- Mortgage arrears (Source: APRA)
The latest APRA report shows concerning trends in the property market, with non-performing home loans and mortgage arrears on the rise for the sixth consecutive quarter. The total amount of money in mortgage offset accounts has dropped, indicating that households are dipping into savings to meet living costs. Owner-occupiers are experiencing higher arrears compared to investors, possibly due to limited options for relief. Despite these challenges, the property market remains active, with an increase in low-deposit loans and a surge in refinancing activity. This presents both risks and opportunities for property investors, as the market adapts to ongoing economic uncertainty.
- Rental market (Source: CoreLogic)
The rental market in Australia has slowed down, with rents remaining flat in July and August. This is due to weakening rental demand, driven by factors such as slowing migration and affordability challenges. While rental growth has eased across the country, cities like Perth and Adelaide continue to show stronger growth, although at a slower pace. The slowdown is particularly noticeable in the unit sector. Affordability constraints, changing household formation patterns, and a reduction in overseas migration are major contributing factors. Additionally, completion of new dwellings and an increase in investor activity are also impacting rental supply.
- National median house price (Source: REIA)
The Real Estate Institute of Australia (REIA) reported that the national median house price in Australia reached $1,049,136 in the June quarter of 2024, with a 1.5% increase in house prices and a 1.1% rise in other dwelling prices. Sydney remains the most expensive city to buy a house, while Darwin is the least expensive. Additionally, the rental market saw increases, with the national median rent for three-bedroom houses rising to $611 per week. These findings indicate ongoing challenges in the Australian property market, impacting housing affordability across the country.
- National vacancy rates (Source: SQM Research)
The vacancy rates for rental properties in Australian cities remained steady at 1.3% in August 2024. Sydney and Melbourne experienced slight changes, while Canberra had the highest vacancy rate at 2.1%. Overall, the national vacancy rate has increased by 0.1% over the past year. Rental prices varied across cities, with some experiencing declines and others seeing increases. The national median weekly rent for a dwelling is now $719.80. Louis Christopher of SQM Research expects further falls in vacancies but does not anticipate a reacceleration of rents. The rental market remains in severe shortage, and annual rental increases are expected to slow down.
- New home sales (Source: HIA)
In August, new home sales in Australia remained relatively stable, with a slight decrease of 1.3% compared to the previous month. However, there was an overall increase of 4.6% in the three months leading up to August compared to the same period last year. Queensland was the top performer, with a significant 53.5% increase in new home sales, while Western Australia and Victoria saw declines. The market in New South Wales and Victoria faced challenges due to regulatory changes and high land prices. Despite these uneven results, the overall trend indicates potential growth in the national new home market, particularly outside of Sydney and Melbourne. This is driven by factors such as ongoing undersupply of homes, robust labor market conditions, and population growth.
- Pain & Gain Report (Source: CoreLogic)
The CoreLogic report for Q2 2024 analyzed approximately 91,000 dwelling resales, revealing that 94.5% of transactions recorded a nominal gain, reaching a record high median nominal gain of $285,000. Brisbane claimed the top spot as the most profitable city, while Darwin and Hobart saw an increase in loss-making sales. Houses remained more profitable than units, with a profit-making sales rate of 97.2% nationally for houses compared to 89.4% for units. The hold period for resales was 8.8 years, and the report also highlighted regional outperformance in terms of profitability. However, the housing market faces potential headwinds such as high interest rates and constrained affordability. Losses from resale totaled $282 million, with a majority of the loss-making resales being units in Sydney and Melbourne. Despite this, the outlook for unit owners looks promising in the short term.
- 7. CoreLogic Auction Results (Week ending 15 September 2024)
(Total Auction / Clearance Rate)
– Sydney: 872 / 63.2%
– Melbourne: 1,164 / 61.3%
– Brisbane: 176 / 60.6%
– Perth: 15 / 73.3%
– Canberra: 71 / 58.8%
– Adelaide: 155 / 70.8%
– Tasmania: 4 / 50%
– Combined Capitals: 2,457 / 62.5%
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