Europe property prices are in turmoil, and the priciest street was in Hong Kong. Australia’s representative held its ground, and might edge higher after the recent $52 million sale of Villa Veneto.

The price reflects about $38,000 a square metre, higher than the $US28,000 ($30,000) a square metre given in the index for Wolseley Road.

Australia’s robust economy and the strength of the local currency helped Point Piper hold its spot on the list, according to Dow Jones.

Severn Road on Victoria Peak in Hong Kong ranks as the most expensive residential street in the world, according to the third annual survey.

It costs $US70,000 for one square metre of real estate. Severn Road jumped from eighth place to overtake last year’s No. 1, Avenue Princesse Grace in Monte Carlo.

About 15 per cent was wiped off the value of the world’s 10 most expensive streets in the past year. The worst fall was on Avenue Princesse Grace, from $US120,000 a square metre to $US65,000.

The next biggest decline was Chemin de Saint-Hospice in Saint-Jean-Cap-Ferrat in the south of France, where values tumbled from $US100,000 a square metre to $US55,000. The only places where prices rose were Severn Road and Moscow’s Ostozhenka.

Kensington Palace Gardens in London and Fifth Avenue, New York, ranked equal second at about $US65,000 a square metre, according to the list compiled by agents Knight Frank, Savills and Chesterton Humberts along with local independents.

It appears it took a Double Bay dentist, David Penn, and his wife, Linda Mueller, to consolidate Point Piper’s spot in the prestige stakes.

After their bullish $52 million purchase last month they will have the Lowys, of Westfield fame, as their neighbours.

Villa Veneto, the home of Andrew and Andrea Banks, had been on and off the market for three years. The Penns made their initial inspection two years ago.

Mr Penn heads clinical and technical research at Southern Cross Dental Labatories, which he founded in 1983. The Penns sold their Michael Suttor-designed home at Bellevue Hill for about $23 million to Tom and Lilly Haikin, owners of the Australian franchise of the Max Brenner chocolate shop, which recorded sales last year exceeding $20 million.

Mr Haikin, a former dental technician, has a $2 million house in Maroubra.

The listing agent of both properties, Bill Malouf of LJ Hooker Double Bay, will not confirm any sale details. But the reputed $52 million price trumps the $45 million – $11,250 a square metre – paid in 2008 by the expatriate foreign exchange dealer Ivan Ritossa for the Vaucluse residence, Coolong, currently rented to Lachlan and Sarah Murdoch.

After the Lehman Brothers bankruptcy in September 2008, which sent sharemarkets into a panic, the highest Sydney sale has been $26.75 million in Vaucluse, at $16,700 a square metre.

In Perth, a 7500 square metre residential compound with three houses on the Swan River at Mosman Park fetched a record $57.5 million in 2009. But it is hardly comparable, at $7666 a square metre and three houses.

The next Wolseley Road test will be the sale of property developer Nati Stoliar’s non-waterfront penthouse through Mr Malouf. It comprises 322 square metres on one floor, and a 280 square metre roof-level terrace with jacuzzi and barbecue.

Mr Stoliar, who once called as home both the record-setting Boomerang in Elizabeth Bay and Villa del Mare in Point Piper, is seeking more than $9 million.

It is in Pacific Point, in which was set a Sydney record off-the-plan apartment price of $3.8 million in 1988. But the apartment was sold again for $2.51 million in 1993, which indicates that prices do not only ever rise on the street paved in gold. Phil Green, of Babcock & Brown, then made money on it by selling it for $3.66 million in 2000.

The ground floor apartment in Pacific Point – which has 277 square metres of internal space, plus terraces – remains unsold after being scheduled for June auction with $5 million hopes through the McGrath agent Alan Waitsman.

It was listed by the Schwartz family executor after the death in 2000 of the long-time BRW Rich List dentist Bela Schwartz, who started investing in property after immigrating from Hungary in 1940, and his widow, Eve, who died in 2005.

The highest sale price at the weekend was $2.54 million for a terrace in Darlinghurst. Two pricier listings, at Balmain and Wollstonecraft, failed to find buyers.

The overall clearance rate from 243 listings was 57 per cent, 10 per cent weaker than the 67 per cent August average, according to Australian Property Monitors.

Source
Jonathan Chancellor
Sydney Morning Herald
September 6, 2010

An overall 66 per cent clearance rate this month, with only a handful of auctions to go, will rank as the best monthly result since April.

It was also a weekend of inner-west records. The dearest sale on Appian Way at Burwood was a six-bedroom house fetching a record $4,175,000. It bettered $4.05 million on the same street in 2008.

It had been renovated since traded in 1999 at $1.2 million.

Another record was set in Newtown when Yarraville, a renovated Georgian residence on 583 square metres, fetched $3.2 million. It had also undergone considerable extensions since traded in 1991 for $254,000.

Agents sold 215 of the 292 reported weekend results, according to Australian Property Monitors. It was a marked increase in volume on last weekend when the election limited activity to 165 auctions.

But the traditional spring selling season appears set for a slower start with 1600 September auctions scheduled so far by Sydney estate agents. There were a record 2400 last September.

