Top 5: Finance & property quotes week commencing 13 April

By the resi financial blog team, 20 April 2015

Top 5: Finance & property quotes week commencing 13 April

There was a refreshing change in the topics of conversation among members of the finance and property industries over the past week. While commentators brought up a wide range of issues, there was particular focus on strong new home building alleviating price pressure across the country, as well as renewed discussion about the place of negative gearing in the housing market. Here are some of the top quotes to shed a bit more light on these points. 

#1. The Housing Industry Association (HIA) hasn't let its voice go unheard this week, with Executive Director of Industry Policy and Media Graham Wolfe highlighting some of the misconceptions about negative gearing. In an April 16 statement, Mr Wolfe said the government should instead focus its efforts on abolishing stamp duty and other restrictive policies. 

"Abolishing stamp duty on residential property conveyances should be the top priority for housing tax reform, making housing more affordable for both renters and owner-occupiers," Mr Wolfe said. 

"Negative gearing promotes private investment in the rental market, thus stimulating economic activity and taking the pressure off social housing and the public purse."

#2. Still on the topic of negative gearing, the Property Council of Australia welcomed comments from Prime Minister Tony Abbott that ruled out changes to the current policy scheme. Executive Director of Residential Nick Proud said negative gearing strategies are used by the majority of everyday Australians.

"It is great to see the federal government providing certainty for the hundreds of thousands of average workers whose modest investments are contributing to housing supply and rental affordability," Mr Proud said in an April 16 statement.

#3. The Property Council also had a few points to note about the recently released construction activity figures from the Australian Bureau of Statistics (ABS). Nick Proud had good news for homebuyers, saying the bumper year of building starts in 2014 would help make houses more affordable.

"What is encouraging in this latest full year data is that construction activity is now catching up with building approvals," he noted in an April 15 release.

"The more new homes we get onto the market, the more the pressure will come off house prices." 

#4. CoreLogic Senior Research Analyst Cameron Kusher had some interesting insights into the relationship between building approvals and the number of properties that are actually completed. In particular, he found that detached houses are much more likely to be finished than their unit counterparts, especially over the past five years. 

"The data highlights, whether you look at it over the longer or shorter timeframe, that houses which are approved for construction are ultimately more likely to be completed than units," Mr Kusher said in an April 17 blog post. 

"One of the possible reasons for the reduced completion rate of units is likely to be the increasing level of high density unit construction." 

#5. In good news for the Australian economy, the ABS announced that the unemployment rate took a minor 0.1 per cent tumble in March in seasonally adjusted terms. The number of people employed increased by 37,700 over the month, driven by rises in both female and male full-time employment.  

"The seasonally adjusted labour force participation rate increased to 64.8 per cent in March 2015 from 64.7 per cent in February 2015," the ABS release said.

Categories: Property Investment