CategoriesNews

Cities where house prices are still going up across Australia

Angie Raphael and Alex Druce April 28, 2022

There are signs Australia’s property boom is cooling down but prices are still rising in some capital cities. Here’s how your state is faring.

House and unit prices have hit quarterly record highs in some capital cities but new data shows Australia’s property boom is slowing, with the median house price growth rate dropping to 0.6 per cent this quarter.

According to Domain’s March 2022 Quarterly House Price Report, growth across the combined capital cities is 10 times slower than the three months to December 31.

Unit prices dropped by one per cent for the first time since June 2020, with a median price of $616,942, although combined capital median house prices are at a record high $1.07m.

Growth in regional Australia has outperformed the cities, with the median house price up by 3.1 per cent over the past quarter and 20.8 per cent annually.

The report comes as annual inflation accelerated to 5.1 per cent in the first three months of the year — the highest level in more than two decades.

Property prices were a major contributor to this figure with continuing strong demand for construction enabling builders to pass through increases in costs for both materials and labour.

The price of new dwelling purchase by owner occupiers rose 5.7 per cent over the quarter, the largest rise since the September 2000 quarter, following the introduction of the GST.

The inflationary figures forced many economists to bring forward their expectations of an interest rate hike with the Reserve Bank now widely expected to boost the cash rate from 0.1 per cent to 0.25 per cent when it meets on Tuesday.

However, Domain chief of research and economics Nicola Powell said their property data could signal a more accommodative purchasing period ahead for first home buyers, with annual growth at a 12-month low.

 

“While each city’s figures vary, we’re seeing Australia settle into a new normal, including increased interstate movements, ease of restrictions and return of international workers, which is prompting shifts in the property market,” she said.

“House price growth in Melbourne and Canberra is declining, while Sydney’s rate of growth is flatlining after an extreme property boom.

“When paired with increasing supply, these current dynamics will help ease competition between buyers.

“While we’re seeing cities such as Perth, Brisbane and Adelaide hitting new records with house prices, overall, the Australian property market is on the cool-down after incredible growth in recent years.”

Here is a breakdown of how each capital city is faring.

Sydney

House prices were up by 0.2 per cent, hitting $1.59m.

Unit prices fell 1.2 per cent to $796,524 which was the first quarterly decline since the June quarter in 2020.

Sydney house prices continue to outperform units, growing more than four times faster annually.

“Flattened house prices and declining unit prices has made Sydney’s price growth rate one of the most significant slowdowns of all the capital cities,” Dr Powell said.

“A year ago, house prices were rising 46 times the current pace, and at the same time unit prices were also increasing.

“This indicates that Sydney’s steepest upswing on record has ended and swinging power back towards buyers, creating better purchasing conditions by providing buyers time to contemplate rather than compromise, and ultimately allowing rational decisions to be made.”

Dr Powell said Sydney’s upswing was due to short supply and strong demand, but noted 2022 had seen the highest number of newly advertised homes for sale over a March quarter since 2014.

“Sellers have become motivated and are strategically timing a sale while prices are at or are close to a peak and prior to a tightening rate cycle that will impact borrowing capacity and the cost of a mortgage,” she said.

Melbourne

House prices recorded the first drop since the June quarter of 2020, with a decrease of 0.7 per cent.

Unit prices also dipped 2.2 per cent, which was the steepest negative moderation over a quarter since 2017.

House prices have grown more than seven times faster than units in the past year, with median house prices at 89 per cent above units.

“Melbourne’s property market is witnessing more homes being listed for sale than being purchased, continually showcasing greater purchasing power to buyers,” Dr Powell said.

“Buyer demand is softening in Melbourne, with the value of new owner-occupied home loans sitting 10 per cent below and first-home loans 29 per cent below the 2021 peak.”

Meanwhile, the value of investment loans hit a high this year, but Dr Powell noted demand would decrease as the prospects of interest rate hikes move closer.

Brisbane

Queensland’s capital has been the fastest-growing in Australia over the past year.