But any political instability could play havoc with the market, according to a poll on the Herald’s website. It found 43 per cent of the 1672 votes thought extended political wrangling would put off buyers and send prices lower.

Source : Jonathan Chancellor, Sydney Morning Herald. 30 August 2010

The drawn-out political wrangle to form the next federal government looks set to affect the nation’s real estate market, delaying the start of the key spring auction season and adding further pressure on house prices.

THE Reserve Bank is expected to keep interest rates on hold for at least a few months after much better than expected inflation data.

A slowing in the pace of underlying inflation sent the Australian dollar tumbling as investors scaled back the chance of a rate increase as early as next Tuesday.

Analysts said the key June-quarter report on consumer prices had put to rest speculation the RBA would lift official rates at its Tuesday board meeting.

While there was less than a one-in-three chance the RBA would lift rates by a quarter of a percentage point to 4.75 per cent, investors had worried about a pick-up in core inflation after second-quarter export prices had a record rise.

But the pace of core annual inflation, which strips out volatile consumer price moves, slowed to within the RBA’s 2-3 per cent target range for the first time in three years.

Macquarie interest rate strategist Rory Robertson said the softer inflation outlook meant the RBA would hold off raising rates from the current 4.5 per cent.

“The RBA will remain on hold for at least the next three months and probably into 2011,” Mr Robertson said in a research note after the data was released.

“If you were thinking the RBA might make this federal election campaign interesting, think again.”

Westpac chief economist Bill Evans agreed the RBA would keep its powder dry at the August 3 board meeting and “most likely for the remainder of 2010”.

“Now, with rates on hold for the foreseeable future, consumer confidence, business confidence, housing and most likely the labour market will be boosted,” Mr Evans said in a note.

“Interest rates are still only at neutral levels, so given this scenario, it is now much more likely that the tightening cycle will resume sometime in 2011.

“By then, the Chinese economy will have restored its upward momentum, labour markets will be uncomfortably tight, and housing is likely to be staging a resurgence.

“Even economies like the US and Europe will have had another six to 12 months to work through their chronic imbalances.”

The RBA has raised rates six times since October in an effort to stabilise an economy benefiting from the fast-growing emerging Asian nations, particularly China.

The pace of core, or underlying inflation, slowed to 0.5 per cent in the June quarter, compared with 0.8 per cent in the previous three-month period, data showed.

“This number comes as an extraordinary surprise,” Mr Evans said.

The headline Consumer Price Index rose 0.6 per cent on-quarter and 3.1 per cent over the year, the Australian Bureau of Statistics said today. The pace of CPI was slower than market forecasts of 1 per cent on-quarter and 3.4 per cent over the year.

The main drivers of the “downside shock” in the inflation report, Mr Evans said, were price falls in the recreation category as well as financial and insurance services.

Royal Bank of Scotland chief economist Kieran Davies said: “The major economies around the world are also forecast to remain steady (on official interest rates).

“The Reserve Bank can extend its pause until later this year and make its judgment with more information about both the world economy and the labour market.

“This means that rates stay higher than the rest of the world for longer, but wider cash-rate differentials are more an issue for later.”

Goldman Sachs economist David Colosimo said the investment bank still forecast a 25bp tightening of monetary policy in November this year, ahead of 75bp in 2011.

“This outcome strengthens our view that the RBA will leave rates unchanged at that time, given that the global backdrop remains uncertain and the previously booming Australian housing market appears to be cooling,” he said.

“From a medium-term perspective, however, we believe inflation pressures remain.”

Source : Scott Murdoch. The Australian Newspaper – 28 July 2010

A SUNNY winter’s day brought out home buyers at the weekend, and auction-clearance rates were higher than the previous week.

THE housing and construction industries are to receive a significant boost from the budget. One of the measures taken by the government to increase housing supply is cutting to zero stamp duty for those buying dwellings off the plan.

Additionally, those aged over 65 years will pay no stamp duty on a new dwelling, as long as they live in it for more than 12 months. In both cases, the new dwelling must cost less than $600,00.

None of the budget measures here involve a large amount of money but, taken with other measures to cut developer contributions to local councils announced last week, will give the housing construction industry a substantial lift.

The government has budgeted $120 million over two years to fund the off-the-plan stamp duty costs, with a further $20 million, also over two years, to finance the stamp duty cuts for those over-65s who are selling the family home to move into smaller housing.

To qualify for zero stamp duty, new dwellings most be at the “pre-construction stage” – that is, before the laying of foundations has begun, although site preparation such as demolishing existing buildings is permitted.

For off-the-plan dwellings where building is under way, stamp duty will fall by 25 per cent.

“What this is about is allowing project finance to be accessed,” the NSW Treasurer, Eric Roozendaal, said of the stamp duty cuts to increase off-the-plan sales. “This is a well constructed plan . . . to get a lot more housing stock into the market.”

Since the global financial crisis, property developers have found it difficult to obtain the financing for new developments. A higher level of pre-sale is expected to ease financing pressures, helping developers to get projects off the ground.

The chief executive of Urban Taskforce, Aaron Gadiel, said: “This is a fundamental re-shaping of the stamp duty regime so that it supports new housing development.”

