -5.2% , Adelaide -5.4% , Perth -3.0% and Hobart -16.1% than they were at the end of 2008, almost eight years of no real value growth in these cities. Real value rises have been moderate since 2008 in Darwin 5.0% and Canberra 4.1% and substantially greater in Sydney 51.4% and Melbourne 41.9% . The above chart looks at the change in real home values on a quarterly basis since their previous peak. What is immediately noticeable is that Sydney +24.3% and Melbourne +8.9% are the only cities in which values are now higher than their previous peaks. The journey to get back above their peaks was somewhat different, Sydney took 41 quarters to eclipse its March 2004 peak while Melbourne took 19 quarters to eclipse its September 2010 peak. Across each remaining capital city, real home values are below their previous peaks, the figures for each city are: -11.8% in Brisbane, -10.0% in Adelaide, -13.0% in Perth, -21.3% in Hobart, -17.9% in Darwin and -8.1% in Canberra. For Brisbane, Perth and Hobart in particular the journey back to the previous peak has proven to be long with these markets previously peaking in March 2008, September 2007 and December 2007 respectively. As values continue to rise in Sydney and Melbourne and show falls or moderate nominal growth in other capital cities, the affordability gap will continue to widen. At some point these other capital city markets will once again become attractive to buyers. Importantly this won’t be driven by affordability factors alone; employment opportunities, amenity and local infrastructure, amongst other factors, will be important factors. The data also highlights that long periods of value falls do happen in the Australian housing market and clearly housing is not a one-way bet. The broader statistics do tend to be overshadowed by the impact of the Sydney and Melbourne housing markets who are substantially bigger than all other capital cities.

New listings still increasing, however, less stock is being added to the market than one year ago

As at the week ending 25 October 2015, a total of 240,384 residential properties were listed for sale across the country. Just over 40 per cent of these 103,852 were situated in one of the 8 capital cities. In comparison to the same period last year, total listings are -2.6 per cent lower nationally and -1.9 per cent across the capitals. Relative to last year, the latest data also shows that the number of new listings being added to the market is lower, despite the number of new properties advertised for sale increasing on a rolling four week basis for the last four weeks. Sydney and Canberra are the only two cities where the number of new property listings over the most recent four week period was higher than at the same time last year, albeit by only 0.3 per cent in Sydney, and 3.7 per cent across Canberra. This result comes from 9,552 new listings added to the market in Sydney over the four weeks ending 25 October, compared to 9,526 one year ago and 720 residential Canberra properties added to the overall stock available for sale, compared to 694 over the corresponding four weeks one year ago. In all other cities the number of new properties listed for sale are lower relative to last year, with the largest differential seen in Perth -22.4 per cent , Darwin -13.6 per cent and Adelaide -12.0 per cent . In particular, the data for Perth and Darwin indicates that home owners are likely aware of the weak housing market conditions and are therefore less inclined to put properties up for sale. In terms of the total stock pool, across the residential capital city markets the results are more varied when compared to one year ago. There are more listings this year compared to last year in: Darwin, 1,581 currently, 1,389 last year +13.8 per cent Perth, 19,284 currently, 17,423 last year +10.7 per cent Sydney, 22,564 currently, 21,609 last year +4.4 per cent All other remaining capital cities are showing less stock availability this year relative to one year ago: Hobart, 2,494 currently, 2,907 last year -14.2 per cent Adelaide, 7,646 currently, 8,335 last year -8.3 per cent Melbourne, 29,948 currently, 32,574 last year -8.1 per cent Canberra, 2,184 currently, 2,370 last year -7.8 per cent Brisbane, 18,151 currently, 19,288 last year -5.9 per cent Furthermore, last week we took a look at the current level of housing supply across each of the capital city markets. The analysis compares the absorption of stock by comparing the trend number of properties selling and the availability of stock for sale. The findings show that Perth and Darwin each have 6.8 months of housing supply on the market, the greatest of any capital cities, while stock levels in Sydney, Adelaide and Melbourne indicate less than 3 months’ worth of supply, showing that these housing markets are somewhat healthier than that of Perth and Darwin. On the flip side, Perth and Darwin’s market conditions are more favourable for those looking to buy a property with more choice and vendors becoming more willing to sell below the current list price to secure a sale. Across the states and territories, the number of listings is lower than one year ago in all but two regions; Western Australia, where current stock levels are 7.1 per cent higher than they were one year ago and Northern Territory, where the number of listings currently is 14.0 per cent higher than over the same period in 2014. At the other end of the scale, the Australian Capital Territory -8.0 per cent and Victoria -6.4 per cent are the two regions with the largest differential in listing volumes compared to one year ago, however, interestingly new listings across the Australian Capital Territory over the four weeks ending 25 October were higher than one year ago +3.3 per cent , while across Victoria they were -4.3 per cent lower.

Melbourne’s clearance rate falls below 70 per cent for the first time since mid-February

The number of homes taken to auction this week increased to 3,086, up from 2,858 over the previous week, while the preliminary clearance rate of 66.6 per cent is down from 67.4 per cent last week, making this week the second lowest clearance rate recorded all year. The clearance rate has now been below the 70 per cent mark for 6 weeks in a row. Over the corresponding week last year, the clearance rate was 69.3 per cent and 3,231 auctions were held. Across Melbourne, auction volumes are the highest they have been all year with 1,663 properties taken to auction this week, while the clearance rate of 69.8 per cent fell from 72.7 per cent across 1,398 auctions last week. This is the third lowest clearance rate for the year. At the same time last year, Melbourne was host to 1,837 auctions and a clearance rate of 71.0 per cent was recorded. The busiest Melbourne sub-region this week was the Inner region where 341 auctions were held and a clearance rate of 73.7 per cent was recorded. Sydney’s preliminary auction clearance rate improved this week after the lowest clearance rate for the year was recorded last week. This week, 64.4 per cent of the 995 auctions scheduled were successful, up from 63.7 per cent across 1,105 auctions over the previous week. Although the clearance rate has improved this week, it is still well below the 74.8 per cent recorded across 961 auctions at the same time last year. The Eastern suburbs sub-region of Sydney has shown the strongest performance so far this week, with 84.3 per cent of the 109 reported results selling, with 20 remaining results yet to be collected. In Brisbane, 223 auctions were held this week and a clearance rate of 54.8 per cent was recorded. Looking at last week, volumes were lower with 145 properties taken to auction and a clearance rate of 47.6 per cent. Over the same week last year, 46.3 per cent of the 211 auctions were successful. The Gold Coast saw 71.4 per cent of the 21 reported auctions sell this week. This week, Adelaide recorded a preliminary clearance rate of 74.6 per cent; with 67 reported results across a total of 103 scheduled auctions. In comparison, over the previous week Adelaide’s clearance rate was 67.5 per cent and 56.5 per cent one year ago. There were 33 Perth auctions this week and so far 16 results have been reported, with just 31.3 per cent selling. Last week there was a 46.2 per cent clearance rate for Perth although only 16 auctions were held. Canberra’s preliminary auction clearance rate of 67.6 per cent this week is similar to last week, when the final auction clearance rate was 68.0 per cent and higher than the 58.3 per cent recorded last year. Of the 8 Tasmanian auction results reported so far this week, 4 sales have been recorded.

Sussex street office tower sold for nearly $60 million

At a price of approximately $60 million, the office tower at 160 Sussex street, Sydney has been sold. The sale was conducted by Simon Fenn and Ben Azar of Savills and Vince Kernahan and James Barber of Colliers International who put the property to market via an expressions of interest campaign that closed September 3rd, 2015. The vendor was Aviva Investors, a global asset manager that specialises in real estate, fixed income, equity and multi-asset investment with over $500 billion AUS under management. Aviva’s Asia Pacific interests were taken over by JP Morgan Asset Management in December of 2014. The buyer is the Burcher Property Group, a private company owned by Steve Burcher of Rose Bay. The group has previously owned property in the CBD, Edgecliff and Double Bay. Rising to 12 storeys and with a net lettable area of 8,622sqm, 160 Sussex Street was built in late 1992 on the site of the old 1890 CMC House. The heritage façade was retained and incorporated into the new building. In 2012, the building underwent extensive refurbishment at the cost of $5 million. The property is currently fully leased with the major tenant being the Australian Institute of Professional Education with 3,700 sqm over six floors. Other tenants include Rankin Ellison Lawyers, Brookfield Multiplex and Healthe Care Australia. The property last traded at $52 million in July 2007 and at $36 million in June 2004. With a net income of $4 million, the most recent sale was on a yield reported to be approximately 7%. Meredith Baume Commercial Research Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results – Week ending 16 October 2015

Commercial auction activity picked up slightly last week with 43 properties taken under the hammer, compared to 39 the previous week. Preliminary results show that 58.1 per cent of commercial auctions were successful over the week ending 16 October compared to 61.5 per cent the previous week. One year ago 57 commercial auctions were held over the week with a clearance rate of 59.7 per cent, showing market conditions remain relatively similar. Auction activity over the most recent four week period shows that 206 properties have been taken to auction and of these 118 have been successful. Of the 92 sold properties reported with a price, the total value of transactions is recorded at $200.96 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update â

The quarter update of Pyrmont-Ultimo Cityscope shows an increase in both sales activity and total sales value. The most recent quarter had a total of 51 sales at a value of $259.4 million compared to 26 sales at a total value of $41.5 million for the quarter ending July 2015. The 12 month total sales figure now stands at $846.8 million for the year ending October 2015, with 164 sales recorded over that period. This is in comparison to the previous 12 months when the year ending October 2014 had 138 sales totalling $515 million. The table below shows sales recorded for the past eight updates of Pyrmont-Ultimo Cityscope: Notable sales in the areas covered by Pyrmont-Ultimo Cityscope for the October 2015 update include: 13-19 Harris Street, Pyrmont, an A grade office building with seven levels of office space and 2 levels of basement parking for 138 cars was bought for $91,919,000 94-136 Harris Street, Pyrmont, a five and six storey brick commercial building with the site area of 3,082 sqm was bought for $72,686,629 108-114 Miller Street, Pyrmont, a one and two storey office building to Miller Street with the site area of 1,846 sqm was bought for $22,400,000 Properties for sale in the latest update of Pyrmont-Ultimo Cityscope include: 39-47 Regent Street, Chippendale, a six storey commercial building with the site area of 175 sqm for sale by expressions of interest closing 17th November 2015 through Savills La Gonda House, 35-45 Myrtle Street, Chippendale, a two storey brick commercial building with loading docks to Myrtle and Shepherd Streets with the site area of 133 sqm for sale through auction on 12th November 2015 through Colliers International Australian Hotel, 100-102 Broadway, Chippendale, a three-storey brick pub in the Inter-war Functionalist style for sale by expressions of interest closing 29th October 2015 through Ray White Leasing opportunities listed in the October 2015 update of Pyrmont-Ultimo Cityscope include: 63-71 Balfour Street, Chippendale, a two storey commercial building with office space from 200 to 1,100 sqm for lease through Fringe Commercial 55 Pyrmont Bridge Road, Pyrmont, a nine storey office building known as the City West Centre with office space from 500 to 4,000 sqm for lease through Cushman & Wakefield Corelogic Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – North Sydney Cityscope

The latest research from North Sydney Cityscope shows sales have increased in the quarter to October 2015. Sales recorded in the most recent quarter totalled $3.283 billion from 75 sales compared to $455.3 million from 78 sales in the quarter to July 2015. The July total is bolstered by the inclusion of the sale of a portfolio of nine properties sold by Investa Property Group for a total of $2.45 billion to China Investment Corporation. The portfolio included 80 Pacific Highway, North Sydney, a 14 storey office tower and eight other properties in Sydney, Melbourne, and Brisbane. The prices for individual buildings are not yet available. This quarter brings the twelve-month total value of sales to $4.684 billion, an increase from the $1.7 billion recorded for the previous year. The table below shows sales recorded for the past eight updates of North Sydney Cityscope. Notable sales for the October 2015 update of North Sydney Cityscope include: Space 207 Tower A at 207 Pacific Highway, St Leonards, a seven storey office tower with a net lettable area of 7,435 sqm and Space 207 Tower B at 207 Pacific Highway, St Leonards, an 11-storey office tower with a net lettable area of 12,643 sqm, which were sold for $169 million. The two towers share basement parking for 200 cars 504 Pacific Highway, St Leonards, a 10 storey office building with a net lettable area of 9,515 sqm and 95 Nicholson Street, St Leonards, a 4-storey office building with a net lettable area of 1,568 sqm, which were sold for $150 million Big Bear Complex at 116 Military Road, Neutral Bay, a seven storey office and retail building with a three-storey annexe and a single-storey retail plaza to Military Road and a three-storey office building to Ernest Street plus two levels of basement parking for 235 cars, providing a net lettable area of 9,100 sqm, which was sold for $98 million 33 Berry Street, North Sydney, a 16 storey office building with three levels of basement parking and a total net lettable area of 13,195 sqm, which was sold for $90 million. Properties for sale in the areas covered by North Sydney Cityscope include: Kimberly-Clark House at 52 Alfred Street South, Milsons Point, a 12 level building with basement parking for 176 cars and a net lettable area of 9,998 sqm, which is available through CBRE Innovation Place at 100 Arthur Street, North Sydney, a 23 storey office tower with three levels of basement parking for 143 cars and a net lettable area of 26,300 sqm, available through CBRE 90 Arthur Street, North Sydney, a 15 storey office building with two levels of parking for 88 cars and a net lettable area of 9,146 sqm, available through Knight Frank and CI Australia. Leasing opportunities in the areas covered by North Sydney Cityscope include: Symantec Place at 181 Miller Street, North Sydney, a 13 storey building with basement parking for 125 cars, which has office space of up to 5,500 sqm available through CBRE and Colliers International Verizon Building at 203 Pacific Highway, St Leonards, an 11 storey office tower with parking for 151 cars, which has office space of up to 4,000 sqm available through Cadigal Office Leasing Cisco Systems Building at 201 Pacific Highway, St Leonards, a 10 storey office tower with basement parking for 262 cars, which has office space of up to 5,000 sqm available through Cadigal Office Leasing. CoreLogic Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Clearance rate is falling, while auction activity is rising

CoreLogic RP Data National Auction Preview, week ending 25 October 2015 Despite a falling auction clearance rate, the volume of auctions being held across the combined capital cities and in particular, Melbourne, is rising. Last week, the final auction clearance rate fell to 67.4 per cent across 2,858 capital city auctions, while this week CoreLogic RP Data is expecting there to be just over 3,000 auctions held across the combined capital cities. Melbourne will be the busiest city by far this week, with 1,710 auctions expected, indicating the busiest week for the city this year, but the auction market won’t be as busy as it was at the same time last year, when over the week 1,837 Melbourne homes were taken under the hammer. Last week, Melbourne was the strongest performing capital city market with both the highest volume of auctions 1,398 and the highest clearance rate 72.7 per cent . Notably, Melbourne’s auction performance last week was much stronger than Sydney, with the city recording its lowest clearance rate since early 2013 at 63.7 per cent, representing a substantial fall from the previous week 69.6 per cent . This week, Sydney is expecting 996 auctions to be held, relatively similar to last year when 961 Sydney homes were auctioned. Auction markets will be busier in Brisbane 213 , Adelaide 109 and Perth 35 this week compared to last week when 145, 93 and 16 auctions were held respectively. Canberra’s auction market activity will slow down this week, with 60 auctions expected, compared to 86 the previous week. This week, the busiest individual suburbs for auctions are all in Victoria: – Glen Waverley 30 auctions – Reservoir 23 auctions – Mount Waverley 22 auctions

7 signs that the housing market may be peaking

There are mounting signs that Australia’s housing market may be moving through the peak of the cycle, however it is important to remember that strong housing market conditions have been evident in Sydney and Melbourne while every other capital city has shown relatively sedate conditions. CoreLogic’s September indices results, released two weeks ago, showed that Sydney dwellings values remained flat over the month and other data flows are also pointing to a moderation in growth conditions across Australia’s largest city and the broader housing market. The factors that hinting at a market peak and outlined in further detail below include: Auction results have been consistently moderating, especially in Sydney where clearance rates have been sub 70% consistently over the past five weeks Listing numbers are rising, which is normal during the Spring season, but a higher than normal number of homes are being added to the market in Sydney which is contributing to higher stock levels than a year ago and rising months of supply. Investment demand is moderating due to both tougher lending from the banks as well as market disincentives such as low yields, affordability constraints and a mature growth cycle. Mortgage related activity has fallen across CoreLogic platforms. Although activity remains higher than a year ago, mortgage related events are down from heights seen over the first half of 2015 and aren’t seeing their normal spring bounce. Rents are hardly moving which has pushed rental yields to historic lows in Sydney and Melbourne. Paying a landlord is likely becoming more affordable than paying a mortgage despite the low interest rate setting. The cost of debt is rising outside of any upwards movement in the cash rate. Higher debt servicing costs can only act as a disincentive. Supply levels are set to rise further as the pipeline of approvals moves through the commencement phase and onto completed housing product. Inner city apartment markets are most exposed to higher supply. While conditions may be starting to slowdown, particularly in Sydney, the coming months will provide further clarity about housing market conditions. Picking the turning point in the housing market is easy in retrospect, but as the market evolves it can be hard to separate short term movements from the beginnings of a longer term trend. The coming months of data flows through to the end of the year will provide a great deal more perspective.” Mature growth cycle The current growth cycle broadly commenced in June 2012, with dwelling values shifting almost 32% higher since this time across the combined capital cities. The rate of capital gains has been led by Sydney where values are almost 50% higher, and Melbourne where dwelling values have shifted 35% higher over the cycle to date. Brisbane has seen the third highest rate of value growth over the period at a comparatively modest 14.5% showing the multi-tiered nature of the capital city housing market at present. Dwelling values do fall. Capital city dwelling values retreated by 7.2% over the previous down phase which lasted from October 2010 through to the end of May 2012, and previously during the GFC period of 2008 capital city dwelling values shifted 6.1% lower. Auction results are moderating but remain historically high The auction market peaked over the last week of April this year with a combined capital city clearance rate of 82%. Since that time, clearance rates have been consistently falling, with weekly clearance rates holding below the 70% mark over the past five weeks. Sydney has shown a similar trend, with clearance rates peaking at 90% over the last week of April. Sydney’s clearance rate was recorded at 63% last week, the lowest clearance since March 2013. The lower clearance rate comes on substantially higher volumes compared with a year ago. The Spring season to date has seen 7,193 auctions held across Sydney which is 1,609 29% higher than over the same period a year ago. The slump in clearance rates hasn’t been as sharp in Melbourne where the weekly clearance peaked at 87% over the last week of April and has consistently reduced to the current level of around 73%. Melbourne clearance rates haven’t slipped below 70% since February this year. Auction volumes across Melbourne are at roughly the same level as a year ago, with 7,394 auctions held so far this Spring 7,381 at the same period a year ago . Outside of Sydney and Melbourne, auction sales are only a small proportion of all sales. Over the year to date, Sydney and Melbourne account for 84% of all auctions held across the capital cities. Listing numbers are rising While it’s normal for listing numbers to ramp up during the Spring season, the number of new listings being added to the Sydney housing market is now 4.4% higher than last year and total listing are nearly 6% higher than a year ago suggesting new advertised supply isn’t being absorbed as fast as a year ago. The same trend of higher listing numbers has been evident for some time in the weakest housing markets of Darwin and Perth where total listing are roughly 12% higher compared with a year ago. Listing numbers haven’t seen the same escalation in Melbourne where the housing market doesn’t appear to be slowing at the same pace as the Sydney market. Listing numbers remain lower than a year ago in Brisbane, Adelaide and Hobart as well, where value growth has been much more moderate compared with Sydney and Melbourne. With listing numbers rising in some markets, ‘months of supply’ is also rising ‘Months of supply’ provides an indication about how long it would take, based on the current rate of sale, the market to absorb all the homes currently being advertised for sale. Sydney is still showing the months of supply reading at 2.4 months, however, we have seen the first rise in this reading since 2012. At the same time, months of supply is holding firm in Melbourne but reducing in Brisbane, Adelaide and Hobart. Where housing market conditions are weaker Perth, Darwin, Canberra the monthly of supply readings are rising, providing better buying conditions for prospective purchasers. Investment demand appears to be moderating The value of investment related housing finance commitments has reduced over three of the past four months and owner occupiers have once again overtaken investors as being the most active segment of the housing market based on the value of new loans being committed to. The slowdown in investment related mortgage activity has been evident across every state, but has been most felt in New South Wales, where investors have reduced from comprising nearly 63% of the market in May this year to a much lower but still high from a historical perspective 54.9% in August. It’s likely investment activity has reduced further over recent months due to the premium being placed on investment mortgage rates and a requirement for larger deposits, as well as natural disincentives such as record low rental yields and affordability and affordability constraints. Mortgage related activity has eased from historically high levels across CoreLogic mortgage platforms CoreLogic facilitates more than 90% of all mortgage related valuation instructions, which provides one of the timeliest indicators of mortgage activity available. While mortgage activity is approximately 4% higher than at the same time last year, activity has moderated from the highs recorded earlier in the year. Weekly rents are hardly moving and gross rental yields have pushed to record lows Across the combined capital cities, weekly rents have increased by only half a percent over the past twelve months. At a time when capital city dwelling values have increased by 11.0%, the sluggish pace of rental movements has pushed rental yields to the lowest level on record. Gross rental yields are the lowest in Melbourne and Sydney at just 3.0% and 3.3% respectively lower for detached houses and slightly higher for apartments and also sit at record low levels. Accounting for holding costs such as vacancy, property management fees, maintenance etc, the net rental yield in these cities likely to be around the low to mid two percent mark. The low yield scenario is likely to act as another disincentive for investors at a time when the growth cycle has been running for almost three and half years. for investors at a time when the growth cycle has been running for almost three and half years. Costs of debt are rising out of cycle with the cash rate In July this year Australia’s largest banks placed a premium on investment related mortgage rates of between 27 and 29 basis points. More recently, Westpac has announced additional premiums on mortgage rates for both owner occupier and investment loans outside of any movement in the cash rate. Supply levels are set to increase further Dwelling approvals appear to have peaked earlier this year after an unprecedented boom in the number of dwellings approved for construction. As the pipeline of approvals migrates to project commencements and ultimately completions, we can expect the supply of new housing, particularly apartments, to provide a further easing in price upwards price pressures. The majority of new supply set to hit the market will be in Melbourne and Sydney where population growth has remained the strongest, however Brisbane and Perth have also seen a substantial influx of new housing approvals. In last week’s Financial Stability Review the Reserve Bank warned of the risk of a potential housing over-supply in inner city areas of Melbourne and Brisbane due to the large boom in new apartment construction.

Volumes remain high while the preliminary clearance rate is below 70 per cent for the 5th week in a row

It was another busy week for auctions across the combined capital cities with 2,817 auctions held after the previous week saw 3,016 properties taken to auction; the highest volumes have been since March this year. The preliminary clearance rate of 69.3 per cent has remained below 70 per cent for the 5th week in a row, down from 69.5 per cent last week. This time last year, the clearance rate was 68.6 per cent, although volumes were lower with only 2,449 auctions held. In Melbourne, Australia’s largest auction market, 73.6 per cent of the 1,193 reported auctions sold this week. There were 1,390 auctions held across the city this week, similar to last week, when there were 1,397 auctions and the final auction clearance rate was 73.4 per cent. In comparison, over the same week last year, there were 1,167 auctions held with a clearance rate of 71.7 per cent. The Inner region of Melbourne had the highest number of auctions this week 287 , with a preliminary clearance rate of 73 per cent. Meanwhile, the strongest clearance rate was recorded across the Outer East region, where 82.1 per cent of homes taken to auction sold based on the preliminary results. Across Sydney, 1,074 homes were taken to auction this week with a preliminary clearance rate of 66.6 per cent across 830 reported results, the lowest clearance rate for the year and also the third week in a row where Sydney’s clearance rate has been below 70 per cent. The last time the clearance rate was this low was the first week of December 2014 66.1 . Last week, the final clearance rate for the city was 69.6 per cent, across 1,197 auctions. One year ago, 929 Sydney homes were taken to auction and the clearance rate was 72 per cent. This week, the performance across Sydney’s individual sub regions was varied. Across the Outer South West region, where 21 results have been reported so far, the preliminary clearance rate was 47.6 per cent, while across the Inner West 80 per cent and the Eastern Suburbs 76.8 per cent , the success rate of reported auctions was much higher. Brisbane was host to 146 auctions this week, down from 186 last week, and the preliminary clearance rate was 53.2 per cent, down slightly from 53.8 per cent over the previous week. At the same time last year, 46 per cent of the 159 auctions held were successful. In the Gold Coast, a clearance rate of 56.5 per cent was recorded across 23 results. A total of 93 Adelaide homes were auctioned this week and the preliminary auction clearance rate of 72.1 per cent is higher than the 64 per cent from the previous week across 127 auctions. One year ago, Adelaide’s clearance rate was a lower 53.3 per cent across 103 auctions. In Perth, just 16 auctions were held this week. Of the 8 results reported toCoreLogic RP Data so far, only 2 have been successful. Last week, the final auction clearance rate for Perth was 37.9 per cent across 34 auctions. Across Canberra a total of 82 auctions were held this week, up from 68 last week and 55 at the same time last year. Canberra’s preliminary clearance rate of 67.3 per cent is stronger than it was the previous week 62.1 per cent . Of the 12 Tasmanian auction results reported so far this week, 7 sales have been recorded.

Key data from the Housing and Occupancy Costs release for 2013-14

The Australian Bureau of Statistics ABS released Housing and Occupancy Costs for the 2013-14 financial year late last week. The data is released every three years and provides some really valuable insights into the characteristics of households and how much they spend on housing costs. The first table shows weekly housing costs across household types over time. As you would expect the costs have increased over time however, rental costs are increasing at a much more rapid pace than costs for owners without a mortgage and owners with a mortgage. In fact, in 2013-14, the weekly costs of taking out a mortgage were 60% higher than rental costs which was the slimmest difference on record between the two series. The second table highlights the proportion of total households showing the particular characteristics. The latest data indicates that since the last data release there has been a decline in the proportion of those that own a home. However, the proportion of those that own without a mortgage has risen whilst the proportion of owners with a mortgage has declined. As a result, the proportion of households that are renting has risen to a record high 31.0%. The third table highlights the average weekly housing costs across the capital cities. The ACT is the most expensive for mortgagees and for renters Sydney is the most expensive however, for those without a mortgage Sydney is one of the cheaper capital cities. Interestingly the cost of renting in Sydney $430/week is higher than the cost of having a mortgage in Adelaide $383/week and Hobart $393/week . The above table highlights the characteristics of residential property ownership, it also really highlights the popularity of residential property investment. 80.6% of households that own an additional property live in an owner occupied property with the remaining 17.4% of households that own additional properties renting. The data also shows that majority of those households that own an additional residential property only own 1. The above table highlights how much Australians love large homes and the subsequent additional space. According to the data 77.7% of all households have additional bedrooms with 85.6% of owner occupied households having more bedrooms than they need. This also provides insight to the housing undersupply, the reality is we have more than enough bedrooms to cater to our population, unfortunately those who need a bedroom don’t have access to them because most households have additional unused bedrooms. Even across rental households, 60.9% have more rooms than are required. In summary the data indicates that it is getting relatively more expensive to rent while paying off the mortgage while interest rates are so low is becoming more popular. Housing costs reduce significantly once the mortgage is paid off. The rate of home ownership is falling overall however, a higher proportion of people now have no mortgage. Residential property investment is popular with a surprisingly high number of people that rent also owning a property themselves. Almost half of all households with a mortgage 45.6% own an additional residential property. Finally Australians like their homes to have lots of space, with a significant majority of homes having more bedrooms than required. Of course this also means that most Australians end up spending significantly more on housing than required given that more bedrooms usually means more expensive accommodation whether it be from a rental or an owner occupation perspective. There is a lot more interesting data in this release but this is a macro snapshot of the key elements of this release.

Commercial Auction Results – Week ending 9 October 2015

For the second week in a row, preliminary results show that auction volumes were relatively low, with 29 commercial auctions held last week compared to 28 the previous week and 41 at the same time last year. Last week’s preliminary result shows a clearance rate of 55.2 per cent compared to 53.6 per cent over the previous week. One year ago, the commercial auction clearance rate was recorded at 48.8 per cent. Activity across the commercial auction market over the four weeks ending 9 October indicates that 55.1 per cent of the 263 commercial auctions held have been successful, resulting in 145 sales. Of the 145 sales, 109 have been reported with a sale price totalling $225.5 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – St Kilda Cityscope

The latest research from St Kilda Road Cityscope shows property sales have decreased in the past three months. Sales recorded in the quarter ending October 2015 totalled $197.5 million, a decrease from the $266.9 million recorded to July 2015. This data brings the 12-month total to $922.4 million, a significant decrease from the $1.488 billion recorded the same time last year. The table below shows sales recorded for the past eight updates of St Kilda Road Cityscope. Recent standout sales in St Kilda Road include: St Kilda Road Police Complex at 412 St Kilda Road, Melbourne, a 22 level office building with net lettable area of 16,285 sqm including a 7 level car parking station for 174 cars, was bought for $58 million through Dawkins Occhiuto and CBRE Melbourne The Hotel Charsfield at 478 St Kilda Road, Melbourne, a two storey brick and render house with building area 2,330 sqm, refurbished as a bed and breakfast hotel of 55 rooms in 2000, was bought for $28 million. Properties for sale in St Kilda Road in October 2015 include: 324 St Kilda Road, Southbank, an eight storey glass-fronted office building with building area of 7,101 sqm and two basement levels for 70 cars, is for sale by Colliers International Melbourne 636 St Kilda Road, Melbourne, a 19 storey octagonal office building with building area of 17,432 sqm and underground car park for 227 cars, is for sale by international expressions of interest closing 20th October, 2015, through Colliers International 22-24 Wells Place, Southbank, a single storey brick building with building area of 329 sqm situated on a 202 sqm piece of land, is for sale by CBRE Melbourne. Significant leasing opportunities in St Kilda Road in October 2015 include: VACC House at 464-166 St Kilda Road, Melbourne, a three and eight storey office building with a basement parking for 180 car, which has floor area ranging from 194 sqm to 3,107 sqm for lease through Cushman & Wakefield 3A-5 Queens Road, Melbourne, an eleven storey hexagonal glass and granite office building with basement parking for 323 cars, which has floor area ranging from 600 to 3,344 sqm for lease through Thorburn Commercial Property and Colliers International Melbourne 616 St Kilda Road, Melbourne, an eleven storey office building with lower ground floor parking plus a 3 storey car parking station at rear for 229 cars, which has floor area ranging from 211 to 1,800 sqm for lease through CBRE Melbourne and Lemon Baxter CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Wellington Cityscope

The latest research from Cityscope has found that Wellington commercial property sales have decreased in the last three months, primarily due to the sale of the building at 171 Featherstone Street, Wellington Central, in the previous quarter. Sales recorded in the three months to October 2015 totalled $118.5 million, a substantial decrease from the $240.4 million recorded in the three months to July 2015, and the $129.2 million recorded to April 2015. This data brings the twelve month total to $626.2 million from 69 sales, an increase from the previous twelve month total of $186.8 million from 59 sales. The table below shows sales recorded for the past eight updates of Wellington Cityscope: Recent standout sales in Wellington include: Capital on the Quay, at 125 The Terrace, Wellington Central, a 19 level commercial building with retail space on the ground and first floors and four levels of parking, bought for $65 million. ASB Bank Tower, at 2-16 Hunter Street, Wellington Central, a 16 storey commercial building with basement car parking and a ground floor foyer and retail space with a net lettable area of 8,062 sqm, which was bought for $20.25 million. The Travelodge Wellington Plimmer Towers, at 2-6 Gilmer Terrace, Wellington Central, a 22 level hotel built in 1986 and internally refurbished in 2010, which was bought for $9 million. Properties for sale in Wellington in October 2015 include: 23 Frederick Street, Te Aro, a two storey building, built in 1925 for the Wellington Chinese Masonic Society. The ground floor is used as the Gourmet Stay hotel, and 25 Frederick Street, Te Aro, a three-storey building also used by the hotel, are available through Paul Hastings & Co. Prime Property Tower, 86 – 90 Lambton Quay, Wellington Central, a 15 storey retail and commercial building with car parking on the fourth floor, with a building area of 5,950 sqm, available through Bayleys Wellington Wellington leasing opportunities in October 2015 include: The Old Bank Shopping Arcade, at 233-247 Lambton Quay, Wellington Central, four historic retail and office buildings around four to five storeys, built between 1885 and 1905, which has office space of 3,070 sqm for lease through CBRE and Bayleys Wellington. Vodafone on the Quay, at 31 Waring Taylor Street, Wellington Central, a 26 storey tower comprising ground floor retail, 15 office floors and 10 floors of car parking, which has office space of 3,000 sqm for lease through CBRE and JLL Wellington. Regional Council Centre, at 142-146 Wakefield Street, Te Aro, an eight storey office building, which steps down to three storeys above two floors of car parking, which has office space of 6,561 sqm for lease in early 2016 through CBRE and Bayleys Wellington. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Sydney Units Cityscope

The latest research from Cityscope has found residential property sales in Sydney to have increased in the last quarter. Sales recorded over the three months to October 2015 totalled $244.8 million, an increase from the $226.4 million recorded to July 2015 and from the $161.9 million recorded to April 2015. The latest data brings the twelve-month sale total to $1,013.7 million, an increase from the previous twelve months, when sales totalled $678.2 million. The table below shows sales recorded for the past eight updates of Sydney Units Cityscope: Recent standout sales in the area covered by Sydney Units Cityscope include: Unit 1502 at 61 Macquarie Street, Sydney, a 226 sqm three bedroom penthouse on the west side of level 15 including a 16 sqm entrance area on level 14 and a 31 sqm car space and a 4 sqm storage lot on basement level 1 was bought for $4.5 million. Unit 65 at 1 Macquarie Street, Sydney, a 135 sqm two bedroom on level 6 including balconies and a 15 sqm car space on basement parking level 2 was bought for $3.825 million. Unit 86 at 171 Gloucester Street, The Rocks, a 195 sqm three bedroom plus study residential apartment on level 18 with 44 sqm of parking including storage on basement level 6 was bought for $3.585 million. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Grocon acquires 50% share in IMAX Theatre

Sales of Sydney CBD development sites continue unabated. A 50% share in the IMAX Theatre building has been sold for $70 million. Vendor of the leasehold interest, expiring September 19, 2045, was the M2 Property Trust, a privately held property trust controlled by James Markham of Darling Point. Purchaser was Markham’s partner, Grocon, a privately owned development, construction and real estate investment business specialising in large scale projects for private clients or in partnership with the Federal and Victorian Governments. Grocon, though substantially a Victorian company, has been involved also with several large NSW projects such as Governor Macquarie Tower, No 1 Martin Place, World Tower and No 1 Bligh Street. The IMAX Building, according to Sydney Cityscope, is currently an aluminium clad building, which appears eye-shaped when viewed from above, containing an eight storey high IMAX movie screen, a 540 seat theatre, a restaurant on the ground floor facing Darling Harbour’s Cockle Bay, a cafe and bar on level 2, and the IMAX Star Room a function venue on level 6. It was built in 1996 and refurbished in 2010. It has a current approved development application for the demolition of the existing IMAX building, tourist office and amenities block; construction of a new 20 storey building and a separate 2 storey building for office, retail and entertainment uses and 86 car parking spaces. It will become part of the Ribbon, a building that with its unusual shape is “intended to be interpreted as a twisted ribbon in the landscape”. The property’s freehold is owned by the Sydney Harbour Foreshore Authority, a statutory authority responsible for management of prime Sydney Harbour foreshore land. The leasehold last traded as a whole at $20.25 million in March 2005 Meredith Baume Commercial Research Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

High auction volumes for the second week in a row, while last week’s final auction clearance rate shows limited movement

CoreLogic RP Data National Auction Preview, week ending 18 October 2015 Across the combined capital cities, 2,904 auctions are scheduled this week after 3,016 residential homes were taken to auction the previous week. The clearance rate last week improved slightly, up from 68.2 per cent to 69.5 per cent, demonstrating that clearance rates are similar to the levels seen at the same time on year ago 67.8 per cent . This week, it is expected that Melbourne auction volumes will rise, while Sydney will be host to less auctions than last week. In Melbourne, 1,481 residential auctions will be held, compared to 1,397 last week and a significantly lower 1,167 one year ago. Meanwhile, there are 1,063 homes being taken to auction in Sydney this week, compared to 1,197 last week and 929 one year ago. Adelaide, Brisbane and Perth will all see a lower number of auctions this week compared to last week and similarly, lower than they were one year ago: Adelaide: 88 this week 127 last week 103 last year Brisbane: 149 this week 186 last week 159 last year Perth: 16 this week 34 last week 23 last year On the other hand, Canberra is expecting 92 auctions this week which is higher than both last week 68 and last year 55 . This week, the top 10 busiest suburbs for auctions are all located in Victoria. Brighton and Reservoir are set to be the busiest, where 21 auctions will be held and Cheltenham, will host 19 auctions this week.

New data shows that since May 2015 investor housing demand has slowed quite sharply

Lending finance data for August 2015 was released earlier today by the Australian Bureau of Statistics ABS . The latest data paired with the previously released housing finance commitments data shows that lending to investors has slowed sharply over recent months following the regulatory changes from APRA and the subsequent changes to lending policies from most mortgage lenders. The above chart shows the proportion of new lending to investors across each state and territory in August 2015. Note that when we say new lending we exclude refinances as they are not associated with a new purchase of property. New South Wales had the greatest proportion of new lending to investors over the month however, we have seen lending to this segment of the market slow across each state and territory. Mortgage lending to investors peaked in May 2015 prior to most Australian ADI’s implementing changes to lending policies relating to investment mortgages. At that time, the proportion of new lending to investors was much higher in each state and territory than it is currently. In each state and territory there has been a significant decline in the value of new lending to investors between May and August of this year. Across each state and territory the magnitude of the fall in investor lending has been recorded at: -10.5% in NSW, -14.0% in Vic, -15.2% in Qld, -17.0% in SA, -10.1% in WA, -10.0% in Tas, -35.6% in NT and -23.5% in ACT. While new lending to investors has fallen away over recent months, there has been a rise in new lending to owner occupiers across some states and territories while others have seen falls across owner occupier lending too. Between May 2015 and August 2015 the changes in the value of new lending to owner occupiers have been recorded at: +22.1% in NSW, +16.5% in Vic, +4.2% in Qld, +4.1% in SA, -2.4% in WA, -8.3% in Tas, -8.1% in NT and -10.8% in ACT. As investor lending is slowing in NSW and Vic, lending to owner occupiers is generally picking-up which should help offset some of the slowdown in investment loans. Elsewhere there has been no significant increase in owner occupier lending, or owner occupier lending has fallen; given this the data release may point to ongoing weaker housing market conditions outside of the two most populous states. It’s important to note that this data only includes mortgage lending domestically. What is not clear is to what extent the weakness in investor demand domestically over recent months is being offset by an uptick in demand from overseas.

Capital cities return a strong clearance rate across a high volume of auctions

Given it was such a quiet week for auctions last week, it was unsurprising to see volumes increase substantially this week, with 2,903 held across the combined capital cities. The preliminary clearance rate was 72.0 per cent this week across a total of 2,178 reported auction results, up from a final clearance rate of 68.2 per cent last week across just 865 auctions. At the same time last year, 67.8 per cent of auctions cleared and a total of 2,408 capital city auctions were held. Melbourne was the strongest performer this week, with 74.1 per cent of reported auctions recording a successful result. There were 1,358 Melbourne auctions scheduled, with 1,169 results reported so far. Last week, Melbourne’s final auction clearance rate was 73.1 per cent, while one year ago it was 70 per cent. The busiest sub-region across Melbourne for auctions this week was the Inner region, with 259 held. So far 228 results have been reported with a preliminary clearance of 75.8 per cent. In terms of clearance rate, the top performer this week was the South East at 79.1 per cent 148 auction results . Sydney hosted 1,141 auctions this week and preliminary results show that 72.8 per cent cleared. Last week, Sydney’s clearance rate just dipped below the 70 per cent mark, at 69.9 per cent when auction volumes were lower 583 . Relative to last year, this week’s result is stronger, given last year 918 auctions were held and the clearance rate was 71.9 per cent. This week, 3 Sydney regions were significantly stronger than others, with Northern Beaches 88 per cent , Eastern Suburbs 85.5 per cent , and City and Inner South 81.9 per cent the top performers. On the other end of the scale, Central Coast’s clearance rate was 41.7 per cent. Across Brisbane 178 auctions were held this week, up from 113 last week and 167 one year ago. Preliminary results show that Brisbane’s clearance rate increased slightly, from 59.1 per cent last week to 59.4 per cent this week. In comparison to last year, current activity is stronger 48.8 per cent . Further south, 71 of the 100 Gold Coast auction results have been reported and the clearance rate so far is 50.7 per cent. In Adelaide auction activity also picked up this week, 124 auctions were held compared to just 33 over the previous week. Adelaide’s preliminary clearance rate of 74.0 per cent is higher than last week 67.7 per cent and also higher than it was over the same week last year 55.8 per cent . There were 31 Perth auctions this week, compared to 10 last week and 25 one year ago. Perth’s preliminary clearance rate is 41.2 per cent, compared to 44.4 per cent last week and 52.6 per cent one year ago. Canberra’s clearance rate was 63.6 per cent this week across 64 auctions. Last week the city saw 63.2 per cent of auction sell, while one year ago the clearance rate was significantly lower at 52.6 per cent. 2 Tasmanian auctions have been reported to CoreLogic RP Data this week and preliminary results show only 1 sold.

Owner occupier housing finance commitments take a step up but all may not be as it seems

The Australian Bureau of Statistics ABS released housing finance data for August 2015 earlier this week. The data broadly showed a further pick-up in owner occupier lending and a slowing in investor lending. It is important to reconcile this against numerous reports that many mortgagees have been quick to advise their lenders that their properties which were formerly investment properties are now in fact owner occupied. This is due to the fact that most lenders are now charging a premium for investment mortgages. The above chart details the components of those borrowing over time. What’s immediately noticeable is that while there has been a recent surge in lending to investors, over recent months there has been a clear fall in lending to this cohort. While investment lending is slowing, owner occupier lending is rising however, there has been very little bounce in lending to first home buyers. For the most part the rise in owner occupier lending is being fuelled by an escalation in both refinances and borrowing for new loans to non-first home buyers. Again, it is important to note some of these figure may be being affected by re-classifications of mortgages. In August 2015, owner occupiers committed to $20.8 billion worth of housing finance, a 6.1% rise over the month and a 26.5% year-on-year rise. Looking at the components of owner occupier lending there was $1.7 billion in lending for construction of dwellings, $1.2 billion in lending for purchase of new dwellings, $6.4 billion in refinances of established dwellings and $11.5 billion for purchase of other established dwellings. The 6.1% monthly rise in owner occupier lending was largely fuelled by a 10.4% rise in lending for purchase of established dwellings however, each component rose. Refinances have typically been the greatest source of growth in owner occupier lending however, they recorded the slowest growth of any segment over the month. Looking at year-on-year changes, lending for construction of dwellings rose 0.5%, lending for purchase of new dwellings rose 17.6%, refinances of established dwellings rose 26.7% and purchase of established dwellings increased by 32.6%. Over the coming months we will be watching closely to see whether the growth in owner occupier lending can be maintained, particularly in the face of falling population growth and no real increase in activity from first home buyers. Switching the focus to the investor segment, there was $13.6 billion worth of commitments to investors in August 2015. The value of lending to investors was -0.4% lower over the month but 12.0% higher year-on-year. It was also the first time in 13 months that the value of new lending excluding refinances was greater to owner occupiers than it was to investors. Over the month there was $0.8 billion in lending for construction of dwellings and $12.7 billion in lending for established housing. Over the month, lending for construction of dwellings fell -22.0% while commitments for established housing rose 1.4%. Year-on-year lending for construction of new homes is -2.5% lower and lending for established homes is 13.1% higher. The data appears to indicate that there is a change occurring in the mortgage lending market. Whereas investors and owner occupier refinances have been the primary drivers of growth lately, it seems as if this is now tilting to owner occupier new loans starting to dominate. Given that investment mortgages generally now have a higher interest rate than owner occupier mortgages, it may be playing a role in the tilt towards owner occupier lending. Furthermore, value growth has been strong for more than three years in Sydney and Melbourne and investors may be becoming concerned about the longevity of the boom while growth outside of these cities has been sedate. Once you also consider a record high pipeline of residential construction accompanied by a record low rate of rental growth and historical low yields perhaps a growing number of investors are looking towards other forms of investment they perceive as less risky at this stage in cycle. It’s still early days for the slowdown in investment lending but we, along with the RBA and APRA, will be watching closely to see whether the slowing in investment lending and the rise in owner occupier lending persists over the coming months. It is also going to be interesting to see what impact this has on overall demand for housing over the coming months in lights of evidence of a bit of a softening in the Sydney housing market.

Commercial Market Update – Melbourne Cityscope

The latest research from Melbourne Cityscope shows that commercial property sales have increased in the past three months.Sales recorded in the quarter ending September 2015 totalled $3.473 billion, an increase from the $838.2 million in sales recorded in the three months to June 2015 and the $547.1 million recorded in the three months to March 2015. This data brings the 12 month total to $5.188 billion from 359 sales, an increase compared with the previous 12 month total of $3.152 billion from 301 sales. The table below shows sales recorded for the past eight updates of Melbourne Cityscope. The most notable sales recorded for the September 2015 update of Melbourne Cityscope include: 222 Exhibition Street, a 30 level office and retail building with a combined net lettable area of 29,910 sqm, which was bought for $231 million. 114 William Street, an office building of 23 storeys, two levels of basement car parking for 106 cars and a paved pedestrian plaza with a net lettable area of 21,022 sqm, which was bought for $125 million. 460 Lonsdale Street, an 18 level building comprising 8 levels of parking for 294 cars, a ground floor restaurant and ten levels of office spaces with a net lettable area of 11,618 sqm, which was bought for $98 million. 575 Bourke Street, an 18 level office block including three ground-floor showrooms plus a two-level, 82-space underground car park and a net lettable office space of 16,200 sqm, which was bought for $88 million. Properties for sale in the area covered by Melbourne Cityscope in September 2015 include: 206 Bourke Street, a five level building comprising retail space on ground and level one and office space in the three upper levels plus one level of basement parking with a combined net lettable area of 11,922 sqm, through expressions of interest closing November 18, 2015 through CBRE and Savills. This property was last sold for $105 million in 2013. A six level car park of 556 bays with showroom and office space of 1,917 sqm on ground and mezzanine floor at 400 Queen Street on a 3,218 sqm-site, by expressions of interest closing October 8, 2015, through Colliers International. This property was last sold for $9 million in 1991. 520 Bourke Street, a five storey bluestone office building built in 1862 and restored in 1981 and strata sub-divided in 1983. The building on a 1,356 sqm site is for sale by expressions of interest closing October 14, 2015, through Knight Frank. This property was last sold for $3.8 million in 1996. A brick three storey building at 21-25 Hardware Lane on a 178-sqm site, by public on-site auction on October 8, 2015, through CBRE. This property was last sold for $5.99 million in 2013. Leasing opportunities in the area covered by Melbourne Cityscope in September 2015 include: North Tower and the South Tower at 459 Collins Street of 32 levels and 15 storeys respectively with net lettable area of 36,678 sqm has office space ranging from whole floors of 852 sqm and floor areas ranging from 149 to 2,438 sqm for lease through Colliers International and JLL Melbourne. 485 La Trobe Street, two office towers linked by a six storey glass atrium and lobby and comprising of a North Tower to La Trobe Street and a South Tower to Little Lonsdale Street and a combined total net lettable area of 33,639 sqm plus a 196-space basement car park, has office space ranging from 1,344 to 7,317 sqm for lease through JLL Melbourne and Savills. 460 Lonsdale Street, an 18 level building comprising 8 levels of car parking for 294 cars, a ground level restaurant and ten levels of office space with net lettable area of 11,618 sqm, has office space ranging from 400 to 4,000 sqm for lease through Knight Frank and Colliers International. 555 Lonsdale Street, a 13 storey office building with a two level 79 space basement car park and net lettable office area of 16,176 sqm, has office space ranging from 637 to 5,837 sqm for lease through Knight Frank. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results – Week ending 2 October 2015

Over the week ending 2 October, preliminary auction results show that volumes were down from 94 the previous week to 23. The clearance rate remained steady, up only slightly from 54.3 per cent the previous week to 56.5 per cent last week. One year ago there were 39 commercial auctions held with a success rate of 46.2 per cent. There have been 273 auctions held over the past four weeks, with 152 successful sales. Of these 152 sales, 113 have been reported with a sale price, totalling just over $224.61 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Supermarket giant’s property up for sale

One of Sydney’s largest suburban office buildings, the 44,000 sqm Woolworths Headquarters, has recently been put to market. 1 Woolworths Way is located in Norwest, a business park of 1,700,000 sqm in the suburbs of Bella Vista and Baulkham Hills in North Western Sydney. The park was established in 1983. JLL and Savills have been appointed selling agents. According to Norwest Cityscope, the office complex consists of three large interconnected four storey office buildings with on-grade and basement level parking for 2,341 cars. Sitting on a site area of 90,000 sqm, the 44,000 sqm building also includes retail space and cafes, sports facilities and an auditorium. It was built in 2005 at a cost of about $200 million. Woolworths is the sole tenant, recently re-signing till 2031. Owned through a 99-year leasehold expiring in October 2104, the building last traded at $241.7 million in 2005. It was later acquired by Mirvac Office Trust following Mirvac’s acquisition of the Westpac Office Trust. Most recently valued at $250 million it has been reported that the eventual sale price could be up to $50 million more due to the recently signed Woolworth’s lease. Whatever the eventual sale price it will most certainly be the largest sale of the area in recent times. Cityscope records a sale of $38.915 million in March 2015 Norwest Quay, a four storey office building at 21 Solent Circuit and a $120 million sale in December 2014 Norwest Marketown, a 4.4ha site comprising a two storey shopping centre, three single storey buildings and a Shell service station at 4 Century Circuit . Meredith Baume Commercial Research

Commercial Market Update – Eastern Sydney Cityscope

The latest research from Eastern Sydney Cityscope shows property sales have increased in the past three months. Sales recorded in the quarter ending September2015 totalled $164.1 million from 57 sales, an increase from the $82.1 million of 36 sales recorded in the three months to July 2015, and an increase from the $93.3 million of 43 sales recorded to April 2015. This data brings the 12 month total to $603.7 million from 190 sales, an increase from the $581.7 million of 159 sales recorded the same time last year. The table below shows sales recorded for the past eight updates of Eastern Sydney Cityscope. Recent standout sales in Eastern Sydney include: 64-76 Kippax Street Surry Hills, an 8-storey, 5,467 sqm, commercial building with parking for 72 vehicles, was bought for $31.5 million in a sale handled by Knight Frank. 292-302 Oxford Street Bondi Junction, a one and two-storey brick building to Oxford Street with 4-storeys to Hegarty Lane, was bought for $20 million in a sale handled by Gunning Commercial Surry Hills. Bounce Sydney, a four-storey, 190 bed, backpackers hotel was bought for $18.3 million in a sale handled by CBRE Hotels. Properties for sale in Eastern Sydney in October 2015 include: 37-41 Oxford Street Surry Hills, a three-storey, 764 sqm commercial building with basement is for sale through JLL Sydney. The building last traded at $7 million in April 2007. 63-73 Ann Street Surry Hills, a four-level, 2,800 sqm, commercial building is for sale through SKW Property. The building last traded at $12 million in December 2014. Briad House at 491-493 Elizabeth Street, a five-storey, 1,075 sqm, commercial building with parking for 5 vehicles, is for sale through CMS Real Estate, and Cushman & Wakefield. Significant leasing opportunities in Eastern Sydney in October 2015 include: 100 William Street Woolloomooloo, a 24-storey, 29,850 sqm, office building with basement parking has office space of 107 to 3,785 sqm through Colliers International. Lot 37 at 50 Holt Street Surry Hills; a 1,445 sqm commercial unit being the whole of level 5 except common property, has the whole level available through DB Property and Colliers International. 241-243 Commonwealth Street Surry Hills, a 9-storey commercial building, has office space of 621 and 1,240 sqm through DB Property and Colliers International. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

A buzz across the capital city auction markets where 3,062 auctions will be held, compared to just 865 last week

CoreLogic RP Data National Auction Preview, week ending 11 October 2015 The NRL and AFL grand finals, combined with a long weekend across many states last week saw auction activity take a backseat, however, this week auction volumes have more than tripled, with 3,062 residential properties going to auction across the combined capitals. This week will be the third busiest for auctions across Melbourne this year, with 1,411 homes being taken to auction, compared to just 98 last week and 1,123 at the same time last year. Similarly, for Sydney, Australia’s second largest auction market, volumes will increase this week, with 1,230 auctions scheduled, up from 583 last week and 918 over the comparable week last year. In all other capital cities, the number of auctions this week will also increase and volumes in each of the cities are higher relative to last year. There are 129 auctions in Adelaide this week, compared to 33 last week and 115 at the same time last year. Brisbane will be host to 186, the busiest week for the city since May this year, while there are 65 Canberra auctions scheduled and 34 across Perth. In terms of the latest clearance rates, clearance rates fell further last week, down to 68.2 per cent across the combined capital cities, with Sydney recording a clearance rate below 70 per cent for the first time this year 69.9 per cent . With the increase in auction volumes this week it will be interesting to see how the clearance rate performs. Mount Waverly in Victoria is host to 31 auctions this week, the highest number of auctions in any one Australian suburb. Following this is Reservoir Vic with 25, Glen Waverley Vic with 21, Mosman NSW and Northcote Vic , both with 18.

Grand finals upstage capital city auction markets

It was a quiet week for auctions this week due to the grand finals and the Labour Day long weekend. 841 properties were taken to auction across the combined capital cities and the preliminary clearance rate was recorded at 69.6 per cent, the lowest clearance rate since the second week of February. In comparison, last week was the busiest week for auctions since the end of March with 2,835 auctions held, however the final clearance rate was only 69.7 per cent. Over the same weekend last year, when only the NRL grand final was being played The AFL grand final was held a week earlier almost twice as many auctions were held 1,650 ; however the clearance rate was a lower 66.9 per cent. Across Melbourne, 90 auctions were held this week and the preliminary clearance rate was recorded at 67.7 per cent, the third lowest clearance rate for the year, compared to last week’s final clearance rate of 72.7 per cent across 1,201 auctions. This time last year, 69.1 per cent of the 912 properties taken to auction sold. Across Melbourne’s individual sub-regions, the strongest performer in terms of clearance rate this week was the North West region, where 8 of the 10 reported auctions were successful. Meanwhile, the South East region was host to the highest number of auctions 21 . In Sydney, preliminary results show a clearance rate of 71.4 per cent across 448 results, with a total of 567 auctions held across the city this week. Last week, the clearance rate was 71.7 per cent across 1,200 auctions. Looking at last year, there were 473 auctions held and a clearance rate of 76.4 per cent was recorded. The Inner West region of Sydney, where 32 auction results have been reported with a clearance rate of 90.6 per cent, is the strongest performing sub-region this week. City and Inner South 79.4 per cent , and North Sydney and Hornsby 78.2 per cent also recorded strong clearance rates. Brisbane was host to 118 auctions this week, down from 203 last week and similar to last years 117. Of the 87 results reported so far, 64.4 per cent have sold, up from last week’s final clearance rate of 54.9 per cent and the 47.4 per cent clearance rate recorded last year. This week, 28 Gold Coast auction results have been reported and the preliminary clearance rate based on these results is 42.9 per cent. There were 32 Adelaide homes taken to auction this week with a preliminary clearance rate of 71.4 per cent across 28 results. This week’s clearance rate is higher than both last week, when 68.1 per cent of the 127 auctions sold, and this time last year, when a clearance rate of only 53.7 per cent was recorded across 63 auctions. Just 10 auctions were held in Perth this week, significantly lower than both last week 25 and last year 23 . Perth’s clearance rate was 75.0 per cent this week, up from 31.6 per cent last week and 25.0 per cent last year. Across Canberra, the preliminary clearance rate was 53.8 per cent across 13 results. Last week, Canberra’s clearance rate was 58.5 per cent, while one year ago, only 29.3 per cent of auctions were successful. Of the 4 auctions held in Tasmania this week, there were 2 successful sales.

Dwelling approvals remain elevated but fall in August

The Australian Bureau of Statistics ABS published building approvals data for August 2015 earlier this week. The data showed a month-on-month fall in approvals driven by a sharp drop in the number of unit approvals. Keep in mind that unit approvals tend to be much more volatile than house approvals on a monthly basis. Over the month there were 18,071 dwelling approvals which was a decline of -6.9% over the month. Dwelling approvals hit a record high of 20,215 approvals in March 2015 and they are now -7.5% lower. It does appear that approvals have peaked notwithstanding the fact that they remain at historically high levels. There were 9,882 houses and 8,819 units approved for construction in August 2015. House approvals actually increased by 4.4% over the month while unit approvals fell by -16.9%. Year-on-year house approvals have increased by 2.2% compared to an 8.4% lift in unit approvals. To further highlight the volatility of unit approvals the 8.4% year-on-year increase in August is well down on the 44.2% year-on-year rise in July. Although it looks as if approvals have peaked it would not surprise to see a sharp rebound in unit approvals next month. Across the country there was a record high 226,415 dwellings approved for construction over the 12 months to August 2015. To put the magnitude of approvals in perspective, two years ago over the year to August 2013 there had been 166,658 dwelling approvals nationally. There has also been a surge in unit approvals over recent years with a record high 48.8% of all dwelling approvals nationally being for units over the past year. Again, 2 years ago units accounted for 42.5% of all approvals over the year. It isn’t just the fact that more units are being built, the type of units being constructed is changing dramatically. Over the 12 months to August 2015, 25.7% of all unit approvals were for townhouses, 10.1% were low rise less than 4 storeys and 64.3% were high-rise 4 storeys or more . The above chart shows that historically townhouses have received the highest proportion of approvals. Trends have changed quite swiftly, 2 years ago just 49.2% of all unit approvals were high-rise. The rise in high-rise approvals is reflective of higher densities within our inner city markets. High rise unit projects also take longer to build than a house or townhouse and as a result the economic benefit is stretched over a longer period. Of course the fact that we are approving high-rise units at an unprecedented pace also creates some challenges. Most notably who are buying these properties and over the longer term who is going to live in these units. The data indicates that dwelling approvals have probably peaked for the current phase however, the number of approvals remains elevated. This has created a significant pipeline of new construction much of which is high-rise and will take some time to complete. Because unit development is so dependent upon presales it will be interesting to see just how many of these units are ultimately built.

Primewest begins to divest portfolio

A $530 million property portfolio, which includes two Perth CBD properties plus others in Brisbane, Melbourne, Sydney and Newcastle, has begun to be divested with the sale of 53 Ord Street, Perth at $59 million. The properties were offered individually or in one line by Primewest. A national wholesale property syndicator and developer, Primewest has a portfolio of over $2 billion and was founded and is run by John Bond, son of the late Alan Bond. CBRE were appointed as the selling agent for the portfolio and the sale was negotiated by their agents, Peter Agostino and Andrew Woodley-Page. Purchaser was Mapletree, a leading real estate development and investment company based in Singapore, where it listed on the Singapore exchange in 2010. Mapletree has over $28 billion of assets under management spanning the retail, office, industrial, residential, corporate housing/serviced apartments, and mixed-use sectors. It is another Australian purchase for Mapletree, having bought the Coles chilled distribution centre at Eastern Creek, NSW for $253 million earlier this year. 53 Ord Street, Perth, according to Perth Cityscope, is an A-grade office building of 5 storeys, with a 2 level car park. Custom built in 2002 for its sole tenant, the building has a net lettable area of almost 7,000 sqm. The building is still tenanted soley by multinational energy corporation, ConocoPhillips, who have recently re-signed until 2022. The property previously traded at $41.5 million at a yield of 7.7% in June 2009. This sale, at $59 million, represented an initial yield of 8.10% on a passing income of $4,778,445 net . Meredith Baume Commercial Research Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Parramatta Cityscope

The latest research from Parramatta Cityscope shows property sales have dramatically increased in the past three months, the result of several large sales. Sales recorded in the quarter ending September 2015 totalled $492.4 million, an increase from the $85.1 million recorded in the three months to June 2015, and an increase from the $170.2 million recorded to March 2015. This data brings the 12 month total to $940.3 million, an increase from the $772.2 million recorded the same time last year. The table below shows sales recorded for the past eight updates of Parramatta Cityscope: Recent standout sales in Parramatta include: 83 Church Street, Parramatta, a car yard with a single-storey sales office, 63 Church Street, Parramatta, a car yard, including a 3-storey office and showroom, 57 Church Street, Parramatta, a car yard with several one and two-storey brick buildings with a carwash, and 44 Early Street, Parramatta not covered by Parramatta Cityscope , which were bought for $150 million; agents Colliers International and Matrix Property Group; 20 Charles Street, Parramatta, an eight-storey office building with retail areas on the ground floor and parking for 162 cars, which was bought for $31 million; and 91 Phillip Street, Parramatta, a nine-storey building with ground floor showrooms, eight levels of offices and parking for 133 cars, which was bought for $30 million. Properties for sale in Parramatta in September 2015 include: 95 Macquarie Street, Parramatta, a four-storey office building, completed in 2002 and 97 Macquarie Street, Parramatta, a two-storey building, available through Khoury & Partners Parramatta; and Shop H, 8 Cowper Street, Parramatta, a retail unit facing Cowper Street with 102 sqm on the ground level, available through C & R Realty International. Significant leasing opportunities in Parramatta in September 2015 include: 130 George Street, Parramatta, a 14-storey office building including ground floor retail/showroom space and basement and on-grade parking for 332 cars, which has office space of 1,480 to 4,440 sqm for lease through Colliers International Sydney West and Dexus Property Group; 56 Station Street East, Harris Park, a 12-storey building with 8 floors of offices, which has space of up to 6,000 sqm for lease through CBRE; and 88 Phillip Street, Parramatta, a six-storey office building with three levels of basement car parking for 113 cars, which has office space of 199 to 2,151 sqm for lease through Colliers International. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results – Week ending 25 September 2015

Over the week ending 25 September 2015, the preliminary clearance rate for commercial auctions was 56.6 per cent across a total of 76 reported results, up from 53.7 per cent the previous week when 108 auction results were reported. Over the corresponding week last year, the auction clearance rate was 64.9 per cent, stronger than this year’s preliminary result, however the number of auctions was significantly lower at 37. Over the most recent four weeks there were 275 commercial properties taken to auction, with 161 reported sales resulting in a clearance rate of 58.5 per cent. Of the 161 sales, 125 have been reported with the sale price disclosed and the total value of these transactions was just over $224 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update â

The latest research from Gold Coast Cityscope shows property sale figures have increased in the past three months, but sale numbers have remained generally consistent. Sales recorded in the three months to September 2015 recorded 38 sales for a total of $147.4 million. Of this, $34.6 million was for commercial, $10.3 million was for commercial strata, $84 million was for retail, $8.5 million was for retail strata and $9.9 million was for other. In comparison, the three months to June 2015 recorded 44 sales for a total of $86.6 million. Of this, $55 million was for commercial, $7.9 million was for commercial strata, $8.6 million was for retail, $5.9 million was for retail strata and $9.1 million was for other. The latest data raises the 12 month total to over $565.9 million; just under double the previous 12 month period. The table below shows sales recorded for the past eight updates of Gold Coast Cityscope: The three most significant sales recorded this quarter together totalled over $104 million. The retail and commercial component of Chevron Renaissance, Surfers Paradise. The centre was bought for $73.4 million by Chevron Renaissance Asia Pacific Shopping Centre Pty Ltd, as trustee for the Chevron Renaissance Shopping Centre Unit Trust. Simon Rooney, John Talbot and Chris Key from JLL negotiated the sale which represented an initial yield of 7.96% on a passing income of over $5.84 million net . An 8,785 sqm site 68-74 Nerang St, Southport, with three commercial office buildings between one and two storeys and one piece of paved land which is used for car parking. Bought in an off-market transaction for $19 million by Lvjian Australia Investment Pty Ltd. Kevin Carmody from Savills Gold Coast negotiated the sale. 16 Queensland Avenue, Broadbeach. A six-storey office building with basement car parking. Bought for $11.86 million by Benzine Pty Ltd, as trustee for The Benzine Trust. Jamie Bourke from First National Commercial Gold Coast and Harry Kakavas from Prestige Property Sales negotiated the sale which represented an initial yield of approximately 6.3% on passing income of about $747,180 net . Properties currently listed for sale include: Paradise Centre formerly Centro Surfers Paradise , Surfers Paradise – a three-level retail centre with car parking for 463 vehicles. For sale by expressions of interest, closing October 15, 2015; agent, JLL Brisbane Simon Rooney . The property was advertised with a fully leased net income of around $19.6 million as at December 1, 2015 . Unit 30702, Southport Central Red Tower, 27 Garden Street, Southport- a 90 sqm office on level 7. Scheduled for auction on October 8, 2015; agent, Ray White Commercial Southport Brett Delmege . KRG Centre, 9-15 Bay Street, Southport – a four-level office building on the corner of Bay and Rawlins Street. For sale by expressions of interest, closing October 11, 2015; agent, First National Commercial Gold Coast Darrell Woodfield and Kevin Lonard . Properties currently under contract conditionally or unconditionally include: 104-114 Scarborough Street, Southport –a mix of single-storey retail shops situated over a 2,430 sqm site. Under contract unconditionally with settlement expected November 6, 2015; agent, Ray White Commercial Southport Brett Delmege and Wayne Devenport . Unit 4, Citypods, 247 Scottsdale Drive, Robina – a two-level unit with 72 sqm on the ground floor and 178 sqm on level 1. Under contract with settlement expected in mid-October 2015; agent, Robina Marketing Australia Marcus Weld . Shop 1, 7-11 Elkhorn Avenue, Surfers Paradise – a 282 sqm shop fronting Elkhorn Avenue. Under contract; agent, CBRE Gold Coast Mason Kidman . CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Auction volumes plummet, driven by the Labour Day long weekend as well as the NRL and AFL grand finals

CoreLogic RP Data National Auction Preview, week ending 4 October 2015 Auction volumes are expected to drop to 829 this week, caused by a combination of the Labour Day long weekend and the NRL/AFL grand finals. Last week the final auction clearance rate softened further from the previous week, down to 69.7 per cent. This result shows that some of the heat looks to be coming out of the auction market. Last week’s result brings the clearance rate across the combined capital cities for September to 70.9 per cent and is indicative of a modest start for Spring, down from 74.5 per cent in August and also lower than September last year 72.0 per cent . At a city-by-city level, there will be fewer auctions this week than there were last week in every capital city. This week in Sydney 564 auctions are expected – less than half of what was seen last week 1,200 , but still higher than one year ago when 473 Sydney homes were taken to auction. On the other hand, Melbourne will be host to just 84 auctions this week, compared to 1,201 last week, and 912 at the same time last year. Over AFL grand final weekend last year, there were 112 Melbourne auctions, slightly higher than the predicted volumes this year. For the remaining capital cities, auction volumes this week are as follows: Adelaide: 31 this week 127 last week Brisbane: 115 this week 203 last week Canberra: 20 this week 58 last week Perth: 9 this week 25 last week Each week, the highest number of auctions in any one Australian suburb is usually a Melbourne suburb, however given the low volume of auctions across the city this week this isn’t the case. The highest volume of auctions will be 9 in Padstow NSW and 8 in each of Wahroonga NSW and Buderim Qld .

the first month of spring returns a lift in new listings

As they do every year, new listings increased over the first month of spring, with further additions of stock to the market expected to ramp up until the end of year slow-down in December. In addition to the number of listings being added to the market CoreLogic RP Data’s lead listings indicator is also showing a 1.6 per cent month-on-month change seasonally adjusted , with Tasmania +5.2 per cent and Victoria 3.4 per cent showing the most activity of listings being prepared for sale. In terms of listing stock, the largest proportionate increases this month relative to last month have been observed in Brisbane, where the number of residential properties added to the market over the four weeks ending 27 September was 12.9 per cent higher than the four week period a month earlier. Following Brisbane was Hobart 12.5 per cent higher and Adelaide 11.0 per cent higher . Despite the increase in new listings, total stock levels remain just 1.2 per cent higher relative to one year ago across the combined capital cities, while nationally; total listings are -0.6 per cent lower. As at 27 September, there were 234,094 residential properties available for sale across Australia, while one year ago, there were 235,399. When compared to last year, across the capital cities, total listings are higher in Perth +20.7 per cent , Darwin +12.3 per cent and for the first time this year, Sydney +4.7 per cent . In Sydney, one of the reasons the total stock levels are now higher than one year ago is likely due to the increase in stock being added to the market. New listings across the city are 16 per cent higher than one year ago, to put this into perspective, over the comparable 28 day period one year ago, 7,431 listings were newly added to the market, compared to 8,617 this year. Across the individual states and territories, there are more listings than one year ago in Western Australia, Northern Territory both +12.9 per cent and to a lesser degree, South Australia +2.2 per cent , while across these three regions, the number of new listings added to the market over the past four weeks is lower than one year ago. In all other states and territories, total listings are currently lower than they were relative to last year.

Auction markets improve with the preliminary clearance rate bouncing back above 70% on the highest volumes since March 2015

A preliminary auction clearance rate of 71.3 per cent was recorded across the combined capital cities this week, having increased from 69.9 per cent last week, the lowest clearance rate since the end of March. Auction volumes were high, with a total of 2,820 auctions held over the week, up from 2,565 over the previous week. In comparison, at the same time last year, auction volumes were lower due to the AFL Grand Final in Melbourne; meaning only 1,369 auctions took place across the combined capital cities. The preliminary auction clearance rate across Melbourne was 73.3 per cent this week, down from the previous week’s final result of 73.7 per cent, making this week the fourth lowest clearance rate for the year. This week, Melbourne was host to 1,197 auctions, higher than the 1,127 held last week and significantly higher than a year ago when there were only 112 Melbourne auctions held over the week. Across Melbourne’s individual sub-regions, the strongest preliminary clearance rate this week was across the Outer East region at 81.8 per cent, followed by the Inner South region where the preliminary clearance rate was 80 per cent. There were 1,193 Sydney homes taken to auction this week and a preliminary clearance rate of 74.2 per cent across 974 results. Over the previous week, Sydney recorded the lowest final auction clearance rate for the year 70.7 per cent and 1,041 auctions were held across the city. At the same time last year, 76.9 per cent of the 933 homes taken to auction recorded a successful result. This week, the strongest sub-region for clearance rates across Sydney was the Eastern Suburbs, with 89.8 per cent of the reported results clearing at auction. Brisbane’s preliminary clearance rate was 58.9 per cent this week, compared to 50 per cent last week and 48.9 per cent at the same time last year. Across Brisbane, a total of 199 auctions were held this week which is higher than both last week 143 and last year 179 . Across the Gold Coast, 54.3 per cent of the reported auctions have sold. Adelaide hosted 127 auctions this week and across the 80 reported results, CoreLogic RP Data’s preliminary auction clearance rate is 68.8 per cent. Last week, Adelaide’s clearance rate was 71.4 per cent across the 99 auctions held, while at the same time last year 65.6 per cent of the 73 homes taken to auction were sold. For Perth, the number of homes taken to auction this week was 25, less than last week 31 and higher than last year 6 . Meanwhile, Perth’s clearance rate of 36.4 per cent this week was lower than last week 38.5 per cent and higher than last year 33.3 per cent . Across Canberra 58 homes were taken to auction this week and the preliminary clearance rate across 36 reported auctions was 50 per cent. There were 21 auctions across Tasmania this week, with 3 successful results out of the 18 reported.

