Gold Coast property finance group City Pacific has continued its run of record profits, yesterday posting an interim result of $24.25 million.
The net profit for the six months to December 31 is up 19 per cent on a year earlier, and sets the company on course for a full-year result of about $75 million.
The half-year result was struck on a $9.1 million drop in revenue to $108.5 million, largely due to rain-affected delays in construction at its Martha Cove project on Victoria's Mornington Peninsula as well as delays in property settlements. The company reaped big rewards from joint ventures, with its 26 per cent interest in Indigo Pacific Capital producing a net profit of $1.81 million, up from $21,474 a year earlier, and its 50 per cent joint venture Mirvac Pacific reaping a healthy $2.54 million.
Earnings per share have jumped 16.5 per cent to 18.68c, the company's fifth half-year record on the trot since listing in 2001.
The interim dividend has edged up 4c to 15c a share, payable on March 30. City Pacific chief Phil Sullivan said the profit result reflected the strong core fundamentals of the business, which is among the stock exchange's top 200 companies.
"City Pacific's operations will continue to benefit from a foundational platform of specialist skills in mortgage origination, property lending and development," he said.
"Our development pipeline, now over 7000 lots, will predictably provide increasing returns in coming years."
Among the company's major projects are the $650 million Martha's Cove waterfront development in Victoria and the $1 billion Ocean Terminal and Breakwater Cove project in Townsville.
City Pacific has also teamed up with property giant Mirvac to develop a 366ha site surrounding Gainsborough Greens golf course at Pimpama.
City Pacific yesterday reported a lift in its net tangible asset backing from 93.1c a share to $1.06 a share.
The company's shares rose 4c to close at $4.70.
Following the placement of 18.3 million shares earlier this month, City Pacific's market capitalisation yesterday stood at $705 million.
Saturday, February 24, 2007
Perpetual Ltd to buy Wignalls Lenders Mortgage Services and be rebranded Perpetual Mortgage Lending Services
The corporate trust division of Perpetual Ltd says it will acquire the business operations of Adelaide-based Wignalls Lenders Mortgage Service.
Wignalls is a national mortgage processing and settlement company with about 100 staff across five states.
Perpetual's group executive for the corporate trust division Phil Vernon said the purchase would strengthen the company's provision of services to the securitisation and lending markets.
"Securitisation market growth and increased outsourcing by bank and non-bank institutions has led to the demand for a provider who can meet all the needs of clients under one roof," Mr Vernon said.
"The acquisition of Wignalls adds an important capability to our service offering."
All Wignalls' employees will be offered jobs with Perpetual, and Wignalls will be rebranded as Perpetual Lenders Mortgage Services.
Perpetual company declined to reveal the cost of the purchase.
Source: AAP
Wignalls is a national mortgage processing and settlement company with about 100 staff across five states.
Perpetual's group executive for the corporate trust division Phil Vernon said the purchase would strengthen the company's provision of services to the securitisation and lending markets.
"Securitisation market growth and increased outsourcing by bank and non-bank institutions has led to the demand for a provider who can meet all the needs of clients under one roof," Mr Vernon said.
"The acquisition of Wignalls adds an important capability to our service offering."
All Wignalls' employees will be offered jobs with Perpetual, and Wignalls will be rebranded as Perpetual Lenders Mortgage Services.
Perpetual company declined to reveal the cost of the purchase.
Source: AAP
Friday, February 23, 2007
Mortgage geared property investors cash out to switch to superannuation investment
Property investors, many of whom are mortgaged heavily, have been quitting the Australian housing market to pour up to $1 million each into superannuation to take advantage of the generous contributions allowance before the super payout tax is abolished on July 1.
The superannuation regime, announced in the May 2006 budget and made even more attractive by allowing large sums to be invested now, has combined with rising interest rates and tax cuts to create a crisis in rental markets around Australia, experts say.
Borrowing for negatively geared property investment has plunged by 30 per cent since June, with the biggest falls in NSW, Western Australia and the ACT, the latest figures show.
