Building firms look for stronger foundations – GLOBAL RATES START TO TUMBLE: [1 Edition]
Stapleton, John. The Australian [Canberra, A.C.T] 05 Jan 2001: 2.
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Kings Bay Estate in Sydney’s Five Dock, an elegant mix of townhouses and apartments, is an example of the extra efforts developers are going to in a tight market. High-quality finishings, a swimming pool, gardens and underground carpark are all part of the package.
“The strength of the US Nasdaq technology index was in the likes of Cisco and Microsoft, it wasn’t in dodgy.com,” said JB Were equities analyst Mike Kendall.
Home starts are already down by a third on last year.
There was plenty of concern among workers on one Sydney building site about the future of the industry.
Building worker Hira Moore, 23, said the situation was “a bit of a worry”.
Jason Bell, 25, said there was concern among labourers that work would dry up.
“Everybody in the building industry will welcome an interest rate drop,” he said.
Master Builders Australia says the Olympics, the GST and five successive interest rate rises led to 60,000 less homes being built this year.
Master Builders chief economist Wilhelm Harnisch said builders were shedding jobs and would continue to do so until the Reserve Bank lowered interest rates. “There has been devastation across the industry,” he said.
“We are looking at job losses of 100,000 in the coming year. It is those with better product who have the best chance of survival.”
Kings Bay Estate in Sydney’s Five Dock, an elegant mix of townhouses and apartments, is an example of the extra efforts developers are going to in a tight market. High-quality finishings, a swimming pool, gardens and underground carpark are all part of the package.
Site manager at Kings Bay Estate, Scott Phillipson, said that lower interest rates encouraged developers to invest.
Construction manager at development company St Hilliers, Mark Longo, said a drop in interest rates would help with pre-sales, which for many developers had dropped off.
“To date, we haven’t had to put anyone off and we are confident we will be able to hold our people,” he said. “But many builders concentrating purely on residential are feeling the squeeze. Other people, including a lot of the majors, have been putting off staff.”
What a reduction means …
* For local shares
The Australian market climbed 1.7 per cent in response to the US rate cuts yesterday, but traders are still wary.
A local rates cut in response to the US move would be especially good for building-related shares such as CSR and Boral, as well as highly geared stocks.
* For technology stocks
The bigger tech stocks improved yesterday after being heavily sold down in recent weeks, but investors are unlikely to flock back to cash-strapped smaller operators.
“The strength of the US Nasdaq technology index was in the likes of Cisco and Microsoft, it wasn’t in dodgy.com,” said JB Were equities analyst Mike Kendall.
* For the $A
A local rates cut should be a negative influence on the currency, in theory at least.
As money market yields decline, investors look to other offshore markets for better returns.
But Australian rates are still likely to remain higher than US rates, giving investors an incentive to buy into the Australian currency.
The $A would also gain relative to the greenback if fears of a US recession are confirmed.
Abstract
Kings Bay Estate in Sydney’s Five Dock, an elegant mix of townhouses and apartments, is an example of the extra efforts developers are going to in a tight market. High-quality finishings, a swimming pool, gardens and underground carpark are all part of the package.
“The strength of the US Nasdaq technology index was in the likes of Cisco and Microsoft, it wasn’t in dodgy.com,” said JB Were equities analyst Mike Kendall.
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Home starts are already down by a third on last year.
There was plenty of concern among workers on one Sydney building site about the future of the industry.
Building worker Hira Moore, 23, said the situation was “a bit of a worry”.
Jason Bell, 25, said there was concern among labourers that work would dry up.
“Everybody in the building industry will welcome an interest rate drop,” he said.
Master Builders Australia says the Olympics, the GST and five successive interest rate rises led to 60,000 less homes being built this year.
Master Builders chief economist Wilhelm Harnisch said builders were shedding jobs and would continue to do so until the Reserve Bank lowered interest rates. “There has been devastation across the industry,” he said.
“We are looking at job losses of 100,000 in the coming year. It is those with better product who have the best chance of survival.”
Kings Bay Estate in Sydney’s Five Dock, an elegant mix of townhouses and apartments, is an example of the extra efforts developers are going to in a tight market. High-quality finishings, a swimming pool, gardens and underground carpark are all part of the package.
Site manager at Kings Bay Estate, Scott Phillipson, said that lower interest rates encouraged developers to invest.
Construction manager at development company St Hilliers, Mark Longo, said a drop in interest rates would help with pre-sales, which for many developers had dropped off.
“To date, we haven’t had to put anyone off and we are confident we will be able to hold our people,” he said. “But many builders concentrating purely on residential are feeling the squeeze. Other people, including a lot of the majors, have been putting off staff.”
What a reduction means …
* For local shares
The Australian market climbed 1.7 per cent in response to the US rate cuts yesterday, but traders are still wary.
A local rates cut in response to the US move would be especially good for building-related shares such as CSR and Boral, as well as highly geared stocks.
* For technology stocks
The bigger tech stocks improved yesterday after being heavily sold down in recent weeks, but investors are unlikely to flock back to cash-strapped smaller operators.
“The strength of the US Nasdaq technology index was in the likes of Cisco and Microsoft, it wasn’t in dodgy.com,” said JB Were equities analyst Mike Kendall.
* For the $A
A local rates cut should be a negative influence on the currency, in theory at least.
As money market yields decline, investors look to other offshore markets for better returns.
But Australian rates are still likely to remain higher than US rates, giving investors an incentive to buy into the Australian currency.
The $A would also gain relative to the greenback if fears of a US recession are confirmed.
Illustration
Caption: Hard slog:; Renee Nowytarger; Photo: Photo