As we enter March, the supercharged real estate market sees prices continuing to surge in regional centres and major cities.
Record low volumes in all major centres, low-interest rates and wages growth, falling unemployment and growing confidence have led to the perfect-real-estate-storm.
Regional prices nationally have risen by 6.5 per cent. After an initial downturn, all capital cities are bouncing back, resulting in record-high prices since January.
Many would-be buyers now realise that renting may be their only option, and, as investors prefer to put their money into property instead of the bank, the boom is expected to continue.
Market forecasts are for house prices to increase between 5 and 10 per cent on average for each of the next two years.
CBDs were rendered virtual ghost towns following the Covid-19 outbreak in 2020, and commercial real estate suffered.
Occupancy rates and rental income dropped, with many businesses abandoning premises and leases favouring work-from-home arrangements for their staff.
Now, as life returns to a new-normal, city centres are evolving, incorporating smaller, dynamic businesses prepared to take advantage of failing commercial rents and prime office space.
PwC reports that 12 per cent of national economic activity comes from CBDs and expects to see locations bounce-back in 2021.
Sydney Real Estate Market
- According to Domain, homes in Sydney are selling, on average, 36 days after being listed. That’s the best sell rate in 8 years. Westpac’s MI Consumer House Price Report shows an increase in house prices of 1.1 per cent in December and January, with prices increasing a further 1.6 per cent in February.
- The Westpac Housing Pulse Report also suggests that units are still underperforming particularly, in inner-city suburbs such as Ryde and Parramatta. However, outer-Sydney areas, including the Northern Beaches and the Central Coast, were rebounding strongly.
- Investors looking to capitalise on their investment should consider buying in regional areas. While Core Logic data shows 48 per cent of regional NSW reported record median property prices in January and February, rents in those areas have also increased between 7 and 40 per cent. Rent increases have been primarily driven by the less than 1 per cent rental vacancy rates in those areas due to the continuing number of ‘tree changers’ leaving Sydney.
- Domain reports the cheapest suburbs to buy within a 10km radius of Sydney are Arncliffe, Tempe and Botany.
Melbourne Real Estate Market
- The Melbourne market is starting to recover from 2020 losses with 1.5 per cent gains over the last three months. Senior economist for Westpac, Matthew Hassan predicts a similar growth in this quarter and predicts an 8 per cent increase over the remainder of the year, followed by a further 10 per cent increase in 2022. “Melbourne’s inner and inner east regions are still considerably weaker than the rest,” Hassan says. “In contrast, the Mornington Peninsula and regional areas are powering ahead”.
- The number of days it takes to sell a house in Melbourne rose to 71 days, a change of only one day from 2020. Domain reports that units are taking an additional nine days to sell now and recording an average of 94 days from listing. The increase is due to the lack of international students who would typically be in inner-city units and little interest from prospective investors.
- Domain reports the cheapest suburbs to buy within a 10km radius of Melbourne are Maidstone, West Footscray and Footscray.
Brisbane Real Estate Market
- The Brisbane property market is finally looking up with the ‘perfect real-estate storm’ catapulting the typically slow-moving market into a once-in-a-decade-boom. Core Logic reports that since bottoming out in June 2019, Brisbane property values are up 3.2 per cent over the last year. Experts predict that the current boom could fuel a further 10 per cent increase in house prices in 2021.
- Realestate.com predicts the suburbs to watch over the next month are Keperra, Chermside West, Cannon Hill and Ashgrove. Brisbane houses in good school catchment zones and those within 5-7km of the CBD have grown strongly in value in recent months and are still worth watching. Domain adds Tingalpa and Salisbury to that list.
- Apartments in high rise towers and new and off-the-plan apartment are now in the worst-performing segments of the local market; buyers preferring secure a house before any further increases.
Perth Real Estate Market
- The market is heating up in Perth. Stock is low, and demand is high. Some homes have hundreds of people lining up to view them, while other homes are selling sight unseen. Prices are starting to increase, but there are still bargains to be found in WA’s capital. Perth’s most affordable homes, all selling for under $350K, can be located in Victoria Park, Gosnells, Scarborough, Port Kennedy, Beechboro, Maddington and Falcon.
- Domain reports the cheapest suburbs to buy within a 10km radius of Perth CBD are Westminster, Nollamara and Redcliffe.
- Perth rents continue to soar, with new data from the Domain Rent Report showing that rents are now at the highest asking price in five years. Recording the nation’s strongest annual growth, rents for houses have risen 13.5 per cent and units 12.9 per cent. The vacancy rate continues to decline and is currently 0.9 per cent.
Canberra Real Estate Market
- According to the Domain House Price Report, median house prices are up 9.1 per cent, a new record high. Prices are expected to increase but look to Conder and Gungahlin for bargains. At the same time, properties in Latham and Fadden continue to set records.
- A new multi-unit development, The Melrose, is coming to Woden and will offer 184 apartments for sale. Expected to be completed by 2024, the development, close to transport and amenities, is one to watch.
Adelaide Real Estate Market
- Adelaide’s housing market has long been considered an affordable option, particularly when compared with Melbourne and Sydney. However, local and interstate buyers now find themselves in a competitive market as volumes remain low and prices hit new record-highs. In recent months local buyers are losing out to investors and interstate buyers. The SA Real Estate institute reports that the median house price is now $510,000, and dozens of properties in various suburbs exceed that price at sale.
- Realestate.com says that buyers are now looking to outlying areas such as Mount Gambier, Morphett Vale, Murray Bridge and Port Lincoln as inner-city supply dwindles. The most popular suburbs for unit sales are Glenelg, Morphett Vale, and Mawson Lakes. Local agents report that travel time from the city is becoming irrelevant as more people work from home.
Darwin Real Estate Market
- Core Logic’s Property Pulse Report revealed that Darwin house prices had increased by 8.3 per cent compared to their value in March 2020. Real Estate of NT CEO Quentin Kilian says that prospective buyers are becoming frustrated at the lack of supply. However, he insists that Darwin is still the “jewel in the crown” when buying real estate in Australia.
- Fifty-nine new homes have been proposed for the next stage of the Zuccoli expansion, a suburb only 23 minutes from the Darwin CBD. The development will include a local park and a greenbelt network.
For a 2-page graphic summary of the markets click here…