At the same time, the rental vacancy rates around Australia have dropped from a long-term average of 2.9 per cent to 1.8 per cent, with families and young couples who thought that the high price of housing and mortgage repayments a barrier to entry, are now struggling to find somewhere to rent that they can afford.
As vacancies fall, asking rents are soaring, with official figures released yesterday showing a massive 6.9 per cent jump last year in Sydney. This does not take into account the recent practice of rental auctions where the highest bidder gets to be the proud tenant.
Investment property lending in NSW has plunged by 38.1 per cent since June, a much greater drop than that which followed the introduction of the ill-fated ``exit tax'' on property investors in that state in 2004.
In a clear sign that the West Australian property boom has run out of steam, investment property lending in the state has plunged 37.1 per cent in six months. In most other states it has dropped by about 20 per cent.
Housing Industry Association chief economist Harley Dale said yesterday the new superannuation rules, higher mortgage interest rates and tax cuts had combined to make negatively geared property investment less attractive.
"There was a recovery in the housing investment market until the middle of last year when we found we were in a higher interest rate environment,'' Mr Dale said.
"The impact of superannuation was not so evident until the last quarter of last year, once the new rules started coming on to people's radar.''
The tax cuts reduced the tax savings from negative gearing for anyone earning less than $150,000.
Mr Dale said the downturn in property investment was entirely due to individuals pulling out of the market. Commercial property development has only weakened slightly since rates started rising early this year.
But Treasurer Peter Costello does not accept that his superannuation reforms are contributing to the downturn in property investment.
A spokesman said yesterday he endorsed the view of the Reserve Bank in its latest economic review that it was unsurprising investors were unwilling to supply additional rental property, given high property costs and low rental yields.
The Government rejected industry requests to allow investment properties to be transferred in to superannuation.
Source: The Australian
The superannuation regime, announced in the May 2006 budget and made even more attractive by allowing large sums to be invested now, has combined with rising interest rates and tax cuts to create a crisis in rental markets around Australia, experts say.
Borrowing for negatively geared property investment has plunged by 30 per cent since June, with the biggest falls in NSW, Western Australia and the ACT, the latest figures show.
At the same time, the rental vacancy rates around Australia have dropped from a long-term average of 2.9 per cent to 1.8 per cent, with families and young couples who thought that the high price of housing and mortgage repayments a barrier to entry, are now struggling to find somewhere to rent that they can afford.
As vacancies fall, asking rents are soaring, with official figures released yesterday showing a massive 6.9 per cent jump last year in Sydney. This does not take into account the recent practice of rental auctions where the highest bidder gets to be the proud tenant.
Investment property lending in NSW has plunged by 38.1 per cent since June, a much greater drop than that which followed the introduction of the ill-fated ``exit tax'' on property investors in that state in 2004.
In a clear sign that the West Australian property boom has run out of steam, investment property lending in the state has plunged 37.1 per cent in six months. In most other states it has dropped by about 20 per cent.
Housing Industry Association chief economist Harley Dale said yesterday the new superannuation rules, higher mortgage interest rates and tax cuts had combined to make negatively geared property investment less attractive.
"There was a recovery in the housing investment market until the middle of last year when we found we were in a higher interest rate environment,'' Mr Dale said.
"The impact of superannuation was not so evident until the last quarter of last year, once the new rules started coming on to people's radar.''
The tax cuts reduced the tax savings from negative gearing for anyone earning less than $150,000.
Mr Dale said the downturn in property investment was entirely due to individuals pulling out of the market. Commercial property development has only weakened slightly since rates started rising early this year.
But Treasurer Peter Costello does not accept that his superannuation reforms are contributing to the downturn in property investment.
A spokesman said yesterday he endorsed the view of the Reserve Bank in its latest economic review that it was unsurprising investors were unwilling to supply additional rental property, given high property costs and low rental yields.
The Government rejected industry requests to allow investment properties to be transferred in to superannuation.