Population growth slumps to its slowest rate in 9 years but holds up well in NSW and Vic

The Australian Bureau of Statistics ABS released demographic data for the March 2015 quarter earlier today. The data showed that despite a quarterly bounce in population growth, the rate of growth continues to trend lower. The national population increased by 1.35% over the 12 months to March 2015 which was the lowest annual rate of growth in 9 years. Although growth slowed it should still be noted that Australia’s population increased by 315,952 persons over the past year. Although population growth has slowed it remains well above the long term average of 256,801 per annum. Over the March 2015 quarter, the national population increased by 93,942 persons, substantially higher than what was recorded over the December 2014 quarter when the nationally population recorded an increase of 64,010 persons. Over the 12 months to March 2015, the national population increased by 315,952 persons which is the lowest annual increase in population since the 12 month period ending June 2011 when the nation recorded population growth of 308,274 persons. At a national level there are two components of population growth, natural increase births minus deaths and net overseas migration. Each of these measures recorded a bounce over the past quarter however, both components continue to trend lower on an annual basis. Over the 12 months to March 2015 natural increase was recorded at 142,898 persons and net overseas migration was recorded at 173,054. Natural increase was -9.7% lower over the year while net overseas migration was -16.0% lower, its largest annual fall since March 2011. While the decrease in the rate of natural increase implies a sharp rise in deaths or slowdown in births, it is important that the ABS has noted that there are problems with the preliminary natural increase estimates due to a lag in registering births in both NSW and Vic. We are likely to an upwards correction to this data over the coming quarters which will lift the rate of population growth. Across the states and territories the rate of annual population growth is lower compared to the same time a year ago across the board. Although population growth is slowing, the sharpest slowdown in population growth is being felt in WA and NT. In WA the rate of population growth has slowed to 1.4% over the year to March 2015 from 3.5% two years earlier. Similarly, annual population growth in the NT was 3.0% two years ago and the latest data shows it at just 0.2% over the past year. Looking at the components of population growth we will ignore natural increase at this juncture because the ABS have highlighted some issues with the data for NSW and Vic. The two other drivers of population growth at a state and territory level are overseas migration and interstate migration. NSW and Vic are the major benefactors of net overseas migration to Australia while Vic and Qld are the only benefactors of interstate migration. Over the 12 months to March 2015, net overseas migration to Australia was recorded at 173,054 persons. More than two thirds of net overseas migration flowed to NSW 38.9% and Vic 31.6% . If you add in Qld 12.1% , the three most populous states accounted for 82.6% of net overseas migration. Although net overseas migration is trending lower, the impact of the end of the mining boom is very clear. In March 2013, annual net overseas migration was recorded at 41,745 persons in Qld, 53,834 persons in WA and 5,173 persons in NT. Over the past year, annual net overseas migration had slowed to 20,857 persons in Qld, 15,383 persons in WA and 1,041 persons in NT. Conversely in NSW where mining is a smaller part of the overall economy, net overseas migration has actually increased from 63,661 persons in March 2013 to 67,272 persons in March 2015. Similarly in Vic net overseas migration has been much stronger over the past 2 years, falling slightly from 55,562 persons to 54,745 persons. Of course while most of the overseas migration is coming to NSW and Vic, most of that is flowing into Sydney and Melbourne fuelling more demand for housing and helping to explain why home value growth in those two cities has been so strong. At a national level net interstate migration cancels itself out and does not add to population growth however, at a state level it can greatly impact on population growth. Over the past 12 months, only Vic 9,774 persons and Qld 6,195 persons have seen a positive inflow of residents from other states. In fact, net interstate migration into Vic is currently at its strongest level on record. Qld has recorded a slight rebound in net interstate migration however, it continues to hover around its lowest level on record. For the length of this data series since 1981 NSW has consistently lost residents to other states and that remains the case losing 6,195 residents over the year. The outflow of residents from NSW is hovering at around record low levels. WA has typically been a benefactor of interstate migration however, it lost a net -1,269 residents last year; its greatest loss since June 2003. Again we can see the impact of the slowing of the resources sector. In March 2013, net interstate migration was recorded at a higher 9,026 persons in Qld and 9,691 persons in WA. Conversely, net interstate migration at that time was recorded at -15,513 persons in NSW and 3,454 persons in Vic. The trends in overseas and interstate migration in particular show that the population growth tide has turned away from the mining states and is now firmly focussed on NSW and Vic which have relatively little mining sector exposure. These states are also creating more employment opportunities and are subsequently attracting both people migrating from overseas and interstate. Higher population growth means more demand for housing, which is one of the drivers pushing dwelling values higher in Sydney and Melbourne. The more up-to-date overseas arrivals and departures data from the ABS indicates that permanent and long-term arrivals into Australia have continued to trend lower since March 2015. This indicates that net overseas migration is expected to continue to trend lower over the coming quarters. It is also likely to result in more of these migrants wanting to move to NSW and Vic due to the fact that these are the states where more jobs are being created. This is of course despite the fact that the two capital cities in these two states recording home value growth which is well in excess of growth elsewhere.

Swiss-based company set to buy in South Brisbane

Commercial property news from Queensland is that Credit Suisse Asset Management is set to buy a South Brisbane office tower at 99 Melbourne Street for between $38 and $40 million. In a sale arranged by Bruce Baker and Flint Davidson of CBRE Brisbane, though not yet confirmed, the vendor was Primewest Funds Limited as trustee for the 99 Melbourne Street Unit Trust. Primewest Funds is a private, unlisted property fund manager founded in 1994 by John Bond of Peppermint Grove, Jim Litis of Applecross, and David Schwartz of Dianella. Primewest is a national wholesale property syndicator and developer with a portfolio of over $2 billion.The purchaser, Credit Suisse, a Swiss-based financial services holding company, was founded in 1856 and provides products across a range of specialist investment classes, including hedge funds, credit, private equity and commodities. According to South Brisbane Cityscope, 99 Melbourne Street is a five storey office building with ground floor retail space.It was completed in 2004 at a cost of $22 million and both its builder, Abigroup, and developer, Leyshon Developments, won awards for the project. The building has a net lettable area of 6,000 sqm and a 5-star NABERS rating. Its tenants include the headquarters of Stockland plus Aspec Engineering, Austcover, Lumley Insurance, Sibelco Australia and Wesfarmers. The property last traded at $28.5 million in 2010 and was advertised for this sale with an income of $3.23 million net . It was sold on yield of between 7.75 and 8.5 per cent. Meredith Baume Commercial Research Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results – Week ending 18 September 2015

Over the week ending 18 September 2015, the preliminary auction clearance rate was 51.7 per cent across a total of 58 commercial auctions. One week prior, the final auction clearance rate was a stronger 60 per cent across less auction results 45 . At the same time last year, the number of commercial properties taken to auction was higher at 79 and the clearance rate was also stronger at 62 per cent. There have been 210 auctions reported over the most recent four week period, with 132 of these reported as sold 62.9 per cent and a total value of $159.07million across the 102 sales reported with a price. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Busiest week for auctions since prior to Easter

CoreLogic RP Data National Auction Preview, week ending 27 September 2015 This week, CoreLogic RP Data is expecting 2,842 auctions across the capital city markets, the highest number of weekly auctions since the week leading up to Easter, when 3,668 capital city auctions were held. The rise in volumes comes of the back of a lower clearance rate last week, when the final results reported a combined capital city weighted average of 69.9 per cent, the lowest clearance rate since February this year. The lower result was driven by a fall across Sydney, where 70.7 per cent of auctions were successful last week, the lowest clearance rate for the city this year. Melbourne and Sydney are both expecting a high volume of auctions this week, with 1,206 scheduled in Melbourne and 1,198 in Sydney. In comparison, last week 1,127 Melbourne auctions were held and 1,041 in Sydney. Last week, Adelaide’s clearance rate was 71.4 per cent, the second strongest result for any capital city following Melbourne at 73.7 per cent and this week Adelaide auction volumes are set to rise from 99 last week to 130. Similarly, Brisbane auction volumes are also on the rise, with 202 auctions this week, compared to 143 last week Canberra 58 this week compared to 118 last week and Perth 25 this week compared to 31 last week are the only two cities where the number of auctions is down week on week, however, both cities current auction activity is higher than it was one year ago. The Australian suburb with the highest number of auctions this week is Reservoir Vic where 23 residential auctions will be held. Following on from this is Mosman NSW with 19, Preston Vic with 17 and Glen Waverley Vic with 16.

Commercial Market Update – Christchurch Cityscope

The latest research from Christchurch Cityscope shows that commercial sales activity in Christchurch has increased in the past three months. Sales recorded in the three months to September 2015 totalled $49.4 million, an increase from the quarter ending June 2015 when sales totalled $38.5 million and an increase from the quarter ending March 2015 when sales totalled $32.1 million. The latest data brings the twelve-month sale total to $198.1 million, a decrease from the previous 12 months when sales totalled $305.6 million. The table below shows sales recorded for the past eight updates of Christchurch Cityscope: Recent notable sales in Christchurch in September 2015 include: 10 Oxford Terrace, Christchurch Central, a five level concrete office building with a site area of 1,479 sqm, was bought for $6.5 million. Vacant land with a site area of 1,166 sqm at 236 Tuam Street, Christchurch Central, the former premises of McKenzie & Willis with a site area of 4,533 sqm at 179-185 High Street, Christchurch Central and vacant land with a site area of 599 sqm at 263 St Asaph Street, Christchurch Central, were bought together for $5.6 million. 85 Hereford Street, Christchurch Central, a 2 storey retail building with three rooftop apartments with a net lettable area of 2,020 sqm and site area of 903 sqm, was bought for $5 million. Properties for sale in Christchurch in September 2015 include: 78-80 Oxford Terrace, Christchurch Central, a three level building with a site area of 242 sqm, is for sale through Savills. 49-51 Manchester Street, Christchurch Central, a 2 storey retail building with a site area of 1,567 sqm is for sale through Knight Frank. Significant leasing opportunities in Christchurch in September 2015 include: Park Avenue on Victoria at 137 Victoria Street, Christchurch Central, a 3 storey plus basement building with retail space on the ground floor, has office space of 586 sqm available for lease through NAI Harcourts Christchurch. 130 Victoria Street, Christchurch Central, a single storey weatherboard former house with a site area of 1,045 sqm, has retail space for lease through Cowdy & Co. Ltd. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – South Sydney Cityscope

The latest research from South Sydney Cityscope shows property sales for the quarter have decreased in terms of total value. While the total number of sales for the quarter to September 2015 has increased from 82 to 88 when compared to the previous quarter, the total value is down from $272.9 million to $158.5 million. The yearly total value of sales has decreased from $1.33 billion for the year to September 2014 to $1.115 billion for the current year, although the total number of sales has increased from 242 to 390. In fact, the $158.5 million total value for this quarter is the lowest for the last eight updates of South Sydney Cityscope. The tale below shows sales recorded for the past eight updates of South Sydney Cityscope. Some notable sales in the September 2015 update of South Sydney Cityscope include: A complex of seven industrial units with three high clearance warehouses and parking for 130 vehicles at 154 O’Riordan Street, Mascot, which sold for $32 million; A two storey office building with a high-clearance warehouse to the rear at 86 Bourke Road, Alexandria, which sold for $19 million; and A high clearance brick warehouse and a three-storey warehouse and office building at 1 – 9 William Street, Alexandria, which sold for $10.15 million. Properties for sale in South Sydney Cityscope in September 2015 include: Two warehouses both with two level office extensions and parking for 30 vehicles on a 11,470-sqm site at 1 – 3 Ricketty Street, Mascot, available through Knight Frank; Two high clearance warehouses with two level office extensions and parking for 79 vehicles at 683 Gardeners Road, Mascot and 671 – 675 Gardeners Road, Mascot, available through Colliers International. Leasing opportunities in the September 2015 update of South Sydney Cityscope include: A complex of ten high-clearance brick warehouses at 1A Hale Street, Botany, which has industrial space of up to 44,600 sqm for lease, available through Colliers International South Sydney; Alexandria Creative Park, a business precinct of ten commercial buildings with parking for 218 vehicles at 41 – 43 Bourke Road, Alexandria, which has office space of 350 to 11,000 sqm of office space for lease, available through Link Property Services; and Botany Grove Business Park, a complex of five high-clearance warehouses with mezzanine offices and parking at 14A Baker Street, Banksmeadow, which has warehouse and office space of 2,033 to 7,524 sqm for lease, available through Colliers International Sydney South and Goodman International. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

What is going on in the Sydney housing market?

There’s been a number of articles this week about the peak of the Sydney market. It does look as if the market is at or slightly past its peak however, it is important to thoroughly investigate how the market is tracking currently. Values Sydney home values have increased by 17.6% over the 12 months to August 2015 and by 14.0% over the first 8 months of 2015. Sydney home values have been trending higher since they reached a low point in May 2012 and since that time Sydney home values have increased by a total of 49.5%. To put that growth in perspective, a home worth $500,000 in May 2012 would now be worth $747,704. The data presented shows that home values have been trending higher at a fairly rapid pace however, more recent data may point to a slowing of the rate of growth. Home values rose by 1.1% over the month of August however, data for September is showing a much more sluggish rate of growth in home values with values -0.3% lower over the twenty eight days to 20 September. Sales transactions Unfortunately sales transactions are not a timely indicator of the market’s performance due to delays in receiving the full population of settled sales transactions. Furthermore, off-the-plan sales are entered into sales counts at their contract date however, the record is not received until settlement which could be several years down the track for large projects. As a result, when you have heightened off-the-plan sales activity as we currently do, unit sales in particular are inclined to be undercounted. The latest sales data to June 2015 shows that over the second quarter of the year there were 23,432 sales. Compared to the same quarter in 2014, house sales were -5.5% lower and unit sales were -16.5% lower. Time on market At the end of July 2015 the typical Sydney home was selling after just 25 days. At CoreLogic RP Data we’ve been tracking the time on market since the beginning of 2005 and this is the quickest rate of sale recorded over this period. The combination of strong value growth and a rapid rate of sale suggests that demand is still quite strong across the city. Auction clearance rates The preliminary auction clearance rate for Sydney last week was 73.2% which was virtually unchanged from the final auction clearance rate the previous week. Importantly, in most instances the final auction clearance rates are revised lower. Auction clearance rates have shifted from their peak of almost 90% in April of this year to their current level. At the same time a year ago clearance rates were recorded at a higher 78%. It is important to note that over recent weeks the number of properties being taken to auction has been significantly higher than the number taken to auction a year ago. Nevertheless it is clear that the auction market which represents slightly more than a quarter of all Sydney home sales has weakened over recent months and has not rebounded so far during the Spring Selling Season. Property listings The latest weekly listings data which tracks houses, units and vacant land for sale across Sydney shows that over the past 4 weeks there were 8,525 new listings and 20,121 total listings. New listings are now at their highest level since the week ended 30/11/14 and total listings are at their highest level since the week ended 14/12/14. Comparing listings to levels at the same time a year ago shows that new listings are currently 19.0% higher and total listings are up 5.0%. In the early part of the Spring Selling Season there is much more stock available for sale in Sydney than there was at the same time a year ago. Heightened stock levels at a time when auction markets are softening and value growth has shown some early signs of slowing may contribute to a further slowdown in the rate of capital gain over the coming months. This is due to the fact that active buyers are afforded more choice and may not have to pay such a price premium to secure a home. Mortgage Activity The CoreLogic RP Data Mortgage Index tracks pre-purchasing activity and has shown some clear weakness over recent weeks. While the Index remains at quite high levels it has fallen by -2.0% over the past couple of weeks at a time when, seasonally, the trend should typically be rising. At the same time last year the index had risen by 1.2% over the previous two weeks. With mortgages, particularly investment mortgages becoming more difficult to obtain, we are potentially seeing the first signs that this segment of the market it is starting to slow resulting in an easing of demand. Building approvals The latest building approvals data for July 2015 shows that there was a record high 5,159 dwelling approvals over the month. This was comprised of 1,655 house approvals and 3,504 unit approvals. Over the 12 months to July 2015 there have been 15,213 house approvals and a record high 30,921 unit approvals. Sydney has consistently approved more units for construction than houses since early 1993. With a record pipeline of new housing stock it is going some way to alleviating housing shortages across the city. It also affords buyers much more choice when they are looking to purchase a new home Housing finance The latest housing finance data for New South Wales to July 2015 shows that demand from the owner occupier segment is starting to ramp-up while investor demand is starting to wane. Importantly, owner occupier demand includes refinances so if we look exclusively at new lending excluding refinances we also see owner occupier demand ramping up while investor demand seems to be waning. Investors still account for the greatest proportion of new lending 58.0% however, two months ago investors accounted for a record-high 62.4% of all new mortgage lending in NSW. Rents and yields Over the 12 months to August 2015, rental rates across Sydney have increased by 2.3% which is the slowest annual rate of rental growth since May 2013. With rental growth sluggish and value growth remaining very strong, gross rental yields across Sydney have shifted to record low levels. Yields were recorded at 3.3% in August 2015 which is the softest yields on record. We’ve already mentioned that investor activity across NSW has recently hit record highs and remains elevated. It appears that many investors are having little regard for rental returns and are largely focussing on the future capital growth potential and the subsequent benefits from a negative gearing strategy. Although the data is still generally undoubtedly strong, it appears there are signs that the market could be showing the first sign that growth rates are peaking. Record high new housing supply at a time when mortgage demand is seemingly slowing along with auction clearance rates and listings are rising points to potentially softer value growth conditions for the city. While we expect the rate of growth will likely start to slow, the significant stimulus of low mortgage rates is expected to ensure that home values continue to rise albeit at a more moderate pace.

More than 2,000 auctions across the combined capital cities for the 7th week in a row

This week’s preliminary clearance rate of 70.7 per cent across a total of 2,064 reported auctions represents the third lowest clearance rate so far this year across the combined capital cities, down further from last week when the final clearance rate was recorded at 71.2 per cent. It will be interesting to see if there is any upwards revision as the remaining results are reported. There were 2,493 capital city auctions held this week, compared to 2,654 last week and 2,530 at the same time last year. Over the past eight weeks, this is the fourth week where more than 2,400 auctions have been held across the combined capitals, while over the same 8 week period one year ago, there was only one week where this volume of auctions was seen. Melbourne’s preliminary clearance rate this week is 73.3 per cent, down from 74.3 per cent the previous week and higher than one year ago, when 72.1 per cent of auctions were successful. 1,091 residential properties went to auction in Melbourne this week, showing volumes are slightly lower than over the previous week 1,189 and one year ago 1,221 . This week, Melbourne’s strongest performing sub-region was the Outer East, where 78.4 per cent of the 74 reported auctions were sold. On the other end of the scale was the Mornington Peninsula, where a lower 60.6 per cent of the 33 reported auctions cleared. In Sydney, there has been little change after recording the lowest clearance rate for the year over the previous week at 73.1 per cent, with preliminary results showing a clearance rate of 73.2 per cent. Sydney’s auction market has consistently been performing at a level lower than the strengths seen at the start of the year, when, for 22 consecutive weeks, the clearance rate for the city was above the 80 per cent mark. In saying that, the number of auctions held across the city has been trending up, with 1,008 auctions held this week and 1,075 last week. One year ago, Sydney’s auction clearance rate was 78 per cent across 883 auctions. The North Sydney and Hornsby sub-region had the highest volume of auctions this week, with 183 held and a preliminary clearance rate of 76.8 per cent. Across Brisbane, 108 auctions results have been reported this week, with 52.8 per cent successful. This week, 144 auctions were held across the city, compared to 179 last week, when the clearance rate was 50.3 per cent and 154 at the same time last year, when the clearance rate was significantly lower, at 38.9 per cent. 29 Gold Coast auction results have been reported so far this week, with a preliminary clearance rate of 41.4 per cent. Adelaide’s preliminary clearance rate was 71.4 per cent this week, up from 62.4 per cent the previous week and 68.4 per cent last year. The number of auctions held across the city increased on a week-on-week basis, from 89 last week to 99 this week, while Adelaide’s auction market was busier at the same time last year 129 . 30 Perth auctions were held this week with a preliminary clearance rate of 37.5 per cent, compared to 54.2 per cent the previous week and 51.2 per cent one year ago. There were 116 auctions across Canberra this week, compared to 79 last week and 80 one year ago. Preliminary results show that 57.0 per cent of reported results were successful this week, down from 65.2 per cent last week and 58.2 per cent one year ago. So far this week, 4 of the 5 Tasmanian auctions have been reported, with only 1 successful result.

Combined capital cities record the lowest clearance rate since February

CoreLogic RP Data National Auction Preview, week ending 20 September 2015 Last week, the auction clearance rate across the combined capital cities was 71.2 per cent, the lowest weekly clearance rate since February this year, however it was the fifth busiest week for auctions so far this year 2,654 . To put this into perspective based on reported results, last week an estimated 1,890 homes were sold as a result of an auction campaign across the nation’s capital cities. This week, CoreLogic RP Data is tracking just shy of 2,600 auctions, showing the number of homes being taken to auction remains relatively steady. This week, Melbourne is expected to host 1,120 auctions, followed closely by Sydney with 1,068. Last week, across both cities the clearance rates fell on a week-on-week basis, down to 74.3 per cent for Melbourne and 73.1 per cent for Sydney. This result for Sydney was the lowest recorded so far this year; however, it still represented the second strongest result across any other capital city market. Across Adelaide, auction volumes will rise this week, up from 89 last week to 101 this week. In Canberra, 124 auctions are scheduled this week, compared to a lower 79 last week. Meanwhile, auction volumes remain relatively steady in Perth, down slightly from 35 last week to 32 over the current week. Brisbane is expecting 149 auctions this week, compared to 179 last week and 154 at the same time last year. The busiest suburb for auctions across Australia this week is located in Sydney, with 19 Mosman auctions to be held. Mount Waverley Vic and Reservoir Vic both have 18 residential auctions this week.

Universityâ

33 Berry Street, North Sydney, has been sold for a reported price of more than $90 million. The sale was arranged by Henry Burke and Jon Chomley of Colliers International and the vendor was private company, Horaco Berry Street Property Pty Ltd, a company owned by Horace Holdings Pty Ltd,which in turn is owned by Chang Sheo Chin Low, Irene Sui Hing Low and Horace Keith Low, all of Hong Kong. The purchaser was the Australian Catholic University, possibly in competition with developers looking for residential conversions. The ACU is a public not-for-profit university funded by the Australian Government. It was formed on January 1st, 1989 following the amalgamation of four Catholic Colleges. The University’s numbers have apparently grown by over 50% since 2012 and, with a corresponding rise in staff numbers, its campus was in need of expansion. 33 Berry Street is a 13 storey building with an additional three levels of basement parking and a net lettable area of over 13,000 sqm. It was built in 1975 and underwent two refurbishments, the first in 1989 and the second in 2003. The building’s major tenants include the NSW Police Service, with several floors, Flight Centre, and the University itself with five floors. There is a small number of retail tenants on the ground floor. The property was previously offered for sale at $40 million in early 1993 and then traded a year later at $23 million. Meredith Baume Commercial Research Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Canberra Cityscope

The latest research from Canberra Cityscope shows commercial property sales have decreased in the latest quarter, both in terms of total numbers and value. In the quarter to September 2015, there was a total of 10 sales at a total value of $92.5 million, as compared to 11 sales at a total value of $149.8 million for the quarter to June 2015. Both of these quarters showed a significant increase in value when compared to the quarter ending March 2015, when there was a total of just $6 million. The yearly total value to September 2015 of $345.9 million also showed an increase compared to the previous year, when the total sales value was $289 million. The table below shows sales recorded for the past eight updates of Canberra Cityscope. Notable sales recorded include: A 13,789-sqm car park on Edmonstone Place in Belconnen, which was bought at auction for $22.1 million An 11-storey office building at 20 Allara Street, Canberra, which sold for $20.5 million A seven-level commercial building with retail on the ground floor and two levels of basement parking for 98 vehicles at 64 Allara Street, Canberra, which sold for $16.8 million. Properties for sale include: The Health Insurance Commission buildings, a complex of three two and three level commercial buildings with a three level car park for 383 vehicles at 134 Reed Street, Tuggeranong, available through CBRE AusAID Building, an 11 level office building with basement parking for 134 vehicles at 255 London Circuit, Canberra, available through JLL A five storey A grade office building with parking for 221 vehicles at 40 Cameron Avenue, Belconnen, available through Colliers International. Leasing opportunities include: An eight storey commercial building with retail on the ground floor and basement parking for 131 vehicles at 33 Allara Street, Canberra, which has office space of 650 to 9,215 sqm for lease through Knight Frank and Colliers International Public Trustee House, a six storey commercial building with undercover parking for 16 vehicles at 4 Mort Street, Canberra, which has 313 to 5,483 sqm of office space for lease through Raine & Horne Commercial and Colliers International The Cosmopolitan Centre, a four and five storey commercial building with a single storey annexe and basement parking at 21 Bowes Street, Woden, which has office space of 4,200 sqm for lease through Laing + Simmons Commercial. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results – Week ending 11 September 2015

Last week 34 commercial auction results were reported with a preliminary clearance rate of 67.7 per cent, compared to a final clearance rate of 72.1 per cent over the previous week when there were 43 auctions reported. At the same time last year, 65 commercial properties were taken to auction and of these, 55.4 per cent were sold. Over the most recent four week period there have been 185 reported results with 123 sales. Of these sales, 94 have been reported with a sale price and the total value of these transactions is $137.61 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Chatswood Cityscope

The latest research from Chatswood Cityscope shows property sales have increased in the past three months. There were 30 sales recorded in the most recent quarter with a total value of $75.4 million, as compared with 23 sales recorded to June 2015 with a total value of $39.4 million. This data brings the 12-month total to $358.3 million, a significant decrease from the $610.3 million recorded the same time last year. The table below shows sales recorded for the past eight updates of Chatswood Cityscope. Recent standout sales in Chatswood include: 425 Victoria Avenue, Chatswood, a two storey brick commercial building with a net lettable area of 793 sqm was bought at auction for $25 million 407 Pacific Highway, Artarmon, a four storey building and a five storey building with 2 basement levels of car parking, net lettable area is 6,083 sqm was bought for $16.1 million. The sale represented an initial yield of 8.5% on a passing income of $1.36 million net including incentives 66-76 Dickson Avenue, Artarmon, a three storey office building with a three-level car parking, building area is 5,025 sqm was bought for $7.65 million. Properties for sale in Chatswood in September 2015 include: Zenith Centre Tower A and Zenith Centre Tower B, at 821 Pacific Highway, Chatswood, a twin A-grade complex with 43,400 sqm of office space and 900 sqm of retail space, it also includes a 250 seat community theatre for sale by international expressions of interest through Savills and CBRE Lot 4, 7 Railway Street, Chatswood, a 164 sqm commercial suite on level one, lot 5, 7 Railway Street, Chatswood, a 170 sqm commercial suite on level two, lot 16, 7 Railway Street, Chatswood, a 173 sqm commercial suite on level 2 and lot 59, 7 Railway Street, Chatswood, a 13 sqm car space on basement level one in Era Apartment for sale in one line through Colliers International 18-26 Dickson Avenue, Artarmon, a three storey office building with container access and a high-clearance warehouse with building area of 2,362 sqm for sale through CBRE North Sydney. Significant leasing opportunities in Chatswood in September 2015 include: Solitaire at 12 Help Street, Chatswood has office space ranging from 250 sqm to 4,000 sqm for lease through JLL North Sydney and Cadigal Office Leasing North Sydney 475 Victoria Avenue, Chatswood has office space ranging from 400 sqm to 9,000 sqm for lease through Cadigal Office Leasing and Colliers International North Sydney 33 Herbert Street, St Leonards has office space ranging from 300 sqm to 1,999 sqm for lease through Knight Frank North Sydney 7-9 George Place, Artarmon has office/warehouse space of 1,092 sqm for lease through Sutton Anderson. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Housing more expensive in the inner city but not necessarily seeing stronger growth

Last week the Reserve Bank’s RBA Head of Financial Stability Luci Ellis gave an interesting speech entitled ‘Property Markets and Financial Stability: What We Know So Far,’ the speech can be downloaded here. In my opinion one of the more interesting pieces of analysis in the speech was the analysis of inner city housing prices relative to those in the outer ring. The chart below was the analysis showed in the speech. Regarding this chart, the speech noted the following key points: Land is two things: it is both space and place. Many have observed that Australia has plenty of the former. But I think the lesson of past booms as well as recent times is that it’s place – location – that really matters. If we think back to boom–bust episodes of the past, whether in land for new development, railways or prime office buildings, in every case you can see people trying to get their hands on the best locations, to take advantage of whatever future economic outcomes they expect. Location explains far more of the variation in individual property prices than block size Hansen 2006 . Yes, some people like a bigger garden, for privacy or to enjoy in other ways. But being in the ‘right’ kind of neighbourhood with the best amenities, close to commercial centres and other services, is more important to most people, if their willingness to pay for it is any guide. The physical reality is that the supply of good locations is more or less fixed in the short term. So any sizeable boost to demand cannot be fully absorbed by more supply. The newly built property is simply not the same as the existing stock, because it’s somewhere else. We should therefore not be surprised that strong demand for property does not just change the general price level for that asset, but also its distribution. We can see this in the increase in prices of inner-ring properties relative to those further out, especially in Sydney I agree with this analysis; housing closer to the city centres and closer to major working nodes is more desirable. Also in many capital cities, as we see houses in inner city areas knocked down to make way for higher density development, the underlying land component becomes intrinsically more valuable. Subsequently, the availability of houses in many inner city areas are actually reducing. After I read this section of the speech I decided to go digging in the data to see just how much difference there was in terms of inner city house values and growth in these values over the past year relative to values and growth across the rest of the capital cities. For the purposes of this analysis we have determined that the inner-city region is within 10 kilometres of each capital city. The above chart shows that in terms of median house values, the proportion of homes above the city-wide median is substantially higher in inner city areas. Even in a city such as Sydney where housing is less affordable, once you shift more than 10 kilometres from the city centre, only 29.3% of suburbs have a median house value above the city-wide median. In all cities, more than half of all inner city suburbs have a median higher than the city-wide median and all non-inner city areas have less than 50% of suburbs with a median greater than the city-wide median. While the fact that the cost of housing is higher as you move closer to the city-centre the magnitude of the difference is significant. The other factor to consider is the growth in values in the inner-city versus the rest of the city. This is where the results change somewhat. Sydney is probably the most interesting result here. Although it has seen the sharpest rises in home values over the past year, suburbs outside of the 10 kilometre inner ring have generally experienced stronger value growth. Of course it is important to recall that Sydney values have been rising for more than three years, and growth, while continuing, has shifted from inner city areas to more affordable outer housing markets. Melbourne, Brisbane, Adelaide and Canberra were the only capital cities in which more than half of the inner city suburbs have recorded value growth in excess of that recorded across the cities. Notably each of Perth, Hobart and Darwin are seeing more outer suburbs outperforming than inner suburbs. Of course it should be remembered that home values are now falling in Perth and Darwin and clearly this is impacting the inner city performance. The lesson here of course is just because inner city housing is generally more desirable, it doesn’t mean it is immune from falls in the event of a housing market downturn. Inner city housing markets will likely remain more desirable than those suburbs further afield, due in large to the abundant amenity typically available in these areas. Although the desire to live in these inner city areas is strong, the reality is that the cost of housing in these locations is restrictive and the supply is relatively short, so many can’t access the housing they want in these areas. As some of the examples show, although housing in inner city areas is more expensive, it doesn’t necessarily mean that value growth will consistently outperform growth across the rest of the city. Furthermore, as the Perth and Darwin highlights, inner city housing isn’t bullet-proof and in the event of a housing market downturn it has in the past and will potentially in the future also see value declines.

Auction volumes rise to 2,615 across the capital cities with a preliminary clearance rate of 72.1 per cent

So far this week, 2,127 capital city auction results have been reported to CoreLogic RP Data, resulting in a preliminary auction clearance rate of 72.1 per cent across the combined capital cities. There were a total of 2,615 capital city auctions held this week. This week’s result indicates that clearance rates are no longer tracking higher than they were one year ago, when the final auction clearance rate over the week was 72.3 per cent across 2,080 auctions. Over the previous week there were 2,297 auctions with a clearance rate of 73.2 per cent. In Melbourne, Australia’s largest auction market, a preliminary auction clearance rate of 73.7 per cent was recorded across 1,181 auctions this week. Last week, Melbourne’s final clearance rate was recorded at 75.1 per cent across 992 auctions, while this time last year, 1,018 properties were taken to auction across Melbourne and a clearance rate of 73.4 per cent was recorded. The busiest Melbourne sub-regions this week were Melbourne’s Inner region and the Inner South region, where 248 and 210 auctions were held respectively. Across these two sub-regions, the preliminary clearance rates were 71.2 per cent across the Inner region and 71.8 per cent across the Inner South. Sydney’s preliminary auction clearance rate was 75.1 per cent this week, the 10th week in a row where Sydney has recorded a result below 80 per cent. Last week, Sydney’s clearance rate was 76.9 per cent, while one year ago, results show that 78.4 per cent of Sydney homes taken to auction were successful. In terms of the number of auctions across the city, this week volumes were higher, up to 1,046 from 1,023 last week. One year ago just 743 Sydney homes were taken to auction over the week. The Northern Beaches sub-region of Sydney has shown the strongest performance so far this week, with 84.4 per cent of the 45 reported results selling, with 18 remaining results yet to be collected. Brisbane’s preliminary clearance rate this week was 54.9 per cent, up from 42.9 per cent last week. There were 178 Brisbane auctions this week, compared to 130 last week. The Gold Coast was host to 73 auctions this week. Based on the results reported to CoreLogic RP Data so far, 46.5 per cent have been sold. This week, Adelaide saw a preliminary clearance rate of 62.0 per cent, with 71 reported results across a total of 88 scheduled auctions. In comparison, over the previous week Adelaide’s clearance rate was 69.5 per cent and 64.3 per cent one year ago. There were 35 Perth auctions this week and so far 13 results have been reported, with 61.5 per cent selling. Last week there was a 36 per cent clearance rate for Perth. Across Canberra a total of 79 auctions were held this week, compared to 52 last week and 51 at the same time last year. Canberra’s preliminary clearance rate of 63.6 per cent is lower than it was the previous week 71.7 per cent . In Tasmania, 5 auctions were reported to CoreLogic RP Data with 4 sales. Last week, 5 auctions were reported with only 1 sale.

Housing finance commitments rise in July but the rate of investment growth appears to be slowing

The Australian Bureau of Statistics ABS released housing finance data for July 2015 earlier this week. Throughout July, there was $32.8 billion worth of housing finance commitments. This figure was comprised of $19.2 billion worth of commitments to owner occupiers and $13.6 billion in commitments to investors. Over the month, the total value of housing finance commitments increased by 1.5% to be 15.0% higher year-on-year. At $19.2 billion, owner occupier housing finance commitments increased by 2.2% over the month and were 13.9% higher year-on-year. Breaking the $19.2 billion into its components: $1.6 billion was for construction of dwellings, $1.1 billion was for the purchase of new dwellings, $6.2 billion was for refinances of established dwellings and $10.2 billion was for the purchase of established dwellings. Over the month, commitments for the construction of dwellings fell -1.5%, purchase of new dwellings rose 8.4%, refinances rose 3.3% and purchase of established dwellings rose 1.5%. Over the past 12 months the refinance segment has been the key driver of growth in the owner occupier lending segment with commitments up 23.7%. In comparison, year-on-year changes have been recorded at -7.6% for construction of dwellings, 15.4% for purchase of new dwellings and 12.6% for purchase of established dwellings. Recently growth in the owner occupier lending segment has been lacklustre, driven largely by refinances however, the 13.9% year-on-year rise in owner occupier housing finance commitments excluding refinances is the largest rise since February 2014. Turning to the investment segment of housing finance commitments, this has over recent years been a significant driver of new demand. In July 2015, investor housing finance commitments rose by 0.5% to be 16.5% higher year-on-year. If we look at the $13.6 billion in investment housing commitments across its components, $1.1 billion was for construction of new investment dwellings and $12.5 billion was for established homes. Over the month, commitments for new construction rose 11.7% compared to a -0.4% fall in commitments for established homes. Year-on-year investor commitments for construction of new dwellings has increased by 81.5% compared to a 12.9% rise in the much larger segment for purchase of established investment homes. The chart above shows the recent weakness in commitments for established homes and the ongoing rise in commitments for new construction. It seems that there is a growing appetite for investment in off-the plan investment properties while demand for established investment stock is waning a little. Despite the monthly rise in demand for investment lending, the rate of growth has started to ease as Australian authorised deposit-taking institutions ADIs tweak their lending policies in line with policy updates from APRA aimed at slowing growth in the pace of total investor housing credit. Housing credit data for July 2015 showed that growth in owner occupier credit is ramping up while investor credit demand is potentially slowing. This release of housing finance data appears to support that notion. The ADIs will be hoping that they can entice additional activity from the owner occupier segment over the coming months as there is likely to be a slowdown in lending to the investment segment. Housing finance data is continuing to rise however, it appears that growth is starting to tilt away from investors towards the owner occupier segment. Although regulators such as the Reserve Bank and APRA will be glad to see that exuberance from investment borrowers may be slowing, they will be very keen to monitor and ensure that any pick-up from owner occupier borrowers is not as a result of a relaxing of lending standards. Both the housing credit and housing finance data will be closely monitored over the coming months in order to see if this transition continues. Specifically we will be watching whether housing credit can continue to increase its rate of growth and if new commitments continue to tilt away from investors towards owner occupiers and what impact that may have on housing finance demand.

Capital city clearance rates hold steady while the number of auctions rise

CoreLogic RP Data National Auction Preview, week ending 13 September 2015 Across Australia’s combined capital cities, the final auction clearance rate was 73.2 per cent last week, remaining virtually unchanged from the 73.4 per cent over the previous week. The first week of spring resulted in 2,297 auctions being held across the combined capital cities, which was 21 per cent higher than one year ago. This week, auction volumes are expected to increase further, with CoreLogic RP Data currently tracking 2,659 auctions, which is, again, significantly higher than one year ago 2,080 . Melbourne and Sydney will collectively host more than 2,200 auctions this week, with 1,180 Melbourne properties scheduled to go under the hammer and 1,084 in Sydney. Melbourne’s clearance rate fell to 75.1 per cent last week, while across Sydney 76.9 per cent of reported auctions were successful, while indicates an improvement on a week on week basis, but is lower than one year ago 80.1 per cent . All cities are expecting more auctions this week when compared to last week, while across Tasmania auctions volumes will remain steady, with 7 scheduled. The most substantial rise in scheduled auctions will be across Brisbane, up from 130 last week to 185 this week and Canberra 77 this week compared to 52 last week. Adelaide has 91 auctions scheduled this week, while Perth has 36, both of which are similar to the same time last year. The top three suburbs for the highest volume of auctions this week are all located in Victoria; Bentleigh East 20 , Reservoir 19 and Richmond 18 .

Parramatta set to rival Sydney CBD

In a show of faith in Parramatta as a future rival to the city of Sydney, the government, council, developers and builders are readying themselves to begin the $2 billion urban renewal project that will be Parramatta Square. In a block of 3 hectares and bounded by the major streets of Church, Macquarie, Smith and Darcy, the re-development is planned to renew and encourage the growth of the Parramatta CBD with commercial, retail and residential developments and an area of public space to become “Western Sydney’s Martin Place”. The development is to include 1PSQ, a commercial tower of 28,000 sqm, which will be a new campus for 10,000 Western Sydney University students, dual commercial office towers of 140,000 sqm, another office tower and a separate public facilities building, and a 5,000 sqm mixed-use retail and commercial building. The jewel in the crown, though not yet set in stone, is to be Aspire – the proposed residential tower of 90 storeys with 700 apartments, a hotel and shops. Set to become one of the tallest buildings in the Southern Hemisphere, negotiations with aviation authorities are still continuing regarding this height. Walker Corporation has been awarded the tender to develop this mixed-use building, along with the dual commercial towers, while Leighton Properties is the preferred developer of the 1PSQ building. Earlier re-development plans from 2002 never eventuated, collapsing due to legal and other problems. In the reincarnation, the council has appointed several developers and owns more of the properties outright. Joining the council’s hopes for Parramatta’s rejuvenation is the developer, Dyldam, the $150 million purchaser of the 14.3 hectare ‘Auto Alley’ site. The site can support a $600 million development encompassing almost 800 apartments and 40,000 sqm of offices and shops after the council rezoned the area to mixed-use in 2014. Other residential Parramatta developments include Meriton’s Altitude apartments, a 53-level building at 330 Church Street, to be completed in 2016, and the planned 40 storey West Village tower, also on Church Street. Meredith Baume Commercial Research Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Newcastle Cityscope

The latest research from Newcastle Cityscope shows that commercial property sales have increased in the three months to September 2015. The most recent quarter had 20 sales at a total value of $29.1 million, as compared to 25 sales totalling $22.2 million in the three months to June 2015, though it is a decrease from the 26 sales totalling $38 million for the quarter to March 2015. This latest data brings the total sales value in Newcastle Cityscope to $111.1 million for the year, a decrease from the $156.3 million recorded the same time last year. The table below shows sales recorded for the last eight updates of Newcastle Cityscope. Notable sales in the September 2015 update of Newcastle Cityscope include: 403-419 Hunter Street, Newcastle, a development site of 3,810 sqm, to be the University of Newcastle CBD, was bought for $5.39 million Colonial Mutual Life Building, at 108-112 Hunter Street, Newcastle, an eight-storey office building with ground floor retail space with a net lettable area of 2,769 sqm was bought for $3.5 million. 182-188 Hunter Street, Newcastle, a two-storey building with retail shops on the ground floor and office on upper floor with a net lettable area of 1,500 sqm was bought for approximately $2.118 million. The most notable properties for sale in Newcastle Cityscope in the September 2015 update are: 780 Hunter Street, Newcastle, a two storey concrete office building with a net lettable area of 858 sqm is to be auctioned on 24 September 2015 through Colliers International Newcastle. Albert Terraces, at 172 King Street, Newcastle, a three storey mid Victorian terrace building built circa 1880 is to be auctioned on 24 September 2015 through Colliers International. Lot 6, 14 Honeysuckle Drive, Newcastle, Chifley on the Wharf, an 88 sqm office unit on the ground floor plus a 29 sqm car parking in an eight storey serviced apartment building for sale in September 2015 through Colliers International Newcastle. Leasing opportunities listed in the September 2015 update of Newcastle Cityscope include: St Philip’s Presbyterian Church, at 48 Watt Street, Newcastle, a brick and stone Gothic style church, with a bell tower for lease in September 2015 through Colliers International Newcastle. 424-426 Hunter Street, Newcastle, a two storey office building, has office or retail space for lease in September 2015; agent Street Property Management. 9-11 Darby Street, Newcastle, a single storey brick building with a net lettable area of 540 sqm for lease in September 2015 through Colliers International. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results – Week ending 4 September 2015

For the second week in a row the commercial auction clearance rate was strong, with the most recent week’s preliminary result recorded at 73.2 per cent, an increase from 68.3 per cent last week. Preliminary results show 41 commercial auctions last week compared to 63 the previous week. In comparison, at the same time last year 69.8 per cent of the 43 auctions were successful.Over the past four weeks 205 auctions have been reported with 136 sales, resulting in a clearance rate of 66.3 per cent. This is a further indication of the strength of the auction market over the past two weeks. Of the 136 sales, 106 have been reported with a sale price totalling just under $200.7 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Perth Cityscope

The latest research from Perth Cityscope shows property sales have increased in the past three months. Sales recorded in the quarter ending September 2015 totalled $800.8 million, an increase from the $10.3 million recorded in the three months to June 2015, and an increase from the $87.8 million recorded to March 2015. The large increase was the result of several large sales in the period. This data brings the 12-month total to $988.4 million, an increase from the $731.3 million recorded the same time last year. The table below shows sales recorded for the past eight updates of Perth Cityscope. Recent standout sales in Perth include: A 50% interest in QV1, 250 St Georges Terrace, Perth, a 43 level building with a two-level retail plaza and parking for 1,067 cars, which was transferred between related parties at $388.5 million 140 St Georges Terrace, Perth, a 29 storey office tower, and 65 William Street, Perth, four levels of basement parking, which was transferred between related parties at over $267 million Four Points by Sheraton Perth, 707-713 Wellington Street, Perth, an eight storey, 278 room hotel, which sold for $91.5 million through CBRE Properties for sale in Perth in September 2015 include: 12-14 The Esplanade, Perth, an 11 storey commercial building with four levels of above ground parking and a building area of 8,031 sqm, by expressions of interest closing September 17, 2015 through Savills Worley Parsons House, 1 Adelaide Terrace, East Perth, an office building of seven levels above lower ground and basement parking for 176 car, through Knight Frank and JLL 105 Outram Street, West Perth, a two storey office building with parking for 18 cars, at $4.1 million through JLL Perth and Axia Corporate Property Significant leasing opportunities in Perth in September 2015 include: Septimus Roe Square, 256 Adelaide Terrace, Perth, a 17 storey office building, with some retail space and a terrace area on the ground floor, which has up to 11,756 sqm available for lease through Colliers International Central Park, 777 Hay Street, Perth, a 48 storey office tower with four levels of basement parking, which has 500 to 8,779 sqm for lease through Savills and JLL Compass 26, 1-5 West Street, West Perth, a four storey office building with 3,960 sqm of office space, situated above 1.5 levels of car parking for 65 vehicles, for lease through Sheffield Estates Property Management and Sales CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Auction clearance rates move higher on lower volumes over first week of spring

The number of auctions across Australia’s capital cities slipped lower over the first week of Spring, with 2,272 auctions held down from a recent high of 2,654 the previous week , however auction numbers remained well above the same week a year ago when there were 1,897 auctions held. The preliminary clearance rate of 74.9 per cent was higher than the previous week’s result of 73.4 per cent and similar to last year, when the final result across the combined capital cities was 74.1 per cent. In Melbourne, a preliminary auction clearance rate of 76.2 per cent was recorded across 998 auctions this week. Last week, Melbourne’s final clearance rate was slightly higher at 76.7 per cent across 1,188 auctions. One year ago, there were 872 Melbourne auctions held with 76.7 per cent of the results reported as successful. Of the 9 individual Melbourne sub-regions, this week the strongest performer, in terms of clearance rate, was Melbourne’s Outer East. So far, CoreLogic RP Data has collected 80 results for the region and the preliminary result shows 91.3 per cent of these auctions were successful. Across Sydney, this week’s preliminary clearance rate was recorded at 78 per cent, up from a recent low of 75.1 per cent last week, the lowest clearance rate the city has seen all year, and below the clearance rate for the city one year ago 80.1 per cent . This week, Sydney was host to almost as many auctions as Melbourne 995 , but less than the 1,106 held last week, and higher than a year ago when there were only 705 Sydney auctions held over the week. North Sydney and Hornsby was the busiest sub-region of Sydney this week for auctions, with 154 homes taken under the hammer. Based on preliminary results, the region recorded a healthy 83.6 per cent clearance rate, with only two other sub-regions recording a higher result; Inner West 88.6 per cent and Eastern Suburbs 84 per cent . There were 129 Brisbane homes taken to auction this week, with 83 results reported so far. The preliminary clearance rate for the city is 50.6 per cent, down from 54.2 per cent last week and higher than one year ago, when 44.7 per cent of the 128 properties taken to auction were successful. Across the Gold Coast 25 results have been reported so far, with a success rate of 64 per cent 16 sales . This week, Adelaide saw a preliminary clearance rate of 74 per cent, with 50 reported results across a total of 66 scheduled auctions. In comparison, over the previous week Adelaide’s clearance rate was 58.1 per cent and 68.8 per cent one year ago. In Perth, auction volumes fell to 26 this week, from 34 last week. So far, only 7 auctions have been reported to CoreLogic RP Data, with 5 of these reported as successful. Last week, the final auction clearance rate for Perth was 45.2 per cent across the 34 auctions. Across Canberra a total of 51 auctions were held this week, compared to 47 last week and 69 at the same time last year. Canberra’s preliminary clearance rate of 65.4 per cent is lower than it was the previous week 69.8 per cent . Tasmania had 7 auctions take place this week, 2 results have been reported so far, with no sales.

Volumes remain high for the first week of spring with over 2,300 auctions expected across Australia’s capital cities

CoreLogic RP Data National Auction Preview, week ending 6 September 2015 The combined capital city weighted average clearance rate increased to 73.4 per cent last week, from 72.9 per cent the previous week, while auction volumes increased from 2,248 to 2,654 which is the highest volumes have been since the last week of May 2,792 . This week, CoreLogic RP Data is tracking 2,335 auctions, higher than the comparable week last year when 1,897 auctions were held across the capital cities. Below is a brief wrap up of each capital city auction market over the winter months. Despite Sydney’s auction clearance rate beginning to trend lower over recent weeks, the city was still the strongest performer over the three month period, followed closely by Melbourne. Across Melbourne this week, 1,007 auctions are scheduled. Melbourne’s clearance rate last week was 76.7 per cent across 1,188 auctions, having increased from 74.3 per cent across 964 auctions the previous week. At the same time last year, 73.5 per cent of the 901 auctions held were successful. Auction volumes are set to fall across Sydney this week, with 1,030 homes scheduled for auction. Last week, 1,106 Sydney homes were taken to auction. Sydney recorded its lowest clearance rate for the year last week, with just 75.1 per cent of auctions successful. Across Brisbane, 139 auctions are scheduled this week, compared to 169 last week and 143 the previous week. Last week Brisbane’s clearance rate fell slightly from 54.5 per cent the previous week to 54.2 per cent. There are 68 Adelaide homes being taken to auction this week, much lower than the number held last week 102 . Last week, 58.1 per cent of Adelaide auctions were successful which, given recent performance, is a weak result for the city. In Canberra, CoreLogic RP Data is currently tracking 53 auctions, similar to last week when 47 Canberra auctions were held, but lower than at the same time last year 69 . There are currently 29 Perth auctions scheduled this week, down from 34 auctions last week. St Kilda in Victoria has the highest volume of auctions scheduled for any one individual suburb this week, with 18 properties set to go under the hammer, followed by South Yarra, also in Victoria, with 17 auctions scheduled.

Joint venture purchase boosts Perth market

In a show of faith in an uncertain Perth commercial market, a joint venture has paid $101 million for a CBD fringe property at Northbridge. In a sale arranged by Mark Hansen, Rick Butler and Andrew Woodley of CBRE, 45 Francis Street, Northbridge has been sold by German fund Deka Immobilien, part of one of the world’s major banks, German Savings Bank Finance Group. The buyer was a partnership of Warrington Property and Goldman Sachs. Warrington, a property investment and management business, was founded by commercial agent Chris Weaver in 2008. Goldman Sachs, founded in 1869 is a leading global provider of investment banking services. The property will be placed in the Warrington Property Value Add Trust 1 fund. 45 Francis Street is a six level building of over 22,000 sqm on a site area of 6,764 sqm. Its major tenant, the Australian Tax Office, has a further nine years on its lease and the building is due for a major $16 million refurbishment. It will eventually be re-connected with the CBD for the first time in 100 years with the completion of the Perth City Link. The sale was reportedly struck on an initial yield of 12.1%. The property previously traded at $95 million in April 2009. Meredith Baume Commercial Research

Commercial Market Update – Brisbane South Cityscope

The latest research from Brisbane South Cityscope shows property sale numbers have decreased in the past three months. The last three months to the end of August 2015 recorded 20 sales for a total of over $72.2 million; with $27.4 million for commercial, $1.6 million for commercial strata, $3.5 million for retail strata and $39.7 million for other. In comparison, the three months to the end of May 2015 recorded 23 sales for a total of $185.5 million, with $124.4 million for commercial, $23.2 million for commercial strata, $1.6 million for retail strata and $36.4 million for other. The 12 months leading up to the end of August 2015 recorded 74 sales for a total of over $510.4 million, over $15 million higher than the recorded figure for the same time period the year before. The table below shows sales recorded for the past eight updates of Brisbane South Cityscope: The top three most significant sales recorded this quarter together totalled over $27 million: 213 Montague Road, West End, a two storey office and showroom building, was sold for $9.5 million to River Quarter No. 4 Development Co Pty Ltd. The site has development approval to construct Ink Apartments, an eight storey residential building with 107 units. Developer, Turrisi Properties 116 Merivale Street, South Brisbane, a high-clearance warehouse/office building, was sold for $9 million to Blue Sky Commercial Asset Managers Pty Ltd. Rick Bird and Joe Tynan from Ray White Transact negotiated the deal. Blue Sky also purchased 88-90 Ernest Street for $8.1 million in early 2015 and has development approval to construct two, 12 storey student accommodation buildings over all three properties 42 Manning Street, 44 Manning Street and 37 Cordelia Street were bought together for $8.68 million by Sunshine Investments International Pty Ltd, as trustee for the South Brisbane Development Unit Trust. Carl Charalambous from Elders Commercial Brisbane negotiated the sale. The properties currently house of a 372 sqm office/warehouse building at 42 Manning Street; a single-storey house, used commercially, at 44 Manning Street; and a two-storey, older style, office building known as Cowlishaw House at 37 Cordelia Street Properties listed for sale include: 35, 37, and 39 Merivale Street, South Brisbane – three commercial buildings between two and three storeys. For sale by expressions of interest, closing September 16, 2015; agent, Wright Property Nick Spiro and Andrew Gard 186 Vulture Street, South Brisbane – a single-storey shop with an alfresco area. For sale with an asking price of $2.1 million; agent, First National Commercial George Koukides . The property was advertised with a potential return in excess of $120,000 net per annum 16 Manning Street, South Brisbane – a former church, converted for commercial use. For sale by expressions of interest; agents, Chesterton International Warren Jopson and North South Real Estate Domenico Bellino CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results – Week ending 28 August 2015

Over the week ending 28 August 2015, the preliminary clearance rate for commercial auctions was 75.0 per cent across a total of 48 reported results, a significant increase from 54.6 per cent the previous week when 44 auction results were reported. Over the corresponding week last year, the auction clearance rate was 54.4 per cent while the number of auctions was higher at 68.Over the most recent four week period there were 237 commercial properties taken to auction, with 154 reported sales resulting in a clearance rate of 65 per cent. Of the 154 sales, 119 have been reported with the sale price disclosed and the total of these transactions is $291.8 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Building approvals rebound on the back of a sharp rise in unit approvals

The Australian Bureau of Statistics ABS released building approvals data for July 2015 earlier this week. According to the data there were 19,298 dwelling approvals over the month which represents an increase of 4.2% over the month and a year-on-year rise of 13.4%. Monthly dwelling approvals reached a record high of 20,260 approvals in March 2015 and the July 2015 result represents the fifth largest monthly number of dwelling approvals on record. Over the month there were more unit approvals than house approvals. In fact it was only the seventh time on record that there were more units approved over the month than houses, five of which have happened in 2015. Although unit approvals outnumbered house approvals over the month it is important to note that they tend to be much more volatile than house approvals and are ultimately less likely to be built than houses approximately 85% of all unit approvals proceed through to a completion historically . Although this is the case, particularly for larger unit development, the economic benefit is extended over a longer period because they take much longer to complete. In July 2015 there were 9,479 houses and 9,819 unit approvals over the month. House approvals fell by -2.6% in July and were -2.1% lower year-on-year. Meanwhile, unit approvals increased by 11.7% in July following a fall of -13.3% in June and were 33.8% higher year-on-year. On an annual basis there has been a record high 224,121 approvals to July 2015. To put the recent ramp-up in approvals into perspective, three years ago there were just 148,449 approvals over the year. As the number of approvals has increased, the greatest rise has occurred across the multi-unit segment. Over the past 12 months a record high 48.3% of all approvals were for units. If you look just at the capital city markets 55.7% of all dwelling approvals were for units. The rise in unit approvals is reflective of changing lifestyle patterns with more and more people preferring to live closer to the city centre and along transport spines where most of these units are located. It also shows that developers are enjoying a level of confidence by seeking approvals for a record high number of units. Another factor contributing to the rise in higher density dwelling approvals is changes in town planning policies where governments are aiming to maximise existing transport infrastructure by allowing higher densities along existing and planned transport corridors and mixed use precincts. If we look at the types of units that are being approved it is interesting to note the sharp rise in high-rise approvals, that is units in a block of four or more storeys. Over the past 12 months, a record high 63.4% of all unit approvals were within high-rise projects while a record low 26.2% of approvals were terrace and townhouses and a record low 4.9% of approvals were for units in a one or two storey block. Again, these figures just go to show the heightened level of developer confidence particularly when you consider the relative level of risk associated with high rise development. The number of dwelling approvals remains high albeit it is slightly lower than recent record highs. Strength in the approvals figures are becoming increasingly reliant on the multi-unit sector which tend to be much more volatile than house approvals. With many banks, credit unions and building societies tightening their lending criteria it will be interesting to see over the coming months if this flows into approvals and causes developer confidence to wane. No matter what happens with approvals over the coming months and years there is a strong pipeline of new construction, much of which is high-rise and will extend out over a number of years. Furthermore, with population growth slowing we should see a better relationship between housing supply and housing demand. This is already being seen by the fact that capital city rental rates are increasing at an historic low rate currently.

New listings across the capital cities push total stock levels slightly higher than one year ago

Relative to last year, total listings across both the combined capital cities and at a national level are similar, with the combined capital city total stock available for sale virtually level with last year at a nominal 0.5 per cent higher, while nationally, stock levels are -1.3 per cent lower. At an aggregate level, the number of new listings added to the market over the past four weeks is higher compared to last year; however this isn’t standard across all regions and is mainly being driven by strong housing markets in Sydney and Melbourne. Historically, at the end of August, new listings begin to increase and based on activity over the past two weeks, this year is no exception. Generally, new listings then continue to ramp up throughout September, peaking in November prior to the end of year slow down. On a city by city basis, the total listings stock this year compared to last year is higher in just two cities, Perth 19,191 vs 16,278 last year and Darwin 1,569 vs 1,361 last year . On the other hand, the number of residential properties available for sale across all other capital cities is lower than one year ago, by as much as -11.2 per cent in Hobart and as little as -0.5 per cent across Sydney. Nationally, there are currently 232,000 residential properties available for sale, with 41,864 added to the stock pool over the past four weeks. Over the same period one year ago, there were close to 3,000 additional properties available for sale. In terms of newly advertised listings, the ACT, NSW, Vic and Qld are all recording a higher number of newly advertised listings over the most recent four week period when compared to one year ago. In all other states and territories there are fewer new listings being added to the market than one year ago.

Final week of winter returns high auction volumes and a strong clearance rate

For the last week of winter, the preliminary auction clearance rate was 75.4 per cent, with 2,583 auctions held across Australia’s capital cities. So far, 2,109 results have been reported to CoreLogic RP Data. This week’s preliminary clearance rate is higher than last week’s result of 72.9 per cent and is likely to revise as additional results are reported. One year ago, the final auction clearance rate was also recorded at 72.9 per cent and there were 2,034 residential auctions held across the capital cities. It is expected that auction activity will continue to ramp up as we enter the spring selling season. This week, 1,024 Melbourne auctions have been reported, with a preliminary auction clearance of 77.0 per cent. This week’s result is an improvement from last week, when Melbourne recorded its lowest clearance rate since February 74.3 per cent . At the same time last year, Melbourne’s clearance rate was 73.5 per cent. In terms of the number of homes being taken to auction, this week 1,158 saw more auctions held than both last week 964 and last year 901 . This week, the Inner sub-region was the busiest for auctions across Melbourne, with 253 homes going under the hammer. Preliminary results show that 68.0 per cent of the 219 reported results were successful. Sydney’s preliminary auction clearance rate was 78.1 per cent this week, increasing from 76.2 per cent last week, however for the first time this year, the clearance rate is lower than the comparable week last year 79.9 per cent . This week, 1,080 Sydney auctions were held, compared to 930 last week and a lower 810 one year ago. There were 6 Sydney sub-regions that recorded an individual clearance rate higher than the city as a whole this week. Eastern Suburbs 87.6 per cent , North Sydney and Hornsby 86.3 per cent and the Inner West 85.1 per cent had the highest clearance rates, followed by Blacktown 84.6 per cent , City and Inner South 82.8 per cent and Northern Beaches 81.5 per cent . Across Brisbane the preliminary clearance rate was 58.2 per cent this week. There have been 110 auctions reported to CoreLogic RP Data, with a total of 158 held across the city. This week’s result was higher than last week 54.5 per cent . For the Gold Coast, 44 results have been reported with a success rate of 61.3 per cent. There were 100 Adelaide auctions this week, compared to 90 last week and 88 at the same time last year, showing volumes increased across the city. The cities preliminary clearance rate this week was 64.8 per cent, down from 72.7 per cent last week and 64.9 per cent one year ago. This week’s preliminary result for Perth was 66.7 per cent, compared to 29.7 per cent last week and 48.0 per cent one year ago. 61.9 per cent of the reported auction results for Canberra were sold this week, down from 71.2 per cent last week and 74.3 per cent at the same time last year. There were 4 Tasmanian auctions reported to CoreLogic RP Data this week, with 3 sales.

Commercial Auction Results – Week ending 21 August 2015

For the week ending 21 August 2015, 33 commercial auctions were reported with a preliminary clearance rate of 51.5 per cent, compared to a higher result over the previous week, when 66.1 per cent of the 56 reported auctions were sold. When compared to last year, current conditions across the commercial auction market are slightly weaker. Last year, 50 commercial auctions were held with a clearance rate of 56.0 per cent. The most recent four week period shows a total of 232 auction results with 143 sales. Of these 143 sales, 120 have been reported with a sale price, totalling $ 301.6 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Sale of two towers reflects healthy Sydney market

A leading Australian real estate investment group has added yet another lower north shore commercial investment to their books with the purchase of Tower A and B at 207 Pacific Highway, St Leonards. In a sale arranged by Josh Cullen and Richard Butler of CBRE and Tyler Talbot of Knight Frank North Sydney, Altis Property Partners has paid $170 million for the two commercial towers. Founded in 2008 by Paul Notaras, Shaun Hannah, Alastair Wright and Chris Packett, Atlis is still privately owned and currently has a commercial portfolio of office, industrial and bulky retail assets valued in excess of $1 billion. Tower A, a seven storey commercial building, has a net lettable area of about 7,500 sqm and Tower B has just over 12,000 sqm across its 11 levels. Both towers were built in 2002, have a 3 star NABERS rating and share basement parking for 200 cars. Major tenants include Wood & Grieve Engineers, EMC2 Corporation, Toyota Finance and Medibank plus numerous small retail tenants. Altis has previously purchased 33 Herbert Street, St Leonards a three storey commercial building bought for $25 million in 2014 ; 10 Herbert Street, St Leonards a potential development site of 8,831 sqm which was bought for $14.2 million in 2013 and 100 Christie Street, St Leonards a 12 level building of 10,000 sqm which was bought for $42 million in 2013 . This sale at $170 million is a reflection of the health of the commercial property market. Previous sales of the two buildings include a 50% share which traded at $61.7 million in 2013 and a full sale at $117 million in 2004. Meredith Baume Commercial Research Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Macquarie Park Cityscope

The latest research from Macquarie Park Cityscope shows property sales have increased in the past three months. Sales recorded in the quarter ending August 2015 totalled $137.1 million, an increase from the $132 million recorded in the three months to May 2015, and an increase on the $63.6 million recorded to February 2015. This data brings the 12 month total to $585 million a decrease from the $1,008.2 million recorded the same time last year. The table below shows sales recorded for the past eight updates of Macquarie Park Cityscope. Recent standout sales in Macquarie Park include: Link Business Park Building B, and an associated 7 storey building at 22 Giffnock Avenue Macquarie Park; two buildings with a total net lettable area of 17,825 sqm; Building B is a 3-storey, 7,531 sqm, commercial building; the other building is a 7 storey, 10,294 sqm, commercial building. They have a total of 206 car parking spaces. The buildings were bought for $74 million in a sale handled by CBRE Sydney and Savills The leaseholds of two lots of vacant land at 1 Murray Rose Avenue Sydney Olympic Park and 2 Murray Rose Avenue Sydney Olympic Park were bought for $30.5 million in a sale handled by Nationwide Norwest 21-24 Railway Road Meadowbank, a 2 and 3 storey building, partly a high-clearance factory, was bought for $9.5 million Properties for sale in Macquarie Park in August 2015 include: 77 Mars Road Lane Cove West a 2 storey commercial building with associated 1,850 sqm yard and warehouse is for sale through CBRE North Sydney and Sutton Anderson Property Consultants. The building last traded at $2.95 million in October 2007 Unit 12 Block C at 88 Falconer Street West Ryde, a 547 sqm industrial unit comprising 442 sqm warehouse on ground level, and 105 sqm of office space on the first floor; plus 8 car spaces; is for sale through CBRE North Sydney and Sutton Anderson Property Consultants. The unit last traded at $1.2 million in January 2007 Unit 5 at 21 Mars Road Lane Cove West, a 520 sqm commercial and industrial unit comprising 440 sqm on level 1 and parking for 6 vehicles, is for sale at $750,000 through Glass Property. The unit last traded at $780,000 in April 2014 Significant leasing opportunities in Macquarie Park in August 2015 include: Citrix House at 1 Julius Avenue North Ryde, a 5 storey, 14,479 sqm, commercial building with parking for 395 vehicles; has office space of 566 to 7,534 sqm through Colliers International The former Fujitsu House at 2 Julius Avenue North Ryde, a 5 storey, 7,227 sqm, office building with parking for 263 vehicles; has 7,119 sqm through Colliers International North Sydney Building F, Rhodes Corporate Park, a 7 storey, 5,700 sqm, commercial building with parking for 375 cars; has office space of 607 to 5,700 sqm through GJS Property, and Colliers International CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update â

The latest research from Sydney Cityscope shows Sydney CBD commercial property sales for the three months to August 2015 have increased substantially in value from the preceding quarter. There were 89 sales recorded for the most recent quarter, compared to 99 for the three months to May 2015. However, the total value of this quarter’s sales was $3.298 billion, compared to $1.798 billion for the preceding quarter. For the year ending August 2015, there were 360 sales at a total value of $7.714 billion, compared to 365 sales at a total value of $5.291 billion for the previous year. The table below shows sales recorded for the past eight updates of Sydney Cityscope. Notable sales in the August 2015 update of Sydney Cityscope include: The freehold of The Westin Sydney, a 32 level, 416 room, 5 star hotel and the leasehold of The General Post Office, a five-level retail building in the former GPO at 1 Martin Place, Sydney, were bought for $445.3 million Telstra Plaza Building, a 32 storey office building with retail on the ground floor at 310 Pitt Street, Sydney, which was bought for $200 million A 14 storey Art Deco office building with retail on the ground floor and basement parking for 47 vehicles at 155 Clarence Street, Sydney, which was bought for $140 million Properties for sale in Sydney Cityscope in August 2015 include: A 34 storey office tower over a 4 level retail podium known as Mid City Centre at 420 George Street, Sydney, available through Savills and JLL Sydney A 17 storey office building with basement parking for 164 vehicles at 28-42 Nithsdale Street, Sydney, available through CBRE Vibe Hotel Sydney, a 10 storey building at 105-119 Goulburn Street, Sydney, available through Knight Frank and JLL Hotels & Hospitality Group Leasing opportunities in the August 2015 of Sydney Cityscope include: A 21 storey office building with ground floor retail and basement parking for 148 vehicles at 255 Elizabeth Street, Sydney, which has office space of 1,750 to 10,000 sqm for lease through Colliers International Governor Macquarie Tower, a 46 level office building with basement parking at 1 Farrer Place, Sydney, which has office space of 130 to 9,000 sqm for lease through Cadigal Office Leasing A 28 level office block with ground floor retail and basement parking at 175 Liverpool Street, Sydney, which has office space of up to 7,518 sqm for lease through CBRE and Savills CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Auction volumes set to reach new record highs over winter 2015

CoreLogic RP Data National Auction Preview, week ending 30 August 2015 The combined capital city weighted average clearance rate fell to 72.9 per cent last week, down from 74.6 per cent the previous week, while auction volumes rose from 2,118 to 2,248. Over the current week, CoreLogic RP Data is tracking 2,639 scheduled auctions, which will bring the total auctions for winter 2015 to over 26,500 which is the highest level on record. This week, between Melbourne and Sydney, Australia’s two largest auction markets, there are more than 2,200 auctions scheduled, with Melbourne expecting 1,190 auctions over the week and 1,086 in Sydney. Both cities saw clearance rates fall last week with Melbourne’s final auction clearance rate down to 74.3 per cent from 76.5 per cent the previous week. Meanwhile, Sydney’s clearance rate of 76.2 per cent was almost identical to the result recorded one year ago 76.1 per cent . The number of residential auctions scheduled across Adelaide 105 , Brisbane 159 and Perth 40 this week is higher than last week, while Tasmania is expecting auction volumes to remain unchanged, with 9 auctions scheduled across the state. In Canberra, CoreLogic RP Data is currently tracking 50 auctions, a fall from last week when 75 auctions were held, but higher than at the same time last year 37 . For the fourth week in a row, Canberra’s clearance rate surpassed the 70 per cent mark, with last week’s final clearance rate for the city recorded at 71.2 per cent. Richmond in Victoria has the highest volume of auctions scheduled for any one individual suburb this week, with 24 properties set to go under the hammer. Following on from this, Reservoir, also in Victoria, has 21 auctions scheduled.

Melbourne’s lowest clearance rate since February

The preliminary auction clearance rate across the combined capital cities was 74.1 per cent this week, across 1,784 reported results. There were a total of 2,192 auctions held across Australia’s capitals this week, up from 2,118 last week. This week’s preliminary clearance rate remained relatively steady over a week on week basis 74.6 per cent and this year’s result continues to track higher than one year ago, when 69.5 per cent of reported auctions were successful. The number of homes taken to auction this year is also much higher than over the same week last year 1,695 and on a year to date basis, there has been 7.6 per cent more auctions this year than at the same time last year. Melbourne’s preliminary clearance rate of 73 per cent is lower than last week’s final clearance of 76.5 per cent and the lowest result for the city since mid-February. There were 943 auctions across the city this week, higher than both last week, when 908 auctions were held and last year, when 758 Melbourne homes were taken to auction. Last year, the final auction clearance rate over the week was 70.7 per cent. All of Melbourne’s individual sub-regions saw clearance rates of 70 per cent or higher this week, except for Inner Melbourne, which was host to the highest volume of auctions this week 206 and saw 69.5 per cent of the 190 reported results sell. Across Sydney, 903 homes were taken to auction this week, with a preliminary clearance rate of 79.9 per cent. This week’s result for the city is higher than last week’s final clearance rate of 77.3 per cent and similarly, higher than over the comparable week last year 76.1 per cent . While the clearance rate for the city is higher, the number of homes taken to auction across the city over the last two weeks has been comparable, with just 12 less auctions this week compared to last week. Last year there were 758 auctions. Based on preliminary results, Sydney’s Central Coast recorded the strongest clearance rate this week, with 90.9 per cent of the 22 reported results successful. Following on from this, City and Inner South was the next best performer, with 89.2 per cent of the 74 reported results selling. So far this week, 104 Brisbane auctions have been reported to CoreLogic RP Data, with a preliminary clearance of 54.8 per cent. There were 130 Brisbane auctions last week, with a clearance rate of 57.5 per cent, while one year ago, 51.2 per cent of the 134 auctions were successful. This week, 59 auctions were held across the Gold Coast with a preliminary clearance rate of 57.1 per cent across 35 results. Adelaide was host to 87 auctions this week and preliminary results show that 74.2 per cent of auctions were successful. Last week, Adelaide’s final auction clearance rate was 68.1 per cent, while one year ago 67.2 per cent of auctions were sold. Perth’s preliminary clearance rate was 37.5 per cent this week, up from 30.4 per cent last week and 37.9 per cent one year ago. The clearance rate for Canberra was 71.1 per cent this week based on preliminary results. Over the previous week Canberra’s clearance rate was 72.1 per cent, while one year ago, 70.7 per cent of reported results were sold. This week’s result for Canberra indicates the 4th consecutive week in which the cities clearance rate has been above the 70 per cent mark. There were 6 Tasmanian auctions reported to CoreLogic RP Data this week, with 4 sales.

