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MARKET ESSENTIALS | APRIL 2024
THIS MONTH IN REVIEW

As widely expected, the RBA decided to hold the cash rate at a 12-year high of 4.35%. And while the Big 4 Banks don’t expect a rate drop until the end of 2024, the latest CPI figures might foreshadow an earlier-than-anticipated rate cut.

For now, it seems the RBA has things under control, but the same cannot be said for the government, which has lost its grip on immigration, with the latest ABS numbers showing the highest-on-record January net migration of 55,330.

With increased migration comes a strengthened demand for centrally located living, narrowing the median rent gap between units and houses in the nation’s three major capitals of Sydney, Melbourne and Brisbane, according to the latest Suburbtrends report.

However, a recent analysis by smartpropertyinvestment.com.au says it’s not apartments but townhouses and villas driving the lift in unit rental and property prices. REIWA CEO Cath Hart says it’s because “they’re similar to houses and often come with some land”.

And while the latest ABS data shows another drop of 1% in January for total dwellings approvals, the excluding-houses approvals have increased by 19.5%, illustrating the widening gap between unit versus house approvals.

The ongoing trend in supply constraints continues to impact the rental market, with median weekly rents going up again last month, gaining 1.2% across all capitals, according to SQM Research.

AUCTION CLEARANCE RATE  
Source: APM PriceFinder
Mar 2nd
Mar 30th
SYDNEY
71%
62%
MELBOURNE
61%
62%
BRISBANE
43%
-
ADELAIDE
69%
-
MONTHLY UNEMPLOYMENT - FEB 2024  
Source: ABS (most recent figure at time of publication)
3.8%
4.5%
3.8%
4.0%
3.6%
4.2%
3.9%
4.3%
POPULATION GROWTH % (Yr to Sept 2023)   Source: ABS
WA
3.3
VIC
2.9
QLD
2.7
NSW
2.3
ACT
2.1
SA
1.7
NT
0.7
TAS
0.3
VACANCY RATE % - FEB 2024  
Source: SQM Research
CANBERRA
1.5
DARWIN
1.5
HOBART
1.2
SYDNEY
1.1
MELBOURNE
1.0
BRISBANE
0.9
ADELAIDE
0.5
PERTH
0.4

CAPITAL CITY UPDATES

SYDNEY NSW

  • The NSW Government has extended the BASIX transition period by another 3 months – until 30 September – for eligible projects.

  • The Parramatta Light Rail Stage 2 project has received the green light from NSW Planning, connecting the Parramatta CBD to Sydney Olympic Park via the expanding communities of Camellia, Rydalmere, Ermington, Melrose Park and Wentworth Point.

  • PropTrack’s data shows Sydney’s inner southwest has experienced the strongest annual growth of combined dwelling values, rising by 11%.

  • Realestate.com.au has entered Kingsford into its 2024 Hot 100 as a suburb that has it all – convenience, character and proximity to the beach and CBD – saying it’s earmarked to outperform in the year ahead.

MELBOURNE VIC

  • Melbourne has matched Hobart for the nation’s lowest weekly median house rental value, currently at $550, according to latest Government Housing data.
  • ABS’ latest figures show Victoria bears the nation’s largest percentage share of month-on-month falling house approvals, dropping by 16.7% in January.
  • According to PropTrack data, Melbourne is experiencing above decade average number of listings, giving buyers more choice but curbing the growth of dwelling values to only 0.1% in February.
  • Real Estate Institute of Victoria’s Market Insights reveal a paradox: the median price of a 2-bed home in Melbourne is over $100K more expensive than a 3-bed home, at $920K and $815K, respectively.
  • The Allan Labor Government is giving the residents of 10 established Melbourne suburbs an opportunity to have their say on its plans to build 60,000 dwellings through density housing.

