As we enter May the Real Estate market in every state capital continues to surge.
A combination of increased consumer confidence, record low-interest rates, low stock rates and the all-consuming fear of missing out has sent buyers into a frenzy. Buyers want to stake their claim in a market that to date has shown no signs of slowing.
CoreLogic has just released a report indicating that during the March quarter, the Australian property market grew at the fastest rate in thirty-three years.
However, Head of Research, Tim Lawless, predicts that “the pace of capital gain will gradually taper over the coming months.
There has been a marked lift in new listings coming to the market relative to prior years”, he said. As more vendors take advantage of the strong selling conditions, Mr Lawless suggests that there will be a “rebalancing between buyer and sellers”. In addition, there are fewer government-stimulus measures now available, as well as affordability constraints.
Despite this prediction, most experts and economists from all major banks suggest that housing values will continue to rise through 2021 and into 2022, although not at the same unsustainable growth rate.
CoreLogic also released their Rental Review for the March 2021 quarter this week. It showed an increase in rental rates of 3.2% on average, with Darwin and Perth driving much of this increase.
Sydney Real Estate
- The median unit price in Sydney is now 66 per cent lower than the median house price. Domain’s Nicola Powell suggests this is due to weaker investor activity over the last year. However, desperate buyers looking to get a foot in the door are now turning to off-the-plan units as an alternative to buying a house. Developers are taking advantage of this trend; the better end of the unit market is now picking up as a result.
- The last month has seen many housing price records fall in Sydney. However, there are still pockets where buyers and investors can find a bargain. Outer suburbs such as Gorokan, Charmhaven, and Budgewoi have median prices under $436,000. Closer to the CBD, Campbelltown, Fairfield, Liverpool, and some areas of Blacktown were still within reach for bargain hunters and first home buyers.
- Long term rentals are now in short supply due to landlords opting to move into their holiday homes or investment properties. Domain reports that the postcodes in Sydney with the best long-term rental potential are Belfield, Bossley Park, Glenwood and Arcadia. On the flip-side, Ultimo, Austral, Chippendale and North Ryde are the Sydney regions with the shortest tenancies.
Melbourne Real Estate
- According to Domain, Melbourne apartment owners and investors are selling units at losses of up to 40 per cent. Many apartments in the CBD and surrounding suburbs are still sitting empty after nine months, with owners who can’t find renters being forced to sell. Look for bargains in Carlton, Essendon and the inner-city. While Box Hill, Hampton and Brighton have had the most significant quarterly median increase.
- Realestate.com reports that a trend towards unusual bids, using “lucky numbers and theatrics,” was seen at Melbourne auctions where houses were selling for well over reserve during April. Glen Waverley, Parkdale and Croydon, saw record ‘early clearance’ rates of 82 per cent.
- The State Revenue Office of Victoria reported this week that a record number of first-home buyers aged 40-plus had entered the Melbourne housing market in the last 12 months. They account for 13 per cent of all first-home buyers, with most taking advantage of the Covid-stimulus measures to get their foot in the door.
Brisbane Real Estate
- After a rebound in sales and listings over recent months, Brisbane’s housing market remains unchanged by closed international borders. In fact, after 12 months of growth, prices are now reaching record highs due to interstate migration. ANZ economists have forecast a further 9.5 per cent growth in 2021.
- Local agents are recommending the following suburbs as areas where potential bargain buys are still on offer. These include Springwood, Geebung, Samford Village and Oxley.
- Domain’s Rent Report for the March quarter reveals the Gold Coast and Sunshine Coast are now two of the most expensive areas to live in the country. Rents in Brisbane also increased and are now on average $500 per week.
Perth Real Estate
- Perth rentals have risen for three consecutive quarters, with increases now at the fastest rate since 2013. While tenants are still paying below the market peak, the gap is rapidly closing. With additional employment opportunities in the mining and resources sector due to overseas demand for resources, rents should continue to rise over the next three months. However, with several new builds being completed in the second half of 2021, Domain’s Dr Powell believes the trend towards increasing rent will slow.
- Realestate.com reports that Perth’s premium property market is going from strength to strength. South Perth, Cottesloe, and Swanbourne all recorded record prices.
- Increased employment opportunities and ex-pats returning to live in Perth have also seen the housing market continue to flourish. Churchlands, Floreat, Wembley Downs and Doubleview, are all suburbs to watch, according to local real estate experts.
Canberra Real Estate
- Village Building Company CEO Travis Doherty has postponed a planned 30-block land release at South Jerrabomberra after being overwhelmed with enquiries from potential buyers. Initially set for release on 1 May, a new sale date is yet to be announced.
- Despite the Anzac Day long weekend, house hunters were out in force over the last weekend in April. According to Domain, thousands are flocking to auctions with properties selling in minutes and at record prices. Suburbs to watch this month are Giralang and Gilmore.
Adelaide Real Estate
- CoreLogic reports that house prices in Adelaide have soared more than 20 per cent over the past year. However, there are still affordable suburbs on offer. Experts believe Peterhead, Salisbury Park, Smithfield Plans and Hendon will see the best growth potential in the next twelve months.
- Auctions are now proving one of the best ways to sell property in Adelaide. Traditionally a city that saw very few auctions, Realestate.com reports that Adelaide now has the third-highest clearance rate in the country with record numbers of bidders at auctions.
Darwin Real Estate
- Energy giant Santos has just approved a significant offshore gas development 300 km north of Darwin. Experts predict a real estate boom in the NT capital similar to the increase in development a decade ago when INPEX’s Ichthys project commenced. With more than 600 new employment positions on offer, the property market can expect a conservative 20 per cent increase.
- The Darwin rental market leads the way in the CoreLogic March quarter Rent Report, with house rents increasing by 8.2 per cent and unit rents increasing by 7 per cent.