Channel Nine wins in sale of the century

In a sale that ushers in the end of an era that began on September 16, 1956, Channel Nine has sold its Willoughby studio for $147.5 million. Nine Entertainment Co, the parent company of Nine, is a publicly listed Australian media and entertainment company. The sale was arranged by CBRE’s Matt Ramsay, Scott Gray-Spencer and Ben Wicks; buyer was Hong Kong-based, Euro Properties. Euro is a boutique real estate company whose focus is the investment, development and marketing of residential and mixed-use projects. The sale will see the 2.9 hectare site’s eventual conversion to a 5 building residential development. Despite continual opposition from local residents and a visit to the Land & Environment Court which reduced the scale of the development from 12 levels to 8 , Nine eventually secured approval for a gross floor area 35,886 sqm and as many as 400 apartments and thus offered the site to the market as a future development site, doubling its value with the hard fought for DA. The site’s location, with its ease of access to the Sydney CBD and close proximity to Chatswood, could translate into buyers paying a premium for the future apartments. Justin Brown of CBRE has reportedly suggested prices of $850,000 for the one bedroom and $1.2 million for the 2 bedroom could be attainable. The sale includes a 3 year leaseback arrangement and is still subject to FIRB approval. Image Source: Nine Network Meredith Baume Commercial Research Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update â

The latest research from Burke Road Cityscope shows property sales for the three months ending August 2015 have increased from the preceding quarter. There were 3 sales recorded from the most recent quarter with a total value of $22.8 million, as compared to 9 sales for a total of $13.2 million for the quarter ending May 2015. The total value of sales for the year ending August 2015 is $125.7 million from 32 sales, an increase from the previous year, when the total value came to $67.4 million from 15 sales. The table below shows sales recorded for the past eight updates of Burke Road Cityscope. Notable sales for the August 2015 update of Burke Road Cityscope include: Qantas House at 2-6 Railway Parade, Camberwell, a four storey office building with a net lettable area of 4,100 sqm and parking for 148 cars was sold for $20.3 million through JLL and Premier Commercial 744 Burke Road, Camberwell, a single storey brick shop building on a site of 200 sqm, which was sold for $1.4 million through Gorman Commercial Unit 4R at 347 Camberwell Road, Camberwell , a retail unit and 2 car spaces on the ground floor, which was sold prior to auction for $1.05 million through Gorman Commercial Properties for sale in August 2015 update of Burke Road Cityscope include: 684 Burke Road, Camberwell, an older two storey brick building with decorations on an agricultural theme, is for sale through S8 Property Pty Ltd Suite 209, 685 Burke Road, East Hawthorn, an office suite of 89 sqm in the seven storey Camberwell Corporate Centre, is for sale through Knight Frank Suite 505, 685 Burke Road, East Hawthorn, an office suite of 59 sqm in the seven storey Camberwell Corporate Centre, is for sale through Prowse Burns Commercial Leasing opportunities listed in the August 2015 update of Burke Road Cityscope include: 799 Burke Road, East Hawthorn, a two storey building with a ground floor showroom for lease through Beller Commercial Qantas House at 2-6 Railway Parade, Camberwell, a four storey office building with a net lettable area of 4,100 sqm and parking for 148 cars, which has office space on levels 2 and 3 for lease though JLL Glen Waverley 397 Camberwell Road, Camberwell, a single storey brick building and a small rear yard for lease through Prowse Burns Commercial CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Southbank Cityscope

The latest research from Southbank Cityscope shows property sales have decreased in the past three months. Sales recorded in the quarter ending August 2015 totalled $147 million, a decrease from the $517.3 million recorded in the three months to May 2015, and a decrease from the $368 million recorded to February 2015. This data brings the 12 month total to $1.576 billion, an increase from the $1.061 billion recorded the same time last year. The table below shows sales recorded for the past eight updates of Southbank Cityscope: Recent standout sales in the Southbank area include: Yarrabank Place, 71-75 City Road, Southbank, a three storey brick building, built in the 1890’s as a warehouse and later converted to use as offices, was bought for $14.6 million in a sale arranged by CBRE Melbourne. 33 Park Street, South Melbourne, a three storey brick and concrete office building with parking for 10 cars was bought for more than $4.775 million in a sale handled by CBRE Melbourne. Properties for sale in Southbank in August 2015 include: South Wharf Office Tower, 30 Convention Centre Place, Southbank, an A-grade 12 level office tower with parking for 404 cars, is for sale through CBRE Melbourne and CBRE Sydney. The property last traded at $115.446 million in September 2010. 18-24 Moray Street, Southbank, a one and two storey brick office-warehouse built in 1927, is for sale through CBRE Melbourne. The property last traded at $1.525 million in October 2006. Photography Studies College, 63-65 City Road, Southbank, a two storey Victorian warehouse building and 67-69 City Road, Southbank, a three-storey brick and concrete office building, are for sale together through Fitzroys. Significant leasing opportunities in Southbank in August 2015 include: The Primrose Potter Australian Ballet Centre, 2-6 Kavanagh Street, Southbank, a six storey concrete building with three floors of offices above a three level 436-space car park has 1,950 sqm for lease through Gross Waddell. 87-89 Queensbridge Street, Southbank, a single storey retail building, with 1,000 sqm for lease through TT Global. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Chapel Street Cityscope

The latest research from Chapel Street Cityscope shows that commercial property sales have decreased in the past three months. Sales recorded in the quarter ending August 2015 totalled $16.9 million from 8 sales, compared with $112.1 million from 13 sales in the three months to May 2015 and the recorded $20.3 million from 4 sales in the three months to February 2015. The August 2015 sales totals represent a return to normalcy after 627 Chapel Street and 661 Chapel Street were each bought for approximately $40 million, boosting the total in the May quarter. This data brings the 12 month total to $169.8 million from 34 sales, a decrease compared with the previous twelve month total of $177.7 million from 36 sales. The table below shows sales recorded for the past eight updates of Chapel Street Cityscope: Notable sales recorded in the August 2015 update of Chapel Street Cityscope include: 182-184 Commercial Road, Prahran, a two storey retail building with a building area of 371 sqm on a site of 278 sqm; sold for $3.35 million; 519 Chapel Street, South Yarra, a two storey retail building and a separate single storey brick building on a site of 183 sqm; sold for $3.125 million; and 27 Toorak Road, South Yarra, a two storey brick building with a small single storey extension to the rear on a 242 sqm site, sold for $2.5 million. Properties listed as for sale in the August 2015 update of Chapel Street Cityscope include: 19-21 Toorak Road, South Yarra, a two storey building two shops at street level and offices above on a 336 sqm site, for sale by auction in September 2015 through Beller Commercial. Unit 1, Unit 2A, Unit 3A, Unit 3B, Unit 4 – 9 are offered for sale in one line by expressions of interest closing 3 September 2015 through Gross Waddell. Leasing opportunities listed in the August 2015 update of Chapel Street Cityscope include: 383 Chapel Street, South Yarra, a two storey retail building with a ground floor banking chamber, providing 445 sqm building area, for lease through Allard Shelton; The Old Post Office at 164-168 Greville Street, Prahran, a three storey building with a two-storey extension to the rear, has retail space of 385 sqm for lease through GarmanKelly; and 262-264 Chapel Street, Prahran, a three storey retail building and a single-storey warehouse to the rear, has 370 sqm retail space for lease through CRS Property. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results – Week ending 14 August 2015

The number of auctions reported last week was 50, with a preliminary clearance rate of 70.0 per cent. In comparison, the final auction clearance rate over the week prior was 64.8 per cent across the 88 reported auctions. One year ago there were 54 commercial auctions reported over the week with a success rate of 63.0 per cent. The most recent four week period shows a total of 231 commercial auctions having taken place with 142 sales. Of these sales, 120 have been reported with a sale price totalling $295.2 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Auction volumes to rise this week

CoreLogic RP Data National Auction Preview, week ending 23 August 2015 Auction volumes are set to rise this week, with CoreLogic RP Data tracking 2,250 auctions, up from 2,118 last week. The number of homes going to auction this week is 33 per cent higher than one year ago, when 1,695 auctions were held. Last week, the final auction clearance rate across the combined capitals fell to 74.6 per cent after 76.9 per cent of auctions were successful the previous week. Melbourne is expecting 962 residential auctions this week, higher than both last week 908 and last year 758 . Melbourne’s clearance rate last week was 76.5 per cent, down two percentage points when compared to the previous week. Meanwhile, across Sydney, Australia’s second largest auction market, the final auction clearance rate fell last week to 77.3 per cent, after having recorded a strong preliminary result. Auction volumes remain steady across the city this week, with 916 expected, compared to 915 the previous week and much higher than last year when 641 Sydney homes were taken to auction. This week, Adelaide is the only city where the number of auctions expected 79 is lower than last week 83 . The cities clearance rate fell substantially last week, down from 77.4 per cent the previous week to 68.1 per cent. Across all other capital cities, auction markets are busier this week. Brisbane has 160 auctions scheduled, up from 130 last week; Canberra is expecting 77 auctions, compared to 50 last week, while Perth will be host to 41 auctions this week, up from 27 last week. This week, there will be 14 auctions held across Tasmania, compared to just 5 last week. The suburb with the most auctions scheduled this week across Australia is Mount Waverley Vic , where 18 residential auctions are scheduled to take place. Following on from this is the neighboring suburb of Glen Waverley where 17 homes are up for auction.

Sydney’s clearance rate hits the 80 per cent mark again, while the combined capital city clearance rate remains steady

This week there were 2,103 capital city auctions held and the preliminary clearance rate was 76.3 per cent across 1,704 results. This week’s clearance rate represents a small fall from last week 76.9 per cent and auction volumes are lower 2,512 . Last year, the final auction clearance rate was 70.8 per cent, indicating that conditions across the auction market still remain stronger than at the same time last year; however the gap between the clearance rate is no longer as large as we saw earlier in the year. At the same time last year, 1,569 auctions were held, significantly lower than the number held this week. Across Melbourne, 902 auctions were held this week, with a preliminary clearance rate of 76.5 per cent. This week’s clearance rate for Melbourne is lower than last 78.5 per cent , but higher than one year ago 73.3 per cent . Similarly, the number of auctions is lower than last week 1,085 and higher than a year ago 727 . This week, there was only one Melbourne sub-region where the clearance rate was above 80 per cent. Outer East Melbourne saw 86.4 per cent of the 59 reported results sell. Following on from this, the second highest clearance rate for the week was across South East Melbourne at 78.5 per cent. There were 907 Sydney auctions held this week and across the 702 reported results, 80.3 per cent were successful, pushing the cities clearance rate back above the 80 per cent mark for the first time in 5 weeks, so it will be interesting to see if the final results remain this high. Over the previous week, Sydney’s clearance rate was 78.3 per cent and 76.2 per cent last year. This week’s preliminary clearance rate for the city is 4.1 percentage points higher than one year ago, a much less significant difference than earlier this year when the gap between this year and last year’s clearance rate was consistently around the 10-15 per cent mark. So far, all of the 13 results reported to CoreLogic RP Data for the Outer South West region were sold; however there are still 9 results yet to be captured. The Inner West 86.6 per cent , City and Inner South 85.9 per cent and North Sydney and Hornsby regions 85.1 per cent were all strong contributors to Sydney’s strong preliminary result this week. This week, Brisbane’s preliminary clearance rate was 60.2 per cent across 93 reported results. There were 130 homes taken to auction across the city this week, compared to 147 last week and 98 at the same time last year. Last week, Brisbane’s clearance rate was 61.1 per cent, while one year ago exactly half of all the reported auctions were sold. So far this week, 23 Gold Coast auction results have been reported, with 15 sales, representing a success rate of 65.2 per cent. Adelaide’s preliminary clearance rate is 71.2 per cent this week, falling from 77.4 per cent last week the strongest result for the city since early April and higher than one year ago, when 65.6 per cent of auctions recorded a sale. The clearance rate for Perth was just 23.1 per cent this week based on preliminary results. Last week 50.0 per cent of Perth auctions were successful, while one year ago the cities clearance rate was 40 per cent. There were 50 Canberra homes taken to auction this week, with 77.4 per cent selling. Over the previous week, a 74.1 per cent clearance rate was recorded and one year ago 51.2 per cent of reported results were successful. Across Tasmania 5 auction results have been reported this week, with 3 sales.

Telstra Plaza Building sold to investment trio

In an unusual cross market transaction, the Telstra Plaza Building at 320 Pitt Street, Sydney, has been sold for $200 million with the buyer also acquiring eight industrial assets to the tune of $108 million. These included properties in Sydney, Brisbane, Melbourne and Perth . The purchases were brokered by Rob Sewell, Paul Noonan and Michael Fenton, all of JLL. The vendor was MacarthurCook Industrial Property Fund, an unlisted property fund in which all units are held by Equity Commonwealth, a US real estate fund manager listed on the New York Stock Exchange and associated with US billionaire, Sam Zell. The purchaser was Propertylink, co-investing with Goldman Sachs, a leading global investment banking, securities and investment management firm, and the Grosvenor Group, a privately owned property group headed by Gerald Grosvenor, chairman and 6th Duke of Westminster. Propertylink is an Australian real estate and infrastructure fund manager with more than $2 billion in assets under management. According to Sydney Cityscope, the Telstra Plaza Building is a 32 storey office tower completed in 1989. With a net lettable area of almost 30,000 sqm and a NABERS rating of 4.5 stars, the building is fully occupied by Telstra on a lease for five years. Its future could see a continuation of its commercial use or a conversion to apartments. The property last traded at $170.21 million in December 2010. At $200 million, this sale represented an initial yield of 8.26% on passing income of $16.52 million. Meredith Baume Commercial Research

Over 2,000 capital city auctions scheduled for the second week in a row

CoreLogic RP Data National Auction Preview, week ending 16 August 2015 The number of auctions across the combined capital cities is set to fall this week, after last week was the busiest week for auctions since May. CoreLogic RP Data is currently tracking 2,167 auctions for this week, compared to 2,512 last week. The final auction clearance rate rose to 76.9 per cent last week, having recorded a low of 74.6 per cent the previous week. There are 916 Melbourne homes scheduled for auction this week, after 1,085 were held the previous week. Melbourne’s clearance rate remained steady last week, at 78.5 per cent. At the same time last year, just 727 auctions were held across the city. In Sydney, 952 auctions are currently being tracked by CoreLogic RP Data, marking what will be the third consecutive week where the number of auctions in Sydney has been higher than in Melbourne, traditionally Australia’s largest auction market. One year ago, 578 Sydney auctions were held, much lower than current numbers. Sydney’s final auction clearance rate was 78.3 per cent, showing improvement on a week-on-week basis, up from 76 per cent the previous week. In Brisbane 129 , Canberra 48 , and Tasmania 6 , the number of auctions scheduled this week is lower than last week. Meanwhile volumes are higher this week in Adelaide, with 85 scheduled auctions compared to 76 last week and Perth, with 31 scheduled auctions compared to 28 last week.

Commercial Auction Results – Week ending 7 August 2015

Over the week ending 7 August 2015, the preliminary auction clearance rate was 71.9 per cent across a total of 57 commercial properties, while one week prior, the final auction clearance rate was 58.5 per cent across 53 results. At the same time last year, the number of commercial properties taken to auction was higher at 97, while the clearance rate was weaker 60.8 per cent . There have been 197 auctions reported over the most recent four week period, with 115 of these reported as sold and a total value of $268.3 million across the 98 sales reported with a price. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Lending eases in May, a sign of things to come?

The Australian Bureau of Statistics ABS released housing finance data for May 2015 last Friday. The data showed a broad-based fall in commitments over the month with both investment and owner occupier lending falling. In May 2015 there was $31.1 billion in housing finance commitments, down -4.4% from $32.6 billion in April. The $31.1 billion worth of commitments was comprised of $18.1 billion in lending to owner occupiers and $13.0 billion to investors. Over the month, the value of owner occupier housing finance commitments fell by -5.3% and investor commitments were -3.2% lower. Year-on-year the value of owner occupier commitments has increased by 8.1% compared to a 19.4% rise in investment mortgage lending. Based on this data the proportion of total lending to investors was at a record high 41.9%. If you exclude refinances and look at just new lending, investors accounted for a record high 52.5% of all lending over the month. The $18.1 billion in commitments to owner occupiers in May consisted of $1.7 billion for construction of dwellings, $1.0 billion for purchase of new dwellings, $6.3 billion in refinances and $9.1 billion for purchase of established dwellings. Over the month, lending for new construction fell -5.4%, lending for purchase of new was -0.6% lower, refinance commitments were -3.7% lower and commitments for purchase of established were -6.8% lower, its largest monthly fall since February 2012. Year-on-year commitments for new construction are -4.3% lower, for purchase of new dwellings they are 9.0% higher, refinances are 30.1% higher and purchase of established dwellings is -1.2% lower. The data highlights that the recent strength in owner occupier housing finance commitments is largely due to refinances. In fact if you remove refinances lending to owner occupiers is -0.9% lower over the year. Investors committed to $13.0 billion worth of housing finance in May 2015 which consisted of $0.9 billion for the construction of new housing and $12.2 billion to established housing. Over the month, investor commitments for new construction rose 1.6% compared to a -3.5% fall in commitments for established housing. Year-on-year, commitments for new construction have increased by 64.1% compared to a 17.1% rise in commitments for established stock. The data shows that domestic investors are largely targeting established housing stock as opposed to new stock. Looking specifically at new mortgage lending excluding refinances $3.6 billion of commitments in May 2015 were for new product as opposed to $21.2 billion for established housing stock. Over the month, lending for new fell by -2.4% compared to a larger -5.0% fall in lending for existing stock. Year-on-year lending for new stock is 10.8% higher compared to an 8.5% rise for existing stock. Although lending to new stock is rising quicker than lending for established, with a record high level of new construction the overall level of purchasing of new, at least domestically is quite low. It makes you wonder just who is buying all these new homes being built, there’s really only two options: Australians are purchasing in cash or people are buying with cash sourced from overseas which is not measured in the housing finance data. With the changes to mortgage lending policies from Australian banks starting to become public in May it will be very interesting to track the housing finance data over the coming months. Since May we’ve seen further changes to lending policies announced and it remains to be seen if it is enough to cool the Sydney and to a lesser degree Melbourne housing markets. Of course there remains the great unknown of just how many buyers are coming from offshore and how much that is impacting home values. If the slowdown in lending experienced in May continues regulators will be happy to see that the changes Australian banks have made to their lending policies is having an impact on demand for mortgages. The next test will be to see whether these changes are enough to slow the rate of home value growth, at the same time they will be hoping it does not deter developers from constructing all those new homes they have in their pipeline.

Auction markets continue to show a slight softening trend with a preliminary auction clearance rate of 76.2 per cent, the third week in a row in which the capital city clearance rate has fallen

The preliminary clearance rate across the combined capital cities was recorded at 76.2 per cent this week, compared to 76.8 per cent last week, marking the third week in a row where the auction clearance rate has trended lower. So far, 1,370 auctions have been reported this week, with a total of 1,669 auctions held across the capital cities. In comparison, last week there were 1,674 auctions, while at the same time last year 1,421 residential properties were taken to auction with a success rate of 67.2 per cent. The preliminary auction clearance rate for Melbourne was 78.2 per cent this week, with 651 auctions held across the city. Over the previous week, 78.6 per cent of the 640 Melbourne auctions sold, while at the same time last year, Melbourne’s clearance rate was significantly lower, at 66.4 per cent across 567 auctions. Across the individual sub-regions of Melbourne, the strongest performer this week was the Outer East, the only region where the preliminary clearance rate surpassed the 90 per cent mark, with 95.7 per cent of the 46 reported results selling. For Sydney, usually Australia’s second largest auction market, the number of homes taken to auction this week 765 was higher than in Melbourne. Sydney’s preliminary clearance rate was 81.0 per cent, down from 82.0 per cent the previous week, but higher than at the same time last year 75.6 per cent . Although Sydney currently remains the strongest capital city auction market, over recent weeks the clearance rate across the city hasn’t been as strong as it was in April and May. Across Sydney’s Outer West and Blue Mountains region, there were six auction results reported this week with all properties selling. Following on from this, Sydney’s strongest performing sub-region this week was the Inner West, with a preliminary clearance rate of 90.1 per cent. 53.6 per cent of Brisbane’s reported auctions were sold this week, compared to 63.5 per cent last week and 43.3 per cent at the same time last year. There were 121 auctions held across Brisbane this week, compared to 115 last week and 118 over the same week last year. Meanwhile, across the 29 reported Gold Coast results, the preliminary clearance rate was 58.6 per cent this week. Adelaide’s preliminary clearance rate was 66.0 per cent this week, across a total of 50 reported results. This week’s clearance rate was lower than last week 69.3 per cent , but higher than at the same time last year 60.9 per cent . Across Perth, 26 homes were taken to auction this week. So far, 13 results have been reported and the preliminary clearance rate for the city is 23.1 per cent, slightly higher than last week’s clearance rate of 22.2 per cent, but significantly lower when compared to last year 44.4 per cent . This week, 30 Canberra auctions were held with a preliminary clearance rate of 69.2 per cent. Across Tasmania, 4 results were reported to CoreLogic RP Data, with 3 of these properties sold.

Commercial Auction Results – Week ending 3 July 2015

Last week, 22 commercial auctions were reported with a preliminary clearance rate of 54.6 per cent, having fallen from a final auction clearance rate of 71.4 per cent the previous week across 126 reported results. One year ago, conditions across Australia’s commercial auction market were comparable, with 37 auctions and a clearance rate of 56.8 per cent. Over the most recent four week period, there have been 236 commercial results reported with 150 sales. The total transaction value of the 102 sales reported with a price comes to just over $209.4 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update â

The latest research from Cityscope has found that Wellington commercial property sales have increased in the last three months, primarily due to the sale of the building at 171 Featherstone Street, Wellington Central. Sales recorded in the three months to July 2015 totalled $240.4 million, a substantial increase from the $129.2 million recorded in the three months to April 2015, and $138.1 million recorded to January 2015. This data brings the twelve month total to $518.9 million from 61 sales, an increase from the previous twelve month total of $231.3 million from 59 sales. The table below shows sales recorded for the past eight updates of Wellington Cityscope. Recent standout sales in Wellington include: 171 Featherstone Street, Wellington Central, part of a 24-storey building developed in conjunction with the adjoining Intercontinental Hotel, formerly known as the HP Tower, with three levels of basement carparking and a net lettable area of 11,293 sqm was bought for $76 million. The AXA Centre, at 80 The Terrace, a 19-storey commercial building including four levels of parking, net lettable area of 10,554 sqm, bought for $36.1 million. Kathryn Jermyn Hall, at 175 The Terrace, Wellington Central, formerly the Night and Day House, a sixteen level building part of the Victoria University of Wellington bought for $33.3 million. Museum Hotel de Wheels, at 90 Cable Street, Te Aro, a five-storey hotel with a site area of 2,015 sqm. The 3,500 ton building is known for being the largest building at the time to be relocated. It was bought for $28.5 million. Properties for sale in Wellington in July 2015 include: The Victory Buildings, a two-storey retail building at 66-70 Courtenay Place, Te Aro and an adjacent two-storey retail building at 74-78 Courtenay Place, Te Aro are for sale by deadline private treaty closing 9 July 2015; agent Colliers International. 25-29 Taranaki Street, a two-storey building at with the Zibibbo Restaurant and Bar on the ground floor and a site area of 278 sqm is for sale through Paul Hastings & Co. Wellington leasing opportunities in July 2015 include: The Clemenger BBDO building, at 7-8 Kent Terrace a four-storey art deco building has office space of 625 sqm for lease through Colliers International and CBRE. 173-175 Victoria Street, a 12-storey retail and commercial building with 4,751 sqm has office space of 1,500 sqm for lease through CBRE. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update â

The latest research from Eastern Sydney Cityscope shows property sales have decreased in the past three months. Sales recorded in the quarter ending July 2015 totalled $86.3 million, a decrease from the $96.3 million recorded in the three months to April 2015, and a decrease from the $267.8 million recorded to January 2015. This data brings the 12 month total to $494.6 million a decrease from the $608.4 million recorded the same time last year. The table below shows sales recorded for the past eight updates of Eastern Sydney Cityscope. Recent standout sales in Eastern Sydney include: Kennedy House at 9-11 Knox Street Double Bay, a 2-storey, 778 sqm, building, was bought for $13.1 million in a sale handled by Burgess Rawson and Metro Commercial Double; 65-67 Foveaux Street Surry Hills; formerly known as the Schweppes Building, a 4-storey retail and commercial building with parking for 6 cars, was bought for $10.75 million in a sale handled by Knight Frank Sydney and Gunning Commercial Surry Hills; The Light Brigade Hotel at 2-2A Oxford Street, a 3-storey building, was bought for $10.37 million in a sale handled by Ray White Hotels. Properties for sale in Eastern Sydney in July 2015 include: 63-73 Ann Street Surry Hills, a 4-level, 2,800 sqm, commercial building; originally built as a warehouse and factory, is for sale through SKW Property. The building last traded at $12,000,000 in December 2014 in a related-party transaction; 292-302 Oxford Street, Bondi Junction, a single-storey and 2-storey building to Oxford Street, and a 4-storey building to Hegarty Lane, is for sale; for the first time in 128 years, through Gunning Commercial Surry Hills. The building stands on an 828 sqm site; 185 Oxford Street Darlinghurst, a 3-storey, 283 sqm Victorian Free Classical style building, is for sale through Khoury & Partners Parramatta. The building last traded at $3 million in September 2002. Significant leasing opportunities in Eastern Sydney in July 2015 include: 372-394 Elizabeth Street Surry Hills, a 7-storey, 4,500 sqm, commercial building with basement parking; has office space of 4,500 sqm through Karbon Property; 100 William Street Woolloomooloo, formerly known as Westfield Towers; a 24-storey, 29,850 sqm, office building with basement parking; has office space of 107 to 3,785 sqm through Colliers International; Terrace Tower, at 80 William Street Woolloomooloo, a 20-storey office building with parking for 108 cars; has office space of 205 to 1,209 sqm through Steven Krulis Real Estate. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Record yield reported for two Parramatta towers

Eureka Funds Management has settled on its $170.1 million December 2014 purchase of two Parramatta office towers. The towers at 4 George Street and 160 Marsden Street, in the Parramatta Justice Precinct, have been sold by the NSW Government in a sale arranged by James Parry and Wally Scales of Knight Frank and Scot Gray-Spencer and Josh Cullen of CBRE. The buildings were sold as part of a government initiative to off load properties not essential to service delivery and re-invest funds in the community, including infrastructure and the stimulation of job growth. The programme has netted the government over $700 million in the past two years. The purchaser, Eureka Funds Management, is a private company owned by its principals and is a vehicle for institutional investors. The company has in excess of $4.2 billion of assets under management, including hotels, office, retail, industrial, car park and residential development. The purchase consists of two commercial office buildings whose tenants include the Department of Public Prosecutions and various Department of Justice agencies. The tower at 160 Marsden Street alone houses 1,000 staff. The sale includes a 15 year leaseback to the government and was sold on a reported record yield of 6.27% for Parramatta commercial property. Meredith Baume Commercial Research

Low auction volumes for the second week in a row

CoreLogic RP Data National Auction Preview, week ending 12 July 2015 The number of auctions scheduled across Australia’s capital cities is relatively low this week, again driven by the school holidays. Across the combined capital cities, CoreLogic RP Data is currently tracking 1,705 auctions this week, slightly higher than the 1,674 last week, but far fewer than the preceding three weeks. Last week, the final auction clearance rate across the combined capitals was 76.8 per cent, remaining steady when compared to the previous week 76.9 per cent . So far this year, the auction clearance rate has been much higher than at the same time last year, with last week being no exception. Currently, CoreLogic RP Data is tracking 660 Melbourne auctions, only slightly higher than last week, when there were 640 auctions across the city and higher than at the same time last year 567 . Last week, 78.6 per cent of the reported auctions across Melbourne were successful; this was the fourth consecutive week in a row where Melbourne’s clearance rate was below the 80 per cent mark. There are 796 Sydney auctions planned this week, up from 734 last week and much higher than the 580 at the same time last year. For the second week in a row, Sydney’s auction clearance rate was recorded at 82.0 per cent last week. Across Brisbane, 120 auctions are scheduled this week, after there were 115 Brisbane auctions last week and 118 at the same time last year. Last week, Brisbane’s clearance rate was 63.5 per cent, the strongest result for the city since February, and the second highest clearance rate for 2015. Much like Sydney and Melbourne, Adelaide’s clearance rate was steady last week, at 69.3 per cent, down only slightly from 69.9 per cent the previous week. There are 66 Adelaide auctions scheduled for the coming week, lower than last week and last year both 85 . Canberra has 31 auctions set to take place this week, down from 58 last week and 41 last year. Across Perth 22 homes will be taken to auction over the week, compared to 35 last week and 24 last year. This week, the highest number of auctions across any one individual suburb will be in the Victorian suburb of Reservoir 15 , followed closely by New South Wales’ Blacktown 14 and Queensland’s Surfers Paradise 14 .

Australian property, expensive for us, not so for foreigners

With plenty of talk about a housing bubble and home values climbing much higher in Sydney and Melbourne, housing is looking expensive to many Australians. Low interest rates and the strong gains in certain areas are making residential housing investment quite attractive for some which is one of the drivers resulting in increasing home values. While housing may be looking expensive to locals, the declining Australian dollar means that it may be looking more attractive to foreign buyers. Since combined capital city home values reached their most recent low point in May 2012 they have risen by 26.8%. At the same time the Australian dollar has fallen by -13.3% over that period in trade-weighted index terms. While the depreciation in the dollar has no impact on local buyers, for off-shore buyers the fall in the Australian dollar is likely to make Australian housing even more attractive. Furthermore, the Reserve Bank continues to state that there is a need for an even lower dollar which would exacerbate the relative affordability even further. Foreign buyers are meant to be purchasing brand new homes in most instances. There have been numerous recent reports of foreign buyers not adhering to these rules. Furthermore a recent parliamentary inquiry found that the Foreign Investment Review Board was significantly underfunded and as a result has not been able to effectively monitor and enforce foreign investment rules. Combined capital city home values have increased by 26.8% between May 2012 and June 2015. Keep in mind that these figures are heavily influenced by the Sydney and Melbourne housing markets with these the only two capital cities recording value growth in excess of this figure over the period. When you look at that 26.8% increase across other currencies you can see the impact of the falling exchange rate. Of those currencies highlighted only the Japanese Yen and Indonesian Rupiah have seen values rise by a greater amount. Across most other currencies the relative value rises have been significantly lower than they have been in Australian dollar terms. Once you look at capital cities that have seen relatively lower recent capital growth, there has been a significant improvement in Australian housing affordability for foreign buyers. Not to mention the fact that in many of these foreign countries mortgage holders are borrowing at significantly lower interest rates than those available to Australians. With the RBA stating that the Australian dollar remains overvalued, any further falls in the Aussie dollar are likely to result in even more attractive buying conditions for foreign buyers. Given this it is imperative that foreign investment rules are tightened and FIRB improve their surveillance work. A central register of foreign buyers would also be seemingly important. The Victorian Government has recently announced that it will increase fees and charges to foreign buyers of property in that state. Despite howls of protest it would seem that this is likely to have little material impact on foreign demand for housing. Furthermore, a national approach similar to this would be a good step towards appropriately funding FIRB to undertake their review and surveillance of foreign housing investment. Particularly given that should the dollar fall further demand from off-shore buyers is likely to increase. Earlier this week Federal Treasury released the Exposure Drafts and Regulatory Impact Statement of legislation designed to tighten foreign investment rules, including those relating to residential real estate. The document can be read here and submissions can be made up until Friday 17 July.

Auction markets slow down on the volume front, while the combined capital city clearance rate of 78.1 per cent is the strongest result since the first week in June.

This week, the preliminary clearance rate across the combined capital cities was recorded at 78.1 per cent, the strongest result in 4 weeks. There were 1,273 reported auctions this week, with total auction volumes at 1,626. Due to the school holidays, this week the number of homes taken to auction was substantially lower than last week 2,249 , but remained higher than at the same time last year 1,442 when the clearance rate was recorded at 68.9 per cent. 76.7 per cent of Melbourne’s reported auctions sold this week, compared to a clearance rate of 78.5 per cent last week and 71.4 per cent last year. This week, 617 Melbourne auctions were held, down from 1,007 last week, but higher than the 549 held at the same time last year. Across Melbourne’s individual sub-regions the performance was varied this week. The stand out performer was the Outer East region, where 93.7 per cent of homes were sold, followed by the Inner East, where the clearance rate was 85.7 per cent this week. The preliminary auction clearance rate for Sydney was 84.5 per cent this week with 711 auctions held. Last week, 896 residential properties were taken to auction across Sydney with a success rate of 82 per cent. Auction conditions across Sydney continue to outperform when compared to the same time last year. One year ago, 72.4 per cent of the 597 auctions across the city cleared. Sydney’s strongest performing sub-region this week was the Sutherland region, where 92.8 per cent of reported auctions were successful, followed by the Inner South West 92.1 per cent , and the Baulkham Hills and Hawkesbury region 91.6 per cent . For Brisbane the number of homes taken to auction this week was 113, down from 140 last week and also lower than one year ago 126 . Based on the preliminary results, 68.9 per cent of Brisbane homes taken to auction sold this week, compared to 46.2 per cent the previous week and 59.5 per cent last year. There have been 30 Gold Coast auction results reported this week, with a preliminary clearance rate of 50.0 per cent. Across Adelaide 86 homes were taken to auction this week with a clearance rate of 75.4 per cent. Last week, 69.9 per cent of the 84 Adelaide auctions were sold, while one year ago the clearance rate was 64.6 per cent. Perth’s preliminary clearance rate this week is 30.0 per cent, across 20 reported results. In comparison, over the previous week, Perth’s clearance rate was 68.0 per cent, the strongest result for the city so far this year, while at the same time last year, 50.0 per cent of Perth auctions were successfully sold. There were 57 Canberra auctions this week, with a preliminary clearance rate of 75.0 per cent. Across Tasmania, only 1 result has been reported so far this week with an unsuccessful result.

School holidays drive auction volumes lower this week

CoreLogic RP Data National Auction Preview, week ending 5 July 2015 Given that winter is in full swing and the mid-year school holidays have begun, auction volumes are lower this week, with CoreLogic RP Data expecting 1,689 capital city auctions, down substantially from 2,249 last week, when the final auction clearance rate was recorded at 76.9 per cent. The drop in auction volumes this year is not a new phenomenon and doesn’t appear to be as pronounced as previous years. Over the same period last year, the number of residential auctions fell by -28 per cent over the week, while in 2013, auction volumes were down -35 per cent week-on-week. Australia’s auction market has maintained record-high strength over the past few months and given this, it will be interesting to see if the limited supply drives the clearance rate up further this week. It is expected that 668 Melbourne auctions will take place this week, compared to 1,007 last week and just 549 at the same time last year. Melbourne’s final auction clearance rate last week was 78.5 per cent, the third week in a row where Melbourne’s clearance rate has been below the 80 per cent mark. The fall in Sydney auction volumes is less noticeable, with 724 auctions this week, compared to 896 last week. Auction volumes across Sydney are still much higher this year than they were last year 597 . Sydney’s auction clearance rate fell last week, to 82.0 per cent, from 82.4 per cent the previous week and much lower than the recent high of 88.7 per cent at the start of June. There are 105 Brisbane homes being taken to auction this week, down from 140 last week and also lower than at the same time last year 126 . Brisbane’s auction clearance rate was recorded at 46.2 per cent last week, a relatively low reading for the city. Across Adelaide, 91 auctions are expected this week, interestingly increasing compared to last week 84 and last year 83 . Adelaide’s clearance rate was recorded at 69.9 per cent last week. In Canberra, 56 auctions are currently being monitored by CoreLogic RP Data this week, compared to 72 last week and just 43 at the same time last year. Last week Canberra recorded its strongest clearance rate 72.9 per cent in eight weeks. Last week, Perth recorded its strongest clearance rate on record for 2015 at 68.0 per cent across 25 reported results. Over the coming week 38 Perth auctions are scheduled, similar to the 34 at the same time last year. This week, the highest number of auctions across any one individual suburb will be 12 in the New South Wales suburb of Epping and 12 in St Kilda Vic .

Commercial Market Update – Melbourne Cityscope

The latest research from Melbourne Cityscope shows that commercial property sales have increased in the past three months. Sales recorded in the quarter ending June 2015 totalled $844.1 million, an increase from the $547.3 million in sales recorded in the three months to March 2015 and the $372.1 million recorded in the three months to December 2014. This data brings the 12 month total to $2.918 billion from 347 sales, an increase compared with the previous twelve month total of $2.649 billion from 278 sales. The table below shows sales recorded for the past eight updates of Melbourne Cityscope. The most notable sales recorded for the June 2015 update of Melbourne Cityscope include: 357 Collins Street, Melbourne, a 23-storey office building with a net lettable area of 31,920 sqm was bought for $222.5 million. The Mid City Arcade at 194-200 Bourke Street, Melbourne, a 3-storey retail building housing the Chinatown Cinema Complex, 24 retail shops and a 171-space basement car park was bought for $60 million. 520 Collins Street, Melbourne, an 18-storey office building with a net lettable area of 12,077 sqm and parking for 14 cars was bought for $52 million. Properties for sale in the area covered by Melbourne Cityscope in June 2015 include: 52 La Trobe Street, a 3-storey commercial building with a building area of 900 sqm, 48-50 La Trobe Street, a 2-storey office building with a building area of 600 sqm, Unit 1 at 42-46 La Trobe Street, 302 sqm on the ground level, Unit 2 at 42-46 La Trobe Street, 302 sqm on level 1, Unit 3 at 42-46 La Trobe Street, 454 sqm on level 2, Unit 4 at 42-46 La Trobe Street, 450 sqm on level 3, Unit 5 at 42-46 La Trobe Street, 300 sqm to the south side of level 4, Unit 6 at 42-46 La Trobe Street, 300 sqm to the north side of level 4 are for sale in one line through Colliers International. 573-585 Bourke Street, Melbourne, an 18-level office building including three ground-floor showrooms and a two-level, 82-space underground car park, with a net lettable office area of 16,200 on a site of 1,833 sqm, is for sale through Colliers International and CBRE. Leasing opportunities in the area covered by Melbourne Cityscope in June 2015 include: 570 Bourke Street, Melbourne, a 33-storey office building with ground-floor retail space, a total building ara of 35,144 sqm and basement parking for 522 cars has office space from 500 to 28,000 sqm through Knight Frank Melbourne. 15W at 15-33 William Street, Melbourne, a 20-level, A-Grade office building with 40,700 sqm and parking for 300 cars has 12,000 sqm for lease through CBRE Melbourne and JLL Melbourne. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results â

Over the week ending 26 June 2015 there were 34 commercial auction results reported with a preliminary clearance rate of 70.6 per cent, the strongest clearance rate recorded over the past six weeks. In comparison, over the previous week, there were 57 commercial auctions with a clearance rate of 59.7 per cent. At the same time last year, the number of commercial properties taken to auction were much higher 100 and the clearance rate was 60.0 per cent. There have been 166 commercial auctions reported over the most recent four week period, with 97 of these properties transacting. Of these 97 sales, 66 have been reported with a price, totalling $127 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Parramatta Cityscope

The latest research from Parramatta Cityscope shows property sales have decreased in the past three months. Sales recorded in the quarter ending June 2015 totalled $85.1 million, a decrease from the $170.2 million recorded in the three months to March 2015, and a decrease from the $191.5 million recorded to December 2014. This data brings the 12 month total to $549.8 million, a decrease from the $704.8 million recorded the same time last year. The table below shows sales recorded for the past eight updates of Parramatta Cityscope. Recent standout sales in Parramatta include: 80 George Street, Parramatta, two office buildings of 6 and 11 storeys with basement parking for 103 cars, was bought for $38.7 million. 44 Anderson Street, Parramatta, a single-storey building on a block with a site area of 2,016 sqm, was bought for $11.5 million. 96 Phillip Street, Parramatta, a four-storey building with basement parking for 23 cars was bought for $9.3 million. Properties for sale in Parramatta in June 2015 include: 267 Church Street, Parramatta, a two-storey brick building with ground floor retail is for sale through Khoury & Partners – Parramatta. The property last traded at $2.2 million in July 2006. 57 Church Street, a 1,992 sqm car yard with 2-storey building; 63 Church Street, a car yard with 3 storey office and showroom; 83 Church Street, a 6,854 sqm car yard with a single-storey sales office and 44 Early Street, a block of residential units not in Parramatta Cityscope , are for sale together as a development site through Colliers International Sydney West, and Matrix Property Group. The buildings are on a 14,287 sqm site. Significant leasing opportunities in Parramatta in June 2015 include: 130 George Street, Parramatta, a 14-storey office building including ground floor retail/showroom space and basement and on-grade parking for 332 cars, has office space of 1,480 to 4,440 sqm for lease through Colliers International Sydney West and Dexus Property Group. 88 Phillip Street, Parramatta, a six-storey office building with three levels of basement car parking for 113 cars has office space of 199 – 2,152 sqm for lease through Colliers International Sydney West. 240 Church Street, Parramatta, a two-storey retail building has retail space of 600 – 750 sqm for lease through Belroy Property Parramatta. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Australia’s largest and most expensive office tower

Recent transactions involving Barangaroo’s Tower 1 have valued the building at approximately $2 billion, making it Australia’s most expensive building. Lend Lease, as the Government’s choice of most preferred developer for Barangaroo, has placed the still to be built tower in a new commercial wholesale fund, the Lend Lease One International Towers Sydney Trust. Its $2 billion price tag is arrived at from the $1.4 billion of equity commitments and $600 million of debt financing. Lend Lease Trust will retain 37.5%, with the Qatar Investment Authority purchasing another 37.5% for about $525 million and the Australian Prime Property Fund Commercial APPF-C taking the remaining 25%. The QIA is Qatar’s sovereign wealth fund, specialising in domestic and foreign investment on behalf of its citizens. The APPF–C units are owned by Australian and overseas institutions and the fund is managed by Lend Lease Real Estate Investment Limited. Tower 1 is 48% leased with pre-commitments received from HSBC, Servcorp, Marsh & McLennan and PWC. The tower’s smaller neighbours, Towers 2 and 3, are 76 – 79% leased and their future tenants include Westpac, Gilbert & Tobin, KPMG and Lend Lease. The two towers have been placed in a fund, the Lend Lease International Towers Sydney Trust, of which 50% has been on-sold to the Canadian Pension Plan Investment Board at $1 billion, thereby valuing the smaller buildings at $2 billion together. Towers 2 and 3 are set to introduce an additional net lettable area into the Sydney commercial market of 89,000 and 78,000 sqm respectively. Tower 1, with a net lettable area of 100,000 sqm over 49 levels, is set to be not only Australia’s most expensive office building but also replace Melbourne’s Rialto Towers as the largest. Meredith Baume Commercial Research

Building approvals rebound and the pipeline of new construction keeps growing

The Australian Bureau of Statistics ABS released building approvals data for May 2015 yesterday. The data showed that dwelling approvals rose over the month following a fall over the previous month. Dwelling approvals remain at extremely high levels with May 2015 being the third highest month ever for approvals. In May 2015 there were 19,414 total dwelling approvals nationally. The number of approvals rose by 2.4% over the month and year-on-year approvals have increased by 17.6%. With 19,414 approvals over the month the number of approvals was just -2.9% lower than the record-high monthly number of approvals. The surge in approvals over the past year has resulted in a record-high number of approvals with 218,442 approvals over the past year, up 13.4% from the same time last year. Looking at house approvals versus unit approvals shows different trends. Over the month there were 9,375 houses and 10,039 units approved for construction. It was only the fourth time on record where more units were approved than houses over a month, three of which have occurred during 2015. Over the month, house approvals fell -8.5% however, this was offset by a 15.2% rise in unit approvals. Year-on-year house approvals have fallen by -2.8% however, unit approvals are 46.2% higher over the period. On an annual basis, a record high 47.0% of approvals were for units with 115,686 house approvals and 102,756 unit approvals. Given that a record-high 47.0% of all dwelling approvals were for units over the past year it is interesting to look at what type of units are being constructed. The above chart indicates that most of it is high-rise stock i.e. greater than 4 storeys . In fact, of the 47.0% of approvals that were for units, 63.1% were 4 storeys or higher. To put the rise in prevalence of high-rise unit development into context, five years ago just 32.3% of unit approvals were for high-rise stock. Similarly, there has been an ongoing decline in approvals for semi-detached product. Much of the building boom currently taking place is occurring across the capital city markets. In fact, 77.9% of all dwelling approvals nationally over the past year have been within a capital city market. There was a sharp rise in combined capital city dwelling approvals in May 2015, in fact it was the highest monthly number of approvals on record. Over the month there were 16,051 dwelling approvals across the combined capital cities. The number of approvals increased by 24.0% over the month to be 26.7% year-on-year. Over the past 12 months there has been a record-high 167,946 dwelling approvals which is a 17.1% annual rise. The annual number of dwelling approvals has now hit a record high in each of Sydney, Melbourne and Brisbane. These three capital cities accounted for 74.2% of all capital city dwelling approvals over the past year. Annual approvals have increased across most cities over the past year, the exceptions have been Darwin -11.5% and Canberra -16.9% . In all other capital cities the number of dwelling approvals have risen over the past year with rises recorded at 9.4% in Sydney, 28.8% in Melbourne, 28.1% in Brisbane, 5.2% in Adelaide, 11.4% in Perth and 43.7% in Hobart. Looking at the differential between houses and units, approvals for units are much more prevalent across the capital cities than they are at a national level. Over the month there were 6,491 capital city houses and 9,560 units approved for construction. The number of house approvals increased by 2.3% over the month but they were -5.5% lower year-on-year. Unit approvals were 44.8% higher over the month and 64.8% higher year-on-year. Over the past 12 months a record high 54.4% of all capital city dwelling approvals were for units. Over the year there were 76,558 houses approved +10.5% yoy and 91,388 units approved +23.2% yoy . Looking at the differential between houses and units, approvals for units are much more prevalent across the capital cities than they are at a national level. Over the month there were 6,491 capital city houses and 9,560 units approved for construction. The number of house approvals increased by 2.3% over the month but they were -5.5% lower year-on-year. Unit approvals were 44.8% higher over the month and 64.8% higher year-on-year. Over the past 12 months a record high 54.4% of all capital city dwelling approvals were for units. Over the year there were 76,558 houses approved +10.5% yoy and 91,388 units approved +23.2% yoy . Annual unit approvals have reached new record highs in Sydney 28,259 , Melbourne 32,980 and Brisbane 15,301 . The three largest capital cities have accounted for 83.8% of all capital city unit approvals. The annual number of unit approvals is higher over the year in most capital cities with Darwin -21.2% and Canberra -14.8% the exceptions. Across the remaining cities the annual increases in unit approvals were: 4.6% in Sydney, 42.8% in Melbourne, 32.4% in Brisbane, 30.4% in Adelaide, 37.6% in Perth and 74.8% in Hobart. Each of Sydney, Melbourne, Brisbane, Darwin and Canberra has approved more units than houses over the past year with the proportion of unit approvals at a record high in Melbourne and Brisbane. The data indicates that the heightened level of housing construction is persisting which is good news as the economy transitions away from mining investment. Housing construction has a significant multiplier effect throughout the economy. Although the heightened level of construction is positive for the economy, there are some concerns about heightened levels of housing investment and there is some cause for concern with the record high level of unit approvals. Of course lifestyle preferences are changing and more people want to live in inner city units. The challenge is that inner city units also tend to be targets for investors, while values are still rising demand will likely remain for most of these new projects. The challenge will be once value growth slows or values start to fall where will the buyers for this stock come from? Furthermore will recent investment purchasers look to exit the market and move to a more liquid investment class? This is of course crystal ball gazing but the record high level of unit construction should at least raise some alarm bells. Particularly when you consider that rental rates are growing at their slowest pace in more than 2 decades and the supply of new rental stock unit approvals is at record highs. Of course these potential risks have been mentioned a number of times over the past year by the Reserve Bank. Foreign demand for new inner city units is certainly playing a part in fulfilling some of the demand for new stock and we expect this to continue, in fact if the Australian dollar falls we will probably see greater demand from offshore. Our latest home values index results also highlight the impact of the heightened supply of unit stock. Across the combined capital cities house value growth is much stronger than unit value growth, recorded at 10.4% and 5.6% over the year respectively. Further highlighting the potential risk in unit markets was our recently released March 2015 quarter Pain & gain Report. The report showed that across Greater Melbourne, the Melbourne Council Area which is dominated by units had the highest proportion of loss-making resales across the city at 24.0% of all resales.

New listings are higher than one year ago and transactions have been trending upwards since 2012. As a result, stock is being absorbed faster and total listings are lower than at the same time last year across most cities

Over the four weeks ending 28 June 2015, there were 24,981 new residential listings added for sale across Australian capital cities. At the same time last year, over the corresponding four week period, 23,676 residential properties were newly listed for sale. That is a difference of 1,305 properties this year compared to last year. On the other hand, total stock levels across the combined capital cities show that currently there are 94,891 properties currently listed for sale. Looking back one year ago, there were 6,615 more properties actively listed for sale, with 101,506 residential homes on the market. The downward trend in overall stock levels, coupled with the upward trend in new listings can also be seen across the nation as a whole. Across the individual capital cities, new listings are higher over the year in Sydney 10.0 per cent , Melbourne 9.2 per cent , Brisbane 7.0 per cent , Hobart 5.8 per cent and Canberra 5.1 per cent , while Perth and Darwin are both showing new listings to be -5.3 per cent lower than at the same time last year and Adelaide, to a lesser extent, is also showing a year-on-year fall in new listings, down -1.7 per cent. On the other hand, Perth and Darwin continue to be the only two cities where total listings are higher than at the same time last year, showing that there is some underlying weakness across the two markets, with stock not being absorbed as quickly as across the other Australian cities. In terms of total listings the amount of stock available for sales is substantially lower than a year ago in Sydney -19.1 per cent , Melbourne -14.6 per cent and Canberra -13.7 per cent . As mentioned, total listings are substantially higher than a year ago in Perth and Darwin. In terms of the number of listings, there are fewer homes available for sale currently in each of Melbourne, Brisbane and Perth than there are in Sydney. This further highlights the supply-side pressures in Sydney which are leading to strong levels of growth in home values. Currently, there are 233,336 residential properties on the market across Australia, with overall listing volumes -3.9 per cent lower than they were last year. In New South Wales, Victoria and the Australian Capital Territory, listings volumes are more than 9 per cent lower than one year ago, while across Queensland, South Australia and Tasmania, volumes are relatively stable when compared to one year ago. Again, as seen across the capital cities, Western Australia and the Northern Territory are both currently seeing more residential properties available for sale than there were at the same time last year.

Outlook for 2015-16 financial year

So where have we been? Over the first 11 months of the 2014-15 financial year, combined capital city home values have risen by 7.5% according to the CoreLogic RP Data Home Value Index. The Index is weighted based on the number of dwellings in each city and looking more closely at the results only Sydney and Melbourne have recorded value rises of more than 4.5% while values are lower in Perth and Hobart. Sydney has been the powerhouse of growth over the current phase, trailed by Melbourne. Meanwhile, the remaining capital cities have recorded very little capital growth despite the very accommodative monetary policy settings. Unsurprisingly, Sydney and Melbourne are also seeing relatively stronger economic conditions and are benefitting from both interstate and overseas migration, as well as the highest levels of interest from offshore investment. Over the past year we have seen the housing market become a much more prevalent topic of discussion. Although there is still no Federal Housing Minister we have seen a number of parliamentary inquiries into housing. We have also seen a number of pointed warnings about the heat in the Sydney and Melbourne housing markets from both the Reserve Bank and the Australian Prudential Regulation Authority APRA . In December 2014 APRA wrote to Australian financial institutions re-iterating what sound lending practices look like and highlighted potential changes for these institutions in the event that these prudent measures weren’t being adhered to. Since then we’ve seen a number of changes to lending practices by lenders. Where are we headed? Looking at what the next 12 months is likely to hold the expectation is that mortgage rates will remain low however; with lenders changing their lending policies, accessing a mortgage may become more difficult. After three years of strong value growth in Sydney and Melbourne we expect growth to continue however, it should start to slow over the year especially as housing supply continues to trend beyond the current record highs. We are already seeing signs of growth in other markets around the country particularly areas like Newcastle and Wollongong adjacent to Sydney as well as certain pockets in Brisbane and the Gold and Sunshine Coasts. We would expect the dramatic differential in affordability in these areas relative to Sydney and Melbourne will drive more buyers to these areas. On the other hand we are seeing significant signs of weakness in both the Perth and Darwin housing markets along with many of the regional markets linked to the resources sector. These markets are characterised by: slowing value growth or falling home values, falling rental rates, declining sales, increasing discounting levels and time on market and an increase in properties available for sale. Overall, it looks as though housing market conditions will remain mixed across the country over the next 12 months. Sydney and Melbourne are likely to continue to be the stand-outs for capital growth however; we expect that over the year the rate of growth will reduce back to more sustainable levels. We may also see a further pick-up in growth in markets such as Brisbane, Newcastle, Wollongong and the Gold and Sunshine Coast. Growth in markets such as Adelaide, Hobart and Canberra is likely to remain contained while weakness in mining areas and Perth and Darwin is likely to persist. Happy EOFY.

Week-on-week results show auction volumes remain steady, while the auction clearance rate rises

A preliminary auction clearance rate of 78.0 per cent was recorded across the combined capital cities this week having increased from 77.3 per cent last week. There were 1,777 auction results reported this week with a total of 2,205 scheduled auctions showing that auction volumes have remained virtually unchanged when compared to the previous week 2,268 . In comparison, over the same week last year 66.6 per cent of the 1,991 homes taken to auction sold. The preliminary auction clearance rate across Melbourne was 78.5 per cent this week, down from the previous weeks final result of 79.3 per cent and stronger than at the same time last year 68.3 per cent . So far this year, Melbourne’s weekly auction clearance rate has been, on average, 10.6 per cent higher than over the comparable week one year ago. Across Melbourne’s individual sub-regions, the strongest preliminary clearance rate this week was across the North East region at 85.8 per cent, followed closely by the Inner East region where the preliminary clearance rate was 85 per cent. There were 887 Sydney homes taken to auction this week and a preliminary clearance rate of 83.5 per cent across 747 results. Over the previous week, the final auction clearance rate was 82.4 per cent with 862 auctions held across the city. At the same time last year, 71.1 per cent of the 861 homes taken to auction recorded a successful result. This week, the strongest sub-region performance across Sydney’s sub-regions was the Ryde region, with 90.6 per cent of the reported results clearing at auction. Brisbane’s preliminary clearance rate was 51.1 per cent this week, compared to 52.2 per cent last week and 42.2 per cent at the same time last year. Across Brisbane, a total of 140 auctions were held this week which is higher than last week 128 , but lower than at the same time last year 153 . Adelaide hosted 81 auctions this week and across the 48 reported results, CoreLogic RP Data’s preliminary auction clearance rate is 70.8 per cent. Last week, Adelaide’s clearance rate was 63.5 per cent across 83 auctions in the city, while at the same time last year 62.7 per cent of the 79 homes taken to auction were sold. For Perth, the number of homes taken to auction this week was 29, less than last week 47 and last year 39 . Meanwhile, Perth’s clearance rate of 57.1 per cent this week was higher than last week 38.9 per cent and last year 50.0 per cent . Across Canberra 72 homes were taken to auction this week and the preliminary clearance rate across 32 auctions was 81.3 per cent. There were 22 auctions across Tasmania this week, with 10 successful results out of the 20 reported.

Australia’s rate of population growth continues to slow

The Australian Bureau of Statistics ABS released demographic data for the December 2014 quarter yesterday. The data highlighted a continuing slowdown in the rate of national population growth, with the quarterly increase now lower than slump in population growth recorded during the GFC. In particular the mining states and territories are recording the biggest slowdown in population growth fueled by a slowdown in both interstate and overseas migration. The data showed that throughout 2014 Australia added another 330,202 persons. Although this is still a relatively high rate of population growth, it is the lowest annual increase in population since the population increased by 327,637 persons over the 12 months to September 2011. Over the final quarter of the year the national population increased by 64,010 persons which was its lowest quarterly increase since June 2006 52,834 . At a national level population growth is comprised of overseas migration arrivals minus departures and natural increase births minus deaths , any interstate migration is neutral at a national level. Over the past year, the country experienced a natural increase of 146,067 persons and net overseas migration of 184,135 persons. The rate of annual natural increase is at its lowest level since December 2006 139,793 and annual net overseas migration is at its lowest level since June 2011 180,372 . On a quarterly basis, natural increase was recorded at 36,517 persons its lowest level since December 2006 and net overseas migration was recorded at 46,034 persons its lowest level since June 2011 . With the national population increasing by 330,202 persons over the past year, the majority of population growth has taken place in the largest states. NSW 31.2% and Vic 30.7% accounted for a combined 61.9% of national population growth. If you add Qld 19.4% and WA 12.1% the four largest states accounted for 93.5% of national population growth over the year. As far as the rate of population growth goes, for the first time since September 2006 WA is no longer the state with the most rapid rate of population growth with Vic taking over the mantle. Vic’s population increased by 1.8% over the year followed by: WA 1.6% , NSW and Qld both 1.4% , ACT 1.1% , SA 0.9% , NT 0.4% and Tas 0.3% . Qld, WA and NT in particular are seeing the impact of the mining downturn with fewer workers required in these states as the pipeline of major infrastructure projects winds down translating into slower population growth. Two years ago these states were recording annual population growth of 2.0% in Qld, 3.7% in WA and 2.8% in NT. Net overseas migration has been slowing at a national level and as the above chart shows, all states are experiencing a fall in net overseas migration. The full brunt of the slowdown in net overseas migration is once again being felt by the resource states. Annual net overseas migration is -30.9% lower in Qld, -47.6% lower in WA and -56.0% lower in NT. All other states except for NSW +1.9% and ACT +4.1% have recorded a fall in net overseas migration over the year, but nowhere near the extent of the mining states and territories. The declines in these states were recorded at -4.2% in Vic, -9.0% in SA and -2.9% in Tas. The data also highlights that overseas migrants have a clear preference to settle in the larger states. Over the past year, 37.9% of net migration occurred in NSW with a further 30.4% in Vic, 13.2% in Qld and 10.3% in WA. At a national level net interstate migration has no impact however, it does have a significant impact across individual states. Over the 12 months to December 2014, there were 335,256 interstate movements across the Australian states. Historically Qld has attracted as high number of interstate migrants however; net interstate migration to the state has slowed sharply over recent years. Across the states, Vic now attracts the most net interstate migrants 9,336 followed by Qld 5,598 and these are the only two states that have recorded a net gain in interstate migration over the year. Vic’s net gain from interstate migration is a record high while migration to Qld is at its lowest level on record. The net outflow of residents from the remaining states was recorded at: -5,572 persons in NSW, -2,744 in SA, -400 in WA, -1,278 in Tas, -3,392 in NT and -1,548 in ACT. Despite the net outflow, the net number of residents leaving NSW is at a record low. On the other hand the loss of residents from WA is the largest since September 2003 and the outflow from NT is the largest on record. In terms of natural increase the states with the largest overall populations also have the greatest natural increase. There has been a sharp decline in natural increase in NSW over the past few years while natural increase is trending higher in WA. The state-by-state shares of natural increase are: 26.5% in NSW, 24.8% in Vic, 23.5% in Qld, 4.9% in SA, 14.8% in WA, 1.0% in Tas, 2.0% in NT and 2.6% in ACT. The demographic data highlights challenges for the Australian economy and individual states. Gross domestic product has been slowing and is much lower on a per capita basis. With population growth slowing and set to slow further in coming quarters as foreshadowed in the monthly overseas arrivals and departures data this poses a challenge for the national economy. The resource states in particular are being impacted as they are attracting fewer migrants from both interstate and overseas. Conversely, NSW and Vic which are a proxy for Sydney and Melbourne are the places that both domestic and international migrants want to head to. This in turn fuels demand for housing, creates the need for more jobs and requires more spending on infrastructure. To-date it doesn’t look as if the sharp rises in home values in Sydney and to a lesser degree Melbourne over recent years is stopping migrants heading to these areas. You would have to think that at some point this will change but no one has a crystal ball to know exactly when that inflection point will occur. Particularly given how low the cost of debt currently is with interest rates so low, furthermore rental pressures are easing given already high new housing construction and a record high pipeline of approvals to potentially follow.

Auction volumes higher in 2015 compared to 2014, with last weekâ

CoreLogic RP Data National Auction Preview, week ending 28 June 2015 CoreLogic RP Data is currently expecting 2,255 capital city auctions this week, which is higher than at the same time last year 1,991 and similar to the number of homes taken to auction across Australia’s capital cities last week 2,268 . Last week saw the final auction clearance rate rise from 75.9 per cent the previous week to 77.3 per cent, which is much higher than one year ago 65.4 per cent . Across Melbourne, Australia’s largest auction market, CoreLogic RP Data is currently expecting 1,009 auctions, compared to 1,084 last week and 811 one year ago. Last week, 79.3 per cent of Melbourne homes taken to auction recorded a successful result, compared to 68.3 per cent last year. Sydney is still maintaining a clearance rate above the 80 per cent mark; however auction results have been slightly softer over the most recent couple of weeks, indicating a slight easing in demand compared to the record strong results seen since mid-April. Despite this, Sydney’s clearance rate is consistently higher than all other major capital city auction markets. Last week’s clearance rate of 82.4 per cent was down from 83.4 per cent the previous week, but remains much higher than over the same week last year 71.1 per cent . This week, there are 909 Sydney homes scheduled for auction, up from 862 last week and 861 at the same time last year. This week there are 141 Brisbane auctions, compared to 128 last week and 153 over the same week last year. Last week, Brisbane recorded the strongest clearance rate so far for June 2015, at 52.2 per cent, which is also higher than one year ago 42.2 per cent . In Adelaide, 75 auction properties are being monitored this week, slightly down on the 83 last week and 79 at the same time last year. Adelaide’s auction clearance rate last week was 63.5 per cent, similar to one year earlier, when the cities clearance rate was 62.7 per cent. Across Canberra there are 71 scheduled auctions this week, a high number for the city and much higher than both last week 52 and one year ago 35 . Over the past two weeks, Canberra’s clearance rate has been recorded above the 68 per cent mark, while one year ago the cities clearance rate was 58.1 per cent. Perth has 30 homes scheduled for auction this week, down from 47 last week and 39 at the same time last year. Across the individual suburbs of Australia, Balwyn North 21 , Glen Waverley 18 , Kew and Mount Waverley both with 17 all in Victoria have the highest number of auctions scheduled this week.

