Melbourne CBD Retail: Businesses Return, Vacancies Tighten
Celebrity chef Michael Lambie had been looking for a venue to open a new style of restaurant for a year and a half before he chanced on the perfect site at the perfect time – a renewed blaze of confidence in the Melbourne CBD. “It just felt that the time was finally right,” said Lambie, the luminary behind Melbourne icons Stokehouse, Circa the Prince, Taxi Dining Room, Lucy Liu and The Smith. “To open up in Melbourne right after COVID would have been suicidal and I wanted to allow some time for the economy to recover. “But it now feels that Melbourne is bouncing back, with a lot of new businesses opening. I’m in the city most days and the really good places are really busy, so the money is definitely there. You just have to be good enough to persuade people to spend.” You may read the whole article here:https://tinyurl.com/3b2djce5
Australia in Top Four for House Price Growth
Australia has secured a position among the top four nations globally for house price growth over the past five years, according to new data from the International Monetary Fund. Significant growth post-inflationData from the IMF revealed that after adjusting for inflation, Australian house prices have seen an increase of over 10% since 2019. This places Australia behind only the US, the United Arab Emirates, and Japan in terms of real house price growth. Experts predict continued riseThe Australian Financial Review’s latest quarterly property survey anticipated further price increases. A panel of 10 experts forecasts a national growth rate of 5% for the coming year, with Perth expected to lead with a significant 16% increase in 2024, Hotspotting reported. You may read the whole article here:https://bit.ly/3UJz9Ln
Rental Squeeze Worsens for Low-Income Earners
The rental market in Australia is seeing a significant shift as high-income earners increasingly dominate the private rental sector, squeezing out lower-income households, according to PropTrack. “High income earners are squeezing lower income earners in the rental market, highlighting the urgent need for more affordable housing,” said Eleanor Creagh PropTrack senior economist. The shift is detailed in a recent Australian Housing and Urban Research Institute (AHURI) paper, which showed that higher income earners have grown from representing 8% of the private rental market in 1996 to 24% in 2021. You may read the whole article here:https://bit.ly/3JIMJs1
Housing Market Defies Economic Pressure
The Australian housing market continues to show remarkable resilience despite increasing cost-of-living pressures and higher interest rates, according to Herron Todd White. HTW’s Month in Review for April showed that demand for housing remains high, driven largely by population growth, which starkly contrasts with a dwindling supply due to building approval delays, material shortages, labour scarcities, and financial strains on builders. Supply constraints and market dynamicsThe current imbalance between supply and demand is maintaining market stability across most regions. You may read the whole article here:https://bit.ly/3xYvnEU
Cash Rate Peak May Hit 5.1%: Economist
Interest rate hikes may continue to rise in the later half of the year, an economist has said. Judo Bank’s chief economic adviser Warren Hogan has said the bank has changed its central case economic forecast to project a peak cash rate of 5.10 per cent in 2024.According to Hogan, he expects the Reserve Bank of Australia (RBA) to commence hiking interest rates once again starting in August this year, followed by two more rate hikes in September and November. He stated that the flow of economic data over the last six weeks has “shifted the most likely path” for the economy and inflation. You may read the whole article here:https://bit.ly/3UBmYzU
High Population Density’s Effect on Housing Trends
According to CoreLogic research director Tim Lawless, the population growth in Australia is reshaping housing trends significantly. “With Australia’s population moving through the fastest rate of growth since the 1950s, our cities and towns are naturally densifying,” Lawless said. He said that despite Australia’s overall low population density of 3.5 people per square kilometer, the majority resides in major cities, leading to a skewed representation of density and its effects. You may read the whole article here:https://tinyurl.com/yc2wfa3r
High Population Density Hampering Unit Value Growth: Corelogic
Areas with high population density have been found to dampen value growth in units, CoreLogic’s research director has said. CoreLogic’s latest Property Pulse research has indicated that there is a significant relationship between unit values and population density. This data comes as CoreLogic (in collaboration with ANZ) found that the latest estimate of median annual household income nationally is $100,244 before taxes and assuming 30 percent of this income is used on mortgage repayments at current average variable rates (around 6.3 percent), an affordable dwelling purchase would be around $503,000. However, as home values continue to climb, this affordable purchase price is below most actual dwelling values as the median Australian unit price sits around $640,000, while the median house price is around $834,000. You may read the whole article here:https://shorturl.at/bkmq9
Australian Housing Crisis Set to Intensify
According to Deloitte Access Economics, Australia’s ongoing housing crisis is projected to intensify before any improvement is seen, putting pressure on the federal government to address these issues in the upcoming May budget. “The cost of land, materials, and labour will stay at higher levels, while recent insolvency rates suggest builders will need bigger profit margins if they are to deliver the significant lift in dwellings that governments and the community are crying out for,” said Stephen Smith, partner at Deloitte Access Economics, in the firm’s latest business outlook report. Building challenges and economic pressuresSmith expressed concern that achieving the national goal of constructing 1.2 million new homes from mid-2024 may not be feasible due to the current construction pace, hindered by sluggish new dwelling starts and a backlog of unfinished homes plaguing builders, according to an NCA Newswire report. “The correcting [of] the housing crisis will take years and will get quite a lot worse before it gets better,” Smith said. You may read the whole article here:https://bit.ly/3Qct4V6
Seeking Solutions for Housing Affordability
Richard Yetsenga, chief economist at ANZ, challenged the notion that increasing housing supply is the silver bullet for Australia’s affordability issues, arguing that a market-based supply response alone is insufficient. “Much of the discussion around Australia’s worsening housing affordability challenges offers a market-based supply response as the ideal solution,” Yetsenga said in a recent analysis. “But responding to these challenges with new supply, in the absence of pushing just as hard on other policies, is unlikely to materially improve affordability, even in the medium term.” Economic and market dynamics complicate new buildsThe complexities of the housing market, including diseconomies of scale and speculative behaviours, contribute to the difficulty in addressing affordability through new construction alone. You may read the whole article here:https://bit.ly/4aLmUn0
Australian Company Failures Surge – ASIC
There is a concerning rise in the number of failing Australian companies, latest insolvency data from the Australian Securities & Investments Commission (ASIC) has shown. During the nine-month period from July 2023 to March 2024, a total of 7,742 companies entered external administration, marking a 36.2% increase compared to the same period in the previous year. The construction sector, with 2,142 companies, and the accommodation and food services industries, with 1,174 failures, were the hardest hit, accounting for approximately 27.7% and 15.2% of the total, respectively. You may read the whole article here:https://bitly.ws/3ijFS
