Land values have continued to rise for a second consecutive quarter, according to the latest figures from the Housing Industry Association.
The new data shows the weighted median price of land rose by 1.1% during the June quarter to $174,490, up from $172,000 during the March quarter after 12 months of declines.
Prices in Sydney were the most expensive with a median price of $255,000, while the Victorian town of Mallee was the most affordable at just $70,000. HIA chief economist Harley Dale says the results indicate new home construction was the dominant factor in the market’s strength earlier this year.
“We saw an increase in land values across Australia in the June quarter, but we also saw an increase in the amount of land sales indicating a recovery in new home building despite rate rises.”
Meanwhile, final or stage three commodity prices increased by 0.1% during the September quarter, mainly due to price increases in electricity, gas and water, according to the Bureau of Statistics.
Baker product manufacturing and petroleum refining prices grew by 10.4% and 6% respectively, but were offset by a 7.1% decline in computer services and a 5% decline in industrial machinery and equipment manufacturing.
Shares open lower after losses on Wall Street
The Australian sharemarket has opened lower today after stocks on Wall Street fell last week after a week of corporate results.
The benchmark S&P/ASX200 index was down 26 points or 0.54% to 483.4 at 12.00 AEST. The Australian dollar dropped slightly due to weak equities markets, but remained at US92c.
Commonwealth Bank shares dropped 0.6% to $55.92, while ANZ also lost 0.9% to $23.64. Westpac gained 0.1% to $27.34, while NAB lost 0.3% to $30.82.
ANZ chief executive Mike Smith has told the Herald Sun that the bank will keep rate rises tied with the actions of the Reserve Bank of Australia. To readjust mortgage rates within the RBA’s own cycle would cost the bank due to rising securities prices.
“The unfortunate thing that has happened is that the market has already priced in further increases in rates,” he said. “I was disappointed that the Reserve Bank raised rates quite as early as they did – I’m still concerned that we’re in quite a fragile recovery,” Mr Smith said.
CSR requests trading halt for capital raising
Meanwhile, diversified industrial group CSR has requested a trading halt ahead of an expected announcement regarding a capital raising.
The company will “shortly” be making an announcement which also relates to some financial results, but no further details have been made.
“The trading halt is necessary to ensure the institutional component of the capital raising can take place in an orderly fashion,” CSR said in a statement. According to reports from The Australian Financial Review, the raising will generate $400 million.
The Australian has reported the Federal Government could consider some restraints on Telstra’s future growth if an agreement regarding the company’s structural separation is reached within six weeks.
While the Opposition has requested delays to the bill, the Government reportedly believes a quick deal would end up providing the company with a better deal.
Stock company Argo Investments has said it expects first half profit to fall, but noted improved conditions in the economy will result in an increase over the year.
Chairman Chris Harris said at the company’s AGM today that the forecast for net operating profit for the year ending 31 December is a decline by 25%.
“This forecast, based on expected lower dividend and interest income, is unlikely to be representative of the company’s results for the current full year ending 30 June 2010,” he said.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
