ABS data: New build costs surge, but data points to rate cut
But the rising cost is no longer expected to impact Reserve Bank decisions on interest rates with a key building industry group who forecast July's shock hold now flagging there will be a cut to home loan costs next week.
The Housing Industry Association analysed Australian Bureau of Statistics data released on Friday and found material costs rose at less than the consumer price index in the past year.
Instead, they believe the increasing cost of new builds in housing approvals data is being caused by seven-star energy efficiency and accessibility minimum standards added to Victoria and South Australia in 2024, and flow on effects from the same code added to NSW and Queensland a year earlier.
Much of the rest of the increase is being linked to homebuyers looking to build homes that are bigger, better quality, or both.
HIA economist Maurice Tapang said given these factors, even with a 4.8 per cent increase in home building approval costs in the past year the way should now be clear for an August interest rate cut.
'I don't think they should be delaying any cuts to the cash rate in regards to people taking on larger or better quality homes, I don't think that will be their main concern,' Mr Tapang said.
The Association was one of the few to predict the RBA's July decision to hold rates, but now believes the odds are they will cut in August, and again in November, as they follow what appears to be a more quarterly-linked schedule following cuts in February and May.
While most building costs did not increase in the past financial year, there were some outliers. Copper pipes and fittings jumped by 13.9 per cent, electrical cable and conduit recorded an 8.3 per cent uptick, while fibrous cement products increased 7.5 per cent, ahead of ready-mixed concrete's 5.7 per cent gain.
The ABS building approvals data showed NSW was home to the biggest increase in the cost of the average new house approval in the past financial year, rising more than $38,700 to almost $550,000.
It eclipsed Western Australia, where the typical house build price rose $26,786 to hit $443,210.
South Australia remains the most affordable mainland state to build a house in, despite a $25,400 increase bringing its typical house cost to $403,348.
Queensland and Victoria both had similar increases, with the former rising $20,940 to $500,160 in the past year, and the latter up just under $20,000 to $510,000.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
News.com.au
29 minutes ago
- News.com.au
Diggers and Dealers: Forget Trump, miners remain bullish ‘scarcity pricing' will return for lithium
Lithium miners have fronted up at 2025's gold-dominated Diggers and Dealers Liontown's Tony Ottaviano and others say the limelight on EV-hating Donald Trump has obscured a strong demand growth outlook outside the US for the battery metal PLS' Dale Henderson says it's too early to say whether the market has bottomed North American EV demand growth has ground to a halt under the policies of America's Republican strongman Donald Trump. But lithium miners say market watchers obsessed with the orange man's EV animus are missing a trick, with demand continuing to grow sharply as low prices stall supply growth. Rising Chinese-backed production at home and in Africa helped turn a lithium bull run into a second lithium winter, with spodumene prices crumbling from US$8000/t at the start of 2023 to US$600/t at their ebb in June. They have since rebounded to US$775/t, giving a glimmer of hope that the dark days could soon be behind the battery metals sector. Tony Ottaviano, the head of WA's newest lithium miner, the Gina Rinehart backed Liontown Resources (ASX:LTR), is confident 'scarcity pricing' will reemerge after low prices caused miners to pause or curtail operations and delay mine builds. "Currently, we estimate the oversupply to be in the tune of 120-130,000 tonnes," he said at the Diggers and Dealers Mining Forum in Kalgoorlie. "So based on that maths, a year and that oversupply will be consumed. "Then what is being built today to take on that new growth? If there are no new projects that are actually in construction now, it'll be three to five years before something gets built. "I can see the industry and believe me, I've been in this a long time, that we will see history repeating itself. We will get this, you know what they call it? Scarcity pricing come back in." Price signal Much of the additional supply has come from lower grade lepidolite operations opened in China by vertically integrated battery and EV giants like BYD and CATL. Speaking just months after opening the Kathleen Valley gold mine near Leinster in WA, Ottaviano says as demand outside China grows and the market gets larger, their influence on pricing should