Biggest Commercial Sale for 2015

The Dexus Property Group has added to its Brisbane office portfolio through the purchase of Waterfront Place at 1 Eagle Street, Brisbane and the Eagle Street Pier at 45 Eagle Street, Brisbane. The sale, at $635 million, was arranged by CBRE Brisbane and JLL Brisbane. Vendors of Waterfront Place, each with a half share, were Future Fund and Stockland Trust. Future Fund was established by the Australian Federal Government in 2006 to assist future Australian Governments to meet the cost of superannuation liabilities. Stockland Trust is a diversified property group with units stapled to shares in Stockland Corporation Ltd and traded on the stock exchange. Dexus, who will now have 14.2% of its office portfolio in the Brisbane CBD, is one of Australia’s largest listed owner and manager of Australian office properties. Dexus is purchasing the properties in partnership with the Dexus Wholesale Property Fund, a $5.5 billion unlisted property fund which owns interests in a diversified portfolio of office, industrial and retail properties throughout Australia. According to Brisbane Cityscope, Waterfront Place is a 36-level, 162-metre office tower completed in mid-1990. The building comprises 36 office floors and two basement levels of tenant and visitor car parking, with 494 car spaces. It has a net lettable area of almost 60,000 sqm and a 5-star NABERS rating. The building is well leased and its major tenants include BankWest, BHP Billiton, BlackRock, Commonwealth Parliamentary Offices and the Honorable Bill Hayden A.C. Eagle Street Pier is a 2-storey retail centre with numerous hospitality/tourism tenants including Matt Moran’s Aria Restaurant, Bavarian Bier Café, The Coffee Club and Kookaburra River Queens river boat tours. The properties last traded as a whole at a total of $307 million in 2004. The current sale, at $635 million, represents an initial yield of 6.3% and values the properties at $9,664 a square metre. Meredith Baume Commercial Research Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results – Week ending 19 June 2015

Auction volumes increased last week, with 31 commercial auction results reported and a preliminary clearance rate of 54.8 per cent. In comparison, the final auction clearance rate over the previous week was just 27.3 per cent across 22 auctions. At the same time last year, there were 49 commercial auctions reported over the week with a success rate of 67.4 per cent. Over the most recent four week period, a total of 170 commercial auctions have been reported with 94 sales. Of these 94 sales, 59 have been reported with a sale price, totalling slightly over $108.9 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – South Sydney Cityscope

The latest research from South Sydney Cityscope shows property sales have decreased in both volume and value for the quarter ending June 2015. There were 81 sales recorded for the most recent quarter at a total value of $269.8 million, compared to 161 sales at a total value of $464.8 million for the quarter ending March 2015. The most recent quarter’s sales compare favourably with the quarter ending December 2014, however, when there were 60 sales recorded at a total value of $241.7 million. The 12-month totals for the year ending June 2015 have increased, with 348 sales at a total value of $1,418.7 billion, compared to 239 sales at a total value of $1,018 billion for the previous year. The table below shows sales recorded for the past eight updates of South Sydney Cityscope. Notable sales in the areas covered by South Sydney Cityscope in the June 2015 update include: A 17,900-sqm area in the proposed Green Square Town Centre development at 105 – 115 Portman Street, Zetland, which sold for $82 million; A 93,810-sqm area of vacant land at Coal Pier Road, Banksmeadow, which sold for $33.1 million; and A large high-clearance warehouse with parking for 75 vehicles at 2 Baker Street, Banksmeadow, which sold for $20.34 million. Properties for sale in South Sydney Cityscope in June 2015 include: A 1.35-hectare area in the proposed Green Square Town Centre development, known as Southern Precinct/Stage 4, at 377 – 397 Botany Road, Zetland, available through JLL Sydney; Two warehouses on a 11,470-sqm site with parking for 30 vehicles at 1 – 3 Ricketty Street, Mascot, available through Knight Frank; and A high-clearance warehouse with office space at 683 Gardeners Road, Mascot, and another high-clearance warehouse with office space at 671 – 675 Gardeners Road, Mascot, are available together as a development site through Colliers International. Leasing opportunities in South Sydney Cityscope in June 2015 include: PortAir Industrial Estate, a complex of ten high-clearance warehouses at 1A Hale Street, Botany, which has industrial space of 2,000 to 20,000 sqm available through Goodman International and Colliers International South Sydney; Gateway 241, a 12-storey office building at 241 O’Riordan Street, Mascot, which has 261 to 13,727 sqm available through Colliers International South Sydney; and Botany Grove Business Park, a complex of five high-clearance warehouses at 14A Baker Street, Banksmeadow, which has 2,033 to 7,524 sqm available through Colliers International South Sydney and Goodman International. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Gold Coast Cityscope

The latest research from Gold Coast Cityscope shows property sale figures have significantly decreased in the past three months, but sale numbers have remained generally consistent. Sales recorded in the three months to June 2015 recorded 43 sales for a total of $86.3 million. Of this, $55 million was for commercial, $7.9 million was for commercial strata, $8.6 million was for retail, $5.6 million was for retail strata and $9.1 million was for other. In comparison, the three months to March 2015 recorded 46 sales for a total of $235.8 million. Of this, $12.3 million was for commercial, $4.9 million was for commercial strata, $127 million was for retail, $18.6 million was for retail strata and $73 million was for other. The latest data raises the 12 month total to over $471.6 million; more than double the previous 12 month period. The table below shows sales recorded for the past eight updates of Gold Coast Cityscope: The most significant sales recorded this quarter together totalled over $58 million. Foxtel Building formerly Austar Building , a six-level commercial building with a total of 268 car parking spaces on the ground 111 car parks and basement levels 157 car parks ; built 2001. Bought for $46 million by Centuria Metropolitan REIT. Christian Sandstrom and Seb Turnbull from JLL sold the property in conjunction with Mark Witheriff, Justin Bond and Ben McGrath of Knight Frank. The sale represented an initial yield of 8% on a passing net income of $3.68 million and a cap rate of 7.8%. Trust House, 3074 Surfers Paradise Boulevard, Surfers Paradise. A four-storey office/retail building. Sold at auction on June 18, 2015 for $4.35 million. Michael Willems and Steven King of Ray White Commercial Gold Coast negotiated the sale, which was a court ordered trustee sale. 16 Griffith Street to 22 Griffith Street, Coolangatta. A single-storey shop and a two-storey building with three ground floor shops and upper level residential space. Both buildings sold separately to Jack & Miriam Freeman and Freda & Hiro Pamamull for $3.95 million each . Properties currently listed for sale include: Karingal Place, 40 Griffith Street, Coolangatta – a two-storey, 368 sqm, retail/office building. For sale by expressions of interest, closing July 8, 2015; agent, Alpha Property Network Neil Johnson . The property was advertised with an annual income of around $130,000. Unit 30205, Southport Central Red Tower, 27 Garden Street, Southport – a 159 sqm unit on level 2. Scheduled for auction on July 9, 2015; agents, Ray White Commercial Southport Wayne Devenport and Ray White Commercial Gold Coast Brad Merkur . Granton House, 36 Nerang Street, Southport – a two-storey retail/office building. Scheduled for auction on July 9, 2015; agent, Ray White Commercial Southport Martin Trautmann and Wayne Devenport . Properties currently under contract conditionally or unconditionally include: 10 Energy Circuit, Robina – a warehouse and associated car parking, tenanted by Bounce Inc. Under contract following an expressions of interest campaign which closed October 30, 2014; agent, Wright Property Josh Wright and Corey Bolt . The property was advertised with a return of $534,200 per annum net. 3 Trickett Street, Surfers Paradise – the former Iluka site, now a 3,494 sqm vacant site. Under contract unconditionally for around $65 million to interests associated with Forise Holdings Group; agent, Canford Property Group Roland Evans . Commerce House, 113 Scarborough Street, Southport – a 2-storey, strata titled commercial/retail building. Under contract unconditionally with settlement expected June 29, 2015; agent, Hoad Commercial Elizabeth Hoad . CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Christchurch Cityscope

The latest research from Christchurch Cityscope shows that commercial sales activity in Christchurch has increased in the past three months. Sales recorded in the three months to June 2015 totalled $38 million, an increase from the quarter ending March 2015 when sales totalled $29.8 million but a decrease from the quarter ending December 2014 when sales totalled $74.7 million. The latest data brings the twelve-month sale total to $182.4 million, a decrease from the previous 12 months when sales totalled $315.3 million. The table below shows sales recorded for the past eight updates of Christchurch Cityscope: Recent notable sales include: The Pacific Tower Apartments at 164-166 Gloucester Street, a 23-level apartment building, 15 storeys of which are occupied by the four-and-a-half-star Rendez Vous Hotel, was bought for $20 million. Vacant land with a site area of 1,643 sqm at 158 Hereford Street was bought for $6,107,500. Vacant land being used as a car park, at 199-201 Madras Street, with a site area of 2,036 sqm was bought for $2.5 million. Properties for sale in Christchurch in June 2015 include: Pentax House, at 124-126 Peterborough Street, a three-storey plus mezzanine besser-brick building with a net lettable area of 668 sqm and a site area of 424 sqm is for sale through Cowdy and Ray White Commercial. Vacant cleared land at 174 High Street with a site area of 172 sqm is for sale through MB Cook. Worcester Chambers, at 69 Worcester Street, a 2-storey historic brick office building with a net lettable area of 740 sqm is for sale through CBRE. Significant leasing opportunities in Christchurch in June 2015 include: Office space of 685 sqm in a new development at 47 Hereford Street in a new development is available for pre-lease through Whalan and Partners Ltd, NAI Harcourts Christchurch and Bayleys Canterbury-Commercial. Office space from 140 – 1,248 sqm in a proposed development at 167 Victoria Street available for pre-lease through Cowdy & Co Ltd and Bayleys Canterbury-Commercial and JLL Christchurch. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

1 in 10 capital city home sales over the past year were over $1 million

Sales data over the 12 months to March 2015 shows that there have been fewer homes sold across the combined capital cities for less than $200,000 than there have been homes sold for more than $1 million. As you would expect there is a growing proportion of sales in excess of $1 million in Sydney and Melbourne while homes selling for less than $200,000 are almost exclusively found in Hobart and Adelaide. Over the 12 months to March 2015, a record low 6.1% of capital city home sales were below $200,000 and 31.8%sold for between $200,000 and $400,000, the lowest proportion since the 12 months to October 2001. While we are seeing a decline in sales at the lower price points, predictably more expensive sales are increasing. Over the 12 months to March 2015, 10.0% of all homes sold across the combined capital cities sold for more than $1 million, a record high. As we will discover the proportion of homes selling in excess of $1 million is substantially higher within cities such as Sydney and Melbourne. Sydney Over the 12 months to March 2015, a record low 8.9% of Sydney houses sold for less than $400,000 compared to a record high 34.0% of houses selling above $1 million. The remaining 59.2% occurred between $400,000 and $1 million. For the unit market, a record low 18.6% of sales were below $400,000 whilst there was a record high 71.1% between $400,000 and 1 million and a record 10.3% above $1 million. The impact of a surge in home values over the past year is being felt at the lower end of the market with a sharp drop in sales below $400,000 for both houses and units over the past year. Melbourne 24.5% of Melbourne houses and 36.9% of Melbourne units sold for less than $400,000 over the 12 months to March 2015. In comparison, 16.5% of houses and 5.1% of units sold for more than $1 million. For houses, the proportion of sales below $400,000 was at a record low while it was just shy of a record low for units. Conversely, both houses and units logged a record high proportion of sales over $1 million. Like Sydney, the impact of the value rises over recent years is being felt most at the lower-end of the housing market with a sharp decline in sales below $400,000. This is highlighted both by the table above which shows a sharp drop in sales below $400,000 over the past 20 years. Unlike Sydney, finding more affordable housing options is relatively easier in Melbourne with almost 1 in 4 houses and more than a third of units selling for less than $400,000. Brisbane Across all sales, 30.6% of houses and 52.5% of units transacted in Brisbane over the year to March 2015 sold for less than $400,000. The proportion of houses sold for less than $400,000 was at a record low while the proportion for units was lower in the middle of last year. House sales in excess of $1 million were at a record high 5.9% over the past year while the 2.3% of unit sales over $1 million is still a way off the record high 3.1% in early 2011. Brisbane has seen fairly moderate value growth over recent years however, we are still seeing an erosion in sales at the lower end of the market, albeit the deterioration is moderate compared to Sydney and Melbourne. 10 years ago, almost three quarters of houses and more than 4 out of every 5 unit sales was below $400,000, as the above table shows there has been a marked shift over the past decade to fewer lower priced sales. Relative to Sydney and Melbourne properties selling for less than $400,000 are much more common across Brisbane. Adelaide Over the 12 months to March 2015 45.3% of Adelaide houses and 65.9% of units sold for less than $400,000. The proportion of houses and units sold for less than $400,000 was at a record low over the past 12 months however, lower priced housing stock is much more readily available than across all other mainland capital cities. While sales at a lower price point are falling, a record high 4.7% of houses sold for more than $1 million over the past year. For units, 2.6% of all sales were over $1 million which was lower than the 3.5% recorded in mid-2008. Value growth across Adelaide has been limited since the financial crisis, nevertheless the proportion of homes selling for less than $400,000 has continued to decline. Adelaide offers much more affordable housing options than all other mainland capital cities. Perth 15.1% of Perth houses and 37.7% of Perth units sold for less than $400,000 over the 12 months to March 2015. In comparison, 10.8% of Perth houses and 4.2% of units sold for more than $1 million over the past year. The proportion of houses and units selling for below $400,000 is above the record-low of 14.7% and 36.9% respectively both of which occurred over the past year. The climb in more affordable sales over recent months is likely to be reflective of the fact that value growth has hit a stand-still in Perth over the past 12 months. Furthermore, new supply of homes is at close to record highs across the city currently. Perth has recorded one of the strongest capital growth rates over the past decade and as a result there has been a substantial decline in the proportion of homes selling for less than $400,000. This is highlighted by the fact that 10 years ago 81.7% of Perth houses and 88.0% of units sold for less than $400,000. In fact, Perth currently has fewer house sales below $400,000 than all capital cities except for Sydney and Canberra. Hobart Hobart is the nation’s most affordable capital city and also sees an overwhelmingly larger proportion of lower priced house and unit sales. Over the 12 months to March 2015, 61.4% of Hobart houses and 82.0% of units sold for less than $400,000. Hobart is the only capital city in which a majority of houses have sold for less than $400,000 over the past year. Subsequently, relatively few homes sell for over $1 million with just 1.5% of all house sales and 1.7% of unit sales over that price point. Hobart’s housing market has seen very little growth in home values over the past 10 years yet there has still been a fairly substantial decline in house sales below $400,000 while unit sales below $400,000 have seen little change. 10 years ago, 86.9% of all house sales were less than $400,000 and 88.5% of unit sales sat within that price point. Darwin Darwin has recorded the strongest value growth of all capital cities over the past decade; as a result it has shifted from being one of the most affordable capital cities to now being one of the most expensive. Over the 12 months to March 2015, 20.8% of houses and 28.8% of units sold for less than $400,000. Alternatively, 6.3% of houses and 4.8% of units in the city sold for more than $1 million. The proportion of houses selling for less than $400,000 has started to trend higher over recent months as values have fallen while unit sales below $400,000 are at a record low. The proportion of sales above $1 million is below its record high for houses and units with the record high coming for houses over the past year and in late 2010 for units. With value growth in Darwin the strongest of all capital cities over the past decade, the decline in the availability of more affordable housing is clear. Around 1 in 5 house sales nowadays are below $400,000 compared to 9 out of 10 a decade ago. For units, just over 1 in 4 sales nowadays are below $400,000 compared to more than 9 in 10 a decade ago. Canberra Over the 12 months to March 2015, 7.8% of Canberra houses and 42.3% of Canberra units sold for less than $400,000. On the other hand, 5.9% of house sales and 2.4% of unit sales were for more than $1 million over the year. The proportion of houses selling for less than $400,000 is currently at a record low while unit sales below $400,000 reached their low point throughout the past year at 39.7%. The number of houses selling over $1 million is below its peak of 6.2% a couple of months earlier, as are unit sales at this price point. Although home value growth in Canberra has been moderate over the past 5 years, there’s been a fairly substantial fall in sales below $400,000 over that time. 5 years ago, 23.2% of Canberra houses and 56.7% of units were sold for less than $400,000. The data shows that whether you look at interest rates, household incomes or any other factor that can influence affordability; we have seen a sharp decline in homes selling at a lower price point in over the past decade. Of course, even a home priced at $400,000 won’t be cheap enough for some potential home buyers. It is to be expected that the cost of housing rises over time however, there are social issues surrounding the sharp decline in lower priced homes. The result is that more people have to choose to rent or alternatively they have to move away from our capital cities or to smaller capital cities. Of course, finding employment in smaller capital cities and regional markets can be more difficult. Anecdotally we are also hearing that in markets such as Sydney and Melbourne first time buyers are purchasing investment properties rather than owner occupied properties for their first home. We also hear that a number are purchasing investment properties outside of these two cities where you can seemingly get better value for money. Of course, in most markets outside of Sydney and Melbourne the economies are currently weaker and capital growth has been much more moderate. Housing affordability is a very individualistic issue however; the data contained here shows that housing at a lower price is becoming much harder to come by, particularly in our larger capital cities.

Preliminary auction results show 77.7 per cent of homes sold at auction

This week, 2,207 auctions were held across Australia’s capital cities with a combined capital city weighted clearance rate of 77.7 per cent across 1,803 reported results. In comparison, a softer result was recorded last week when the final clearance rate of 75.9 per cent was reported. Last week’s clearance rate was the lowest clearance rate across the combined capitals since mid-March this year. Current clearance rates continue to track at levels much higher than last year, when over the same week one year ago 65.4 per cent of homes taken to auction were sold. Melbourne’s preliminary auction clearance rate was recorded at 79.2 per cent this week, with 1,047 properties taken to auction and 909 results recorded so far. In comparison, over the previous week, Melbourne’s clearance rate was 77.7 per cent across 947 auctions, while one year ago 69.1 per cent of Melbourne auctions were successful. This week, the strongest clearance rate across Melbourne was recorded in the North East sub region, where 88.7 per cent of the 89 auctions reported were successful. The preliminary auction clearance rate for Sydney was recorded at 83.9 per cent this week, compared to 83.4 per cent last week and 70.1 per cent over the previous week. There were 847 Sydney homes taken to auction this week, up from 816 the previous week and 785 at the same time last year. Across the individual sub-regions of Sydney, the strongest performance this week was recorded across the Ryde region, with 45 results reported and a clearance rate of 88.8 per cent. Following on from this, the Eastern Suburbs, City and Inner South, Baulkham Hills and Hawkesbury and Inner West regions all recorded a clearance rate of above 87.0 per cent. For Brisbane, the number of homes taken to auction this week was 122, down from 135 last week and 141 at the same time last year. In comparison this week’s clearance rate rose from 45.5 per cent last week to 55.4 per cent this week, both of which were stronger than the 32.2 per cent recorded over the same week last year. Across the Gold Coast, 47.2 per cent of the reported auctions have sold. Adelaide’s preliminary auction clearance rate was 62.3 per cent this week, in comparison to last week’s final result of 58.7 per cent and 59.7 per cent one year ago. There were 81 Adelaide auctions this week, 87 last week and 74 held over the comparable week last year. Across Perth, the preliminary clearance rate was 26.3 per cent this week, down from 31.0 per cent last week, and 29.0 per cent at the same time last year. 45 Perth homes were taken to auction over the week, compared to only 32 last week. In Canberra, 53 auctions were held this week with a 67.5 per cent success rate. There were 12 Tasmanian auctions this week; so far 6 results have been reported with 5 transactions.

Old Schweppes building sold for $10.75 million

The former Schweppes building at 65-67 Foveaux Street, Surry Hills, has sold for $10.75 million to a private investor. The sale reflects a net yield of 6.4% at a passing income of $688,000. The Australian based investor purchased the property following an expression of interest campaign conducted by Andy Hu and Dominic Ong of Knight Frank and Tom Speakman and Romain Saussey of Gunning Commercial. The property attracted interest from Hong Kong, South Korean and Indian investors and also from local property syndicates, funds and investors. According to East Sydney Cityscope, the property is a 4-storey brick retail and commercial building and has extensive 1903 alterations and additions by architect T. W Hodgson. In 2006, extensive internal alterations were completed by Trico Constructions. The ground floor is occupied Foveaux Restaurant & Bar with a lease until February 2017. Office tenants on the upper levels include Wella Studio, Benchmarque Recruitment Services and The Holla Agency. Brendon Wood Data Integration Manager – Commercial Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Over 2,000 capital city auctions expected this week

CoreLogic RP Data National Auction Preview, week ending 21 June 2015 There are 2,050 capital city auctions expected across the capital cities this week, similar to the number held last week 2,076 when the final auction clearance rate was recorded at 75.9 per cent, the softest result across the combined capital cities since March this year. At the same time last year, 2,040 residential auctions were held and the clearance rate over the week was recorded at 65.4 per cent. Melbourne is expecting 959 auctions this week, an increase from 947 last week and higher than the 946 at the same time last year. Last week, Melbourne’s final auction clearance rate was recorded at 77.7 per cent, which is much higher than one year ago 69.1 per cent , however it is the lowest clearance rate for the city in 9 weeks. This week, there are 799 Sydney homes scheduled for auction, compared to 816 last week and 785 over the previous week. Sydney’s clearance rate was down last week, from 88.7 per cent the previous week to 83.4 per cent, while in comparison, the clearance rate for the city last year was 70.1 per cent. Sydney’s year to date clearance rate is 84.9 per cent, while over the same period last year, the clearance rate for the city was tracking at 75.0 per cent. On the other hand, auction volumes this year are slightly lower than they were last year. Across Brisbane, CoreLogic RP Data is currently expecting 114 auctions this week, compared with 135 last week and 141 last year. Brisbane’s clearance rate last week was 45.5 per cent, while one year ago, 32.2 per cent of homes taken to auction were sold. There are currently 76 Adelaide homes scheduled for auction this week, slightly lower than the 87 last week and tracking at a similar level as the same time last year when 74 auctions were held across the city. Adelaide’s clearance rate last week was 58.7 per cent, having fallen from 71.2 per cent the previous week. Canberra has 51 scheduled auctions this week, compared to 53 last week and 35 at the same time last year. Across Perth, 40 homes are set for auction over the current week, increasing from 32 last week and slightly lower than one year ago 45 . Across Australia’s individual suburbs, the highest volume of auctions this week will be held in Balwyn North, Glen Waverley and Richmond Vic .

Commercial Market Update – Canberra Cityscope

The latest research from Canberra Cityscope shows property sales have increased in the past three months. Sales recorded in the quarter ending June 2015 totalled $149.8 million, an increase from the $6 million recorded in the three months to March 2015, and an increase from the $97.6 million recorded to December 2014. This data brings the 12 month total to $334.6 million a decrease from the $404.2 million recorded the same time last year. The table below shows sales recorded for the past eight updates of Canberra Cityscope. Recent standout sales in Canberra include: The Novotel Canberra and the Jolimont Centre at 65 Northbourne Avenue, City, a six-storey building; comprising a 286-room hotel in the upper levels, a bus terminal on ground level , and basement parking, was bought for $77.3 million. St George Building at 60 Marcus Clarke Street, City, two 13-storey office buildings with net lettable office area of 12,205 sqm and parking for 133 cars, was bought for $49.1 million in a sale handled by Colliers International and CBRE. 54 Marcus Clarke Street, City an 8-storey, 5,157 sqm, office building with parking for 53 cars, was bought for $14.2 million in a sale handled by Colliers International and CBRE. Properties for sale in Canberra in June 2015 include: Scarborough House at 8 Atlantic Street, Woden, a 14-storey, 16,782 sqm, office building with parking for 47 cars, is for sale through JLL Canberra. 40 Cameron Avenue, Belconnen, a 5-storey, 15,338 sqm, office building with parking for 45 cars, is for sale through Colliers International Canberra. The property was valued at $42.7 million in June 2014 at a capitalization rate of 10.5 per cent. 20 Allara Street, City, an 11-storey, 13,948 sqm, office, is for sale through Knight Frank and Colliers International. The property last traded at $23.2 million in February 2004. Significant leasing opportunities in Canberra in June 2015 include: 2 Constitution Avenue, City, a 7-storey, 19,835 sqm, office building with parking for 203 cars; has office space of 650 to 10,131 sqm through Knight Frank and JLL Canberra. 40 Cameron Avenue, Belconnen, a 5-storey office building with parking for 221 cars; has office space of 500 to 9,470 sqm through Knight Frank and JLL Canberra. 33 Allara Street, City, an 8-storey, 9,900 sqm, office building with parking for 131 cars; has office space of 650 to 9,215 sqm through Knight Frank and Colliers International. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results – Week ending 12 June 2015

The preliminary results show that 18 commercial auction results were reported over the week ending 12 June 2015, with just 4 sales. In comparison, the final auction clearance rate over the previous week was 62.5 per cent across 48 reported auctions. One year ago, 42 properties were taken to auction with a clearance rate of 45.2 per cent. Over the most recent four week period, a total of 208 commercial auction results have been reported with 120 sales. Of the 120 sales, 79 have been reported with a sale price, totalling just over $174.3 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Chatswood Cityscope

The latest research from Chatswood Cityscope shows property sales have decreased in value for the quarter to June 2015. There were 23 sales recorded in the most recent quarter with a total value of $39.4 million, as compared with 30 sales recorded to March 2015 with a total value of $57 million. The 12 months leading up to the mid June 2015 recorded 123 sales for a total of $327 million, a significant decrease from the $600.9 million recorded the same time last year. The table below shows sales recorded for the past eight updates of Chatswood Cityscope. Recent standout sales in Chatswood include: 134-150 Mowbray Road, Willoughby, a three-storey concrete commercial building over two basements levels with a net lettable area of 2,480 sqm and 680 Willoughby Road, Willoughby, a three-storey concrete and glass commercial building with a net lettable area of 1,959 sqm were bought for $16 million; 10 Carlotta Street, Artarmon, a three-storey freestanding office/warehouse building with a total lettable area of 1,051 sqm plus 612 sqm of basement parking was bought for $3.85 million; 398 Pacific Highway, Lane Cove, a three-storey office building to the rear with a single-storey showroom to Pacific Highway on a 816 sqm site was bought for $2.65 million. Properties for sale in Chatswood in June 2015 include: Zenith Centre Tower A and Tower B, at 821 Pacific Highway, Chatswood, a twin A-grade complex with 43,400 sqm of office space and 900 sqm of retail space, it also includes a 250-seat community theatre for sale by international expressions of interest through Savills and CBRE; 425 Victoria Avenue, Chatswood, a two-storey brick commercial building situated on a 550 sqm site for sale through auction on 16th July 2015 through Knight Frank Sydney; 73 Dickson Avenue, Artarmon, a two-storey warehouse building with parking for three cars on a 551 sqm site for sale through Sutton Anderson. Significant leasing opportunities in Chatswood in June 2015 include: Solitaire at 12 Help Street, Chatswood has office space ranging from 250 sqm to 4,000 sqm for lease through JLL North Sydney and Cadigal Office Leasing North Sydney; Citadel Towers Complex Tower A and Tower B at 783-803 Pacific Highway, Chatswood, both has fitted suites to whole floor with areas ranging from 214 sqm to 3,137 sqm for lease through JLL North Sydney and CBRE North Sydney and 10 Herbert Street, St Leonards has retail/office space ranging from 5,000 sqm to 14,000 sqm for lease through Sutton Anderson and Savills. CoreLogic RP Data Commercial. Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Removal of negative gearing alone is no silver bullet to housing affordability

As someone who works analysing housing markets every day it is good to see that housing policy is back on the agenda especially considering that we currently don’t have a Federal Housing Minister. The lack of a Housing Minister at the Federal level is intriguing when you look at some of the statistics relative to the housing market. According to CoreLogic RP Data the total value of residential property at the end of May 2015 was $5.9 trillion. To put this in perspective, gross domestic product GDP for Australian was recorded at $1.587 trillion over the 12 months to March 2015. The Australian Bureau of Statistics’ housing finance data showed that as at April 2015 there was $1.392 trillion in outstanding mortgage debt to Australian banks, building societies and credit unions. Meanwhile, the share market garners plenty of attention, as at April 2015 the market capitalisation of listed domestic equities was $1.693 trillion. Based on this data it would be fair to say that housing is Australia’s largest and arguably most important asset class. Even the value of Superannuation clocks in at a much lower $2 trillion, nearly three times smaller than the overall value of housing. Given the importance of shelter and the runaway growth currently being experienced in Sydney and, to a lesser degree, Melbourne home values, it is no wonder that housing is becoming a politically very sensitive topic. In particular negative gearing has become a topic of plenty of debate over the past few weeks. While the current Government have ruled out changes to negative gearing, both the Labor and Green parties are highlighting potential changes to their policies. Negative gearing allows owners of investment properties to offset their expenses losses against their taxable income and as a result it can reduce their taxable income. While this most certainly makes investment attractive the suggestion that negative gearing alone drives up the cost of housing is somewhat debatable. The above chart shows the total value of net rent claimed by individual taxpayers by financial year up to 2012-13. Net rent is gross rent minus applicable deductions such as rental interest, depreciation and costs such as capital works. What you will immediately note is that prior to 1999-00 the net profit or loss made from rent was fairly negligible. The Federal Government made changes to capital gains tax in September 1999 and this has seemingly helped to make negative gearing much more attractive than it was previously. In September 1999 the Federal Government made changes which offered investors a 50% discount on capital gains tax when they sold their property if they held their investment for at least 12 months. As the first chart shows, since the 1999-00 financial year net rental losses have spiked. This would seem to suggest that the 50% discount to capital gains tax has conspired to make negative gearing of residential property a much more attractive investment option. If we take a look at the most recent financial year’s taxation data available there are some interesting statistics about negative gearing and who is claiming the benefit. In terms of the number of individuals claiming net rent, 68.9% of claimants had a taxable income of less than $80,000. While more taxpayers with a taxable income of less than $80,000 claim net rent losses, only 13.1% of all individuals with a taxable income below $80,000. On the other hand, more than a quarter 25.8% of all taxpayers with an income of more than $80,000 claimed net rent. In terms of the value of these losses, individuals earning less than $80,000 claimed rental losses of $2.781 billion or an average of $2,050 per claimant. Individuals earning more than $80,000 claimed $2.613 billion in rental losses at an average of $4,276 per claimant. More people on incomes below $80,000 claim rental income but that is largely due to the fact that 81% of taxpayers had a taxable income of less than $80,000. Conversely, a greater proportion of total higher income earners own rental properties and the typical losses claimed from these properties are much larger than those with taxable incomes below $80,000. In my opinion negative gearing is essentially a way in which the Government outsources social housing to the private sector or at least this should be how it works. If we take a look at dwelling approvals data you can see that very few new approvals have been granted to the public sector over the past three decades. Typically more than 90% of all dwelling approvals over any month are granted to the privates sector with very few being approved and ultimately constructed by the public sector. Ultimately the private sector takes on the role of construction of homes and it appears private citizens are incentivised to provide rental accommodation via the provision of negative gearing. If negative gearing were removed no doubt housing would still be an attractive investment for some who are seeking to be positively geared however, you may find that fewer people are attracted to housing as an investment option because of the absence of the tax deductions which negative gearing provides. The data shows that a greater number of people on lower taxable incomes claim rental losses than those on higher incomes however, as a proportion of total taxpayers a greater proportion of high income earners claim rental losses and the value of these losses is greater for higher income earners. The longer term net rental losses chart indicates that negative gearing alone didn’t really result in a high level on net rental losses however, when the capital gains tax discount was halved that seemingly made negative gearing much more attractive and the losses began to add up. While scrapping negative gearing would likely provide a saving to the Budget bottom line, I believe it is unlikely to result in the substantial improvement in housing affordability that many are hoping for. Arguably removing the capital gains discount which was introduced after negative gearing is a good first step to addressing the problems and then Government can revisit negative gearing. The housing market has many moving parts that result in relatively expensive housing prices here in Australia. While the removal of negative gearing may help improve the Budget bottom line it is unlikely to be the silver bullet which improves housing affordability. Zoning restrictions on developable land which drive up the cost of housing, the tax-free nature of the family home, stamp duty, the mass-centralisation of our population and shortage of jobs away from the major capital cities all conspire to make housing less affordable. Any discussion about improving housing affordability shouldn’t solely focus on just one of the issues such as negative gearing rather it needs to look at all of the factors which contribute to high housing costs.

Combined capital city clearance rate of 77.8 per cent with the number of auctions almost doubling from last week

There were 1,582 capital city auction results reported this week with a preliminary clearance rate of 77.8 per cent. Compared to last week, the number of auctions is much higher, up from 1,201 last week, when the final auction clearance rate was recorded at 78.5 per cent. In comparison, over the same week last year, there were 2,108 auctions held and the clearance rate was 65.5 per cent. Since the third week of February, the combined capital city auction clearance rate has consistently been recorded at a higher level than at the same time last year, with the gap becoming increasingly significant. The preliminary clearance rate for Melbourne was recorded at 78.0 per cent this week, having decreased from 80.3 per cent over the previous week. Melbourne hosted 918 auctions this week, compared to 315 last week, when the auction market had a small rest with Monday’s public holiday. One year ago, 1,016 residential auctions were held across the city with a success rate of 69.2 per cent. The strongest clearance rate for any individual Melbourne sub-region this week was 92.6 per cent across the Outer East region where 50 auctions were scheduled and 41 results have been reported. Across Sydney there were 796 auctions this week and the preliminary clearance rate, across 621 results, was 86.5 per cent. In comparison, last week there were 603 auctions with a stronger clearance rate of 88.7 per cent, while last year, just under 70 per cent of all homes taken to auction recorded a successful result. Sydney’s auction clearance rate has been above the 85 per cent mark since the third week in April this year. Given Sydney’s strong result this week, it is not surprising that across the individual sub-regions, 6 regions saw the preliminary clearance rate come in above the 90 per cent mark. Brisbane’s preliminary clearance rate was 51.2 per cent this week, compared to last week’s final result of 48.5 per cent and 43.5 per cent last year. There were 132 Brisbane homes taken to auction over the most recent week, similar to last week 130 and the same as this time last year. The clearance rate across the Gold Coast this week was recorded at 44.4 per cent across 27 results, with some revision likely as more results across the region are reported. Across Adelaide this week, 85 homes were taken to auction with a preliminary clearance rate of 60.4 per cent. In comparison, last week, Adelaide’s clearance rate was 71.2 per cent, and at the same time last year it was 52.3 per cent. For Perth, the number of homes taken to auction this week fell from 48 last week to 29. The preliminary auction clearance rate was recorded at 30.8 per cent across 13 results. Canberra’s preliminary clearance rate was 70.0 per cent across 30 auction results. In Tasmania, 6 homes were taken to auction this week, with 1 sale recorded so far.

Commercial Market Update – Perth Cityscope

The latest research from Perth Cityscope shows property sales have decreased in the past three months. Sales recorded in the quarter ending June 2015 totalled $10.3 million, a decrease from the $87.8 million recorded in the three months to March 2015, and a decrease from the $89.5 million recorded to December 2014. This data brings the 12 month total to $391.6 million, a decrease from the $1.05 billion recorded the same time last year. The table below shows sales recorded for the past eight updates of Perth Cityscope. Recent standout sales in Perth include: 195 Hay Street, a 3-level building with retail space on the ground floor, residential back packer accommodation on the first floor and basement parking for 8 cars, was bought for $2.7 million. 139 Barrack Street, a single-storey retail building with room for one car to the rear, was bought for $1.5 million through Realmark Commercial. 716 Murray Street, a single-storey former house built circa 1900 and refurbished in 1997 with parking for 5 cars, was bought for $1.4 million through Burgess Rawson. Properties for sale in Perth in June 2015 include: 53 Ord Street, an A-grade office building of 5 storeys with a 2-level car park and a building area of 6,864 sqm is for sale through CBRE. Four Points by Sheraton Perth at 707-713 Wellington Street, an 8-storey, 278-room hotel is for sale through CBRE. Unit 19 at 160-162 Colin Street, part of the Blue Note Executive Offices, of 620 sqm on level one plus 13 car spaces on the basement level is for sale at $4.59 million through Burgess Rawson. Significant leasing opportunities in Perth in June 2015 include: 45 St Georges Terrace, a building of 9 floors of office space, 2 basement levels and 2 levels of plant and equipment, has 329 to 2,504 sqm available for lease through CBRE and Sheffield Property Group. Central Park at 777 Hay Street, a 48-storey office tower plus 4 levels of basement parking has 500 to 8,779 sqm for lease through Savills and JLL. 32 St Georges Terrace, a 16-storey commercial building expanded in 2014 to 14,895 sqm, with basement car parking for 46 vehicles, has 200 to 7,242 sqm in the redeveloped building available for lease through JLL and Knight Frank. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results – Week ending 5 June 2015

There were 38 commercial auctions reported over the week ending 5 June 2015 with a preliminary clearance rate of 57.9 per cent, only slightly lower than the 58.0 per cent recorded over the previous week across 69 results. At the same time last year, 72 commercial auction results were reported with 43 sales 59.7 per cent . Over the most recent four week period there were 258 properties taken to auction with 163 successful results. Of these 163 sales, 103 have been reported with a sale price, totalling just under $217.77 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Newcastle Cityscope

The latest research from Newcastle Cityscope shows that commercial property sales have decreased in the three months to June 2015. The most recent quarter had 25 sales at a total value of $22.2 million, as compared to 26 sales totalling $38 million in the three months to March 2015, though it is an increase from the 13 sales totalling $21.8 million for the quarter to December 2014. This latest data brings the total sales value in Newcastle Cityscope to $142 million for the year, a decrease from the $151.3 million recorded the same time last year. The table below shows sales recorded for the last eight updates of Newcastle Cityscope. Notable sales in the June 2015 update of Newcastle Cityscope include: 464-470 King Street , Newcastle West, a two-storey office building and an adjoining single-storey brick commercial building with a net lettable area 3,626 sqm mas bought for $3.85 million. 48-50 Hunter Street, Newcastle, a five-storey rendered brick building commercial with classical facade detail, built circa 1926 was bought for $3.745 million. The most notable property for sale in Newcastle Cityscope in the June 2015 update is: 11 Argyle Street, Newcastle, a six-storey building with 342 cars with two levels of office space and a total net lettable area 5,002 sqm is for sale by expression of interest closing 18 June 2015 through Knight Frank and CBRE. Leasing opportunities listed in the June 2015 update of Newcastle Cityscope include: 150-162 Wharf Road, Newcastle, a three-storey ferry building and two-storey wharf building, has 3,000 sqm of retail space for lease in June 2015 through Colliers International Newcastle. A future development at 16-18a Honeysuckle Drive, Newcastle West has 7,000 sqm for lease in a future development on the site through Colliers International Newcastle. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Canberra’s commercial activity reaches $97.34 million worth in sales

With the Canberra property market behind the other Eastern seaboard markets, two interesting results have emerged. The first sale is that of the Novotel in the CBD at 65 Northbourne Avenue. The hotel was sold by GW Hotels Pty Ltd, a subsidiary of Tourism Asset Holdings Ltd and in turn an asset of the Abu Dhabi Investment Authority. This investment vehicle, a sovereign wealth fund owned by Emirate of Abu Dhabi was founded in 1976 for the purpose of investing funds on behalf of its Government. The hotel was sold for $77.34 million. According to Canberra Cityscope, the Novotel Canberra, which includes the Jolimont retail centre, was built in 1983 and is a six-storey building with basement parking. The 286-room hotel was refurbished and extended in 2009. Besides the hotel the property includes various small retail outlets such as Greyhound Australia,an Ezymart and several cafes and restaurants. The property last traded at $10 million in 1998. Another noteworthy Canberra sale is the purchase of the commercial tower at 20 Allara Street in the CBD, which was bought for about $20 million. Interestingly, the purchaser is the Morris Property Group, a residential apartment developer owned by Barry Morris of Queensland. This perhaps foreshadows a residential conversion for the site, a trend already strong in the eastern states and yet to have a big impact in Canberra. The property currently comprises an 11-storey office building in Allara Street and a 3-storey office and retail section along City Walk on a site area of over 3,000 sqm. The property last traded at $23.25 million in 2003. Meredith Baume Commercial Research Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Auction volumes rise after another strong clearance rate was confirmed for last week

CoreLogic RP Data National Auction Preview, week ending 14 June 2015 Auction volumes are set to rise this week, given the number of homes taken to auction last week were down significantly due to the Monday public holiday across most states and territories. Volumes are set to rise by almost 60 per cent, from 1,201 last week to 1,905 this week. The combined capital city weighted clearance rate was recorded at 78.5 per cent across the 1,054 auction results reported last week. So far this year, it has been apparent that even in weeks where auction volumes are low, demand across the auction markets, especially Sydney, has remained strong. This week, there are 864 Melbourne auctions scheduled, more than doubling from 315 last week. Last week, Melbourne’s clearance rate was recorded at 80.3 per cent, having remained steady when compared to the previous week 80.2 per cent , showing that limited stock across the region did nothing to slow down demand. One year ago, 1,016 Melbourne homes were taken to auction, with a 69.2 per cent success rate. Across Sydney, auction volumes didn’t fall as much as they did in Melbourne last week, with 603 Sydney homes taken to auction with a final clearance rate of 88.7 per cent. This week, 753 Sydney homes will be taken to auction and given Sydney’s clearance rate has remained above the 85 per cent mark for the last 8 weeks, it is likely another strong result will be recorded this week. At the same time last year, Sydney’s auction clearance rate was recorded at 69.3 per cent when 798 properties went to auction. Brisbane is expecting a similar number of auctions this week when compared to last week, with 120 homes set to go under the hammer. Last week a clearance rate of 48.5 per cent was recorded when 130 homes went to auction In Adelaide, CoreLogic RP Data is currently expecting 80 auctions this week, following a 71.2 per cent clearance rate across 62 auctions last week. Although Adelaide’s auction volumes remain relatively low, especially compared to Australia’s larger auction markets of Sydney and Melbourne, the clearance rate across the city is becoming increasingly strong, with last week’s clearance rate the strongest since the first week in April, albeit across a relatively low volume of auctions. There are 53 Canberra auctions scheduled this week, compared to 38 last week and 41 at the same time last year. Across Perth, only 28 auctions are currently being tracked this week, down from 48 last week and also slightly lower than at the same time last year 32 . Once again, the individual suburb with the highest number of residential auctions scheduled this week is located in Melbourne. CoreLogic RP Data is expecting 21 South Yarra auctions to be held.

Investors keep powering the housing market

The Australian Bureau of Statistics ABS released housing finance data for April 2015 earlier today. The seasonally-adjusted data showed that over the month there were a total of $32.7 billion in housing finance commitments with the value of commitments increasing 2.9% over the month and by 18.7% year-on-year. The raw data provides further insight into the make-up of mortgage lending although the figures are slightly different to the seasonally-adjusted data. As the first chart shows, for the 26th straight month, investors account for the greatest proportion of overall lending while investors and refinances are the only segment of lending recording any significant increase. In fact, over the past year the value of investment commitments has on average been more than 4.5 times greater than the value of commitments to first home buyers. The seasonally-adjusted data shows that in April there was $19.2 billion in commitments to owner occupiers and $13.5 billion in commitments to investors. Keep in mind that the owner occupier figure includes both commitments to owner occupiers which include first home buyers and refinances by owner occupiers. Over the month, the value of housing finance commitments to owner occupiers rose 3.1% to be 15.6% higher year-on-year. The investment segment of the market has been growing at a much more rapid pace than owner occupier lending, over the month the value of investment housing finance commitments rose 2.6% to be 23.6% higher year-on-year. Focussing solely on the owner occupier segment of lending there was $19.2 billion in lending to owner occupiers in April 2015. The data was made up of $1.8 billion 9.6% in commitments for construction of dwellings, $1.0 billion 5.3% for purchase of new dwellings, $6.6 billion 34.2% for refinances of established dwellings and $9.8 billion 50.9% for the purchase of established dwellings. Overall, there was $6.6 billion worth of refinancing and $12.7 billion in new lending. Over the month, the change in the value of owner occupier housing finance commitments was: +4.6% for construction, +3.5% for purchase of new, +4.5% for refinances and +1.8% for purchase of existing. Year-on-year, the change was recorded at: +5.4% for construction, +14.0% for purchase of new, +38.8% for refinances and +5.8% for purchase of existing. The 38.8% year-on-year increase in refinance commitments is the largest since January 2004. It highlights that many mortgage holders are shopping around for a better deal on their mortgage. It may also reflect that people are re-drawing their equity to re-invest or fund their lifestyle. Looking at the investment segment, the $13.5 billion worth of commitments in April was made-up of $0.9 billion 6.4% for construction of new homes and $12.6 billion 93.6% for purchase of existing homes. Over the month, the value of housing finance commitments to investors for construction of new homes fell -9.1% while commitments for purchase of existing homes rose 3.5%. Year-on-year, commitments for construction of new dwellings rose 25.6% compared to a 23.4% rise in commitments for purchase of existing homes. The data for both owner occupiers and investors shows that very little is actually going towards new housing. Just $3.7 billion of the $32.7 billion in commitments was to new housing representing just 11.4% of all housing finance commitments. Over the past two years, the value of housing finance commitments for new housing stock has increased by 31.2% compared to a 43.9% rise in commitments for existing stock. We have recently seen building approvals hit new record high levels and it does pose the question just who is buying all this new stock. Remember that the housing finance data is only collected across Australian Authorised Deposit-taking Institutions ADIs so overseas buyers are not captured in this data. Of course it is perfectly legal for overseas buyers to buy off-the-plan or newly built housing stock. This data suggests there is a lot of purchasing taking place by non-residents given the ramp-up in new construction appears misaligned to the commitments data for new homes. The housing finance data shows that investors and owner occupiers refinancing their existing mortgages remain the clear divers of the current housing market. Over the past month we have seen a number of ADIs changing their lending criteria and this may start to result in a cooling of the investment segment of the market. It is encouraging to see some strength returning to the owner occupier segment of the market with new loans to this segment up 3.1% so far this year after only increasing by 5.6% throughout all of 2014. If the investment segment does begin to slow over the coming months it will be important to see a pick-up in the owner occupier segment of lending.

Despite low volumes, capital city clearance rates remain strong at 79.2 per cent

The preliminary auction clearance rate was recorded at 79.2 per cent this week across 872 auction results. Given the public holiday on Monday, the number of homes taken to auction this week 1,155 has fallen in comparison to the previous week, when 2,792 homes were taken to auction. Last week, the final auction clearance rate was recorded at 78.5 per cent, bringing the combined capital city clearance rate for May to 78.4 per cent, only slightly lower than April’s result 78.8 per cent . Across Melbourne this week, auction volumes were significantly lower than the previous week, falling from 1,248 to 302. The preliminary auction clearance rate for Melbourne was recorded at 78.4 per cent across 255 results, which is a decrease from the final auction clearance rate last week 80.2 per cent . At the same time last year, 335 Melbourne homes were taken to auction and the clearance rate was 62.4 per cent. The Melbourne sub-region with the highest number of auctions this week was the South East, where 49 auctions were held. In terms of clearance rate, the strongest performing region was the Outer East region, with a preliminary clearance rate of 95.5 per cent across 22 results. This week, Sydney’s preliminary auction clearance rate was recorded at 90.1 per cent, up from the final result over the previous week at 85.0 per cent. There were 573 Sydney auctions held this week, with 464 results reported to CoreLogic RP Data so far. The first five months of 2015 have proved to be the strongest on record for Sydney with an estimated 85 per cent of all homes taken to auction recording a successful result. This week, Sydney’s strongest performing sub-regions were the City and Inner South 97.9 per cent , North Sydney and Hornsby 96.3 per cent , Ryde 96.3 per cent and Sutherland 96.1 per cent regions. The preliminary clearance rate for Brisbane was recorded at 52.2 per cent this week, compared to 48.0 per cent last week and 37.3 per cent at the same time last year. There were 129 homes taken to auction in Brisbane this week, lower than the 213 held last week. Across the Gold Coast, 52.9 per cent of the reported auctions have sold. Adelaide saw 61 homes taken to auction this week, with a preliminary clearance rate of 69.0 per cent. Last week, there were 95 Adelaide auctions and the final auction result was recorded at 67.4 per cent. Unlike each of the other capital cities, the number of auctions held in Perth this week increased, up from 21 last week to 47 this week. The preliminary clearance rate for Perth was recorded at 38.1 per cent across 21 auction results. Canberra’s preliminary clearance rate this week was 84.2 per cent across 19 auction results. There were 38 homes taken to auction in the city this week. In Tasmania, 5 auctions were held and so far 4 results have been reported. Of the reported results, 2 properties have sold.

Capital city auction volumes slow due to public holiday

CoreLogic RP Data National Auction Preview, week ending 7 June 2015 Given that all states and territories, except for Western Australia, have a public holiday on Monday the 8th of June auction market activity will be much quieter this week with many vendors choosing to hold off on taking their property to auction. Perth is the only capital city auction market where volumes are set to rise on a week-by-week basis. There are just 1,016 capital city auctions scheduled this week, down significantly from 2,792 last week. The slow-down in auction volumes comes after a strong month of auction activity, with the final auction clearance rate for the last week in May recorded at 78.5 per cent, significantly higher than at the same time last year, when the clearance rate was recorded at 66.4 per cent. The latest result brings May’s clearance rate across the combined capitals to 78.4 per cent. Given most of Melbourne’s auctions are held on a Saturday, auction volumes are prone to falling over the weeks that lead up to a long weekend. There are only 253 Melbourne auctions scheduled this week, down 80 per cent from last week 1,248 . Melbourne’s final auction clearance rate was recorded at 80.2 per cent last week, bringing May’s clearance rate for the city to 80.3 per cent. Sydney auction volumes are more ‘immune’ to public holidays, partially due to the fact that the city is often host to a number of mid-week auctions. This week, there are 508 Sydney homes being taken to auction, compared to 1,149 last week. Sydney’s clearance rate for May was recorded at 86.2 per cent, strengthening from the previous month 85.9 per cent . This week, the number of Brisbane auctions scheduled is 114, down from 213 last week, a particularly busy week for the city. One year ago there were 95 Brisbane homes taken to auction. Adelaide is expecting 58 auctions this week, compared to 95 last week and 78 last year. Across Canberra only 35 auctions will be held this week, down from 52 last week and 44 one year ago. In Perth, the only city that doesn’t have a public holiday on Monday, auction volumes are set to increase this week, up from 21 last week to 44 this week. At the same time last year there were 38 Perth auctions held. Usually, the individual suburb with the highest number of auctions for the week is located in Melbourne; however this week, due to the drop in auction volumes, Mosman in Sydney has the highest number of auctions, with 13 scheduled for this week.

Commercial Auction Results – Week ending 29 May 2015

Over the week ending 29 May 2015, the preliminary clearance rate was recorded at 55.3 per cent across 38 auctions, down from 61.8 per cent the previous week, when 68 commercial auction results were reported. One year ago, the auction clearance rate was tracking at a similar level, recorded at 59.1 per cent when there were 88 auctions held over the week. Over the four weeks ending 29 May 2015, there were 224 commercial properties taken to auction, with 142 reported sales, resulting in a 63.4 per cent success rate over the period. Of the 142 sales, 98 have been reported with a sale price, totalling $220.41 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Brisbane South Cityscope

The latest research from Brisbane South Cityscope shows property sale numbers have increased in the past three months. The last three months to the end of May 2015 recorded 23 sales for a total of over $185.5 million; with $23.2 million for commercial, $1.6 million for retail strata and $36.4 million for other. In comparison, the three months to the end of February 2015 recorded 17 sales for a total of $137.8 million, with $115.4 million for commercial, $2.8 million for commercial strata and $19.6 million for other. The 12 months leading up to the end of May 2015 recorded 68 sales for a total of over $524.7 million, over $70 million higher than the recorded figure for the same time period the year before. The table below shows sales recorded for the past eight updates of Brisbane South Cityscope: The top three most significant sales recorded this quarter together totalled over $68 million: 1 Cordelia Street, South Brisbane – A three-level former educational building. Sold for $46 million td 22.03.2015 to R&F Mega Property Pty Ltd. 22 Merivale Street, 26 Merivale Street, 28 Merivale Street, South Brisbane – a two-storey, office/showroom building and two, high-clearance warehouses were bought for $22.15 million td 04.05.2015 by Merivale JV Pty Limited, as trustee for the Merivale JV Unit Trust. Carl Charalambous from Elders Commercial Brisbane negotiated the sale. 41 Buchanan Street, West End, a four-storey office/educational building. Bought for $20 million cd 31.10.2014, td 17.02.2015 by Green Future Aust Pty Ltd, as trustee for the Buchanan St Trust. Nick Spiro and Andrew Gard from Wright Property negotiated the sale, which represented an initial yield of 7.69% on a passing income of $1.537 million net . Properties listed for sale include: 99 Melbourne Street, South Brisbane – a five-storey office building with ground floor retail space. For sale by expressions of interest, closing June 18, 2015; agent, CBRE Brisbane Bruce Baker and Flint Davidson . 137 Melbourne Street, South Brisbane – a single-storey, raised, brick-built former house, used commercially. For sale with a reduced asking price of $1.9 million; agent, Chesterton International Warren Jopson . 23-27 Merivale Street, South Brisbane – Centrelink Building, a two-storey office building, used as a call centre. For sale with offers over $30,000,000 considered; agents, CBRE Sydney Rick Butler , CBRE North Sydney Matthew Ramsey and Deloitte Capland Real Estate Advisory James Walsh . CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Macquarie Park Cityscope

The latest research from Macquarie Park Cityscope shows property sales have increased in the past three months. Sales recorded in the quarter ending May 2015 totalled $132 million, an increase from the $63.6 million recorded in the three months to February 2015, but a decrease from the $252.2 million recorded to November 2014. This data brings the 12 month total to $590.9 million a decrease from the $738.7 million recorded the same time last year. The table below shows sales recorded for the past eight updates of Macquarie Park Cityscope. Recent standout sales in in the area covered by Macquarie Park Cityscope include: 6 and 7 Eden Park Drive Macquarie Park, two buildings with a total net lettable area of about 18,131 sqm; 6 Eden Park Drive, the CA building is a 6-storey commercial building; 7 Eden Park Drive, Dupont House, is a six-storey office building with ground floor retail. They have a total of 324 car parking spaces. The buildings were bought for $81,800,000 in a sale handled by Chesterton International North Sydney and Savills. A half-share of 68 Waterloo Road Macquarie Park, a 5-storey office and research building, was bought for $20,629,504. 1-7 Waterloo Road Macquarie Park, a 3-storey, 3,201 sqm, building; partly office and partly high-clearance warehouse with parking for 101 cars, was bought for $7,500,000 in a sale handled by JLL North Sydney. Properties for sale in the area covered by Macquarie Park Cityscope in May 2015 include: 4 Sirius Road Lane Cove West, a 3-storey office and high-clearance warehouse building, and a two-storey office and warehouse building is for sale through CBRE. The building last traded at $9,750,000 in April 2009. 125 Bowden Street Meadowbank, a 489 sqm high-clearance warehouse with office space is for sale through Knight Frank North Sydney. 21 Sirius Road Lane Cove West, a 2-storey, 1,193 sqm, office building with a single-storey workshop is for sale through Griffin Property. Significant leasing opportunities in the area covered by Macquarie Park Cityscope in May 2015 include: Citrix House at 1 Julius Avenue North Ryde, a 5-storey, 14,479 sqm, commercial building with parking for 395 vehicles; has office space of 566 to 7,544 sqm through Colliers International. The former Fujitsu House at 2 Julius Avenue North Ryde, a 5-storey, 7,227 sqm, office building with parking for 263 vehicles; has office space of 7,227 sqm through Colliers International North Sydney. 54 Waterloo Road Macquarie Park, two 2-storey commercial, research and industrial buildings with total net lettable area of 5,394 sqm, have office space of 1,166 to 5,394 sqm through Knight Frank North Sydney. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Hong Kong investors buy North Sydney office tower for $58 million

A North Sydney office tower has changed hands at $58 million. The property, at 140 Arthur Street, North Sydney was sold by Bevan Kenny and Chris Veitch of Chesterton International North Sydney and Dominic Ong and James Parry of Knight Frank Sydney. Vendor was fund manager CorVal, on behalf of the Victorian Funds Management Corporation a Victorian fund which provides investment and funds management services to Victorian public authorities , Funds SA a SA fund which manages and invests public sector assets and the Future Fund a Federal fund to help meet future superannuation liabilities . The buyer, HK Realway, is owned by Ling L Wong and Yun C Choi of Hong Kong and is a private company that engages in overseas property investment and management. The sale follows its previous purchases of a 13-storey office building at 309 George Street, Sydney and a 10-level car parking station at 521 – 527 Kent Street, Sydney. According to North Sydney Cityscope, the property is a 17-storey office building with basement parking which was completed in 1973 and refurbished in 1996. With a building area of 8,384 sqm, the property has a NABERS rating of 3.5 starts. It is fully leased and its major tenants include NSW Business Chamber, Active International and University of South Australia. The property last traded at $39 million in December 2012 which represented an initial yield of 9.53% on passing income of $3,727,100. This sale, at $58 million, equates to a yield of about 7.5% and is evidence that the commercial market is also performing strongly in this rising Sydney market. Meredith Baume Commercial Research

Dwelling approvals remain high but ease in April

Earlier this week the Australian Bureau of Statistics ABS released building approvals data for April 2015. The data showed that after a record high number of approvals in March, approvals fell to their lowest levels since November of last year. Despite the fall, when compared to historic levels, dwelling approvals remain very high as the dwelling construction boom continues. In April there were 18,715 dwelling approvals nationally which was -4.4% lower over the month from a record high in March. Although the number of approvals fell over the month, they were still 16.3% higher year-on-year. Over each of the past six months there have been more than 18,000 dwelling approvals each month. To provide some context as to the surge in approvals, over the past decade there has been an average of 13,922 approvals each month while over the past two years, the average has increased to 17,861 approvals a month. Of the 18,715 dwelling approvals in April, there were 10,264 houses and 8,451 units approved for construction. Over the month, house approvals rose by 4.7% and house approvals recorded their highest monthly volume since February 2010. On the other hand, the more volatile unit sector saw approvals fall by -13.6% over the month which is their lowest monthly level since October 2014. Year-on-year, house approvals have increased by 8.8% while unit approvals have increased by 26.8%. Over the past 12 months, a record high 45.9% of all dwelling approvals were for units. Looking more closely at the type units being approved, the data shows that there is a surge in high density unit approvals; note that this data is not seasonally adjusted. Over the 12 months to April 2015 there were 26,594 townhouses approved for construction compared to 69,814 apartments. Of the townhouses approved 33.6% were one storey and 66.4% were two or more storeys. Looking at the apartments, 7.7% were in a one or two storey block, 8.4% were in a three storey block and 83.9% were in a four or more storey block. High-rise apartments ie four storey’s or higher accounted for a record high 27.6% of all dwelling approvals over the past year. It is clear that developers are building more higher density stock which is, in most instances, located within or close to the city centre of our major capital cities. Focussing on capital city data, which is also not seasonally adjusted, it shows that in April there were 12,843 dwelling approvals. The 12,843 approvals was a -16.7% decline in approvals over the month however, year-on-year approvals were 13.0% higher. Over the month dwelling approvals fell across most capital cities except for Melbourne, Darwin and Canberra. Year-on-year monthly dwelling approvals are higher across each capital city except for Adelaide. Of the 12,843 capital city dwelling approvals in April, 6,300 were for houses and 6,543 were for units. It was the seventh consecutive month in which unit approvals were greater than house approvals. Over the month, house approvals fell by -6.0% compared to a much greater -25.0% fall in unit approvals. Year-on-year house approvals have increased by 11.3% compared to a 14.6% rise in unit approvals. Over the 12 months to April 2015 there has been a record high 163,576 dwelling approvals across the combined capital cities. To put the surge in approvals into perspective, two years ago there had been just 117,549 approvals over the year. Over the year, dwelling approvals increased across each capital city except Canberra and were at record highs in Sydney, Melbourne and Brisbane. The greatest increases in approvals over the year were recorded in Hobart 53.0% , Brisbane 28.0% , Melbourne 22.7% and Darwin 22.0% . Approvals fell in Canberra -24.8% over the year and increases were relatively moderate in Sydney 8.6% , Adelaide 6.7% and Perth 12.5% . There were 76,872 capital city house approvals over the past year, which is a 12.6% year-on-year increase and the highest number of approvals since the 12 months to May 1989. The number of house approvals was higher over the year across all capital cities except Adelaide -2.1% and Canberra -14.2% . The greatest increases were recorded in Hobart 52.3% , Brisbane 27.0% and Sydney 18.4% while increases were more moderate in Melbourne 14.3% , Perth 6.1% and Darwin 8.3% . In Sydney 34.0% , Melbourne 43.3% , Brisbane 42.8% , Darwin 42.8% and Canberra 37.7% less than 50% of all dwelling approvals were for houses. In Adelaide 62.9% of all approvals were for houses compared to 72.2% in Perth and 84.3% in Hobart. There were a record high 86,704 capital city unit approvals over the 12 months to April 2015, an 18.0% year-on-year rise. Annual unit approvals were at a record high in Melbourne and Brisbane. The annual number of unit approvals was higher over the year across each capital city except for Canberra -30.0% . The greatest annual increases in approvals were recorded in Hobart 56.8% , Darwin 34.8% , Perth 33.2% and Melbourne 29.9% . The annual increases were only slightly lower in Brisbane 28.7% and Adelaide 25.9% but much lower in Sydney 4.1% . After recent record high approvals, we may have passed or are currently close to peak approvals. As the Reserve Bank has previously stated, the challenge is extending this period of heightened construction for as long as possible. With many banks now tightening lending criteria for investors that may prove difficult. New stock, particularly units, tends to appeal to investors because of the depreciation benefits as well as the higher yield profile and strategic location of many of these new developments. With investor lending a focus by the banks, some projects may start finding it harder to achieve the necessary presales to enter construction. As shown in the ABS’ data released last week relating to construction work done, engineering construction is slumping due to the end of the resource investment boom. Residential building is increasing and assisting in offsetting this decline however, the improved performance of the residential construction sector is nowhere near large enough to offset the downturn in mining related investment entirely. The ABS building approvals data will be very important to watch over the coming months as we start to see what, if any effects, there are from the banks tightening their lending criteria. If it results in a fall in the residential construction pipeline dwelling approvals , it will make the Reserve Bank’s job of rebalancing the economy even more difficult, particularly as mining investment continues to slide.

Both auction volumes and the preliminary auction clearance rate remain strong leading up to the Queen’s Birthday long weekend

There were 2,727 homes taken to auction this week, up from 2,599 over the previous week. The preliminary clearance rate was recorded at 78.9 per cent, down slightly from 79.1 per cent last week, making it the tenth week in a row where the combined capital city clearance rate has been above the 77 per cent mark. Although auction volumes were higher at the same time last year 3,072 , the auction clearance rate was lower, at 66.4 per cent. In Melbourne, Australia’s largest auction market, there were 1,221 auctions held across the city. Of the 1,053 results reported so far, the preliminary clearance rate is 78.3 per cent. In comparison, last week, Melbourne recorded a final clearance rate of 82.1 per cent across 1,162 auctions. One year ago, Melbourne’s clearance rate was recorded at 65.4 per cent across 1,356 auctions. Across Melbourne’s sub-regions, the Inner region had the highest number of auctions this week 296 , with a preliminary clearance rate of 73.8 per cent, while the Outer East region of Melbourne had the strongest result, with 88.8 per cent of reported auctions selling. Across Sydney, 1,120 homes were taken to auction this week with a preliminary clearance rate of 86.5 per cent across 882 reported results. Last week, 1,018 Sydney properties were taken to auction with a clearance rate of 86.2 per cent. At the same time last year, Sydney’s auction clearance rate was 73.0 per cent across 1,316 auctions. This week, across Sydney’s individual sub-regions, Baulkham Hills and Hawkesbury 94.7 per cent , City and Inner South 92.5 per cent , Inner West 92.3 per cent and Sutherland 91.2 per cent regions all recorded strong preliminary clearance rates. This week, Brisbane’s preliminary clearance rate was recorded at 52.1 per cent, up from 46.2 per cent last week and 42.5 per cent at the same time last year. There were 209 Brisbane auctions this week, compared to 159 last week and 219 last year. The Gold Coast’s preliminary clearance rate was 40.3 per cent across 62 results this week. In Adelaide 92 auctions took place this week with a clearance rate of 72.1 per cent. In comparison, at the same time last year, 87 Adelaide homes were taken to auction and 55.3 per cent were reported as sold. A total of 20 Perth homes were taken to auction over the week, with 10 results reported so far. Perth’s preliminary clearance rate of 50 per cent across these 10 results is similar to this time last year, when the clearance rate was 52.2 per cent. In Canberra, 52 auctions were held over the week. 70.4 per cent of the reported auctions were successful. Tasmania saw 13 auctions take place this week. Of the 11 results that have been reported so far, 4 have sold.

More residential listings are being added to the market when compared to last month, but new listings remain lower than last year

The number of new listings that have been added to the market over the most recent four week period is significantly higher than it was at the same time last month. On a capital city basis, new listings numbers have increased by 7.6 per cent for houses, 10.5 per cent for units, while for vacant land, new listings are -2.7 per cent lower than they were last month. Despite this increase, when compared to the same time last year, the number of new listings being added to the market is still lower across each individual capital city and similarly, across each state and territory with the exclusion of the Northern Territory, where new listing number are 5.8 per cent higher than they were one year ago. According to CoreLogic RP Data, there are 99,783 residential properties across Australia’s capital cities currently available for sale. One year ago, the number of properties available for sale was 5.4 per cent higher 105,183 . Perth and Darwin are the only two cities where the number of properties currently available for sale is higher than the number of properties that were available for sale at the same time last year. To put that into perspective, compared to last year, there are an additional 2,560 Perth properties available for sale, and an additional 379 Darwin homes available for sale. Given some general weakness across these two markets, with capital growth across Perth and Darwin over the past year lacklustre when compared to Australia’s other capital cities, and the average time it takes to sell a home across these two cities increasing over the year, this result is not a surprise. Similarly, across the states and territories, the Northern Territory and Western Australia both have more homes available for sale currently than they did one year ago, however the same can also be said for South Australia +1.2 per cent and Queensland +0.3 per cent , where the total listings volumes are also higher than they were one year ago. Across each of the remaining states and territories, the number of homes available for sale currently is lower than they were over the corresponding four week period last year. New South Wales -14.7 per cent and the Australian Capital Territory -13.2 per cent are showing the most significant fall in total listings, while across Victoria -2.6 per cent and Tasmania -2.9 per cent the difference in the number of listings when compared to one year ago is less prominent.

CBD hotel sold for $445.3 million

A third luxury Sydney CBD hotel has been sold in four weeks. Following the sales of the Sofitel Wentworth at $224 million and the Sydney Hilton at $442 million is the sale of the Sydney Westin Hotel at $445.3 million. The vendor, GIC Pte Ltd, is a sovereign wealth fund established by the Government of Singapore in 1981 to manage Singapore’s foreign reserves for the well-being of current and future generations of Singaporeans. The sale was arranged by Peter Harper and Craig Collins of JLL and Stephen Burt and Gus Moore of Colliers International. Purchaser was a partnership of the Singaporean Far East Organisation and Hong Kong based Sino Group. The Far East Organisation was established in 1960. Effectively owned by brothers Robert and Phillip Ng, it is the largest private property developer in Singapore. The Sino Group, one of the leading property developers in Hong Kong, is a public company also associated with the Ng family. According to Sydney Cityscope, the Westin is a 32 level, 416 room, 5-star hotel. The hotel features a 32 metre high mural by Australian artist Frank Hodgkinson in the foyer area, one of the largest in Australia. Set partly in the heritage-listed 1844 GPO building, it also includes the Grand Ballroom, a pillar-free function room catering for 1,000 people, a 1,000 sqm courtyard, 49 heritage rooms and several luxury designers’ retail outlets. The property last traded at $160 million in 2002. This sale, at $445.3 million, apparently reflects a yield of approximately 4.5%. The sale price equates to a record price of $1.2 million per room, which reflects the strong demand for Sydney’s hotel market. Meredith Baume Commercial Research

The lead up to the Queen’s birthday weekend pushes auction volumes higher

CoreLogic RP Data National Auction Preview, week ending 31 May 2015 Auction volumes are set to reach their highest level since the last week in March, however the current scheduled number of auctions 2,591 remains below the levels seen one year ago 3,072 . So far this year, while the clearance rate has been much higher than last year, auction volumes have been just 1.3 per cent higher. Last week, the final auction clearance rate increased to 79.1 per cent, from 77.5 per cent over the previous week. With volumes rising this week, it will be interesting to see if the strength across the auction market can be maintained. In Melbourne, it is expected that 1,149 residential properties will be taken to auction this week, compared to 1,162 last week, when the final auction clearance rate of 82.1 per cent was recorded. Last week’s clearance rate was one of the strongest clearance rates for the city so far this year. One year ago, 1,356 Melbourne homes were taken to auction, with a clearance rate of 65.4 per cent. This week, the number of auctions scheduled across Sydney is only slightly lower than Melbourne, at 1,087. This will be the 5th week so far this year where Sydney’s auction volumes for the week have surpassed the 1,000 mark, which is lower than last year 7 weeks , despite the strengthening clearance rate. In Brisbane, 137 auctions are scheduled this week, compared to 159 last week and 219 last year. This week there are 88 auctions expected in Adelaide, the same as last week and almost unchanged when compared to last year 87 . There are 54 Canberra homes listed for auction this week, a decrease from 96 last week, which was the highest number of weekly auctions for the city so far this year. At the same time last year 40 auctions were held across Canberra. In Perth, CoreLogic RP Data is currently expecting 19 auctions over the current week, down significantly from 53 last week and also lower than the 30 held one year ago. The three suburbs which will host the highest number of auctions this week are all located in Victoria Camberwell, Reservoir and South Yarra .

Commercial Auction Results – Week ending 22 May 2015

The preliminary auction clearance rate over the week ending 22 May 2015 fell to 50.0 per cent, from 69.3 per cent over the previous week. Auction volumes were also down, from 75 the previous week to 30 last week, however, it is expected the number of auctions will revise upwards when the final results are reported next week. One year ago, there were 51 commercial auctions with a clearance rate of 56.9 per cent. Over the most recent four week period, there has been 131 sales recorded from a total of 208 commercial auctions. Of the successful results, 91 have been reported with a sale price, totalling just short of $158 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Sydney Cityscope

The latest research from Sydney Cityscope shows that Sydney CBD commercial property sales for the three months ending May 2015 have increased from the preceding quarter. There were 97 sales recorded for the most recent quarter with a total value of $1.795 billion, as compared to 86 sales for a total of $1.059 billion for the quarter ending February 2015 and 85 sales for a total of $1.538 billion for the quarter ending November 2014. For the year ending May 2015, there were 369 sales recorded for a total of $5.973 billion, compared to 363 sales for a total of $4.659 billion for the year ending May 2014. The table below shows sales recorded for the last eight updates of Sydney Cityscope: Recent notable sales in Sydney include: Hilton Sydney, a 577-room, five-star hotel of 44 levels, redeveloped over a period of three years, completed and reopened in July 2005, which was bought for $442 million by Bright Ruby Resources Pte Ltd, a Singapore-based Chinese Investment group, in a sale handled by JLL Hotels & Hospitality Group. The vendor, Hilton International Co, will continue to operate the hotel under a 50-year management contract; The 75-year leasehold of Sofitel Wentworth Sydney, a 436-room, five-star hotel of 19 storeys, built in 1966 and last refurbished in 2007, which was bought for $224 million by Frasers Hospitality Real Estate Investment Trust FH-REIT ; 60 Carrington Street, an 18-storey office building completed in 1971 and last refurbished in 1996 with 13,862 sqm commercial space and 686 sqm ground level retail space, which was bought for $118 million; and 309 George, a 13-storey building with 2 basement levels , completed in 1965 and refurbished in 1994 and again in 2005, which was bought for $112.3 million in a sale handled by JLL Sydney and Knight Frank Sydney. The sale represented an initial yield of 6.26% on passing income of $7,028,901. Properties for sale in Sydney Cityscope in May 2015 include: Bligh House at 4 Bligh Street, a 17-storey office building completed in 1964 and featuring 21 basement parking spaces and ground floor retail space, available through Colliers International and CBRE; Lutheran Church Centre at 17-19 Valentine Street, a three-storey building on a 172-sqm parcel of land, by expressions of interest through Colliers International; A 671-sqm parcel of land at the northern end of the site at 15-31 Parker Street, available through Colliers International; and Unit 1 at 209 Clarence Street, a 192-sqm retail unit with frontage to 350 Kent Street, which is to be auctioned by Metro Commercial. Properties with space for lease in Sydney Cityscope in May 2015 include: 83 Clarence Street, a 19-storey building with two levels of car parking and two floors of retail space, which has office floor space ranging from 180 to 3,000 sqm for lease through Dexus Property Group and Colliers International; Treehouse, at 227 Elizabeth Street, a 24-level commercial building with two levels of basement parking and retail on the ground and lower ground floors, which has office space of 93 to 9,450 sqm available for lease through Colliers International; No 1 Martin Place at 374-376 George Street, a 24-level office tower with 7 levels of basement parking for 382 cars, which has office space of 485 to 6,500 sqm for lease through DTZ Australia and CBRE; and 1 York, a 25-storey office building with typical floor area of 859 sqm and four levels of basement car parking, which has office space of 80 to 4,860 sqm for lease through CBRE and Colliers International. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Southbank Cityscope

The latest research from Southbank Cityscope shows property sales have increased in the past three months. Sales recorded in the quarter ending May 2015 totalled $517.3 million, an increase from the $367 million recorded in the three months to February 2015, and a decrease from the $542.9 million recorded to November 2014. This data brings the 12 month total to $1.8 billion, a large increase from the $683 million recorded the same time last year. The table below shows sales recorded for the past eight updates of Southbank Cityscope. Recent standout sales in Southbank include: 97A Kavanagh Street, Southbank, 6-10 Power Street, Southbank and Citylink, Southbank, three parcels of vacant land, partly used for parking and with a combined site area of 20,259 sqm was bought for $145 million. 274 City Road Southbank, 272 City Road Southbank and 270 City Road Southbank, a single storey showroom, a 2-storey brick building and a 2-storey former Victorian warehouse was bought for more than $20 million in a sale handled by Conquest Estate Agency. 42-48 Moray Street, Southbank, a two-storey brick building with ground-floor showroom and workshops and first-floor offices, was bought for $13.5 million in a sale handled by CBRE Melbourne. Properties for sale in Southbank in May 2015 include: 153-159 Sturt Street, South Melbourne, a two-storey retail building constructed in 1952 total building area 1,825 sqm with parking for 30 vehicles, is for sale through CBRE and Gross Waddell. The property last traded at $5 million in October 2007. Russell & Russell Building, 11-13 Hancock Street, Southbank, a single-storey brick workshop constructed in 1940 site area 168 sqm , is for sale through agent Savills. The property last traded at $1.233 million in March 2012. 33 Park Street, South Melbourne, a three-storey brick and concrete office building, constructed in 1971 on a site of 405 sqm, is for sale by auction scheduled for May 21, 2015 through CBRE Melbourne. The property last traded at $705,000 in June 1992. Significant leasing opportunities in Southbank in May 2015 include: 380 City Road, a 2-storey, 2,287 sqm, industrial building, has 1,400 to 4,043 sqm for lease through Lemon Baxter. The Primrose Potter Australian Ballet Centre, 2-6 Kavanagh Street, Southbank, a six-storey concrete building with three floors of offices above a three-level 436-space car park has 480-1,950 sqm for lease through Gross Waddell. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

APRA data shows investment lending continues to outpace growth on owner occupier loans

The Australian Prudential Regulation Authority APRA released their quarterly Authorised Deposit-taking Institution ADI Property Exposures data for March 2015 earlier today. The data always provides a valuable insight into current and historic mortgage lending by domestic ADIs and this quarter’s release was no different. Given the heightened vigilance from APRA around investment lending and overall lending standards as well as recent changes to mortgage policies from many banks, the latest release from APRA may also signal a cyclical peak in investment lending as well as interest-only mortgage lending. Based on the value of all outstanding mortgages by households to Australian ADIs, there was $852.5 billion outstanding to owner occupiers 65.4% of all housing loans at the end of March 2015 and $450.2 billion to investors 34.6% . Over the 12 months to March 2015, the total value of outstanding mortgages to owner occupiers has increased by 7.2% compared to a 12.4% rise in outstanding credit to investors. This represents a reduction in the annual rate of increase in owner occupier lending over the quarter and the greatest rise in investor lending since September 2010. Much like other data received more regularly, the chart indicates that there remains significantly more momentum in the investor lending space than that for owner occupiers where growth is more moderate. With changes to investment lending criteria now being adjusted we are likely to see a slowing of that rate of change over the coming quarters. At the end of March 2015, a record high 38.6% of loans outstanding had an offset facility, up from 35.4% a year earlier. Also a record high was the 37.4% of all outstanding mortgages which were interest-only, up from 35.4% a year earlier. Just 0.2% of all outstanding mortgages were reverse mortgages and 2.3% were low documentation which was down from 3.1% a year earlier and at a record low proportion. Other non-standard loans accounted for just 0.1% of all outstanding mortgages. It seems that more and more mortgagees are accessing offset accounts in order to reduce the interest payable on their mortgages and maximise repayments of the principal while interest rates are so low. The data also indicates that a high proportion of lenders are accessing interest-only mortgages which seem somewhat counterintuitive at a time when interest rates are so low. Following APRA’s letter to ADIs in late in 2014 they specifically called out interest only lending as a risk and we would expect that over the coming months these types of mortgages will become harder to obtain. The average balance on all outstanding mortgages at the end of March 2015 was $243,500. The average balance has increased by 3.6% over the past year, its fastest annual rate of growth since the year to June 2012. Loans with an offset facility $290,600 and interest-only mortgages $315,100 have much higher average outstanding loan balances. The annual growth in average outstanding loan balances has been slightly more moderate for mortgages with an offset and interest-only mortgages at 3.3% and 3.4% respectively. The annual rate of growth for mortgages with an offset is the fastest since September 2012 and the rate of growth for interest-only mortgages is at its fastest pace since September 2010. Encouragingly, the data indicates that outstanding balances are reducing for low documentation and other non-standard loans as they become less common. Over the past year the average balance has fallen by -2.9% for low-documentation loans and by -6.7% for other non-standard loans. With mortgage rates low and fewer of these loan types being written it seems those that have these types of loans are continuing to pay down these mortgages at a fairly rapid pace. Turning the focus to new loans written over the March 2015 quarter, 63.0% of the total value of new lending was to owner occupiers and 37.0% was to investors. The proportion of new lending to investors has fallen from a record high of 37.9% in the June 2014 quarter. Based on this data it suggests that growth in demand for both owner occupier and investment lending may have peaked. The annual change in new owner occupier and investment lending was recorded at 9.3% and 15.4% respectively. The annual change in owner-occupied mortgages is growing at its fastest pace since March 2014 while the annual change in investment lending has been trending lower over the past two quarters. Over the March 2015 quarter, 0.7% of new loans approved were low-documentation, 42.3% were interest-only, 0.1% was other non-standard loans, 42.2% were third party originated loans and 2.8% were loans approved outside of serviceability. The 42.3% of new loans which were interest-only was down over the quarter with the proportion at its lowest level since March 2014. The data also seems to reflect the slowing of growth in investment demand, remember that interest only loans tend to be but not always reflective of lending for investment purposes. The ADIs seem to be increasing the usage of their broker channels with 42.2% of loans originated by third parties. With 2.8% of new mortgages approved outside of serviceability over the March 2015 quarter, this was down from 2.9% over the previous quarter. In terms of the annual change in new lending, the value of new low documentation loans approved rose 31.1% year-on-year, interest-only loans rose 19.7%, other non-standard loans fell -24.3%, third party originated loans increased by 14.9% and loans approved outside of serviceability increased 25.2%. Although low documentation and loans outside of serviceability make up a small overall proportion of lending, the significant increase in lending for these loan types over the year is a potential cause for concern. Looking at the loan to value ratios LVR of loans written over the March 2015 quarter, 25.7% of new loans had an LVR of less than 60%, 41.4% of loans had an LVR of between 60% and 80%, 21.7% had an LVR of between 80% and 90% and 11.1% had an LVR of 90% or more. The 11.1% of new loans with an LVR of more than 90% is the lowest proportion since December 2010. The 25.2% of mortgages with an LVR lower than 60% was the highest proportion since June 2013. This falling proportion of loans above 90% LVR suggests there are proportionally less high-risk mortgages being written. It should be noted that around a third of all new mortgages written 32.8% had an LVR of more than 80%. Looking at the year-on-year change in mortgage lending by LVR bands, mortgages with an LVR above 90% were the only segment to record a fall down -7.8%. Mortgages with an LVR below 60% were up 18.6% year-on-year, LVRs of 60% to 80% were up 12.4% and LVRs of 80% to 90% rose 13.9%. The 18.6% rise in mortgages with an LVR of less than 60% was the largest since December 2013, the 12.4% rise in mortgages with an LVR of 60% to 80% was the lowest since March 2013, the 13.9% rise in mortgages with an LVR of 80% to 90% was the lowest since March 2013 and the -7.38% fall in mortgages with an LVR greater than 90% was the largest fall since March 2011. Given that we have recently seen many banks starting to implement changes in their lending policies, mostly focussed on investors we would anticipate that investor and interest-only lending will likely moderate over the coming quarters. The decline in higher LVR lending is an encouraging development given a focus on mortgage serviceability at this time of low mortgage rates. The increase in lending outside of serviceability and low documentation loans over the past year is likely to be an area of scrutiny for APRA over the coming months.

