- National vacancy rates (Source: SQM Research)
The residential dwelling vacancy rate has declined to 1.0%, a significant drop from the previous month, indicating a continuation of the rental crisis. Major cities like Sydney, Melbourne, and Brisbane have seen sharp declines in rental vacancies. Rental prices have also increased across most capital cities, with Sydney, Melbourne, and Perth seeing the most significant rises. However, Darwin and Hobart experienced rental declines. The Managing Director of SQM Research, Louis Christopher, expresses concern over the sharp drop in rental vacancies, suggesting it might not be a one-off occurrence. He also raises questions about potential surges in migration levels contributing to this trend.
- Queensland’s building industry (Source: Smart Property Investment)
Queensland’s building industry is undergoing regulation changes to reduce red tape and costs, with a focus on removing unnecessary paperwork and financial reporting requirements. The new regulation, Building Reg Reno, aims to boost productivity and ease the housing crisis by pausing the trust account rollout for projects below $10 million and reviewing the construction industry. The Productivity Commission will also assess ways to further reduce red tape and increase productivity. The changes are expected to benefit 50,000 small operators and improve Queensland’s standing as a building hub in Australia. The number of home building approvals in Queensland increased by 7.4% in 2024, but the country still fell short of its annual housing target.
- Australia’s construction industry (Source: Property Buzz)
Australia’s construction industry is experiencing severe skills shortages, with the housing sector in particular needing an additional 83,000 tradespeople to meet government housing targets. The Housing Industry Association’s Trades Availability Index showed only slight improvement in the December quarter 2024, with the worst shortages reported in Perth, Brisbane, and Adelaide. The shortage of skilled trades is expected to impact housing affordability and broader productivity and economic growth. The HIA has called for reforms including apprentice subsidies, pre-apprenticeship training funding, and streamlined visa programs for in-demand trades.
- Central Barangaroo development (Source: Property Buzz)
The NSW government has given approval to Aqualand for the development of the final 5-hectare piece of Sydney’s Barangaroo precinct into a mixed-use hub, generating $2.26 billion in economic activity and creating 12,360 jobs during construction. The project, which includes residential, retail, hospitality, and community spaces, will feature public spaces and parkland, with extensive consultation shaping the plans. The development is expected to begin construction in late 2025 and will deliver over $220 million in public benefits. Buildings will reach up to 10 storeys high, with most at eight storeys, and the project is forecast to generate $134.1 million in annual economic activity and provide 581 permanent jobs upon completion.
- Regional home values (Source: CoreLogic)
Regional property values have demonstrated resilience, with three-quarters of regional suburbs experiencing an increase in dwelling values over the quarter, compared to almost half of capital city suburbs reporting declines. The affordability advantage in the regions has attracted more buyers, leading to value growth shifting away from capital cities towards regional areas. The latest CoreLogic Housing Chart Pack shows that national home values held steady in January, with regional increases cancelling out capital city declines. However, vendor discounting rates have expanded, and new listings have more than doubled from seasonal lows. Rents were up 4.4% over the year to January but are expected to fall to below average levels in the first half of 2025.
- Cash rate (Source: RBA)
The Reserve Bank of Australia (RBA) cut the interest rate for the first time since November 2020, decreasing it by 0.25 percentage points to 4.1%. The decision was met with relief from mortgage borrowers, although the Australian share market remained in the red despite the rate cut. Smaller lenders also followed suit and cut their rates. The RBA’s decision was based on economic conditions and was not influenced by politics. The next RBA meeting is scheduled for March 5, 2025.
- New Soth Wales (Source: Smart Property Investment)
In early 2025, regional cities in New South Wales, including Bathurst, Dubbo, and Wagga Wagga, are experiencing significant property growth. Buyer demand, expectations of interest rate cuts, and infrastructure investments are driving this surge. Bathurst has seen a tripling of property transactions, while Dubbo and Wagga Wagga have reported a 20% increase in sales, listings, and appraisals. Investors and first-time buyers are active in these markets, with many drawn from capital cities due to affordability constraints. Infrastructure projects, such as the $4.85 billion HumeLink project, are also bolstering confidence in the property markets of these cities.
- Investor home loans (Source: Smart Property Investment)
The number and total value of new investment loans declined in the December 2024 quarter, marking the first fall since March 2023. However, the average loan size continued to grow, reaching $674,316. The value of new investment loans for the year reached $125.1 billion, a 29.8% increase from 2023. The number of new home loans approved also rose by 2.2%, with the largest increases in value occurring in Queensland, Victoria, and NSW. Investors have been active in building new homes, and owner-occupiers have gradually returned to the market.
- Co-living developments (Source: Property Buzz)
Co-living developments, which combine private apartments with shared living spaces, have gained popularity in the Australian property market. Recent sales of co-living development sites in Sydney, such as one in Marrickville for $4.85 million, demonstrate growing interest in the sector. European-style co-living models, featuring private bedrooms and shared facilities, aim to improve housing affordability by reducing costs through shared amenities. The sector is expected to continue growing due to housing affordability issues and strong demand for homes in Australia.
- Foreign investment (Source: The Independent)
The Australian government plans to ban foreign investors from buying existing homes for two years starting April 2025 to tackle soaring property prices. This is part of the Labor Party’s housing agenda, which aims to prioritize home ownership for young Australians. The ban is expected to have a minimal impact on prices, as foreign buyers make up a small percentage of the market. The tax office will receive additional funding for enforcement. Both major parties are focusing on housing affordability ahead of elections.
- 11. CoreLogic Auction Results (Week ending 16 February 2025)
(Total Auction / Clearance Rate)
– Sydney: 767 / 67.2%
– Melbourne: 815 / 63.7%
– Brisbane: 149 / 56.4%
– Perth: 8 / 62.5%
– Canberra: 57 / 57.9%
– Adelaide: 110 / 55.1%
– Tasmania: 1 / 0%
– Combined Capitals: 1,907 / 63.8%
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