Key takeaways
With property values rising and "re-accelerating" in all major capital cities according to market analysts CoreLogic, and with talk of interest rate cuts on the horizon, the Australian property market is gearing up for strong market this year.
Australia’s housing is so horribly undersupplied that I've rarely encountered a supply-demand inflection point like this.
Our combined capital cities have increased in value by 10.2% over the last year. That's very different to the pessimistic forecasts of double digit price falls made by the RBA and many of the bank economists only 12 months ago
And it's likely property prices and rents are going to keep increasing throughout 2024, albeit more slowly.
Sydney property prices remained flat over the last week but increased 0.4% over the last month and are 9.7% higher than they were 12 months ago.
Melbourne property prices increased 0.1% over the last week, increased 0.2% over the last month, and are 3.6% higher than they were 12 months ago.
Brisbane property prices increased by 0.3% over the last week, increased 0.9% over the last month and are 15.9% higher than they were 12 months ago.
Overall, Australian capital dwelling prices increased by 0.6% over the last month and are now 10.1% higher than they were 12 months ago.
This current property cycle has been driven by an undersupply of good properties relative to current demand pushing up property values and rents.
The depth of buyer appetite was again shown by this week's strong auction clearance rates despite 2,723 properties being put to auction as demand from buyers keeping up with the increased number of properties put to auction.
With property values rising and "re-accelerating" in all major capital cities according to market analysts CoreLogic, and with talk of interest rate cuts on the horizon, the Australian property market is gearing up for strong market this year.
Australia’s housing is so horribly undersupplied that I've rarely encountered a supply-demand inflection point like this.
The depth of buyer appetite was again shown by this week's strong auction clearance rates despite 3,356 properties being put to auction as demand from buyers keeping up with the increased number of properties put to auction.
Easing inflation and the prospect of an earlier-than-expected rate cut are buoying vendor hopes and buyer appetites for property.
However beneath these headline results, housing market performance remains diverse around the country.
Moving forward, demand is going to continue to outstrip supply for some time to come as we experience high levels of immigration at a time when we’re just not building anywhere as many properties as we require.
At the same time, the cost of construction of delivering new dwellings will keep increasing not only because of supply chain issues and the lack of sufficient skilled labour but also because builders and developers will only commence new projects if they are financially viable and currently new projects will need to come on line at considerably higher prices than the current market price,
It will be much the same for our rental market where the supply / demand equation is so far out of balance that we’ve experienced an unprecedented rental crisis with historically low vacancy rates and skyrocketing rents and this will continue into 2024.
On the auction front, there were 3,356 capital city homes taken to auction last week, the second-busiest auction week since the week prior to Easter 2022 (4,035), behind w/e 29th October 2023 (3,381).
The preliminary clearance rate came in at 72.3%, -1.7 percentage points lower than the previous week’s preliminary clearance rate of 74.0% (revised down to 66.7% once finalised).
See Corelogic's full auction report below.
- Sydney property prices remained flat over the last week but increased 0.4% over the last month and are 9.7% higher than they were 12 months ago.
- Melbourne property prices increased 0.1% over the last week, increased 0.2% over the last month, and are 3.6% higher than they were 12 months ago.
- Brisbane property prices increased by 0.3% over the last week, increased 0.9% over the last month and are 15.9% higher than they were 12 months ago.
Overall, Australian capital dwelling prices increased by 0.6% over the last month and are now 10.1% higher than they were 12 months ago.
Clearly, the property cycle is moving on driven by an undersupply of good properties relative to steady demand from buyers.
Source: CoreLogic March 25h 2024
Of course, these are "overall" figures - there is not one Sydney or Melbourne or Brisbane property market.
And various segments of each market are performing differently.
The more expensive parts of our capital cities are likely to outperform this year as the local residence will, in general, have more equity in the properties they are selling, and they won't be as sensitive to high interest rates and the high cost of living as the outer and new suburbs.
To help keep you up-to-date with all that's happening in property, here is my updated weekly analysis of data and charts as of 25th March 2024 provided by CoreLogic, and realestate.com.au.