Regional market analysis shows that there is strength outside of capital city markets

Based on the Australian Bureau of Statistics latest Regional Population Growth figures, 67 per cent of Australia’s population resides in the capital cities. To put that further into perspective, Sydney and Melbourne are home to around 40 per cent of the population. Given this, much of what is reported on in the market place revolves around these cities; however, this week CoreLogic RP Data released the Quarterly Regional Market Report, which focuses on some of the larger cities outside of the Australian capitals. In the latest edition, eleven key areas are focused on; Newcastle & Lake Macquarie, Illawarra, Richmond-Tweed NSW Gold Coast, Sunshine Coast, Townsville, Wide Bay, Cairns Qld Geelong, Latrobe-Gippsland Vic Bunbury WA Of the above regions, home values increased by the greatest amount across the Illawarra region which is around an hour and a half south of Sydney, up 9.3 per cent for houses and 9.6 per cent for units. Similarly, the Newcastle and Lake Macquarie region also saw solid results over the year, indicating that Sydney’s current strong growth phase is not just limited to the capital city. Across Queensland’s lifestyle markets, the Gold Coast and Sunshine Coast, the performance of the housing market, in terms of value growth has been relatively strong over the year to March. Gold Coast home values were up 4.8 per cent and 3.9 per cent for houses and units respectively, while Sunshine Coast values increased by 6.3 per cent for houses and 4.7 per cent for units. These results are especially significant considering the lacklustre performance of these markets since the financial crisis, when both capital growth and sales volumes across these regions were declining. Similarly, after a downturn following the financial crisis, Cairns has shown some recent improvement across the residential housing market. On the other hand, off the back of the slowing resources sector, some weakness was observed across Townsville’s residential property market, with house values falling by -2.4 per cent and unit values down -1.4 per cent. The number of homes sold across the region also fell over the most recent 12 month period. Across Victoria, both the Geelong and Latrobe-Gippsland regions have shown positive growth across the housing markets over the year to March 2015. Latrobe-Gippsland home values have been rising since 2013 and the detached housing market is continuing to show steady growth. Bunbury, in Western Australia has seen both house and unit values rise over the year, up 1.2 per cent for houses and rising slightly for units 0.4 per cent . Despite what may look like a subdued result, given Perth’s current soft market, the increases indicate a moderate level of housing demand in the region. If you are interested in further information and to view key statistics for each area, please refer to the complete report.

Both the number of auctions and the auction clearance rate up week-on-week

Across the combined capital cities, the preliminary auction clearance rate was recorded at 78.4 per cent across 1,981 results this week. This week, auction volumes were higher than last week, with 2,470 capital city homes taken to auction, compared to 2,232 over the previous week when the clearance rate was recorded at 77.5 per cent. The number of homes taken to auction this week was lower than last year, when 2,786 auctions were held, however the clearance rate last year was lower, at 67.1 per cent. In Australia’s largest auction market, Melbourne, the preliminary clearance rate of 80.0 per cent was an improvement on the previous week’s final auction clearance rate of 78.3 per cent. Prior to this week, Melbourne’s clearance rate for the year to date was tracking at 77.6 per cent, so this week’s result has shown further improvement across an already strong market. There were 1,110 Melbourne auctions this week, with 961 results reported so far. Over the previous week, 1,012 Melbourne auctions were held, and a higher 1,211 were held last year, with a clearance rate of 66.6 per cent. This week, the individual sub-region of Melbourne with the strongest result was the Outer East region, where 87.3 per cent of reported auctions were successful. The clearance rate increased in Sydney this week to 86.9 per cent, based on preliminary results, signifying that Sydney’s clearance rate of 85.0 per cent last week was a brief dip, after the four previous weeks where Sydney’s clearance rate was recorded above the 87 per cent mark. There have been 770 Sydney auction results reported so far this week, with 950 homes taken to auction. Volumes are higher than last week, when 885 residential auctions were held, and lower than last year, when there were 1,115 auctions. One year ago, Sydney’s auction clearance rate was 73.1 per cent, more than 10 percentage points lower than the current level. Across Sydney’s individual sub-regions, the Inner West region recorded the strongest result with a preliminary clearance rate of 94.7 per cent across 76 results. Brisbane’s preliminary clearance rate across 86 results this week was 51.2 per cent, increasing from 50.0 per cent across 136 auctions last week. At the same time last year, Brisbane was host to 185 auctions with 49.4 per cent of properties recording a sale. Across the Gold Coast, 40 auction results have been reported and based on this, the preliminary clearance rate is 35 per cent. Across Adelaide, there were 87 auctions this week, with 65 results collected so far. The preliminary clearance rate of 72.3 per cent is higher than both last week 63.8 per cent and last year 64.2 per cent . There have been 20 Perth auction results reported so far this week with a preliminary clearance rate of 25 per cent. Perth’s clearance rate last week was 41.9 per cent and 45.0 per cent last year. In Canberra this week, 100 auctions were held and so far, 69 results have been reported with a clearance rate of 65.2 per cent. There were 15 Tasmanian auctions held over the week. Of the 10 results reported, 2 properties have sold.

Pyrmont waterfront to be transformed into luxury apartments

Several prime sites on the waterfront at Pyrmont on Darling Island Road have been sold for approximately $180 million. The vendor was a partnership between Seven West Media and Greg Shand’s property arm, the Barana Group. The Barana Group, with a portfolio size of $450 million invests, develops and manages commercial, retail and residential property. The buyer, Aqualand Australia, a privately owned Chinese backed company based in Shanghai, specialises in all areas of property development including acquisitions, planning, designing, marketing and construction of projects. The sale was arranged by Justin Brown, Peter Krieg and Matt Ramsay of CBRE. According to the Pyrmont/Ultimo Cityscope, the sites include the Revy Buildings at 42 Pirrama Rd, two buildings of 5 and 6-storeys on a site area of 4,480 sqm, a two level gatehouse, a car park and a development site of 2,264 sqm at 8 Darling Island Road, with its vacant 8-storey heritage building having approval for conversion to 46 high end apartments. The Seven Network occupies the Revy Buildings, using the other sites as a car park. Their lease runs to 2029 though the car park site does have development approval for 32 units. The properties last traded at $29 million in May 2003. The current price of $180 million reflects the sites’ water views, the proximity to the CBD and the current confidence in and growth of the luxury apartment market. Meredith Baume Commercial Research

Commercial Market Update – Richmond Cityscope

The latest research from Richmond Cityscope shows property sales have increased in the past three months. Sales recorded in the quarter ending May 2015 totalled $63.9 million, an increase from the $29.8 million recorded in the three months to February 2015 and an increase from the $24.2 million recorded to November 2014. This data brings the 12-month total to $146.8 million, a decrease from the $236.7 million recorded for the same time last year. The data for this update of Richmond includes sales from the past two years in the additional 17 maps that have been added to the coverage area. The table below shows sales recorded for the past eight updates of Richmond Cityscope. Recent standout sales in Richmond include: 584 Swan Street, Richmond, part of the Botanicca Corporate Park, Building 8, a five-storey commercial building with ground floor retail and two levels of basement parking, was bought for $46.5 million. 9-11 David Street, Richmond, a single-storey industrial building with a bas-relief carving in the facade and 13-15 David Street, Richmond, a single-storey industrial building with a brick and corrugated iron façade, were bought together for $5.85 million. 418 Burnley Street, Richmond, a single-storey high-clearance warehouse with a paved area used for parking and storage, was bought for $3.005 million. Properties for sale in Richmond in May 2015 include: 17 David Street, Richmond, a single-storey brick industrial building, is to be auctioned on 5 June 2015 through CBRE. 38 Bridge Road, Richmond, a two-level retail terrace building with a shop at street level with the site area of 193 sqm is to be auctioned on 28 May 2015 through Axis Property. Significant leasing opportunities in Richmond in May 2015: 572-576 Swan Street, Burnley, three levels including basement parking, which has office space of 500 – 2,300 sqm for lease through Colliers International 582 Swan Street, Burnley, a three-storey building, part of the Botanicca Corporate Park, comprising ground floor retail space, office space on the upper levels and one level of basement parking, which has 94 – 310 sqm of office space for lease through Colliers International. 650 Bridge Road, Richmond, retail and commercial building with a glass façade, three levels to Bridge Road, which has 560 sqm of office space on level 1 for lease through Knight Frank. 600 Victoria Street, Richmond, a five-storey office building, part of the Victoria Gardens complex, which has 443 – 2,200 sqm of office space for lease through JLL Glen Weverley and Colliers International. CoreLogic RP Data Commercial. Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Burke Road Cityscope

The latest research from Burke Road Cityscope shows property sales have decreased for the last three months. Sales recorded in the quarter ending May 2015 totalled $13.2 million, a decrease from the $72.7 million recorded in the three months to February 2015 and a decrease from the $17 million recorded to November 2014. The total value of sales for the year ending May 2015 is $106.6 million from 31 sales, a slight decrease from the previous year, when the total value came to $111 million from 18 sales. The table below shows sales recorded for the past eight updates of Burke Road Cityscope. Notable sales for the May 2015 update of Burke Road Cityscope include: 626 Burke Road, Camberwell, a single-storey brick showroom building on a site of 261 sqm, which was sold for $5.529 million through CBRE Melbourne and Fitzroys; and Unit 1R, known as Shops G.01 and G.02 at 347 Camberwell Road, Camberwell, a retail unit on the ground floor and 6 car spaces in the lower basement, which was bought after auction for $3.601 million through Colliers International. Properties for sale in May 2015 update of Burke Road Cityscope include: 744 Burke Road, Camberwell, a single-storey brick retail building with a site area of 201 sqm, scheduled for auction on June 4, 2015, through Gorman Commercial; and Suite 402, 685 Burke Road, East Hawthorn, an office suite of 60 sqm in the seven-storey Camberwell Corporate Centre, available through Prowse Burns Commercial. Leasing opportunities listed in the May 2015 update of Burke Road Cityscope include: Shell Headquarters, at 4-14 Redfern Road, East Hawthorn, a four-storey office building built in 2002, which has 1,336 – 8,118 sqm for lease through CBRE Melbourne and Gorman Commercial; 467 Riverdale Road, East Hawthorn, a two-storey brick building with a net lettable area of 119 sqm, for lease through GormanKelly; and 277 Camberwell Road, Camberwell, a four-storey concrete office building, which has office space for lease through JLL Glen Waverley. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results – Week ending 15 May 2015

Over the week ending 15 May 2015, the preliminary auction result was strong, with 71.4 per cent of the 42 properties taken to auction selling. The number of commercial properties taken to auction was slightly higher over the week, compared to the 38 over the previous week, when the clearance rate was lower at 57.9 per cent. One year ago, the number of commercial properties taken to auction was higher, at 76 and exactly half of the results were reported as successful. The most recent four weeks shows 185 results, with 123 sales. Of these 123 sales, 91 have been reported with a price, totalling just over $139.6 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Chapel Street Cityscope

The latest research from Chapel Street Cityscope shows that commercial property sales have increased in the past three months. Sales recorded in the quarter ending May 2015 totalled $112.1 million from 13 sales, compared with $20.3 million from 4 sales in the three months to February 2015 and the recorded $20.5 million from 9 sales in the three months to November 2014. This data brings the 12 month total to $194.8 million from 40 sales, an increase compared with the previous twelve month total of $131.6 million from 22 sales. The table below shows sales recorded for the past eight updates of Chapel Street Cityscope: Notable sales recorded in the May 2015 update of Chapel Street Cityscope include: 661 Chapel Street, South Yarra, a vacant site of 1,435 sqm, sold for $40 million; 627 chapel Street, South Yarra, an office building of 6 levels plus basement parking for 86 cars, providing a net lettable area of 5,714 sqm; sold for approximately $40 million; and 663-667 Chapel Street, South Yarra, a vacant site of 1,171 sqm, sold for $16.3 million. Properties listed as for sale in the May 2015 update of Chapel Street Cityscope include: A two-storey retail building with 371 sqm building area at 182-184 Commercial Road, Prahran, is scheduled for auction on 15 May 2015 through Prowse Burns Commercial Real Estate; and Retail shops in the Luxton Prahran development at 18-30 Chatham Street, Prahran, with areas from 59 to 288 sqm are for sale through Gross Waddell. Leasing opportunities listed in the May 2015 update of Chapel Street Cityscope include: 236 Chapel Street, Prahran, a three-storey retail building with 352 sqm net lettable area, is for lease through TeskaCarson; 177 Toorak Road, South Yarra, a five-level retail and office complex with shops at street level, providing a net lettable area of 1,691 sqm, has office space of 329 sqm for lease through Newtons; 208 Chapel Street, Prahran, a two-storey retail building with 408 sqm area, is for lease from July 2015 through Hocking Stuart Commercial. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Auction volumes to rise this week, but they aren’t as high as one year ago

CoreLogic RP Data National Auction Preview, week ending 24 May 2015 Currently, CoreLogic RP Data is tracking 2,322 capital city auctions this week, signifying a slight increase from last week, when 2,232 auctions were held and the auction clearance rate fell to 77.5 per cent. The scheduled auction volumes for this week are currently tracking below the volumes seen last year, when 2,786 capital city auctions took place, which was a 27 per cent increase on the previous week. Last year, however, the clearance rate was 67.1 per cent, which is noticeably lower than the level that clearance rates have currently been tracking. Canberra and Tasmania are the only two auction markets, where the scheduled auction numbers for this week are higher than at the same time last year. As Australia’s most prominent auction market, Melbourne is set to host 1,053 auctions this week, up on last week when there were 1012 auctions and lower than the 1,211 auctions held over the same week last year. Melbourne is continuing to maintain a healthy clearance rate, with last week’s results showing 78.3 per cent of properties taken to auction sold. Meanwhile, one year ago, the clearance rate was 66.6 per cent, showing that Melbourne’s auction market has strengthened since then. In Sydney, it is expected that 884 auctions will be held this week, on par with last week, when 885 auctions were held, but lower than last year, when over the week 1,115 Sydney homes were taken to auction. Last week, Sydney’s final auction clearance rate fell 2.6 percentage points, from the previous week, to 85.0 per cent across the city, a strong result, despite the fall. Brisbane is host to 137 auctions this week, similar to the 136 last week, and lower than the 185 one year ago. Across Adelaide, 84 auctions are set to take place this week, which is lower than both last week 106 and last year 121 . For Canberra, the number of homes being taken to auction this week is 96. This is the highest number of weekly auctions scheduled in the city so far this year. More than doubling from last week, when 43 auctions were held and also higher than last year 76 . The number of auctions scheduled across Perth this week is 51, higher than last week 36 , but lower than the 70 Perth auctions held last year. The Melbourne suburb of Richmond is set to host 20 auctions this week, the highest number of auctions for any individual suburb this week.

Property related tax revenue moves beyond the $40 billion mark for the first time on record

Last week the Australian Bureau of Statistics ABS released data which revealed that 48.7% of state and local government taxation revenue over the 2013-14 financial year came from property related taxes. The data showed that over the year, state and local governments collected a record $40.485 billion in taxes from property related sources. In comparison, they collected $21.341 billion in taxes from employers, $11.208 billion in taxes from the provision of goods and services and $10.024 billion in taxes on the use of goods and performance of activities. As this shows, at a state and local government level property taxes are the largest source of revenue. Although property accounted for 48.7% of total tax revenue over the year, it has previously accounted for as much as 50.6% of all revenue in 2003-04. The total value of property related taxes increased by 12.6% over the most recent financial year. This represents the greatest year-on-year increase in property related tax revenue since it rose 14.3% over the 2009-10 financial year. In comparison, taxes on employer’s payroll and labour force rose by 2.8%, taxes on the provision of goods and services rose 1.2% and taxes on the use of goods and performance of activities rose 3.5%. Overall, state and local government tax revenue increased by 7.2% over the year. With home values nationally beginning to rise in June 2012, it is clear that state and local governments are a major benefactor of the strong housing market conditions. With higher home values, taxes such as land tax, municipal rates and stamp duty on conveyances all increase. Conversely when housing market conditions shift and value growth slows or values falls the largest source of tax revenue property is adversely affected. Of the $40.485 billion in property related tax revenue collected in 2013-14, 40% came from municipal rates and 36% came from stamp duties on conveyances. Land tax was the only other sizeable contributor to property related tax accounting for 17% of revenue. Over the year the most significant increase in property related taxes came from stamp duty, up by 24.4%. The amount of tax revenue collected from municipal rates increased by 5.3%, and land taxes increased by 2.8%. Property related tax revenue is only collected by those who own properties. Ultimately every property is owned by someone, some as an owner occupier and some as an investor. The taxes levied against property are typically only payable by the owner of the property. Given this, those who choose to rent rather than own property pay no tax on property. Not to mention the fact that the cost of renting is typically much lower than the cost of owning. State and local governments have clearly experienced a significant revenue boost via the improvement in the residential housing market over the year. Stamp duty in particular has seen a significant rise. With sales volumes and property values rising there have been more sales to receive stamp duty from and at a higher price which also increases the stamp duty collected. Of course, the issue with stamp duty is that it is a tax only collected across those properties which sell. From a residential perspective this is just 5% to 7% of the total housing stock over a given year. Stamp duty also acts as a disincentive for home owners to transact property on a more regular basis because it is a tax paid on a new purchase. Looking more closely at stamp duty over time you can see just how inefficient the tax is, being heavily reliant on the performance of the housing market. The 2013-14 financial year was a bumper one for stamp duty revenue thanks to strong growth in home values and an increase in sales activity. As we’ve seen in the past, these good times won’t last forever and eventually state and local governments will feel the impact of a downturn in tax revenue as the housing market cools. I have previously argued that the removal of stamp duties would encourage greater mobility of residents and provide less of a barrier to those home owners looking to upgrade or downsize. Of course state and local governments would lose 36% of their property related tax revenue and 17% of their total taxation revenue. Replacing stamp duty with a blanket land tax, another tax, would likely be unpopular and you’d have to consider how equitable that would be particularly for those who have recently paid stamp duty if a blanket land tax regime were to be introduced it would likely be accomanpied by compensation or discounts to those who recently purchased under the stamp duty regime . To put a blanket land tax into perspective to cover the $15.976 billion in stamp duty revenue over the 2013-14 financial year, each residential dwelling would have to pay $1,705.60 based on the ABS estimate of 9,366,800 residential dwellings as at June 2014. Keep in mind that stamp duty isn’t just payable on residential property transactions and more revenue is available from commercial and industrial properties or the cost per home could be reduced. Over the year, stamp duty revenue was higher in each state and territory except for the Australian Capital Territory -1.7% . Across the other states the rise in stamp duty revenues were recorded at: 32.3% in New South Wales, 27.9% in Victoria, 27.3% in Queensland, 2.1% in South Australia, 9.5% in Western Australia, 10.8% in Tasmania and 12.7% in the Northern Territory. According to the CoreLogic RP Data Home Value Index, home values rose across each capital city except for Darwin over the year with the largest rises in Sydney, Melbourne and Brisbane. Clearly home value rises across the capital city markets have had a positive effect on stamp duty revenues. The data highlighted shows that property related taxes are the most important source of revenue for state and local governments, accounting for 48.7% of their total taxation revenue. The issue of course is that these levels of government are looking to constantly grow their revenues. The two main sources of property related revenue are rates and stamp duty. Rates can be grown by encouraging a greater number of ratepayers into a region create more housing and stamp duty can only be lifted by changing the rates or encouraging higher prices and/or more sales. In certain regions increasing the supply of ratepayers is not possible so it is clear that stamp duty is an extremely important source of revenue. With capital city home values continuing to rise throughout the 2014-15 financial year, we anticipate that stamp duty will be higher once again. The question is whether governments can continue to rely on property being a one-way bet? The ACT has already announced a phase out of stamp duty over the next two decades, and there is also discussion around a move away from stamp duty in South Australia. The major benefit to State governments under a broad land tax arrangement as opposed to stamp duty would be the consistency of revenue flows rather than the lumpy market driven revenue which is evident under the stamp duty system.

Preliminary results show 76.4 per cent of homes sold at auction

CoreLogic RP Data National Auction Comment, week ending 17 May 2015 The preliminary clearance rate across 1,748 results was recorded at 76.4 per cent this week, a decrease from the final auction clearance rate over the preceding week, recorded at 78.2 per cent. There were a total of 2,127 auctions held this week, while in comparison, last week there were 2,426 and 2,194 over the corresponding week last year. The latest clearance rate shows that broadly, demand across the capital city auction markets remains strong. There were 973 Melbourne auctions this week and of the 849 results 74.3 per cent were reported as sold. Last week, when there were 1,072 Melbourne auctions, the clearance rate was 79.0 per cent; while one year ago, Melbourne’s clearance rate was lower at 68.8 per cent across a similar number of auctions 1,068 . Across Melbourne’s individual sub-regions, the strongest performer in terms of clearance rate this week was the Inner East region, where 81.9 per cent of reported auctions were successful. Meanwhile, the Inner region was host to the highest number of auctions 200 . This week another strong clearance rate was recorded in Sydney, which is currently Australia’s strongest auction market in terms of clearance rates. The preliminary results show a clearance rate of 85.5 per cent across 690 results, with a total of 830 auctions held across the city this week. Last week, the clearance rate was slightly stronger at 87.6 per cent across 955 auctions. One year ago, fewer Sydney homes were taken to auction 796 and the clearance rate was much lower, at 69.6 per cent. The North Sydney and Hornsby region of Sydney, where 102 auction results have been reported with a clearance of 94.1 per cent, is the strongest performing sub-region this week. Similarly, Ryde 91.7 per cent , Parramatta 90.9 per cent and Inner South West 90.1 per cent all had clearance rates over the 90 per cent mark. Across Brisbane, 129 homes were taken to auction this week with a preliminary clearance rate of 53.7 per cent across 82 results. Last week, Brisbane’s clearance rate was 54.5 per cent across 176 auctions, while one year ago, 133 Brisbane homes were taken to auction with a clearance rate of 46.5 per cent. This week, 31 Gold Coast auction results have been reported and the preliminary clearance rate based on these results is 51.6 per cent. There were 103 Adelaide homes taken to auction this week. So far, 67 results have been reported with a preliminary clearance rate of 67.2 per cent. This week’s clearance rate is higher than both last week 59.5 per cent , and last year 63.8 per cent . In Perth there were 36 auctions this week and of the 23 reported results 43.5 per cent have sold. Perth’s clearance rate last week was just 21.4 per cent, while one year ago it was 46.9 per cent. Across Canberra, the preliminary clearance rate was 76.0 per cent across 42 results. Last week, Canberra’s clearance rate was 65.7 per cent, while one year ago, 45.8 per cent of auctions were successful. There were 14 Tasmanian auctions this week. Of the 12 results reported, 5 have sold.

The number of homes scheduled for auction this week is lower than last week, despite steady, strong clearance rates

CoreLogic RP Data National Auction Preview, week ending 17 May 2015 There are 1,934 auctions scheduled across the capital cities this week, less than the 2,426 held last week, when for the fourth week in a row, the combined capital city clearance rate was recorded above 78 per cent, at 78.2 per cent. One year ago, over the comparable week, there were 2,194 homes taken to auction, which is higher than the current scheduled number, however it is likely that this will revise upwards as additional auction results are reported over the weekend. Currently, in Melbourne, 903 auctions are expected this week, lower than the 1,072 last week, when 79 per cent of reported auctions sold but higher than the 1,068 one year ago. So far this year, Melbourne’s clearance rate has been trending higher, with the rise likely to be attributed to growing consumer confidence borne through recent interest rate cuts. Sydney’s auction market is currently performing at record levels. So far this year, it is estimated that of the 12,074 homes taken to auction there have been 10,227 sales, which equates to more than 8 in every 10 properties taken to auction recording a successful result. The result shows the current strength across Sydney’s auction market. This week, it is expected that 720 residential properties across Sydney will be taken to auction, less than the 955 last week and also lower than the 796 at the same time last year. There are 119 Brisbane homes set for auction this week, lower than both last week 176 and last year 133 . Brisbane’s final auction clearance rate was recorded at 54.5 per cent last week, strengthening from 47.3 per cent the previous week. There is expected to be 101 residential auctions across Adelaide this week, up from 92 last week, when the final auction clearance rate was recorded at 59.5 per cent. One year ago, 121 auctions were held. Across Canberra, 43 auctions are scheduled for this week, after 78 last week and 29 one year ago. Last week, Canberra’s final auction clearance rate was 65.7 per cent. Perth is expecting 35 auctions this week, similar to one year ago, when there were 39 auctions. Last week, there were 42 Perth auction results and the clearance rate was low, 21.4 per cent, the second week in a row where Perth’s clearance rate was recorded below the 30 per cent mark There will be 15 auctions held in Reservoir Vic and Preston Vic this week, both of which have the highest volume of auctions for any individual Australian suburb.

Heritage listed hotel sold for $224 million

Hot on the heels of last week’s $442 million sale of the Sydney Hilton Hotel, comes news of the sale of the Sofitel Sydney Wentworth Hotel for $224 million to the Frasers Centrepoint managed Hospitality Real Estate Investment Trust. The trust purchased a 75 year leasehold interest in the hotel, and as part of the deal the trust will lease the furniture, furnishings and equipment in the hotel to another Fraser’s subsidiary, Ananke Holdings, for 20 years with an option to renew. The hotel was bought from Frasers Sydney Wentworth Trust, another trust managed by Frasers Centrepoint. Frasers Centrepoint is a diversified property trust controlled by Thai tycoon Charoen Sirivadhanabhakdi and is listed on the Singapore Exchange. In recent weeks Frasers has announced a strategy of optimizing the profitability of its assets. Moving existing assets to its real estate investment trust REIT platforms is part of this strategy. The sale of the Sofitel from the Frasers Sydney Wentworth Trust to the Hospitality Real Estate Investment Trust is part of this strategy and follows last month’s sale of 357 Collins Street, Melbourne, into the Frasers Commercial Trust for $222.5 million. According to Sydney Cityscope, the Sofitel Sydney Wentworth Hotel, 61-101 Phillip Street, Sydney is a heritage listed, 5 star, 19 storey hotel with 436 hotel rooms and 46 suites, a café and two levels of car parking. The hotel was originally built in 1966. The building includes the three level Wentworth Connection retail arcade, which is on a separate stratum title to the hotel and is owned by Wentworth Connection Retail Pty Ltd. The hotel was bought by Frasers Sydney Wentworth Trust in $202.7 million from a trust managed by LaSalle Investment Management in May 2014. LaSalle purchased the property for $130 million in May 2010. The hotel will continue to be operated as part of the Sofitel chain by French company Accor. Brendon Wood Data Integration Manager Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Investor lending surges again in March

Housing finance data released yesterday by the Australian Bureau of Statistics ABS for March 2015 showed that despite the recently released guidelines for sound lending practices released by APRA and repeated warnings from the RBA, lending for investment purposes continues to surge. While values are still rising, the prospect of very low yields remain no deterrent to prospective investors. Based on the value of mortgage lending over the month there was $31.6 billion worth of mortgage lending by Australian authorised deposit-taking institutions ADIs over the month which represented an increase of 3.5% over the month and 15.4% year-on–year. Looking at the segments, $18.7 billion was borrowed by owner occupiers with $12.3 billion for new loans and $6.4 billion for refinances. New owner occupier loan commitments are now 1.3% higher over the month and 3.3% higher year-on-year. Owner occupier refinances have experienced much stronger growth over the year, up 33.0% and rising by a further 2.2% over the month. Over the month, investors committed to $12.9 billion in mortgages with the value of these rising 6.4% and by 20.9% year-on-year. As can be observed, new lending to investors is outweighing lending to owner occupiers once refinances are excluded. Since home values started rising in the current growth phase, the values of investment housing finance commitments has increased by 86.6% compared to a 59.5% increase in refinances by owner occupiers and a 29.8% rise in new mortgages ex-refinances to owner occupiers. It is clear that investors have played a significant role in the increase in home values across the current growth phase. Looking at the owner occupier segment of housing finance; $1.7 billion was borrowed for construction, $1.0 billion for purchases of new homes, $6.4 billion for refinances and $9.5 billion for purchase of established stock. Over the month, the change in borrowings was recorded at; -2.7% for construction, +2.2% for purchase of new, +2.2% for refinances and +1.9% for purchase of established stock. Year-on-year, the changes have been recorded at; -4.0% for construction, +10.7% for purchase of new homes, +33.0% for refinances and +4.1% for purchase of established stock. Growth is clearly strongest across the refinance segment whilst there is a clear weakness in the data for commitments for construction of new homes. The growth in refinance is reflective of consumers shopping around for a better home loan deal. It may also indicate that some home owners are drawing down on their equity. Switching the focus to the investment segment, in March there was $0.9 billion committed to for construction of new dwellings and $12.0 billion committed to established investment housing. Over the month, the change in investment was recorded at +35.6% for construction of new dwellings and +4.6% for established homes. Year-on-year the increases were recorded at +68.5% for construction of new and +18.3% for established housing. Along with refinances by owner occupiers, investment borrowing is clearly a key driver of the current market. In terms of magnitude, investors are overwhelmingly more inclined to target established stock rather than new stock. In terms of the total value of housing commitments which was recorded at $31.6 billion, only $3.7 billion or 11.7% of total commitments were for construction or new dwellings across owner occupiers and investors. Over the month the total value of commitments for new housing stock has increased by 6.4% and it is 12.4% higher year-on-year. Although this is quite solid growth, it does pose the question of just who is buying all this new stock with a record high level of new construction activity currently taking place. The proportion of total commitments which are for new homes at 11.7% has trended lower over recent months. We know that legally, foreign investors can in most cases only purchase newly built stock so the data seems to suggest that a growing proportion of the new housing stock is being purchased by foreigners. Most of the foreign borrowings are not collected in the housing finance data due to the fact that its coverage is only for Australian authorised deposit-taking institutions ADIs . If funds are borrowed from overseas, the housing finance data provides no visibility of them. From now, it will be interesting to see in which direction housing finance data heads. We know that APRA and RBA have repeatedly expressed concerns about the level of investment lending and have reiterated minimum lending standards that they would like ADIs to target. The surge in investment lending over the month coupled with another interest rate cut in May could potentially create even more challenges for the two institutions. There are also tentative signs that new mortgage commitments by owner occupiers those excluding refinances may also be starting to pick-up. The next couple of months of housing finance data will be very interesting to watch to see if investor housing finance commitments begin to cool and whether the owner occupier segment is buoyant enough to continue its recent uptick.

Commercial Market Update – Melbourne Units Cityscope

Sales recorded over the three months to May 2015 totalled $411.6 million, an increase from the $238.2 million recorded to February 2015 and the $392.7 million recorded to November 2014. The latest data brings the twelve-month sale total to $1.426 billion, an increase from the previous twelve months, when sales totalled $1.101 billion. The table below shows sales recorded for the past eight updates of Melbourne Units Cityscope: Recent standout sales in Melbourne Units include: Unit 2401 at 218-236 A’Beckett Street, Melbourne, a two-level residential unit with balconies on both levels plus four car spaces and two storage units was bought for $2.93 million. Unit 1004A at 201 Collins Street, Melbourne, a residential unit with two bedrooms, a balcony and car space was bought for $2.5 million. Unit 904 at 199-205 Collins Street, Melbourne, a residential unit with a balcony and one car space was bought for $2.415 million. Unit 1114 at 108 Flinders Street, Melbourne, a residential unit with three bedrooms, a balcony and two car spaces was bought for $2.03 million. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update â

The latest research from Brisbane Cityscope shows property sale numbers have increased in the past three months. The last three months to the beginning of May 2015 recorded 20 sales for a total of $313.1 million, with $85 million for commercial, $3.1 million for commercial strata, $42.5 million for retail, $300,000 for retail strata and $182 million for other. In comparison, the three months to the beginning of February 2015 recorded 8 sales for a total of $331.8 million, with $327.5 million for commercial, $1.1 million for commercial strata and $3.3 million for retail. The 12 months leading up to the beginning of May 2015 recorded 56 sales for a total of over $1.024 billion, significantly less than the recorded figure for the same time period the year before. The table below shows sales recorded for the past eight updates of Brisbane Cityscope: The three most significant sales recorded this quarter were: 76 Queen Street – NEXT Hotel Brisbane, converted in 2014 from a mix-use hotel/office building to a 300-room hotel. Bought for $133 million cd 18.02.2015, td 25.03.2015 by Challenger Life Nominees Pty Ltd. Simon Rooney from JLL Brisbane and Dean Dransfield of Dransfield Hotels & Resorts negotiated the sale. 111 Mary Street – an eight-level underground car park with development approval in place. Bought for $49 million cd 12.09.2014, td 23.12.2014 by Mary 111 Pty Ltd. 363 Adelaide Street – Boeing House, a 16-storey office building with basement car parking. Sold for $47.5 million td 10.04.2015 to El Camino Priority I Pty Ltd, on behalf of Valparaiso Capital Partners. The sale was negotiated by Jason Lynch and Tom Phipps from Colliers International Brisbane and James Barber and James Quigley from Colliers International Sydney. Properties currently listed for sale include: 215 Adelaide Street – a 30-storey office tower and adjoining heritage listed Rothwells and Rowes Buildings. For sale by expressions of interest, closing June 4, 2015; agents, Knight Frank Brisbane Ben McGrath and Justin Bond and JLL Brisbane Seb Turnbull and Geoff McIntyre . 63 Adelaide Street – a 3-storey retail building. For sale by expressions of interest; agent, L J Hooker Commercial Richard Bomhoff . The property was advertised with a fully leased net income of $955,165. Unit 11, 301-307 Ann Street – a 35 sqm unit on the lower ground level of ULTIQA Rothbury Hotel. For sale with an asking price of $255,000; agent, Chesterton International Warren Jopson . Properties under contract include: Unit 15, 345 Ann Street – a 203 sqm unit on the fourth floor. Under conditional contract in late April 2015; agent, CBRE Brisbane Callum Short . 420 George Street – a 14-storey office building. Under conditional contract to Forza Capital, details undisclosed; agents, CBRE Brisbane Peter Court and Mike Walsh and Ray White Transact Rick Bird and Joe Tynan . 38 Wharf Street – Wharf Central, a two-level retail building. Under contract, details undisclosed; agent, CBRE Brisbane Mike Walsh and Peter Court CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results – Week ending 8 May 2015

Preliminary results show that there were 15 commercial properties taken to auction over the week ending 8 May, with 53.3 per cent selling at auction. In comparison, over the previous week both volumes 53 auctions and the clearance rate 60.4 per cent were higher. One year ago, 57 commercial properties were taken to auction and 69.7 per cent recorded a successful result. There has been 188 commercial auctions over the most recent four week period and 117 sales reported. Of these 117 sales, 92 have been reported with a sale price, totalling exactly $180 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update – Auckland Cityscope

The latest research from Auckland Cityscope shows that property sales have substantially decreased over the past three months. This is primarily due the previous quarter including several large sales over $50 million, including the sale of the SAP Tower at 151 Queen Street, Auckland Central, which sold for $97 million. In the three months to May 2015, there were 38 sales for a total of $139.2 million, as compared with $566.9 million recorded for the three months to February 2015 and the $338.3 million recorded for the three months to November 2014. This latest data brings the total sales for the 12 months to May 2015 to $1,356.4 million, an increase from the $567.2 million in sales recorded to the same time last year. The table below shows sales recorded for the past eight updates of Auckland Cityscope: Recent standout sales in Auckland Cityscope include: Canterbury Arcade, at 170 Queen Street, Auckland Central, a group of four buildings between four to nine-storeys, integrated at the ground floor retail levels, with a net lettable area of 5,689 sqm , was sold for $38.75 million. Auckland Central Backpackers, at 229 Queen Street, Auckland Central, an eleven-storey building with car spaces in the basement, with a gross floor area of 5,780 sqm was sold for $23.2 million. Properties for sale in the May 2015 update of Auckland Cityscope include: 42 Airedale Street, Auckland Central, a three-storey building comprising of two floors of office space and a workshop and parking space on the lower ground floor, with a net lettable area of 851 sqm is for sale by auction on 20th May 2015 through Bayleys Auckland Central. 15-23 O’Connell Street, Auckland Central, a four and three-storey art deco building with a net lettable area of 860 sqm is for sale by tender closing 19 May, 2015 through Bayleys Auckland Central. 36 Fort Street, Auckland Central, a three-storey building, built circa 1890 with a gross floor area of 800 sqm is for sale; agent Colliers International Auckland. Notable leasing opportunities in the May 2015 update of Auckland Cityscope include: The Tower Centre at 22 Fanshawe Street, Auckland Central, a 12-storey office building with parking space for 75 cars has office space of 6,000 sqm for lease through Robert Walters. ACG House at 396 Queen Street, Auckland Central, a 19-storey office building with a tavern to Queen Street, has office space of 3,402 sqm for lease through Colliers International NZ. IDATA House at 7 City Road, Auckland Central, a 12-storey office building with 4 levels of basement parking has office space of 625 sqm for lease through Colliers International NZ and CBRE. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Combined capital city weighted clearance rate remains steady, showing buyer confidence continues

The number of homes taken to auction this week fell slightly to 2,385, compared with 2,540 over the previous week. However, the preliminary clearance rate of 78.2 per cent has remained steady, down only slightly from 78.6 per cent last week. The overall strength across the combined capital city market is showing no sign of slowing down, with 13 of the 15 weeks in which auction results have been reported on so far this year seeing the clearance rate at, or above, 74 per cent. Over the corresponding week last year, the clearance rate was 65 per cent and 1,535 auctions were held. In Melbourne, 77.5 per cent of the 938 reported auctions sold this week. There were 1,064 auctions held across the city this week, down from 1,139 last week when the final auction clearance rate was 81.7 per cent and higher than the 710 auctions held one year ago, with a notably lower clearance rate 61.9 per cent . The Inner region of Melbourne had the highest number of auctions this week 231 , with a clearance rate of 71.1 per cent. Meanwhile, the strongest clearance rate was recorded across the South East and Outer East region, where preliminary results show 9 in every 10 homes taken to auction sold. Across Sydney, 924 homes were taken to auction this week with a preliminary clearance rate of 88.7 per cent across 726 reported results. The latest results show that Sydney’s record strong conditions are continuing. Last week, the final clearance rate for the city was 87.3 per cent, which prior to being overtaken this week, had been the cities second strongest result on record across 914 auctions. One year ago, 618 Sydney homes were taken to auction with a clearance rate of 73.3 per cent. This week, the performance across Sydney’s individual sub regions was varied. Across the Central Coast, where 21 results have been reported so far, the clearance rate was 51.1 per cent, while across Blacktown 96.0 per cent , Ryde 93.6 per cent and North Sydney and Hornsby 92.9 per cent the success rate of auctions was much higher. There were 176 Brisbane auctions this week with a preliminary clearance rate of 55.5 per cent, having increased from 47.3 per cent last week across 192 auctions and higher than one year ago when there were 89 auctions with a success rate of 46.7 per cent. The Gold Coast’s preliminary clearance rate was 41.8 per cent across 55 results this week. A total of 92 Adelaide homes were auctioned this week and the preliminary auction clearance rate of 63.9 per cent is just higher than the 62.8 per cent from the previous week across 167 auctions. One year ago, although Adelaide’s clearance rate was comparable at 62.3 per cent, there were far fewer auctions 57 . In Perth, 42 auctions took place this week, with 19 results reported so far. Perth’s preliminary clearance rate of 26.3 per cent across these 19 results is similar to both last week’s result 29.4 per cent and the clearance rate from one year ago 25.0 per cent . Canberra’s preliminary auction clearance rate of 63.0 per cent this week is lower than last week, when the final auction clearance rate was 83.0 per cent and higher than the 57.1 per cent recorded last year. So far this year, Canberra’s auction clearance rate has been substantially stronger when compared to previous years. Tasmania saw 11 auctions take place this week, 7 results have been reported so far, with 3 sales.

Sydney Hilton sold for $442 million

The Sydney Hilton Hotel has been sold for $442 million to Singapore-based investment firm Bright Ruby. The hotel was sold by Hilton Worldwide subsidiaries Admiral I Pty Ltd, Admiral II Pty Ltd and Admiral III Pty Ltd. Hilton Worldwide is listed on the New York Stock Exchange and a 66 per cent stake in the company is held by Blackstone Group, an American multinational private equity, investment banking and financial services corporation based in New York City. Bright Ruby is a Singapore based Chinese investment group which was originally incorporated in 2009. Bright Ruby purchased two Sydney office towers in 2013 when they paid $62.5 million for 10 Barrack and $201 million for 231 Elizabeth Street. Bright Ruby is also believed to be interested in purchasing the Westin Sydney hotel. According to Sydney Cityscope, the Sydney Hilton, at 255 Pitt Street, Sydney is a 5-star 44-level hotel with a 3,000 seat conference and convention centre, 11 event rooms, 9 meeting rooms, a 1,200 guest ballroom and a total of 577 hotel rooms. An extensive redevelopment of the hotel was completed at a cost of $200 million in July 2005. The hotel includes the Marble Bar, which was originally built in 1893 and restored as part of the redevelopment of the Hilton. Brendon Wood Data Integration Manager. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update â

The latest research from Adelaide Cityscope shows that commercial property sales in Adelaide have increased for the quarter to April 2015. The latest quarter shows total sales figures of $420m, an increase from the quarter to January 2015, which had total sales figures of $110.2m, and an increase on the quarter to October 2014, which had $269.9m. The year to April 2015 shows total sales of $908m, an increase on the previous year, which had $361m. Notable sales in the April 2015 update of Adelaide Cityscope include: Myer Centre Adelaide at 14-38 Rundle Mall, Adelaide, a department store and office building with total building area of 64,718 sqm and 474 car parking spaces; sold for $288m with settlement expected by end of June 2015. Hender Consulting House at 81-99 Flinders Street, Adelaide, an office building of 12 levels plus basement for 42 car parking spaces, sold for $41.3m. Properties for sale in the April 2015 update of Adelaide Cityscope include: The State Administration Centre Precinct comprising the State Administration Centre and Torrens Building at 190-220 Victoria Square, Adelaide, State Education Centre at 15-41 Flinders Street, Adelaide, Wakefield House at 24-40 Wakefield Street, Adelaide and 16-24 Flinders Street, Adelaide are for sale by expressions of interest closing 7 May 2015 through agent JLL Adelaide and the Government of South Australia; 15-19 Frome Street, Adelaide, an 8-level car park, 11 Frome Street, Adelaide, a one to two-storey retail building, 13 Frome Street, Adelaide a 2-storey retail building and 21-27 Frome Street, Adelaide, a 3-storey retail building are for sale by expressions of interest closing 12 May 2015 through Colliers International Adelaide; and 228-230 North Terrace, Adelaide, a 5-storey office building with a net lettable area of 2,689 sqm and 231 North Terrace, Adelaide, a 7-storey medical and retail building with two rooftop apartments are for sale by expressions of interest closing 30 April 2015 through JLL Adelaide. Leasing opportunities in the update of Adelaide Cityscope include: Origin Energy House at 1 King William Street, Adelaide, a 19-level office building with a lettable area of 20,776sqm on a 1,396sqm site, which has 400 to 12,500sqm available through Knight Frank; Grenfell Centre at 23-31 Frenfell Street, Adelaide, a 26-level office building with a retail plaza level, ground and basement level, providing a net lettable area of 25,244sqm, which as 240 to 7,000sqm through JLL Adelaide and CBRE Adelaide; and 58-78 Franklin Street, Adelaide, a two-tower property comprising a 16-level serviced apartments and a 19-level office building, which has office space from 532 to 5,534sqm available through Colliers International. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update â

The latest research from East Melbourne Cityscope shows property sales have decreased in the past three months. Sales recorded in the quarter ending April 2015 totalled $166.2m, a decrease from the $179.5m recorded in the three months to January 2015, but an increase from the $118.8 m recorded to October 2014. This data brings the 12 month total to $538.5m an increase on the $301.3m recorded the same time last year. The table below shows sales recorded for the past eight updates of East Melbourne Cityscope. Recent standout sales in East Melbourne include: Greenwood Office Park, at 301 Burwood Highway Burwood, three commercial buildings of 2 and 3 storeys, with a total net lettable area of 19,967sqm, and parking for 976 cars was bought for $70m in a sale handled by Melbourne Acquisitions. Kingsway@Monash, at 295-297 Springvale Road Glen Waverley; a 6-storey, 5,200sqm, commercial building with parking for 160 cars was bought for $22m in a sale handled by JLL Melbourne. 700 Springvale Road Mulgrave, a 6 storey, 6,930sqm, office building with parking for 361 cars was bought for $14.35m. Properties for sale in East Melbourne in April 2015 include: 2-6 Glenferrie Road Malvern, a three storey, 2,394sqm office building with parking for 69 cars is for sale through Rosin Smyth. The building last traded at $4.5m in March 2007. Unit 1 in the Monash Corporate Centre at 10 Duerdin Street Clayton, a 2-storey office and warehouse unit, part of Monash Corporate Centre; with parking for 20 cars, is for sale through Eastpoint Property Consultants. The unit/building last traded at $2.727m in May 2007. 303 Burwood Highway Burwood East, part of Eastern Views Office Park, a 2-storey office building with parking for 29 cars, is for sale through MP Burke Commercial. The building last traded at $1.150m in October 1993. Significant leasing opportunities in East Melbourne in April 2015 include: Australian Taxation Office at 990 Whitehorse Road Box Hill, a 9-level, 21,760sqm office and retail building, with parking for 403 cars, has office space of 1,500 to 20,000sqm through Colliers International. Ferntree Business Park at 310-324 Ferntree Gully Road Notting Hill, a complex of five self-contained office/warehouse/laboratory buildings, and 2 separate 4 and 5 storey buildings, has an office space of 2,000 to 10,000sqm through Colliers International and Goodman. The Adidas Building at 759-767 Springvale Road Mulgrave; a large high clearance warehouse at the rear with 2 storeys of offices at the front, has warehouse space of 10,611sqm through Colliers International Melbourne East and CBRE Mulgrave. CoreLogic RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Auction Results – Week ending 1 May 2015

There were 45 commercial auctions reported over the week ending 1 May 2015, with a preliminary clearance rate of 64.4 per cent. In comparison, over the previous week, the final auction clearance rate was ten percentage points higher, at 74.4 per cent across a comparable number of auctions 43 . The current auction market conditions are reflective of what was happening at the same time last year, when 60 commercial properties were taken to auction with a clearance rate of 63.3 per cent. Over the four weeks ending 1 May, 176 commercial properties have gone to auction with 112 properties sold. Of the 112 properties reported as sold, 86 have been advised with a sale price, totalling $152.6m. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update â

The latest research from Brisbane Fringe Cityscope shows property sale numbers have increased in the past three months. The last three months to the beginning of May 2015 recorded 33 sales for a total of $89.4 million, with $54.1 million for commercial, $6.9 million for commercial strata, $500,000 for retail, $6 million for retail strata and $22 million for other. In comparison, the last three months to the beginning of February 2015, recorded 21 sales for a total of $93.7 million, with $57.5 million for commercial, $7.3 million for commercial strata, $16.8 million for retail, $4.6 million for retail strata and $7.5 million for other. The 12 months leading up to early May 2015 recorded 118 sales for a total of more than $512 million, over $118.5 million less than the same time last year. The table below shows sales recorded for the past eight updates of Brisbane Fringe Cityscope: Together the top three sales recorded this quarter total over $50.5 million. The top three sales recorded this quarter include: 16 Marie Street, Milton – a six-storey office building with basement car parking. Bought for $20.425 million cd 13.03.2015, td 18.03.2015 by The Marie Street Trust. Peter Court and Darren Collins of CBRE Brisbane negotiated the sale which represented an initial yield of 10.37% on a passing income of $2,117,497 net . 223 Barry Parade, 161 Alfred Street, 237 Barry Parade and 265 Barry Parade, Fortitude Valley – 2,950 sqm of vacant land with an approved development proposal in place. The properties were bought together for $15.15 million td 31.03.2015 by 237 Barry Parade Pty Ltd. Mark Evans, Tony Pagano and Neville Jenson of Ray White Metro negotiated the sale. 324 Wickham Street, Spring Hill – a two-storey retail and office building and associated car parking. Bought for $15 million cd 07.08.2014, td 08.09.2014 by N G P Investments No 2 Pty Ltd. Seb Turnbull and Christian Sandstrom of JLL Brisbane negotiated the sale which represented an initial yield of 5.74% on a passing income of $861,000 net . Properties for sale include: 419 Upper Edward Street, Spring Hill – a two-storey plus lower ground floor office/retail building. Scheduled for auction on May 14, 2015; agent, Colliers International Hunter Higgins . The property was advertised with a current net income of $236,283. 44-48 Leichhardt Street, Spring Hill – a three-level former Methodist church, used commercially. Scheduled for auction on June 17, 2015; agent, Chase Commercial Michael Feltoe and Rod Brown . 454 St Pauls Terrace, Fortitude Valley – a three-storey office building. For sale by expressions of interest, closing June 4, 2015; agent, JLL Brisbane Christian Sandstrom and Seb Turnbull . Properties under contract include: 185 Wharf Street, Spring Hill – a four-storey office building. An expressions of interest campaign closed April 16, 2015. The property is now under conditional contract, details undisclosed; agent, JLL Brisbane Sam Bryne and Christian Sandstrom . 31 Duncan Street and 315 Brunswick Street – China Town Car Park and TCB on Brunswick. An expressions of interest campaign closed November 12, 2014. Due diligence was being conducted in January 2015 and was continuing in April 2015, details undisclosed; agent, Colliers International Tom Phipps and Jason Lynch . 211 Leichhardt Street, Spring Hill – St Paul’s on Leichhardt tavern. Under contract unconditionally for $3.05 million, with settlement expected in June 2015; agent, Ray White Transact Joe Tynan and Rick Bird . RP Data Commercial Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Increased sales at auction a likely result of the latest interest rate cut

CoreLogic RP Data National Auction Preview, week ending 10 May 2015 Currently, CoreLogic RP Data is tracking 2,651 auctions across Australia for this week, with 2,177 scheduled across the capital cities. Last week there were 2,540 capital city auctions and over the same week one year ago, there were 1,535 capital city auctions. Last year, 65.0 per cent of the homes taken to auction sold, which is a softer result when compared to current activity. Last week, the final weighted average clearance rate was 78.6 per cent, yet another strong result in what has been a record strong year for auctions so far, mostly driven by the solid results across Sydney. There are 961 Melbourne homes set to go to auction this week, 1,139 Melbourne homes were taken to auction last week, with a final auction clearance of 81.7 per cent. Last year there were 710 Melbourne auctions over the corresponding week. Currently, in Sydney, 854 auctions are expected this week, compared to 914 last week and a lower 618 at the same time last year. Last week, Sydney’s final auction clearance rate was 87.3 per cent, the second highest result on record for the city. Given the latest rate cut by the RBA, we anticipate another strong result again this week, with the clearance rate potentially shifting even higher. In Brisbane, last week’s auction clearance rate was 47.3 per cent across 192 auctions, while this week, the number of homes taken to auction is set to fall to 151. Adelaide is expecting 90 auctions this week, a much lower number when compared to last week, when there were 167 auctions, but comparable to the same time last year, when 89 Adelaide homes were taken to auction. There are currently 75 auctions scheduled across Canberra this week, compared to 59 last week and 33 last year. Across Perth, 38 auctions are expected this week, compared to 47 last week and just 15 at the same time last year. Across Australia the highest volume of auctions in one suburb are the 21 in Reservoir, Victoria.

Dwelling approvals hit new record highs in March 2015

The Australian Bureau of Statistics ABS released building approvals data for March 2015 earlier today. The data showed that over the month there were 19,419 new dwelling approvals which was a record high and 2.8% higher than levels in February. The data highlights that approvals and subsequently new housing construction is continuing to surge across the country. In March there were more units 9,767 approved for construction than there were houses 9,651 . Although this may not sound like a big deal, this has only occurred on two previous occasions. House approvals were 0.5% higher over the month and are 1.3% higher year-on-year. In comparison, unit approvals rose 5.3% over the month and are 57.9% higher year-on-year. Keep in mind that the number of unit approvals tend to be more volatile than houses however, the surge coupled by the fact that there were more approvals for units than houses shows a growing tendency toward new unit construction. Over the past 12 months, there have been a record high 210,484 dwellings approved for construction which is 11.2% higher than at the same time last year. Over the period, there have been 114,874 houses approved and 95,608 units. Although house approvals outnumber unit approvals on an annual basis, unit approvals accounted for a record high 45.4% of all dwelling approvals over the past year. While there is a growing prominence of units approvals, so too is there a growing prominence of these approvals being for high density stock. Over the 12 months to March 2015, a record high 60.5% of all unit approvals were for units in a block of four or more storeys. To put this surge into perspective, ten years ago just 39.7% of unit approvals were for units in these higher density buildings. You only have to drive through inner city areas of Sydney, Melbourne or Brisbane to see that there is a current shift towards much higher density living and today’s data shows there is plenty more in the pipeline. The capital city data isn’t seasonally-adjusted so it doesn’t line-up with the national data however, over the month there were 15,349 dwellings approved for construction across the combined capital cities. Like the national figures, this was also a record high number of approvals following a 9.7% monthly increase and a 33.5% year-on-year increase. Looking at the split between capital city house and unit approvals there were 6,709 houses and 8,640 units approved for construction over the month. House approvals were 7.5% higher over the month and 9.0% higher year-on-year. Unit approvals increased by 11.5% over the month and by 61.8% over the year. Although total approvals were at a record high neither houses or units recorded their highest month for approvals. Across the capital cities, dwelling approvals increased over the month in all capital except for Melbourne and Darwin. Year-on-year approvals are higher in each capital city except for Canberra. Looking at annual approvals across the capital cities, annual approvals are at a record high in Sydney, Melbourne and Brisbane as well as being just shy of a record high in Perth. Hobart 40.4% , Melbourne 25.5% , Brisbane 25.1% and Darwin 12.1% have recorded the greatest increases in approvals over the year. Dwelling approvals have fallen -36.8% in Canberra over the year, while increases in Sydney 4.9% , Adelaide 10.3% and Perth 11.4% have been relatively moderate. Annual house approvals were higher in March 2015 than a year earlier in all cities except for Adelaide -1.3% and Canberra -9.0% . Across the remaining cities the annual increases in house approvals were recorded at: 16.5% in Sydney, 14.6% in Melbourne, 29.6% in Brisbane 6.1% in Perth, 54.0% in Hobart and 6.9% in Darwin. What is noticeable from the above chart is that Melbourne the 2nd largest city has approved substantially more houses 22,878 than Sydney the largest city 13,776 . Similarly, Perth the 4th largest city has approved far more houses 19,783 than both Sydney and Brisbane the 3rd largest city 10,826 . While annual capital city unit approvals have risen by 15.2% over the year, across the capital cities unit approvals were lower over the year in Sydney -0.2% , Hobart -6.9% and Canberra -49.9% . Elsewhere the annual increases in unit approvals have been recorded at: 35.2% in Melbourne, 21.7% in Brisbane, 36.5% in Adelaide, 28.4% in Perth and 16.6% in Darwin. When we look at the annual approvals picture, more than half of all approvals over the year were for units in Sydney 66.2% , Melbourne 56.9% , Brisbane 58.6% , Darwin 56.2% and Canberra 53.9% . Over the past 12 months, a record high 52.7% of all capital city dwelling approvals were for units. Unit approvals have accounted for more than half of all approvals in Sydney, Darwin and Canberra for many years however, it is a relatively new phenomena in Melbourne and Brisbane. In our opinion this raises some concerns given the rapid ramp-up in unit approvals in these two cities. Although lifestyle preferences are changing we have some concerns about an oversupply of units in these markets. Especially when you consider that unit stock is generally favoured by investors and rents are already growing at their slowest pace in a decade. Furthermore, capital growth for units is lower than that for houses across four of the five cities in which there have been more unit approvals than house approvals over the past year, the exception is Darwin. Value growth for units over the year has been particularly sluggish in comparison to house value growth in Melbourne and Brisbane. The data is encouraging; there remains a large volume of new house and unit developments being approved for construction. Much of the new unit stock is high density which by nature means most of it is taking place in inner city areas. Although there is a strong pipeline of construction we continue to have concerns of a new unit oversupply in certain areas, particularly in inner city Melbourne and Brisbane. Although there are some concerns a record-high level of approvals, should they ultimately end up constructed, should alleviate some of the housing shortages and contribute to a slowing of the escalation in home values. What is somewhat worrying is that the Sydney market, where home values are escalating rapidly on the back of low overall housing supply, is not experiencing as significant a ramp-up of approvals as we are experiencing across most other capital cities.

A combined capital city clearance rate of 79 per cent, the third strongest on record, shows auction strength continues into May

This week there were 2,419 capital city auctions held and the preliminary clearance rate was 79.0 per cent, a good start to May, following on from last week’s record result 82.3 per cent across the capital city auction markets, when just 604 auctions were held. This week’s preliminary clearance rate is the third strongest combined capital city clearance rate on record, topped only by last week’s clearance rate and the 79.7 per cent recorded in mid-September 2009. At the same time last year, 2,053 homes were taken to auction and the clearance rate was 63.2 per cent. Melbourne’s preliminary clearance rate this week was 81.3 per cent. There were 1,110 auctions held across the city and so far 963 results have been reported. Last week, only 183 Melbourne homes were taken to auction, however demand was still strong, with 86.6 per cent of homes selling. One year ago, Melbourne’s clearance rate was almost 20 percentage points lower, at 61.9 per cent, while auction volumes were also lower, with 891 auctions held. This week, 6 out of the 9 individual Melbourne sub-regions saw auction clearance rates above the 80 per cent mark. The strongest performer this week was the Outer East region, where, across the 72 results reported, 65 were sold 90.3 per cent . There were 839 Sydney auctions this week with a preliminary clearance rate of 87.3 per cent, down from 89.7 per cent last week and much higher than the 71.4 per cent from one year ago. This week marks the 13th week in a row where Sydney’s clearance rate has been above 80 per cent, and based on preliminary results, this is the third week in a row where Sydney’s clearance rate has been recorded at 87 per cent or more. These strong results are no surprise given that one third of Sydney’s individual sub-regions recorded a preliminary clearance rate in excess of 90 per cent. This week, Brisbane’s preliminary clearance rate fell to 49.5 per cent from 61.5 per cent last week and 42.4 per cent at the same time last year. There were 186 Brisbane auctions this week, compared to 41 last week and 142 last year. Across the Gold Coast there were 90 auctions held this week and so far 53 results have been reported with just 17 sales. In Adelaide 158 auctions took place this week with a clearance rate of 72.5 per cent. In comparison, at the same time last year, 97 Adelaide homes were taken to auction and 62.7 per cent were reported as sold. A total of 45 Perth homes were taken to auction over the week, up from 12 last week. Based on the preliminary results, Perth’s auction market was relatively soft this week, with just 27.8 per cent of the 18 reported auctions sold so far, compared to 42.9 per cent last week. In Canberra, the auction clearance rate increased to 81.5 per cent this week, from 71.4 per cent last week. This week, 15 Tasmanian auctions were reported to CoreLogic RP Data, with 6 sales.

Commercial Auction Results â

Over the week ending 24 April 2015, the preliminary auction clearance rate was recorded at 84.9 per cent across 33 reported auctions. In comparison, the final auction clearance rate for the previous week was 57.9 per cent across 76 results. Last year, given both Anzac Day and Easter, auction activity was much lower with just 8 commercial auctions held. Of the 8 auctions held, 7 were reported as sold, a strong result given the small number of properties available. Over the most recent four week period, there has been a total of 150 commercial properties taken to auction, with 95 reported as sold. Of these 95 sales, 67 have been reported with a sale price, totalling just over $127.1 million. The table below indicates National Auction Clearance Rate figures. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Melbourneâ

The former Stock Exchange House at 357 Collins Street, Melbourne has been sold in a related party sale for $222.5m. The sale is the largest commercial transaction in Melbourne this year. Vendor was Frasers Centrepoint, an international real estate company based in Singapore with a portfolio that spans residential, commercial, hospitality and industrial asset classes. Controlled by Thaibaire, Charoen Sirivadhanabhakdi, Frasers was listed in 1988 and is the vendor through its control of the Australand Property Holdings Collins St No.1 . Frasers gained control of the trust after its 2014 $2.6b takeover of Australand. The buyer is Frasers Commercial Trust, a trust that invests primarily in quality income-producing commercial office properties and has assets of almost $2b under management. According to Melbourne Cityscope, 357 Collins Street is a 23 level office tower, built in 1968 and now merged with an 11-level building to Collins Street, which was completed in 2005 and refurbished in 2009. A further refurbishment of the building to Flinders Lane and the redevelopment with extensions of the existing tower to the Collins Street frontage was completed in mid-2013 and achieved a 5 Star NABERS rating. The building has parking for 40 cars, a total of 31,800sqm of office space and 1,800sqm of retail space. It is now 95% leased with major tenants including the Commonwealth Bank, Omega Global Investors, AXIS and numerous small retail tenants. The building last traded pre-refurbishment and being tenanted at $45m in March 2010. Meredith Baume Commercial Research Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update â

The latest research from Norwest Cityscope shows a substantial decrease in the total value of sales over the last quarter. For the three months to April 2015, there were 35 sales at a total value of $64.6 million, compared to 38 sales at a total value of $148.1 million for the three months to January 2015. However, the most recent quarter shows an appreciable increase to the quarter ending October 2014, when there were 35 sales at a total value of $15.2 million. The figures for the year ending April 2015, of 146 sales at a total value of $247.6 million, represent a considerable increase on those for the year ending April 2014, when there was a total of 142 sales at a total value of $128.3 million. The table below shows sales recorded for the last eight updates of Norwest Cityscope. Notable sales recorded in the April 2015 update of Norwest Cityscope include: Norwest Quay, a four-storey office building with a net lettable area of 10,836 sqm and basement parking for 427 vehicles at 21 Solent Circuit, Baulkham Hills, which sold for $38,915,306; A 16,000-sqm site of vacant land at 26 – 28 Norbrik Drive, Bella Vista, which sold for $5,202,344; and The 8,170-sqm site of the Quest Serviced Apartments development at 24 Norbrik Drive, Bella Vista, which sold for $3,550,000. Significant properties for sale in the April 2015 update of Norwest Cityscope include: Part of Hills Corporate Centre, 15 Brookhollow Avenue, Baulkham Hills, a two-storey office building with warehouse space, available through Coutts Industrial Real Estate; and An office/warehouse unit of 1,384 sqm with parking for 32 vehicles at 18 Lexington Drive, Bella Vista, at an asking price of $3.65 million through Norwest Commercial and Industrial. Significant leasing opportunities in Norwest Cityscope include: Century Estate, a group of commercial and industrial buildings on a 54,390-sqm site with parking for over 500 vehicles at 2 Solent Circuit, Baulkham Hills, which has up to 3,120 sqm of office space available through Norwest Commercial and Industrial; The aforementioned Norwest Quay, which has up to 2,640 sqm of office space available through Colliers International Sydney West and Norwest Commercial and Industrial; and Norwest C3, a group of three four-storey office buildings with a net lettable area of 15,099 sqm and parking for 682 cars at 3 Columbia Court, Baulkham Hills, which has office space of 450 to 2,200 sqm available through Norwest Commercial and Industrial and CastleCorp Real Estate Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Commercial Market Update â

The ninth quarterly update of Pyrmont-Ultimo Cityscope shows a decrease in both sales activity and total sales value. The most recent quarter had a total of 41 sales at a sales value of $122 million, as compared to 45 sales at a total value of $423.8 million for the quarter ending January 2015. The 12-month total sales figure now stands at $677 million dollars for the year ending April 2015, with 159 sales recorded over that period. The table below shows sales recorded for the nine editions of Pyrmont-Ultimo Cityscope: Notable sales in the areas covered by Pyrmont-Ultimo Cityscope for the April 2015 update include: 13-19 Harris Street, Pyrmont, an A-grade office building with seven levels of office space and 2 levels of basement parking, sold for $75.3 million; 37-49 O’Connor Street, Chippendale, a one-and-two-storey industrial building with high-clearance roller door access, sold for $10 million; 385 Wattle Street, Ultimo, two adjoined single-storey brick warehouse buildings, each with a loading dock to Blackwattle Lane, sold for $5 million; 2-12 Kensington Street, Chippendale, a three-storey brick warehouse to the corner of Dwyer and Kensington Streets and a two-storey brick warehouse at 12 Kensington Street, sold for $4.75 million; and Suite 121 at 26-32 Pirrama Road, Pyrmont, a 601 sqm strata office suite, sold for $3.68 million. Properties for sale in the latest update of Pyrmont-Ultimo Cityscope include: 167 Glebe Point Road, Glebe, a two-storey building with ground floor retail at is to be auctioned on 28 April 2015 through Raine & Horne Commercial. 92 Glebe Point Road, Glebe, a two-storey building with ground floor retail at is to be auctioned on 12 May 2015 through Taylor Nicholas. 609-615 Harris Street, Ultimo, a two-storey warehouse, at with the site area of 806 sqm is for sale through DB Property and Joandarc Realty. Suite 109, 55 Miller Street, Pyrmont, a 116 sqm strata office suite is for sale through auction on 24 April 2015 through Laing and Simmons and Suite 133, at 89-97 Jones Street, Ultimo a 147 sqm strata office suite is for sale through Century 21 Mirabella Property. Leasing opportunities listed in the April 2015 update of Pyrmont-Ultimo Cityscope include: 13-19 Harris Street, Pyrmont, has office space from 250 to 3,500 sqm at an A-grade office building with seven levels of office space and 2 levels of basement parking, is for lease through Savills; City West Centre, at 55 Pyrmont Bridge Road, Pyrmont has office space of 1,200 and 1,500 sqm for lease through Cushman & Wakefield; 63-71 Balfour Street, Chippendale has office space from 200 to 1,100 sqm for lease through Fringe Commercial; and 63-79 Miller Street, Pyrmont, a five-storey refurbished commercial building has office space of 1,000 to 1,250 sqm for lease through Regus and Colliers International. Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Residential auction markets set to become busy again, with a strong result recorded for April

CoreLogic RP Data National Auction Preview, week ending 3 May 2015 CoreLogic RP Data is currently tracking 2,871 auctions across Australia this week and 2,295 of these are in the capital cities. At the same time last year, auction volumes were lower at 2,053. Last weekend marked the final weekend for auctions in April and while the number of auctions was low, the combined capital city clearance rate remained strong, showing that the demand for the homes that did make it to auction did not waver. The final auction clearance rate for last week was 82.3 per cent across 604 auctions. While last week’s clearance rate is the strongest result on record, given ANZAC day, auction volumes were around 70 per cent lower than the average number of auctions that has been held each week so far this year. Last week’s result brings the April clearance rate for the combined capitals to 78.8 per cent, well above the same time last year when the clearance rate over the month was 66.4 per cent and higher than the 76.6 per cent recorded in March. Currently, there are 1,033 auctions scheduled in Melbourne for this week, compared to 891 at the same time last year. Last week, the clearance rate across the 183 auctions held was 86.6 per cent, a strong result, despite the low volume. Last week’s result brings the clearance rate for April to 79.7 per cent. In Sydney, the auction clearance rate for last week was 89.7 per cent across 285 auctions. The result was the strongest on record for the city; however, given the low number of auctions, it could be argued that it was not as significant as the 87.0 per cent recorded across 988 auctions the previous week. This week, Sydney is expecting 815 residential auctions. Over the past four weeks, April proved to be a strong month for Sydney, with the auction clearance rate above 83 per cent each week. There are 172 auctions expected across Brisbane this week, compared to 41 last week and 142 at the same time last year. The final auction clearance rate was recorded at 61.5 per cent for Brisbane last week, a strong result for the city. This week, Adelaide is expecting 156 auctions, up from 59 last week and 97 at the same time last year. Last week Adelaide’s clearance rate was 59.2 per cent. Canberra’s auction clearance rate from last week was 71.4 per cent with just 23 homes taken to auction. This week, CoreLogic RP Data is expecting 55 auctions which are relatively similar to the 47 homes taken to auction one year ago. There will be 43 Perth homes taken to auction this week, up from 12 last week and 41 at the same time last year. The highest volume of auctions for any one individual suburb this week is outside of the main capital city auction markets in Armidale, New South Wales. Currently, CoreLogic RP Data is tracking 21 Armidale homes that are set for auction this week. The number of auctions scheduled in the Victorian suburbs of South Yarra 18 and Reservoir 17 is also high.

