Weekly Market Update (8 March 2024)

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Weekly Market Update (8 March 2024)
  1. CBA forecast (Source: Yahoo Finance AU)

    National home prices hit a new record high in February 2024, with the fastest annual rise since July 2022, driven by factors such as population growth, tight rental markets, and resilient labor market conditions. Despite the increase in new listings hitting the market, buyer demand has kept up, resulting in a sellers’ market with home prices continuing to rise at a fast pace in 2024. The unit market has started 2024 on a stronger footing, with unit prices nationally up 1.26% year to date compared with house price growth of 0.73%, indicating a relative value in the apartment market due to strong demand for inner-city living post-pandemic.

 

  1. Sunshine State’s Property Market (Source: Newsdesk)

    The December 2023 quarter saw Queensland’s property prices hitting new records, with median house prices rising by 3.88 percent and median unit prices increasing by 3.4 percent. Brisbane, Ipswich, and the Gold Coast experienced significant growth in house prices, with regional areas also showing strong performance. However, the CEO of REIQ noted challenges such as supply shortages and lack of housing diversity, especially for first-time buyers. The market saw high volumes of house sales in Brisbane, the Gold Coast, and Moreton Bay, while the unit market also showed vibrancy. Homeowners welcome the increase in property values, but prospective buyers face more challenges.

 

  1. Coastal Office Markets (Source: Newsdesk)

    The coastal regions of the Gold Coast and Sunshine Coast have seen a significant increase in demand for office spaces due to population shifts and business growth, leading to a reduction in office vacancies. In contrast, New South Wales coastal CBDs like Newcastle and Wollongong have faced challenges such as supply issues, demographic uncertainties, and divergent business trends, leading to higher office vacancy rates. Despite some fluctuations, the demand for high-quality office spaces and business expansion suggests a growing local economy in these coastal regions, leading to optimism for future growth.

 

  1. National Vacancy Rates (Source: Domain)

    The vacancy rate in Australia has reached a new record low of 0.7%, indicating high demand for rental properties. However, there has been a slight decrease in tenant competition, with fewer average views per rental listing in February compared to previous years. This easing demand may signal a potential rise in vacancy rates later in the year. Factors such as rapid population growth, a slow construction sector, and rising property prices are contributing to the low vacancy rate. Despite this, the rental crisis is expected to persist, with rents projected to continue increasing strongly until 2024. Additionally, various factors such as first-home incentives and the possibility of interest rate cuts may further impact the rental market. The vacancy rates vary across different cities, with Sydney, Melbourne, and Brisbane experiencing declines, while Perth and Adelaide remain highly competitive for tenants.

 

  1. Regional Market Update (Source: CoreLogic)

    The property values in Australia’s regional areas are outperforming those in the capital cities, despite challenges like affordability and reduced borrowing capacity. Recent growth in regional housing values has been driven by a slowdown in capital city growth rates. Coastal towns in Western Australia and Queensland have seen the highest increases in dwelling values, driven by diverse economic bases and positive interstate migration. However, Tasmania and some parts of Victoria and New South Wales have experienced declines due to affordability constraints and migration trends. Regional rental markets have seen an increase, especially in mining regions, while the outlook for regional housing markets in 2024 will depend on demographic trends, migration patterns, and local economic drivers.

 

  1. Building Approvals (Source: Newsdesk)

    The Housing Industry Association (HIA) reported a continued decrease in building approvals into 2024, with a 1.0% drop in January. This decline has been linked to the rise in the cash rate, impacting all jurisdictions. Notably, detached home building approvals fell by 9.6% in January, while multi-unit approvals increased by 14.5%. Western Australia saw a surge in approvals, whereas Tasmania experienced the largest decline. The slowdown in building approvals has led to a decrease in home constructions throughout 2023.

 

  1. CoreLogic Auction Results (Week ending 3 Mar 2024)
    (Total Auction / Clearance Rate)

    – Sydney: 898 / 73.5%

    – Melbourne: 1,352 / 65%

    – Brisbane: 149 / 59.7%

    – Perth: 6 / 66.7%

    – Canberra: 113 / 53.6%

    – Adelaide: 145 / 73.1%

    – Tasmania: 2 / 0%

    – Combined Capitals: 2,665 / 67.5%

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