wane. Miners are keen to see the development of a more mature market with more transparent price signals. " You cannot have this sort of boom-bust and these amplitudes. You need … that steady price signal to keep that incentive going so that we can get rational new supply coming on." Dale Henderson, managing director of Pilbara Minerals (ASX:PLS), the ASX's lithium bellwether with its large Pilgangoora mine, says lithium needs a spot market place and "the right" futures exchange to enable more transparent price discovery. Volatility in spodumene and lithium carbonate pricing, including a recent surge that floated the boats of the ASX lithium sector, has been closely linked to speculative trading on China's Guangzhou Exchange. "It's essentially the only futures market, at this time," Henderson said. " To determine if that's the futures market to back, you've got to look closely at it and I couldn't offer an opinion on that. "I know some have expressed concerns around it because of its own volatility and who's actually trading on that? But regardless whether it's Guangzhou or another exchange, we need one or more very healthy exchange to help guide a healthy market." Demand on the up Where lithium exponents are united is their belief that the market is continuing to grow ... and fast. Ottaviano pointed to strong growth rates in China and Europe, noting the media's focus on Trump was obscuring green shoots elsewhere. Patriot Battery Metals (ASX:PMT) MD Ken Brinsden, the former PLS boss whose new company owns North America's largest hard rock lithium deposit at Shaakichiuwaanan in Canada's James Bay region, said the US market was currently irrelevant for the EV story. Henderson pointed out that mass energy storage, a market his former boss Brinsden believes will come to outstrip EVs, is growing at a rapid and previously unforeseen rate. The current PLS boss thinks we could be headed in that direction. "What we saw for last calendar year is the mass energy storage spoke to approximately 15% of the total demand," he said. "But what was interesting about last year is that subset had grown by approximately 50% from the prior year. "Now as we step into this calendar year, that stronger growth rate, stronger than EVs, is continuing at least so far this year. "Now, if that carries forward, it will end up eclipsing, being a larger subset of the total lithium demand." Price rebound? What every lithium bull, and there are few left, is being asked in Kalgoorlie is: when will prices turn around? Miners are loathe to put a date on it, though Henderson thinks the time spent deep in the cost curve and recent curtailments suggests the worst could be in the rear view mirror. Canaccord Genuity analyst Tim Hoff said the market would tighten, even with the US EV market flat. "We wrote a report a few weeks ago where we we went through our supply-demand and where we landed," he told Stockhead. "The last time we ran this report was in February. We were cautious on global demand, given how the US was performing and that has performed to our expectations – in terms of the USA, growth is basically flat. "However, the rest of the world and China are growing EV market share rapidly. We see adoption of these vehicles. Here in Australia, you can see it out on the roads every single day. "And so the EV demand story rolls on, the energy storage demand story rolls on – where America is actually leading the charge there. Australia will soon be putting in a lot of storage as well. And so that's strong. "So we're looking for a demand-led recovery. Prices are low enough to have stopped the supply additions. "We expect things to improve."
News.com.au
29 minutes ago
- News.com.au
MoneyTalks: Summit Biotech Fund's three standout ASX healthcare stocks
MoneyTalks is Stockhead's drill down into what stocks investors are looking at right now. We tap our list of experts to hear what's hot, their top picks and what they're looking out for. Today we hear from Australia's Summit Biotech Fund manager Reece O'Connell. With experience trading through multiple economic and market cycles, Reece O'Connell has developed a long-term investment approach focused on preserving and growing capital. In a career that has taken him from Perth to London and back again, he has worked closely with high-net-worth and wholesale investors, tailoring strategies to meet their objectives while navigating changing market conditions. At Summit Biotech Fund (SBF) he aims to provide long-term capital growth by investing in a portfolio of life science companies where innovation plays a crucial role in improving global health and economic outcomes. This includes biotechnology, pharmaceuticals, medical devices and equipment, medical data, information technology (e-health), and robotics. And in some good news for the fund, a