Source: The Australian
Thursday, February 22, 2007
Australian housing market struggles east to west as the Perth property boom ends and Sydney house prices continue to fall
The West Australian capital Perth house price boom has ended and New South Wales capital Sydney house prices have dropped even further as the property downturn continues to bite, with analysts predicting months more pain for homeowners.
House price growth in Perth slowed to just 1.7 per cent in the December quarter, with property prices in the city now growing at the fourth-slowest rate in the country, according to Australian Bureau of Statistics figures.
In Sydney, median house prices fell 1 per cent in the quarter - reversing slight gains made earlier in the year - as the impact of last year's three rate rises was digested by the nation's weakest property market.
Housing Industry Association chief economist Harley Dale said housing affordability in NSW remained the lowest in the country, but flat or falling prices were slowly attracting first-home buyers and investors back into the Sydney market.
Mr Dale said the effect of last year's interest rate rises would continue to dampen house price growth until at least June.
National house price growth slowed to 0.9 per cent in the December quarter, resulting in annual growth of 8.3 per cent.
That slowdown was driven by the cooling Perth market, which had delivered total house price growth of 34.6 per cent in the first three quarters of last year as the state rode the resources boom.
Elsewhere in the country, house price growth remained relatively subdued in the December quarter except in Brisbane and Darwin, where prices grew by a respectable 3 per cent.
"We expect Brisbane will lead the housing recovery over the next two years," BIS Shrapnel senior analyst Jason Anderson said yesterday. "Brisbane is where rental growth has been strongest, it's where pressures are greatest and I think that's showing up in this price growth."
Mr Anderson said Perth prices were likely to fall 1 per cent this year because that market had "overshot" during the boom.
Macquarie Bank head of property Rod Cornish said interest rates were expected to remain on hold this year as inflation pressures eased.
And he predicted the Reserve Bank would probably cut rates early next year in an attempt to stimulate building activity in the floundering NSW and Victorian markets.
Mr Anderson said Sydney would remain a two-tier market, with house prices in the city's struggling outer-western suburbs expected to fall as much as 5 per cent this year, while inner-city areas could show slight growth.
"There's still this tug of war going on between what buyers are asking and what people are prepared to pay," he said.
In a sign of the weakness in Sydney's outer suburban housing market, Stockland - Australia's second-biggest property group - last week revealed only 96 of the 1900 blocks of land it had sold in the past six months were in NSW.
Source: The Australian
House price growth in Perth slowed to just 1.7 per cent in the December quarter, with property prices in the city now growing at the fourth-slowest rate in the country, according to Australian Bureau of Statistics figures.
In Sydney, median house prices fell 1 per cent in the quarter - reversing slight gains made earlier in the year - as the impact of last year's three rate rises was digested by the nation's weakest property market.
Housing Industry Association chief economist Harley Dale said housing affordability in NSW remained the lowest in the country, but flat or falling prices were slowly attracting first-home buyers and investors back into the Sydney market.
Mr Dale said the effect of last year's interest rate rises would continue to dampen house price growth until at least June.
National house price growth slowed to 0.9 per cent in the December quarter, resulting in annual growth of 8.3 per cent.
That slowdown was driven by the cooling Perth market, which had delivered total house price growth of 34.6 per cent in the first three quarters of last year as the state rode the resources boom.
Elsewhere in the country, house price growth remained relatively subdued in the December quarter except in Brisbane and Darwin, where prices grew by a respectable 3 per cent.
"We expect Brisbane will lead the housing recovery over the next two years," BIS Shrapnel senior analyst Jason Anderson said yesterday. "Brisbane is where rental growth has been strongest, it's where pressures are greatest and I think that's showing up in this price growth."
Mr Anderson said Perth prices were likely to fall 1 per cent this year because that market had "overshot" during the boom.
Macquarie Bank head of property Rod Cornish said interest rates were expected to remain on hold this year as inflation pressures eased.
And he predicted the Reserve Bank would probably cut rates early next year in an attempt to stimulate building activity in the floundering NSW and Victorian markets.
Mr Anderson said Sydney would remain a two-tier market, with house prices in the city's struggling outer-western suburbs expected to fall as much as 5 per cent this year, while inner-city areas could show slight growth.
