Huge news this week with New Zealand finally opening up the trans-Tasman border.

NZ Prime Minister Jacinda Ardern has announced that Australians are free to travel to New Zealand with no mandatory quarantine from 11.59pm April 18.

Australia’s border has been mostly open to New Zealanders since October, with a few short suspensions when there were small coronavirus outbreaks in Auckland.

But until this week’s announcement, New Zealand had delayed returning the favour amid more frequent bursts of COVID-19 clusters across Australia.

Air New Zealand has already increased its schedule in its booking system from Monday, April 19. It has 23 return services between Auckland and Sydney that week, as opposed to just four return flights this current week.

This is huge news from a tourism perspective, but what does it have to do with the property market you ask?

Well, it’s big news from an overseas migration perspective and migration drives demand for property.

New Zealand is our 4th largest source of overseas migration (behind England, China and India). Just under 40% of all New Zealand-born Australian residents live in Queensland, so this state will be the main beneficiary of this announcement

In other news this week, the Reserve Bank of Australia (RBA) held its monthly meeting this week, deciding to hold the cash rate at its current record low of 0.1%.

While the RBA was encouraged by better employment numbers and the generally positive global rollout of vaccines, it didn’t like that the Aussie dollar was still trading quite high (which hurts our exports), and that wage growth still isn’t increasing enough to see inflation sitting between its target of 2%-3% (their number one ‘KPI’ of sorts).

What does it mean? The RBA won’t be increasing the cash rate until inflation is comfortably within the 2%-3% range, and they don’t expect that to occur until 2024 at the earliest.

The RBA has made some commentary on rising house prices, acknowledging that they are on the increase in most markets. However, it also pointed out that investor credit growth remained subdued.

While the RBA will keep an eye on house price movements, it primarily wants to ensure current lending standards are maintained. In other words, ‘no concerns at the moment but we will continue to keep an eye on lending standards’.

The ANZ Australian jobs report this week revealed the number of jobs advertised in Australia hit a 12-year high and is now 23% higher than it was before the COVID-19 pandemic started.

The report found job ads increased 7.4% in March, following an upwardly revised 8.8% jump in February. Job ads are now at the highest level since November 2008.

The trend of growth in job ads is similar to job vacancy data from the Australian Bureau of Statistics which recorded a 13.7 % increase in February, to be up 26.8 % higher than pre-COVID levels.

JobKeeper ended on 31 March so it will be interesting to see what impact that has had when the next batch of data comes out in a month or so.

It’s a tough time to buy a house at the moment, with more buyers than sellers in the market. 

CoreLogic reported this week that total listings across the four weeks to 28 March were 25.5% below the five-year average. Having said that, there is encouraging news for prospective buyers with new listings in the four weeks to 28 March sitting 8.1% above this time last year and 3% above the five-year average.

According to CoreLogic head of research Tim Lawless, total listings remain low because buyer demand is consistently outweighing new advertised supply. “The ratio of sales to new listings is tracking around 1.1, implying for every new listing added to the market, 1.1 homes are sold. Such a rapid rate of absorption is keeping overall inventory levels low and adding to a sense of FOMO amongst buyers.”

Total home sales in the March quarter were 21.9% higher than March 2020. Although March 2020 was a period significantly impacted by the onset of COVID-19, which feels like way longer than 12 months ago!

As always, we love to look out for the big deals happening and a couple in particular piqued our interest this week. 

First up, REA Group (owner of announced this week it was buying Mortgage Choice – Australia’s biggest mortgage broking franchise – for $244m. This will complement the Smartline broking franchise that REA bought in 2017 for $67m. 

REA believe the combination of more than 900 brokers with REA’s 12 million monthly web visitors will allow the company’s broking business to grow faster than the home-loan market as a whole. Sounds like a smart acquisition on the face of it.

The other deal we liked was the $97m purchase of Watergardens Homeplace in Taylors Lakes, Victoria, by Harvey Norman. It was bought for a very low 4.75% yield! 

Harvey Norman and Bunnings are anchor tenants (plus Baby Bunting, Supercheap Auto, Barbeques Galore, Repco and PET stock) of the 25,931-sq m mall, which stands on a 7ha site at the junction of Melton Highway and Kings Road opposite the Watergardens Town Centre, owned by QIC, and Watergardens train station.

Harvey Norman apparently owns $3.1Bn of property, showing they’re not just in the appliance and homeware business!

Interested in knowing more? Check out the weekly podcast  I do with my cousin Alex at The Double Shot Podcast.

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