Weekly Market Update (2 May 2024)

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Weekly Market Update (2 May 2024)
  1. Australian Housing Market (Source: Domain)

    The Australian housing market has seen continued growth in both house and unit prices during the first quarter of 2024, marking a fifth consecutive quarter of growth for houses and a fourth for units. Experts anticipate that prices will continue to rise due to factors such as a shortage of new homes, population growth, high construction costs, and a tight rental market. Record-breaking prices have been observed in major cities like Sydney and Perth, reflecting strong demand despite challenges like high-interest rates. Additionally, smaller capital cities like Brisbane, Adelaide, and Perth have also experienced new price records. Challenging rental conditions may lead to more first-time buyers entering the market, especially at the more affordable end. This trend is expected to impact both houses and units across various markets.


  1. Consumer Price Index (Source: ABS & REIA)

    The latest Consumer Price Index (CPI) data from the Australian Bureau of Statistics (ABS) shows that inflation in Australia has risen by 1.0% in the March 2024 quarter but has slowed to 3.6% over the past twelve months. This marks the fifth consecutive quarter of lower annual inflation. The Real Estate Institute of Australia (REIA) President, Leanne Pilkington, stated that Australia is facing similar challenges to the USA in getting inflation back into the target range. The report also highlights that the economy is slowing, with rising unemployment and a need for more patience in controlling inflation. Notable price rises include rents, secondary and tertiary education, and medical/hospital services, which emphasizes the need to address housing supply and maintain private investment.


  1. First Virtual Reality Auction (Source: realestate.com)

    The world’s first virtual reality auction just concluded with a $1.487 million sale of a converted church in Elwood, Melbourne. The auctioneer, Greg Brydon, used VR goggles during the auction, allowing the vendors to see what he saw. The winning bid came from a downsizer relocating from Sassafras. The use of VR in auctions is seen as a potential future trend in Melbourne’s real estate market, alongside the already popular live streaming of auctions. The rise of technology, including streaming and VR, has contributed to an increase in auction numbers and is changing the way auctions are conducted in the city. This innovative approach is seen as a significant milestone and is expected to continue shaping the real estate landscape in the future.


  1. Dangerously low vacancy rates persist in Qld (Source: REIQ)

    The Real Estate Institute of Queensland’s Residential Vacancy Report for the March 2024 Quarter shows that rental availability in Queensland remains critically low, with vacancy rates falling in 22 areas and stable in 10. Only one area, Mount Isa, had a “healthy” vacancy rate, while more than half of the areas reported extremely tight rental markets. The overall state vacancy rate sits at a very tight 0.9%. REIQ CEO Antonia Mercorella emphasized the need for government support in the form of social housing and rental assistance to address the housing crisis. The report also highlighted the challenges faced by renters in finding suitable properties due to the limited rental supply. Regional markets like Mackay, Rockhampton, and Bundaberg experienced exceptionally tight rental markets, while greater Brisbane had a consistent vacancy rate of 0.9%. The report also identified the tightest and highest vacancy rates across various regions in Queensland. The REIQ classified rental markets into tight, healthy, or weak categories based on vacancy rates. The media release emphasized the need for long-term solutions to improve rental supply, including support for private investors in the housing market.


  1. Trades Report (Source: HIA)

    The report by the Housing Industry Association (HIA) highlights the persistent shortage of skilled trade workers in Australia’s building industry, despite a slowdown in building activity. The shortage has led to a significant increase in trade prices. The report emphasizes the need for government reform to address the shortage, including incentivizing employer training of apprentices and allowing the industry to access skilled labor from overseas. The reforms are seen as crucial for meeting the demand for home building and to counter the fluctuations in building activity caused by government policies.


  1. April Home Prices (Source: Dr. Andrew Wilson)

    The housing market in Australia continued to rise in April, although at a slower rate than in March. The national median house price increased by 0.4% over the quarter, with strong growth seen in most capital cities, especially in Perth, Brisbane, and Adelaide. Unit prices also increased, with the highest annual growth in Perth, Brisbane, and Adelaide. However, the market’s growth rates have moderated due to seasonal factors and affordability issues. The economy remains strong, but the spectre of higher interest rates looms. High migration levels are exacerbating housing undersupply, leading to surging rents and low vacancy rates in rental markets. The trend is expected to continue into May, with incentives for first-home buyers and investors. Overall, the housing market is likely to continue its upward trend, with potential for value opportunities in Sydney and Melbourne, and continued strength in Perth, Brisbane, and Adelaide.


  1. Home Value Index (Source: CoreLogic)

    Housing values rise 0.6% in April, as low supply trumps high interest rates and inflation.

    In April, Australian home values continued to rise, with mid-sized capitals leading the growth. Perth topped the charts with a 2.0% increase, while Sydney and Melbourne showed relatively stable or slight declines. Affordability pressures are impacting growth in Brisbane, while lower value markets and units are outpacing higher value properties. Regional markets have shown stronger growth than capital cities, with regional WA leading the gains. Home sales peaked in November, and while recent sales are higher than last year, affordability and low sentiment may limit sales until interest rates decrease.


  1. CoreLogic Auction Results (Week ending 28 Apr 2024)
    (Total Auction / Clearance Rate)

    – Sydney: 667 / 71%

    – Melbourne: 893 / 62.5%

    – Brisbane: 168 / 61.9%

    – Perth: 15 / 40%

    – Canberra: 82 / 60.5%

    – Adelaide: 137 / 77.9%

    – Tasmania: 2 / 0%

    – Combined Capitals: 1,964 / 66.1%


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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