The jump in residential sales after the election was short-lived – what they call “a dead cat bounce”.
Stockland provided the chart above for property enquiries last week. At the same time, being the country’s largest residential builder, they informed the market that property purchase defaults had increased in the last three months to 5%, which is a 66% increase on their long-term average rate of 3%.
UBS economist Carlos Cachos told The Australian newspaper “The recovery – if, and when it comes – is certainly more fragile than sentiment would lead you to believe”.
Thanks to the election UBS has revised its national drop in housing prices from 14% down/up to 10%, saying that market is likely to bottom out before Christmas.
The building blocks for stability in pricing include the failure of Labor and its negative gearing and capital gains tax policies, the Australian Prudential Regulation Authority (APRA) loosening lending guidelines, and lower interest rates.
Meanwhile Stockland reconfirms it is seeking a capital partner for its retirement village portfolio, the third-largest nationally.
Stockland is also divesting of non-core villages and identifies three being sold last month for $59 million – the villages purchased by Derek McMillan for his new village venture, Centennial Living, backed by Melbourne’s real estate financier and investment manager Qualitas.