BRISBANE QLD

  • Queensland’s valuer general has increased land valuations – used to calculate council rates and land tax – in Queensland’s 20 biggest council areas, with Moreton Bay up by 36% in the last 2 years.
  • Queensland is one of only two mainland states, WA being the other, with rising total dwellings approvals. According to seasonally adjusted ABS data, they are up by 31.8% for January.
  • New reforms for manufactured homes were introduced to the State Parliament, including limiting site rent increases to CPI or 3.5%.
  • The Miles Government has introduced a Bill to further strengthen renters’ rights by banning rent bidding, tying rental increases limits to the property and introducing a portable bond scheme.

PERTH WA

  • Once again, Perth has outperformed all other capitals on combined dwelling values, gaining another 1.9% in March, according to CoreLogic’s indices, which is driven almost equally by house and unit values.
  • Aimed at removing red tape, WA’s planning reforms came into effect last month. They comprise a streamlined system for lodgement and application tracking, including direct lodgement with WA Planning Commissions for larger projects and reforms to DAPs.
  • The updated planning rules will hopefully lift the lagging approval rates, with 1,490 total dwelling units approved in January, compared to the eastern states averaging 3,362 – according to latest ABS figures.

CANBERRA ACT

  • While rents in other mainland states and territories are showing strong growth, 59.6% of ACT’s suburbs have declined in value over the last 12 months by an average of 3%, according to data from CoreLogic.
  • However, according to SQM Research, Canberra’s month-on-month median weekly rents have risen by 0.5%, with units driving most of the growth, which is not a bad result considering it holds the nation’s highest vacancy rate at 1.5%.
  • The ACT Government is continuing to invest in affordable housing by supporting a 54-apartment Built-to-Rent development in Curtin to be completed by mid-to-late 2026.

ADELAIDE SA

  • The SA Government has introduced changes to the Planning and Design Code, amending the definitions of “ancillary accommodation” and “student accommodation”, allowing these types of housing to be fully self-contained.
  • Adelaide continues to offer the nation’s most affordable unit rents, with a current median weekly price tag of $457.72, according to SQM Research.
  • The Malinauskas Government has launched the Land Supply Dashboard, showing up-to-date information about the location and amount of land available for residential construction.
  • Planning rules for historical buildings and character areas have been strengthened, with hundreds of new homes added to the heritage importance list. With that, non-compliance fines have doubled, from $500K to $1M for body corporates and from $250K to $500K for individuals.

DARWIN NT

  • Darwin maintains the nation’s top spot (alongside Canberra) for vacancy rates, currently at 1.5%, according to SQM Research. Although, its month-on-month rents have dropped by 2.1%.
  • Elite Agent says house prices in Darwin are on the precipice of a major shift. The city – the nation’s leader in rental yields nearing 7% – is experiencing increased interest from investors, with several major infrastructure projects underway and a tight listings market.
  • Despite the growing interest, Darwin’s property values are yet to see a corresponding increase. According to CoreLogic, it’s the only capital where dwelling values declined in March – by 0.2%.
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AUD to USD

65 .7c

up from 64.2c in Mar

Source: RBA

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RBA Cash Rate

4.35%
Steady to mid April

Source: RBA

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Cash Rate Forecast

3.6%

12 mths to Apr 2025

Source: Westpac

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Inflation

4.1%

to Dec Qtr 2023

Source: RBA

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GDP

0.2%

to Dec Qtr 2023

Source: ABS

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Wage Growth

4.2%

yrly to Dec 2023

Source: ABS

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Consumer Confidence

-1.8%

down for Mar 2024

Source: Westpac-Melbourne Institute

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Disposable Income

1.4%

up for Dec Qtr

source:ABS

Level 3, 100 Pyrmont St. Pyrmont, NSW 2009 | P: 1300 87 99 03 | E: [email protected] | W: www.buyside.com.au

All data shown is the latest available for the issued month. Any information contained within this document should not be considered investment or financial advice. Before acting on any information please speak with a qualified investment adviser, accountant and solicitor. The information contained in this document has been obtained from various sources and other third parties and is indicative and to be used as a guide only. To the extent permitted by law, BuySide Pty Ltd and its associates will not be liable for any costs, loss or damage arising in any way from the information contained within this document, including file attachments.