Strong conditions in the Australian housing market continue, and June is expected to be another real estate ‘Groundhog Day’.
While more sellers have been lifting asking prices midway through campaigns compared to previous years, Domain’s Dr Nicola Powell says that this trend is easing and “proves that the strong pace of price growth recorded this year is unlikely to continue at such a rapid rate”.
Australia’s combined capital city median house price notched the sharpest quarterly increase in more than eighteen years, with Sydney and Canberra showing the fastest acceleration.
Meanwhile, thousands of investors are expected to offload apartments in Sydney and Melbourne housing markets over the coming months.
A new survey by ME bank showed that 23 per cent of investors want to sell their property in the next twelve months. Higher vacancy rates and plummeting rents in the CBD mean some landlords struggle to cover their costs and this is the catalyst for investor sales.
The federal budget was announced last month with a variety of measures impacting real estate. However, the most significant windfall is that taxes relating to investment property remain unchanged.
In addition, the government extended the First Home Loan deposit scheme. It also introduced a new deposit scheme to support single parents, the Family Home Guarantee, and made changes to the First Home Super Saver Scheme.
Sydney housing market
- Domain reports that Sydney’s prestige home prices are rising at twice the rate of entry-level homes. The median price at the top of the market sits at $3.65 million, and high-end homes lead the charge in Sydney’s rapidly rising demand. Homes in Killara, Clovelly, Manly and Balmain are the most sought after.
- With Sydney house prices soaring, buyers who once dreamed of buying a house are turning to apartment living. Core Logic reports that houses in Sydney now cost 74 per cent more than apartments; that’s up from 55 per cent last year. Prospective buyers are still focusing on their suburb of choice but opting to buy a unit in the area instead.
- Commercial real estate sales in Sydney are also beginning to rebound. Core Logic reports that Macquarie Park and nearby Riverside Corporate Park in North Ryde are going from ‘strength to strength’. With a total of $1.4 billion in sales in the last twelve months compared to $885.7 million in the previous twelve months.
- Marrickville in Sydney’s inner-west is becoming a first home buyers haven, according to Domain. Sought after because of its proximity to the CBD, relative affordability and vibrancy, put it on your list of suburbs to watch.
Melbourne housing market
- Property industry groups and investors are unhappy with the property tax hikes announced in the Victorian state government budget. There will be a rise in land tax for those with investment property valued between $1.8 million and over. The government also announced a raft of changes to Victorian stamp duty.
- Density restrictions will again apply to all auctions held across Melbourne until the latest Covid-19 outbreak is under control. Attendees must also wear face masks and sign in using QR codes.
- According to Domain, with house prices continuing to rise in Melbourne, desperate buyers are looking to the traditionally ‘less affluent’ areas of the city. Buyers are flocking to Melbourne’s west and north in an attempt to break into the market. Footscray, Seddon, Kingsville, and Yarraville are all popular.
- With house prices increasing by 7.3 per cent to a record median of $974,000, buyers looking for a foothold in the Melbourne market should consider Bundoora, Prahan, Glen Iris and Preston.
Brisbane housing market
- Brisbane house prices have soared to record highs for the seventh consecutive quarter, according to Domain. Key spots include Brisbane inner city, inner east, inner west and inner north. Interest from interstate continues to be a market driver, with buyers from Sydney and Melbourne still seeing Brisbane as a bargain.
- The Brisbane commercial property market has gone into overdrive, with industrial precincts in the suburbs north of the CBD recording one of the best months for sales in more than 20 years. Astute investors and owner-occupiers are taking advantage of low-interest rates and looking to buy in precincts such as Rocklea, Sumner, Raceview and Loganholme.
- Want bargain in Brisbane? Consider New Farm, Kangaroo Point, Wynnum West and Everton Park.
Perth housing market
- The Real Estate Institute of WA has forecast a 15 per cent growth this week. However, it’s expected that some suburbs are on track to exceed that, already showing more than 10 per cent increases in value in the last four months.
- At least 20 Perth suburbs have recorded 10 per cent or higher growth since the start of the year. Bitcon, North Beach, Sorrento, Applecross and Claremont have all exceeded that, showing median house price increases up to 20 per cent.
- Real estate experts are calling for more investors to buy into the local market. In a call to action this week, REIWA listed the top ten suburbs for investors to consider – Stratton, Brookdale, Koondoola, Lockridge, Armadale, Cooloongup, Greenfields, Camillo, Maddington and Parmelia.
Canberra housing market
- Many Canberrans have given up on the dream of owning a house and are now opting for apartment living. With a median unit price of $473,304, the most affordable suburb for a unit purchase is Gungahlin, followed by Bruce and Franklin.
- The ACT government has extended the Land tax Exemption scheme indefinitely. The scheme is for landlords whose investment properties are managed through a community housing provider. Landlords who signed up for the scheme are exempt from land tax if they rent their properties for less than 75 per cent of the market rates.
Adelaide housing market
- Usually a steady and stable market, residential properties in Adelaide are now regularly selling for more than $100,000 above their listing price. In what is definitely a seller’s market, buyers should consider Adelaide’s outer suburbs such as Croydon Park, Prospect and Glandore.
- Core Logic reports that commercial property sales in Adelaide have increased significantly, with $192.2 million in sales in the last quarter. This is an increase on the previous quarter, with commercial real estate experts suggesting that this may be the perfect time for investors and owner-occupiers considering commercial property to act.
Darwin housing market
- Only thirteen minutes from the Darwin CBD, a new 36-lot boutique housing estate, Mirawood, has started selling in Berrimah. The affordable housing estate will consist of a range of dwellings. It’s part of the governments most significant land release program to date and will eventually accommodate 6,500 new homes.
- Savvy investors still have some excellent real estate opportunities in Darwin. Market hot spots include inner-city apartments and houses in the outer Darwin suburbs Malak and Karama. Investors should also consider inner Palmerston suburbs such as Roseberry, Bakewell, Driver and Woodroffe.
For access to the 2 page Market Essentials Report click here.