Property asking prices
Property asking prices are a useful leading indicator for housing markets - giving a good indication of what's ahead.
Here is the latest data available for March 2024.
Sydney
Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
---|---|---|---|---|
All Houses | 1,904.824 | 12.056 | 0.6% | 10.9% |
All Units | 796.385 | 2.010 | 0.4% | 4.4% |
Combined | 1,458.800 | 8.014 | 0.5% | 9.0% |
Source: SQM Research
Melbourne
Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
---|---|---|---|---|
All Houses | 1,255.866 | 1.134 | 1.9% | 8.5% |
All Units | 604.519 | -0.471 | 0.6% | 2.0% |
Combined | 1,052.780 | 0.633 | 1.7% | 7.0% |
Source: SQM Research
Brisbane
Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
---|---|---|---|---|
All Houses | 1,065.034 | 2.726 | 1.4% | 12.2% |
All Units | 589.227 | 5.173 | 1.8% | 17.4% |
Combined | 946.712 | 3.335 | 1.5% | 12.9% |
Source: SQM Research
Perth
Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
---|---|---|---|---|
All Houses | 957.606 | 3.374 | 1.5% | 16.0% |
All Units | 498.730 | 3.315 | 3.7% | 17.4% |
Combined | 838.456 | 3.359 | 1.8% | 16.1% |
Source: SQM Research
Adelaide
Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
---|---|---|---|---|
All Houses | 640.82 | 2.18 | -0.2% | 12.8% |
All Units | 460.61 | 1.39 | 1.1% | 13.0% |
Combined | 578.77 | 1.91 | 0.2% | 13.0% |
Source: SQM Research
Canberra
Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
---|---|---|---|---|
All Houses | 767.30 | 10.70 | 1.7% | 1.0% |
All Units | 576.19 | -0.19 | 0.7% | 2.4% |
Combined | 663.68 | 4.80 | 1.2% | 1.6% |
Source: SQM Research
Darwin
Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
---|---|---|---|---|
All Houses | 659.850 | 0.750 | -1.0% | -3.1% |
All Units | 375.750 | -2.417 | -0.3% | 0.1% |
Combined | 548.440 | -0.492 | -0.8% | -2.3% |
Source: SQM Research
Hobart
Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
---|---|---|---|---|
All Houses | 808.401 | 4.235 | 0.8% | 2.0% |
All Units | 501.373 | -6.010 | -1.3% | 0.2% |
Combined | 762.285 | 2.696 | 0.6% | 1.7% |
Source: SQM Research
National
Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
---|---|---|---|---|
All Houses | 913.705 | 5.120 | 1.0% | 11.1% |
All Units | 535.388 | 0.488 | 0.5% | 6.0% |
Combined | 832.915 | 4.131 | 0.9% | 10.3% |
Source: SQM Research
Cap City Average
Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
---|---|---|---|---|
All Houses | 1,361.508 | 6.671 | 2.0% | 11.1% |
All Units | 670.992 | 1.211 | 1.0% | 5.3% |
Combined | 1,158.902 | 5.069 | 1.8% | 9.8% |
Source: SQM Research
The value of property asking prices as a leading indicator for housing markets is quite significant.
In fact it's more valuable than median prices which can be quite misleading.
Let's delve into why this is the case and how it impacts the real estate market.
- Early Market Sentiment Indicator: Asking prices often reflect the current sentiment of sellers in the real estate market.
If sellers are confident, they might set higher asking prices, anticipating strong demand.
Conversely, if sellers are uncertain or perceive a market downturn, they might lower their asking prices to attract buyers.
This makes asking prices a real-time indicator of market sentiment, often preceding changes in actual sales prices. - Predictive of Future Price Trends: Trends in asking prices can be predictive of where the actual property prices are headed.
For example, a consistent rise in asking prices over a period can signal an upcoming rise in transaction prices. - Impact of Economic Factors: Economic factors such as interest rates, employment rates, and broader economic health influence asking prices.
