Residential housing – bouncing back or stabilising?

housing Mason Stevens property

28 October 2019
| By Mike |
image
image
expand image

Before anyone gets too carried away with rebound in the residential housing market, Mason Stevens has noted the uptick in housing loan approvals has not resulted in a similar increase in residential building approvals.

The company said this would suggest that the oversupply in housing that occurred in the last few years, particularly with respect to apartments, was being soaked up by buyers rather than new housing being built.

Noting recent news suggesting the housing market was staging a recovery, Mason Stevens suggested there were some caveats that needed to accompany the data.

“In correlation to the housing price uptick, unsurprisingly, total dollar value housing loan approvals have recorded similar increases. Both the increases in prices and loan approvals shows that monetary policy continues to fuel housing demand and with rates envisaged to remain low for a long time to come, it is difficult to see the recent uptick as just a dead cat bounce (and perhaps a short to medium term floor has been found),” it said.

“Ignoring those sources that have a vested interest, non-biased commentators suggest we may be about to experience a period of stabilisation. Backing up that theory, with wage growth low and forecasts for slowing economic activity globally, it is hard to imagine a return to the boom times,” the Mason Stephens analysis said.

“Nonetheless, Australia continues with a high migration policy and the stats indicate a large component of housing demand stems from foreign investors and migrants. Australia (and particularly the major capital cities) have lofty targets for population growth, which also supports the stabilisation theory.”

It said any notable positive moves in the number of building approvals might provide the best indication that any sort of sustained recovery would eventuate.

 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Interesting. Would be good to know the details of the StrategyOne deal....

3 days 22 hours ago

It’s astonishing to see the FAAA now pushing for more advisers by courting "career changers" and international recruits,...

3 weeks 1 day ago

increased professionalism within the industry - shouldn't that say, FAR register almost halving in the last 24 months he...

4 weeks 1 day ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

2 weeks 3 days ago

A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments ...

2 days 20 hours ago

Pinnacle Investment Management has announced it will acquire strategic interests in two international fund managers for $142 million....

1 day 23 hours ago