Latest news with #NeridaConisbee
Sydney Morning Herald
5 days ago
- Business
- Sydney Morning Herald
The type of housing cost that just soared 75 per cent in five years
The cost of land for housing development has skyrocketed by 75 per cent over the past five years, pushing homeownership further out of the hands of average potential buyers. The median development site cost has risen from $4.8 million in 2020, to $8.5 million this year, Ray White analysis of Real Capital Analytics data shows. It comes as construction costs remain elevated from their pre-COVID-19 levels, putting further pressure on affordability. Ray White Group chief economist Nerida Conisbee said it would take considerable time before building costs fell enough to make new housing genuinely affordable for average buyers. 'Land costs haven't come back down and what's happening is developers want to build, but they can't do it affordably,' Conisbee said. 'We're not seeing the crashes in the market we previously saw so we're in a kind of holding pattern.' In past economic downturns, rising interest rates would put pressure on some owners of development sites, forcing them into distressed sales at reduced prices. But this time was different, and Conisbee said many had built financial buffers while interest rates were at record lows, and developers have been in a better position to hold onto land. They were also entering into joint ventures when finances were squeezed. Changes to how lenders operated were also helping developers hold on to their assets, banks were holding off on forced sales for struggling developers, and were more likely to offer relief measures. It comes as the federal government aims to deliver 1.2 million homes in five years to address the housing affordability challenge.
The Age
5 days ago
- Business
- The Age
The type of housing cost that just soared 75 per cent in five years
The cost of land for housing development has skyrocketed by 75 per cent over the past five years, pushing homeownership further out of the hands of average potential buyers. The median development site cost has risen from $4.8 million in 2020, to $8.5 million this year, Ray White analysis of Real Capital Analytics data shows. It comes as construction costs remain elevated from their pre-COVID-19 levels, putting further pressure on affordability. Ray White Group chief economist Nerida Conisbee said it would take considerable time before building costs fell enough to make new housing genuinely affordable for average buyers. 'Land costs haven't come back down and what's happening is developers want to build, but they can't do it affordably,' Conisbee said. 'We're not seeing the crashes in the market we previously saw so we're in a kind of holding pattern.' In past economic downturns, rising interest rates would put pressure on some owners of development sites, forcing them into distressed sales at reduced prices. But this time was different, and Conisbee said many had built financial buffers while interest rates were at record lows, and developers have been in a better position to hold onto land. They were also entering into joint ventures when finances were squeezed. Changes to how lenders operated were also helping developers hold on to their assets, banks were holding off on forced sales for struggling developers, and were more likely to offer relief measures. It comes as the federal government aims to deliver 1.2 million homes in five years to address the housing affordability challenge.
Canberra Times
19-05-2025
- Business
- Canberra Times
Further house price growth if rate cut occurs, expert
What are you predicting for May's rate decision by the RBA? I expect the RBA to cut interest rates in May, likely by 0.25per cent. "I expect the RBA to cut interest rates in May, likely by 0.25 per cent," says Ray White Group's chief economist Nerida Conisbee. Pic: Supplied This would be a significant move that reflects the changing economic landscape and the need to address mounting global pressures on our economy. While it is possible we will see a 0.5per cent cut, the Board has been very careful this cycle and I think that that they will be hesitant to cut too hard What are the key conditions that will bring this decision? The key conditions driving this rate cut include persistent global economic uncertainty, growing concerns about Australia's economic growth trajectory, and signs that inflation pressures are finally easing. The RBA will be particularly focused on potential employment impacts from a global slowdown, as well as the potential for tariffs to impact inflation Is the Trump factor a consideration? The Trump administration's economic policies are absolutely a consideration for the RBA. The introduction of high tariffs has created significant market volatility and disrupted global trade flows. The Trump administration's economic policies are absolutely a consideration for the RBA, according to Ms Conisbee. Pic: Shutterstock While Australia isn't a major direct trading partner with the US, the secondary effects through our relationship with China and global supply chains have created a new layer of uncertainty that the RBA must factor into its decision-making process. If interest rates go down, what is the expected impact on house prices in Australia generally? A reduction in interest rates will almost certainly stimulate further house price growth across Australia. Lower borrowing costs increase buyer capacity and confidence, typically leading to more competition for available properties. We're already seeing strong momentum in markets like Perth, Adelaide and Brisbane, but even the currently slower Sydney and Melbourne markets would likely respond positively to rate cuts, as they've historically been quite sensitive to interest rate movements. Would a cut in interest rates also affect listing numbers? It is likely that a cut will encourage more people to sell. It is difficult to forecast listing volumes as they tend to increase either because people are stressed and needing to sell, or alternatively more positive and deciding to upgrade or take advantage of buoyant conditions. A rate cut will lead to greater positivity and this will mean more listings. How many cuts do you expect to see this year? I expect we'll see multiple rate cuts throughout 2025, likely 4 in total, including the one tomorrow. We have however seen rapidly changing economic conditions this year and a lot will depend on how global economic conditions evolve. That said, we shouldn't expect rates to approach the extreme lows we saw during the COVID period. The RBA will maintain a measured approach, balancing the need to support economic growth against the risk of reigniting inflation.