The median house price has increased by 32.1 per cent annually, while units have gone up 9.3 per cent annually.

“Brisbane has long been waiting for this property boom, showcasing the steepest upswing in 18 years for houses and 14 years for units,” Dr Powell said.

She noted the affordability of keeping up with rapid house price gains was a barrier for first home buyers.

“The property boom is likely to continue, with Queensland recording the strongest annual population growth of all the states driven by heightened interstate migration,” Dr Powell said.

“This interest will be supercharged by the opening of international borders, eased social distancing rules, and high vaccination rates.

“Also, the 2032 Olympic Games will underpin strong infrastructure, population, and economic growth over the next decade.”

Perth

House prices reached a record high of $622,030 — up by 1.5 per cent quarterly and five per cent annually for the first time since 2014.

But unit prices have fallen by 3.1 per cent over the last quarter and 4.6 per cent annually.

Perth remains the most affordable city to purchase a property.

“Perth’s buyer demand is soaring, with the volume of properties sold over the March quarter 15 per cent above the five-year average,” Dr Powell said.

“Easing of Western Australia’s border restriction in early March could accelerate another wave of new demand, freely allowing an easier relocation from overseas and interstate.

“This could create a population shift, with some residents opting to return home.

“This is a trend to watch as given the timing, these drivers are unlikely to have made an impact in the March quarter.”

Adelaide

South Australia’s capital hit new records, with house prices up by three per cent over the last quarter and unit prices increased by 1.3 per cent.

But the quarterly growth is about four times slower compared to the previous quarter, indicating affordability constraints.

“Adelaide has been a highly competitive market for buyers, as property choice has been problematic at a time of heightened demand,” Dr Powell said.

“While this remains the case, it is beginning to improve as the total supply of homes for sale is 16 per cent above the multi-year low.

“Rapidly rising house prices and the lure of a sellers’ market are enticing homeowners.

“As the supply-demand dynamics continue to rebalance, it should help to ease the fiercely competitive nature that has impacted buyers throughout this price upswing.”

Canberra

House prices declined by 0.9 per cent over the last quarter — the first drop since March 2020.

But Canberra remains the second most expensive capital city to purchase a house, behind Sydney.

Meanwhile, unit prices are up by 0.6 per cent.

“Confident sellers are listing their homes for sale while conditions remain strong and prices are close to a peak in Canberra,” Dr Powell said.

“This is helping to shift market conditions, with the total volume of homes for sale improving from the recent multi-year low.

“While supply remains tight — 30 per cent below the five-year March average — it is tracking higher following the first annual increase in just over two years.”

Hobart

House prices hit a record high, up by 4.3 per cent over the last quarter, but unit prices fell by 2.3 per cent.

Dr Powell said the quarterly price growth was losing momentum.

“Hobart’s hot property market is continuing as record-breaking house prices have been a persistent feature since mid-2020 but growth is starting to cool after it peaked in 2021,” she said.

“The quarterly growth has been strongest at the entry-price point, suggesting home hunters are trying to seek affordability.

“Unit prices fell over the quarter following three consecutive quarters of extreme price gains of around 10 per cent each.

“Despite the drop, this makes Hobart Australia’s third most expensive unit market behind Sydney and Melbourne.”

Darwin

House prices fell by 1.8 per cent, while unit prices dropped by 0.5 per cent.

“Weakening demand at a time of rising newly advertised homes for sale has resulted in a build-up of supply — 21 per cent higher in March compared to the same time last year,” Dr Powell said.

“This is creating more options for buyers and ensuring realistic seller price expectations.” 

CategoriesNews

QLD property: What your house could be worth by 2027

Samantha Healy 28 Apr 2022,

A Queensland suburb that has seen house prices soar by almost 200 per cent in the past five years is tipped to add another $557,000 to its values by 2027.

The median house price in Sunshine Beach, which is home to some of Australia’s richest and most famous faces, is currently $3.5 million, and is tipped to surge $557,000 to hit $4.057 million.5 million by 2027.

That is after a meteoric $2.3 million rise in values since 2017.

