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Auckland commercial property market surges ahead of New York and Singapore

Wednesday June 24th, 2015

Auckland has one of the most active commercial property investment markets in the world, according to an index of global commercial property investment trends by international real estate company JLL.

Auckland was ranked seventh in the world in JLL's latest City Investment Index, which measures the proportion of institutional investment grade commercial property sales (in NZ that's sales above $5 million) in a city over a three year period, relative to its overall economic activity.

That puts Auckland ahead of real estate powerhouses such as new York, Singapore, Frankfurt, San Francisco, Paris and Tokyo, but behind London, Munich, Oslo, Stockholm Copenhagen and Sydney.

Auckland has moved up six places since last year's survey, following a surge in commercial property investment activity.

The Index provides a measure of commercial real estate market activity and highlights those cities that are punching above their weight in terms of attracting real estate investment, JLL said.

""Auckland's competitive advantage is its high quality commercial stock that is encouraging international real estate interest," JLL New Zealand managing director Nick Hargreaves said.

This is Auckland's best ever performance in the JLL study and a key indicator that we are beginning to reach the global forefront in terms of our transparent and liquid real estate market."

JLL new Zealand's head of research, Justin Kean, said the Index was much like a free float measure of a stock market because it indicated both the availability of quality commercial property stock and the propensity of investors to buy and sell based on the investment outlook.

"For Auckland to beat New York, Singapore and several major Chinese markets underlines the attractiveness of the location," Kean said.

Source: Interest.co.nz

Australia's central bank cuts rates to historic low

Wednesday May 20th, 2015

The Reserve Bank of Australia (RBA) has cut its key interest rate by 25 basis points to an all-time low of 2%.

Rising property prices in Australia's biggest city, Sydney, a strong currency and a drop in iron ore prices are among the reasons for the cut.

The cut is the second this year, following a previous 25 basis point cut in February.

The RBA's move follows similar action from central banks in China, Canada, Singapore, Korea and India.

A rising Australian dollar had also been cause for concern. The currency started to fall against the US dollar on the RBA's announcement.

"The RBA has done the right thing," said economist Shane Oliver from AMP Capital.

"Sure, surging Sydney house prices are a concern but interest rates need to be set for the national 'average', not just one city," he said.

Australia's central bank had been under pressure to cut its lending rates further this year, particularly amid worrying iron ore prices - which recently fell to decade lows - together with a recent strengthening of the local currency.

Analysts said the RBA's move to cut its lending rates would help further lower the Australian dollar, which would in turn help commodity producers exporting products priced in US dollars.

Source: BBC

New tax will slug foreign property buyers

Wednesday May 20th, 2015

Foreigners buying houses in Victoria will be slugged with a $330-million tax, under a radical state budget plan to force international investors to pay "their fair share".

Under Labor's highly controversial move, foreign nationals - many from China - will pay a new tax equivalent to 3 per cent of the purchase price of houses, raising $279 million over four years.

That means a Chinese national buying an $800,000 property will pay an extra $24,000, in addition to about $43,000 in stamp duty charges.

Foreign housing investors will also pay an extra 0.5 per cent in land tax from 2016 on new and existing properties, raising $53.5 million over four years.

Permanent Australian residents and New Zealand citizens are exempt from the new taxes.

Treasurer Tim Pallas said the surcharges were "modest" and would force foreigners to contribute to services and infrastructure.

"It is inherently unfair on Victorians for foreign purchasers to take the gains of owning property in Victoria - through the services and infrastructure that Victorians pay for over an extended period of time - without contributing their fair share," Mr Pallas said.

"Amenity in and around Melbourne is important and it is why people are so keen to live here. If you own a property in the area then you should contribute accordingly, and these modest charges go some way to redressing that balance."

To justify the tax increase, the Andrews government will highlight soaring demand from foreigners for new residential property. A survey by the National Australia Bank shows foreign demand for new properties in Victoria has leapt from about 5 per cent in 2011 to more than 30 per cent by the end of 2014.