rotation back into the healthcare sector appears to be gaining momentum with the S&P ASX 200 Health Care index rising 9.05% in July. "The healthcare sector has been the worst performing sector for two years and there's great positioning in quality healthcare names before the sector turns," he said. "We see these sector rotations every three to five years and I believe the ASX healthcare sector represents good value and plenty of upside in quality names with strong management." Here's three companies Summit Biotech Fund has invested in and why. Arovella Therapeutics (ASX:ALA) SBF is a major shareholder in Arovella, which is developing a next-generation cell therapy platform based on invariant Natural Killer T (iNKT) cells engineered with Chimeric Antigen Receptors (CARs) to target specific cancer antigens. Unlike traditional CAR-T therapies, Arovella's approach uses healthy donor cells to create off-the-shelf treatments, which reduces cost, complexity and time to treatment — the major issues currently faced by CAR-T companies. Arovella's lead candidate, ALA-101, targets CD19-positive blood cancers, and its pipeline encompasses therapy development for solid tumours such as gastric and pancreatic cancers. O'Connell reckons Arovella is in a hot area of cancer research. Nasdaq-listed MiNK Therapeutics recently soared following publication of a case report in the peer-reviewed Oncogene journal, detailing a patient with advanced, treatment-refractory testicular cancer who achieved complete remission after receiving its lead product iNKT Agentâ€'797, in combination with the immune checkpoint inhibitor nivolumab. "Arovella presents an opportunity in a rapidly growing sector, with a differentiated platform and strong early-stage clinical momentum," O'Connell said. "The company is the only ASX-listed biotech delving into CAR-iNKT therapies and one of only a handful globally." He said Arovella was well funded, finishing Q4 FY25 with cash of $20.9 million, which should fund the company through to completion of patient enrolment for its phase I clinical trial for ALA-101 n non-Hodgkin's lymphoma and leukaemia patients exhibiting the CD-19 biomarker – the target its CAR-iNKT cells recognise. The funding will also support the advancement of the company's solid tumour programs (CLDN18.2-CAR-iNKT targeting gastric cancer) and its armouring program (IL-12-TM). "ALA presents a highly compelling investment opportunity over the next six to 12 months, given the competitive landscape and the deals being struck for allogeneic assets and platforms," O'Connell added. SBF is a significant shareholder in Tryptamine, a clinical-stage biopharmaceutical company developing next-generation psychedelic medicines for neuropsychiatric conditions. Its lead program, TRP-8803, is a proprietary, IV-delivered formulation of psilocybin designed to provide more precise dosing and improved patient tolerability compared to oral psychedelic treatments. Phase 1b trials have already shown the drug to be safe and well tolerated in obese and non-obese participants. The company recently kicked off a world-first psilocin trial with TRP-8803 targeting Binge Eating Disorder (BED). The study, run in collaboration with Swinburne, will assess TRP-8803 when administered with psychotherapy with the goal to evaluate safety, feasibility and efficacy in adults diagnosed with BED. For O'Connell when analysing a biotech it as much about who is running the company as it is about the science. "One of the most important investment themes I always look for is a material monetary investment by directors in a company," he said. "Too many small ASX-listed companies have boards that aren't truly aligned with shareholders. "The number one way to be aligned is to have directors putting in their hard-earned cash like us. In this case, TYP ticks all the boxes.' He said directors, management,and major shareholders were collectively invested for more than $9m, with CEO Jason Carroll personally contributing more than $1 million. Carroll's 30-year career in big pharma includes two decades at Johnson & Johnson, where he led the strategy that doubled US sales of Remicade — a blockbuster IBD drug that ultimately reached US$10bn in annual global sales. O'Connell said other board members brought similar firepower. Executive director Chris Ntoumenopoulos was involved in the growth of Race Oncology (ASX:RAC) from $10m to north of $200m, founded former ASX-listed ResApp Health, which was acquired by Pfizer for ~$200m, and has helped double Island Pharmaceuticals' (ASX:ILA) value since joining its board. As part of the last raise experienced biotech investor Dr Daniel Tillett joined the Tryptamine board as a non-executive director and became a cornerstone investor. Tillet also cornerstoned a raise in Race Oncology in its