That forecast is based on an assumed rate of growth of 3 per cent a year, a much more modest number given that house values in the Sunshine Coast suburb have soared 192 per cent since 2017.

Hot on the heels of Sunshine Beach is Surfers Paradise, where median house prices are forecast to rise by another $416,000 by 2027 to $2.61 million.

Neighbouring suburb Mermaid Beach, home to Millionaires Row, Hedges Avenue, is also tipped to see values rise by $382,000 over the next five years, while Brisbane’s New Farm and Hamilton round out the top five with values predicted to rise by $357,000 and $336,500 respectively.

The Brisbane suburbs of Ascot (+$311,000) and Hawthorne (+$291,000) also make the top 10 list for forecast growth over the next five years, while the Sunshine Coast continues to dominate with Alexandra Headland (+327,000), Minyama (+$319,000) and Noosa Heads (+$303,5000) among the top performers.

“Prices rose significantly over the past five years due to a combination of extraordinary events,” PropTrack economist Paul Ryan said.

“Take 2021, which alone represented the strongest annual growth rate in more than 30 years.”

It marked the third-fastest period of growth in history, according to REA.

For units, Sunshine Beach is again a standout, with apartments there tipped to add $240,5000 to their value, followed by Noosa Heads (+$224,500), Twin Waters (+$167,000), Hollywell (+$166,000) and Sunrise Beach (+$165,000).

Also making the list for units were the suburbs of Bilinga, Burleigh Heads, Main Beach, Peregian Beach and Miami.

The lists suggest that while the rate of growth seen during the pandemic property boom will ease, the insatiable appetite for Queensland’s coastal and lifestyle locations will continue.

The exclusive data also revealed the top 10 suburbs that have recorded the biggest price hikes since 2017, with the Sunshine Coast shining brightly.

Along with Sunshine Beach, the suburbs of Sunrise Beach, Minyama, Doonan, Warana, Alexandra Headland and Marcoola all recorded price growth north of 110 per cent over the past five years.

Miami and Currumbin on the Gold Coast also made the top 10 list, with the mining town of Moranbah, which saw values tank after the resources downturn, recording growth of 120 per cent, or $172,200.

For units, the Sunshine Coast again dominated, with seven of the top 10 performing suburbs for price growth.

On the Gold Coast, Palm Beach, Miami and Clear Island Waters were also on the list.

Mr Ryan said a series of fairly unprecedented factors combined over recent years to drive the exceptional growth.

“Interest rates fell to a record low as the pandemic and other shocks hit the economy,” he said.

“This increase in borrowing capacity, along with unprecedented preference shifts towards lifestyle locations and larger homes, pushed prices up very quickly.

“The pandemic supercharged trends towards locations such as Byron Bay and Noosa – with more remote work flexibility, demand for larger homes and, of course, the beach.”

But will we see such a boom again? In short, Mr Ryan said “no”.

“Across the country, home prices increased a massive 40 per cent over the past five years,” Mr Ryan said, adding that such growth was simply unsustainable.

“It would take another rare combined series of exceptional events to see a repeat of the past five years.”

CategoriesNews

Australian property sees a strong 2022 start

 Mina Martin 21 Apr 2022

Over $150 billion of property has been settled across the east coast of Australia this year, amidst growing speculation of imminent market softening, latest analysis from PEXA Insights showed.

According to PEXA’s Property Insights quarterly report, property sale settlements across both the east-coast and west-coast of Australia from January to March were at similar levels to the record-breaking numbers seen for the same period in 2021, with metropolitan areas strongly outperforming regional areas in all east coast states.

 

Queensland, New South Wales, Victoria, and Western Australia all recorded at least 20% growth in aggregate value when compared to the first quarter of 2021. Given settlement volumes have remained consistent, PEXA’s findings highlight the growth in property prices throughout 2021.

