• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to secondary sidebar
  • Skip to footer
  • Subscribe
  • Twitter
  • RSS Feed

Investment News NZ

Investment News provides financial advisers news stories from the financial industry in New Zealand. Subscribe to our free weekly newsletter.

  • Home
  • News
  • Kiwisaver
  • Subscribe
  • About
  • Advertise
  • Contact
You are here: Home / Investment News / Harbour Views: a heat map of Aussie property market

Harbour Views: a heat map of Aussie property market

June 29, 2015

Shane Solly: Harbour Asset Management director
Shane Solly: Harbour Asset Management director

 Harbour Asset Management portfolio manager and director, Shane Solly, was in Australia recently to gauge the ‘temperature’ of the Aussie residential property market… it was hot in spots

 

The parallels between the Sydney and Auckland housing markets are striking.

Headlines suggest conditions are ‘hot’. Average Sydney house prices are up by more than 20 per cent over the last two years, new residential housing starts are running at an all-time high of 200,000 plus per annum, new State Government taxes have been introduced aimed at foreign investors, and banking regulators are heavily scrutinising residential lending – all of which might lead you to believe the Aussie housing market is overheated. While these high level statistics suggest conditions are ‘hot’, they hide the fact that the strength has been led by Sydney and Melbourne with other capital cities not participating to the same degree – over the last five years property prices have fallen in real terms in six out of eight Australian capital cities.

The Sydney market is ‘hot’ and may stay ‘hot’ in the near term, driven by four factors:

  • significant under-build since the tax break driven boost to construction activity in 2008-09,
  • consistently positive net migration trends which are expected to remain supportive for NSW,
  • lifestyle changes whereby owner occupiers are favouring the amenity of inner ring (10km radius from the CBD) locations, and
  • in an environment of low interest rates investors are favouring direct residential property (despite falling rental yields) particularly given its tax advantaged status.

But there is a supply side response occurring with new development picking up strongly. Government bodies and private owners are releasing urban regeneration land for development around transport nodes. Infrastructure is planned to open up land locked locations. New, well-capitalised, global residential developers have entered the Australian market to increase supply. These factors mesh well with a growing acceptance of higher intensity of living. Local council intransigence may continue to hamper the pace of development.

While Sydney is hot, there are indications that other locations are cooling as new supply meets or in some cases exceeds demand. Significant new supply in Melbourne is slowing price appreciation. In the resource states, such as Western Australia, house prices continue to decline as major resource expansion projects are completed or curtailed, and interstate migration slows.

APRA, the Australian Prudential Regulation Authority, is due to announce further macro-prudential initiatives including stronger capital requirements for Australian Banks. An increase in mortgage risk weights or (following New Zealand’s lead) the introduction of macro-prudential policy targeted at a specific city, may supress some speculative Australian housing demand. Such a policy change could set the stage for the RBA to reduce its official cash target just as the RBNZ recently did.

While the Aussie residential cycle may have further to run, volatility is increasing reflecting the mature phase of the cycle and increased scrutiny from Federal and State authorities. After a strong positive performance Harbour has reduced exposure to listed Australian residential property developers.

 

Read More » Investment News

Recent articles

  • KiwiSaver comes out mixed in budget wash May 25, 2025
  • FMA wins $6.7m pay rise on compliance, enforcement upgrades May 25, 2025
  • Amplifi names new CEO; Fisher CFO quits; Alvarium fills CIO gap May 25, 2025
  • NZX investment platform wins more advice clients; FNZ court date looms   May 25, 2025
  • New direction: where the NZ financial advice industry needs to go next May 25, 2025
  • Portfolio in a storm: why global listed infrastructure is taking off May 25, 2025
  • Regulator lines up mass exemptions for review May 25, 2025
  • Wanted: IOSCO calls for clean-up in digital fin-town May 25, 2025
  • Calming influences May 25, 2025
Finished reading? Why not subscribe? To receive a weekly email enter your email address here.

Primary Sidebar

WEEKLY NEWSLETTER

Sign up here to receive our weekly newsletter.
Learn More »

Most Recent Investment News

KiwiSaver comes out mixed in budget wash

May 25, 2025

FMA wins $6.7m pay rise on compliance, enforcement upgrades

May 25, 2025

Mint chief executive, Rebecca Thomas

Amplifi names new CEO; Fisher CFO quits; Alvarium fills CIO gap

May 25, 2025

NZX investment platform wins more advice clients; FNZ court date looms  

May 25, 2025

New direction: where the NZ financial advice industry needs to go next

May 25, 2025

Search by Keyword

INVESTMENT NEWS

  • KiwiSaver comes out mixed in budget wash May 25, 2025
  • FMA wins $6.7m pay rise on compliance, enforcement upgrades May 25, 2025
  • Amplifi names new CEO; Fisher CFO quits; Alvarium fills CIO gap May 25, 2025
  • NZX investment platform wins more advice clients; FNZ court date looms   May 25, 2025
  • New direction: where the NZ financial advice industry needs to go next May 25, 2025
  • Portfolio in a storm: why global listed infrastructure is taking off May 25, 2025
  • Regulator lines up mass exemptions for review May 25, 2025

Quick-links to Popular News

  • FAP Compliance
  • Coronavirus
  • New Appointments
  • Financial Markets Authority (FMA)
  • Kiwisaver
  • Climate Change
  • Crypto Currency
  • Blockchain
  • Insurance

Sponsored Content

Calming influences

Trade walls, profit falls: NZX 50’s tariff exposure unpacked

Building a smarter portfolio: strategies for diversified growth 

Five strategies for dealing with market volatility

Unlocking the potential of smarter portfolio management for New Zealand’s largest investors

Bullish on bullion? Discover gold’s role as a diversifier

More Sponsored Posts >>>

Secondary Sidebar

Recent News

  • KiwiSaver comes out mixed in budget wash May 25, 2025
  • FMA wins $6.7m pay rise on compliance, enforcement upgrades May 25, 2025
  • Amplifi names new CEO; Fisher CFO quits; Alvarium fills CIO gap May 25, 2025
  • NZX investment platform wins more advice clients; FNZ court date looms   May 25, 2025
  • New direction: where the NZ financial advice industry needs to go next May 25, 2025
  • Portfolio in a storm: why global listed infrastructure is taking off May 25, 2025
  • Regulator lines up mass exemptions for review May 25, 2025
  • Wanted: IOSCO calls for clean-up in digital fin-town May 25, 2025
  • Calming influences May 25, 2025
  • Consilium sells to FirstCape May 19, 2025

Footer

Copyright ©2025 InvestmentNews.co.nz — All Rights Reserved — Terms & Conditions