Sydney and Melbourne house price recoveries now tipped for 2019
So says ANZ, which just two months ago tipped any recovery wouldn't occur until next year. The faster-than-expected turnaround in sentiment has prompted a revision of that assessment; ANZ now expects modest growth nationally between now and the end of the year, followed by a 3 per cent increase in prices across the country in 2020.
ANZ also responded this week to APRA's removal of the lending serviceability buffer earlier this month. The bank dropped from the mandated 7 per cent to 5.5 per cent for its calculations on a borrower's ability to repay their mortgage; Westpac also dropped its serviceability floor this week, to 5.75 per cent.
Speaking of low rates, the Reserve Bank released detailed notes this week explaining the recent month-on-month official cash rate cuts. One of the key take-outs is that the RBA is relatively unconcerned that these actions will prompt another mortgage borrowing spree.
The market is pricing in a 78 per cent chance of another 0.25 per cent rate cut in November. There are some who even think we'll see another cut in August, depending on the story tomorrow's fresh job market figures tells.
While we're talking numbers, SQM Research data released yesterday shows Sydney's rental vacancies are the highest they've been since 2005 - caused by, according to SQM, a flood of new housing stock hitting the market. On that basis, Melbourne is likely to follow suit.
How many of those vacant homes are apartments?
Today's SMH tells of 19 Gadigal Avenue, Zetland loft apartment owners who can't sell because of the problems plaguing other sections of the building. It's a problem Opal Tower apartment owners are familiar with.
Many, many other apartment owners across the country are about to be in the same boat. The combustible cladding crisis is about to hit home to residents and owners in thousands of buildings across the country.
The state-run taskforces investigating the issue are not saying which buildings have been identified with combustible cladding, but numbers are emerging. There are more than 1,000 in South Australia, for example. And this piece by Jake McCallum that appeared on dailytelegraph.com.au last night revealed there are 171 in Parramatta alone.
The Victorian government has pledged to cover half of the $600 million bill to replace combustible cladding on the 500 privately-owned buildings it currently knows about - but developers will need to cover the rest. The federal government has clearly stated it will not be stepping in to assist.
The ramifications for private building certifiers is staggering. Insurers are hitting back saying this isn't their fault as they astronomically raise premiums for certifiers, architects, surveyors and other building professionals in the wake of these issues - but the fact remains that the building sector is facing a crisis as a result.