Top 5: Finance & property quotes week commencing October 27

By the resi financial blog team, 03 November 2014

Top 5: Finance & property quotes week commencing October 27

The last week of October saw several comments on market and property activity that highlighted a need for increased commercial and consumer awareness when it comes to market conditions. Government intervention was also called for to ensure continued growth and sustainability of the Australian economy.

#1. On October 27 Dr Luci Ellis spoke to the Australian Housing and Urban Research Institute panel roundtable about how the current economic conditions made for affordable housing, despite rising house prices. She noted that low interest rates and other policies had created an accommodative environment.

"Mortgage repayments are lower than the average of the past 10 or 15 years, so again thinking about what it means to have affordability and unaffordability – the affordability of a current mortgage is not unusually high at present."

#2. Speaking on the sales of new homes, HIA Chief Economist Harley Dale illustrated how an overall decline in the sale of new dwellings disguised increases in certain sectors that were quite significant.

"While total new home sales recorded a flat result in the month of September, this headline outcome masked a strong, 11.0 per cent lift in multi-unit sales," explained Dr Dale on an October 30 statement.

#3. Recent research from Ernst & Young showed an increased expectation of mergers and acquisitions (M&A) this year, with the number of companies intending to complete an acquisition more than doubling from 32 per cent to 66 per cent six months ago. Confidence in the quality and number of M&As is also at a four-year high.

In an October 27 release, EY Oceania Transaction Advisory Services Leader Graeme Browning pointed out that new competitors in this market should give traditional market operators pause to think about their strategies going forward.

"There are now new players, including hedge funds, superannuation funds and buyers from across Asia, who have different costs of capital and longer term horizons – Australian companies need to understand these different drivers to win," said Mr Browning.

#4. Commenting on the latest Australian Industry Group/Australian Constructors Association Construction Outlook survey, Australian Industry Group Chief Executive, Innes Willox addressed projected falls in building activity over the next two years, as dwindling resource-related construction continues to have an effect.

"The latest Construction Outlook shows that trends set in train over the past year or so have become well established. While areas of strength are taking up some of the slack, we also need an acceleration of state-based infrastructure projects. These projects could take advantage of the capacity being released from mining-related activity, help build national productivity and improve the amenity of our cities and regions," Mr Willox said in an October 30 statement.

#5. Referring to the same survey as above, Australian Constructors Association Executive Director, Lindsay Le Compte put the onus on the state governments to provide impetus through increased infrastructure spending, despite the upcoming electoral cycle, which can prove a distraction.

"The survey outcomes reinforce the need for governments to get on with undertaking announced infrastructure projects. They should not be diverted by the impact of the forthcoming electoral cycle, especially as the pipeline of projects will provide very significant employment and economic benefits across many communities and the supply chain in general over coming years," Mr Le Compte said.

Categories: Business Owners, Home Loans