A 'cracking' start to 2024 with strong weekend property auction results
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A ‘cracking’ start to 2024 with strong weekend property auction results

It was the second-biggest start since 2008 with 1,671 homes going under the hammer

By Bronwyn Allen
Tue, Feb 6, 2024 9:32amGrey Clock 2 min

More than seven in 10 homes that went to auction on Saturday sold under the hammer, delivering a preliminary national clearance rate of 73.9 percent across the combined capital cities, according to CoreLogic data. The strongest result was seen in Canberra where 80 percent of the 75 homes auctioned were sold. Adelaide recorded a 77.6 percent clearance rate, Sydney 76.3 percent, Melbourne 71.9 percent and Brisbane 68.5 percent.

Impressive clearance rates were also recorded in regional areas. Newcastle and Lake Macquarie hosted 37 auctions with a 77.8 percent clearance. The Gold Coast saw 126 homes go to auction with a clearance of 65.3 percent. For perspective, a clearance rate of 60 percent reflects normal market conditions, with anything above this indicating strong selling conditions and high buyer demand.

Australia’s biggest agency network, Ray White, also reported a 74 percent clearance rate for the 387 auctions it conducted on Saturday. The company said the market was roaring back in 2024, with the number of buyers attending open inspections up by 24 percent since 1 January compared to the same period last year.

CoreLogic said the first major week of auctions had set a “cracking pace” for the market in terms of volume and sales success. Saturday was the second-biggest start to a new year’s auction season since CoreLogic began keeping records in 2008. A total of 1,671 homes went to auction across the capital cities. CoreLogic economist Kaytlin Ezzy said the clearance rates in Sydney and Melbourne represented “a sizeable step change compared to the end of last year.

Overall, it looks like auction markets are starting the year on a strong footing,” Ms Ezzy said. Potentially, the news of low inflation and the possibility of early rate cuts is already boosting sentiment. The next few weeks should provide further guidance on whether this strong result is simply some early-year exuberance or a trend that can persist.

Last week the Australian Bureau of Statistics revealed inflation fell to 4.1 percent in December, lower than the expected forecast of 4.5 percent, representing a two-year low. Prior to the figures being released, most economists were predicting that interest rates could start to fall by September this year.

The first interest rate decision by the Reserve Bank will be announced at 2.30pm today. Following on from changes signalled last year in the way the rate decision is announced, Governor Michele Bullock will conduct a press conference to explain the board’s decision and answer questions from journalists at 3.30pm.



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Hong Kong Takes Drastic Action to Avert Property Slump

The city’s real-estate market has been hurt by high interest rates and mainland China’s economic slowdown

By ELAINE YU
Fri, Mar 1, 2024 3 min

Hong Kong has taken a bold step to ease a real-estate slump, scrapping a series of property taxes in an effort to turn around a market that is often seen as a proxy for the city’s beleaguered economy.

The government has removed longstanding property taxes that were imposed on nonpermanent residents, those buying a second home, or people reselling a property within two years after buying, Financial Secretary Paul Chan said in his annual budget speech on Wednesday.

The move is an attempt to revive a property market that is still one of the most expensive in the world, but that has been badly shaken by social unrest, the fallout of the government’s strict approach to containing Covid-19 and the slowdown of China’s economy . Hong Kong’s high interest rates, which track U.S. rates due to its currency peg,  have increased the pressure .

The decision to ease the tax burden could encourage more buying from people in mainland China, who have been a driving force in Hong Kong’s property market for years. Chinese tycoons, squeezed by problems at home, have  in some cases become forced sellers  of Hong Kong real estate—dealing major damage to the luxury segment.

Hong Kong’s super luxury homes  have lost more than a quarter of their value  since the middle of 2022.

The additional taxes were introduced in a series of announcements starting in 2010, when the government was focused on cooling down soaring home prices that had made Hong Kong one of the world’s least affordable property markets. They are all in the form of stamp duty, a tax imposed on property sales.

“The relevant measures are no longer necessary amidst the current economic and market conditions,” Chan said.

The tax cuts will lead to more buying and support prices in the coming months, said Eddie Kwok, senior director of valuation and advisory services at CBRE Hong Kong, a property consultant. But in the longer term, the market will remain sensitive to the level of interest rates and developers may still need to lower their prices to attract demand thanks to a stockpile of new homes, he said.

Hong Kong’s authorities had already relaxed rules last year to help revive the market, allowing home buyers to pay less upfront when buying certain properties, and cutting by half the taxes for those buying a second property and for home purchases by foreigners. By the end of 2023, the price index for private homes reached a seven-year low, according to Hong Kong’s Rating and Valuation Department.

The city’s monetary authority relaxed mortgage rules further on Wednesday, allowing potential buyers to borrow more for homes valued at around $4 million.

The shares of Hong Kong’s property developers jumped after the announcement, defying a selloff in the wider market. New World Development , Sun Hung Kai Properties and Henderson Land Development were higher in afternoon trading, clawing back some of their losses from a slide in their stock prices this year.

The city’s budget deficit will widen to about $13 billion in the coming fiscal year, which starts on April 1. That is larger than expected, Chan said. Revenues from land sales and leases, an important source of government income, will fall to about $2.5 billion, about $8.4 billion lower than the original estimate and far lower than the previous year, according to Chan.

The sweeping property measures are part of broader plans by Hong Kong’s government to prop up the city amid competition from Singapore and elsewhere. Stringent pandemic controls and anxieties about Beijing’s political crackdown led to  an exodus of local residents and foreigners  from the Asian financial centre.

But tens of thousands of Chinese nationals have arrived in the past year, the result of Hong Kong  rolling out new visa rules aimed at luring talent in 2022.

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