The quietly hopeful may dare to start whispering a bit louder after today.
Domain's property update for June is catnip for optimists. It tells a particularly encouraging tale for Sydney property owners, saying we're likely to see a 2 per cent recovery before the end of 2019 and another 3 to 5 per cent growth in 2020. Melbourne prices are tipped to grow by 5 per cent between now and Christmas 2020. It's a massive turnaround compared to just a few months ago, where dire long-term predictions were the commentary du jour.
Speaking of which, Domain's update jars badly with the latest update from listed construction products company, Fletcher Building. It's told the market that it'll be another two years before the new housing construction sector starts to rebound, and it expects building approvals to drop from 200,000 at June 30 to between 150,000 to 160,000 over the next 12 months.
Whether or not Fletcher has taken the emerging insurance crisis for the high-rise building industry remains to be seen. Yesterday, the banks called on government to step in and address the issue of building projects becoming uninsureable as a result of the industry's exposure to combustible cladding.
New standards coming
Tougher quality and compliance standards are on their way for buildings in NSW with the introduction of new legislation unveiled yesterday. This will include fresh "duty of care" requirements of builders and developers that protect home owners, and provide an avenue for seeking compensation for negligence.
The legislation is going into a community review process, which should be interesting given the politically-charged environment we're in right now in the wake of Mascot Towers.
Property researcher Riskwise has backed up reports from Sydney builder, Thrive Homes that the Mascot Towers situation has pushed people to consider alternatives to buying off-the-plan apartments. Meanwhile, Mascot Towers's neighbouring developer, Aland has struck out to distance itself from the issue, saying it can't be blamed for the former's legacy issues.
One looming issue for Mascot Towers homeowners is the prospect of the banks defaulting their loans. That's unlikely, property finance laywer Peter Faludi told the AFR yesterday; he reckons the reputational damage risk alone for banks performing a coup de gras on embattled Mascot Towers owner should stay their hand.
Mortgage brokers call for boycott
Speaking of lenders, the Mortgage and Finance Association of Australia is urging mortgage brokers to boycott the incoming fresh banking code of practice. The updated code requires brokers to identify and weed out vulnerable applications such as older or mentally or physically impaired people, including suspected victims of domestic violence. It's a role the broking industry says it is unqualified to fulfill.
If the call to arms is taken up, the banks will take a huge hit; brokers account for more than half of new business for lenders - who are already falling over themselves to attract borrowers with still-falling interest rates. That said, the fine print's getting longer on many of these products, including even greater scrutiny on household expenditure during the application process.
What more can a poor boy do?
(With apologies to Split Enz, who I'm pretty sure weren't singing about the plight of aspirant first home buyers when they coined that lyric...)
The answer is, soon to be more than he did yesterday if some of the industry's biggest heavyweights have anything to do with it.
Firstly, Stockland and Lendlease have formed a superhero team-up to call on the Morrison government to make Western Australia's Keystart low-deposit scheme for first home buyers a national program. They want to bring Keystart to the east coast, which they say will help another 15,000 aspiring homeowners into the market.
Others are eschewing the lobby route and are taking matters into their own hands. Founders of four of Melbourne's biggest home building companies - Metricon, Simonds, Burbank Homes and Henley Homes - are contributing $300 million to start their own lower-income home buyers scheme modeled off Keystart. Their investment will establish a trust that makes affordably-priced homes available for as little as a 3 per cent deposit.
While we're yet to see any detail or even serious post-election mention of the government's First Home Buyer Loan Scheme, little wonder these industry captains are taking matters into their own hands.
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