The Guardian
12-05-2025
- Business
- The Guardian
Australian property bounce after Labor wins second term, early data shows
Australia's housing market has surged in the immediate aftermath of Labor's emphatic election victory, preliminary data shows, while analysts say an anticipated string of rate cuts may see the trend continue. Auction clearance rates rose to 70% in the week following the election, according to preliminary Cotality data, from 60% in the middle of last month. An auction clearance rate of 70% or above typically indicates sellers are in control of the market. Nerida Conisbee, the chief economist at real estate agency Ray White, attributed some of the buying enthusiasm to Labor's win. 'There's a higher level of certainty,' she said. 'It was a landslide election, so people are feeling pretty confident that the right outcome has happened.' Sign up for Guardian Australia's breaking news email Home prices are expected to rise faster than wages through the rest of 2025 on the back of expected interest rate cuts, analysts predict, while some forecast the returned government and its buyer help schemes could keep property prices rising in 2026. The number of homes listed for sale remains relatively low, up to 33,000 on Monday from about 32,000 during April, according to Cotality's head of research, Eliza Owen. 'People are still waiting to see the outcome of the interest rate decision in May,' Owen said. The Reserve Bank board is heavily tipped to cut its key interest rate on 20 May, with markets predicting a further three reductions by November. The bank's rate cut in February, the first since 2020, has led to home values rising by a steady 0.6% in Sydney and Melbourne on Cotality's measure, counteracting falling prices recorded at the end of 2024. Economists expect nationwide values to rise by at least 3% but potentially as much as 10% over 2025, helped by rate cuts and a regular springtime sales surge. Those forecasts could be constrained by a slower-than-expected recovery in buyers' budgets after household spending data surprised forecasters last week by falling in March after rising five months in a row. Sign up to Morning Mail Our Australian morning briefing breaks down the key stories of the day, telling you what's happening and why it matters after newsletter promotion But the government is expected to underwrite further price growth from January, when it expands its program enabling Australians to buy their first home with a deposit of just 5%. Anticipated robust increases in home values, outpacing wages, threaten to widen the gap between property owners and younger renters struggling to get into the market. Both Labor and the Coalition were criticised during the election campaign for promising policies that would drive up prices and for suggesting affordability could be resolved by prices growing 'sustainably', described by independent economist Saul Eslake as a 'con'. Lower house prices would be economically feasible but politically difficult for a government promising to underwrite rising home prices, Owen said. 'People do buy housing in the mindset that they're going to make money off it … and policy that works to bring housing values down [means] changing that social contract.'
Sydney Morning Herald
05-05-2025
- Business
- Sydney Morning Herald
Bidders show up late, win auction for Red Hill Queenslander in seconds
The vendors, interstate investors, had owned the home for nine years, having paid close to $900,000. 'At the first open home for this one we had 21 groups … and then we had about 35 groups today, which is strong,' Peter said. 'We were expecting what we got. Internally, within Brisbane, the market is still strong; you can't find a rental, and prices are still going up. It's quite a buoyant market.' According to data from Domain's latest House Price Report, median house prices in Red Hill are now $1,612,500 following a 9.3 per cent annual hike and 86.6 per cent growth over the past five years. The striking Queenslander was one of 95 scheduled auctions in Brisbane in the past week. By Saturday evening, Domain Group recorded a preliminary auction clearance rate of 43 per cent from 51 reported results, while four auctions were withdrawn. Withdrawn auctions are counted as unsold properties when calculating the clearance rate. Despite the sluggish clearance, Ray White chief economist Nerida Conisbee agreed Brisbane's market was strengthening, with their pricing data revealing a re-acceleration. 'We saw a significant slowdown at the start of the year, but it was a strong auction weekend despite the election, and I think that's because people are pushing through and are just out and about,' she said. 'I think a lot of it also has to do with interest rates — there's an expectation of two cuts in May, and there's a lot more positivity around that. 'There's also going to be more stability with the election over, and a lot of things are making property feel like a safer asset again.' Over in Stretton — one of the city's most tightly held markets — a six-bedroom, five-bathroom home on a 4047-square-metre block fetched $3.7 million under the hammer, making it one of just two acreage homes to transact there over the past two years. Selling agent Eric Lu, of Ray White, said two bidders battled in a short auction with just three bids lobbed until the home – 18 Mildura Street – sold under the hammer. 'Bidding kicked off at $3 million, then the second bid jumped to $3.5 million, and the third took it to $3.7 million,' Lu said. 'The buyer is an investor from South Australia who bought it as a land-banking investment — they didn't want to muck around, and they know the value here. 'The sellers are a family who lived here for 20 years, and the only reason they're selling is to downsize — most people live here 20 or 30 years. 'There were a lot of people at the house, about 100 watching — most of them neighbours wanting to see the result. 'This is the first transaction for an acreage home this year.' In Annerley, a three-bedroom, one-bathroom home on a 425-square-metre block fetched $1.31 million after a buyer from Mount Ommaney outmuscled two other bidders. The home, at 10 Torrens Street, sits a stone's throw to Princess Alexandra Hospital and in the Brisbane South State Secondary College catchment, while featuring hardwood floors and period details. The vendors are investors who have owned the home for seven years. Selling agent Mark Diamond, of Atlas by LJ Hooker, said an active $1 million opening bid kicked off the auction, followed by bids to $1.1 million and then $1.27 million where it paused. 'It was at that point that the third bidder and ultimate buyer stepped in to negotiate the price to $1.31 million,' Diamond said. 'That's our second recent auction in Annerley, and we're finding it's been quite strong for buyer activity — there's just a lack of renovated, good-quality homes.'