The federal government regulates foreign investment in Australia for the Foreign Investment Review Board, with the vast bulk of foreign purchases rubber-stamped.

Critics blame foreign investment for pushing house prices beyond reach for Australians, particularly among first-home buyers. But the tax slug is also likely to be criticised as xenophobic and anti-business, with a broad consensus that foreign investment should not be discouraged.

Earlier this year the Abbott government proposed extra fees on foreign property investment, including $5000 for properties valued under $1 million and an additional $10,000 for every additional $1 million.

"Foreign investment has been very, very good for Australia but it's got to be the right foreign investment under the right circumstances, properly policed and it can't disadvantage Australian home-buyers," Prime Minister Tony Abbott said in February.

Foreigners invested $14 billion in Victorian property last financial year, up from just $5.8 billion the previous year. The Foreign Investment Review Board this week reported that the number of approvals for foreign buyers of new Australian homes more than doubled in 2014-15.

On Friday the Foreign Investment Review Board revealed that the value of foreign investment in new Australian homes tripled last financial year.

China is the biggest foreign purchaser of Australian real estate, having spent $12.4 billion in 2013-14 - up from just $5.9 billion in 2012-13.

In the case of joint owners, the surcharge will be applied to the foreign owner's share only.

Source: The Age Victoria

The forces driving foreign buyers to Aussie real estate

Wednesday May 20th, 2015

Higher government taxes and tougher legislation are unlikely to deter the nouveau riche of Asia seeking to diversify their investment portfolios.

Residential real estate is increasingly a global commodity. In the end, market forces, not government regulations, will determine the level of foreign investment in Australia’s residential sector.

The choice of investment destination will be influenced only partly by financial considerations. For many, the driver goes far deeper than dollars and cents.

Sarah Nicholson, head of international project marketing Asia at CBRE, describes Asian investors as being “shock-proof” because they are used to their governments bringing down successive rounds of cooling measures. What's more, Australia has a relatively lower purchase cost compared to other parts of the world.

Hong Kong-based Gavin Sung, head of international residential sales at Savills Asia Pacific, says people recognise that the Australian government needs to look after Australian buyers first -- and to ensure that foreign investment does not swamp domestic investment.

The irony is that the devaluation of the Australian dollar and the latest round of interest rate cuts have combined to make Australian real estate even more attractive.

“Over the course of the past 12 to 15 months, the Australian dollar has weakened significantly,” he says.

“This translates to a saving of about 20 per cent on the price of a property. And now, with the RBA cutting rates again, borrowing in Australia is even cheaper.”

Source: BusinessSpectator.com.au

Perth’s population hits two million people and remains Australia’s fastest growing capital city

Wednesday April 1st, 2015

31 March 2015

PERTH is the fastest-growing capital city in Australia and the fourth to hit two million people, data released by the Australian Bureau of Statistics shows.

Perth’s population grew by 2.5 per cent in the 12 months to June 2014 – an extra 48,400 people – with 2.02 million people now calling Greater Perth home.

Phil Browning, from the ABS, said this was a significant milestone, given just 30 years ago Perth’s population lagged behind Adelaide.

“In 1983, Adelaide just beat Perth to the one million mark.” said Mr Browning.

“However, since that time, Perth’s population has more than doubled, whereas Adelaide has grown by less than one third.

“Adelaide’s population increased by 1 per cent in 2013-14 with only Hobart (0.6 per cent) having a slower rate of population growth.”

Sydney grew by 84,200 people to 4.8 million, but Melbourne (4.4 million people) is closing the gap in the race to be the first city home to five million.

Brisbane’s annual growth rate fell to its lowest level in over a decade (1.7 per cent), but it’s still growing faster than Canberra (1.2 per cent).

At June 2014, WA’s population was 2.57 million people, which represents 11 per cent of the total Australian population.

The number of people living in WA grew 2.2 per cent (54,400 people), the fastest of all states and territories and well above the national rate of 1.6 per cent.

Source: perthnow.com.au

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