Hilton Parkes Real Estate
Banks Report Drop in Stressed Loans

Westpac says its stressed assets have fallen in the third quarter, despite a rise in mortgage delinquencies.
Stressed assets are generally defined as non-performing assets
like loans where the repayment is overdue by 90 days, restructured loans or loans that are written off.

Westpac said stressed assets slipped four basis points to 1.10% of total lending, although repossessions increased due to prolonged weakness in the mining states of Western Australia and Queensland.

Rivals Commonwealth Bank, ANZ and National Australia Bank earlier this month all reported a decline in expenses related to bad debts.

House Price Growth to Ease in Sydney

Listed residential developer AVJennings expects house price growth to ease in the east coast capital cities in the near future, but says it expects the volume of new dwelling construction to stay strong.

“In Sydney we believe that pricing will ease,” chief executive Peter Summers says.

“Sydney price growth has been very strong but it was strong because for a decade it was very weak. That growth will now moderate back to more long-term averages.”
Melbourne’s future will be similar to Sydney, says the developer.

“Where we believe Sydney will be really strong is in terms of volume, because it continues to be under-supplied,” Summers says.

 

Financial Stress Figures Fall: Survey

The number of people experiencing financial stress has fallen sharply in the past five years, despite widespread perceptions to the contrary.
Unpublished data from the Household Income and Labour Dynamics of Australia survey, which follows the lives of 17,000 people each year, shows the number who have had to ask for financial help from family or friends has dropped from 12.6% in 2011 to 10.8%.

The share of the
population unable to pay a bill on time has similarly fallen from 12.8% to 11.1%.

The share of people unable to afford to heat their home has fallen from 4% to 2.8%, while the number unable to pay their rent or their mortgage on time has dropped from 6.5% to 5.1%.

Unemployment falls to 5.6%


Unemployment has fallen to 5.6% following the strongest run in seven years, according to figures from the ABS.

The economy has added 1,000 full-time jobs a day over the past six months. Since September 2013, 658,300 jobs have been added and if the economy continues at the current rate, 1 million jobs will have been added by September 2018.

“Full-time employment has now increased by around 220,000 persons since September 2016 and makes up the majority of the 250,000-person increase in employment over the period,” the Bureau’s chief economist Bruce Hockman says.

Treasurer Scott Morrison says: ”That is the highest rate of jobs growth we have seen in a full financial year since before the
global financial crisis.”

China Restricts Foreign Investment

 

The Chinese Government
has implemented new policies that will restrict Chinese companies from investing in overseas property development. The new rules are likely to have an impact in Australia.
China’s State Council, or cabinet, has issued a “banned list” including casinos and defence technology, while overseas property development and hotels are classified as “restricted”.

Chinese companies bought 38% of all the residential development sites sold in Australia last year, spending $2.4 billion, according to a Knight Frank report.

China’s National Development and Reform Commission declared companies investing overseas in real estate could be harming China’s financial stability by increasing capital outflows.

Quote of the week

“In Sydney we believe that pricing will ease. Sydney price growth has been very strong but it was strong because for a decade it was very weak. That growth will now moderate back to more long-term averages.”


AV Jennings chief executive Peter Summers