NEW HOME starts have hit a seven-year low, but infrastructure starts have finally begun to kick in, according to Master Builders Australia.

“The number of new homes started during the September 2019 quarter has dropped to its lowest point since early 2013, although the news on infrastructure work was a little better,” Master Builders chief economist Shane Garrett said.

“Official results released this morning by the ABS indicate that new home building starts suffered an 11.7 percent reduction during the September 2019 quarter. The volume of engineering construction work done inched up by 0.5% over the same period,” Mr Garrett said.

 “The fall in new home starts was more pronounced in the high-density part of the market where a 21.9 percent decline occurred during the September 2019 quarter. This was due to a number of one off factors including the reputational issues around apartments during the middle of last year as well as the adverse fall out from the banking Royal Commission and its detrimental impact on credit.

“Despite these disappointing figures, the latest indicators around building approvals and house prices do suggest that a resumption of growth in new home building is not too far off,” he said. 

“Having recently sagged to a decade low, engineering construction did take a small step in the right direction during the September 2019 quarter. Engineering activity is positioned to benefit the most from the host of new infrastructure projects announced in recent times.

“It is taking longer than we would like to see new infrastructure announcements translate into real action on the ground. The figures today provide welcome evidence that activity here is finally gaining ground, albeit it gradually,” Mr Garrett said. 

“There remains a strong onus on government to ensure that infrastructure project work is still delivered as quickly as possible so that the considerable gap in economic growth can be closed."

www.masterbuildersaustralia.com.au

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IN RESPONSE to the devastation being caused by the Australian bushfires, Henry Schein, Inc. (Nasdaq: HSIC) announced today that it is raising money for recovery and rebuilding efforts, donating much-needed health care supplies, and supporting its dental customers who may be impacted by the ongoing crisis.

The Company and the Henry Schein Cares Foundation are seeding a 2020 Disaster Relief Fund with a $50,000 donation and will match employee contributions up to $25,000. In addition, Henry Schein plans to donate up to $50,000 worth of health care product to relief organiSations. Locally, Henry Schein Australia is also donating a portion of its January sales to local relief efforts.

“Team Schein stands ready to assist our relief agency partners and local health care providers in their efforts to rebuild and recover from these terrible fires,” said Stanley M. Bergman, chairman of the board and chief executive officer of Henry Schein.

“Our company has long been committed to supporting disaster preparedness and recovery, and we are working with our supplier partners and Team Schein Members to provide relief agencies with the resources they need to support public health.”

The fund is not limited to Team Schein Members. Credit card donations can be made on the Henry Schein Cares Foundation website, and checks can be made payable to Henry Schein Cares Foundation and mailed to Kate Sorrillo, Henry Schein Cares Foundation, Inc., 135 Duryea Road, Melville, NY 11747.

About Henry Schein Cares

Henry Schein Cares stands on four pillars: engaging Team Schein Members to reach their potential, ensuring accountability by extending ethical business practices to all levels within Henry Schein, promoting environmental sustainability, and expanding access to health care for underserved and at-risk communities around the world. Health care activities supported by Henry Schein Cares focus on three main areas: advancing wellness, building capacity in the delivery of health care services, and assisting in emergency preparedness and relief. Firmly rooted in a deep commitment to social responsibility and the concept of enlightened self-interest championed by Benjamin Franklin, the philosophy behind Henry Schein Cares is a vision of “doing well by doing good". Through the work of Henry Schein Cares to enhance access to care for those in need, the company believes that it is furthering its long-term success.

www.henryschein.com/socialresponsibility.

About Henry Schein, Inc.

Henry Schein, Inc. (Nasdaq: HSIC) is a solutions company for health care professionals powered by a network of people and technology. With approximately 19,000 Team Schein Members worldwide, the company's network of trusted advisors provides more than 1 million customers globally with more than 300 valued solutions that improve operational success and clinical outcomes. Business, Clinical, Technology, and Supply Chain solutions help office-based dental and medical practitioners work more efficiently so they can provide quality care more effectively. These solutions also support dental laboratories, government and institutional healthcare clinics, as well as other alternate care sites. Henry Schein operates through a centralised and automated distribution network, with a selection of more than 120,000 branded products and Henry Schein private-brand products in stock, as well as more than 180,000 additional products available as special-order items. A Fortune 500 Company and a member of the S&P 500 index, Henry Schein is headquartered in Melville, New York and has operations or affiliates in 31 countries. 

www.henryschein.com

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DWELLING prices have reached the bottom in Adelaide as buyer confidence rises alongside auction clearance rates.