The number of new listings being added to the residential property market is lower than at the same time last year, with regional markets showing the greatest slow down

Over the most recent four week period, the number of new listings added to the market has remained somewhat subdued with the traditional slow-down in listings experienced each year around Easter still included in the four week reporting period. The number of new residential property listings are broadly still lower than they were one year ago. Across the combined capitals, 24,535 new listings were added to the market over the four weeks ending 26 April 2015, -4.8 per cent lower than the 25,785 added at the same time last year. Nationally, new listings are -8.9 per cent lower than last year, with 40,688 new homes advertised for sale over the most recent four weeks 3,952 fewer than last year . As a result of the new stock that has been added to the market, the total number of residential properties currently available for sale across the combined capitals is 99,270 and 241,647 properties nationally. While the total stock levels for the capital cities are lower than at the same time in 2014 -3.9 per cent , the number of properties available Australia-wide is trending closer to the 2014 levels, with -2.2 per cent fewer residential properties available for sale, however, this number is largely being driven by re-lists, rather than new listings. Melbourne, Brisbane and Adelaide are each seeing more new listings come onto the market than at the same time last year however, unlike Brisbane and Adelaide, Melbourne’s total stock available for sale is currently lower than it was at the same time last year. In each other capital city, the number of residential properties entering the market is lower than over the comparable four week period at the same time last year. Despite Sydney’s current strong performance in terms of capital growth, stock levels across the city are much lower than what has been observed historically. Across the states and territories, total available stock levels are higher than at the same time last year in Queensland 66,158 compared to 63,773 last year , South Australia 17,227 compared to 16,954 last year Western Australia 34,993 compared to 34,328 last year , Northern Territory 1,942 compared to 1,500 last year and the Australian Capital Territory 2,194 compared to 2,067 last year , while in New South Wales, Victoria and to a lesser extent, Tasmania, the number of residential properties currently listed for sale is lower than over the comparable period 12 months ago.

Some ideas about measuring the relativity of housing costs

Measuring the cost of housing and housing affordability is such an abstract idea because it is not a one size fits all measure and there are so many factors which contribute to affordability or unaffordability. Most of the common measures have one or a number of glowing weaknesses which I will cover. Interest rates What interest rate do you use when a typical mortgage is 25 to 30 years? Most measures utilise the current mortgage rate and while that may tell you what affordability is like now affordability is important to analyse throughout the life of the mortgage not just as you purchase. With generational low mortgage rates right now, affordability in many areas looks good but if rates were to normalise affordability would look very different. Household income What figure do you use for household income? Much like interest rates household incomes will fluctuate over the 25 to 30 year cycle of a mortgage. Given this, are household income measures appropriate or is it better to assume a single or dual income household? Furthermore, outside of the Census, which is conducted every five years, this data is only published semi-regularly and at a state level. Housing markets and income levels are very different across different regions of the country. International comparisons Is a home in Australia the same as a home anywhere else in the world? In the sense that it provides shelter it is, however, tax regimes, the cost and scarcity of developable land, the provision of infrastructure and the availability of jobs are all other factors that contribute to the cost of housing. Furthermore, most comparisons are not apples with apples. Australian housing markets are dominated by detached houses whereas markets like Tokyo, Singapore, Hong Kong and Manhattan are largely apartment markets while London for example is predominately attached housing types what we would call terraces or townhouses . The fact that Australian homes are, at least for the large part, detached and the largest in the world will also contribute to a higher cost. Ryan Fox and Richard Finlay from the RBA wrote an excellent paper back in 2012 which provides an overview of some of the challenges around blending household income data with housing prices which is available here CoreLogic RP Data don’t regularly publish a measurement of housing affordability, however, a different perspective on housing affordability is to look at the cost of renting relative to the price of a home. Using our data on advertised median rental rates and median selling prices of homes we can determine how many years difference there is between the cost of renting and the cost of a home. This analysis focusses on the relative affordability between the two primary means of shelter; renting or owning a home. This analysis doesn’t factor in interest rates or household incomes and doesn’t compare internationally. What it does do is look at the difference between the two forms of housing residents have, to rent or to purchase. With rental growth at its lowest level in more than a decade, we would expect that the number of years of rent required to purchase a home will rise over the coming year. As a result we may see more residents choosing not to purchase their own home despite the low mortgage rates available. Across the combined capital cities, the annual rent for a house is $25,552, for a unit it is $24,013 and for combined houses and units dwellings it is $25,311. In comparison, the median house price is $559,000, the median unit price is $470,000 and the median dwelling price is $530,000. Based on this data, to buy a house would take 21.9 years of rental payments, to buy a unit requires 19.6 years of rent and a dwelling would take 20.9 years of rental payments. As the chart shows, the differential has been greater at the end of 2007 and there has been little change over recent years. In saying this, in March 1997, the differential was much lower at 10.8 years for houses and 11.7 years for units. In Sydney, the cost of a house is equivalent to 24.6 years of rents and the cost of a unit is 21.7 years of rent. Across Melbourne the median house price is equivalent to 23.8 years of rent while the cost of a unit equates to 21.3 years of rent. A typical Brisbane house costs 20.9 years’ worth of rent while the typical Brisbane unit costs 17.7 years of rent. Note that the 17.7 years is the lowest since July 2004. The median house price in Adelaide is equivalent to 22.0 years of rent and the unit price amounts to 20.6 years of rent. The median Perth house costs 21.0 years’ worth of rent while the median unit costs 19.1 years’ worth of rent. A typical house in Hobart costs the equivalent of 18.9 years of rent while a unit costs 17.0 years of rent. A house in Darwin costs 18.4 years’ worth of rent while a unit costs 18.9 years’ worth of rent. The median house price in Canberra is equivalent to 22.6 years of rent while the median unit price is 19.7 years of rent. It is also interesting to look at the relativity between cities. The way to read this chart is if you use Sydney as an example, rents are on the left and purchase prices are at the top. Given this, if you rent in Sydney and want to purchase in Sydney it costs 22.4 years of rent, whereas if you live in Sydney but want to purchase in Melbourne it is equivalent to just 16.8 years of your Sydney rent. The table shows that those renting in the more expensive cities would have a much easier time entering into home ownership outside of these cities. On the other hand, if you are thinking about buying in Sydney but are currently renting in another city you could be in for a nasty shock when you go to purchase. By no means do I think this analysis is a perfect picture of housing affordability however, I do think it is a different way to measure it. It still has the weakness of using medians and of course, very few people purchase the median home and in particular first time buyers should be looking to purchase below the median price. Nevertheless it does show the difference in the cost of renting and housing and potentially provides some food for thought for those looking to enter into home ownership. Considering this analysis is quite different from other studies around the cost of housing, I’d value any feedback that readers may have on this analysis.

Commercial Market Update â

The latest research from Docklands Cityscope shows property sales have decreased in the past three months. Sales recorded in the quarter ending April 2015 totaled $220.5 million, a decrease from the $262.9 million recorded in the three months to January 2015, and from the $566.1 million recorded to October 2014. This data brings the 12 month total to $1.49 billion, an increase from the $484.6 million recorded the same time last year. The table below shows sales recorded for the past eight updates of Docklands Cityscope. Recent standout sales in Docklands include: 105 Pearl River Road, Docklands, 440 Docklands Drive, Docklands and 52-90 Waterfront Way, Docklands, The National Ice Sports Centre known as The Icehouse , a 2-level sporting and entertainment complex, the Harbour Town Melbourne Shopping Centre, a complex of 170 retail outlets over 38,000 sqm and Harbour Town East Car Park, a 7-storey, 1,300-space car parking station, was bought for $142.3 million. 733 Bourke Street, Docklands, The Goods Shed North, an extensively refurbished 1889 heritage building with 11,235 sqm of retail and commercial space, was bought for $76.5 million in a sale arranged by Colliers International and JLL – Melbourne. Properties for sale in Docklands in April 2015 include: Unit 11R, 223 Harbour Esplanade, Docklands, a retail unit with an area of 180 sqm is for sale at $1.3 million through Lucas Real Estate. Unit G4, 439 Docklands Drive, Docklands and Unit 6G, 439 Docklands Drive, Docklands, a 188 sqm retail premise and a 279 sqm retail strata unit for sale together at $2.5 million through Lucas Real Estate. Significant leasing opportunities in Docklands in April 2015 include: Ericsson Commercial Tower, 818 Bourke Street, Docklands, a six-level office building above a car park of three split level has a whole floor of 3,815 sqm available for lease through Knight Frank and Colliers International. 720 Bourke Street, a 22-storey, 47,000 sqm office building with 70 car parking spaces has 251 to 11,659 sqm available for lease through Colliers International and Knight Frank. Cityscope covers 28 predominantly capital city CBD markets across Australia and New Zealand, providing a rich level of property level data including building attributes, tenancy detail, sales and ownership.For more information on Cityscope or any other CoreLogic RP Data products call 1300 734 318 or visit the website at www.corelogic.com.au/products/cityscope. Subscribe to the free Commercial Pulse eNewsletter Get the latest commercial news and sales data each week from our CoreLogic RP Data Commercial Pulse! Click here to subscribe.

Auction volumes drop due to Anzac Day commemorations

CoreLogic RP Data National Auction Comment, week ending 26 April 2015 As a result of the Anzac Day commemorations on Saturday, which is traditionally the busiest day for auctions, it was a quiet week for auction activity. There were 550 auctions held across the combined capital cities this week, with a preliminary auction clearance rate of 84.3 per cent. While this is the highest auction clearance rate on record, it is likely that the clearance rate will revise down as the remaining auctions are reported. Last week, a clearance rate of 78.9 per cent was recorded across 2,603 capital city auctions. At the same time last year, auction volumes were higher than this week, but still low off the back of Easter, with 881 properties taken to auction and a clearance rate of 64.6 per cent. In Melbourne, Australia’s largest auction market, a preliminary auction clearance rate of 87.4 per cent was recorded across 169 auctions this week. Last week, Melbourne’s final clearance rate was recorded at 79.5 per cent across 1,266 auctions, while this time last year, 373 properties were taken to auction across Melbourne and a clearance rate of 63.0 per cent was recorded. The busiest Melbourne sub-regions this week were Melbourne’s Inner region and the Inner South region, where 27 and 26 auctions were held respectively. Sydney’s preliminary clearance rate this week was 91.9 per cent across 192 auction results. There were a total of 249 auctions held across the city. Excluding this week, last week’s clearance rate of 87.0 per cent across 988 auctions was the highest clearance rate on record for the city. It will be interesting to track this week’s final auction clearance rate once the remaining results have been reported. Looking back at this weekend last year, 361 auctions were held across Sydney and a clearance rate of 71.3 per cent was recorded. Sydney’s Eastern Suburbs hosted the most auctions of any Sydney sub-region this week, with 62 properties taken to auction. The preliminary clearance rate for the region is 95.7 per cent across 47 results. There were 39 Brisbane auctions this week and so far 11 results have been reported, with 10 sales. Last week, auction volumes across the city were much higher with 140 auctions held across the city and a 46.4 per cent clearance rate recorded. Much like Brisbane, the number of homes taken to auction this week fell across the Gold Coast with 32 properties up for sale this week. Of the 21 results reported, just over half 52.4 per cent were successful. A total of 59 Adelaide homes were taken to auction this week, with a preliminary clearance rate of 55.0 per cent across 20 results, down from 69.7 per cent last week when 97 auctions were held across the city. In Perth, just 10 auctions were held this week. So far, only 2 successful sales have been reported to CoreLogic RP Data. Last week, the final auction clearance rate for Perth was 28.6 per cent across 36 auctions. Canberra’s clearance rate was 78.6 per cent this week, up from 65.6 per cent last week. There was only 1 Tasmanian auction held this week. The property was reported as sold.

Anzac Day shifts focus away from auctions this weekend

CoreLogic RP Data National Auction Preview, week ending 26 April 2015 Given that Anzac Day falls on Saturday this year, traditionally the busiest day for auctions, the number of auctions being held this week is much lower than usual. Currently CoreLogic RP Data is expecting 433 capital city auctions to take place during the week ending 26 April, with just 591 held nationally. At the same time last year, there were 881 capital city auctions held. In Melbourne, 143 homes will be taken to auction this week. Last week, Melbourne’s final auction clearance rate was recorded at 79.5 per cent, with 1,266 auctions held across the city. Melbourne’s clearance rate last week was the second highest on record this year, with the highest recorded over the Easter weekend, when volumes were considerably lower. Last week, Sydney’s final auction clearance rate came in at 87.0 per cent across 988 total auctions. This is the highest clearance rate on record for the city, with nine of the top ten clearance rates on record for the city having occurred this year. There will only be 174 auctions held across Sydney this week, with the majority of the auctions held prior to the weekend, given the Anzac Day commemorations. There are 31 Brisbane auctions currently being tracked by CoreLogic RP Data, down significantly from 140 last week, when the final auction clearance rate was 46.4 per cent. Adelaide’s final auction clearance rate for last week was 69.7 per cent, with 97 auctions held over the week and 76 results reported. There will be 54 auctions held across the city this week, with the majority of the auctions held on weekdays and on Sunday. There are 22 Canberra auctions scheduled this week, down from 65 last week. 65.6 per cent of Canberra’s auctions that were reported last week were successful at auction, with Canberra’s auction success rate becoming increasingly strong. In Perth, 36 auctions were held last week and the clearance rate fell to 28.6 per cent. This week, there are only 6 auctions scheduled across Perth. The busiest suburbs for auctions this week are Bondi Beach in Sydney and Surfers Paradise in Queensland’s Gold Coast. Both suburbs have 6 auctions being held this week.

Sydney and Melbourne are the only capital cities where dwelling values have risen at a faster pace than inflation over the past five years

The Australian Bureau of Statistics ABS released Consumer Price Index CPI data for the March 2015 quarter yesterday. The data showed that over the quarter, headline inflation was recorded at 0.2% taking annual inflation to 1.3%. The Reserve Bank’s RBA preferred measures of underlying inflation, the trimmed mean and weighted median, were recorded at an annual rate of 2.3% and 2.4% respectively. Headline inflation is well below the RBA’s target range of 2% to 3% however, underlying inflation is towards the bottom of the RBA target range. From a housing market perspective, it is useful to understand the real change in home values. We all know that the Sydney market is recording strong rates of value growth at the moment while most other capital cities are seeing more moderate growth. When you take the impact of inflation into consideration, growth is generally much more tepid. Over the 12 months to March 2015, nominal home values across the combined capital cities increased by 7.4% however, including inflation, real home value increases have been recorded at 6.0%. Across the individual capital cities, real home value growth over the past year has been below 1.5% in all cities except for Sydney 12.5% and Melbourne 4.2% . When you compare the annual change in real capital city home values to the 10 year real annual change it shows that only Sydney, Melbourne and Brisbane are outperforming the decade average. Elsewhere real home values have increased at a rate which is below the decade average. Over the past five years, real combined capital city home values have increased by 1.2% per annum compared to 2.2% pa over the past decade and 4.3%pa over the past 15 years. Over the past five years, real home values have increased at a rate of 4.0% pa in Sydney and by 1.3% pa in Melbourne. Every other capital city has recorded real value falls over the period with values down -2.3% pa in Brisbane, -1.3% pa in Adelaide, -1.0% pa in Perth, -3.9% pa in Hobart, -1.6% pa in Darwin and -1.2% pa in Canberra. Even over the past 10 years home values have fallen in real terms in Hobart whilst they have recorded gains elsewhere. Over the longest timeframe shown, 15 years, Perth has recorded the strongest annual value increases at 5.5% pa, followed by: Melbourne 5.0% pa , Brisbane 4.8% pa , Hobart 4.7% pa , Canberra 4.6% pa , Adelaide 4.5% pa , Darwin 4.2% pa and Sydney 3.5% pa . One of the features of the capital city housing market has been the strength of growth in home values across Sydney and Melbourne since the end of 2008 following value falls during the financial crisis in 2008. From December 2008 to March 2015 nominal home values have increased by 40.2% however, in real terms value growth is much more moderate at 18.2% over the period. Over this period real home values have recorded falls in Brisbane, Adelaide and Hobart while Perth, Darwin and Canberra have each recorded real home value growth of less than 10%. Only Sydney 42.0% and Melbourne 26.9% have recorded any significant real increases in home values over the period. Earlier this week RBA Governor Glenn Stevens noted that there is generally too much attention on the Sydney housing market which ignores the 80% of Australians that don’t live in that city. Looking at the real change in home values really highlights this point; value growth has been comparatively very strong over recent years in Sydney while most cities have actually recorded real declines in values. What’s also interesting is that although Sydney is seeing a strong rise in both nominal and real home values currently, over the past 15 years it has been the overall weakest performing capital city housing market.

Australia has a glut of bedrooms but a dearth of policies in place to make these rooms and homes available to those who need them most

The last Census showed that across Australia we have ample bedrooms to cater to our population yet the lack of new housing supply over recent years along with increasing demand for homes has resulted in increases in home values. Particularly in Sydney and Melbourne the escalation in home values over recent years has been strong while most other capital cities have largely remained on the sidelines. The 2011 Census showed that at that time there were 21,507,717 residents of the country. The data also showed that there were 7,760,320 private dwellings which were occupied at the time with a further 10.7% unoccupied. Given this, and if we assume that everyone has a dwelling to live in, each occupied dwellings would have an average of 2.77 residents. According to the Census data, on average occupied dwellings in Australia have 3.1 bedrooms which is theoretically more than ample bedrooms to house the population. The above table which is lifted from the Census shows that there are far more bedrooms than required across the country. In fact, if we exclude those labelled as ‘none’, assume the 4 bedrooms or more category is just 4 bedrooms and exclude those where the number of bedrooms aren’t stated there were 22,866,601 bedrooms at the time of the 2011 Census. When you consider that many married couples sleep in the same room there is actually a substantial oversupply of bedrooms nationally. The problem is we have a housing market and taxation system which largely discourages home owners from moving to more appropriate accommodation as their lifestyle evolves. Furthermore, the high cost of housing makes it difficult for some younger home owners to move into more appropriate accommodation as their family grows. First of all, home owners are taxed via stamp duty when they buy a new home, if they also sell they incur agent commissions. Both of these factors act as a disincentive for home owners to move on a more regular basis. The disincentive for home owners to move on a more regular basis is highlighted when we look at the turnover of house and unit stock. On a monthly basis, the record-high number of sales occurred in July 2003 when there were 59,414 sales over the month. In comparison over the past 12 months there has been an average of 40,561 dwelling sales a month which is -32% lower than the peak. While sales volumes peaked in July 2003, the national population was recorded at 19.7 million persons at the end of June 2003. The latest data to September 2014 shows that the national population was 23.6 million persons which is 3.9 million more persons than there were in June 2003. Despite the fact that the population is substantially larger than it was in 2003 there are now fewer homes selling. Housing is one of the most heavily taxed asset classes; the most recent data for the Australian Bureau of Statistics ABS showed that over the 2012-13 financial year, $35.931 billion in property related taxes were collected by state and local governments. Looking at the breakdown of this data, property related taxes were collected from the following sources: 17% was land taxes, 40% was municipal rates, 36% was stamp duty on conveyances, 3% was government guarantee borrowing levies and 4% was from other sources. Stamp duty in particular is the most contentious of these taxes because it is only collected from homes which are transacted rather than being broadly taxed on all homes. Over a typical year only around 5% to 7% of properties nationally are sold, given this more than a third of all property related revenue is collected based on how many homes are sold in a given year. As I have mentioned previously, in my opinion shifting away from a turnover dependent tax such as stamp duty to a more stable and broad tax such as land tax would seemingly make sense as well as potentially improve labour mobility and encourage residents to shift into more appropriate accommodation. While investment properties incur capital gains tax, the sale of a home that is owner occupied doesn’t incur any capital gains tax. If the owner occupied home is sold, agent commissions are payable and if a new home is purchased stamp duty would be payable. This is probably one of the major reasons for the excess number of bedrooms across the country, after the children move out of home there is simply no real incentive to downsize. Furthermore, many homes have seen significant value appreciation over the past 25 years so there is substantial equity in these homes which can be withdrawn by the owners. As owners of owner occupied property enter into retirement, their tax-free home is also currently not included in the pension asset test. Essentially this means that if an owner has held their home for say 25 years they have likely seen a significant rise in the home’s value and can then retire and still receive the pension. Again, if they were to sell and re-purchase they would incur stamp duty so there is little incentive to do so. Most people enter retirement with little or no mortgage so excluding the family home from the pension asset test seems counter-intuitive as it creates an additional cost to the government for people who can afford to sell or take out a reverse mortgage in order to fund their own retirement. On the other hand, there is the argument that some pensioners have very little other than their home to fund their retirement so there would likely need to be some balancing with regard to this policy. You also don’t necessarily want to put pensioners in a position where they have to sell their home to fund their retirement and as a result have to move further away from their support network. Australia needs to investigate ways to encourage greater household mobility along with encouraging people to shift over time into more appropriate housing. The removal of stamp duty would seem like an easy place to start along with including the family home in the pension asset test for retirees. Stamp duty removal would make it easier for home owners to move into more appropriate and suitable accommodation as their family life cycle changes. Including the family home in the pension asset test may act as a disincentive for retirees to stay in their large tax-free homes and would also reduce the impost on the Government to pay a pension to these retirees, many of whom have the equity in their home to fund their own retirement or could release the equity to fund their retirement by moving to a smaller home. The data clearly shows that there isn’t an undersupply of bedrooms it is simply that many of these homes are locked away from the market because there is no incentive to move homes. Incentivising home owners to shift to more appropriate accommodation could go a long way to improving supply-side issues in the housing market.

Capital city clearance rate reaches 79.2 per cent, the second strongest result on record

CoreLogic RP Data National Auction Comment, week ending 19 April 2015 It has been another strong week for auction activity, with a preliminary auction clearance rate of 79.2 per cent this week, the strongest result since September 2009. There were 2,541 auctions held across the combined capital cities. Last week, the final auction clearance rate was recorded at 77.2 per cent with 1,674 residential properties taken to auction. At the same time last year, due to the Easter long weekend, auction volumes were low across most cities, with just 642 capital city auctions held. So far this year, with 12 weeks of auction results having been reported, the combined capitals have seen clearance rates above the 75 per cent mark in eight of these weeks. There were 1,252 Melbourne auctions held this week, with a preliminary auction clearance rate of 78.7 per cent. Over the year to date, Melbourne’s clearance rate has been outperforming when compared to the same periods over the past four years, however the number of homes taken to auction so far this year is slightly below last year. The best performing Melbourne sub-region this week was Melbourne’s Outer East, where 73 auction results were recorded, with a clearance rate of 93.2 per cent. Auction activity was also solid across the Inner South region 86.8 per cent . In what was yet another strong result for Sydney, this week’s preliminary auction clearance was 88.3 per cent, the strongest clearance rate for the city on record. There were 950 auctions held across Sydney this week, up from 671 over the previous week. Since the last week in January this year just shy of 9,890 Sydney homes have been up for auction and the number of transactions is around 8,300. The high success rate shows that vendors and buyers within this market are well aligned, which is also reflected in the short time it is taking to sell a Sydney home by private sale. Much like last week, Sydney’s Eastern Suburbs performed well this week, with 62 auctions held and so far, 95.9 per cent of reported auctions sold. A similar result was obtained across North Sydney and Hornsby 95.0 per cent and Blacktown 94.7 per cent . Brisbane’s preliminary clearance rate this week was 48.3 per cent, down from 54.4 per cent last week, which was the second highest clearance rate for the city this year. There were 139 Brisbane auctions this week, compared to 117 last week. The Gold Coast was host to 103 auctions this week. Based on the results reported to CoreLogic RP Data so far, 65.8 per cent have been sold. In Adelaide, the preliminary clearance rate was 70.5 per cent, compared to 68.6 per cent last week. As the year progresses, Adelaide’s clearance rate is becoming increasingly strong. There were 37 Perth auctions this week and so far 19 results have been reported, with just 21.1 per cent selling. Last week there was a 57.1 per cent clearance rate for Perth. Canberra’s clearance rate was 73.7 per cent this week, compared to 72.7 per cent last week. In Tasmania, 6 auctions were reported to CoreLogic RP Data with 2 sales. Last week, 8 auctions were reported with 4 sales.

The relationship between dwelling approvals, commencements and completions

Earlier this week the Australian Bureau of Statistics ABS released building activity data for the December 2014 quarter. The data includes quarterly figures for dwelling commencements and dwelling completions. With a record number of dwelling approvals coming through the system it is important to track this data as it provides insight into how many of these approvals are ultimately being constructed. Over the past 30 years, approvals and commencements have been highly correlated with the vast majority being approved and commenced in the same quarter. If we look at the relationship between approvals and completions, most houses are completed two quarters after approval while most units are constructed three quarters after being approved. Based on this data over the past 30 years, 96.5% of house approvals have moved to the commencement phase and 96.2% of unit approvals have been commenced. Looking at the completion rate for houses based on a two quarter lag, 95.1% of houses which have been approved are ultimately completed. For units the completion rate has been somewhat lower. Using a 3 quarter lag between approval and completion, 86.9% of units approved for construction have been completed. On this logic, detached housing approvals are much more likely to result in a completed product, with a fallout rate of just 5%, while apartment approvals are less likely to ultimately be constructed, with a dropout rate close to 15%. The results are much different over the past five years with the correlations not as strong as they have been over the longer term, particularly for apartments. The commencement rate for properties approved for construction over the past five years has been stronger than it has been over the past 30 years. Over the past 30 years, 96.5% of houses approved had been commenced in the same quarter compared to 98.1% over the past five years. For units, the commencement of approvals has typically been a quarter later over the past five years however, the likelihood of commencement has increased from 96.2% over the past 30 years compared to 97.8% over the past five years. Looking at the completion rate of approvals over the past five years, with a lag of two quarters 96.7% of houses approved for construction have been completed over the past five years. For units, based on a three quarter lag 85.1% of units approved have been completed. Note that the completion rate of houses over the past five years has been stronger than over the past 30, while the unit approval to completion rate has been slightly lower. One of the possible reasons for the reduced completion rate of units is likely to be the increasing level of high density unit construction. While the data indicates a lag of three quarters from approval to completion the reality is higher density unit construction takes significantly longer to complete often a number of years. The data highlights, whether you look at it over the longer or shorter timeframe, that houses which are approved for construction are ultimately more likely to be completed than units. With a record-high number of unit approvals currently there is no guarantee that they will all end up constructed. The long term and short term averages indicate we should expect around 15% of apartment approvals won’t transition to a completed product. The more timely dwelling approvals data showed an all-time high number of approvals in January and the second strongest month on record in February. The data clearly shows that the pipeline of housing construction is continuing to grow and that commencements will likely remain high for most of 2015 while the heightened level of completions is likely to extend out over the next few years at least.

Auction volumes to rise in Sydney, Melbourne and Perth

CoreLogic RP Data National Auction Preview, week ending 19 April 2015 This week, CoreLogic RP Data is currently tracking 2,936 auctions across Australia, with 2,296 scheduled in the capital cities. The coming week of auction activity will bring auction volumes back into line with where they were sitting prior to the seasonal Easter slow-down. At the same time last year, only 642 capital city auctions were held, given the seasonal effect from Easter. The final auction clearance rate for last week confirms that Sydney’s auction market is not showing any signs of slowing down; with last week signifying the 9th week in a row in which the Sydney auction clearance rate remained above the 80 per cent mark. The consistently high rate of clearance highlights that there is increasingly more incentive for Sydney vendors to consider selling their home by auction. The last time an auction market was recording results this strong was towards the end of 2009 and the start of 2010, when Melbourne’s clearance rate was trending above the 80 per cent mark. At this time, however, the number of auctions being held across the city was lower than what is currently being experienced across Sydney. Melbourne is set to host 1,145 auctions this week, an increase from 716 last week. Melbourne’s final auction clearance rate was recorded at 77.6 per cent last week, strengthening when compared to the 76.2 per cent clearance rate recorded over the first quarter of 2015. Last week, 671 Sydney auctions were held with a final auction clearance rate of 83.4 per cent. This week, 845 Sydney auctions are expected. The number of auctions have not returned to the volumes seen in the lead up to Easter, however, the clearance rate is maintaining strength with no signs of slowing down. Brisbane is expecting 119 auctions this week, almost unchanged when compared to the 117 auctions held last week. Brisbane’s final auction clearance rate was recorded at 54.4 per cent last week, a strong result for the city. Over the March 2015 quarter, Brisbane’s auction clearance rate was recorded at 46.5 per cent, having improved from 44.3 per cent over the final three months of last year. This week, Adelaide has 85 auctions scheduled, up only slightly from 83 last week. While Adelaide recorded a strong preliminary auction clearance rate this week, as additional results were reported the clearance rate revised down to 68.6 per cent, which is trending in line with what was observed over the few weeks leading up to the Easter slow down. Canberra has 56 auctions scheduled this week, compared to 53 last week, when a final clearance rate of 72.7 per cent was recorded. There are 32 Perth auctions scheduled for this week, up from 24 last week. Over the same week last year, Easter brought the volume of Perth auctions down to virtually nothing, with just 3 homes taken to auction over the seven day period. Nationally, the two suburbs with the most auctions scheduled this week are both located in Melbourne. The neighboring suburbs of Glen Waverley and Mount Waverley each have 17 auctions scheduled to take place on Saturday.

Strong national auction clearance rate maintained last week as volumes rise from a low base

CoreLogic RP Data National Auction Comment, week ending 12 April 2015 Auction volumes increased this week, albeit from a low base due to the Easter long weekend, with 1,568 auctions scheduled across the combined capital cities this week. A total of 1,014 results were recorded with the preliminary clearance rate remaining stable at 79.0 per cent, up only slightly from 78.9 per cent last week. At the same time last year, 67.2 per cent of all capital city properties taken to auction recorded a successful sale, while volumes were much higher at 3,534; however volumes were elevated in what was last year’s lead up to the Easter long weekend. As Australia’s largest auction market, Melbourne’s preliminary auction clearance rate was recorded at 77.7 per cent this week, more than 10 per cent higher than at the same time last year, when over the week the auction clearance rate was recorded at 64.4 per cent. The number of Melbourne homes taken to auction this week was 674, compared to just 63 last week and 1,530 over the same week in 2014. Across Melbourne’s sub-regions, the strongest performers this week were the Outer East region 91.7 per cent , followed by Melbourne’s Inner East, where the clearance rate was recorded at 84.9 per cent. Sydney vendors continued to experience strong conditions across the auction market this week, with the preliminary auction clearance rate recorded at 84.8 per cent with 619 auctions held across the city. In comparison, over the previous week, 427 Sydney auctions were held with a highly comparable clearance rate of 84.7 per cent, while one year ago, Sydney’s auction clearance rate was recorded at 74.8 per cent across 1,496 auctions. This is the ninth week in a row where Sydney’s auction clearance rate has been recorded above the 80 per cent mark. An exceptional result was recorded across Sydney’s Eastern Suburbs this week, with 35 auctions reported to CoreLogic RP Data and 34 of these recording a sale. Brisbane saw 111 auctions take place this week, with just over half of all results collected recording a sale 50.9 per cent . This week’s preliminary clearance rate is stronger than both last week, when 40.0 per cent of Brisbane auctions sold and at the same time last year, when the final auction clearance rate was recorded at 45.3 per cent. Across the Gold Coast, 57 auctions were held this week, with the preliminary clearance rate recorded at 56.5 per cent. A total of 80 Adelaide homes were taken to auction this week, with a strong preliminary clearance rate of 88.5 per cent, up from 69.4 per cent at the same time last year, and higher than the 83.3 per cent recorded last week. Perth’s preliminary clearance rate this week was recorded at 77.8 per cent, up from 60.0 per cent the previous week and also higher than the 43.5 per cent recorded at the same time last year. 76.0 per cent of Canberra auctions were successful this week, which leaves the clearance rate relatively stable when compared to last week 71.8 per cent and much higher than at the same time last year 55.8 per cent . There were 10 Tasmanian auctions this week. 7 results were reported to CoreLogic RP Data, with 4 sales recorded.

Is lending to investors finally starting to slow?

The Australian Bureau of Statistics ABS released housing finance data for February 2015 earlier today. The results suggested to me that perhaps; after many warnings, the exuberance from the investor segment of the market is starting to slow. Keep in mind that investor borrowing remains at near record highs however, there have been signs that the growth has slowed recently. In February, there was $30.4 billion worth of housing finance commitments which was -1.0% lower over the month. $18.3 billion was committed to by owner occupiers compared to $12.1 billion to investors. Over the month, the value of owner occupier housing finance commitments increased by 0.5% while the value of investment commitments was -3.4% lower, the largest monthly fall since January 2012. Year-on-year, the value of owner occupier housing finance commitments has increased by 8.7% compared to a 9.9% increase in investment lending. Taking a closer look at the owner occupier commitments shows that virtually all of the growth is coming from the refinance segment. As previously mentioned, owner occupier housing finance commitments increased by 0.5% in February with construction of new -0.2%, purchase of new +5.7%, refinances +4.5% and purchases of established stock -2.3%. Year-on-year, construction of new is +1.1%, purchase of new is +7.5%, refinances are +28.4% and purchase of established stock is +0.1%. This data indicates that refinances are the driving force behind the increase in housing finance commitments by owner occupiers. It suggests that many home owners are shopping around for a better mortgage deal, which should come as no surprise considering the low mortgage rates that are available and the heightened level of competition across Australia’s lenders. It may also be indicative of many home owners refinancing their mortgage with the intention of purchasing an investment property or using their equity to invest in some other asset class. Turning to the investment segment of the market, which recorded its largest monthly fall in commitments since January 2012 in February 2015 with a fall of -3.4%. Although I try not to read too much into one month’s data, the value of investment housing finance commitments has now fallen in three out of the past four months. Breaking the results down further shows that investor commitments for construction of new stock was -15.8% lower over the month while established home commitments fell -2.5%. Year-on-year investor commitments for construction were -37.9% lower while commitments for established stock rose by +15.2%. The chart below shows that the investors overwhelmingly favour borrowing for established stock as opposed to new stock. Keep in mind that there is significantly more established stock to choose from than new stock. The owner occupier and investor data paired shows some interesting trends. Over the month, owner occupiers committed to $2.8 billion in new housing stock while investors committed to $0.7 billion in new housing stock. This indicates that new stock made up just $3.5 billion in new commitments or 11.4% of total commitments or 14.3% of total new commitments excluding refinances . Whether it is the investment or the owner occupier segment, a relatively small proportion of borrowing is directed towards new construction. Year-on-year the value of owner occupier commitments for new housing is +3.3% higher while the lumpy investment series is -8.7% lower. On the other hand the owner occupier segment of lending for established stock was +0.1% higher year-on-year while investor commitments for established stock were +15.2% higher. This data seems to indicate that much of the new unit stock being built across the major capital cities is not being purchased by local investors. Local investors generally have a preference for existing stock rather than newly constructed stock. A proportion of this new construction is being purchased by owner occupiers but the data suggests implies a lot of the newly developed unit stock is being purchased by offshore investors. This month’s data makes for interesting reading and while it is still early days it seems like growth in the local investor segment of the market may be cooling we have though this to be the case previously and the market surged once again! . Additionally, the heightened level of refinances may lead to more investor activity over the coming months. We know that APRA are monitoring lending standards closely and they, along with the RBA, are carefully watching the investment segment of the market. No doubt the regulators will be happy to see that growth in the investor lending segment is slowing and will be hopeful that overall credit growth to investors falls back within the APRA guidelines of ten percent per annum based on February data, investor credit growth was at 10.1% growth over the past year . Housing credit data also indicates that the rate of growth in investor demand has slowed over recent months which may indicate that the warnings from the RBA and new benchmarks from APRA are starting to be heeded.

Auction volumes slow to pick up following the long weekend.

CoreLogic RP Data National Auction Preview, week ending 12 April 2015 In response to the Easter long weekend, capital city auction markets took a break last week, with only 653 capital city auctions held, down significantly from 3,668 over the previous week. The auction clearance rate, however, maintained its strength, with 78.9 per cent of auctions recording a successful sale, compared to 77.6 per cent the previous week and a much lower 66.2 per cent over the same week last year. Given that school holidays continue, auction markets remain relatively quiet, with only 1,478 capital city auctions set to take place this week and 1,958 nationally. In comparison, at the same time last year, 3,534 capital city homes went to auction in what was last year’s lead up to the Easter long weekend. To put this into perspective, if we exclude last week, so far this year there has been an average of over 2,100 across the combined capital cities each week. Across Melbourne this week, 626 auctions are set to take place, up from 63 last week and lower than the 1,530 at the same time last year. For the past seven weeks, Melbourne’s clearance rate has consistently remained above 75 per cent. The clearance rate across Melbourne has not been this strong since early 2010. Last week there were 427 residential properties taken to auction in Sydney, with 586 expected this week. In comparison, at the same time last year 1,496 auctions were held. So far this year, Sydney is currently experiencing the strongest auction clearance rate conditions that CoreLogic RP Data has on record. There are 102 auctions expected in Brisbane this week and 289 across the state. In comparison, there was 61 Brisbane auctions last week and 240 over the same week last year. Adelaide is set to see 82 properties taken to auction this week, up from 34 last week and 144 at the same time last year. Adelaide’s clearance rate has been fluctuating between 52 per cent and 84 per cent so far this year, with the average number of homes taken to auction each week around the 100 mark. In Canberra, CoreLogic RP Data is expecting 52 auctions this week, similar to the volume seen last week 49 and at the same time last year 51 . Although Canberra’s auction market is much smaller than some of the other capital city auctions markets, volumes have increased this year, with the year to date number of auctions held this year 26 per cent higher than at the same time last year. Currently there are 20 auctions scheduled across Perth for this week, up from just 6 auctions last week and 56 at the same time last year.

Booming building approvals and slowing population growth are reducing housing undersupply

Regional population growth data was recently released by the Australian Bureau of Statistics ABS for the year to June 2014. By combining this data over time with dwelling approvals over time we can derive localised information to approximate the extent of oversupply and undersupply in the capital city housing markets. The combined capital cities recorded an increase in population over the 12 months to June 2014 of 288,994 persons, down from an increase of 308,206 persons the previous year. While the population increased by 288,994 persons, there were a record-high 145,268 dwelling approvals over the year. The population increase was -6.2% lower over the year while the number of dwelling approvals was 25.6% higher. Based purely on a ratio of population growth to dwelling approvals there was one dwelling approved for construction for every 1.99 residents added to the capital cities. This represents a significant improvement on the ratio of one dwelling approval for every 2.66 new residents over the previous year. The 2011 Census reported that across the nation, households had an average of 2.6 persons. Based on this figure, we have approved significantly more homes than required based on population growth over the past year. Unfortunately, measuring housing demand is not quite so simple. We must also consider how much of the new demand is from overseas migration compared to natural increase as well as factors such as demolitions and holiday home demand. I haven’t found any literature on housing demand from overseas migration compared to natural increase however; I think it is a reasonable assumption that overseas migration creates a more immediate addition to housing demand than natural increase. There has been a noticeable slump in net overseas migration to Australia over the past year. Although it is a little bit old now, the former Deputy Governor of the Reserve Bank RBA gave a speech entitled ‘Housing and the Economy’ to the National Housing Conference in November 2009. Two of the most interesting and relevant points to housing demand from the speech were: 1. A higher proportion of the new dwellings built are simply replacing existing homes that have been demolished. The RBA estimated that between 2001 and 2006, around 15% of new dwellings built replaced those that had been demolished; 10 to 15 years earlier that figure was less than 10%. 2. A significant proportion of dwelling investment appears to have gone into holiday homes or second homes. Census data 2006 Census shows that the number of dwellings built has exceeded the increase in the number of households by a large margin. As a result, the ratio of the number of dwellings to the number of households has been rising over time; as at 2006, there were 8% more dwellings in Australia than there were households. Presumably, most of this surplus reflects holiday homes and second homes. Based on these two points from the former deputy governor’s speech, in order to cater to dwelling replacements and secondary homes we should construct 23% more dwelling than the previous simplistic analysis of measuring the rate of population growth compared to approvals. There are a few points and assumptions to keep in mind here: 1. This analysis is based on approvals not completions and approvals won’t necessarily become a completion; based on our calculations completion rates are historically 98% for houses and 85% for units. 2. The heightened level of inner-city unit development in most instances would see fewer homes demolished to make way for this new construction. 3. Holiday and second homes ae generally more likely to be located outside of the capital city than within. 4. Anecdotally activity from foreign buyers is increasing, a proportion of these homes sit unoccupied and don’t even enter into the rental market. So while the supply of housing has increased if the property sits vacant it is more reflective of secondary homes. Given these qualifications, the point about holiday and second homes is likely to be less relevant here, but in the absence of more up-to-date data we will still allow for the 15% of homes which have been demolished when looking at the approvals data. The 2011 Census reported that on average, Sydney, Brisbane and Darwin had 2.7 persons per household, Melbourne, Perth and the ACT had 2.6 persons per household and Adelaide and Hobart had 2.4 persons per household. Returning to the original findings, over the year to June 2014 the capital city population increased by 288,994 persons and 145,268 dwellings were approved for construction. If we adjust these figures based on the average household sizes as at the 2011 Census, based on population growth the capital cities required 109,825 new homes. If we further adjust for the assumption that the country needs to approve 15% more homes to replace demolitions, the capital cities required 126,298 new homes last year. Given this, 18,970 more homes were approved for construction than were required over the year compared to a deficiency of 19,076 homes the previous year. The above chart shows that new dwelling approvals were typically sufficient for the rate of population growth throughout the 1990’s however, since the beginning of the 2000’s population growth has boomed while new approvals have largely been unresponsive. Dwelling approvals are now climbing on the back of rising home values and increasing demand for homes. Keep in mind, the heightened level of dwelling construction will have to persist for a number of years to make up for the cumulative effect of the insufficient supply response over the past decade or so. Over the past year, each capital city had more homes approved for construction than was required based on population growth. While dwelling construction is a positive outcome for the economy, it is important to note that an approval doesn’t necessarily translate into a completion. Furthermore, there is a time lag between approval and completion; these homes are required right now, not in a year or twos time or longer in some unit developments . The following charts track the annual population growth and annual number of swelling approvals across each of the capital cities. The above charts show that the disconnect between new dwelling approvals and population growth since the beginning of the 2000’s has been largest across the four most populous capital cities. These four cities are also home to a majority of the national population and have also been recording the greatest increase in residents over that period. A further important consideration for housing supply and demand is the type of new product that is being built. While the city-wide analysis can be useful it should be remembered that new housing is typically either new detached houses on the outskirts of the city or medium to high density product within the inner city areas. We are seeing over time a shift from greenfield and brownfield detached housing development to inner city infill and higher density development across most capital cities. In fact, over the past year more than half of all capital city dwelling approvals have been for units as opposed to houses. The analysis shows that within the four largest capital cities there has been a deficiency of dwellings approved for construction over recent years compared to the rate of population growth. Over the past 24 months or so there has been a surge in dwelling approvals, at the same time the rate of population growth has slowed. The RBA has spoken many times about looking to extend this period of heightened construction activity for a number of years. Not only would this have a multiplier effect throughout the economy but it would also help to improve the undersupply of housing which currently exists. In 1991, 29.9% of all dwelling approvals across the combined capital cities were for units showing an overwhelming majority of approvals were for houses. Over the most recent year, 51.6% of capital city dwelling approvals were units. In 2013 50.1% and 2014 51.6% it was the first time that there were a greater number of capital city unit approvals than house approvals. The above chart shows that since 2010 when 38.1% of all approvals were for units, there has been a strong trend towards a smaller proportion of house approvals. Over the past 12 months, each of Sydney, Melbourne, Brisbane, Darwin and Canberra have approved more units than houses. Sydney, Darwin and Canberra have approved a majority of units for more than a decade however, in Melbourne and Brisbane the rising prominence of unit approvals is a relatively new phenomena. Adelaide, Perth and Hobart have each recorded a significantly lower proportion of unit approvals, in fact as a proportion, Perth and Hobart had fewer unit approvals last year than they had 20 years ago. Data from the 2011 Census showed that across the separate house category, the most prevalent number of bedrooms is 3 bedrooms 49.6% and 4 bedrooms 32.4% . When you combine the Census data for semi-detached and units, the most prominent number of bedrooms in 2 bedrooms 50.1% and 3 bedrooms 28.6% . To look at it another way, 88.8% of detached houses have three bedrooms or more compared to 66.9% of units having 2 bedrooms or fewer. The point being that more units are being approved and constructed however, they typically have fewer bedrooms and are likely to have a smaller average household size than a detached house would. Given this, it is likely that as more units are constructed, we will actually need more housing than we would have if houses had been exclusively built because of the potential smaller household size. The challenge of course is that while the pipeline of approvals is very strong, there are more unit approvals than houses and ultimately these units are less likely to be built than houses. The other feature we are seeing in the market is the rise and rise and rise of the investor segment. In fact the value of loans to investors has been greater than new loans to owner occupiers over each of the past 6 months and that has never happened before. A lot of the new unit construction taking place is to cater to demand from the investment segment of the market. The important thing to note is that while investment style detached houses are fairly similar to houses for owner occupiers, the same is not necessarily the case for units. The type of unit that someone is willing to live in while they are renting is often quite different to what they would be willing to live in as an owner occupier. This is largely in relation to internal floor area, kitchen size and design and balcony size. With investment purchases surging, a large proportion of the new unit development is targeted at that market while units for owner occupation are not as prevalent. Of course developers build what product is going to sell. The potential cause for concern is that many of these investors exit the housing market when the returns aren’t as strong as they currently are. What could then happen is a lot of investment stock hits the market at a time of falling demand coupled with a product offering which is not what the market wants. Despite this potential cause for concern, it is very encouraging to see an improving relationship between housing demand and housing supply. With population growth looking likely to slow further it would be encouraging, particularly from a housing affordability perspective if the heightened level of approvals persisted. More importantly of course will be that we see these approvals ultimately constructed, particularly in our largest capital cities where housing deficiency has been greatest.

Dwelling approvals fall to the second highest month on record in February

Earlier today the Australian Bureau of Statistics ABS released building approvals data for February 2015. After a record high monthly number of dwelling approvals in January 2015 approval numbers could not quite be matched in February although they remain at near-record highs. Over the month there were 18,768 dwelling approvals, down from 19,397 in January. Although approvals fell by -3.2% over the month, the number of approvals in February was still the second highest monthly figure on record. The number of approvals has increased by 14.3% over the past twelve months highlighting that there is a clear boom in approvals which sit at highs never before seen. Given that housing supply has been insufficient for the past decade this is a welcome development, especially considering the strong multiplier effect of higher rates of construction on the Australian economy. Over the past 12 months there have been a record high 205,929 dwellings approved for construction. Looking at a breakdown between houses and units, the data shows that over the month there were 9,613 houses and 9,155 units approved for construction. House approvals were 0.2% higher over the month while the more lumpy unit approvals recorded a -6.6% monthly fall. Year-on-year, house approvals are unchanged while unit approvals have increased by 34.5%. With such a higher rate of growth in new apartment approvals, is clear that the new unit segment of the market is booming at the moment. Over the 12 months to February 2015 there were 114,747 house approvals and 91,183 unit approvals. While house approvals were a long way from their record high annual approvals of 140,832, unit approvals currently sit at an all-time high. Looking at the capital city data it becomes further evident that new unit construction is booming, particularly across the east coast capital cities, despite a sharp rise in house approvals in February. Over the month, capital city house approvals increased by 26.6% and capital city unit approvals rose by 11.5%. The year-on-year figures show the trend towards unit approvals with house approvals increasing by 3.5% compared to a 43.0% jump in unit approvals. Over the 12 months to February 2015 there were a record-high 153,303 capital city dwelling approvals. Dwelling approvals have increased by 13.0% over the year. Over the past year there were a record high number of dwelling approvals in Sydney 39,802 , Melbourne 51,037 and Brisbane 23,303 . Approvals were below their record highs but still hefty in Adelaide 8,990 , Perth 26,942 , Hobart 981 , Darwin 1,820 and Canberra 3,428 . Note that despite Sydney being our most populous city and arguably having the greatest under-supply of housing and increases in home values, the number of approvals was much lower compared with Melbourne. Focussing on the detached housing market there were 75,597 capital city house approvals over the year to February 2015 which is 14.6% higher than the previous year. Across the individual cities, there were 13,503 approvals in Sydney, 22,530 approvals in Melbourne, 10,671 in Brisbane, 5,755 in Adelaide, 19,891 in Perth, 887 in Hobart, 795 in Darwin and 1,565 in Canberra. Note that Melbourne house approvals were almost double that in Sydney and Perth was also significantly higher. Over the year, the change in house approvals has been recorded at: 17.5% in Sydney, 15.5% in Melbourne, 31.4% in Brisbane, 4.0% in Adelaide, 8.8% in Perth, 50.1% in Hobart, 5.4% in Darwin and -5.1% in Canberra. Across the unit market there were 80,706 capital city approvals over the past year accounting for 51.6% of all capital city dwelling approvals and a record-high annual number. Unit approvals in Melbourne 28,507 and Brisbane 12,632 were at historic high levels over the year while Sydney and Perth were also close to a record high with 26,299 and 7,051 unit approvals respectively. Elsewhere there were 3,235 unit approvals in Adelaide, 94 in Hobart, 1,025 in Darwin and 1,863 in Canberra. Unit approvals were higher over the year in Sydney 1.7% , Melbourne 27.4% , Brisbane 12.3% , Adelaide 25.8% , Perth 21.7% and Darwin 4.9% but fell in Hobart -47.8% and Canberra -45.2% . Unit approvals accounted for more than half of all approvals in Sydney 66.1% , Melbourne 55.9% , Brisbane 54.2% , Darwin 56.3% and Canberra 54.3% . Sydney, Darwin and Canberra have approved more units than houses for many years however, in Melbourne and Brisbane this is a relatively new phenomena. With unit approvals at all-time highs in both Melbourne and Brisbane we have some concerns around exactly who is going to buy all this stock. Of course demand for inner city units is growing however supply can quickly turn to a glut if there is too much development. Rental growth is already slow in both cities and given units tend to be favoured by investors there are some concerns about a potential glut of this stock in Melbourne and Brisbane. It should be noted that just because a dwelling is approved doesn’t necessarily mean it will be constructed and there are generally many more hurdles in order to deliver high-rise units. Record high unit approvals with record low interest rates are likely to create some risks, most notably a risk of oversupply of inner city units in Melbourne and Brisbane where the level of new construction is unprecedented. Further down the track as interest rates rise and capital growth slows there are some concerns that the heightened level of investor activity in the Sydney and Melbourne unit markets may result in value falls if and when these investors exit to asset classes enjoying a superior performance. Particularly considering that rental returns for Sydney and Melbourne units are at near record lows and rental growth is moderate.

The number of new residential property listings slows down in the lead up to the Easter long weekend

Each year, in the weeks leading up to the Easter long weekend, the number of new listings coming onto the market often slows down. This year has been no exception, with the number of residential properties being added to the market beginning to fall on a week-by-week basis. Across the combined capital cities, the number of new listings coming onto the market over the four weeks ending 22 March was -1.6 per cent lower when compared to the previous rolling four week period and over the week ending 29 March, new listings were a further -4.0 per cent lower. There were 27,238 new capital city properties advertised for sale over the four weeks ending 29 March 2015, -13.3 per cent lower than at the same time last year, however overall stock levels 103,022 across the combined capital cities are just -3.9 per cent lower than they were at the same time last year. Perth 20,409 compared to 17,406 , Darwin 1,452 compared to 1,091 and Canberra 2,344 compared to 1,911 are all recording higher total stock levels than they were at the same time last year, however the number of new listings for each market is lagging behind when compared to the same four week period one year ago which, as mentioned previously, is likely to be attributed to the seasonal slow-down leading up to the Easter long weekend. Across Sydney, the total number of listings over the most recent four week period was recorded at 19,047, down -16.2 per cent when compared to the 22,723 properties available for sale at the same time last year and new listings being added to the Sydney market are currently -20.9 per cent lower than at the same time last year. In Melbourne, total listings are -10.4 per cent lower, -6.0 per cent lower in Hobart, -4.2 per cent lower in Adelaide, while total listings are just -1.5 per cent lower than over the same four week period last year in Brisbane. One interesting thing to take note of is that currently the number of total listings across Perth is higher than the number of listings that CoreLogic RP Data is tracking across the Sydney market. This has generally been the trend since the beginning of the year and it is the first time in the history of tracking listings since 2007 that Perth has had a higher number of properties listed for sale than Sydney. This indicates that stock turnover across Sydney is outpacing the number of new homes coming to the market and can likely be attributed to the strong performance across the residential housing market over the past year. Similarly, Perth’s residential market has shown a slow-down in transactions and value growth since the end of 2013 resulting in less of the listings stock being absorbed. On a national level, over the 28 days ending 22 March 2015, there were 45,039 new residential properties advertised for sale, bringing the total number of houses, units and vacant land properties available for sale across Australia up to 246,708.

Strong clearance rate and record highs for volume in three capital cities

CoreLogic RP Data National Auction Comment, week ending 29 March 2015 A desire by vendors to sell before Easter and the strong market this year has resulted in record volumes for the year in Sydney, Adelaide and Perth. The results show that the high volumes did not overwhelm demand. The auction market is clearly responding positively to the interest rate cut two months ago. A preliminary weighted average clearance rate of 77.5 per cent was recorded this week across capital cities compared to 75.9 per cent last week and 67.7 per cent this time last year. In Sydney a preliminary clearance rate of 84.6 per cent was recorded compared to 84.8 per cent last week and 75.9 per cent last year. Buyers responded very well to the high volumes this week and kept the market in boom territory. In Melbourne a preliminary clearance rate was 78.5 per cent was recorded, compared to 77.1 per cent last week and 66.9 per cent this time last year. Volumes are similar to this time a year ago however more homes have been sold due to strong demand from buyers. In Brisbane a preliminary clearance rate of 45.6 per cent was recorded compared to 41.5 per cent last week and 47.1 per cent last year. In Adelaide a preliminary clearance rate of 69.1 per cent was recorded compared to 64.6 per cent last week. In Canberra a clearance rate of 58.1 per cent was recorded compared to 62.1 per cent last week. In Perth a clearance rate of 57.7 per cent was recorded compared to 23.1 per cent last week and 41.7 per cent last year. Robert Larocca CoreLogic RP Data Housing Market Specialist

The rate of population growth remains strong but continues to slow

The Australian Bureau of Statistics ABS released its demographic data for the September 2014 quarter yesterday. The data showed that over the quarter, Australia’s population was recorded at 23.581 million persons having increased by 1.5% or 354,605 persons over the past year. The increase in population over the past year was actually the lowest increase in national population over a year since the 12 months to December 2011. Looking at the components of the national population increase, natural increase births minus deaths accounted for a 150,721 person increase in population and net overseas migration contributed to a 203,884 person increase. The 150,721 person natural increase was the lowest annual increase since the 12 months to March 2007 while the additional 203,884 persons due to net overseas migration was the lowest since September 2011. As the first chart shows the sharp slowdown in net overseas migration in particular is having a big impact on the overall national rate of population growth. Looking at population growth across the states, the annual increase in population was greatest in New South Wales NSW 106,365 , Victoria Vic 102,021 , Queensland Qld 69,423 and Western Australia WA 53,691 . Annual population growth was much lower over the year in South Australia SA 14,303 , Australian Capital Territory ACT 4,403 , Northern Territory NT 2,765 and Tasmania Tas 1,602 . Over the past year, 58.8% of total population growth occurred in NSW and Vic. If you add Qld and WA those four states account for 93.5% of total national population growth. In terms of the rate of annual population growth, it is currently strongest in WA 2.1% , Vic 1.8% , Qld 1.5% and NSW 1.4% . Elsewhere, the rate of annual population increase was recorded at 0.9% in SA, 0.3% in Tas, 1.1% in NT and 1.2% in ACT. Although the population of each state is continuing to grow, the rate of growth has slowed across the board. In NSW the annual increase in population was the lowest since June 2013, in Vic it was the lowest since March 2013, in Qld it was its lowest since September 2001 and in WA it was at its lowest level since September 2010. Across the remaining states and territories the rate of population growth in SA was its lowest since September 2011, in Tas it was its lowest since March 2014, in NT it was higher than the previous quarter but lower over the year and in ACT it was at its lowest level since September 2006. If we look at the components of population growth at the state level we get even further insight into the trends taking place. Natural increase is basically a function of the overall population size and as a result natural increase is much greater within the largest states. Over the 12 months to September 2014, the natural increase was recorded at 43,069 persons in NSW, 36,794 in Vic, 34,603 in Qld, 6,932 persons in SA, 21,210 persons in WA, 1,503 persons in Tas, 2,882 persons in NT and 3,706 persons in ACT. Turning to net overseas migration, overseas migrants are finding NSW and Vic the most attractive states in which to settle. Over the 12 months to September 2014, 62.0% of the net gain from overseas migration was recorded in NSW and Vic. Across the individual states the net overseas migration was greatest in NSW 69,601 , Vic 56,772 , WA 32,190 and Qld 28,878 . Across the remaining states and territories net overseas migration was recorded at: 10,304 in SA, 1,065 in Tas, 3,266 in NT and 1,798 in ACT. NSW and Vic have always attracted the greatest number of overseas migrants however, as the chart shows the gap has widened significantly over recent quarters. The profile of interstate migration has also changed significantly over recent years. Qld has historically been the powerhouse in terms of interstate migration however, Vic has now taken that mantle. Over the 12 months to September 2014 only Vic 8,455 , Qld 5,942 and WA 291 recorded positive net interstate migration. On the flipside, each of NSW -6,305 , SA -2,933 , Tas -966 , NT -3,383 and ACT -1,101 recorded a net loss of residents to the other three states. This data set is published from 1981 onwards and over that time NSW has always recorded a net loss of residents to other states and territories however, the outflow is currently at a record low. In Vic, the inflow eased slightly from a record high over the previous quarter. Across the other states and territories, Qld net interstate migration is hovering around the lowest level on record, WA interstate migration is at its lowest level since September 2003 and the outflow of residents to other states and territories in NT is at a record high. The data highlights an overall slowing of the rate of population growth which will undoubtedly have an impact on the wider economy. Economic growth is slower than it has typically been over the past 2 decades and is extremely weak on a per capita basis, lower population growth may exacerbate the slowing of economic growth. Dwelling approvals and construction are at record high levels, as we know over the past decade there hasn’t been an ample supply of new housing. The heightened level of construction will go some way to alleviating housing shortages however, it would take a number of years of heightened construction to totally rectify the shortage. Looking at the data, the rate of population growth has slowed and the fall has been most noticeable across net overseas migration. Those migrants who are coming to Australia are favouring settling in NSW Sydney and Vic Melbourne . This is creating further demand for housing in these cities, so too is the fact that Vic now has the highest net interstate migration of any state and the outflow of residents from NSW is at a record low level. Given this it is easy to see the impact demographics are having on the housing markets and why Sydney and Melbourne are seeing much greater housing demand and housing value growth. Fewer people are leaving those cities, more people are coming from interstate and most coming from overseas are choosing to settle in our two largest cities. On the other hand population growth has slowed significantly in other capital cities, fewer residents are leaving NSW and Vic to settle in these states and territories and they are attracting fewer overseas migrants. With population growth now showing a consistent slowdown since the end of 2012 and new housing supply showing a consistent increase since late 2011, the gap between housing supply and demand has significantly narrowed. It is reasonable to assume that higher supply levels and lower housing demand will eventually dampen the exuberant housing market conditions that are so evident in Sydney and to a lesser extent in Melbourne. It is important to note that to-date the supply-side response has been nowhere near as strong in Sydney as it has been across most other capital cities.

Records for auctions in 2015 in three capital cities

CoreLogic RP Data National Auction Preview, week ending 29 March 2015 This is a big week nationally for auctions with record volumes for 2015 expected in Sydney, Adelaide and Perth. The rate cut from nearly two months ago will now be having an impact on listings as vendors will have had sufficient time to both decide sell and undertake a marketing campaign. The fact that this is the last week before Easter will also have had an impact on volumes. There are 3,961 auctions expected this week across Australia with 3,323 expected in capital cities. This is compared 2,896 last week and 3,039 for the same week last year. In Sydney 1,343 auctions are expected this week compared to 1,123 last week and 1,163 this week last year. This is the biggest weekend for auctions in Sydney this year but is short of the all time record of 1,631 at the end of November last year. In Melbourne 1,459 auctions are expected compared to 1,333 last week and 1,414 this week last year. Over one thousand auctions in a week have become the norm for the late summer, autumn and spring markets as volumes have risen with buyer demand and sellers have increasingly opted for auctions as a selling method. There are 195 auctions expected in Brisbane compared to 185 last week and 238 this week last year. This week there are 166 auctions expected in Adelaide compared to 112 last week and 107 over the same week last year. This is the biggest weekend for auctions this year in Adelaide. In Canberra there are 84 auctions expected, compared to 74 last week and 51 this week last year. In Perth 56 auctions expected over the coming week, compared to 46 recorded last week and the 55 on this week last year. This is the biggest week of the year for auctions in Perth. Across Australia the highest volume of auctions in one suburb are 29 in Reservoir VIC . Robert Larocca CoreLogic RP Data Auction Market Specialist

Melbourne Auction Market preview for week ending 29 March

There are 1,459 auctions scheduled this week in Melbourne compared to 1,414 for the same time last year. The highest volume of auctions in a single suburb will be found in Reservoir where 29 are expected. There are 26 scheduled in St Kilda and 24 in Brighton. The compressed autumn auction market, the three weeks between Labour Day and Easter, are delivering excellent results to vendors with clearance rates tracking nearly 10 points above the same time last year while simultaneously showing high volumes. At the end of last year the market appeared to have a slowing trend but the interest rate cut has clearly reversed that. Citywide across the private sale market over the past week the time on market results for houses sold at private sale fell to 31 days, down from 32 days in the previous week. Overall vendor discounting contracted to -5.2 per cent from -5.4 per cent. Key data Clearance rate week ending 22 March: 77.1 per cent Melbourne auctions expected week ending 29 March: 1,459 Melbourne private sales time on market week ending 22 March: 31 days houses Melbourne vendor discounting market week ending 22 March: -5.2 per cent houses Listings being prepared for market are 11.2 per cent higher in the month ending 22 March seasonally adjusted Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

One billion dollars a week on Melbourne property in 2014

Key points Over one billion dollars a week was spent of residential real estate last year Brighton recorded the highest spend, $842m Glen Waverley recorded a $233m rise In 2014 a total of $53.7b, over one billion dollars a week, was spent on Melbourne residential real estate. In 2014 a total of $53.7b, over one billion dollars a day, was spent on Melbourne residential real estate. This is an increase from the $52.9b in 2013 and $43.8b in 2012, reflecting the overall growth in the market over the last few years. It is worth noting that last year was still slightly below the all time record of $54b in 2010. The citywide changes are also reflected at a suburban level. Whilst the top 10 Melbourne suburbs ranked by the total spent on residential real estate did not show a lot of change between 2013 and 2014, the amount spent did. Top of the list was Brighton. Last year an average of $2.3m was spent every day in Brighton property purchases and $378,213 more every day than the previous year. This pushed the entire value of sales from $700m to $841m. Brighton may have a higher value of sales than any other suburb, however the increase was dwarfed by the rises recorded in Melbourne, Glen Waverley, Kew and Toorak. In 2013 for instance, $1.49m was spent on units in the suburb of Melbourne and this rose by half a million dollars a day to $2.05m. This rise is partly due to the increased prices being paid and partly the increased construction. Glen Waverley recorded the most significant difference.. Over the course of the year $233m more was spent on houses which in turn pushed the median house price up from $807,000 to $970,000. Neighbouring Mount Waverley also saw a significant rise of $311,747 on a daily basis. Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

The RBAâ

The Reserve Bank RBA released its bi-annual Financial Stability Review FSR earlier today. The document provides a guide as to the RBA’s thoughts on the overall economy and potential risks. As you’d expect, the residential housing market features heavily in their assessment of financial stability and I will delve into some of the key take-outs for the housing market from the document. Housing loan performance The report details that the share of non-performing banks housing loans ie those housing loans which are at least 90 days in arrears on their repayments was extremely low, recorded at around 0.6% in December 2014 which is down from a peak of 0.9% in 2011. The lack of repayment distress across Australian bank mortgage portfolios is being supported by low interest rates which make servicing the mortgage debt easier. The document also states that rising housing prices also make it easier for those home owners in arrears to sell rather than remain in arrears should they run into financial difficulty. It is important to note that while as a general the statement about rising house prices making it easier to sell is true, the housing market performance varies greatly region-to-region. Although selling a home in Sydney and Melbourne is relatively easy currently thanks to strong value growth and high levels of demand, housing market conditions in Perth, Hobart or Canberra are more challenging and it would probably be more difficult to sell a home in these markets. Competition in the mortgage market According to the Report competition has remained rigorous over the past six months. There is plenty of competition amongst lenders and as a result they are offering attractive fixed rates and significant discounts of up to 100 basis points off their advertised variable rates. The RBA has also noted targeted special rates as an example of short-term rate specials for those refinancing with lower LVRs. Banks have also increased commissions being paid to their brokers. As a result, refinancing activity has increased and around 40% to 50% of new housing loans are sourced from brokers. The RBA does raise some concerns that the rising prevalence of the broker channel potentially creates risks, specifically that misaligned broker incentives could create higher levels of lending outside of their risk tolerance. While APRA wrote to Authorised Deposit-taking Institutions ADIs highlighting its guidelines for sound residential mortgage lending late last year, the high level of competition across the banking sector may create issues, particularly in the investor space. Given APRA has indicated that growth in investor housing credit should not be materially above 10% per annum, the significant competition in the market means that those who can’t source an investor loan from one ADI may still have plenty of other ADIs to choose from. Lending criteria The RBA is reporting that serviceability and deposit criteria have been relatively unchanged over the past six months. They acknowledge that some banks have recently applied stricter criteria for some inner-city unit markets and regional towns linked to the resources sector. Despite the lending criteria being largely unchanged, the RBA acknowledge that low mortgage rates and the strength in demand from the investment segment have increased the macroeconomic risks from the housing market. Once again they have acknowledged that investors may amplify housing price cycles and increase the potential for falls in the future. They also note that the rising share of interest-only loans may also increase risks because there is a period over which the principal is not repaid leaving the household with more debt than they would have if they repaid both the principal and interest on the mortgage. It should be noted that while interest rates are low everywhere and investor activity has increased in most states, the sharp rise in investor participation is most prevalent in Sydney and Melbourne. These two cities have seen the strongest growth in home values over recent years, along with the most significant compression of rental yields which has resulted in these cities exhibiting the lowest rental yields across the capital city housing markets. The risks of investors amplifying the market are greatest within these two cities, particularly given the strong value growth coupled with very low rental yields and high investor concentrations. Investor lending The FSR notes that investor housing credit has increased at an annualised rate of 10.5% over the past six months however, it is too early to expect a slowdown in investment lending just yet in response to APRA’s guidelines. The reason being that the pipeline of pre-approvals was already in place before APRA wrote to ADIs in December highlighting a guideline of a cap of 10% annual growth in lending to investors. The RBA notes that investors have contributed to fuelling the rapid growth in home values in Sydney however, the growth has been more moderate outside of Sydney. The FSR states that periods of value growth also increase expectations for further price rises, creating even more demand. A future fall in housing prices would reduce wealth and dampen spending for the broader household sector, particularly for those households with significant housing debt, not just for the investors who contributed to the upswing. The RBA has also raised potential concerns that the surge in lending from the investment segment could lead to excessive new housing construction and a potential future glut in certain areas. While the RBA points out there is little risk of this currently at a national levels, there are some areas of local vulnerability, namely inner-city units in Melbourne and Brisbane. While the RBA has covered off on the risks surrounding heightened levels of investment lending quite well there are a few additional points that need to be made. While investor activity is strongest in Sydney and Melbourne, these two cities already have the lowest gross rental yields. This feeds in to the comment about amplifying the market but is important to understand; investors are chasing capital growth and having little regard for the returns. Secondly, while there are concerns about too much new housing supply in inner-city Melbourne and Brisbane rental growth is already at its lowest level in more than a decade. Although inner-city Melbourne and Brisbane are areas for concern, there is no mention of the fact that rental rates are already falling in Perth, Darwin and Canberra. Furthermore, while both rents and the rate of population growth are falling in Perth there is simultaneously a record high number of dwelling approvals currently. Mortgage characteristics Although low interest rates and the high level of competition in the mortgage market could create risks, the RBA sees little evidence that lending standards have deteriorated. The share of loan approvals above 90% LVR continued to reduce over 2014. The RBA reports that this shift was led by those lenders that previously reported a higher than average share of these types of loans. The profile of new lending indicates that households remain well placed to service their loans. The area that the RBA points out as a concern is the increase in interest-only lending. The rising level of interest-only lending to investors is consistent with tax deductibility of investors’ mortgage interest payments which act as a disincentive to pay down the principal. The banks have suggested that the rise in owner occupier interest-only mortgages has been driven by the borrowers seeking greater flexibility in managing their repayments rather than affordability pressures. Reportedly some of this demand is from owner occupiers who plan to switch their property into a rental property in the future. The RBA also notes that many of these owner occupiers are building sizeable buffers in their offset and redraw facilities. It should also be noted that in principle, interest-only loans should not increase borrowing capacity because consumer protection regulations imply that lenders should assess a borrower’s ability to service principal and interest payments following the expiry of the interest-only period. ASIC is currently assessing compliance with this obligation through its review of interest-only lending. Despite these considerations, interest-only loans – especially for owner-occupiers – pose greater risk to the financial system because they enable borrowers to pay down the principal more slowly than a conventional mortgage. Conclusion The RBA have spelled out a number of key areas of risk surrounding the residential mortgage market. It is clear that the RBA along with APRA and ASIC are closely monitoring the overall market conditions and are on the lookout for risks and an easing of lending standards. While each organisation has stated publicly their concerns and what they are going to do to allay those concerns, it seems unlikely that any significant changes to policies due to these risks for individual ADIs would be communicated publicly.

