Inflation rose to 6.1 per cent – the fastest pace in more than two decades – as the RBA increased interest rates again this week to 1.85%.
Meanwhile, Treasurer, Jim Chalmers, has warned us to ‘brace for pain to escape recession’ later this year.
Despite the gloomy economic forecast, there were mixed messages in the property market last month, with auction clearance rates falling below 60 per cent for the seventh straight week but prestige properties going gangbusters.
However, for the most part, homebuyers are sitting on their hands, reluctant to buy as the triple whammy of rate hikes, rising inflation and waning consumer confidence persist.
For sellers and investors alike, higher stock volumes and a decrease in housing values have seen auction withdrawal rates increase across the country.
Winter is traditionally a slower season across all property markets, but Sydney and Melbourne’s in particular have reacted strongly to the current economic conditions.
Proptrack expects property prices in all centres to fall over the next eighteen months, with the eastern capitals set to drop the furthest.
Commercial property sales have also started to stall across the country in the last month, but it seems there’s one investment that might still be worth grabbing: the humble Aussie pub.
The value of big-ticket pubs continues to rise, with a 25 per cent increase in pub sales across the country in the last month.
Sydney Property
- As buyer demand decreases, investors in Sydney are stepping up to the plate with a report from Well Money identifying the top twenty investment-grade suburbs in NSW. St Huberts Island, Empire Bay and Woongarah in greater Sydney made the list, as did Horningsea Park.
- Sydney tenants pay the highest house rents in the country, with Domain reporting that the median weekly rental is expected to increase further by spring. In the quarter to June, house rents increased on average 3.3 per cent, with units experiencing a 5 per cent rental hike. The most significant rent increases were seen in Sydney’s Inner west, North Sydney and Hornsby.
- New figures show that the Sydney median house price recorded its steepest fall in three years, with experts forecasting further falls as the downturn spreads across the city. Sydney’s inner-west, Northern Beaches, and Hornsby regions showed the highest decline, while Ryde and Sydney’s south-west both recorded more moderate decreases of 2 per cent.
- Welfare groups have called for a ban on the ‘no pets’ policy in rental homes. As Sydney renters struggle to find pet-friendly accommodation, an increase in pet surrenders was the catalyst for the call to action.
Melbourne Property
- Melbourne’s median house prices have recorded back-to-back falls with a new median of $1,07,369, $20,000 less than its December peak. This marks the longest period of decline since the pandemic hit, and experts expect the downturn to continue well into spring.
- The Victorian housing affordability scheme in which the state pays for up to 25 per cent of a home in return for share equity has just 200 places left eight months after launch. The first-home buyer hot spots are Pakenham, Tarneit, Point Cook, Reservoir and Truganina.
- Caydon Property Group is in receivers’ hands, citing the impact of Covid lockdowns and rising interest rates as the culprits. The multi-billion dollar property group is behind several of high-profile projects.
- Auction withdrawals hit 61.1 per cent in July, with homeowners deciding to switch to a private sale process or alternately renting their property as buyer confidence wanes. With many sellers still expecting record high prices and sellers who planned to renovate deterred by interest rate hikes and the high cost of building materials and labour, days on the market have also increased across the city.
Brisbane Property
- Brisbane is one of two cities with record high real estate prices. According to Domain’s House Price Report, real estate prices rose by almost $167,000 for houses and $40,000 for units in the last quarter.
- Despite a strong June quarter, the market slowdown is expected to impact Brisbane over the next few months, with experts predicting that the market will see a 5 to 10 per cent drop by the end of 2022.
Perth Property
- According to Domain’s quarterly house price report, Perth is no longer Australia’s most affordable city to purchase a home. House prices reached a new record median of $651,956 over the quarter.
- REIWA president Damian Collins said demand for property remained high throughout the last financial year, with overall sales up 19.8 per cent across Perth. The top performing suburbs for sales growth include Dayton, North Fremantle, Orelia, Armadale and Leda. Of the ten suburbs included in the analysis by REIWA, seven had median prices well below half a million dollars.
Canberra Property
- Canberra is now the second most expensive city to buy a house or unit. Domain reports that unit prices increased a further 4.4 per cent over the last quarter while house prices increased by 1.8 per cent to a median of $1,154,535. Woden and the inner-south are the go-to locations for more affordable units.
- Investors who want to dip a toe in the Canberra property market should consider properties in Belconnen, Holt, Phillip, Gordon and Ngunnawal. According to Domain, these suburbs are the most sought after by renters.
Adelaide Property
- Rents in Adelaide have increased in some suburbs by 55 per cent year to date, with weekly rents in metropolitan Adelaide rising by 1o.3 per cents in the last quarter. Suburbs with the biggest house rental increases include Unley Park, Frewville and Glenelg South. The most considerable unit rental increases were in Port Adelaide, Millswood and Woodville South.
- Proptrack data of the most popular search terms on realestate.com.au revealed that prospective buyers in Adelaide are looking for houses that offer a guaranteed rental income suggesting that investors are driving the market in the city of churches. Homes in St Peters and Golden Grove were proving popular.
Darwin Property
- According to Domain’s quarterly house price report, Darwin has earned the title of the most affordable city to purchase a house. The median house price in Darwin is $610,278.
- With demand still high, housing approvals up, and a continued surge in people relocating to the top-end, the NT property market is looking increasingly stable. Property values are holding in Darwin as the number of new listings slowed over the last month. Outside of Darwin, Palmerston and Litchfield are gaining in popularity.
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