This is the latest in my series of good news bulletins. And I can’t imagine a piece of news that’s good-er than this, from the viewpoint of the economy and the nation.
And that is that the Federal Treasurer revealed today that the cost of the JobKeeper payment over six months will not be $130 Billion as originally announced. It will be $70 Billion – which means a saving of $60 Billion for the nation.
The not so good news, I suppose, is that we have a Federal Treasury that’s capable of making a calculation error that big. I mean, how embarrassing for the Federal Government to have to announce: Oooops, we made a slight error – we got is wrong by $60 Billion.
So that means the nation will be much less heavily in debt than first imagined – OR that, if the Federal Government was willing to spend $130 Billion on business stimulus, they have a spare $60 billion to spend on something else. Maybe they could buy Virgin Australia.
Turning to some real estate market news …
There are a number of indicators that consumer confidence is rising, including confidence surrounding our real estate markets.
One is an analysis by CoreLogic which suggests listings of homes for sale are set to rise in the coming weeks, after pre-listing activity rose 11% in the week ending May 10.
CoreLogic’s research analyst Eliza Owen says, “With restrictions on open inspections and auctions being gradually lifted, agents may find they have capacity to take on more listings. “
Owen says consumer sentiment has bounced back significantly over the past few weeks, with May results of consumer sentiment regaining 80% of what was lost in the index over March. She says: “For now, it would seem that people are more confident in selling property.”
In the past week, the number of newly-listed homes rose 12% while mortgage activity rose by 3% compared to the previous week, a further sign of improving sentiment, says Owen.
The Westpac-Melbourne Institute consumer sentiment index shows sentiment among buyers rebounded in May, rising by 32% and reversing most of April’s 27% drop. The Index is now only 8% below its average level for the period from September–February before governments imposed their restrictions. The rebound is confidence has been seen across all states, led by Western Australia which is up by 68%. Consumer expectations for house prices rose 5% – a dramatic turnaround from the large drop of 50% in April.
Urgent property sales – which means sales by distressed sellers – have remained virtually unchanged around Australia.
New figures suggest that the government’s support packages and the banks’ mortgage holidays have put a floor under the real estate market, and reduced the number of distressed sales that might otherwise.
New Domain data shows that most capital cities around the country have seen only very marginal increases in distressed listings, while in Canberra and Brisbane the number of distressed listings has actually fallen.
How do we know whether it’s a distressed sale? The data filters listings for descriptions such as: reduced price, mortgage in possession, urgent sale, motivated vendor or reduced price, between February and mid-May.
Domain’s senior research analyst Dr Nicola Powell says that despite the huge economic upheaval caused by the COVID-19 pandemic, many home owners had been able to weather the storm for now.
And just repeating the price data out earlier this week – which continues to show what we saw with house prices during March and April and in the first half of May … which is – no evidence of major decline in house prices. The figures out this week are from SQM Research, which has indexes showing the previous week, the past month and the past year. Looking at the rolling month figure up to this week, the capital city average is a rise of just under 1% for houses and a rise of 0.3% for apartments.
In terms of house prices over the past month up to this week, there have been rises in Sydney, Melbourne, Perth, Adelaide and Canberra – with Perth and Adelaide both up 1.6% for the past month.
There have been monthly decreases in Brisbane, Darwin and Hobart. In annual terms, every capital city except Darwin has house prices higher than this time last year – and the capital city average is a rise of 10.8%, boosted by double-digit rises in Sydney, Melbourne and Hobart.
Turning to other market news …
Sydney developer Crown Group has sold $63 million worth of luxury apartments including three penthouses, defying the collapse in sales seen in the broader market. The developer said it was able to close more than $20 million worth of deals each month across February, March and April. More than half of the total sales were completed apartments, while 48% were off the plan. Eight out of 10 buyers were from overseas, including all the buyers of the three penthouses it sold during the last three months. Crown Group director of sales Prisca Edwards said the low dollar made the properties more attractive to overseas buyers, who paid the equivalent of a 14 % discount.
Now the latest news about government stimulus measures …
Local councils will share in $1.8 billion for road upgrades and community projects to help communities battling the impact of coronavirus.
The federal government has brought forward $1.3 billion from its annual grant to local governments from next financial year. A further $500 million has been injected into a new program for roads and other infrastructure upgrades. Prime Minister Scott Morrison says the money would help councils accelerate priority projects to boost local jobs.
In Victoria …
A road and rail maintenance blitz will feature in a $2.7 billion building boom designed to boost Victoria’s economy and create thousands of jobs.
The stimulus package focuses on shovel-ready projects including resurfacing roads, fixing train tracks, sprucing up railway stations and upgrading piers and jetties. Ten new schools will be built and old classrooms revamped in $1.2 billion in education works. This will deliver space for 21,000 more students and create 1,600 construction jobs.
Also in Victoria …
A $2 billion redevelopment of land on the CBD fringe is expected to provide a new pedestrian and cycle link between the city, parks and the Yarra River.
Four bidders, including Mirvac and Cbus Property, have submitted plans to the state government for the 1.4ha site on Flinders St stretching from Exhibition St to Wellington Parade South. Three towers, possibly including a hotel, would be built on decking next to the rail corridor.
In Queensland …
The state has an $80 billion pipeline of “catalytic” projects on the table, which $70 billion of the $80 billion is in one very big proposed project, which is the SEQ fast rail network proposal.
