Weekly Market Update (22 Dec 2023)

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Weekly Market Update (22 Dec 2023)
  1. What will 2024 bring to the Australian property market? (Source: Brett Warren)

    The Australian property market in 2023 defied expectations as house prices continued to rise despite rising interest rates and economic uncertainty. Factors such as housing undersupply, population growth, and migration contributed to the surge in prices. Looking ahead to 2024, the property market presents a complex and uncertain picture, with population growth and supply challenges likely to maintain upward pressure on prices. However, affordability issues and a potential rise in unemployment could exert downward pressure. Key trends to watch include market stimulus, urban dynamics, and changing attitudes towards urban densification. Understanding these dynamics is crucial for navigating the Australian property market.

 

  1. Australia’s population (Source: Robert Chandra)

    Australia’s population has experienced a significant increase, growing by 2.4% in the past year, reaching a total of 26.6 million people. This growth is attributed to a record influx of foreign students, workers, and permanent settlers. Net overseas migration added over 500,000 people, a 150% increase from the previous year. The increase in population is expected to create a housing shortage in the coming years, as the construction of new dwellings is declining. Western Australia had the fastest population growth, followed by Victoria and Queensland. There has been a return to living in capital cities, and the migration from Victoria has ceased. Queensland and Western Australia attracted the most net interstate migrants.

 

  1. ShapingSEQ 2023 (Source: Queensland Government)

    The Queensland government has released a regional plan for South-East Queensland (SEQ) called ShapingSEQ 2023. The plan aims to accommodate 2 million new residents in the area by 2046 by providing almost 900,000 new homes and 1 million additional jobs. The government plans to balance housing supply with environmental protection, affordability, and lifestyle considerations. The plan includes a commitment to 20% social and affordable housing, as well as diverse housing types in each local government area. Higher-density dwellings will be located near infrastructure and public transport, and new greenfield areas have been identified for future growth. The government also intends to provide work opportunities close to residential areas and protect the natural environment. The plan includes infrastructure projects and initiatives to support growth and implementation.

    https://planning.statedevelopment.qld.gov.au/planning-framework/plan-making/regional-planning/south-east-queensland-regional-plan

 

  1. Pain & Gain Report (Source: CoreLogic)

    According to CoreLogic’s Pain & Gain report for the September quarter, profitability from property resales in Australia increased, with 93.5% of resales recording a gain. The median gross profit from resales was $298,000, and the total nominal profits amounted to $27.4 billion. However, short-term loss-making resales also increased, rising to 6.6%. Adelaide was the most profitable city, with only 1.5% of resales making a loss. Houses had a higher profitability rate than units, but the gap between the two narrowed. The rise in short-term resales may be due to the fast rate hiking cycle and the increase in scheduled mortgage payments. The RBA predicts a rise in unemployment, which may lead to more motivated selling. However, ongoing increases in home values are expected to contain the rate of loss-making resales.

 

  1. CoreLogic Auction Results (Week ending 17 Dec 2023)
    (Total Auction / Clearance Rate)

    – Sydney: 958 / 65.5%

    – Melbourne: 1,401 / 66.9%

    – Brisbane: 186 / 56.3%

    – Perth: 27 / 77.8%

    – Canberra: 143 / 65.9%

    – Adelaide: 199 / 81.7%

    – Tasmania: 4 / 75%

    – Combined Capitals: 2,918 / 66.8%

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