National clearance rate reaches 77.4% from weekend auctions

CoreLogic RP Data National Auction Comment, week ending 22 March 2015 After 6 weeks with a clearance rate in the mid to high 70’s sellers in Melbourne, Sydney, Canberra and Adelaide can be quite confident of attaining a good outcome when selling at auction. A preliminary weighted average clearance rate of 77.4 per cent was recorded this week across capital cities compared to 77.2 per cent last week and 69.4 per cent this time last year. In Sydney demand continues to outpace supply at auction with a preliminary clearance rate of 84.7 per cent was recorded compared to 83.9 per cent last week and 76.1 per cent last year. In Melbourne auction market conditions are very strong and favoring sellers. If this continues post Easter it will begin to impact overall price movements. This week the preliminary clearance rate was 78.1 per cent, compared to 78 per cent last week and 69.4 per cent this time last year. In Brisbane a preliminary clearance rate of 52.1 per cent was recorded compared to 47 per cent last week and 37.8 per cent last year. In Adelaide a preliminary clearance rate of 73.8 per cent compared to 66.7 per cent last week. In Canberra a clearance rate of 71.1 per cent was recorded compared to 68.8 per cent last week. In Perth a clearance rate of 17.4 per cent was recorded compared to 41.4 per cent last week and 50 per cent last year. Robert Larocca CoreLogic RP Data Housing Market Specialist

Auctions as a sales method have increased in all capital cities

CoreLogic RP Data National Auction Preview, week ending 22 March 2015 There are 3,003 auctions expected this week across Australia with 2,539 expected in capital cities. This is compared to 2,556 last week and 2,466 for the same week last year. With full data now available for 2014 it is clear that the proportion of sales by auction increased in each capital city when compared to both 2013 and 2012. The use of auctions traditionally grows with prices and competition as vendors and agents seek to take advantage of the rising market. The data shows that compared to other recent upswings this cycle is different as all auction records have been broken in Sydney and Melbourne at the same time as there were more than 100,000 auctions in capital cities. In Sydney 947 auctions are expected this week compared to 926 last week and 982 this week last year. Last year 30.2 per cent of sales were by auction, up from 21.8 per cent in 2013 and over double the 14.1 per cent in 2012. In Melbourne 1,202 auctions are expected compared to 1,269 last week and 1,160 this week last year. Last year a remarkable 33.6 per cent of sales were by auction, up from 29.4 per cent in 2013 and 20.3 per cent in 2012. There are 170 auctions expected in Brisbane compared to 132 last week and 130 this week last year. Last year 6.6 per cent of sales were by auction, an increase from 5.7 per cent the year before. This week there are 97 auctions expected in Adelaide compared to 100 last week and 80 over the same week last year. Adelaide saw just over 10 per cent of sales by auction last year up from 8.3 per cent the year before and nearly double the 5.8 per cent recorded in 2012. In Canberra there are 69 auctions expected, compared to 71 last week and 57 this week last year. Last year just over one in five sales were by auction, up from 13.1 per cent in 2013 and only 7.8 per cent in 2012. In Perth auction volumes are set to remain steady, with 45 auctions expected over the coming week, the same as the 45 recorded last week, but up from the 31 over this week last year. Last year a mere 1.8 per cent of sales across the city were by auction. Across Australia the highest volume of auctions in one suburb are 21 in both Reservoir VIC and Thornbury VIC . Robert Larocca CoreLogic RP Data Auction Market Specialist

Melbourne Auction Market preview; Week ending 22 March, 2015

There are 1,202 auctions scheduled this week in Melbourne compared to 1,160 for the same time last year. The highest volume of auctions in one suburb is 21 in both Reservoir VIC and Thornbury Auction volumes are higher than last year and on track to exceed last years volumes when there were more auctions and a higher proportion of homes sold at auction. Our latest data shows that a record 33.6 per cent of sales were by auction in Melbourne last year, up from 29.4 per cent in 2013 and a mere 20.3 per cent in 2012. Remarkably the 30,079 sales at auction last year was near twice the 15,640 recorded in 2012. The increase in use of auctions is a market feature, especially when prices rise as they can deliver better outcomes in competitive markets. In respect of the private sale market in the past week, on a citywide basis, the time on market results for houses sold at private sale fell to 32 days, down from 33 days in the previous week. Overall vendor discounting was stable at -5.4 per cent. Key data Clearance rate week ending 15 March: 78% Melbourne auctions expected week ending 22 March: 1,202 Melbourne private sales time on market week ending 15 March: 32 days houses Melbourne vendor discounting market week ending 15 March: -5.4% houses Listings being prepared for market are 7.6 per cent higher in the month ending 15 March seasonally adjusted Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

Only 1 out of 100 apartments has 4 bedrooms in Melbourne’s CBD

Key points Across 2013 and 2014 only 1 per cent of apartments advertised for sale in Melbourne had 4 bedrooms Two bedroom apartments are more likely to be found in Southbank and Docklands than Melbourne In Brighton only 9 per cent of apartments had one bedroom It will come as no surprise that there are very few three or four bedroom apartments in the CBD, Docklands or Southbank. Developers frequently cite market demand as the reason why they don’t build larger high-density dwellings. A review of data from the apartments advertised for sale in the past two years shows that the size of dwellings does vary between the three inner city suburbs of Melbourne, Docklands and Southbank. Across those three suburbs, 43 of the 3,966 homes had four or more bedrooms. Three bedroom apartments where rare but slightly more plentiful with 434 advertised for sale. They were mostly found in Southbank and Docklands. Almost one in two apartments in the suburb of Melbourne were one bedroom but they are far less plentiful in Docklands and Southbank, accounting for around 25 per cent of the housing. It is interesting to see the differences in the type of apartments between Melbourne and Docklands/Southbank. From the perspective of the number of bedrooms Docklands and Southbank are the home to larger apartments than Melbourne. One-bedroom apartments accounted for 23 per cent of apartments in Docklands and 28 per cent in Southbank. In the suburb of Melbourne the comparable number is 47 per cent. Clearly, developers are providing different dwellings in different suburbs. This is also obvious when a comparison is made to a very different apartment market such as bayside Brighton where 9 per cent had one bedroom, three bedroom apartments comprised 34 per cent of the market, and two bedroom apartments were the majority at 53 per cent. What is also clear is that if you are looking for a four bedroom unit then it will take a very long time.

What does a 10% cap on growth in investment mortgage lending look like?

Late last year the Australian Prudential Regulation Authority APRA wrote to Australian Authorised Deposit-taking Institutions ADIs reinforcing sound residential mortgage lending guidelines. One of the guidelines related to the growth in investor lending. The letter stated, ‘annual investor credit growth materially above a benchmark of 10 per cent will be an important risk indicator that supervisors will take into account when reviewing ADIs’ residential mortgage risk profile and considering supervisory actions.’ APRA has explained that the approach involves benchmarks, not hard limits. The letter is forward-looking and is about how ADIs should lend in 2015, not about how they have lent in the past. It’s worthwhile to consider the practicality of implementing a cap such as this and what impact it could have on the overall market. APRA publish statistics each month on lending by the Australian banks, note that this data does not cover building societies and credit unions which are also considered ADIs which shows the level of growth for investment housing loans is substantially outpacing growth in loans for owner occupation. At the end of January 2015, there was $1.322 trillion in mortgages outstanding to Australian banks. This figure is made up of $859.645 billion in owner occupier mortgages and $462.358 billion in investor mortgages, indicating that owner occupier mortgages account for 65% of the value of outstanding mortgages and investors account for 35%. The overall value in residential mortgages has increased by 7.9% over the year to January 2015, comprised of owner occupier lending growing by 6.4% and investor lending growing by 10.8%. If we assume that a hard cap was to be introduced whereby the investment segment of the market would be limited to 10% growth per annum, the market as a whole would already be growing above that benchmark. Based on the published data from APRA, the following banks have grown their investment mortgage book at a level above 10% over the past year: Arab Bank Australia, ANZ, Defence Bank, Macquarie Bank, NAB, Police & Nurses Ltd, Police Financial Services Ltd, Suncorp-Metway Ltd, Taiwan Business Bank, Teachers Mutual Bank, Victoria Teachers Ltd and Westpac. There are a few problems surrounding the implementation of a cap on the growth in investment lending which I will now explore. Firstly, investor lending is currently the chief driver of growth in the current market. As mentioned earlier, across all banks, owner occupier mortgages have grown 6.4% over the year compared to 10.8% for investors. There are very few banks recording double-digit growth in owner occupier mortgages. Quite simply, there is currently modest demand from this segment of the market. Even with a firm cap on investment loan growth in place it is unlikely that it would result in a pick-up in owner occupier lending of a significant enough magnitude to offset the expected slowdown in investment lending associated with APRA’s communication. Secondly, a blanket percentage cap overly advantages those that already have a much larger mortgage book and disadvantages those that currently have a smaller investment loan book in relative terms. To put this into perspective, the two banks with the largest portfolio of investor loans; Westpac and CBA, have investor loan books of $146.7 billion and $123.5 billion respectively. Limiting growth to 10% annually would mean they could grow their investment loan books by $14.7 billion and $12.3 billion respectively. If we look at the number 3 and 4 banks nationally for investment loans NAB and ANZ , they have investment loan books of $63.0 billion and $58.5 billion respectively, meaning on an annual basis they could only grow their investment loan books by $6.3 billion and $5.9 billion in order to remain under the 10% cap. What this means is that Westpac and CBA the main competitors to NAB and ANZ could lend more than double the amount to investors than NAB and ANZ could. Further, a bank such as Macquarie, which has only recently re-entered the mortgage industry, is currently growing both their owner occupied and investment loan books well above the 10% pa benchmark as their portfolio is growing from a low base. APRA and the RBA appear intent on limiting the growth in investment lending, however a hard limit such as a 10% cap on the annual growth in lending to investors has its challenges. It is overly advantageous to those that already have a large amount of mortgage lending to investors. The second table shows that investment loans account for 35.0% of all mortgages. Perhaps a better indicator of potential risk is looking at which banks are overweight to investors based on this proportion, as you will note a number of the larger banks are underweight while others show higher investment concentrations. Housing finance data for January 2014 revealed that year-on-year, investment housing finance commitments have increased by 22.1% compared to a 28.5% increase in owner occupier refinance commitments and a -1.1% fall in owner occupier new loan commitments. Clearly the investor segment is a key driving factor in the current housing market, in fact for six consecutive months the value of housing finance commitments to investors has been greater than owner occupier new loans; a trend that has not previously been recorded over the length of the ABS housing finance series. The data on a state-by-state basis and excluding refinances shows that a majority of new lending in New South Wales and the Northern Territory is to investors. The data also reveals 40% or more of all lending was for investment purposes across each state and territory except for Western Australia and Tasmania in January 2015. It shows that there is a significant slant to investor lending currently which helps explain the current focus placed on investment lending by APRA and the RBA. With mortgage rates at record low levels resulting in little returns from risk-free assets, it is no wonder that investors are turning to residential property, particularly in Sydney and Melbourne. The concern should be around future serviceability of these mortgages and the fact that many of these investment properties are recording extremely low yields while the growth in values is currently quite strong, which implies most investors are speculating on further capital gain with little concern for negative cash flow. While there may be room for a cap on the growth in investment mortgage books as we have indicated, it may need to be a more horses-for-courses approach rather than blanket limits in order to truly be effective. The challenge for APRA and the RBA is that something should be done to slow mortgage lending to the investment segment of the market but it is a complex question as to how to implement changes and ensure that lending to this segment slows. Other factors that APRA also may need to consider include serviceability and the level of leverage along with the make-up of the lenders total mortgage book. APRA is attempting to constrain growth across the different geographies and lenders, all of whom have different histories and investment loan profiles, and different risk appetites at present. The key point of any new policy is to keep new lending balanced so as not to permit too much speculation which by implication some of the current investment lending appears to be when you look at the fundamentals.

Highest national clearance rate in 6 years

CoreLogic RP Data National Auction Comment, week ending 15 March 2015 A preliminary weighted average clearance rate of 78.3 per cent was recorded this week across capital cities compared to 74.5 per cent last week and 70.8 per cent this time last year. This is the highest national clearance rate in 6 years, since 79.7 per cent was recorded in September 2009 and provides a further indication of the improvement in demand since last year. There can be no doubt now that the interest rate cut has had a positive impact on the real estate market. In Sydney a preliminary clearance rate of 85.1 per cent was recorded compared to 84.2 per cent last week and 79.8 per cent last year. Sydney continues to have the strongest auction market nationally and is providing vendors with unprecedented results. In Melbourne the preliminary clearance rate was 77.8 per cent, compared to 75 per cent last week and 67 per cent this time last year. This is the highest clearance rate in a year and half and the market is now well ahead of this time a year ago. In Brisbane a preliminary clearance rate of 57.1 per cent was recorded compared to 37.2 per cent last week and 54.5 per cent last year. In Adelaide a preliminary clearance rate of 72.9 per cent compared to 60.7 per cent last week. In Canberra a clearance rate of 73.3 per cent was recorded compared to 70.8 per cent last week. In Perth a clearance rate of 41.7 per cent was recorded compared to 33.3 per cent last week and 41.9 per cent last year. Robert Larocca CoreLogic RP Data Housing Market Specialist 0409 198 350

Capital city auction market improving on 2014

CoreLogic RP Data National Auction Preview, week ending 15 March 2015 It is already clear that this year is on track to record both a higher number and higher proportion of sales by auction across capital cities. Last year saw 21.5 per cent of all residential sales in capital cities by auction and this was the first time the 20 per cent barrier had been exceeded. It is not a coincidence that it was also the first time there had been more than 100,000 auctions as both Sydney and Melbourne returned strong results. There are 2,679 auctions expected this week across Australia with 2,258 expected in capital cities. This is compared 1,705 last week and 2,293 for the same week last year. In Sydney 777 auctions are expected compared to 944 last week and 868 this week last year. It is unlikely that the clearance rate will drop below 80 per cent this week as stock levels have dropped when demand is still remarkably strong. In Melbourne 1,149 auctions are expected compared to 387 last week and 1,085 this week last year. Melbourne buyers and sellers face a busy three weeks until Easter. With around three in every four homes selling under the hammer the market is favouring vendors. There are 118 auctions expected in Brisbane compared to 164 last week and 138 this week last year. This week there are 97 auctions expected in Adelaide compared to 73 last week and 95 on the same week last year. In Canberra there are 67 auctions expected compared to 83 last week and 57 this week last year. Last week saw the national capital record the fourth consecutive week above 70 per cent for the first time since late 2009. It should be noted that volumes are around twice as high now. In Perth 43 auctions are expected compared to 40 last week and 44 this week last year. Across Australia the highest volume of auctions in one suburb are 22 in Reservoir VIC . Robert Larocca CoreLogic RP Data Auction Market Specialist

Housing finance eases in January but the proportion of lending to investors hits an all-time high

The Australian Bureau of Statistics ABS released housing finance data for January 2015 yesterday. This data represents the first full month of lending-based results after APRA’s recommendation to Australian Authorised Deposit-taking Institutes ADI’s reinforcing sound residential mortgage lending benchmarks. Over the month the total value of housing finance commitments fell by -0.6% across both the owner occupier and investor segments of the market. The value of housing finance commitments has increased by 12.8% year-on-year. Taking a look at the breakdown between the owner occupier and investor segment of the market, it is clear that most of the strength is coming from investors. The value of owner occupier housing finance commitments fell by -1.0% over the month and investor lending recorded a fall of -0.1%. Despite the monthly fall in lending, the value of housing finance commitments was 7.1% higher year-on-year to owner occupiers and 22.1% higher to investors. The proportion of total lending to investors reached an all-time high in January 2015. Over the month, 41.4% of the value of all housing finance commitments was to investors. In comparison, a record low 39.1% of the value of housing lending was to owner occupiers for new loan purposes and 19.5% was to owner occupiers for refinances. If we look solely at the value of new lending excluding refinances investor lending hit a record high 51.4% of all new lending in January 2015. Focussing on the owner occupier segment of lending, $17.7 billion was lent in January down from $17.9 billion in December. Across the segment: $1.8 billion was lent for construction of new homes, $0.9 billion for the purchase of new homes, a record high $5.9 billion for refinances and $9.1 billion for purchase of established homes. Month-on-month, housing finance commitments for owner occupiers fell by -2.6% for construction of new homes, -5.4% for the purchase of new homes, +1.8% for refinances and -2.0% for purchases of established dwellings. Year-on-year, the strength in the owner occupier segment has largely been from refinances which have increased by 28.5%. Across the other segments, construction of new homes were up +1.5%, purchase of new homes are -7.2% and purchase of established homes are -0.9%. The data indicates that much of the activity across the owner occupier segment of the market is coming from refinances as home owners shop around for a better deal or prepare to withdraw some of their equity which would feed into the strength of the investment segment. Turning to the investment lending segment, $12.5 billion was lent in January which was slightly lower than investment lending in December. Over the month there was $0.8 billion in commitments for construction of new dwelling and $11.7 billion for commitments to existing homes showing that investor lending is largely going to existing homes with lending to that segment almost 14 times greater than lending for new construction. Over the month, investor commitments for new construction fell -18.8% compared to a 1.6% increase in lending for purchases of existing homes. Year-on-year, the value of commitments for construction of new dwellings is 85.1% higher while investor lending for established homes has increased by 19.1%. The data shows that despite lending to investors is surging, a relatively small amount of this lending is contributing to new housing stock being constructed. Turning to the first home buyer segment of the market, the number of owner occupier first home buyer commitments fell sharply in January. It should be noted that this data series is not seasonally adjusted. Over the month there were 5,961 commitments which was -26.4% lower over the month and -14.4% lower year-on-year. As a proportion of all owner occupier housing finance commitments, investors accounted for 14.2% of commitments in January. Based on this data, the level of first home buyer participation in the market remains extremely low, however a weakness of the ABS data set is that it doesn’t identify first home buyers that are purchasing as investors. Anecdotally, it appears that many first time buyers are choosing to purchase an investment property rather than a principal place of residence. The CoreLogic RP Data Mortgage Index measures activity across CoreLogic RP Data’s mortgage platforms each week. The activity is highly correlated with housing finance data and as the above chart shows, activity has surged over recent weeks. Based on this data, it suggests that despite the Christmas / New Year slowdown there has been no sustained slowdown in mortgage demand. Given this we would expect a rebound in housing finance commitment over the coming months. Following the letter from APRA to Australian ADI’s in December we have seen a slight easing in housing finance commitments however, it is too early to suggest the two are related. Investor activity remains very strong and for the first time on record we have seen six consecutive months in which lending to investors is greater than lending to owner occupiers for new loans. Investors are largely purchasing existing homes which does little to contribute to new housing, although the value of commitments to investors for new construction has risen sharply over the past year. The owner occupier segment is largely being driven by refinance activity as borrowers shop around for better deals on their mortgage and prepare to re-invest some of their equity. Over the coming months it will be important to monitor if the new guidelines from APRA and the ramping up of their surveillance of mortgage lending has much of an effect on demand. We would suspect that the high level of competition in the mortgage market is likely to result in minimal change across the board. While some individual lenders may have to tinker with their lending policies, borrowers have many other banks to choose from if one borrower cannot provide the type of product they are looking for.

Melbourne Auction Market preview; Week ending 15 March, 2015

There are 1149 auctions scheduled this week in Melbourne compared to 1085 for the same time last year. Last week’s lower volume produced an outcome in line with trend with the overall auction market continuing to be better than last year. The highest volume of auctions will be held in Reservoir with 22 scheduled. The timing of Easter this year will ensure a very busy three weeks for sellers, buyers and real estate agents. The gap between Labour Day and Easter last year was 5 weeks and there were an average of 1280 auctions a week. This is a similar level of activity to Spring. In respect of the private sale market in the past week, on a citywide basis, the time on market results for houses sold at private sale fell to 33 days, down from 43 days in the previous week. Overall vendor discounting was up stable at -5.4 per cent. Key data Preliminary clearance rate week ending 8 March: 75% Melbourne auctions expected week ending 15 March: 1149 Melbourne private sales time on market week ending 8 March: 33 days houses Melbourne vendor discounting market week ending 8 March: -5.4% houses Listings being prepared for market are 3.3% higher in the month ending 8 March seasonally adjusted Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

Buying into a tightly held suburb of Melbourne

There are many different ways of looking at the market and making judgements about its performance. You can look at sale prices, days on market or even turn up at auctions and count the number of active bidders. These metrics will invariably tell you how the market is performing, whether is trending up, down, flat and by how much. They don’t and can’t tell you about the future performance. They also don’t tell you about the ease of buying. The fact is that some suburbs are easier to buy into than others because owners are less inclined to sell. That can be for many reasons, sometimes it is cyclical, for instance in the first few years after property is purchased the owners are less likely to sell. We measure the ease of purchasing by comparing the number of homes advertised for sale in a given period with the number of properties in the suburbs. These suburbs are often described as ‘tightly held’. In the year ending 30 November across Melbourne 5.3 per cent of all houses had been advertised for sale. Those houses sold over the same time had been owned for an average of 11.8 years. Drilling down to a suburb level the hardest place to buy a house was in Brunswick East. In Brunswick East a mere 2.1 per cent of houses had been advertised for sale in the past year. Those houses that did sell had been owned for well over the metropolitan average at 14.2 years and in a sign of the lengths buyers were willing to go, the median sale price rose 26.6 per cent in a year. With some exceptions there is a correlation between the period of ownership, the recent capital growth and likelihood to list for sale. At a simple level that is demand and supply in action and it won’t surprise anyone active in the market. It also helps explain why real estate agents often letterbox suburbs or streets looking for an owner to sell! An analysis of the top 10 most difficult places to buy a house shows a high representation of suburbs in the inner north. Carlton is second on the list and it is followed by Fairfield, Carlton North and Fitzroy North. In each case the proportion of houses on the market is below 3 per cent. With the exception of Carlton the increase in median sale price is above the metropolitan wide number for the same time. The inner north of Melbourne has been in strong demand from buyers but the owners have not been as willing to sell. The inner northern suburbs are not the only place this occurs in Melbourne. The top 10 is rounded out by Clayton South, Mulgrave, Watsonia, Hughesdale and Carnegie. With the exception of Watsonia these are also all in a similar part of Melbourne. But what happens if you want to buy into a suburb where the owners don’t want to sell? These are called ‘off market’ transactions and they won’t be covered in this data because the homes are not listed for sale. A small number of those will be the homes sold direct by the owners but the majority are those transacted with the assistance of a buyers agent. Astute buyers agents are able to build their own networks of sellers. This happens because sometimes an owner wants to sell without advertising or they find that because the buyers agent has a good network of buyers there is simply no need to buy the advertising to support the sale. So if you want to buy into a tightly held suburb it pays to approach local real estate agents and let them know you are interested and consider hiring a buyers agent. Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

Strong demand in Sydney the main feature of weekend

CoreLogic RP Data National Auction Comment, week ending 8 March 2015 A preliminary weighted average clearance rate of 73 per cent was recorded this week across capital cities compared to 76.4 per cent last week and 70.2 per cent this time last year. The main auction activity this week was in Sydney and that ensured that the national clearance rate remained above 70 per cent for the fourth week in a row. We expect a very busy period between now and Easter with only three weekends available and demand from buyers very strong in Sydney, Canberra and Melbourne. In Sydney a preliminary clearance rate of 83.3 per cent was recorded compared to 81.4 per cent last week and 78.8 per cent last year. This is now the fourth consecutive week with a clearance rate in excess of 80 per cent. This indicates an auction market is strongly tilted in the favour of sellers. In Melbourne the preliminary clearance rate was 73.7 per cent, compared to 77.1 per cent last week and 67.3 per cent this time last year. There was a low volume of auctions in Melbourne due to Labour Day which may account for the small drop in the clearance rate. In Brisbane a preliminary clearance rate of 35.5 per cent was recorded compared to 47.9 per cent last week and 45 per cent last year. In Adelaide a preliminary clearance rate of 57.1 per cent compared to 76.6 per cent last week. In Canberra a clearance rate of 68.3 per cent was recorded compared to 74.6 per cent last week. In Perth a clearance rate of 30 per cent was recorded compared to 36.8 per cent last week and 44 per cent last year. Robert Larocca CoreLogic RP Data Housing Market Specialist

Short drop in auction market volumes after strong fortnight

CoreLogic RP Data National Auction Preview, week ending 8 March 2015 Strong auction demand continued in Sydney, Melbourne and Canberra last week with all three markets recording clearance rates in excess of their 2014 trend and they were joined by Adelaide where a clearance rate in excess of 70 per cent was recorded for the first time in a year. National volumes also fell this week due to the impact of the Labour Day long weekend, particularly in Melbourne, There are 1,818 auctions expected this week across Australia with 1,448 expected in capital cities. This is compared to 3,238 last week and 1,520 for the same week last year. In Sydney 801 auctions are expected compared to 1,223 last week and 859 this week last year. As volumes reached a record high last year, it is remarkable that they are higher again this year and that demand remains very strong. In Melbourne 312 auctions are expected compared to 1,565 last week and 329 this week last year. Last week saw a record set for the number of homes sold at auction in February. There are 144 auctions expected in Brisbane compared to 216 last week and 138 this week last year. This week there are 62 auctions expected in Adelaide compared to 109 last week and 80 on the same week last year. In Canberra there are 75 auctions expected compared to 84 last week and 64 this week last year. In Perth 42 auctions are expected compared to 27 last week and 33 this week last year. Across Australia the highest volume of auctions in one suburb are 16 in Mosman NSW . Robert Larocca CoreLogic RP Data Auction Market Specialist 0409 198 350

Melbourne Auction Market preview; Week ending 8 March, 2015

There are 312 auctions scheduled this week in Melbourne compared to 329 for the same time last year. Volumes are low due to the Labour Day long weekend. The highest volume of auctions in one suburb is the very popular Glen Waverley where 7 are scheduled. The February Home Value Index results showed the dwelling prices rose at a greater rate over the last three months than any other capital city and rose slightly in the last month. When viewed in conjunction with the strengthening auction market this data confirms the solid position intending sellers now find themselves. This will also encourage a rise in listings over the next few months and provide buyers with good choice in April and May. The clearance rate also rose compared to last year. In February a clearance rate of 74.2 per cent was recorded from 3,452 auctions compared to 71.5 per cent from 2,623 auctions a year ago. In respect of the private sale market in the past week, on a citywide basis, the time on market results for houses sold at private sale fell to 43 days, down from 60 days in the previous week. Overall vendor discounting was up slightly to -5.5 per cent from -5.4 per cent. Key data Clearance rate week ending 1 March: 77.1% Melbourne auctions expected week ending 8 March: 312 Melbourne private sales time on market week ending 1 March: 43 days houses Melbourne vendor discounting market week ending 1 March: -5.5% houses Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

Dwelling approvals reach new record highs in January 2015

Earlier this week, the Australian Bureau of Statistics released building approvals data for January 2015. The data showed that over the month, dwelling approvals surged to an all-time high while the annual number of approvals is also at a record high. Across the nation, the seasonally adjusted data showed that in January 2015, there were 19,282 dwelling approvals. This was a record high number of monthly approvals, 4.9% higher than the previous peak of 18,389 approvals two months earlier. The number of dwelling approvals increased by 7.9% over the month and approvals are 9.1% higher year-on-year. On an annualised basis, we are also seeing a record high with 203,182 approvals, up 0.8% over the month and 10.8% year-on-year. This represents a strong pipeline of new dwellings to be constructed. Looking more closely at the national figures, it shows that the surge in approvals over the month was entirely due to unit approvals as opposed to house approvals. We also saw a rare occurrence whereby there were more units approved for construction than houses. The above chart highlights monthly approvals with the thicker lines showing the 6 month average number of approvals. Over the month there were 9,588 house approvals and 9,694 unit approvals. The monthly number of house approvals has been fairly flat for the past 11 months while unit approvals tend to be much more volatile but trending higher. In January 2015, house approvals fell -0.4% while unit approvals increased by 17.5%. Year-on-year to January 2015, house approvals have fallen by -2.9% while unit approvals were 24.3% higher. Turning the focus to the capital cities it is firstly important to note that unlike the national data the figures are not seasonally adjusted. In January 2014 there were 11,926 capital city dwelling approvals which was -14.1% lower over the month but 8.6% higher year-on-year. Over the past 12 months, there has been a record high 153,323 dwelling approvals across the combined capital cities. Once again looking at houses as opposed to units, the data shows that the unit market is the key driver of new housing approvals. In January 2015 there were 4,986 capital city house approvals and 6,940 unit approvals. Approvals for both houses -11.2% and units -16.0% were lower over the month which can largely be attributed to seasonal effect of a weaker January. The unit series tends to be more volatile however, house approvals were at their lowest level since December 2013 over the month. The chart also shows that unit approvals have generally been outnumbering house approvals since the middle of 2012 despite some volatility month-to-month . Year-on-year, capital city house approvals are -5.9% lower while unit approvals are 22.1% higher. Looking at the individual capital cities and utilising annual data to smooth out some of the volatility, it is clear that there has been a surge in approvals over the past few years across the major regions of Australia. First looking at house approvals, over the 12 months to January there were 13,337 approvals in Sydney, 22,198 in Melbourne, 10,574 in Brisbane, 5,879 in Adelaide, 20,001 in Perth, 886 in Hobart, 789 in Darwin and 1,621 in Canberra. Year-on-year, the number of house approvals have changed by 18.1% in Sydney, 16.2% in Melbourne, 34.2% in Brisbane, 8.2% in Adelaide, 12.1% in Perth, 59.1% in Hobart, 7.5% in Darwin and -1.0% in Canberra. Probably the most interesting point to note from the data is that both Melbourne and Perth approved more houses than Sydney, despite Sydney’s larger overall population. Turning the focus to the unit market, over the past year the number approvals across the cities have been recorded at: 25,440 in Sydney, 26,712 in Melbourne, 12,012 in Brisbane, 3,241 in Adelaide, 7,432 in Perth, 95 in Hobart, 1,016 in Darwin and 2,090 in Canberra. Only Adelaide, Perth and Hobart have approved more houses than units over the year. The annual change in unit approvals across the cities are recorded at: 0.7% in Sydney, 22.8% in Melbourne, 7.6% in Brisbane, 17.8% in Adelaide, 38.0% in Perth, -48.4% in Hobart, -15.4% in Darwin and -38.9% in Canberra. The supply-side response has generally been quite positive over recent years however, in Sydney, where the dwelling deficiency is greatest, has experienced a much smaller increase in new supply than across other cities. The Perth, Darwin and Canberra housing markets have weakened noticeably over the past year with value growth slowing and rental rates falling. New dwelling approvals have eased in Darwin and Canberra however, Perth continues to approve a increasingly larger number of dwellings for construction despite the softening housing market conditions in this city. Approvals have surged by a greater amount for units as opposed to houses over the past several years. If we look at how this is now playing out we find some interesting trends: • Investors tend to target unit stock rather than detached houses in particular units in the inner city and this is where a large amount of unit stock already exists and a high proportion of the new stock is being delivered. • In Melbourne and Brisbane, where the rise in prominence of unit approvals has been greatest over recent years, unit values have recorded an annual increase of 2.8% and 0.5% compared to 8.0% and 6.5% for houses. • Turning to the rental markets, capital city house rents have increased by 1.6% over the past year which is lower than the 2.3% increase in unit rents however, in Melbourne and Brisbane annual growth in rents has been lower for units than houses. • The annual rental growth figures for units are 2.2% in Melbourne and 0.5% in Brisbane compared to 2.5% and 2.0% respectively for houses. Keeping in mind that many of these recent unit approvals will take time to be built, it could be the case that value and rental growth for Melbourne and Brisbane units will be minimal due to the higher supply levels coming on line. This may also have an impact for the wider market as the overall composition of unit stock increases it may result in lower overall value growth. Other cities should be cautious of higher housing stock levels, particularly within the inner city apartment markets. With population growth slowing, particularly from overseas, and a surge in new construction, without careful management an under-supply of dwellings can quite quickly turn to a glut in particular areas if too many new homes are approved. Brisbane at least appears to have slowed its rate of approvals growth recently however, it is potentially concerning that Melbourne has seen no such easing of the throttle. More dwellings are required nationally however, developers and those approving these new homes need to carefully monitor just how many new homes are required at one point in time. The RBA has pointed out that they want to extend this period of increased construction for as long as possible. Extending this heightened period of construction will help support jobs, particularly as high rise construction takes much longer than house construction, and will help reduce the housing deficiency. But we must be cautious to ensure that we aren’t just creating oversupplies in inner city areas while maintaining deficiencies in other areas of our cities where cheap and affordable housing options are required.

Melbourne residential market provides highest growth over quarter

The February CoreLogic RP Data Home Value Index results read results here showed the dwelling prices rose at a greater rate over the last three months than any other capital city. When viewed in conjunction with the strengthening auction market this data confirms the solid position intending sellers now find themselves in. This will also encourage a rise in listings over the next few months and provide buyers with good choice in April and May. In the last three months house values have risen 4.8 per cent and over the last month the rise was a more moderate 0.2 per cent. Based on settled sales in the last quarter the median sale price was $549,000. In the last three months unit values have risen 1.8 per cent and over the last month the rise 0.5 per cent. Based on settled sales in the last quarter the median sale price was $450,000. Unit values continue to be subdued due to high supply. The clearance rate also rose compared to last year. In February a clearance rate of 74.1 per cent was recorded from 3,452 auctions compared to 71.5 per cent from 2,623 auctions a year ago. Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

Capital city auction market showing best results in 5 years

CoreLogic RP Data National Auction Comment, week ending 1 March 2015 A preliminary weighted average clearance rate of 77.1 per cent was recorded this week across capital cities compared to 77.3 per cent last week and 74.2 per cent this time last year. Following last weeks strong result this week’s result indicates the auction market is delivering healthy outcomes to sellers in increasing numbers. In Sydney a preliminary clearance rate of 82.8 per cent was recorded compared to 86.2 per cent last week and 77.6 per cent last year. This is the fourth consecutive week in excess of 80 per cent making it the strongest capital city auction market in recent times. The Sydney auction market is in uncharted territory now. In Melbourne the preliminary clearance rate was 76.5 per cent, compared to 75.8 per cent last week and 76.6 per cent this time last year. The Melbourne auction market is beginning to record numbers similar to autumn 2010, when high clearance rates and volumes translated into strong capital gains. In Brisbane a preliminary clearance rate of 54.6 per cent was recorded compared to 63.6 per cent last week and 46.2 per cent last year. In Adelaide a preliminary clearance rate of 78.6 per cent compared to 53.3 per cent last week. In Canberra the market is beginning to show levels of demand currently present in Sydney and Melbourne. A clearance rate of 81.6 per cent was recorded compared to 72.4 per cent last week. In Perth a clearance rate of 40 per cent was recorded compared to 46.4 per cent last week and 55 per cent last year. Robert Larocca CoreLogic RP Data Housing Market Specialist

Residential property listings – February update

CoreLogic RP Data’s latest listings counts show that while overall listing stock is picking up on a monthly basis, listing volumes remain low when compared to the same time last year, although conditions are different across the individual states and capital cities. Over the four weeks ending 22 February 2015 there were 45,681 new listings added to the market nationally, bringing the total listings stock up to 241,994. Meanwhile, across the capital city markets, 28,447 new listings were added to the market over the four week period giving buyers access to a total of 98,811 residential properties that were listed for sale across the combined capital cities over the four week period. Nationally, total listing numbers are -2.5 per cent lower than at the same time last year and -4.1 per cent lower across the capital city markets, however this is not reflected across all individual markets. At a capital city level, total listings are 10.4% higher than at the same time last year in Perth, while across the smaller markets of Darwin +31.6% and Canberra 11.4% , total stock levels are currently higher than they were at the same time last year. Interestingly, while new listing being added to the market are also higher than at the same time last year in Perth and Darwin, the same cannot be said for Canberra, indicating the high level of stock is more likely attributed to a lower turnover. On a state-by-state basis, listings activity is relatively similar, with WA, NT and the ACT all recording a higher level of stock currently when compared to the same time last year, while the opposite can be said for all of the other states and territories. The latest figures from the CoreLogic RP Data Listing Index shows a 3.6% monthly increase in the number of properties being prepared for sale across the CoreLogic RP Data platforms when adjusted for seasonality. Tasmania is the only state to record a decrease across the Listing Index -0.2% over the month while all other states have seen listing activity increase over the month. In absolute terms, it is unsurprising that the preparation of homes for sale nationally has increased over the month +36.4% , given the seasonal slow-down experienced each year over the December/January period. We would anticipate that this will translate into a further surge in new listing activity over the next couple of weeks.

Good conditions for sellers after highest clearance rate since 2009

CoreLogic RP Data National Auction Preview, week ending 1 March 2015 The national auction market demonstrated exceedingly strong demand last week with the highest clearance rate recorded since September 2009. This is evident in all capital cities along the eastern seaboard along with Canberra. There are 3,347 auctions expected this week across Australia with 2,831 expected in capital cities. This is compared 2,372 last week and 2,712 for the same week last year. In Sydney 1,028 auctions are expected compared to 921 last week and 1,035 this week last year. If last week’s result, a clearance higher than any in the past 5 years, is repeated over the next few weeks it will have a direct impact on prices across the market. Clearance rates persistently in the 80’s indicate a market strongly favouring sellers and this generally results in unsustainable price rises. In Melbourne 1,401 auctions are expected compared to 1,074 last week and 1,334 this week last year. Demand continues to rise in line with supply and buyers will see good choice with high volumes in many of the leafy green inner eastern and popular seaside suburbs. There are 187 auctions expected in Brisbane compared to 119 last week and 149 this week last year. The substantial increase in the clearance rate last week mirrors market conditions at the same time last year. This week there are 103 auctions expected in Adelaide compared to 125 last week and 97 on the same week last year. In Canberra there are 73 auctions expected compared to 86 last week and 68 this week last year. In Perth 23 auctions are expected compared to 32 last week and 22 this week last year. Across Australia the highest volume of auctions in one suburb are 24 in Reservoir Vic . Robert Larocca CoreLogic RP Data Auction Market Specialist 0409 198 350

Melbourne Auction Market preview; Week ending 1 March, 2015

There are 1,401 auctions scheduled this week in Melbourne compared to 1,334 for the same time last year. This is the second week with over 1,000 auctions for the year and volumes at auctions have risen to a level that is similar to last year now. Once listings for private sale are taken into consideration there are fewer new homes on the market than a year ago. There were 1.8 per cent fewer homes listed for sale in the past month than last year which suggests consumers are still approaching the market is caution. In respect of the private sale market in the past week, on a citywide basis, the time on market results for houses sold at private sale fell to 60 days, down from 66 days in the previous week. Overall vendor discounting was up slightly to -5.4 per cent from -5.1 per cent. Key data Preliminary clearance rate week ending 22 February: 75.8 per cent Melbourne auctions expected week ending 1 March: 1,401 Melbourne private sales time on market week ending 22 February: 60 days houses Melbourne vendor discounting market week ending 22 February: -5.4 per cent houses Listings being prepared for market are 0.7 per cent higher in the month ending 22 February seasonally adjusted Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

Melbourne Auction Market preview; Week ending 1 March, 2015

There are 1,401 auctions scheduled this week in Melbourne compared to 1,334 for the same time last year. This is the second week with over 1,000 auctions for the year and volumes at auctions have risen to a level that is similar to last year now. Once listings for private sale are taken into consideration there are fewer new homes on the market than a year ago. There were 1.8 per cent fewer homes listed for sale in the past month than last year which suggests consumers are still approaching the market is caution. In respect of the private sale market in the past week, on a citywide basis, the time on market results for houses sold at private sale fell to 60 days, down from 66 days in the previous week. Overall vendor discounting was up slightly to -5.4 per cent from -5.1 per cent. Key data Preliminary clearance rate week ending 22 February: 75.8 per cent Melbourne auctions expected week ending 1 March: 1,401 Melbourne private sales time on market week ending 22 February: 60 days houses Melbourne vendor discounting market week ending 22 February: -5.4 per cent houses Listings being prepared for market are 0.7 per cent higher in the month ending 22 February seasonally adjusted Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

Interest-only and investor lending continued to increase up to the end of 2014 according to APRA

The Australian Prudential Regulation Authority APRA released data earlier today on residential property exposures by Australian Authorised Deposit-taking Institutions ADIs . The data was published up to the end of December 2014. The information provides additional insight into the nature of mortgage lending by Australian banks, building societies and credit unions. According to APRA’s data, at the end of 2014, there were $1.278 trillion in residential term loans with $839.8 billion in owner occupied loans 65.7% and $438.9 billion in investor loans 34.3% . Over the 12 months to December 2014, the value of residential term loans to owner occupiers increased by 7.4% compared to a 12.2% rise in loans to investors. Note that in December APRA raised concerns about annual growth in investor loan books above 10%. Based on this data many ADIs would be growing that segment of their book above that benchmark. Focusing on the characteristics of these loans shows a growing appetite for loans with an offset facility and interest-only loans. Meanwhile, the prominence of low documentation loans and other non-standard loans is reducing. Based on the value of lending, loans with an offset facility increased by 18.4% year-on-year to December 2014, interest-only loans were 15.1% higher, reverse mortgages had increased 1.9% while low documentation loans and other non-standard loans had reduced by -18.6% and -20.2% respectively. At the end of 2014, a record high 37.5% of outstanding loans had an offset facility and a record high 36.9% were interest-only. Just 0.2% of loans were reverse mortgages, a record low 2.5% were low documentation and just 0.1% were other non-standard loans. At the end of December 2014, the Australian Bureau of Statistics ABS estimated that there were 9,448,300 households while APRA reported that there were 5,213,000 mortgages to Australian ADIs. This indicates that 55.2% of Australia’s housing stock was mortgaged to Australian ADIs. The 55.2% figure is the highest on record, noting that records have only been calculated from the September quarter of 2011. The ABS also reports the value of residential housing stock at $5.4 trillion and given the $1.258 trillion in outstanding mortgages to Australian ADIs, 23.3% of the value of all housing stock is mortgaged. The average value of the outstanding mortgages, according to APRA’s data, was $241,400 at the end of 2014, with the average loan size having increased by 3.4% over the past year. Loans with offset facilities $285,900 and interest-only mortgages $311,300 had much higher average loan sizes which have increased by 2.1% and 2.8% over the past year. Reverse mortgages had an average size of $93,100 having increased by 3.8% over the year. Low documentation loans had an average outstanding amount of $204,800 and other non-standard loans had an average of $211,900, outstanding loan sizes have fallen over the year -2.9% and -7.1% respectively. Over the December 2014 quarter, there were 93,231 new loans written by Australian ADIs. Of these loans, 23,183 24.9% had a loan-to-value ratio LVR of less than 60%, 38,964 41.8% had an LVR of between 60% and 80%, 20,464 21.9% had an LVR of 80% to 90% and the remaining 10,620 11.4% had an LVR of more than 90%. Year-on-year, the number of loans with an LVR of more than 90% have fallen by 6.9%. Over the same period, loans with an LVR of less than 60% have increased by 10.8%, loans with an LVR of 60% to 80% have increased by 13.1% and loans with an LVR between 80% and 90% have increased by 17.7%. Given APRA had concerns of the rate of growth in the investment segment of the market, this latest data is likely cause APRA some discomfort. Not only is this data showing the investment segment growing at a rate much higher than 10% annually, but also interest-only lending which tends to be reflective of investment lending is also increasing substantially. On a more positive note, although investment lending is increasing it is encouraging to see the drop in higher LVR lending above 90% which suggests that ADIs are being somewhat more cautious around higher risk lending especially considering the overall number of loans being written has continued to grow. We can expect the regulator will be monitoring lending standards with more focus after the release of this data, particularly from the perspective of investment lending and interest only mortages.

Where are most of Melbourneâ

Key points Over the past 5 years the number of million dollar homes sold has almost tripled; Glen Waverley and Mount Waverley are in the top 10 and were not 5 years ago; Nearly 10,000 homes have sold in the last year for more than $1m. Five years ago there were 3,335 homes sold for in excess of one million dollars in Melbourne – not so surprising is that the top 10 sales were in the city’s most expensive addresses. The top three, Brighton, Camberwell and Kew, saw 266, 162 and 157 houses sold for over a million dollars in 12 months. Remarkably, in the bayside suburb of Brighton, 109 of those were in excess of 2 million dollars. Bay views command incredible sale prices due to their scarcity. The remaining seven in the list are Toorak, Brighton East, Hawthorn, Malvern, Malvern East, Canterbury and Surry Hills. Over the past year, the million-dollar list has changed and shows some interesting shifts in the market. Firstly, there are many more with 9,684 sales over a million. Secondly five of the top 10 are new. Balwyn North, Glen Waverley, Glen Iris, Balwyn and Mount Waverley are newly into the list. Balwyn and Balwyn North are not a surprise, along with neighbouring Mont Albert and Mont Albert North, they have seen the highest capital gains on an annualised basis over the past 5 years in Melbourne. The most significant shift is found in Mount Waverley and Glen Waverley. Between these, 442 houses sold for over a million dollars, 41 of those for over two million. Both have seen increases in demand well in excess of the comparable suburbs to the north and south with buyers attracted by a range of factors from transport choices to schools. Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

National clearance rate of 77.7% recorded over the weekend

CoreLogic RP Data National Auction Comment, week ending 22 February 2015 A preliminary weighted average clearance rate of 77.7 per cent was recorded this week across capital cities compared to 74 per cent last week and 76.2 per cent this time last year. At this stage this is the highest clearance rate recorded on a national level since September 2009. Last week’s momentum has been carried into this week with solid demand evident in Sydney, Melbourne and Canberra. The interest rate cut is clearly having a beneficial impact. In Sydney a preliminary clearance rate of 87.8 per cent was recorded and this is higher than any other week in the past year. This is compared to 83.3 per cent last week and 84.2 per cent last year. This result is the sign of a strong market but not against the trend at this time last year. In Melbourne preliminary clearance rate was 74.9 per cent, compared to 70.9 per cent last week and 73.5 per cent this time last year. The Melbourne auction market has lifted by around 15 points in the past two weeks. In Brisbane a preliminary clearance rate of 68.9 per cent was recorded compared to 49.5 per cent last week. In Adelaide a preliminary clearance rate of 55.2 per cent compared to 69 per cent last week. In Canberra a clearance rate of 72.9 per cent was recorded compared to 72.3 per cent last week. This is the third week with a clearance rate in excess of 70 per cent and means the Canberra auction market has had a stronger start than last year. In Perth a clearance rate of 53.8 per cent was recorded. Robert Larocca CoreLogic RP Data Housing Market Specialist

Melbourne Auction Market preview; Week ending 22 February, 2015

There are 936 auctions scheduled this week in Melbourne compared to 1,401 for the same time last year. The highest volume of auctions will be in Richmond with 20 scheduled. There are 17 in Bentleigh East and St Kilda. The Melbourne auction market is sending mixed messages at the moment, on one hand the clearance rate has risen to be closer to the trend rate for last year, when it was 68.2%. In contrast volumes are low suggesting that potential vendors are lacking the confidence shown last year. It is also possible that vendors and their real estate agents are choosing private sale instead of auction as a method of sale. It won’t however be possible to ascertain if that is happening for a few months. In respect of the private sale market in the past week, on a citywide basis, the time on market results for houses sold at private sale was 66 days, slightly up from 65 days in the previous week. Overall vendor discounting was up slightly to -5.2% from -5.1%. Key data Clearance rate week ending 15 February: 70.9% Melbourne auctions expected week ending 22 February: 936 Melbourne private sales time on market week ending 15 February: 65 days houses Melbourne vendor discounting market week ending 15 February: -5.2% houses Listings being prepared for market are 3.5% lower in the month ending 15 February seasonally adjusted Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

Volumes continue to be low but clearance rate rises

CoreLogic RP Data National Auction Preview, week ending 22 February 2015 The trend of lower auction volumes in 2015 continues with 29 per cent fewer homes on offer across capital cities this week. The low volumes appear to have contributed to strong rises in the clearance rate last week in both Sydney and Melbourne. There are 2,497 auctions expected this week across Australia with 2,058 expected in capital cities. This is compared 1,541 last week and 2,905 for the same week last year. In Sydney 775 auctions are expected compared to 662 last week and 1,101 this week last year. The clearance rate last week was the highest in a year and should encourage a few more vendors to list for sale as there is clearly strong demand from buyers. In Melbourne 936 auctions are expected compared to 584 last week and 1,401 this week last year. The 10-point rise in the clearance rate last week is a sign of a healthy market and provides an indication that the interest rate cut has been welcomed by buyers. There are 101 auctions expected in Brisbane compared to 118 last week and 161 this week last year. This week there are 124 auctions expected in Adelaide compared to 91 last week and 118 on the same week last year. In Canberra there are 77 auctions expected compared to 49 last week and 65 this week last year. In Perth 30 auctions are expected compared to 26 last week and 49 this week last year. Across Australia the highest volume of auctions in one suburb are 20 in Richmond Vic . Of the 2,497 homes being auctioned 936 are listed as 3 bedrooms, 666 as 5 bedrooms and only 162 with 5 bedrooms. Robert Larocca CoreLogic RP Data Auction Market Specialist 0409 198 350

US real estate agents are harnessing social media and new technology to win customers

In late January I attended the Inman Real Estate Connect Conference in New York. The conference is targeted at real estate professionals and provides insight into the latest news and trends within the market. In this week’s blog I will share some of the new technology, websites and applications as well as some of the ways US agents are now using social media to communicate with clients. Most of the websites and applications are US-centric but here I will highlight those which are also relevant to the Australian market. Social Media In the US, social media is big for real estate agents and brokers. Although LinkedIn, Facebook, Youtube and Twitter may immediately spring to mind, real estate professionals are now starting to effectively create leads from Instagram and Pintrest. In fact, in the US, agents receive more referral traffic from Pintrest than they do from Google Plus, Linkedin and Youtube combined. Real estate professionals are effectively using Pintrest by creating pinboards of design ideas and solutions that they like and local area information. This can include but is not limited to: Smart home design Storage solutions Room designs Local area landmarks shops, cafes, bars etc Local restaurants Furthermore, US agents are pinning the listings information of homes they have, and have had, available for sale so they can show customers on their inspections. Instagram is being used in a similar way whereby agents create a unique hashtags e.g. #ckusherlistings and upload photos of all their current and previous listings to have these immediately searchable to show clients. Websites Buzzsumo buzzsumo.com Buzzsumo is a website that that allows you to analyse how well your social media content is being used. It shows the total number of shares of your content and then breaks it down by the different social media platforms. Social media in real estate certainly isn’t as big in Australia as it is in the US, but this is a good website that allows you to see where both you and your competitors are getting the eyeballs and ultimately the shares. Fancyhands fancyhands.com Fancyhands is a US based business which offers a virtual personal assistance service. As per the website they can do all those tasks that you don’t have the time nor the desire to do, this may include: Managing your appointment schedule Organising travel Administrative tasks such as data entry Reservations Booking travel Floored floored.com Floored create 3D videos of properties so potential buyers can walk through a property before they physically see the property. The models are optimised so you can watch them through an internet browser of through a mobile phone or tablet. The technology can also be used to create 3D real estate models for homes which aren’t even built as yet. You can also include furniture to get an even clearer idea of how things will fit in the space. Oculus oculus.com Oculus is a virtual reality headset which is being backed by Facebook. For the real estate industry it can be utilised by allowing customers to literally walk through the home without having to physically do open-for-inspection. Homekeepr homekeepr.com Homekeepr is a home maintenance app that can be used by both real estate professionals and anyone that owns a home. The app asks 10 questions about the characteristics of your home, it then creates a list of maintenance tasks that are required for the home and sets reminders as to when you should do these tasks. The application provides a description of what the task is and why it should be done. It then recommends local service providers to undertake these tasks. The agent’s app offers customers the opportunity to download the app and it is customised to the clients’ home s . The list of local service providers for each task can be customised by the agent. When the task is due to be completed they receive both a notification on the app and an email from you as their agent reminding them that the task needs to be completed. The agent can even put their own recommendations outside of those specifically for the home such as local restaurants, shops, schools and much more.

National clearance rate of 70% recorded for the weekend

CoreLogic RP Data National Auction Comment, week ending 15 February 2015 A preliminary weighted average clearance rate of 70 per cent was recorded this week across capital cities compared to 67.3 per cent last week and 70.2 per cent this time last year. The market performed to recent trend this week and results between now and the Labour Day long weekend should provide a clearer indication as to the state of the auction market this year. In Sydney a preliminary clearance rate of 77.9 per cent recorded compared to 80.6 per cent last week and 80.2 per cent last year. The Sydney auction market has not shown any sign of weakness following the stand out year in 2014. In Melbourne the auction market improved following the lowest clearance rate in 26 months last week. The preliminary clearance rate was 67.4 per cent, compared to 60.7 per cent last week and 69.2 per cent this time last year. In Brisbane a preliminary clearance rate of 50.6 per cent was recorded compared to 47.6 per cent last week. In Adelaide a preliminary clearance rate of 72 per cent compared to 58.2 per cent last week. In Canberra a clearance rate of 72.2 per cent was recorded compared to 67.9 per cent last week. In Perth a clearance rate of 33.3 per cent was recorded. Robert Larocca CoreLogic RP Data Housing Market Specialist

Melbourne’s Top 10 suburbs by Vendor Discounting

Key points Vendor discount is great metric for buyers and sellers Springvale was the most highly discounted suburb in 2014* Million dollar suburbs dominated the highest discounts in 2009* One of the more interesting property market metrics tracked by CoreLogic RP Data is the average vendor discount. It shows the difference between the advertised price and sale price. It only applies to homes sold through private sale and those that had an advertised price. If the vendor discount is very high it shows that either demand is soft in an area, the vendors expectations are too high, or a combination of both. For a house in the Melbourne metropolitan area the average vendor discount in the most recent 12 months was -5.6 per cent. This does contrast to auctions where the sale price tends to be above advertised price. This can therefore be very useful information for buyers as it can help them make a judgement about how much to offer. Likewise for sellers it can help them set a realistic sale price. In the twelve months ending 30 November the most recent and comprehensive data the top 10 suburbs when ranked by the size of the vendor discount were mostly south of the Yarra and around the metropolitan median. Top of the list was Springvale where the vendors had to discount their desired sale price by 15.3 per cent. Other suburbs in the outer east where vendors’ house price expectations were overpriced for the market conditions were Wantirna, Ringwood East, Springvale South, Bayswater and Bayswater North. Five years ago the most remarkable difference was the prevalence of million dollar suburbs. Half the list had a median house value in excess of a million dollars which reflects the soft market conditions at the time. Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist *The above analysis is based on detached houses over the twelve months ending 30 November

National auction market trailing 2014

CoreLogic RP Data National Auction Preview, week ending 15 February 2015 Auction volumes are currently tracking lower than they were this time last year with around 8 per cent fewer across capital cities. Despite being early in the year, this is most pronounced in Melbourne which has had 27 per cent fewer auctions. In contrast volumes are 25 per cent higher in Adelaide and stable in Sydney. As the entire number of auctions so far this year is similar to a large week in spring, this trend may still be easily reversed. Across Australia, there are 1,713 auctions expected this week with 1,289 expected in capital cities. This is compared 987 last week and 1,667 for the same week last year. In Sydney, 509 auctions are expected compared to 255 last week and 614 this week last year. In Melbourne 506 auctions are expected compared to 255 last week, and 783 this week last year. Many prospective vendors appear to be holding back which is contributing to a lower clearance rate. Last week was the lowest recorded for 26 months. There are 103 auctions expected in Brisbane compared to 109 last week and 133 this week last year. In Adelaide the auction market has had a very healthy start to the year so far. This week there are 88 auctions expected compared to 94 last week and 58 on the same week last year. In Canberra there are 51 auctions expected compared to 69 last week and 41 this week last year. In Perth 23 auctions are expected compared to 31 last week and 26 this week last year. Robert Larocca CoreLogic RP Data Auction Market Specialist 0409 198 350

Melbourne Auction Market preview; Week ending 15 February 2015

There are 506 auctions scheduled this week in Melbourne compared to 783 for the same time last year. Auction volumes continue to be well below those recorded twelve months ago and last week saw the lowest clearance rate for 26 months. Recent analysis from CoreLogic RP Data & the Australian Bureau of Statistics ABS shows that, once inflation is accounted for, Melbourne home values were not quite yet at a new peak. The results showed that home values were 2.7 per cent below the peak in September 2010; when the improvement in January is included home values will be very close to peak in real terms. It’s also illustrative to compare the strength of the market in this cycle to the last in 2010. Values rose at just half the rate of pace in 2010 which has helped to underscore the more moderate market conditions and consumer conservatism. The private sale market has also begun. On a citywide basis, the time on market results for houses sold at private sale was 65 days over the last week and vendor discounting was -5.1 per cent. Key data Clearance rate week ending 8 February: 60.7% Melbourne auctions expected week ending 15 February: 506 Melbourne private sales time on market week ending 8 February: 65 days houses Melbourne vendor discounting market week ending 8 February: -5.1% houses Listings being prepared for market are 9 per cent lower in month ending 8 February seasonally adjusted Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

Investors surge after APRA warns about investor housing lending in December 2014

The Australian Bureau of Statistics ABS released housing finance data for December 2014 earlier today. The data showed an end of year surge both in the value and the number of loans. The surge coincided with the Australian Prudential Regulation Authority APRA warning Australian Authorised Deposit-taking Institutions ADIs about risky mortgage lending practices during the month. Over the month, the value of housing finance commitments increased by a total of 4.7%, the largest monthly increase since September 2013. The large increase was comprised of a 4.1% increase in owner occupier refinanced loans, a 3.6% increase in owner occupier new loans and a 6.0% increase in investor loans. The surge in investor loans is noteworthy, but so too is the jump in owner occupier new loans which had been flat for the past 12 months. Year-on-year, owner occupier refinances have increased by 27.0%, owner occupier new loans have increased by 4.9% and investor loans have climbed 18.8% higher. In December 2014, there were $5.8 billion in housing finance commitments for owner occupier refinances, $12.3 billion for owner occupier new loans and $12.6 billion for investor loans. Both refinances and investor loan commitments were at a record high. Based on this data, the proportion of owner occupier new loans accounted for an all-time low 40.1% of housing finance commitments compared to 18.9% of all commitments for owner occupier refinances and a near record high 41.0% of commitments to investors. If we strip out refinances, investors accounted for a record high 50.6% of new housing finance commitments in December 2014. Looking specifically at the owner occupier segment of the market, there was $1.9 billion in commitments for construction of dwellings, $1.0 billion in commitments for the purchase of new dwellings, $5.8 billion in refinancing of established dwellings and $9.4 billion in commitments for established dwellings. There has been a surge in finance demand over the year, particularly for newly constructed dwellings and refinances. Year-on-year, the change in owner occupier housing finance commitments has been recorded at: 14.6% for the construction of new dwellings, 1.8% for the purchase of new dwellings, 27.0% for refinances and an increase of 3.5% for purchase of established homes. Focusing on the investment segment, in December 2014 there was $1.0 billion lent for the purposes of both construction of new and $11.5 billion borrowed for investment in established homes. The year-on-year changes have been recorded at 59.8% for new construction and 16.1% for established homes. The other important figure released by the ABS is the owner occupier first home buyer commitments. The ABS has recognized that these figures have been under-reported and have revised these figures this month. Note that these figures still only include first home buyers that are purchasing homes for owner occupation. In December 2014 there were 8,213 owner occupier housing finance commitments to first home buyers, representing 14.5% of all owner occupier commitments. Despite the revisions, the number of commitments is -1.3% lower over the year. Furthermore, the 14.5% represents the lowest proportion of commitments to first home buyers since June 2004. The data indicates first home buyers continue to languish whilst those that already own homes and are upgrading, refinancing or purchasing an investment property continue to dominate the market. What is less clear is how many first time buyers are doing so for investment purposes the ABS doesn’t provide a further breakdown of investment loans by buyer type as they do for owner occupiers . As noted earlier, APRA wrote to Australian ADIs in December reiterating what they determine are prudent measures for lending and potential repercussions for those that don’t follow these guidelines. Given the results you would have to say it had little effect on borrowers or lenders in December. It’s also worth noting that along with an 18.8% year-on-year increase in the value of investor commitments over 2014, the RBA’s housing credit data showed that total investor credit expanded by 10.1% in 2014. APRA noted concerns with lenders growing the investment segment of their loan book above 10% annually. Based on these results you would have to say there remain some concerns for the regulator and it will be interesting to see if or what their next move is. What’s not in doubt is that the ball is now firmly in APRA’s court and we are closely watching what happens next.

National clearance rate of 66.9% on second auction week of 2015

CoreLogic RP Data National Auction Comment, week ending 8 February 2015 A preliminary weighted average clearance rate of 66.9 per cent was recorded this week across capital cities compared to 61.6 per cent last week and 68.2 per cent this time last year. This weeks result compares well to the 2014 market when an overall clearance rate of 67.8 per cent was recorded. It also broadly reflects the moderate growth recorded in home values this year. The positive impact of the rate cut will take a few weeks to be apparent on a national wide scale as volumes are still low. If the rate cut is to encourage a few more active buyers and sellers it will also take a few weeks to be obvious. In Sydney a preliminary clearance rate of 80.5 per cent recorded compared to 77.9 per cent last week and 79.5 per cent last year. Compared to last year this is near identical start. In Melbourne a preliminary clearance rate of 61.4 per cent was recorded compared to 66.3 per cent last week and 67.5 per cent this time last year. It is still early but results so far make it interesting to see which way the market goes as the year has started with lower auction volumes and clearance rates. In Brisbane a preliminary clearance rate of 45.6 per cent was recorded compared to 43.3 per cent last week. In Adelaide a preliminary clearance rate of 61.1 per cent compared to 52.7 per cent last week. In Canberra a clearance rate of 62.8 per cent was recorded compared to 72.7 per cent last week, whilst for Perth a clearance rate of 35.7 per cent was recorded. Robert Larocca CoreLogic RP Data Housing Market Specialist

Auction buyers to benefit from interest rate cuts

This week’s interest rate cut will provide a boost to the auction market over the coming month and deliver a welcome reprieve for buyers looking to reduce costs. Not only will buyers enjoy the increased purchasing power, sellers will welcome the unexpected boost to the market in the middle of their marketing campaigns. This week, there are 1,218 auctions expected across Australia, with 824 of these scheduled for in capital cities. This is compared to 502 last week and 927 for the same week last year. The primary reason for lower auction volumes in capital cities is due to 36 per cent fewer auctions in Melbourne. In Sydney 317 auctions are expected compared to 154 last week and 362 this week last year. In Melbourne 214 auctions are expected compared to 102 last week and 335 this week last year. The main activity this week in Melbourne will be found in the eastern suburbs with 9 auctions in Mount Waverley and 8 in Glen Waverly. In Portarlington, near Geelong, there are also 9 auctions expected. There are 99 auctions expected in Brisbane compared to 85 last week and 98 this week last year. This highest level of activity will be found outside Brisbane with 180 auctions scheduled across the rest of Queensland. For example, the most auctions in any one suburb in Queensland will be in Surfers Paradise where 9 are expected. In Adelaide there are 86 auctions expected. This is slightly lower than the 102 last week but higher than the 70 on the same week last year. In Canberra the volume of auctions is higher than last week and this time last year when there was 50. There are 69 expected this week. In Perth 30 auctions are expected compared to 24 last week and 43 this week last year. The highest volume of auctions will be in Port Macquarie NSW where 10 are expected. Robert Larocca CoreLogic RP Data Auction Market Specialist 0409 198 350

Some words of caution on housing supply

In a blog post produced a few weeks ago HERE , we highlighted that the number of dwellings approved for construction reached an all-time high over the year to November 2014 with almost 200,000 approvals registered nationally. Over the year house approvals were up 3.6% compared with an 18% increase in the number of multi-unit dwellings approved. The record level of housing supply in the pipeline comes at a time when population growth ie housing demand is winding down and some of the heat is coming out of the housing market. A deep dive on the Australian Bureau of Statistics approvals data pinpoints exactly where the bulk of the development pipeline from the past year is geographically concentrated. At a broad level we can see the majority of new dwelling approvals are located in Melbourne where 44,633 new dwellings have been approved for construction over the 12 months ending November 2014. Melbourne dwelling approvals accounted for 23% of all approvals nationally and 31% of all approvals across the combined capital city metro areas. Sydney was close behind, recording just over 39,000 new dwelling approvals over the year. 67% of all approvals across the Sydney market were for multi-unit dwellings the highest proportion of apartments approved of any capital city . While new housing supply should generally be viewed as positive and a necessary factor in the Australian housing market and economy, areas where the approved supply pipeline are out of alignment with demand can offer up an element of risk. We recommend that prospective buyers factor supply levels into their housing market analysis and undertake additional research where they fear an area may be in oversupply or at least moving in this direction. The number of multi-unit dwellings, particularly in Melbourne and Brisbane are hovering around record highs. Of course demand for this type of product is increasing but there are risks associated with too much new development of this product type, particularly given values are rising and population growth is slowing. Eight of the top 20 SA3 regions, based on the number of dwelling approvals over the year to November 2014, are located in Melbourne; five are located in Perth, four in Sydney, two in Brisbane and one in Canberra. The tables and maps below highlight exactly where the largest amount of new housing supply is in the pipeline. Seven of the top ten SA3 regions showing the most dwelling approvals across Sydney have a strong bias towards multi-unit dwellings, with the Inner Sydney region topping the list at 2,631 new apartments approved over the twelve months to November 2014. Within the inner city region it is the Waterloo-Beaconsfield area that is attracting the most developer interest. These suburbs account for 1,047 or 41% of the apartments being developed across the Inner Sydney SA3 region. Several areas around Sydney’s inner ring are attracting very little in the way of densification over the past year. The Manly region has only recorded 48 new dwelling approvals over the past year and similarly, Leichardt has recorded only 65 new dwelling approvals. Towards the outskirts of the city, the regions attracting the largest supply pipeline are Parramatta 1,558 new unit approvals over the past year and 119 house approvals as well as the Bringelly-Green Valley region which is seeing an influx of new detached housing approvals 1,449 . Melbourne’s inner city tops the nation with the majority of new dwelling approvals, recording just over 5,000 new apartment approvals over the past year. The high approval reading comes after 3,725 apartments were approved in the same region over the previous year as well as 5,419 the year before that. More than half of last year’s approvals across the Melbourne Inner City were located in the Melbourne CBD 2,418 followed by North Melbourne 682 and Docklands 657 . Outside of the inner city, the majority of new dwelling approvals across the Melbourne metro area have been located in the outer fringes and are primarily detached dwellings. The Whittlesea-Wallan region has recorded the second highest number of Greater Melbourne dwelling approvals over the twelve month period at 2,956 of which 83% were detached dwellings. The data shows that the densification taking place in the Melbourne housing market is very much focussed within the inner city core. The Brisbane Inner North SA3 region has recorded the third highest number of new dwelling approvals of all SA3 regions nationally over the 12 months to November 2014. 2,981 new apartment approvals were recorded over the year and 117 house approvals. The suburbs of Bowen Hills and Newstead comprise the majority of these approvals with 1,535 new apartments approved for construction over the twelve month period. The Inner City region also recorded a high number of multi-unit dwelling approvals, with 1,881 new apartments approved for construction over the year. Outside of the state capital, the regional city of Townsville recorded the third highest number of dwelling approvals across the state over the twelve month period, with 1,228 houses and 410 apartments. Interestingly, the resource-intensive regions of Mackay and Gladstone-Biloela, where market conditions have softened substantially, have also made it into the top ten for the state for new dwelling approvals over the year. Slightly less than one third 31.3% of all new dwelling approvals across Adelaide were for multi-unit dwellings over the twelve months ending November 2014, with the city having a clear preference for detached dwellings. The largest supply pipeline, based on approvals over the twelve month period, can be found in Onkaparinga where 1,103 new dwelling approvals were issued over the year. Most of the approvals were at Seaford 418 , Aldinga 164 and Christies Beach 132 . The Charles Sturt region was the only other SA3 in South Australia to record more than 1,000 approvals over the year. At a time when the Perth housing market is slowing down, new dwelling approvals have moved to historic highs. The SA3 region of Wanneroo ranks as number two nationally for dwelling approvals, with 3,406 new homes approved for construction over the twelve months to November 2014. The Swan region ranked second highest across Western Australia and 8th nationally with 2,557 new dwelling approvals. The urban form of Perth housing continues to be mostly focussed on detached housing, with only 23% of new dwelling approvals being for multi-unit dwellings only Hobart shows a lower proportion at 11% . With home value growth slowing and both sales volumes and rents falling, buyers of new homes, particularly if they are buying for investment purposes, should be cautious. Despite recording the lowest number of dwelling approvals of any state or territory over the twelve months ending November 2014, dwelling approvals across Tasmania have been trending higher to reach their highest point since early 2012. The most significant level of approval activity over the twelve months to November last year was located in the north of the state at Launceston where 329 dwellings were approved for construction. 58% of Darwin dwelling approvals over the twelve months to November 2014 were for multi-unit dwellings, the highest proportion of apartment approvals outside of Sydney. The largest development pipeline, based on dwelling approvals over the twelve month period, was at Palmerston with 818 new dwelling approvals a majority of which were units. The annual number of dwelling approvals has been trending lower across the Australian Capital Territory since early 2014 as housing market conditions broadly soften across the national capital. The Gungahlin region remains the most popular location for dwelling approvals across the Territory, with 2,160 new dwelling approvals over the twelve month period ending November last year. That figure is almost three times higher than the next most popular SA3 location, Cotter-Namadji, where 762 dwellings were approved for construction. Buyers and developers of new stock should be cautious given that values, sales volumes and rental rates are currently falling in Canberra.

Melbourne house owners on track for another year of growth

Residential dwelling values in Melbourne returned to trend in January with a 2.7 per cent rise recorded by CoreLogic RP Data in the latest home value indices results read results here . This sets the Melbourne property market up for another stable year with moderate value increases likely, particularly in the detached house market. Melbourne home owners have seen stable growth in values for two years now and are more likely to record a profit when selling now. House values in the city grew the strongest with a 2.8 per cent rise compared to 1.7 per cent for units. This takes the growth in values over 12 months to 7.5 per cent for houses and 2.7 per cent for units. The rise in property values will be welcomed by vendors seeking to sell over the summer and in autumn as it suggests the poorer performance recorded in November and December last year was a consequence of high supply levels in spring and summer. Demand is not limitless and there is still some caution from buyers. Based on settled sales the median price of a house in the past three months was $613,000 and $480,000 for a unit. The performance of the auction market provides little indication of the markets health due to the very low auction numbers in January and their geographic diversity. Volumes are likely to rise strongly over the next few weeks. Melbourne continues to have the lowest rental yields in Australia with 3.2 per cent for houses and 4.2 per cent for units. This does not appear to have a negative impact on investors who are happy to wait for capital gains. Robert Larocca Victorian Housing Market Specialist CoreLogic RP Data

Low volume of capital city auctions this week

January has seen a fairly typical commencement to the auction market with only 419 auctions held. The market moves up a notch this week with 800 expected across Australia and 391 in capital cities. The volume of auctions in capital cities should rise to exceed 1,000 in the middle of February, as most real estate agents need to allow a reasonable marketing period for the property. It is also fairly typical to see the majority of auctions outside the capital cities and that is the case this week. The highest volume of auctions is expected in Adelaide with 97. There are 94 expected in Sydney, 80 in Melbourne, 72 in Brisbane, 24 in Perth and 21 in Canberra. Before the auction market increases significantly in volume it is useful to reflect on how 2014 ended. On a national basis there 101,444 auctions held in capital cities, the first time ever the volume has exceeded 100,000. Melbourne had the most auctions with 44,089 and just exceeded Sydney for the most sold. The most significant shift in 2014 was the growth in the Sydney auction market. If this is sustained this year it will be difficult for Melbourne to retain the title of the “auction capital”. The highest clearance rate for 2014, 74%, was recorded in Sydney. Robert Larocca CoreLogic RP Data Auction Market Specialist 0409 198 350

Residential Property Listings – What’s happening and how does it compare to last year?

Each week, CoreLogic RP Data monitors residential properties coming to the market for sale through what is commonly known as ‘listing activity’. Listings are tracked across three different categories; houses, units and vacant land. Listing counts provide a comprehensive look at stock currently available for sale at a national level and across each state and territory. CoreLogic RP Data also tracks listing volumes across the combined capital cities as well as in each individual Australian capital city. One of the key benefits of this data set is that it can be used to monitor stock levels over time. The listings volumes are a key indicator of how the property market is tracking at any given time. Paired with the number of transactions, listings volumes help to provide a good indication of how balanced a market is, and what proportion of stock is available for sale or is being turned over. Similarly, listings can be paired with sales volumes to help us work out the effective supply across the market and how many months of stock are available at any one time. Over the four weeks ending 25 January 2015 there were 29,107 new listings added to the market and the total number of properties available for sale was 229,453. While not surprising, off the back of the end of year slow down, new listings are much lower than they were three months ago when over the four weeks ending 21 September 2014, 42,650 new listings were added to the market nationally. In comparison to the same time last year, we can see that new listings coming onto the market across Australia are currently -8.3 per cent lower, however, total stock levels are just -2.2 per cent lower. Similarly across the capital city markets, the total number of new listings that were added to the market over the four weeks ending 25 January 2015 16,352 were -6.6 per cent lower this year, compared to last year and total listings 89,521 are -4.1 per cent lower. What is interesting is that across the combined capital cities for the majority of 2014, total listings on a rolling four week basis remained lower than at the same time in 2013. However, new listings numbers were higher in comparison to the previous year for much of the first half of the year and a similar trend was seen in October and November. The fact that new listings were higher, but total listings were lower suggests that stock was being absorbed faster than it was in 2013. This can be further quantified by looking at sales volumes over the start of 2014. Between January and May, the total number of houses and units sold was higher on a month-by-month basis than the previous year, while sales volumes began to ease slightly towards the end of the year. Furthermore, the average time on market trended lower in 2014 further highlighting a more rapid rate of sale. As shown in the above graphs, we know from previous years that the number of homes available for sale will start to ramp up over the next few weeks and we will also see more activity begin to resume across the auction market which over the past six weeks has been relatively quiet. Similarly, we have also seen the CoreLogic RP Data Listings Index pick up after the seasonal slowdown, with the index up 31.6 per cent over the week ending 25 January 2015. This Index is a lead indicator for residential dwellings being prepared for sale, so the rise in the Index is clearly signifying the conclusion of the quiet end of year period.