According to the latest RiskWise Property Research Risks & Opportunities Report, housing finance in South Australia is showing signs of improvement with an increase of 8.6 percent since February 2019 after a reduction of 6.6 percent relative to August 2018.

RiskWise CEO Doron Peleg said in recent years the market had delivered modest capital growth for houses and poor capital growth for units.

“While the labour market has improved in the past couple of years, the effective unemployment rate in South Australia is still above 9 percent and the employment market is still soft,” Mr Peleg said.

“This has a strong connection with low population growth (only 0.8 percent per annum) and, therefore, low demand for dwellings.

“While serviceability measures have improved due to the RBA’s interest rate cuts (with another expected sometime in the new year), the relatively high unemployment rate increases the risk of credit defaults.

“That, combined with some properties that suffer from low demand, require special attention in relation to credit provisioning.”

However, he said in some high-demand areas the housing market was showing some evidence of recovery, particularly those with steady recent price growth rates.

“Buyer confidence has increased in South Australia, particularly Adelaide. This has also improved auction clearance rates and, consequently, it appears dwelling prices have reached the bottom,” Mr Peleg said.

“However, while South Australia enjoys high levels of public and private expenditure, in the short term, the economic growth is projected to remain relatively low, around the 2 percent mark.

“Long-term economic growth will be a slow process and with a soft labour market no significant changes to demand are expected in the short to medium term, with less popular areas experiencing modest growth only.”

He said despite low building approvals, demand for houses was projected to remain moderate with, therefore, only moderate capital growth forecast.

However, he said the growth rate was projected to vary greatly across the state with houses in areas close to the Adelaide CBD, such as Adelaide Central and Hills, likely to deliver better growth.

Houses in areas that do not enjoy good growth drivers still carry a risk of delivering poor / negative capital growth. For example, according to CoreLogic, the median house price in the Barossa-Yorke-Mid North area declined by 0.2 percent in the past 12 months.

He said while South Australia offered healthy rental returns for both houses and units, demand for units among owner-occupiers, despite good affordability, was generally low.

“In addition, units in some suburbs are subject to voluntary lending restrictions by the major lenders, such as lower loan-to-value ratio (that is, higher deposit) due to oversupply,” he said.

“Units are not considered a popular dwelling option among families especially off-the-plan units in high rises, and these carry the highest level of risk. Overall, units in South Australia are likely to deliver poor capital growth.”

Adelaide Central and Hills has the highest rate of oversupply in South Australia with 2696 units in the pipeline (an 8.2 percent increase to the current stock). This unit oversupply has led to a price decline of 0.3 percent in the past year.

www.riskwiseproperty.com.au

THE Northern Territory's poor economy continues to play a part in its subdued property market with 15.6 percent price reductions for houses in the past five years and a massive 29.4 percent for units.

According to the latest RiskWise Property Research Risks & Opportunities Report, much of the negative capital growth in recent years is due to population decreases following the end of the mining boom and lack of employment, leading to high interstate emigration.

RiskWise CEO Doron Peleg said the territory was the only state in Australia that experienced population loss in 2017-18.

“While dwelling supply in relation to population growth is low and dwellings are very affordable, the low demand for housing makes the Northern Territory a risky area especially given the low level of private investment that is significantly below the growth levels during the mining boom,” Mr Peleg said.

“According to CoreLogic, Darwin house prices peaked in 2014 and fell 15.6 percent over the past five years. However, improved housing affordability slightly reduces the risk associated with houses from medium-high to medium.”

He said it was likely houses in the Northern Territory would deliver poor or negative capital growth in the short to medium term.

However, as more than 67 percent of houses in the territory were owner-occupied and held for a long period of time, he said they carried a lower level of risk than units.

“Units carry a very high level of risk to deliver negative capital growth, due to the combination of oversupply, lending restrictions and low demand,” Mr Peleg said.

“The current supply of units, while not considered high in relation to population growth, still exceeds the low demand for them.

“This is particularly the case in areas with a high concentration of off-the-plan units, such as Darwin with 2034 units in the pipeline (10.2 percent increase to the current stock). They delivered -33.7 percent capital growth over the last five years.”

www.riskwiseproperty.com.au

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