QBE Sees Queensland Housing Boost From Currency, Tasmania LagNichola Saminather and Narayanan Somasundaram
Housing in Australia’s Queensland state will benefit from a recovery in tourism, while Tasmania’s jobless rate, the country’s highest, will hurt confidence there, according to QBE Insurance Group Ltd.’s Lenders Mortgage Insurance unit.
Queensland’s housing market, which was battered by a decline in visitors last year due to a strong currency, is now on the path to recovery due to recent Australian dollar weakness, said Jenny Boddington, chief executive officer of QBE LMI. Tasmania’s market will struggle, she said.
The Australian dollar has fallen 10 percent in the past three months and the central bank indicated today that the currency may weaken further. Tasmania had an unemployment rate of 7.3 percent in May, compared with a national rate of 5.5 percent, government data show.
“With the dollar on a downward trend it can be quite stimulating,” Boddington said in an interview in Sydney. “Tasmania is not looking at all optimistic in terms of the unemployment.”
The LMI unit of Australia’s largest insurer provides lenders’ mortgage insurance on home loans that are more than 80 percent of the value of the home.
Home-buyer sentiment is on the rise across Australia, with more than a quarter considering buying a property in the next 12 months, compared with 20 percent in 2012, a report from QBE LMI showed. More than a third of respondents expect home prices to rise this year, according to the survey.
The online survey was based on 1,107 responses between May 1 and 13 from people who had a mortgage or planned to buy a residential property in the next five years.
Home prices across Australia’s eight state and territory capitals rose 2.9 percent in May from a year ago, according to Brisbane-based real estate researcher RP Data.
The Reserve Bank of Australia’s 2 percentage points of interest-rate cuts since November 2011 to a record-low 2.75 percent enabled almost half of all home-loan borrowers to get ahead on payments last year, according to the survey.