The coronavirus and its potential negative impact on the global and Australian economies is dominating the news at the moment.
This month the RBA pushed forward the decision to cut rates to a record low 0.5% to help stimulate any downturn that the Coronavirus may be causing throughout the economy.
If history is any guide, demand for property increases during times of economic uncertainty. How long the uncertainty associated with the coronavirus will last is unknown at this stage.
However, the Australian share market has already been negatively affected, with 6% being wiped off the value of Australian shares in the last week of February (though the overall market is still slightly higher than it started the year).
Demand for Australian property could also be positively impacted by the early high level of interest currently being shown in the federal government’s new First Home Loan Deposit Scheme.
The Scheme commenced on January 1 this year to help first home buyers with a deposit of as little as 5% to avoid the cost of lenders’ mortgage insurance. In this financial year, 6,500 of the 10,000 places available in the Scheme were already allocated to first home buyers by mid-February. Another 10,000 places in the Scheme will become available from July 1.
- According to the 2020 Demographia International Housing Affordability Survey, Sydney is third in the world in terms of the least affordable cities to buy a home (behind only Hong Kong and Vancouver, and just ahead of Melbourne).
- The latest CoreLogic data shows that Sydney home values have increased by 11.2% since bottoming out in May last year. However, they are still 5.4% off their 2017 peak. 17% more properties sold in Sydney in 2019 compared to 2018.
- The latest lending figures from the Australian Bureau of Statistics show that first-home buyer numbers in NSW are at their highest level since 2012, with the average loan size being 15% higher than it was a year ago during the market downturn.
- According to the latest CoreLogic research, Melbourne home prices have increased by 8.2% in the last year and are now only 1.5% off their October 2017 peak. Vendors are only discounting their list prices by an average of 3.5% to make a sale, compared to an average of 6.7% a year ago.
- The CoreLogic data further reveals that the average selling time of a home in Melbourne is currently 31 days, which is 14 days fewer than 12 months ago, and that 7.9% more Melbourne properties sold in 2019 compared to 2018.
- The latest Australian Bureau of Statistics figures show that Victoria had the highest annual population growth of any Australian city (2.1%).
- CoreLogic research reveals that Brisbane is currently one of the most affordable property markets in Australia, with average home prices just 55% of average Sydney prices, and average Brisbane household incomes only being 12% lower than average Sydney incomes.
- Major infrastructure projects currently underway in Brisbane include the Queen’s Wharf redevelopment, The Howard Smith Wharves development, building the Cross River Rail Network, and constructing a second airport runway.
- 6.5% fewer properties sold in Brisbane in 2019 compared to 2018, according to the latest CoreLogic figures, despite market prices being relatively flat year-on-year.
- Perth property prices have been in a slump since the market last peaked in mid-2014. Current prices are 21% off that level according to CoreLogic.
- However, despite the ongoing price slump, CoreLogic data also reveals that the average selling time for a home in Perth has dropped from 57 days to 42 days over the last year. 6% more Perth properties also sold during that 12-month period.
- According to the Real Estate Institute of Western Australia, Perth’s top suburbs for investors are currently Medina, Armadale and Parmelia. These three suburbs are currently experiencing the highest rental returns in Perth and the average time to find tenants is far less than the city’s average of 28 days.
- Average home prices in Canberra have reached a new peak according to Core Logic, with prices having risen by 3.1% over the past year. The average selling time for a home has dropped from 45 days to 35 days over the same period.
- The CoreLogic data further reveals that 5.7% more properties sold in Canberra over the last year than in the previous 12 months.
- Major infrastructure projects currently underway in Canberra include the Northbourne Avenue Corridor development, the Canberra Hospital expansion and Stage 1 of the Canberra Light Rail Network.
- The latest CoreLogic data revels that the Adelaide property market has been relatively flat over the past year on three key metrics: average home prices, the average number of properties sold, and the average number of days to sell a property.
- However, according to the Real Estate Institute of South Australia, suburbs that have bucked the flat price trend and seen the highest increases over the last 12 months are Gulfview Heights, Norwood and Torrensville.
- Major long-term infrastructure projects that could encourage employment and population growth in Adelaide include the Future Submarine Program and the proposed Whyalla Steelworks expansion.
- The Darwin property market has been in a slump since 2010, with average prices having dropped by 31% since then according to the latest CoreLogic data.
- The CoreLogic research further reveals that the average selling time of a Darwin home (69 days) is the highest of any Australian capital city. Darwin vendors are currently discounting their list prices by 7.6% to make a sale.
- The Northern Territory economy is currently the worst-performing in the nation according to the latest CommSec.’ State of the States’ report. The property market is unlikely to improve significantly unless the economy improves.
You can also view the 2 page visual report here: