Weekly Market Update (7 June 2024)

Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on print
/
/
Weekly Market Update (7 June 2024)
  1. Home Price Index Update (Source: PropTrack)

    The PropTrack Home Price Index report for May 2024 reveals that national home prices reached a new peak, increasing by 0.30% and rising 2.73% year-to-date. This growth is driven by strong demand, population growth, tight rental markets, and home equity gains, despite challenges in building activity and higher costs. Capital cities have outperformed regional areas, with Perth, Adelaide, and Brisbane leading the price growth. The report forecasts further price increases due to population growth and tight market conditions. However, the pace of growth is expected to slow during the quieter winter period, particularly with interest rate cut expectations delayed to late-2025.

 

  1. Home Value Index (Source: CoreLogic)

    In May, CoreLogic’s Home Value Index showed a 0.8% rise, marking 16 months of consecutive growth, with mid-sized capitals like Perth, Adelaide, and Brisbane leading the way. The strong growth is attributed to low supply levels, especially in Perth and Adelaide. Brisbane has overtaken Canberra and Melbourne in median dwelling values, with significant increases since the onset of COVID. Sydney also saw a recovery, reaching a new high in May. However, upper quartile home values have grown at a lower rate compared to lower quartile values, reflecting a shift in demand towards more affordable properties.

 

  1. Total Property Listings (Source: SQM Research)

    In May 2024, the total number of residential property listings in Australia increased by 5.5% compared to April, reaching 252,757 properties. New listings surged by 12.4%, with notable increases in Sydney and Melbourne. However, older listings (listed for over 180 days) also increased by 6.1%, indicating a potential slowdown in the housing market. Distressed property listings decreased by 2.5%, defying expectations of a rise. Asking prices for properties rose by 1.6%, with Brisbane and Perth showing significant annual increases. Overall, the housing market appears to have returned to more normal levels, with moderate asking price growth and a balanced market outlook.

 

  1. Brisbane’s Medium Dwelling Value (Source: Orana Durney-Benson)

    The median dwelling value in Brisbane has surpassed Melbourne’s due to low supply, with house prices in Brisbane now higher than in Melbourne. Brisbane’s housing market has seen a significant increase during the pandemic, with values rising five times faster than Melbourne’s. The shortage of properties for sale in Perth and Adelaide, and a mismatch between housing supply and demand in capital cities, has contributed to upward pressure on prices. Despite affordability challenges, the housing market remains resilient across Australia, with Sydney being the most expensive city and Perth experiencing the steepest monthly growth. Darwin and Hobart saw declines in dwelling values in May.

 

  1. New Loan Approvals (Source: Orana Durney-Benson)

    Data from the Australian Bureau of Statistics (ABS) has revealed a nearly 10% increase in new loan approvals for home buyers since autumn 2023, indicating a resurgence in confidence among young buyers. Despite financial challenges, first-time home buyers are driving the market, particularly in outer Melbourne, favoring new homes with three or four bedrooms. The demand for homes under 10 years old is high, while older homes are less appealing. Despite economic challenges, the local housing market is expected to remain strong, with buyers looking to take advantage of current stability rather than waiting for potential rate hikes or price increases. The “Great Australian Dream” of home ownership is still attainable for young buyers, who are turning to outer suburbs and regional areas due to unaffordable inner-city prices.

 

  1. Housing Crisis & Construction (Source: PropTrack)

    The housing crisis in Australia is putting pressure on renters, with rents increasing by 9.1% over the past year. However, regions where more homes were built saw slower rent growth, indicating the importance of building more homes to address the crisis. While the government has committed to delivering more housing, doubts remain about meeting the demand in the near term. PropTrack emphasizes the need for more construction to lower rents and alleviate the housing crisis for renters. Academic research supports the idea that new supply lowers rents, but the current pace of home construction falls short of the target needed to address the crisis. PropTrack suggests that more measures and penalties for regions not meeting construction targets are necessary to ensure long-term rent growth remains in line with wages.

 

  1. Cost of Living (Source: CommBank)

    The latest CommBank iQ Cost of Living Insights Report indicates that Australians in their mid-to-late twenties have significantly reduced their spending, particularly on both essential and discretionary expenses. This age group has cut their consumption by more than 7% compared to the previous year, with notable reductions in health insurance, utilities, and supermarket spending. On the other hand, Australians over 65 continue to spend at rates above inflation, especially on activities like travel, general retail, and eating out. Regionally, spending in areas outside of metro locations has outpaced metro areas, with Queensland showing the most resilience in spending. In contrast, Victoria residents have cut spending on homewares and apparel and have not increased spending as much on travel, leisure, and dining out. The report also highlights the shifting spending patterns across different age groups and locations, reflecting the impact of economic factors and changing consumer behaviors.

 

  1. REIQ (Source: Newsdesk)

    The Real Estate Institute of Queensland (REIQ) has raised concerns about the worsening housing crisis in the state, citing declining building approvals, commencement, and completion rates. They highlighted the long completion times for apartments and the lack of housing diversity, particularly in the middle market. The REIQ called for both parties to present a long-term vision for Queensland housing in the upcoming State Budget, including initiatives to support home ownership and a transparent delivery plan with regular reporting. They also urged the state government to take leadership in helping people achieve home ownership, rather than relying solely on the federal Help to Buy scheme.

 

  1. Sydney’s CBD & Inner-City Rental Markets (Source: Newsdesk)

    The Sydney CBD and inner-city rental markets are experiencing a softening of rental prices due to changes in supply and demand dynamics. This is partly driven by the rising cost of living, pushing tenants towards more affordable suburbs further from the city. Landlords are advised to be strategic in their marketing and pricing to minimize vacancy periods. Tenant behavior is also changing, with applicants applying for multiple properties simultaneously, but many withdrawing interest post-agreement due to competition fears. Even premium properties are not immune to market changes, and professional property managers play a critical role in guiding landlords through these shifting market dynamics.

 

  1. CoreLogic Auction Results (Week ending 2 June 2024)
    (Total Auction / Clearance Rate)

    – Sydney: 899 / 65.9%

    – Melbourne: 1,109 / 64.3%

    – Brisbane: 141 / 63.8%

    – Perth: 11 / 81.8%

    – Canberra: 68 / 61.8%

    – Adelaide: 152 / 84.9%

    – Tasmania: NA / 0%

    – Combined Capitals: 2,380 / 66.2%

🟦🟨🟦🟨🟦🟨🟦🟨🟦🟨

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.

Leave a Reply

Your email address will not be published. Required fields are marked *

Looking For Real Estate Services?