early days and now leads it as CEO and managing director. Recent clinical progress provides Tryptamine with valuable proprietary data as its seek to advance the use of TRP-8803 in patient-specific indications. "With a differentiated psychedelic platform, directors heavily invested alongside shareholders, and multiple catalysts on the horizon, Tryptamine is emerging as one of the more compelling plays in the sector," O'Connell said. SBF also holds a strong position in NeuroScientific, which O'Connell said was positioning itself as a serious player in the fast-growing field of stem cell therapies for immune-mediated diseases, underpinned by its recently acquired StemSmart platform. The patented mesenchymal stromal cell (MSC) therapy has shown strong early results including a 53% remission rate in a phase II trial for refractory Crohn's disease and outperforming Humira, the long-time anti-inflammatory drug used as a standard of care. It also showed high response rates in a phase I trial for steroid-refractory Graft-versus-Host Disease (GvHD). "With the global markets for Crohn's and GvHD forecast to reach US$25 billion combined by 2035, StemSmart is tapping into significant unmet needs," O'Connell said. He also sees validation from the sector's leader Mesoblast (ASX:MSB), which recently secured US Food and Drug Administration (FDA) approval for its MSC product and now commands a $3.1bn market cap. He said by comparison, Neuroscientific trades at just ~23 cents but carries a midpoint valuation of 60 cents, representing around 161% upside based on a probability-adjusted DCF model assuming modest success rates and future partnerships. This assumes modest 20% success rates, 25% market penetration in Crohn's and potential partnerships with big pharma to fund late-stage trials. With a Special Access Program about to generate real-world data, plans to initiate Phase II trials in 18–24 months, and expansion into additional inflammatory and lung diseases, StemSmart offers a scalable pipeline. "For investors looking at the MSC space NSB could be an early-stage, high-upside opportunity positioned to follow Mesoblast's trajectory as the market matures," he said. The views, information, or opinions expressed in the interview in this article are solely those of the interviewee and do not represent the views of Stockhead. Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article. Disclosure: Summit Biotech Fund held shares in Arovella, Tryptamine Therapeutics and NeuroScientific Biopharmaceuticals at the time of writing this article.
News.com.au
29 minutes ago
- News.com.au
Dr Boreham's Crucible: Telix has homework but remains dux of radioimaging class
With multiple clinical trials and approval applications in train, nuclear medicine superstar Telix Pharmaceuticals (ASX:TLX) is like one of those irritatingly brilliant all-round students. We're thinking of the straight-A school captain who stars in the school play, whilst padding up for the First XI in between clarinet lessons. But when Goody Two Shoe's Latin grade slips to B+, panic ensues – mainly on the part of overbearing 'parents' (investors). Last month, Telix experienced the corporate version of such angst when it revealed the US Securities and Exchange Commission (SEC) had varied subpoenaed 'various documents and information'. These relate mainly to Telix's disclosures about its prostate cancer therapeutic program. While the company dubbed the entreaty a 'fact finding request', investors birched the stock by 15%. Telix has a nearer-term focus on winning US Food & Drug Administration (FDA) approval for two imaging products and says the longer-term therapy programs will continue unchanged. But the mysterious episode is not the first time that Telix has slipped up. In April, the FDA knocked back Telix's marketing application for its brain cancer (glioma) diagnostic, telling the company to do more homework. Management said the setback (by way of a Complete Response Letter) was merely temporary and the company would do what Headmaster requested. A year ago, the FDA also rejected the company's filing for its kidney cancer diagnostic Zircaix, on account of an 'unacceptable' manufacturing defect. Telix founder, CEO and head prefect Chris Behrenbruch dubbed the glitches 'relatively minor and fixable'. Indeed, the company re-filed the application and the market awaits an FDA decision by the end of the month. Telix machine is clicking along To date, Telix has derived most of its revenue in the US, from its approved prostate cancer imaging agent Illuccix. Illuccix is a kit for preparing gallium-68 gozetotide – more commonly known as a PSMA-11 injection – for positron emission tomography (PET) scans. Illuccix is used for prostate cancer patients suspected of having either metastasised growths, or a recurrence