ASX gains as JB Hi-Fi profits surge; Commonwealth Bank forecasts house price boom

ASX gains as JB Hi-Fi profits surge; Commonwealth Bank forecasts house price boom

ASX gains as JB Hi-Fi profits surge; Commonwealth Bank forecasts house price boom

Commonwealth Bank economists expect national dwelling prices to increase 8 per cent in 2021.

Economists at Australia's biggest bank think the housing market is "on the cusp of a boom", as record low mortgage rates collide with the recovery in the jobs market.

Key Points :

CBA forecasts house prices to rise 16pc and apartment prices to rise 9pc over two years.

JB Hi-Fi shares have risen after its net profit climbed 86 per cent

Nearmap has rejected a short-seller report that caused its shares to dive last week

Commonwealth Bank economists are forecasting an 8 per cent rise in national dwelling prices this year, followed by a 6 per cent increase next year.

House price growth has been tipped to outstrip growth in apartment prices, at around 16 per cent over the next two years compared to 9 per cent.

The most recent figures from CoreLogic showed that prices rose 0.9 per cent in January, taking dwelling values to a record high.

"Near term indicators of momentum suggest conditions will further strengthen," CBA's head of Australian economics Gareth Aird wrote.

"Auction clearance rates are sitting at levels consistent with double-digit dwelling price growth."

Preliminary figures from last week's auctions put the clearance rate for the capital cities at 86.1 per cent, according to CoreLogic.

However, that rate could be revised lower once all results are collected, as auctions in Melbourne were withdrawn due to the lockdown.

CBA economists revised their property price forecasts last year, after previously forecasting an 11 per cent fall in house prices over three years under their 'base case' pandemic scenario.

The bank's worst-case scenario of a prolonged downturn had factored in the risk of a 30 per cent-plus fall in prices.

"[We] revised our call in September 2020 to look for a smaller peak-to-trough fall and a decent lift in prices over 2021," Mr Aird said.

"But even then, the rapid growth in new lending over the second half of 2020 was stronger than we anticipated.

"The increase in new lending is now feeding into higher prices for bricks and mortar."

While CBA economists expect the effect of low home loan rates on prices to wane slightly next year, they see a boost to demand from population growth as international borders are reopened.

ASX 200 rises, JB Hi-Fi shares up on profit surge

The Australian share market steadily rose through the session, as reporting season rolled on, with a profit surge for JB Hi-Fi.

The ASX 200 closed 0.9 per cent higher at 6,868 points, while the All Ordinaries index gained 1 per cent to 7,149.

The Australian dollar was also stronger, buying around 77.85 US cents at 4:20pm (AEDT).

Shares in JB Hi-Fi gained 3.1 per cent to $52.44, after the electronics retailer announced an increased payout to shareholders as its profit climbed.

JB Hi-Fi will pay an interim dividend of $1.80 per share, double the 90-cent final dividend declared in August.

The sales boom continued past the initial lockdown that began in March last year, when people fitted out of home offices, splashed out on home entertainment and upgraded appliances.

Strong demand for electronics and home appliances lifted JB Hi-Fi's sales.

Over the six months from July through December, sales across the JB Hi-Fi group, which includes its New Zealand business and The Good Guys, rose nearly 24 per cent to $4.9 billion.

Online sales more than doubled, rising almost 162 per cent to $678.8 million.

That saw the retailer's net profit rise by 86 per cent to $317.7 million.

JB Hi-Fi chief executive Richard Murray described it as an "extraordinary period" and thanked the company's 13,000 employees for their work during the pandemic.

Sales continued to grow in the new year, with turnover at JB Hi-Fi in Australia rising more than 17 per cent, while The Good Guys saw 14 per cent sales growth in January.

However, due to the uncertainty of the pandemic, the company did not provide sales and earning guidance for the second half of the financial year.

Nearmap rebounds from short-seller attack

Most sectors of the Australian share market ended higher, led by materials and consumer stocks, with BHP (+2.3pc) and Fortescue (+2.5pc) making gains.

Shares in Crown Resorts rose 0.8 per cent to $9.97 after chief executive Ken Barton resigned following the damning NSW inquiry report, which found company unsuitable to hold a licence for its Sydney casino.

The best performing stock on the benchmark index was aerial imagery company Nearmap, with its shares rising 19 per cent.

The company reported a net loss of $9.4 million, an improvement on the previous period's loss, and will not pay an interim dividend.

It followed a sell-off in Nearmap shares last week, after investment fund J Capital said it was short the stock, arguing "accounting tricks" had been used to misrepresent the company's growth in the US.

On Monday, Nearmap responded, saying the report contained "many inaccurate statements and makes unsubstantiated allegations of a very serious nature".

"Nearmap is in compliance with its continuous disclosure obligations and the company remains highly confident and committed to its long-term strategy and outlook," it said.

Bendigo and Adelaide Bank shares rose strongly, gaining 11.3 per cent.

The bank's net profit rose 67 per cent to $243.9 million in the first half.

The worst performers of the session were Altium (-4.8pc), Beach Energy (-4.3pc) and AGL Energy (-3.8pc).

Source : amp-abc-net-au.cdn.ampproject.org/c/s/amp.abc.net.au

 

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