Weekly Market Update (10 May 2024)

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Weekly Market Update (10 May 2024)
  1. Brisbane’s Housing Market (Source: API Magazine)

    The upcoming 2032 Olympic Games in Brisbane have led to significant infrastructure spending, boosting the city’s property market prospects. Brisbane is predicted to experience strong property price growth in 2024, driven by increased demand from southern buyers and infrastructure projects related to the Olympics. The city’s low vacancy rates and rising rents make it appealing for investors. Additionally, regional Queensland is expected to see a positive impact on property prices, particularly in major centers like the Gold Coast, Gladstone, Townsville, Cairns, Rockhampton, and Toowoomba. The overall outlook for property investment in Brisbane and regional Queensland is highly promising for the year 2024.


  1. Home Price Index (Source: PropTrack)

    The PropTrack Home Price Index report for April 2024 indicates that national home prices have continued to rise for 16 consecutive months, reaching a new record in April. Factors such as strong population growth, tight rental markets, low unemployment, and home equity gains are driving housing demand. However, the supply side of the housing market has not kept up with the demand, leading to a shortage in housing supply. Despite a higher interest rate environment and affordability constraints, home prices continue to increase. Key findings include stronger performance in smaller capitals like Perth and Adelaide, with regional areas also experiencing growth. Unit prices have shown strong growth, and regional markets in Queensland, South Australia, and Western Australia have performed well. The report expects home prices to continue rising due to housing demand buoyed by population growth, tight rental markets, and stable interest rates, despite concerns about the economic outlook. The supply shortage is expected to offset the impact of higher interest rates and affordability constraints, fueling further price rises.


  1. Residential Building Approvals (Source: SPI)

    The Australian Bureau of Statistics reports a 1.9% increase in dwelling approvals in March, with a 3.8% rise in house approvals but a 16.8% drop in multi-dwelling builds over the year. However, Master Builders Australia is concerned as only 161,500 new homes were approved in the past year, falling short of the 240,000 target under the National Housing Accord. They attribute this to challenges such as tradie shortages, delays, regulatory issues, and cost inflation. The organization urges the government to address these issues in the upcoming federal budget to make home building more feasible.


  1. Rental Market (Source: CoreLogic)

    The rental market in Australia saw a 0.8% increase in April, although at a lower rate than previous months. Rental demand remains high due to a trend of smaller households and limited supply. Most major cities experienced a rise in rents, with Perth leading at 3.9%, while Darwin recorded a slight decrease. Despite an increase in rental yields, investors with high leverage may face negative cash flow. The trend of high rental growth is likely to continue, but the peak in overseas migration may gradually ease rental demand.



  1. Rent Growth (Source: CoreLogic)

    The Australian rental market has seen a new record high in median weekly rent at $627, with annual rent growth accelerating to 8.5%. Analysis shows that markets within 30-40km of city centers experienced the strongest reacceleration in rent growth. While some areas have rents below their peak, overall, rent increases are widespread. Factors such as supply and demand pressures, overseas migration, and household formation are driving the rental market. The outlook suggests a potential moderation in rental market pressure from a decrease in net overseas migration in the near future.


  1. Cash Rate (Source: RBA)

    The Reserve Bank Board has decided to keep the cash rate target and interest rate paid on Exchange Settlement balances unchanged at 4.35% and 4.25% respectively. Inflation is still high and declining more slowly than expected, with excess demand in the economy and strong domestic cost pressures. The economic outlook is uncertain, with the expectation that inflation will return to the target range of 2-3% in the second half of 2025, and to the midpoint in 2026. The persistence of services inflation is a key uncertainty, and returning inflation to target is the Board’s highest priority. The path of interest rates to ensure inflation returns to target remains uncertain, and the Board will rely upon data and evolving assessment of risks.


  1. Total Property Listings (Source: SQM Research)

    In April 2024, national residential property listings decreased by 6.4%, with new listings falling by 15.7%. Distressed property listings also decreased slightly. However, asking prices for Sydney and Melbourne dropped, indicating vendor caution. Despite a 0.5% national increase in asking prices, the market may see price falls in major cities in the second half of 2024. SQM Research expects caution to build over the winter months, partly due to the realization that an interest rate cut is not imminent. Overall, the property market is returning to normal levels after years of shortage.


  1. Australia’s Rental Market (Source: API Mazagine)

    The rental market in Australia is facing significant challenges, with rent prices hitting record highs and a chronic lack of rental properties. The surge in demand for housing is driven by population growth, particularly from net migration, and a shortage of new construction. High income earners are increasingly entering the rental market, squeezing out lower income earners. The situation is exacerbated in outer suburban areas, where rent growth is accelerating rapidly. The government’s target to build 1.2 million new homes in the next five years seems unlikely to ease the crisis. The upcoming elections are expected to be heavily influenced by the housing issue, and potential solutions include increasing public housing stock and improving land use and planning systems. Overall, the rental market is facing a tough road ahead, with no quick fix in sight.


  1. Rate Hikes (Source: Tim Lawless)

    The Australian property market has shown a mix of resilience and decline in different cities, suburbs, and regions over the past two years. Despite a relatively small overall increase in home values, there has been significant variation across different areas. Some cities, like Perth, have experienced substantial growth, while others, like Hobart and Melbourne, have seen declines. Capital city suburbs have generally performed better than regional areas, with high demand and supply constraints driving resilience in some locations. Factors such as interest rate hikes, affordability constraints, and demographic trends have influenced the market’s performance. Overall, the property market has shown diverse trends, with some areas experiencing growth while others have faced declines in home values.


  1. Granny Flats (Source: Newsdesk)

    The cost of retirement living in Australia is becoming too high for many older Australians, leading them to seek alternative options such as moving into granny flats in their family’s backyard. Demand for affordable granny flats has increased significantly, with many seeing it as a more flexible and cost-effective housing option compared to retirement villages. This trend is also fueled by the desire to live closer to family, concerns about safety and health, and the ability to provide childcare. Granny flats are seen as a way to maintain independence while being in close proximity to family, offering a more affordable and valuable living solution.


  1. CoreLogic Auction Results (Week ending 5 May 2024)
    (Total Auction / Clearance Rate)

    – Sydney: 755 / 69.1%

    – Melbourne: 1,057 / 63.8%

    – Brisbane: 165 / 61.2%

    – Perth: 10 / 55.6%

    – Canberra: 81 / 48.1%

    – Adelaide: 133 / 82.7%

    – Tasmania: 1 / 0%

    – Combined Capitals: 2,202 / 65.9%


If you’re interested in staying updated on the Australian housing market, feel free to reach out to us. You can also follow our Facebook page and Instagram for regular updates on new listings, market trends, statistics, and insightful information.

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