- the $2.4bn Coomera Connector (the M2)
- the $2.1bn Moreton Connector
- the $1bn Ipswich rail connection to Springfield via Ripley
- and the $550 Mil Beerburrum to Nambour rail duplication project.
In central Queensland …
Economic growth is expected to increase with the latest concepts unveiled for the Rockhampton Ring Road.
The $1 billion project funded by the Queensland and Federal Governments is 17 kilometres long and includes a new Fitzroy River crossing to help with flood immunity. It would be the largest road project in Queensland, supporting close to 800 jobs.
Also in Queensland …
The State Govt has announced $400 million in accelerated road funding for upgrades, new intersections and widening projects which she said would create or sustain hundreds of jobs. In response to a proposal from the Local Government Association of Queensland, there will also be $200 million for councils to build, upgrade or refurbish community facilities such as playgrounds, swimming pools and libraries, as well as essential services. More small business grants will be available under a $100 million fund, while the tourism sector will benefit from $50 million in support, and retooling the manufacturing sector to provide health supplies will require another $50 million.
The State Govt has also announced a contribution towards the $1.5 billion CopperString 2.0 high voltage transmission line in the North West Minerals Province. CopperString is expected to underpin the creation of thousands of mining jobs and industrial manufacturing jobs and stimulate large-scale renewable energy investment. The 1100km high voltage transmission line from Townsville to Mt Isa is designed to provide cheaper power and turbo charge investment across the North West Minerals Province.
In South Australia …
Shovels are in the ground on the first of 37 local community projects funded as part of the State Government’s stimulus package to support local jobs and businesses.
The Government has announced $66 million in funding, in conjunction with councils, to support local jobs and deliver more open spaces for the community. Minister for Transport, Infrastructure and Local Government Stephan Knoll says: “Building 37 local projects across the South Australia is part of our strong plan to support local jobs, businesses and keep our economy strong. “We are delivering $1 billion in economic stimulus to keep as many South Australians in a job as possible and support local businesses during this unprecedented global pandemic.”
In NSW …
A major energy storage project has been given the green light by the NSW government, with construction of the Snowy 2.0 main works expected to create up to 2,000 jobs. The project involves the construction of a 240-metre long pumped-hydro power station about 800 metres underground. The state government says it will add 350 gigawatt hours of energy storage and 2000 megawatts of generation capacity to the state’s grid – enough to power 500,000 homes during peak demand.
Also in NSW …
Power grid owner TransGrid expects to start construction in two months on a $285 million upgrade of Sydney’s electricity network.
Sydney’s peak electricity demand is expected to continue to grow due mainly to transport infrastructure projects. The project will improve security of supply for about 800,000 residents and businesses in and around the inner city when it comes online in 2022.
Major new transport projects under construction – including the Sydney Metro upgrade, WestConnex and the Western Harbour Tunnel, and the recently opened Sydney Light Rail – are all contributing to power usage.
Back to Queensland …
Plans to build 2GW of wind generation capacity in and around Gladstone have been unveiled, with Sydney-based Energy Estate joining forces with global outfit RES on the major project. The two companies says are collaborating on the Central Queensland Power Project (CQP), which plans to deliver over 2GW of wind, solar and storage, as well as new transmission infrastructure. The project is separate to the existing and neighbouring Rodd’s Bay project – a 300MW solar project with around I64MWh of battery storage – that is set to begin construction in the second half of this year by Energy Estate affiliate Renew Estate, just south of Gladstone.
The CQP also builds on the successes that RES has already notched up in Queensland, including its 72MW Emerald solar farm and 180MW Dulacca wind farm.
Also in Queensland …
NEW legislation has been introduced to the Queensland parliament to push a mega wind farm to be built near Maryborough closer to reality. The $2 billion Forest Wind project will be the largest wind farm in Queensland. The wind farm will create up to 440 jobs during construction and 50 ongoing jobs.
And … The first new homes in one of southeast Queensland’s largest future suburban sprawls may happen soon. For more than a decade, Caboolture West has been earmarked for future residential development. Development in the area is seen as a long-term prospect over the next 40 years, eventually housing up to 27,000 new homes for about 69,000 new residents. But there are currently two applications lodged with the council which are proposing a total of 1,000 new homes. A third, much larger application is from AV Jennings with scope for 8,700 new dwellings on 410ha of land.
In South Australia …
BHP’s plans to lift copper production at Olympic Dam by 70% over the long term have advanced with the state government releasing its assessment guidelines on the staged multi-billion dollar investment. The Olympic Dam mine, about 560 km north of Adelaide, has produced 124,000 tonnes of copper in the year to date. BHP wants to increase it to 350,000 tonnes per annum as part of its Olympic Dam Resource Development Strategy. The $3 billion project was granted Major Development status by the state government last year and is expected to support 1,800 jobs in construction and 600 ongoing.
Also in SA …
The prospect of a $400 million residential estate on part of Morphettville Racecourse is a step closer, with the State Government rezoning the land to allow for housing. The South Australian Jockey Club has announced that its Development Plan Amendment has been approved, paving the way for the development that includes 1,000 homes in apartment buildings up to 12 storeys high.
So, once again, there’s no shortage of good news around the nation, with plenty of positive events in real estate markets, and lots of new measures from government to stimulate economic activity and jobs.