Continuing to lead the nation in terms of aggregate value for settlements was NSW with $62.3 billion from 48,100 settled sales. When it comes to volume, Queensland remained the leader for three successive quarters with 51,458 sale settlements, valued at approximately $39 billion. Victoria experienced the highest year-on-year growth in aggregate sale settlement value at 36%, recording $50.9 billion from 50,702 sales settled. WA, meanwhile, saw a resurgence at the start of 2022 with 2.5% growth for the quarter when compared to the same period in 2021.

“One of the more interesting trends we have seen in the latest quarter is a return to capital cities,” said Mike Gill, PEXA Insights’ head of research. “Throughout the COVID pandemic, regional areas boomed; however, with restrictions significantly relaxed, it appears Australian homebuyers have refocused on the metropolitan regions in Queensland, New South Wales and Victoria.

Scott Butterworth, PEXA’s chief data and analytics officer, said that despite the Australia’s property market’s continuing resilience, many variables are yet to play out in 2022.
“A level of uncertainty remains across global markets with new variants of COVID emerging, the Russian invasion continuing, and rising interest rates,” Butterworth said. “The PEXA Insights team will continue to closely monitor the impact of these issues on the Australian property, most notably the imminent rise in the Australian cash rate as speculated by many of the nation’s leading economists.”

CategoriesNews

Listings with eco-friendly and disaster-resistant features are selling quickly and for a premium

SONIA TAYLOR APR 20, 2022

New research has found home owners are snapping up properties that include features to mitigate the effects of climate change.

US housing platform Zillow has revealed that buyers are seeking out and competing for more sustainable homes and those built to withstand natural disaster.

The report found that homes with electric vehicle charging stations and drought-resistant landscaping can sell up to 10 days faster than similar homes.

And properties that offer some protection from climate disasters and other natural hazards, such as hurricane shutters or stilts, have been found to help a home sell for more money.

While the data surveyed Americans, the realities of climate change and its impact on housing is front of mind for Australians, off the back of consecutive years of catastrophic bushfires and ‘once-in-a-generation’ floods.

Senior ex-ADF officers named climate change as Australia’s biggest threat and natural disasters now cost Australians $18.2 billion per year, but that price tag is expected to more than double to $39 billion by 2050 even without accounting for a change in climate, reports 9News.

The UN released a report stating that globally, wildfires are getting worse and that governments are unprepared. This places the onus on individuals to seek out the best possible options in their remit. A previous Zillow survey found nearly two-thirds of young adults believe climate change will impact their homes or communities in their lifetime.

Those generations are now ageing into their prime home-buying years, conscious of their ecological footprint and making purchase decisions based on their beliefs, values and principles.

Large shares of buyers seriously consider flooding (55 per cent), tornadoes (41 per cent), hurricanes (35 per cent) and earthquakes (29 per cent) when choosing a home.

The frequency of these severe weather events and other natural hazards is putting a price premium on homes that have features designed to protect against such disasters.

As a result, homes on stilts or piers, built to defend against flooding, can sell for 1.1 per cent more in the States.

Sustainability is also front of mind, with energy-saving features a big plus for home buyers as inflation skyrockets.

“Homes with listing descriptions that mention double-pane windows can sell a week faster than similar homes and for 1 per cent more than expected,” Zillow’s research states.

“Homes with solar panels can sell for 1.4 per cent more. Listings that tout programmable thermostats, smart sprinkler systems and smart lights can sell up to six days faster than expected.”

So if you want your home to sell quickly and for a premium, protect it from natural disaster and make it eco-friendly. Zillow’s research looked at environment-related features mentioned in listings for 3.1 million home sales across 2020 and 2021.

CategoriesEvents

International searches go nuts for rentals across Melbourne, Docklands and inner city limits

Alesha Capone April 18, 2022

Melbourne inner city markets hardest hit by Covid-19 are the most in-demand with international homeseekers looking for a rental, in a positive sign for investors.

The number of foreign residents looking for a Victorian rental property increased 40 per cent in the March quarter compared to 12 months earlier, realestate.com.au figures show.

Melbourne, Docklands and Southbank — the worst affected property markets by the pandemic — are joined by Carlton as the most searched suburbs by offshore rental seekers.