based on elevated PSA (prostate-specific antigen) levels. Elevated levels in the blood of PSA, a protein, can be a marker of prostate cancer. PSMA (prostate-specific membrane antigen) is a protein found on the surface of prostate cancer cells. Illucix is approved in 17 countries, including the US, the UK, Brazil, Germany, France, Canada and here. In March, the FDA approved second diagnostic, Gozellix (for metastatic castrate resistant prostate cancer). Telix hopes to launch Gozellix in the US in the current quarter. A bit of history Dr Behrenbruch founded Telix in 2015 out of a 'deep frustration' that there was a burgeoning interest in nuclear medicine technologies, but few commercial players. In early 2017 Telix acquired the Dresden-based radio-pharmaceutical outfit Therapeia, founded by Dr Andreas Kluge. Dr Kluge retired from the board in September last year. Telix listed in November 2017, after raising $50 million at 65 cents apiece. In November 2024 the company listed on Nasdaq, having abandoned a $300 million IPO in favour of a $650 million non-US corporate bond issue. Dr Behrenbruch was the executive director of the now defunct Factor Therapeutics and was also on the board of the very un-defunct pancreatic cancer tearaway, Amplia Therapeutics. In 2020, Telix inked a 10-year deal with China Grand Pharmaceutical, worth 'up to' US$225 million from market authorisation. The Hong Kong-based entity became the exclusive partner in greater China for any approved Telix therapy. Telix remains Melbourne based, but most of its commercial activity is in the US. Good golly, it's Gozellix In March this year the FDA approved the company's gallium isotope-based Gozellix, for PET scanning of lesions showing PSMA. While not an expansion to a completely new indication, Gozellix extends the company's US prostate cancer imaging market reach by an estimated 5-10%. Gozellix is for prostate cancer patients with suspected metastasis, who are candidates for initial definitive therapy (prostate removal or broader radiation treatment). It's also for those with suspected recurrence, based on elevated PSA levels. 'The ability to reliably deliver the product much further from its point of production means Gozellix can reach PET cameras that are currently not served by any PSMA imaging providers,' the company says. Gozellix has a longer shelf life of up to six hours, about three times more than Illucix. It can also be used on older scanning machines. On the acquisition trail To expand its repertoire and bolster its manufacturing oomph, Telix has continued an acquisitive splurge. In January Telix acquired a 'proprietary novel biologics technology' from antibody engineering company Imaginab Inc. The platform avails of small, engineered antibody formats that enable specific radiation targeting of cancer. The deal delivers a 'state-of-the-art' research facility in Los Angeles, adding to existing capacity at Sacramento, Angleton (Texas) and across the border in Vancouver. In September 2024 Telix spent $388 million to acquire RLS Radiopharmacies, to expand its North American manufacturing and distribution footprint. RLS derives revenue from providing radiopharmacy products to third party clients. In April, the company bought the Austin-based Isotherapeutics (radio-chemistry services) and the Canadian radio-isotope producer Artms Inc. Let's get clinical It's hard to do justice to Telix's extensive clinical program in a few paragraphs, but here goes … By the end of the year, the company should unveil an initial safety and dosing readout pertaining to its phase III prostate cancer therapy candidate, the lutetium-based TLX-591. The study, Prostact Global, has enrolled 30 men for the part one phase. These patients have PSMA-positive metastatic castrate-resistant prostate cancer. These men are also treated with the standard-of-care chemotherapy drugs, or the standard-of-care alone. To date, TLX-591 has been evaluated in 242 patients across eight phase I/II studies, with 'evidence of anti-tumour effect and a clear dose response profile for key measures of efficacy.' Telix also has mid-stage brain and kidney cancer therapy programs and another one for bone marrow conditioning. Telix also runs earlier stage programs for musculo-skeletal conditions including soft tissue sarcoma, bone metastases and 'pain palliation'. Readers should peruse the company 127-page investor presentation from June 11, but only if they are feeling strong. Finances and performance Telix reported revenue of US$204 million for the June 2025 quarter, up 63% year on year and a 10% increment on the March 2025 quarter. (As of January this year, the company reports in US dollars.) Sales of Illuccix accounted for US$154 million, up 25% year on year. RLS contributed US$46 million of sales, 39% higher than the