Coupled with the measures to increase housing supply outlined late last week by capping developer contributions to councils for infrastructure, while also paving the way for councils to raise rates beyond the present rate cap, the stamp duty cuts detailed yesterday will result in a boost in the amount of new housing stock being offered for sale.

The NSW acting executive director of the Property Council of Australia, Glenn Byres, said: “The [stamp duty changes] break the back of some of the impediments to bringing housing demand though.”

In pre-budget lobbying, his organisation argued for the government to follow Victoria in cutting stamp duties for dwellings bought off the plan. NSW went a step further, in abolishing stamp duty altogether in some cases.

Treasury expects the additional measures to boost housing stock by 8000 units, twice the estimate arrived at by BIS Shrapnel based on concessional cuts to stamp duty introduced earlier in Victoria.

After the initial two years of stamp duty cuts, they would be reviewed, Mr Roozendaal said.

The $600,000 threshold might also need to be assessed, property industry officials said. “The thresholds may need to be reviewed in 12 months time, to see if it is acting as an impediment to some stock being brought to market,” Mr Byres said. Even with the stamp duty cuts, the state government is budgeting for a $400 million increase in stamp duty revenues from property transactions in 2010-11 and again in 2011-12.

BRIAN ROBINS

June 9, 2010 – Sydney Morning Herald

JONATHAN CHANCELLOR – Sydney Morning Herald

June 7, 2010

More Favourable Conditions For Sydney Home Buyers Have Arrived

After a very heated start to the 2010 Sydney real estate season, recent weeks have seen a welcome calm in the frenzy.  With volatile stock and currency markets resulting from concerns surrounding European debt levels, the real estate market has come somewhat off the boil.

This has been reflected in auction clearance rates going from well over 70% for March and April to around 63% in late May.

During the first few months of 2010, we as buyers’ agents have seen an unprecedented surge in prices – the highest short term spike since we commenced operations in 1999. Many areas of Sydney saw massive rises of 15%-20% between January and late April 2010, depending on the price segment and area.  This has been as strong if not stronger than the overall 29% gains to Sydney prices that we saw in the frenzy of 2002.

In our opinion the market steam has come off around 5% over the past few weeks and we believe that the property market is likely to be in a “holding pattern” until world financial markets strengthen. Provided that financial markets stablise, we expect the Sydney market to perform at more realistic and sustainable levels.

Favourable contitions remain for the Sydney property market and these include:

• Recovered economy, having experienced a GDP growth rate of 2.7% for the 12 months to March 2010
• Unemployment at a low of 5.3%
• Relatively low interest rates which appear to have now stabilised. The RBA in their recent June meeting stated that interest rates are now at “appropriate levels”
• High levels of immigration continue to stimulate demand for housing
• Lag in property development will continue an under supply of housing
• An expected continuing of the shortage of listings over the winter months
• Lower Australian dollar has substantially increased the purchasing power of expatriate Australians and foreigners purchasing Australian real estate

We believe that a calming in the frenzy can only be a good thing for buyers and that conditions for buyers are now more favourable than they have been since mid 2009. A change in the “buy at all costs” mentality of early 2010 has seen more sense return to the market and has created some good buying opportunities in the current measured market.

Market Report dated 3 June 2010. Author Henry Wilkinson of Homesearch Solutions

After a very heated start to the 2010 Sydney real estate season, recent weeks have seen a welcome calm in the frenzy. With volatile stock and currency markets resulting from concerns surrounding European debt levels, the real estate market has come somewhat off the boil.

This has been reflected in auction clearance rates going from well over 70% for March and April to around 63% in late May.

During the first few months of 2010, we as buyers’ agents have seen an unprecedented surge in prices – the highest short term spike since we commenced operations in 1999. Many areas of Sydney saw massive rises of 15%-20% between January and late April 2010, depending on the price segment and area. This has been as strong if not stronger than the overall 29% gains to Sydney prices that we saw in the frenzy of 2002.

In our opinion the market steam has come off around 5% over the past few weeks and we believe that the property market is likely to be in a “holding pattern” until world financial markets strengthen.

Provided that financial markets stablise, we expect the Sydney market to perform at more realistic and sustainable levels.

Favourable contitions remain for the Sydney property market and these include:

• Recovered economy, having experienced a GDP growth rate of 2.7% for the 12 months to March 2010
• Unemployment at a low of 5.3%
• Relatively low interest rates which appear to have now stabilised. The RBA in their recent June meeting stated that interest rates are now at “appropriate levels”.
• High levels of immigration continue to stimulate demand for housing
• Lag in property development will continue an under supply of housing
• An expected continuing of the shortage of listings over the winter months
• Lower Australian dollar has substantially increased the purchasing power of expatriate Australians and foreigners purchasing Australian real estate

We believe that a calming in the frenzy can only be a good thing for buyers and that conditions for buyers are now more favourable than they have been since mid 2009. A change in the “buy at all costs” mentality of early 2010 has seen more sense return to the market and has created some good buying opportunities in the current measured market.

Market Report dated 3 June 2010