"There's still this tug of war going on between what buyers are asking and what people are prepared to pay," he said.
In a sign of the weakness in Sydney's outer suburban housing market, Stockland - Australia's second-biggest property group - last week revealed only 96 of the 1900 blocks of land it had sold in the past six months were in NSW.
Source: The Australian
Tuesday, February 06, 2007
Mortgage Interest rates to stay steady
Building approvals fell in December as higher mortgage interest rates hurt demand for housing while retail spending sagged, taking pressure off interest rates.
Housing approvals fell 1.9 per cent to a seasonally adjusted 12,395 units, from a downwardly revised 12,630 units in November, the Australian Bureau of Statistics said today.
RBC Capital Markets senior economist Su-Lin Ong said the result shows three interest rate rises last year were hurting the building market.
This should prompt the Reserve Bank of Australia (RBA) to keep rates on hold when it meets this week, she said.
"Households had been showing resilience but its looking like the higher interest rates are starting to take their toll," Ms Ong said.
"It points to the RBA keeping rates on hold this week and for the foreseeable future."
In the year to December, building approvals fell 1.5 per cent. Economists had forecast a fall of 2 per cent in the month.
Meanwhile, the value of retail sales rose at a slightly weaker than expected pace in December, suggesting that inflationary pressures would not be strong enough to prompt the central bank to hike rates in the near-term.
Australian retail trade at current prices rose 0.3 per cent in December to a seasonally adjusted $18.445 billion from a downwardly revised $18.397 billion in November, the Australian Bureau of Statistics (ABS) said.
Economists had forecast an increase of 0.4 per cent in the month.
Meanwhile, retail trade in chain volume measures rose 1.3 per cent to $53.188 billion in the December quarter.
Macquarie Bank senior economist Brian Redican said the retail sales figures were mixed, but spending was holding up.
"In the month, the results was weaker than the market had anticipated, and it does suggest that there is a bit of a weakening trend there in the retail sales series," he said.
"But offsetting that was a very healthy quarterly retail sales number."
Mr Redican said the results suggested that while spending was healthy, it was not adding to inflationary pressures.
"It doesn't suggest that the Reserve Bank will need to do anything further, but nor does it suggest that the economy is falling in a hole either," he said.
Source: AAP
Housing approvals fell 1.9 per cent to a seasonally adjusted 12,395 units, from a downwardly revised 12,630 units in November, the Australian Bureau of Statistics said today.
RBC Capital Markets senior economist Su-Lin Ong said the result shows three interest rate rises last year were hurting the building market.
This should prompt the Reserve Bank of Australia (RBA) to keep rates on hold when it meets this week, she said.
"Households had been showing resilience but its looking like the higher interest rates are starting to take their toll," Ms Ong said.
"It points to the RBA keeping rates on hold this week and for the foreseeable future."
In the year to December, building approvals fell 1.5 per cent. Economists had forecast a fall of 2 per cent in the month.
Meanwhile, the value of retail sales rose at a slightly weaker than expected pace in December, suggesting that inflationary pressures would not be strong enough to prompt the central bank to hike rates in the near-term.
Australian retail trade at current prices rose 0.3 per cent in December to a seasonally adjusted $18.445 billion from a downwardly revised $18.397 billion in November, the Australian Bureau of Statistics (ABS) said.
Economists had forecast an increase of 0.4 per cent in the month.
Meanwhile, retail trade in chain volume measures rose 1.3 per cent to $53.188 billion in the December quarter.
Macquarie Bank senior economist Brian Redican said the retail sales figures were mixed, but spending was holding up.
"In the month, the results was weaker than the market had anticipated, and it does suggest that there is a bit of a weakening trend there in the retail sales series," he said.
"But offsetting that was a very healthy quarterly retail sales number."
Mr Redican said the results suggested that while spending was healthy, it was not adding to inflationary pressures.
"It doesn't suggest that the Reserve Bank will need to do anything further, but nor does it suggest that the economy is falling in a hole either," he said.
Source: AAP
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