Weekly Market Update (31 May 2024)

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Weekly Market Update (31 May 2024)
  1. International Homeseekers Update (Source: PropTrack)

    The Australia 108 tower in Melbourne is attracting significant interest from international homebuyers and tenants, making Victoria the second-most popular state for overseas buyers. Offshore demand for rentals is 32% higher than usual, with strong interest from the UK, New Zealand, and China. However, there has been a 2.3% decrease compared to last year, and potential changes to student visa rules could further impact overseas rental searches. Melbourne’s CBD and Richmond are top choices for international tenants, while the West Side Place development is the most searched in the country from abroad. Victoria, Queensland, and NSW have consistently been the top spots for international buyers and renters, with strong interest in the city center and Brighton for property purchases.


  1. Prime Global Cities Index (Source: Knight Frank)

    The Prime Global Cities Index for Q1 2024 ranked Sydney as the city with the highest rental growth in luxury properties, with a 17.3% increase over the previous year. This growth outpaced other global cities, attributed to strong internal migration trends and a shortage of available properties. While some global markets are experiencing a slowdown in rental growth, the overall expectation is for growth to resume later in the year due to sustained demand in key cities.


  1. Regional Market Update (Source: CoreLogic)

    – Regional home values reached a new record high in April, with the fastest growth in almost two years.

    – 19 out of 50 non-capital city Significant Urban Areas (SUAs) are at a record high.

    – Western Australia has some of the best-performing regional markets, driven by diverse economic activity and interstate migration.

    – The worst-performing regional markets were in Victoria and NSW, with Ballarat and Port Macquarie down -2.0% over the past three months.

    – Rents across the regions are also at a record high, with annual rental growth continuing to accelerate.

    – Housing affordability has deteriorated, and the future outlook for regional housing markets depends on demographic trends, housing supply, economic drivers, and the outlook for interest rates.


  1. Government Blamed for Housing Crisis (Source: PIPA)

    The Property Investment Professionals of Australia (PIPA) accuse governments of using private investors as scapegoats for underinvestment in social housing, while collecting billions in property taxes annually. There are 175,000 households on waiting lists for public housing in Australia, with a third of those seeking assistance being turned away. Despite a 33% population increase in the past two decades, the social housing stock has barely changed. Governments have invested only 1.4% of total revenue into housing and community amenities, while property tax collection has increased by 73% over the past decade. Some major state governments have been selling off social housing stock for profit, exacerbating the housing crisis. The lack of investment in social housing is criticized, with over 640,000 families in Australia having unmet housing needs or living in unsuitable housing due to cost pressures, and this number is expected to rise to 940,000 households by 2041.


  1. Renters (Source: REIA)

    The Real Estate Institute of Australia (REIA) reported that despite a recent 10% increase in Commonwealth Rent Assistance (CRA), renters are still struggling to keep up with rising market rents. The proportion of rent covered by CRA has declined over the past two decades, and the REIA is advocating for the payment to be pegged to market rental rates at 25%. They believe that higher CRA payments could benefit eligible families and individuals, lower the Consumer Price Index (CPI), and potentially prompt a supply response from builders to address the housing demand-supply imbalance.


  1. Rental Market (Source: Mike Mortlock)

    The rental market in Victoria is facing significant challenges, with a net loss of 5,044 rental properties over the last three months and a downward trend in investor loans, making it harder for tenants to find affordable housing. It is crucial to avoid blaming landlords and focus on constructive solutions to address this crisis. In contrast, the Sydney rental market is relatively stable, while Queensland is experiencing a positive trend in replenishing rental stock, with an estimated net gain of 8,600 rental properties over the next 12 months.


  1. Inflation (Source: ABS)

    The Consumer Price Index (CPI) rose by 3.6% in the 12 months to April 2024, with significant contributions from housing, food, alcohol and tobacco, and transport. Excluding volatile items, the annual rise was steady at 4.1%. Housing and electricity prices saw notable increases, while food prices rose due to unfavorable weather conditions affecting fruit and vegetable supply. Rents increased due to a tight rental market, and new dwelling prices rose due to higher labor and material costs.


  1. National Housing Market (Source: Dr. Andrew Wilson)

    The national housing market has seen steady price growth, with the median house price increasing by 0.3% over the May quarter compared to April. Unit prices also increased by 0.8% over the same period. Most capital cities reported higher house prices, with Perth, Brisbane, and Adelaide leading the way. The late autumn selling season was vibrant, and the market is expected to continue to grow, especially in Sydney and Melbourne. Economic factors such as low jobless rates and migration continue to support the housing market. Overall, the housing market is expected to remain positive, although growth rates may not match those of the previous year.


  1. Rental Market (Source: PropTrack)

    The rental market in Australia is under significant pressure, with rental prices rising sharply and affordable options becoming scarce. The surge in rents since the pandemic has led to a record low availability of rentals priced under $400/week, forcing many renters, especially lower-income households, to spend a large portion of their income on rent. The tight market conditions have also led to compromises by renters and increased financial stress, particularly for those on lower incomes. The demand for rental properties remains high, fueled by strong population growth and limited housing supply. While the pace of rent increases is expected to ease, there is a clear need for more affordable and available rentals, especially for low-income households, to prevent homelessness and address the crisis in the rental market.


  1. CoreLogic Auction Results (Week ending 26 May 2024)
    (Total Auction / Clearance Rate)

    – Sydney: 767 / 67.3%

    – Melbourne: 1,087 / 61%

    – Brisbane: 151 / 63.6%

    – Perth: 9 / 33.3%

    – Canberra: 89 / 47.2%

    – Adelaide: 157 / 74.7%

    – Tasmania: 4 / 50%

    – Combined Capitals: 2,264 / 63.6%


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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