March quarter. Dr Behrenbruch notes Illuccix dose volumes rose 7%, quarter on quarter. He says despite 'emerging competitive pricing pressure', Telix has 'effective strategies' to maintain average selling prices. Not irrelevantly, Gozellix in July was granted a permanent Healthcare Common Procedure Coding System code. Telix expects to obtain Transitional Pass-Through (TPT) payment status, which provides additional Medicare reimbursement to hospitals using innovative medical devices or drugs. TPT should apply from October 1 with reimbursement of around US$1000 per dose, almost twice that applying to Illuccix. In calendar 2024, Telix expended US$195 million on research and development, up 50%. This year the number should be 20-25% higher again. Telix has maintained calendar 2025 guidance of US$770-800 million, having chalked up first half revenue of US$390 million. We'll know about the innards of Telix's financials at its full-year results on August 21. Over the last 12 months Telix shares have irradiated between $17.44 (early September last year) and a record $31.14 in late January this year. In November 2017 the shares were worth 13 cents. Telix trumps tariffs with US manufacturing Telix says it won't be affected by Trump's drug pricing and tariff proposals. Given Telix's just-in-time products are made in the US out of necessity, they are as American as apple pie and a Colt AR-15 rifle under the bed. 'This will continue to be the case for new products the company expects to launch in 2025,' the company says. As for drug pricing, The Trump administration plans to benchmark certain local therapeutics against those charged in the cheapest of the industrialised nations. Telix reckons it's in the clear because 'localised production makes international pricing comparisons challenging to benchmark'. In any event, the company promises 'pharmaco-economically defensible' pricing. What the brokers say Broking analysts maintain their faith in Telix, despite the distraction of the SEC probe (if we can call it that) and stiffening prostate imaging competition. Broker Jefferies says such SEC entreaties are common, but the issues might take two years or so to resolve. UBS suggests any disclosure shortcomings may relate to Telix's dual ASX/Nasdaq listing, with the company needing to satisfy different requirements across the Pacific. On competition, UBS notes the 7% uptick in Illuccix sales shows Telix is winning market share in a hotter market. The firm believes the launch of Gozellix (and its TPT status) has relieved some of the pricing pressure. UBS values Telix at $36 a share, while Jefferies and Bell Potter plump for a $34 price target. The latter does so on the expectation of FDA approval of Zircaix. UBS says the current valuation assumes 'total scientific and clinical failure' of the therapeutic programs. Valuing the stock at $35, Wilsons says Gozellix provides 'exciting upside' and Telix has 'so many options available to it both competitively and operationally'. The only Grumpy Bob is Morningstar, which in April described Telix as overvalued by about 40%. The research house opined Telix's product pipeline remained 'commercially unproven in an increasingly competitive market'. Dr Boreham's diagnosis Telix faces a pile of homework, but we concur the company can remain dux of the radioimaging class despite the regulatory issues. We should stress that Telix is solidly profitable: UBS plugs in a net profit of $138 million for the 2024-25 year just gone, rising to $480 million within two years. Telix cites a current US prostate cancer imaging market at US$2.5-3.5 billion. But with expanded indications, this figure swells to US$6.7 billion across 1.7 million scans annually. One might think the medical world had nuclear diagnostics down pat by now, but evidently there are isotopes and there are isotopes. In the past, Dr Behrenbruch has described Zircaix as potentially bigger for Telix than Illuccix. Not that he expects the prostate business to slow down. Beyond imaging, if Telix can crack a better therapy for the key cancers in its remit, then its $7 billion market valuation looks only the start. At a glance ASX Code: TLX Share price: $18.53 Shares on issue: 338,399,059 Market cap: $6.27 billion Co-founder and CEO: Dr Christian Behrenbruch Board: Tiffany Olson(chair), Dr Behrenbruch, Dr Mark Nelson, Jann Skinner, Marie McDonald (chairman Kevin McCann retired in May 2025) Financials (June quarter 2025): revenue US$204 million (up 63%) Calendar 2024 year: revenue $783 million (up 56%), adjusted earnings before interest, tax, depreciation and amortisation $99.3 million (up 70%), net profit $49.9 million Major shareholders: Gnosis Verwaltungsgesellschaft (Dr Kluge) 6.88% Elk River Holdings (Dr Behrenbruch) 6.2%, Grand Pharma (China Grand Pharmaceuticals) 3.3%.