Melbourne’s ‘Mega suburbs’!

Key points Reservoir is the largest suburb in Melbourne Gilderoy is the smallest suburb in Melbourne The are 12 suburbs in Melbourne with over 10,000 houses Most weeks when the highest volume of auctions are listed, the suburbs of Reservoir, Glen Waverly and Mount Waverly come out near the top. Auctions may well be a popular method of sale in these suburbs but their appearance in the list is more likely due to the fact that they are three of Melbourne’s largest areas. Melbourne’s progressive growth over the past 180 years has seen suburbs planned and developed in many different ways. Sometimes geography provides natural borders and sometimes the common ownership by one developer provided the impetus for the naming or borders. Sometimes names and borders have even moved. As a result Melbourne suburbs vary from 13,741 houses in Reservoir to 18 in Gilderoy. At more than 67km from the CBD the small ‘suburb’ of Gilderoy is more representative of it being a town than a considered decision to create a small suburb. There are 12 suburbs in total that have more than 10,000 houses. Each is bigger than medium-sized regional centres such as, Mildura, Shepparton and Warrnambool and without outlying suburbs. Those 12 suburbs are Reservoir, Frankston, Glen Waverly, Berwick, St Albans, Pakenham, Point Cook, Werribee, Mount Waverly, Hoppers Crossing, Craigieburn and Sunbury. Interestingly many of those were once separate towns which have now expanded considerably as they have become more proximate to the cities outer edge. As many of those are still being developed they are likely to grow further. The vagaries of place naming and suburb size become even more obvious when the case of Croydon is considered. On its own, Croydon is a large but not massive suburb with 7,293 houses. But once neighbouring Croydon North, South and Hills are considered, its size grows to 12,446 houses. When buying in larger suburbs it is therefore sensible to consider where specifically a home is as factors such as distance from a train station, park or school may vary considerably. The form of housing may vary as well. Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

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The Federal Government is to shortly release a white paper on taxation reform. Plenty of recent inquiries and taxation documents have specifically noted that the taxation treatment of property should be reviewed and if ever there was a good time to look at changes to stamp duty it would be now. Given where the property market now stands any changes to stamp duty should be implemented sooner rather than later especially given home value growth is slowing and transaction volumes are trending lower. Of course, state governments are heavily reliant on stamp duty revenue and are therefore reluctant to have it removed although we will discuss how these issues can be overcome. Stamp duty is a tax which is payable when someone chooses to purchase a home. Home owners will generally move home because their current home is too big or too small for their needs or because they have changed jobs and need to move elsewhere to be closer to employment. The impost of stamp duty discourages people from moving to more appropriate accommodation. If you don’t yet own your home and are considering purchasing your first home, stamp duty is an additional upfront cost which can make purchasing a home even more difficult. The above chart tracks home sales over time and as you can see, after transaction activity peaked in the boom of 2001 to 2004 it has trended much lower ever since. Although home values have been increasing over the past two and a half years and sales volumes have increased, the rise has been moderate. When sales hit a low point in October 2011 there had been 409,582 house and unit sales nationally over the year. Transaction volumes rose to as high as 490,326 sales over the 12 months to July 2014 which represents an increase of 19.7 per cent. The recent peak in sales was -22.9% lower than the all-time peak of 635,661 sales over the 12 months to May 2002. While increasing home values may make home owners feel wealthier, when you buy your next home stamp duty is calculated based on the purchase price so you have to also pay a higher amount of stamp duty. Over the past, two and a half years, home values have increased by a total of 20.7% across the combined capital cities. Most of that growth has occurred in Sydney and Melbourne however, values have risen across all capital cities. What this means is that when people are buying homes the increase in value is also increasing the stamp duty burden for the next purchaser and subsequently providing additional taxation revenue to government. The impost of stamp duty is also a further barrier to market entry for first home buyers despite some states offering discounts and incentives to first time buyers. Furthermore, stamp duty is acting as a disincentive for home owners from moving eg. upgrading or downsizing to more suitable or appropriately located housing. Data released last year by the Australian Bureau of Statistics ABS showed that across the state and territory governments there was almost $36 billion in taxation revenue from property note this is both residential and other property types over the 2012-13 financial year. Stamp duty was the second largest source of tax revenue at $12.841 billion with only municipal rates at $14.192 billion being higher. Over the year, as home values and sales rose, stamp duty revenue increased by 16.9%. Home values moved even higher during the 2013/14 financial year and sales rose further so it is reasonable to expect a further significant increase in stamp duty revenue. At CoreLogic RP Data we have noted a reduction in sales over recent months and the rate of capital city home value growth is slowing, while this may not be enough to impact stamp duty revenue in 2014/15 it will probably start having an impact by 2015/16 of course different states will see the impact at different times . The point is because stamp duty is a tax collected on the purchase of a home it is collected from a relatively small proportion of the population and is an unreliable source of tax reliant on demand for homes at any given time which can ebb and flow substantially. Although I am an advocate for stamp duties removal I do realise that state government will need to raise that revenue elsewhere. I am also not an advocate for more taxes however, a blanket land tax, paid by all home owners, would seem to make more sense. It is a way of guaranteeing revenue each year as well as broadening the tax base for this revenue rather than just relying on those purchasing properties. Over the 2012-13 financial year $12.841 million was collected in stamp duty, the ABS estimates that as at June 2013 there were 9,226,900 residential dwellings. Based on this dwelling count, land tax of $1,391.69 annually per residential dwelling would cover the cost of this foregone revenue. Keep in mind that stamp duty is collected from any property transaction so revenue would be higher when you include land sales and sales of other property types. This would potentially allow for a reduction in the overall land tax rate per household. By broadening the base of tax collection governments would provide themselves greater surety of revenue as well as assisting the housing market by reducing the costs associated with those who consider it necessary to move home. Given the concerns about investor activity in the market and considering they already reap the benefits of negative gearing perhaps a higher rate of land tax for investment properties should also be a consideration for any stamp duty reform. With home value growth slowing and sales volumes falling, now would seem like the right time to reform stamp duty. Although the impact of a slowing market won’t be felt straight away, no doubt that in years to come Governments will be left with a revenue hole as the effects of the housing market slowdown hit their tax revenue. Providing governments with a higher level of guaranteed revenue would seem like a good idea even if it unfortunately would mean an additional tax for everyone rather than for just those buying property. Note that the ACT is already going down the track of removing stamp duty. In last year’s budget the government announced a plan to phase out the tax over the next 20 years with rates gradually increasing to make-up for the revenue shortfall. Over the period stamp duty rates continue to fall. While the phasing out is commendable I still feel that now is the time to remove stamp duty across the board.

How buyers can use auction results to be better buyers

Key facts Attendence at auctions important for buyer research Clearance Rates – in 2014 these fell to 68.4% Auctions increased to take advantage of rising market In many respects the Melbourne auction market last year was better than in 2013. Auction volumes rose 19.7 per cent compared to last year, however the clearance rate fell a small degree from 69.2 per cent to 68.4 per cent. While there is a great degree of interest in data associated with the auction market, what exactly should buyers be looking at to help inform their judgement? Firstly, when undertaking market analysis it is important to get as much information as possible and understand the data in context, after all the sale of a new home means something different to the sale of an established one. Auctions can provide a rich source of information, even if you are not bidding. Auctions account for around one in five sales in capital cities and nearly one third in Melbourne. With that in mind there are three important things for buyers to look at from auctions; Number of Buyers: The number of active buyers is a slice of the people you are competing against in a given area. If you go to enough open houses and auctions you will get a feel about how strong demand is in an area and that will affect the price you need to pay.. Sale Price or passed in amount : Buyers will be able to compare the sale prices with their expectations of price, even if it is passed in. This information will help you make informed judgments about the market when bidding on the home you want. You can then see this data the day after, however it’s far better to turn up and see it live. Local Auction Conduct: Auctions can be a high-pressure event, as a result the more you attend the more used to the process you will get which in turn will help you stick to your budget and strategy. Attending auctions in the area you aim to buy in will allow you to become acquainted with the styles of different auctioneers and the level of competition in the area. Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

Boroondara sellers make $232m in three months

Key facts 35.7% of sellers made a 100% or higher profit Sellers in Boroondara made the highest total profit of $232m 98.6% of sellers in Knox made a profit The latest CoreLogic RP Data Pain and Gain Report compares the sale price with purchase price for all homes sold in the most recent quarter and for which there is comprehensive data available. Note: The report does not cover developer sales. The central message of the CoreLogic RP Data Pain & Gain Report is that owners are more likely to make a profit if they hold the property for a reasonable length of time, especially when the upfront impost of stamp duty and other transaction costs are taken into account. For example, nationally, 3.3 per cent of sellers made a 100 per cent profit selling within one year of buying and almost passed this mark by half after 10 years of ownership. In the September quarter last year, 6.5 per cent of sellers in Melbourne made a loss in nominal terms. This was a slight improvement on the 6.6 per cent in the June quarter and a substantial improvement on the 7.4 per cent a year ago. On a more local basis there are two ways of looking at the data; the proportion of sellers that made a profit and the gross profit made. Obviously the total profit made was higher in the more expensive municipalities. For example the highest profit was recorded in Boroondara at $232m. By comparison the total profit in Brimbank was $66m. The other way of assessing the data looks at the proportion of owners who made a profit. Of municipalities wholly within the metropolitan area Knox topped the list with 98.6 per cent. It was followed by Monash on 97.4 per cent, Casey with 96.6 per cent and both Glen Eira and Whitehorse with 96.4 per cent. Interestingly this demonstrates that through medium to long-term ownership a profit can be found in more than just the most expensive parts of Melbourne. Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

The 2014 Melbourne rental market

Key facts Median advertised rent for a house in Melbourne $448 Median rent for house rise 2.5 per cent in 2014, units 1.9 per cent Melbourne yields lowest of all capital cities Historically speaking, the performance of last year’s rental market in Melbourne was relatively moderate. In the last three months of 2014 the median advertised rent for a house in Melbourne increased by a minor 0.3 per cent to $448 per week, the opposite to the -0.3 per drop in the unit market. September’s result is reflective of the broader performance of the rental market over 2014 where low rental growth and low yields persisted. Over the course of 2014 house rents increased by 2.5 per cent and units increased by 1.9 per cent. For houses, 2014 was not dissimilar to the past five years. On a annualised basis, rents rose by 2.5 per cent in 2013, 1.3 per cent in 2012, 2.7 per cent in 2011. The only year that recorded a substantially different result was 2010 when rents grew 5.5 per cent. The unit market recorded similar results. In many respects the rental market is following the changes in value seen in the ownership market. With the exception of the unit market, the last two years were similar and 2010 saw boom-like conditions. Similar to the ownership market, the biggest question for 2015 is whether the growth in supply in the unit segment will further moderate advertised rents. Yields remained low. For both units 4.2 per cent and houses 3.3 per cent the yield in Melbourne is the lowest of all capital cities. This does not seem to concern investors who are clearly focused on the longer term prospects for capital gains. Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

Housing finance commitments start to ease in November 2014

The November 2014 housing finance data from the Australian Bureau of Statistics ABS indicates that demand for mortgages is starting to wane. We would expect that this trend will continue over the coming year as APRA crack down on higher risk mortgage lending and focus on curtailing growth to the investment segment of the market. In November 2014, the total value of housing finance commitments fell by -1.0%. The total value of owner occupier housing finance commitments fell by -0.2% with owner occupier refinance commitments 0.1% higher while owner occupier new loan commitments fell by -0.3%. The investor segment of the market recorded a sharp fall in lending over the month down -2.2% following rises over the previous six months. Year-on-year housing finance commitments have increased by 7.3% which is their slowest rate of year-on-year growth since January 2013. The year on year increase in the value of housing finance commitments has decelerated from a peak of 26.6% in December 2013. Owner occupier refinance commitments rose 18.2%, owner occupier new loan commitments fell -1.8% and investment finance commitments rose 13.0%. Although lending to the housing investment segment is up 13.0% over the year, this represents the lowest year-on-year growth rate since December 2012. The first chart above shows the total value of housing finance commitments over time broken down by owner occupier refinances, owner occupier new loans and investors. While lending for home refinance and investment purposes have continued to trend higher over the past year there has been clear weakness in the new loans to owner occupiers segment. Investor commitments fell -2.2% in November and with APRA trying to slow the growth in lending to investors we would expect the investment segment will follow the lead of the owner occupier new loan segment over the coming year with growth continuing to slow. The total value of housing finance commitments in November 2014 was recorded at $29.0 billion. Over the month there was $11.8 billion in commitments to owner occupier new loans 40.5% , $5.5 billion in owner occupier refinances 19.1% and $11.7 billion in investment loans 40.4% . The proportion of lending to investors eased over the month however, if refinances are excluded the proportion of lending to this segment is still extremely high, accounting for 49.9% of lending commitments for housing. The third chart shows the rolling annual change in housing finance commitments excluding refinances versus the rolling annual change in combined capital city home values. Refinances are excluded because the data is used as a proxy for demand for new borrowings to purchase a home. As you can see there is a correlation between growth in housing finance commitments slowing and growth in home values slowing. Currently we are seeing growth in both housing finance commitments and home values trending lower and we expect that this trend will continue over the coming year. Demand for mortgages remains strong despite the fact that it has started to ease over recent months. With APRA writing to Australian banks, building societies and credit unions late last year reinforcing sound residential mortgage practices we would expect a further slowdown in mortgage demand in 2015. Consequently we would also anticipate that this will result in a slowdown in the rate of growth in home values as demand eases. We have already seen demand from the owner occupier market segment slow over the past year. With APRA advising Australia’s banking sector that they will be watching closely those that grow their investor mortgage book by materially more than 10% year-on-year, the investor segment may well follow suit in 2015.

Melbourne home values rise faster south of the Yarra in 2014

CoreLogic RP Data Melbourne Property Values report – 2014 The top 10 Melbourne suburbs ranked by growth in house values in 2014 were dominated by some of the cities most expensive suburbs and they were located south of the Yarra. Overall, the Melbourne housing market produced a near repeat of 2013 with house values rising by 8.4 per cent and units recorded a rise of 1.1 per cent as a result of high levels of supply; particularly in the inner city high rise market. Armadale, Caulfield North and Kew experienced the highest growth in house values and this is reflective of a number of factors including that the strongest rate of value growth being recorded in the middle and upper segments of the market. The appearance of Box Hill in the Top 10 highlights the continual popularity of the group of suburbs around Balwyn and Mont Albert. Over the last decade these suburbs have provided the best capital gains for owners. These suburbs have broad appeal for myriad reasons such as close proximity to local amenities such as parks, a range of transport choices, local shopping nodes and accessibility to the central business district. At a broader level, the fundamentals of the Melbourne property market remain sound. A major contributor to these fundamentals is the positive impact on housing market from supportive monetary policy in the form of a record low interest rate. Furthermore, ongoing strong overseas migration to Victoria and a record high influx of residents moving to the state from the rest of Australia also helps to support housing demand. House value growth slowed from 3.8% in the September 2014 quarter to just 1.1% over the final quarter of 2014. My big question for the summer and autumn markets is whether this was simply due to higher levels of supply or the start of a softer trend.

A record high number of dwelling approvals in November 2014

The November 2014 dwelling approvals data has been released and it makes for very positive reading. In November there were 18,245 dwelling approvals across the nation. The dwelling approvals data is published from July 1983 and from that month until November 2014 there has never been more approvals over a one month period. Dwelling approvals increased by 7.6% over the month and year-on-year they have increased by 10.1%. Looking at the approvals data, the 18,245 monthly approvals were comprised of 9,404 house and 8,841 unit approvals. House approvals were actually -0.2% lower over the month while unit approvals increased by 17.2%. As the chart above shows, unit approvals tend to be much more volatile than house approvals. Unit approvals are trending higher once again while house approvals are flat. Year-on-year, house approvals have increased by 3.6% compared to a much larger 18.0% increase in unit approvals. There is now a substantial pipeline of dwellings approved for construction. Over the 12 months to November 2014 there were 199,174 new dwellings approved for construction. The annual number of dwelling approvals is approaching 200,000 and is also at an all-time high. Over the past year there were 113,734 houses and 85,439 unit approvals. House approvals have increased by 15.5% and unit approvals have risen by 11.3%. To further highlight the significant number of approvals of late, over the past two years there have been 374,401 new dwellings approved for construction. If we assume the Census figure of 2.6 persons per household, that is enough housing approvals for 973,443 persons. Looking at the relationship between dwelling approvals and population growth we see there has been a significant improvement over the past year or so. Population growth is now trending lower while dwelling approvals are at record high levels. There still remains a significant gap between population growth and dwelling approvals, as has been the case for the past decade, but the gap between housing demand and housing supply is improving. Importantly, net overseas migration which creates more housing demand than natural increase is trending much lower. The population data is only currently published up until June 2014 however, if population growth continues to trend lower and overseas arrivals and departures data indicates that it will this bodes well for a better balance between population growth and approvals. It should also go some way to easing pressure on housing both from a purchase and rental perspective. The capital cities have also had a record month in November with an all-time high 14,816 dwelling approvals over the month. Capital city dwelling approvals were 1.4% higher over the month and have increased by 13.4% year-on-year. In November there were 6,207 capital city house approvals and 8,609 unit approvals. Unit approvals reached an all-time high and were 14.9% higher over the month while house approvals fell by -12.8% and were at their lowest level in five months. Year-on-year capital city house approvals have increased by 5.9% compared to a 19.5% rise in unit approvals. Similar to the national figures, the chart shows that unit approvals across the capital cities tend to be much more volatile than house approvals. The other trend to note is that how over recent years the number of unit approvals has regularly outnumbered house approvals. This reflects the growing appetite for unit product, particularly within inner city areas of the capital cities. Given some earlier concerns that dwelling approvals were starting to fall, this month’s result is quite encouraging. Of course, the rebound was driven by the volatile unit market which could just as easily reverse next month. Nevertheless, when you see a record number of monthly dwelling approvals and annual approvals are at an all-time high it is a positive result. Furthermore, with population growth slowing, if approvals can hold at or close to current levels, a better balance between population growth can be achieved. In-turn this would likely ease some of the value and rental growth pressures in the market. Overall it is a very good result and it would be economically beneficial to see approvals remain at these elevated levels over the next 12 months. Of course, with value growth already slowing across the capital cities and sales volumes trending lower it may start to become more difficult for some of these developers, particularly those of unit product, to achieve sufficient presales to commence construction. While the pipeline of approvals is very strong, it will be important to monitor just how many of these approvals ultimately make it to completion. Particularly given the number of unit approvals is at an unprecedented level.

Capital city auctions to exceed 100,000 for the first time

CoreLogic RP Data National Auction Preview, week ending 21 December 2014 There are 1,807 auctions scheduled across Australia this week. In capital cities there are 1,489 auctions expected compared to 1,332 for the same period last year. With one week to go, the combined capital cities clearance rate for 2014 is 67.9 per cent compared to 66.2 per cent last year. Once this week’s auctions are finalised, the number of auctions held in capital cities this year will exceed 100,000 for the first time. Excluding this week, there has been a 22 per cent rise on last year with 25 per cent more homes selling. Sydney’s auction market experienced the most significant improvement this year where the clearance rate and share of sales by auction increased. Adelaide and Canberra also had notable improvements. The likelihood of these improvements being repeated next year is largely dependent on the state of the broader economy. The use of auctions for residential sales also increased in five of the capital cities this year. Preliminary figures for Melbourne show that the proportion of homes sold by auction rose from 30 per cent last year to 31.3 per cent this year.There are 565 auctions scheduled in Melbourne this week, compared to 1,585 last week, and 531 this time last year. Sydney is expecting 562 auctions compared to 1,357 last week and 532 for this week last year. The use of auctions reached an all-time high with 27.6 per cent of all homes being sold by auction compared to 22 per cent last year. This increase was a result of real estate agents and vendors seeking to take advantage of the improved market. In Brisbane 160 auctions are expected after 252 were held last week. Compared to last year the use of auctions as a sales method remained stable at 5.7 per cent of all sales. Adelaide is expecting 111 auctions, compared to 171 last week. Last year Adelaide recorded 8.2 per cent of sales by auction and this year it has risen to 9.4 per cent. Canberra has 70 auctions scheduled compared to 69 last week. Canberra saw a significant rise in the use of auctions, from 13.4 per cent of sales last year to 17.3 per cent this year. Perth has 16 auctions compared to 51 last week. Auctions remain a very small part of the Peth market with only 1.6 of sales by auction this year compared to 1.5 per cent last year. There are 11 auctions scheduled in Tasmania. Across Australia, the highest volume of auctions will be in Marrickville NSW with 13 expected. Robert Larocca CoreLogic RP Data Auction Market Specialist 0409 198 350

Melbourne Auction Market preview; Week ending 21 December, 2014

There are 565 auctions scheduled this week in Melbourne compared to 531 for the same time last year. This is the last week for the year in which there are expected to be a substantial volume of auctions. Until early February next year there will be a small number of auctions weekly, mostly outside of the metropolitan area. With one week to go this year the auction market has seen more homes sold by more people. The clearance rate for 2014 is likely to be marginally lower, around 68.6 per cent, than 2013 when it was 69.2 per cent. With one week to go there have been 43,298 auctions held, 17.8 per cent more than last year and 29,632 homes selling. Weeks with over 1,000 auctions used to be a rarity but with 22 occurring this year they are now a regular feature of the market. In the private sale market conditions continue to be healthy for sellers. On a citywide basis, the time on market results for houses sold at private sale was stable at 31 days over the last week and vendor discounting was also stable at -5 per cent. Key data Clearance rate week ending 14 December: 68.6% Melbourne auctions expected week ending 21 December: 565 Melbourne private sales time on market week ending 14 December: 31 days houses Melbourne vendor discounting market week ending 14 December: -5 per cent houses Listings being prepared for market are 1.3 per cent lower in month ending 14 December seasonally adjusted Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

The economic factors to watch for in 2015 that may impact the housing market

The combined capital city housing markers have seen values increase by 7.0% over the first 11 months of 2014. Throughout the whole of 2013, capital city home values increased by 9.8% indicating that the rate of home value growth is likely to be lower this year than last. On an annualised basis, combined capital city home value growth peaked at 11.5% in April of this year and has slowed to 8.5% over the 12 months to November 2014. As we enter 2015 it is our expectation that the housing market will see another year of home value growth, but not likely at the same pace as experienced over the 2014 or 2013 calendar years. Although this is our base-case scenario, there will still be plenty of potential headwinds to watch out for that may impact on the housing market. Unemployment The national unemployment rate was recorded at 6.3% in November 2014 which is the highest unemployment rate since September 2002. The Mid Year Economic and Fiscal Update MYEFO was released earlier this week by the Federal Government. In the document the Government revised up its forecast of the unemployment rate to 6.5% at the end of the current and the next financial year. It isn’t just the high rate of unemployment which remains a concern. Over the past year, the majority of new employment has been part-time positions which have increased by 2.5% over the year compared to a 0.7% increase in full-time employment. The data also showed that in November 2014 the underemployment rate had increased to 8.6% which was its highest on record. This is reflective of the strong growth in part-time employment, many working part-time would probably like to be working more hours or in full-time employment. With comparatively high rates of unemployment and growing underemployment it has the potential to impact on housing demand. If employees become concerned about job security they will be less inclined to commit to purchasing a home. Furthermore, if employees can work as much as they like and subsequently earn as much as they’d like they may also not be able to purchase a home. New APRA steps to reinforce sound residential mortgage lending practices Last week APRA the Australian Prudential Regulation Authority wrote to all Australian authorised deposit-taking institutions ADIs . The letter highlighted further steps that will reinforce sound lending practices. Although the note didn’t indicate that any macroprudential tools would be formally implemented, the letter noted that APRA will be increasing supervisory surveillance to reinforce sound lending practices. This is in response to specific prudential concerns which are detailed below: Risk profile – higher risk lending such as high loan to income and high loan to valuation ratios, interest-only lending to owner occupiers for lengthy periods and long term lending are of specific concern. APRA is concerned about lenders undertaking larger than normal volumes of lending in these areas Investor lending – fast or accelerating credit growth in this space can be a key indicator of growing risk. APRA highlighted that annual investor credit growth that was materially above 10% per annum will be an indicator of increased risk. Serviceability assessments – APRA is of the view that mortgages should have a serviceability buffer of at least 2% above the loan product rate and with a minimum floor assessment rate of 7% Through these guidelines they have advised the ADIs of the lending environment they expect. Although there have been no blanket macroprudential tools, the letter is pointed and notes that ADIs that do not adhere to these rules will be under review to stricter lending limits. These guidelines are likely to have an impact on the residential housing market. Firstly the very strong growth in investor housing demand over the past two years will likely taper to a more moderate pace. Secondly, some borrowers who are stretching themselves financially to enter the market may find accessing home loans increasingly difficult due to the new serviceability guidelines. Household income growth While home values have increased by 8.5% over the 12 months to November 2014, real household incomes have increased by just 0.8%. One wonders how long home value growth can continue to outpace household income growth. Over the 10 years to September 2014 nominal home values have increased 52.4% compared to real household income growth of 36.4%. These two figures are not significantly different and real home value growth has actually been lower than growth in household incomes. This would seemingly suggest that the current surge in home values, which has started to slow, cannot continue all that much longer without income growth. Consumer sentiment According to the Westpac and Melbourne Institute’s monthly measure of consumer sentiment, consumers have been more pessimistic than optimistic for 10 consecutive months. To put that in perspective, consumers haven’t been this consistently gloomy since the depths of the financial crisis in 2008 and early 2009. Further highlighting the consumer gloom the data shows that when respondents were asked about the wisest place for savings 40.3% chose a banks, building societies and credit unions. This was the highest reading since September 2012. Over the past 15 years, an average of 27.5% of respondents have chosen this segment, highlighting the heightened sense of consumer anxiety. The level of consumer anxiety is more confronting when you consider that those with savings in a financial institution are currently earning virtually no interest with the cash rate sitting at 2.5%. Consumer sentiment is closely correlated with housing demand. If consumers are feeling less confident about the overall economic conditions, they are going to be much less likely to make high commitment decisions such as taking out a new mortgage. Housing finance commitments We have already highlighted that APRA is concerned with the heightened level of investment lending and have provided stricter guidelines for Australian ADIs regarding to this segment of the market. Housing finance data shows that investors are currently the primary driver of housing demand. In October 2014, there were $11.7 billion in housing finance commitments to owner occupiers for new loans, $5.4 billion to owner occupiers for refinancing purposes and $12.1 billion to investors. Year-on-year, owner occupier new loan commitments are 0.8% higher, owner occupier refinances have risen 18.1% and investment loan commitments are 19.8% higher. Owner occupier new loans and investor loans are a much larger driver than refinances. With the new APRA guidelines it looks as if lending to the investor cohort will slow in 2015. It is unlikely this can simply be replaced by lending to owner occupiers for new loans. In fact, new lending to owner occupiers has been trending lower since it peaked at $12 billion in lending in November 2013. If lending to investors slows as owner occupier lending is already doing, it seems that there will be less mortgage demand and subsequently less property transactions. In turn, this is likely to result in lower levels of capital growth across the housing market. Dwelling approvals Dwelling approvals have lifted significantly throughout the past two years, providing a significant pipeline of new construction. Although dwelling approvals have eased over recent months, over the 12 months to October 2014 there were 197,529 dwelling approvals which is hovering around the highest annual number on record. On a monthly basis dwelling approvals peaked in January 2014 and although they remain high, they have trended lower. An important feature of dwelling approvals is that the number of multi-unit dwellings being approved is at near record highs. There is growing demand for inner city units however, a unit development is typically a riskier development proposition than a detached house and ultimately multi-unit dwelling approvals are less likely to proceed into the construction phase. If growth in home values slows throughout 2015 along with a slowdown in housing transactions, we may see some of the pipeline of approvals, particularly unit approvals, not actually make it to construction. In order to commence construction developers typically require a certain level of pre-sales to begin. If sales slow, achieving a sufficient level of presales may become more difficult and may potentially jeopardise some of the progress of these projects. Recommendations for new foreign investment rules The House of Representatives Standing Committee on Economics recently released its findings and recommendations following a review of foreign investment. The four key findings of the report were: Recognising there is no accurate or timely data that tracks foreign investment in residential real estate, the Committee recommended the establishment of a national register of land title transfers that records the citizenship and residency status of all purchasers of Australian real estate. Improving the inner workings of the Foreign Investment Review Board FIRB . Bolstering the compliance and enforcement regime of the foreign investment rules. Recommending an application fee of $1500 for each approval application made to FIRB by non-resident foreign investors in order to fund improved administration and monitoring of the foreign investment rules undertaken by FIRB. The report also recommends the following civil penalties for breaches of the foreign investment framework: Financial penalties to be calculated as a percentage of the property value, rather than restricted to $85,000 as is currently the case; and The regime applies to both foreign investors and any third party who knowingly assists a foreign investor to breach the framework. Although these are just recommendations at this stage, one would hope that the committee’s recommendations do get implemented. More timely, accurate and reliable data about foreign buyers would certainly seem to be valuable and penalties for those who skirt the rules seems appropriate. Importantly, it is unlikely that any of these recommendations would act as a disincentive to foreign investment rather they would result in improved transparency about such investment. Australian dollar In Australia we generally like to compare our currency to the US dollar. After the end of month peak in the exchange rate of $1.08 in February 2012, the exchange rate has now fallen to $0.849 at the end of November. Importantly, most of the fall has occurred recently, six months earlier the exchange rate was $0.93. The fall in the trade weighted index TWI has not been as large as the fall relative to the US Dollar. The TWI was recorded at 68.2 at the end of November, down from 71.5 six month ago and a peak of 79.2 in February 2012. Nevertheless the Australian dollar has weakened. The lower dollar should provide some support for the Australian economy, making our exports more attractive and providing heightened demand for the struggling manufacturing sector. We suspect that demand from foreign buyers has grown over recent years. Furthermore, if the Australian dollar continues to depreciate, it is likely that Australian residential property will potentially become even more attractive for overseas buyers as the relative cost improves. Interest rates Official interest rates were recorded at 2.5% in December 2014, with no meeting of the Reserve Bank’s board in January they will remain at that level until at least February. The average standard variable mortgage rate is currently 5.95%, discounted variable rates are 5.1% as are three year fixed rates. The RBA has repeatedly stated that they believe a period of interest rate stability is the most prudent course. In an interview with the Australian Financial Review last week Glenn Stevens remarked that any change in interest rates would have to help boost confidence while a cut may do the opposite. Nevertheless, over recent months there have been a growing number of economists predicting the next movement in rates would be lower as the overall economic performance slows. The cash rate futures market is now also pricing in a 25 basis point rate cut to interest rates by June next year. A lower interest rate would seemingly make investment in housing even more attractive as returns on cash savings reduce further. Of course, if this were to occur it would likely take place in the face of slowing growth in housing demand and limits on just how much Australian ADIs can lend to the investment segment of the market. As the RBA has previously stated, there are limits to what monetary policy can do. Given this, a further 25 basis points cut to official interest rates may make little material difference to the residential property market….of course it could also make a substantial difference. Conclusion At CoreLogic we are of the view that home value growth will continue in 2015, albeit at a more moderate pace than what we have seen in 2014. As the above analysis shows there are plenty of factors which will impact on the housing market in 2015, not to mention potentially hundreds of other factors which could impact on the direction of the market. It will be important to keep track of the broader economic trends and consider how that may impact on your property in 2015.

Prahran joins million dollar club in Victoria

According to CoreLogic RP Data, Melbourne now has 52 suburbs with a median house value in excess of 1 million dollars – the data covers the 12 months ending in September. Melbourne’s most expensive suburb remains Toorak, with a median house value of $2.92m. The median sale price, which reflects the prices paid over the last year has for the first time, exceeded $3m. This indicates a slightly more expensive segment of Toorak has been selling over the last year. Toorak will clearly be the city’s first $3 million dollar suburb, its just a matter of when. There are three other suburbs with medians in excess of two million, Deepdene, Canterbury and Kooyong. From sales volumes perspective, the highest was in Brighton followed by Balwyn North, Kew, Glen Iris and Camberwell. Putting aside the cost, the million dollar suburb that proved the easiest to buy into was Deepdene were 14 per cent of houses sold in the last year. In contrast Fairfield was a tightly held suburb with only 2.8 per cent of houses selling. Two new suburbs in the list are Prahran and Williamstown. The median value of a house in Williamstown – the second suburb in the west to reach this level was $1.002m. Prahran’s median for a house is now $1m. Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

2014 was a stronger year for auctions than 2013

CoreLogic RP Data National Auction Comment, week ending 14 December 2014 A preliminary weighted average clearance rate of 65.2 per cent was recorded this week across capital cities compared to 63.7 per cent last week and 65.1 per cent this time last year. The market may have cooled since the start of spring but that won’t prevent the overall clearance rate for 2014 exceeding last year. In 2013 the capital cities clearance rate was 66.2 per cent and with one week to go this year it is 67.9 per cent. With the exception of Melbourne and Perth the clearance rate has risen in each capital city. More people have sold more homes at auction this year. In Sydney a preliminary clearance rate of 71.2 per cent recorded compared to 66.1 per cent last week and 72.2 per cent last year. The Sydney auction market has delivered very good outcomes for sellers this year with a higher clearance rate and number of sales. The clearance rate for 2014 is likely to be close to 74.4 per cent, higher than 72.7 per cent last year. In Melbourne a preliminary clearance rate of 65.9 per cent was recorded compared to 66 per cent last week and 64.9 per cent this time last year. The clearance rate for 2014 is likely to be marginally lower, around 68.5 per cent, than 2013 when it was 69.2 per cent. In Brisbane a preliminary clearance rate of 47.3 per cent was recorded compared to 39.7 per cent last week. The overall clearance rate in Brisbane for 2014 is likely to be 45.8 per cent, higher than 41.5 per cent last year. In Adelaide a preliminary clearance rate of 57.5 per cent compared to 56.6 per cent last week. The overall clearance rate for 2014 is likely to be 61.9 per cent, higher than 56.5 per cent last year. In Canberra a clearance rate of 59.5 per cent was recorded. The overall clearance rate for 2014 is likely to be 55.9 per cent, higher than 52.3 per cent last year. In Perth a clearance rate of 33.3 per cent was recorded. The overall clearance rate for 2014 is likely to be 41.1 per cent, lower than 46.5 per cent last year. Robert Larocca CoreLogic RP Data Housing Market Specialist

2014 housing market review and outlook for 2015

Combined capital city dwelling values fell by -0.3 per cent in November 2014 according to the CoreLogic RP Data Home Value Index. Over the month, values increased in four cities and fell across the remaining four. Values were higher over the month in Sydney, Brisbane, Perth and Hobart and were lower elsewhere. Over the first 12 months of the year, combined capital city home values have increased by 7.0 per cent. As a result, it looks as if home value growth in 2014 will be lower than the 9.8 per cent increase in 2013. Over the three months to November 2014, combined capital city home values rose by 0.8 per cent. The results over this period show that the growth in the market is quite narrow with only Sydney 3.1% , Brisbane 1.7% and Perth 0.4% recording value rises. Elsewhere, values fell over the three months by -1.6 per cent in Melbourne, -0.5 per cent in Adelaide, -2.5 per cent in Hobart, -2.1 per cent in Darwin and -3.3 per cent in Canberra. The rate of home value growth over the 12 months to November 2014 has continued to slow. After the annual rate of home value growth across the combined capitals peaked at 11.5 per cent in April it has slowed to a rate of 8.5 per cent in November. The 8.5 per cent growth over the year to November is the slowest rate of annual growth since November of last year. Sydney continues to be the key driver of capital growth with home values up 13.2 per cent over the past year. Melbourne has been the second strongest performer with values up 8.3 per cent and Brisbane home values are 6.0 per cent higher. Elsewhere, values have risen by 2.8 per cent in Adelaide, 1.4 per cent in both Perth and Darwin, 5.2 per cent in Hobart and 1.7 per cent in Canberra. The annual rate of home value growth is now lower than the recent peak across all capital cities other than Hobart. Houses have recorded a superior rate of value growth compared to units across the combined capital cities over the past year. Over the 12 months to November, capital city house values are 8.9 per cent higher compared to a 5.9 per cent rise in unit values. Across each capital city annual value growth for houses has been greater than that for units over the last year. Combined capital city home values are now 10.8 per cent higher than they were at their previous cyclical peak in October 2014. Between October 2010 and May 2012, combined capital city home values fell by a total of -7.7 per cent. From their low point in May 2012, combined capital city home values have increased by 19.6 per cent however, the value increases have been narrowly based. The greatest rises in values over the current growth phase have occurred in Sydney 31.2% , Melbourne 17.6% , Darwin 17.5% and Perth 15.5% . Growth across the remaining capital cities has been much more moderate with values rising 10.6 per cent in Brisbane, 7.4 per cent in Adelaide, 5.2 per cent in Hobart and 4.8 per cent in Canberra. As the data shows, Sydney has been the primary driver of value growth followed by Melbourne, Darwin and Perth albeit their growth has been somewhat lower than Sydney’s. CoreLogic estimates that over the third quarter of 2014 there were 53,962 capital city houses and 24,124 capital city units sold across the country. The number of home sales over the most recent three months is -2.8 per cent lower than over the same period in 2013. House sales are actually 1.0 per cent higher than a year ago while unit sales are -10.3 per cent lower. Importantly with so many off –the-plan sales taking place final numbers upon settlement of these projects may revise higher. Within the individual capital cities, sales over the last three months were lower than a year ago in Sydney, Perth and Canberra but still higher elsewhere. Selling conditions are still quite favourable in the market however, stock levels are starting to rise and there are variations across the cities. Discounting levels across the combined capital cities sat at 5.5 per cent while the average time on market is at an all-time low of 36 days. Remember that the stronger markets of Sydney and Melbourne are having a much greater impact on these figures. The number of new properties listed for sale across the combined capital cities is now 0.4 per cent higher than a year ago. Total listings are -2.4 per cent lower than they were a year ago however, they are currently at their highest level since the middle of December last year. With stock on market rising it will be very interesting to see what happens to time on market and discounting levels over the next few months. Value growth on an annual basis remains much stronger than rental growth however, the more recent weaker capital growth conditions have seen the decline in gross rental yields stall. Over the past 12 months, combined capital city rental rates have increased by just 1.9 per cent. House rents have increased by 1.8 per cent and unit rents are 2.3 per cent higher. Although rental growth is slow, rental rates have risen over the year in all capital cities except Perth, Darwin and Canberra. With a strong pipeline of dwellings both under construction and due for commencement it seems likely that the rate of rental growth will remain soft for the foreseeable future. Gross rental yields across the combined capital cities sit at 3.7 per cent for houses and 4.5 per cent for units. At the same time a year ago they were recorded at 4.0 per cent and 4.7 per cent however, yields have been on hold for the past four months for both houses and units. As always, there is likely to be a continued variance in performances from city to city and region to region. Much of the growth over the past two and a half years has occurred in Sydney and Melbourne and this appears to be continuing with the rise in values only moderate outside of these cities. Note that the annual rate of value growth in both Sydney and Melbourne has been slowing over recent months. Subsequent purchasers and investors are the main drivers of the market currently spurred by the low mortgage rate environment. From an investor’s perspective the best opportunity to enter the Sydney, Melbourne or Perth markets has likely passed, especially considering the strong value growth over the past year is now moderating and rental yields are low. The RBA has also flagged that they are concerned with the level of investment lending taking place in both Sydney and Melbourne and APRA has recently announced greater surveillance of mortgage lending, specifically investor and higher risk lending by the banks. It will be interesting to see whether investors start to turn their attention away from cities such as Sydney and Melbourne and towards higher yielding markets that are earlier in their value growth phase such as Brisbane and potentially Adelaide where value growth is now becoming more evident and the cost of housing is significantly lower than in Sydney and Melbourne. Of course, with APRA announcing that banks need to limit their growth in investment lending to around 10% per annum we would expect this will have a significant impact on investor demand for mortgages over the coming year. As a result of these changes and slowing home value growth, investors may potentially start looking at other asset classes. RP Data anticipates that the rate of capital growth, particularly in Sydney and Melbourne will continue to moderate over the coming year. We believe that home values will continue to increase over the coming year however, the rate of growth will continue to slow and markets such as Perth, Darwin and Canberra look susceptible to value falls over the coming year. ENDS. While you’re here… Watch the latest national housing market update, released December 2014, click on the following: Full version 8 minutes Short version 2 minutes Sydney, NSW Melbourne, VIC Brisbane, QLD Perth, WA Adelaide, SA

National Auction Preview; Week ending 14 December, 2014

Notable improvement in conditions for Sydney buyers There are 3,781 auctions scheduled across Australia this week. In capital cities there are 2,995 auctions expected, compared to 3,548 for the same period last year. A softening Sydney auction market has exacerbated the now typical reduction in the clearance rate as Christmas approaches. Improving conditions for buyers continue this week in Sydney, which has its 8th week with over 1,000 auctions. Compared to a month ago there is a lower clearance rate in all capital cities with the exception of Adelaide. There are 1,324 auctions scheduled in Melbourne this week, compared to 1,733 last week and 1,616 this time last year. Last week was the second largest weekend for auctions in the city’s history. The Sydney market is showning signs of excess supply with the clearance rate last week hitting a 18-month low of 66.1 per cent.. In Sydney, CoreLogic RP Data is expecting 1,166 auctions compared to 1,294 last week and 1,396 for this week last year. Mosman has the highest volume of auctions with 26 expected. In Brisbane 223 auctions are expected after 189 were held last week. Adelaide is expecting 154 auctions, compared to 131 last week. Canberra has 64 auctions scheduled compared to 87 last week. Perth has 50 auctions compared to 57 last week There are 24 auctions scheduled in Tasmania. Across Australia, the highest volume of auctions will be in Reservoir VIC which has 33 expected. Robert Larocca CoreLogic RP Data Auction Market Specialist 0409 198 350

Melbourne Auction Market preview; Week ending 14 December 2014

There are 1,324 auctions scheduled this week in Melbourne compared to 1,616 for the same time last year. The highest volume of auctions will be in Reservoir which has 33 expected. Last week was the second largest weekend for auctions in the city’s history with 1,733 auctions compared to 1,837 in late October. The clearance rate dropped from 71 to 66 per cent; this comparison between the two almost identical weeks provides a very clear summary of the change in the market over two months. There are only 2 weekends for auctions now until Christmas. On a citywide basis, the time on market results for houses sold at private sale contracted from 32 to 31 days over the last week and vendor discounting eased slightly to -5 per cent. Key data Clearance rate week ending 7 December: 66% Melbourne auctions expected week ending 14 December: 1,324 Melbourne private sales time on market week ending 7 December: 31 days houses Melbourne vendor discounting market week ending 7 December: -5% houses Listings being prepared for market are 0.4 per cent higher in month ending 7 December seasonally adjusted Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

Investment lending continues to surge in October, no wonder APRA are concerned

The Australian Bureau of Statistics ABS published housing finance data for October earlier today. The data release coincided with the Australian Prudential Regulation Authority APRA sending Australian Authorised Deposit-taking Authorities ADIs a letter on Tuesday afternoon. The letter highlighted that APRA was going to increase surveillance on risky lending and have a specific focus in growth in investor lending by ADIs. The October housing finance data showed that the proportion of lending to investors had grown to fresh record highs while owner occupier lending is slowing. The value of housing finance commitments continues to become much more important than the headline number of commitments. The reason being that the number of commitments only coves owner occupier commitments, excluding investors completely which are the key driver of the current market. Furthermore, with APRA now focused on ADIs not growing housing credit to investors too fast, a focus on the value of lending becomes even more important. The above chart uses raw not seasonally adjusted data and uses a 12 month average to smooth the volatility of the data. The chart shows an ongoing decline in demand from owner occupier first home buyers and more recently a dip in commitments by owner occupiers that already own a home. Across the four borrower types listed you can see that investors now account for the greatest proportion of borrowings from ADIs. With values continuing to rise across capital city markets clearly they are a key driver of this growth. The second chart shows the monthly value of housing finance commitments across owner occupier new loans excluding refinances owner occupier refinances and investment loans. Over the month, owner occupier refinance commitments increased by 3.7%, owner occupier new loan commitments fell by -0.1%, while investment commitments rose by 1.0%. Year-on-year, the increases have been recorded at 18.1% for owner occupier refinances, 0.8% for owner occupier new loans and 19.8% for investment loans. With $5.4 billion in commitments for owner occupier refinance commitments in October, activity in this space continues to trend higher. Investment lending is also trending higher reaching a record high $12.1 billion in October. Meanwhile, owner occupier new loan commitments have actually pulled back a little of late. After monthly commitments sat at a record high $12.0 billion in November 2013, they have pulled back to $11.7 billion in October 2014. For only the second month on record, the value of investment loans was greater than the value of owner occupier new loans in October 2014. As a proportion of the value of all housing finance commitments, investors were steady at a record-high 41.4% in October. Owner occupier new loans accounted for 40.2% a new all-time low and owner occupier refinances accounted for 18.5% of lending, its greatest proportion since August 2012. If we just look at new lending, excluding refinances, investment lending reached a new all-time high of 50.8% of total lending in October, more than one in every two loans. The capital city housing market has been rising since hitting a low point in May 2012 and at that time investor housing finance commitments totalled $6.9 billion and 33.9% of all housing finance commitments. Clearly there has been a substantial surge in demand from this segment, recorded at $12.1 billion in October 2014 and 41.4% of all borrowings. The headline result that gets reported on each month is the number of owner occupier loans. Although it is a very valuable statistic, it should be read with caution because it is missing a significant proportion of the market, those represented by investors. As the above chart shows, much like the data on the value of commitments, the number of owner occupier new loan commitments is now trending lower while refinance commitments trend higher at a moderate pace. In October, the number of refinance commitments rose 3.6% while new loan commitments fell by -1.4%. Year-on-year, refinances are 7.5% higher while new loan commitments are -4.2% lower. The number of new loan commitments most recently peaked at 35,568 in November 2013 and has since fallen by -5.5% to 33,597 commitments in October 2014. There were 18,123 refinance commitments in October 2014, the highest monthly volume since February 2008. As investor activity has risen, there has been a sharp drop-off in the number of loans to first home buyers. Although there is no data to support it, there are plenty of anecdotal suggestions that many first home buyers are choosing to purchase investment properties rather than homes for owner occupation. Unfortunately, the ABS data only captures those homes purchased by first home buyers for owner occupation. Owner occupier first home buyer numbers continue to languish at near record low levels. The proportion of total owner occupier housing finance commitment to first home buyers hit a record low 11.6% in October 2014. The number of loans actually rose, up 1.2% over the month however, year-on-year first home buyer commitments are -7.8% lower. The Reserve Bank RBA has already highlighted a number of times that they have some concerns with the heightened level of investment activity, particularly in Sydney and Melbourne. With the proportion of loans to investors hitting a new record high in September it will further re-iterate those concerns. Just yesterday APRA wrote to ADIs highlighting some concerns about lending practices and providing a set of guidelines to ensure prudential standards are maintained. With investor activity continuing to rise in October, it seems the concerns are well found. We may see a further increase in the November data next month however, it is likely that growth in the value of investment finance commitments should start to ease thereafter. Of course, owner occupier lending demand is already slowing and if/when investment lending follows suit, demand for mortgages should ease and we would expect that it will also continue to contribute to a further slowing of home value growth. It will be interesting to see how the slowing of demand plays out from a new housing perspective. With the RBA hopeful that a heightened level of housing construction can help assist the economy as it transitions away from resource investment, as value growth slows some of these projects may be in jeopardy. Given most developers are private businesses, they generally need growing demand for housing and some increase in home values to allow enough pre-sales for the project to go ahead. We are already seeing sales volumes and home values trending lower, so if demand for mortgages softens further we will potentially see a fall in dwelling commencements despite the fact that there is such a strong pipeline of development in place. It will be interesting to see how this plays out in 2015.

Clearance rate remains lower than when spring started

CoreLogic RP Data National Auction Comment, week ending 7 December 2014 A preliminary weighted average clearance rate of 66.6 per cent was recorded this week across capital cities compared to 63.7 per cent last week and 64.5 per cent this time last year. High auction volumes and a market where value growth is moderating explain why the capital city auction clearance rate has remained below 70 per cent for the past 10 weeks. In Sydney a preliminary clearance rate of 71.7 per cent recorded compared to 70.6 per cent last week and 73.8 per cent last year. The market in Sydney may have eased from the perspective of the clearance rates however a longer term view shows the remarkable increase in homes offered at auction. Compared to the same recent 4 week period the number of auctions is up 22.6 per cent on last year and 90 per cent on 2012. In Melbourne a preliminary clearance rate of 67.1 per cent was recorded compared to 63 per cent last week and 63.3 per cent this time last year. This week was the second largest on record with the 1,823 auctions missing the previous high in late October by 14. In Brisbane a preliminary clearance rate of 35.2 per cent was recorded compared to 37.8 per cent last week. Not unlike other capital cities the Brisbane auction market is showing a lower clearance rate as we get closer to Christmas. In Adelaide a preliminary clearance rate of 68 per cent compared to 62.3 per cent last week. In Canberra a clearance rate of 62.1 per cent was recorded. In Perth a clearance rate of 38.1 per cent was recorded. Robert Larocca CoreLogic RP Data Housing Market Specialist

High yield, high capital gains in the Melbourne market

Investment decisions in property are often presented as choices between yield and capital gains. In Melbourne, there is a small selection of suburbs where both objectives can be met; they have above average capital gains and a yield higher than the citywide one. As past performance is not a guarantee of future performance in the property market these are not suburbs investors should automatically buy into, rather it shows that with some astute property hunting strong investment outcomes may be found. Over the past decade the compounding annual growth rate for a house in Melbourne was 5.77 per cent and 5.16 per cent for a unit. The gross rental yield over the last year for a house was 3.6 per cent and 4.1 per cent for a unit. In the unit market there were 34 suburbs that recorded capital growth and with yields in excess of the citywide outcome, and five of those stood out. In the market for houses there were 33 suburbs. The five standouts in the unit market, predominantly because of reasonable sales volumes providing opportunities for buyers, were Ferntree Gully, Brunswick West, Chelsea, Mount Martha and Boronia. In the market for houses the five that stood out were Bayswater, Altona North, Boronia, Collingwood and Mooroolbark. In it interesting to note that many suburbs in the outer eastern suburbs, around the base of Mount Dandenong, have recorded above average yields and capital gains over the past decade. The other area of Melbourne that has multiple suburbs with good capital gains and yield is in the inner east. Obviously the skill for an investor is not just finding the right suburb but the right property and that can take time and requires both research and a strong understanding of the local market. Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

High volumes after new national auction record

CoreLogic RP Data National Auction Preview, week ending 7 December 2014 Last week saw the highest volume of auctions ever recorded in capital cities with 3,908 auctions held, 10 per cent more than the previous high of 3,548 in December last year. Volumes remain high this week. There are 3,851 auctions scheduled across Australia this week. In capital cities there are 3,226 auctions expected, compared to 3,213 for the same period last year. There are 1,570 auctions scheduled in Melbourne this week, compared to 1,635 last week and 1,535 this time last year. The trend of improved buyer conditions is strengthening after last week saw the lowest clearance rate in 6 months and the second highest volume of auctions on record. The trend was also reflected in the recent home value index that recorded a fall in house values fell of 2.8 per cent In Sydney, CoreLogic RP Data is expecting 1,204 auctions compared to 1,631 last week and 1,139 for this week last year. Once the final auction results were included last week was the largest auction week in Sydney’s history with 9 per cent more auctions than the previous high in April this year. In Brisbane 172 auctions are expected after 294 were held last week. Adelaide is expecting 127 auctions, compared to 179 last week. Canberra has 82 auctions scheduled compared to 94 last week. Perth has 56 auctions compared to 62 last week There are 15 auctions scheduled in Tasmania. Across Australia, the highest volume of auctions will be in Mosman NSW which has 39 expected. Robert Larocca CoreLogic RP Data Auction Market Specialist 0409 198 350

How does the current growth cycle compare to the 2001 to 2004 boom?

In this week’s blog we take a look at how current housing market conditions compare with the boom in home values between 2001 and early 2004. Immediately a point to note is that the current housing market upswing came off the back of dwelling values falling over the previous two years. If we assume that the previous boom period began at the start of 2001, there had actually been no home value falls prior to its commencement, rather the increase in home values had been more moderate at 6.6% over the 2000 calendar year. The previous boom ran from the beginning of 2001 until October 2004 across the combined capital cities. Over that 46 month period, home values rose by a total of 68.1% across the combined capital cities. This is a monthly rate of value growth over that period of almost 1.5%.The current rise in capital city home values commenced in June 2012 and up until November 2014 values had been trending higher for 30 months. Over this 30 month period combined capital city home values have increased by 19.6% or a monthly rate of growth of 0.7%. Again it is also important to consider that the current growth phase occurred off the back of values having fallen by -7.4% between October 2010 and May 2012. After 30 months of growth in the 2001 to 2004 growth period, combined capital city home values were 52.1% higher. The combined capital city growth really only tells part of the story though. The capital city housing market isn’t homogenous and growth periods begin and end over different lengths of time. Because Sydney and Melbourne are the largest cities by some way and given our Home Value Index is weighted to reflect that, the capital city results are influenced much more by these two cities than the other capital cities. Given there were no home value falls prior to the growth between 2001 and 2004, if we assume that the growth phase stared in January 2001 we see that the growth ran for varying lengths of time. In fact in most capital cities, home values continued to rise following October 2004 albeit the rate of growth was more moderate than it had previously been. Looking at home value growth across the cities from January 2001 to October 2004 you can see that the rate of growth varied greatly. It is interesting to note that Sydney and Melbourne’s rate of value growth over that period was much more moderate than in all other capital cities except Darwin. Furthermore, the growth in home values commenced much later and ran for longer in most other capital cities. Taking a look at the level of value growth over the current growth phase there are quite a few points of note. Firstly growth has been more moderate than what was recorded over the previous growth phase. Secondly, while Sydney and Melbourne were two of the weaker growth performers previously, they have been the standout performers across the current growth phase. Sydney and Melbourne have been the strongest growth performers, value growth has been moderate elsewhere but particularly weak in Adelaide 3.6% , Hobart 0.0% and Canberra 4.6% . To look at the results another way and by way of direct comparison, we should look at the rate of value growth per month. To determine this I have divided total value growth by the number of months and the results make for some interesting reading. Between January 2001 and October 2004, the rate of monthly growth across the cities was recorded at: 1.3% in Sydney and Melbourne, 2.3% in Brisbane, 2.0% in Adelaide, 1.4% in Perth, 3.0% in Hobart, 0.7% in Darwin and 2.1% in Hobart. Looking to the current growth phase, monthly value rises have been recorded at: 1.1% in Sydney, 0.6% in Melbourne, 0.4% in Brisbane and Darwin, 0.1% in Adelaide, 0.5% in Perth, 0.0% in Hobart and 0.2% in Canberra. Clearly the growth in home values has been more moderate over the most recent growth phase. While growth has been more moderate, so too have the number of homes selling. In both growth phases the number of sales has increased however, in the current market the rise in sales has been much more modest than the rise in 2001-04. Over the period from January 2001 to October 2014 there was a total of 1,402,217 capital city house and unit sales or a monthly average of 30,481. In comparison, over the period from June 2012 to September 2014 there have been 716,908 house and unit sales or a monthly average of 25,604 sales. Monthly sales volumes over the current growth phase have been -16% lower than they were between 2001 and 2004 despite a high rate of population growth and development of new housing stock. Across the individual capital cities the number of monthly sales is lower than over the 2001 to 2004 boom period. In Sydney monthly sales are -14% lower and elsewhere the differentials are recorded at: -8% in Melbourne, -28% in Brisbane, -12% in Adelaide, -16% in Perth, -35% in Hobart, -4% in Darwin and -31% in Canberra. So not only has value growth been slower in each capital city this time around, so too has transaction activity. The lower rate of sales can probably be attributed to the low level of first home buyer participation in the market as well as household savings being much higher than what was recorded between 2001 and 2004. Looking at some of the broader economic conditions suggest some sizeable differences between the 2001-04 boom and current market conditions. At the beginning of 2001 standard variable mortgage rates were recorded at 8.05%. By the end of the year they had fallen to 6.05% which was the low point for the cycle. By the time home value growth began to fall standard variable mortgage rates had climbed to 7.05%. Over the current growth phase, standard variable mortgage rates were 6.85% in June 2012 having fallen from 7.05% the previous months. From that level they have fallen to 5.95% and have been on hold at that level for the past 16 months. Given this for the past 16 months standard variable mortgage rates have been lower than they ever were during the 2001 to 2004 boom. Housing credit advanced by a total of 89.1% over the period from January 2001 to October 2004 at a rate of 1.9% a month. Over that period, investor credit expanded at a rate of 2.4% a month, outpacing the 1.7% monthly expansion in owner occupier credit. Over the current growth period, housing credit has expanded by 13.4% at a rate of 0.5% a month. Over the period, owner occupier credit has risen by 0.4% a month compared to 0.6% a month for investor credit. The rate of credit growth really does only tell part of the story because much more is lent for housing now than it was back in the previous boom so you would expect the growth rate to be lower now. It is important to remember that the cost of housing was also lower at that time so the typical mortgage was much lower than it is today. Finally, because the data looks at credit outstanding, if repayment of that credit is being made at a faster pace it will also impact on these figures. Throughout the 2001 to 2004 boom housing credit expanded at a rate of $6.4 billion a month with owner occupier credit up $4.0 billion a month and investor credit rising $2.4 billion a month. Over the current growth phase, housing credit is expanding at a rate of $5.7 billion a month with owner occupier credit rising $2.9 billion a month compared to a $2.8 billion monthly increase in investor credit. This seems to suggest that housing credit is increasing by only a slightly lower amount currently than it was back in the 2001 to 2004 boom. As mentioned before, the biggest influence on this is likely to be the cost of housing now as opposed to then especially when you consider how much lower sales transactions are currently. Looking at the supply of housing, over the 2001 to 2004 period, an additional 654,253 dwellings were approved for construction at a rate of 14,223 per month. Over the current phase there have been 436,130 dwelling approvals at a rate of 15,039 per month. In the current phase the pipeline of approvals has grown at a faster rate of course, the national population is higher so this is certainly a positive outcome. Unfortunately population growth data is only available each quarter. Each month we do receive overseas arrivals and departures data which correlates strongly with net overseas migration data. The other component of population growth, natural increase, does not have as big of an impact on housing demand as overseas migration. Over the 2001 to 2004 boom period, there were 603,550 net long-term and permanent arrivals to Australia at a rate of 13,121 per month. Over the current growth phase there have been 880,120 net long-term and permanent arrivals to Australia at a rate of 31,433 per month. The data shows that net migration to Australia has been much stronger over the current growth phase compared to the previous phase which creates additional housing demand. Household finance data highlighting selected ratios from the RBA is only available each quarter but is worthwhile to analyse. Between December 2000 and September 2004, the ratio of housing debt to household disposable income increased from 78.8% to 118.0%. Subsequently, household debt to household disposable incomes rose from 95.2% to 137.2% and housing assets to household disposable income rose from 333.4% to 448.3%. From June 2012 to June 2014, housing debt to disposable income rose from 130.4% to 137.7% and household debt to disposable incomes rose from 145.2% to 151.1%. Meanwhile, housing assets to disposable income increased from 393.7% to 433.6%. In summary, the comparison between the 2001 and 2004 growth phase and the current one shows: Growth in home values has been much more moderate over the current phase than in what was recorded over the housing boom of 2001-04 and this is also the case across all capital cities. The 2001 to 2004 growth phase was broad occurring in all capital cities where the current phase is characterised as being quite narrow, focussed mainly on Sydney and Melbourne. Importantly, the growth trend in the previous growth phase started in Melbourne and Sydney before rippling to the other capital cities. Transaction volumes for houses and units have been significantly lower over the current growth phase compared to the previous phase despite a larger population and higher overseas migration . Standard variable mortgage rates have typically been much lower over the current growth phase than they were in 2001 to 2004 with rates consistently at record lows for the past 16 months. The rate of growth in housing credit has been much more moderate over the current growth phase compared to the 2001-04 boom phase. Although the rate of credit growth is slower now than before, so too is the value of housing credit increases albeit the gap between 2001 and 2004 and the current phase is much narrower. On a monthly basis we are currently approving more dwellings for construction than we were in 2001 to 2004. Keep in mind that we are also approving a lot more units than we were in 2001 to 2004 and unit approvals have proven to be less likely to ultimately be constructed than houses. Net long-term and permanent arrivals have been significantly greater over the current growth phase than they were between 2001 and 2004. The 2001 to 2004 boom period coincided with a significant rise in housing and household leverage along with a jump in housing assets. Whilst each of these factors have also increased over the current growth phase the slope of the increase has been much more moderate. Furthermore over the current phase the ratio of housing assets to household income has increased by a greater amount than household and housing debt to disposable income while in 2001 to 2004 it increased at a slower pace. Debate around the sustainability of home value growth over the current growth cycle is healthy and warranted, however some lessons can be learnt from how the housing market performed during an even stronger and longer growth phase over the period from 2001 to 2004. As interest rates rose, housing market exuberance was gradually quelled. Values didn’t plummet, but they did retreat in Sydney and growth rates flattened out in most other cities. Australian households are now more sensitive to the cost of debt, with the ratio of disposable income to household debt at record highs which means the market will probably respond even more swiftly to any perception of interest changes ahead. Importantly we are already seeing the housing market move through the peak rate of growth. The CoreLogic RP Data Home Value Index peaked in April this year and the rolling annual rate of capital gain has been drifting lower since that time. Transaction numbers have also levelled, as has the average selling time of a home, the rate of vendor discounting and growth in housing credit. Our expectations looking forward are that growth rates will continue to drift lower, at least at a macro level due to natural affordability pressures, compressed rental yields and further warnings on speculative investment from the RBA.

Combined capital city dwelling approvals reach an all-time high in October 2014

The Australian Bureau of Statistics ABS released building approvals data for October 2014 on Tuesday of this week. The headline data showed that there were 17,062 total dwelling approvals in October 2014. Total dwelling approvals increased by 11.4% over the month and were 2.5% higher year-on-year. Although there was quite a strong rebound in monthly approvals, they remain -3.7% lower than their recent monthly peak of 17,721 approvals in January 2014. The large increase in dwelling approvals over the month was driven by the much more volatile unit approvals. In October, there were 9,478 houses and 7,584 units approved for construction. House approvals were -0.3% lower over the month while unit approvals were 30.4% higher. Year-on-year, house approval have increased by 12.2% while unit approvals have fallen by -7.4%. As the second chart shows, the six month trend indicates a slowing of dwelling approval numbers. The slowing trend in approvals is much more apparent for units whereas house approvals appear to have reached a plateau. It is also important to remember that a multi-unit development of units is more risky than developing a single house and ultimately less likely to ultimately be constructed. Looking at dwelling approvals across the combined capital cities, there were 14,635 approvals in October which was an all-time high. Capital city dwelling approvals have increased by 18.5% over the month and are 4.5% higher year-on-year. You only have to visit any of the major capital cities to see that there has been a significant surge in construction activity of new homes over recent years. The approvals data indicates that the dwelling construction pipeline in these regions is continuing to grow. One factor that sets apart the capital city market from the national market is the much greater prevalence of unit approvals. In fact, over the past two years there have generally been more capital city units approved each month than houses. In October, there were 7,139 capital city houses and 7,496 capital city units approved for construction. The 7,139 house approvals were the highest number of approvals over any month since November 1999. Monthly unit approvals were at their highest level since October 2013. Over the month, capital city house approvals increased by 6.8% while unit approvals rose 32.4%. Year-on-year, house approvals were up 15.7% while unit approvals are -4.3% lower. Looking at dwelling approvals across the major capital cities, you can see that approvals are higher than they were a year ago in most cities. Dwelling approvals were lower in October 2014 than they were in October 13 in Sydney -1.6% , Darwin -42.3% and Canberra -43.9% . Across the remaining capitals, the year-on-year increase in approvals has been recorded at: 5.3% in Melbourne, 5.6% in Brisbane, 16.3% in Adelaide, 23.4% in Perth and 66.1% in Hobart. In Melbourne and Perth dwelling approvals currently sit at near record highs. House approvals are trending higher across each of the major capital cities. Although the trend is towards more house approvals year-on-year approvals are now lower in Adelaide -17.3% and Darwin -1.6% . Across the remaining cities, the year-on-year increase in house approvals have been recorded at: 28.3% in Sydney, 23.8% in Melbourne, 28.4% in Brisbane, 4.5% in Perth, 26.3% in Hobart and 3.8% in Canberra. Across the major capital cities, the above chart shows that nowadays a much greater number and subsequently proportion of units are being approved for construction. It is interesting to note that unit approvals are trending sharply lower in Sydney lately while elsewhere they continue to trend higher. Also note that for most of the past six years Melbourne has been approving a greater number of units than Sydney. As mentioned earlier the unit data tends to be much more volatile than the house approvals data and is reflected in the year-on-year change in approvals to October 2014. Over the period, the change in approvals across the cities have been recorded at: -15.3% in Sydney, -6.1% in Melbourne, -8.3% in Brisbane, +84.4% in Adelaide, +117.8% in Perth, +520% in Hobart, -52.6% in Darwin and -58.4% in Canberra. If we look over the past 12 months, half of all capital city dwelling approvals were for houses. In fact, the result is only really driven down by the fact that in Adelaide, Perth and Hobart so few units relative to houses have been approved. In each of the remaining capitals more than 50% of approvals have been for units. Units have historically been less likely to ultimately reach completion than houses. Given the high number of unit approvals over the past two years and the fact that home value growth is now slowing you do wonder just how many of these units that are approved will actually be constructed in the current cycle. Dwelling approvals remain at a very high level and with the rate of population growth slowing it is encouraging to see that supply has responded on the back of low interest rates and some rises in buyer demand and home values. As the rate of value growth slows along with sales activity, it will be interesting to see how much of this stock which is approved will commence and ultimately make it to completion. Furthermore, we know that much of the unit stock which is now so prevalent in inner city areas is being purchased by investors. With capital growth slowing and rental growth slow this may also impact on some of the future construction of these approved units. The Reserve Bank has also flagged that they, along with banking regulators, are looking to curb higher risk lending to investors. We don’t yet know what these curbs may be but once implemented they may act as a further deterrent to investors and put into jeopardy some of these inner city unit approvals coming to fruition.

Melbourne Auction Market preview; Week ending 7 December, 2014

There are 1,570 auctions scheduled this week in Melbourne compared to 1,535 for the same time last year. The highest volume of auctions will be found in Mount Waverley where there are 26 expected. The November CoreLogic RP Data November Home Value Index showed that house values fell by 2.8 per cent and unit values fell by 1.5 per cent. The market in Melbourne clearly slowed in November as volumes rose and the clearance rate dropped resulting in a reduction in property values. Over the year the Melbourne property market has showed healthy growth. With one month left in 2014 house values have risen by 6.5 per cent and units by 1.6 per cent. Viewed in conjunction with what has been a small rise in transactions compared to last year these results show a moderate and not booming market. The clearance rate for November was 66.8 per cent and there were 5,722 auctions held with 3,819 selling. This is lower than the 68.2 per cent recorded last year Volumes look set to remain high until the end of the year and this will be welcomed by buyers, especially as the clearance rate has been edging lower. On a citywide basis, the time on market results for houses sold at private sale rose from 31 to 32 days over the last week and vendor discounting eased slightly to -4.9 per cent. Key data Clearance rate week ending 30 November: 63 per cent Melbourne auctions expected week ending 7 December: 1,570 Melbourne private sales time on market week ending 30 November: 32 days houses Melbourne vendor discounting market week ending 30 November: -4.9 per cent houses Listings being prepared for market are 0.5 per cent higher in month ending 30 November seasonally adjusted Robert Larocca CoreLogic RP Data Victoria Housing Market Specialist

Capital cities record a clearance rate of 66.6% from the weekend

CoreLogic RP Data National Auction Comment, week ending 30 November 2014 A preliminary weighted average clearance rate of 66.6 per cent was recorded this week across capital cities compared to 65.7 per cent last week and 66.9 per cent this time last year. Conditions for buyers at auction are improving as we get closer to Christmas with volumes remaining at historical highs and demand easing, particularly in Melbourne. In Sydney auction volumes are very high and the number of active buyers seem to be rising in line with supply. A preliminary clearance rate of 75.2 per cent recorded compared to 71.8 per cent last week and 72.7 per cent last year. In Melbourne a preliminary clearance rate of 63.7 per cent was recorded compared to 66.1 per cent last week and 67.9 per cent this time last year. The state election has had no impact on results that are on trend with the mild easing in demand seen over November. In Brisbane a preliminary clearance rate of 45.9 per cent was recorded compared to 43.3 per cent last week. Adelaide recorded an above trend clearance rate of 66.7 per cent compared to 61.2 per cent last week. In Canberra a clearance rate of 63.3 per cent was recorded. In Perth a clearance rate of 21.7 per cent was recorded. In Tasmania 8 auction sales were recorded and no homes were passed in. Robert Larocca CoreLogic RP Data Housing Market Specialist

Where owners are queuing to sell in Melbourne

The residential property market differs from suburb to suburb in many different ways. Some suburbs are tightly held, some are in high demand from buyers and in others, sellers are seeking to capitalise on improved local conditions. It is in these suburbs that CoreLogic RP Data has recorded a substantial increase in the number of houses listed for sale compared to a year ago. In undertaking this analysis only those suburbs within a 30 km of the CBD have been considered as outside of this, development suburbs become more prevalent and that affects the outcome. In those suburbs the high rate of listings is a factor of developers’ centralised decision-making as opposed to the individual decisions of 100’s of owners. The suburb where owners have been seemingly queuing up to sell is Doncaster. Compared to a year ago there has been a 41 per cent rise in listings. Over the same time the median sale price has grown by 15.5 per cent, well in excess of the citywide 9.7 per cent. This suggests that sellers have been motivated by high buyer demand. Second on the list is Heidelberg Heights with a 33.3 per cent rise in listings. Not unlike Doncaster, sellers have been rewarded for their decision with the median sale price rising by 14 per cent. Third on the list is Burwood East where those seeking to sell have increased by 30.9 per cent. It is followed by Sunshine, Forest Hill, Preston, Parkdale, Vermont South, Glen Iris and Altona North. The common factor in each case is an above average rise in the median selling price. Now of course there are exceptions to this, for instance Bayswater has seen a 17 per cent fall in listings and 11.5 per cent rise in the median selling price but the in the majority of circumstances strong loca