The median unit rent in Melbourne postcode 3000 has risen 13 per cent year-on-year to $450, according to realestate.com.au, as demand returns post-lockdown.

The CBD rental vacancy rate — which hit 10.8 per cent in September 2020 — is now 2.4 per cent as of March, according to SQM Research.

PropTrack economist Angus Moore said opening the country’s borders had been “a big changer” for the rental market, “particularly so for the inner city rental market”, with international students, backpackers and skilled migrants seeking properties.

“Vacancy rates are now lower than they were pre-pandemic, and the number of inner Melbourne rentals listed on realestate.com.au is less than half what it was at its peak in November 2020,” Mr Moore said.

“That’s starting to translate into growing rents in inner Melbourne.”

New Zealand, India, the UK, the US, Hong Kong and China topped the list of overseas searchers for Victorian property rentals, according to realestate.com.au

SQM Research managing director Louis Christopher said there were 12,400 vacant rental properties in metropolitan Melbourne last month compared to 27,300 the same time last year.

Mr Christopher said this had been caused by multiple factors, including renters returning to the city from regional areas; some landlords withdrawing their properties from the market; and leaseholders being less willing to share with others for fear of catching Covid.

He believed it “likely homelessness will be increasing” as rental stock dried up.

International property website Juwai co-founder Daniel Ho said many of the 150,000 student visa holders stuck outside Australia during the pandemic could now return.

“They will add significant heat to rental markets in their most popular suburbs by the end of the year,” Mr Ho said.

Barry Plant Docklands property management associate director Steven Heaven said the amount of people seeking inner city rentals had “gone through the roof”.

“We did 52 lets in February, predominantly half of that would have been with the city stock with international students, people relocating from interstate and also people coming back from the regions,” he said.

Their office recorded 138 vacant rentals across Docklands and the CBD at the pandemic’s height but now only have about seven vacant leasable properties.

The same countries dominating the international rental list were the top nations searching for homes to buy in the state, with Melbourne, Richmond, Toorak, Glen Waverley and St Kilda among the hot spots.

It comes as the Foreign Investment Review Board’s annual report showed a 37.8 per cent decrease in the number of residential real estate proposal approvals year-on-year to 4384.

That national figure was worth $10.4bn.

Melbourne Lord Mayor Sally Capp said stamp duty concessions and exemptions on eligible properties meant the inner city had “never been more affordable” for buyers.

“The quality of real estate stock that is available in the city right now should be tempting buyers from all walks of life, from young professionals, savvy investors, to downsizers looking to revel in the buzz of Melbourne’s central entertainment district,” she said.

Top overseas searchers looking for properties to rent in Victoria

1. New Zealand

2. India

3. United Kingdom

4. United States

5. Hong Kong, special administrative region of China

6. China

7. Japan

8. Singapore

9. Malaysia

10. Indonesia

Top rental suburbs for overseas property seekers in Victoria

1. Melbourne 3000

2. Docklands 3008

3. Carlton 3053

4. Southbank 3006

5. South Yarra 3141

6. Clayton 3168

7. St Kilda 3182

8. Richmond 3121

9. Hawthorn 3122

10. Fitzroy 3065

Top overseas searchers for property purchasers in Victoria

1. United States

2. United Kingdom

3. New Zealand

4. Hong Kong, special administrative region of China

5. India

6. Singapore

7. China

8. Japan

9. Canada

10. Malaysia

Top suburbs for overseas property purchasers in Victoria

1. Melbourne 3000

2. Richmond 3121

3. Toorak 3142

4. Glen Waverley 3150

5. South Yarra 3141

6. Brighton 3186

7. St Kilda 3182

8. Point Cook 3030

9. Doncaster East 3109

10. Hawthorn 3122

Metropolitan Melbourne median rents January – March 2022

Houses – $450, up 2.3 per cent year on year

Units – $395, down 1.3 per cent year on year

Melbourne 3000 median rents January – March 2022

Units – $450, up per cent year on year

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