For instance, changes in the Reserve Bank of Australia's policies or shifts in the job market can quickly reflect in the asking prices, providing insights into how these factors are influencing the housing market. - Regional Variations: In a diverse market like Australia's, asking prices can also provide insights into regional disparities.
For instance, the property markets in Melbourne and Sydney might behave differently from those in Brisbane or Perth. Asking prices can give early indications of these regional trends. - Influence of Supply and Demand: Asking prices are also a response to the balance of supply and demand in the market.
In areas with limited supply and high demand, asking prices tend to be higher and vice versa.
However, it's important to note that while asking prices are a valuable indicator, they should not be used in isolation.
Other factors like actual sales prices, time on the market, auction clearance rates, and economic conditions also play crucial roles in understanding the property market dynamics.
READ MORE: The latest median property prices in Australia’s major cities
Last weekend's auction report
Preliminary clearance rate of 72.3% across the combined capital cities
There were 3,356 capital city homes taken to auction last week, the second-busiest auction week since the week prior to Easter 2022 (4,035), behind w/e 29th October 2023 (3,381).
The preliminary clearance rate came in at 72.3%, -1.7 percentage points lower than the previous week’s preliminary clearance rate of 74.0% (revised down to 66.7% once finalised).
Sydney saw a slight improvement in the preliminary clearance rate week-on-week, with 75.9% of auctions returning a successful result so
far, up from 74.8% over the previous week (revised to 66.5% on final numbers).
With 1,176 homes taken to auction across the city, last week was Sydney’s busiest auction week since the week prior to Easter 2022 (1,490).
Melbourne’s preliminary clearance rate dropped below the 70% mark for the second time this year at 69.4% (down from 72.4% last week which was revised down to 66.4% on final numbers).
There were 1,636 homes taken to auction across the city last week, the busiest week since w/e 29th October 2023 (1,725).
Across the smaller capitals, Brisbane recorded the busiest auction week, with 242 homes taken to auction, followed by Adelaide (185), Canberra (102), Perth (14) and Tasmania (1).
Adelaide recorded the highest preliminary clearance rate at 79.4%, followed by Canberra (71.6%) and Brisbane (71.2%).
Three of the seven auctions reported in Perth so far were successful, while the one auction in Tasmania was withdrawn.
This week will see auction volumes drop due to the Easter long weekend, with around 900 capital city homes currently scheduled for auction.
In comparison, Easter 2023 saw 652 auctions held, while Easter 2022 saw 926 homes taken to auction across the combined capitals.
City | Clearance Rate | Total Auctions | CoreLogic auction results | Cleared Auctions | Uncleared Auctions |
---|---|---|---|---|---|
Sydney | 75.9% | 1,176 | 912 | 692 | 220 |
Melbourne | 69.4% | 1,636 | 1,283 | 890 | 393 |
Brisbane | 71.2% | 242 | 153 | 109 | 44 |
Adelaide | 79.4% | 185 | 97 | 77 | 20 |
Perth | n/a | 14 | 7 | 3 | 4 |
Tasmania | n/a | 1 | 1 | 0 | 1 |
Canberra | 71.6% | 102 | 67 | 48 | 19 |
Weighted Average | 72.3% | 3,356 | 2,520 | 1,819 | 701 |
Source: CoreLogic
Our rental markets
Our rental markets have been tightening further over the last few months, with vacancy rates for both houses and apartments extremely low across the country and asking rents rising rapidly.
Asking rents across the capital cities for houses had been rising in annual terms in the “double digits”, while for units, new asking rents are rising at faster rates, at over 20% in Sydney, Melbourne and Brisbane.
The recently released National Accounts showed that Australia’s population has grown by around 620,000 people in the past financial year.
That’s the highest number in history and a hundred thousand more than what the May federal budget projected.
This record 2.8% expansion in the 15 plus age group of our population is placing a great strain on our rental markets.
The number of overseas students and also people on graduate visas in Australia has increased by just over three hundred thousand in the last financial year.
In particular rents have been rebounding across inner-city rental markets (popular with international students) after slumping during the pandemic when international borders were closed.
While the pace of rental growth is likely to slow down, with current vacancy rates rents will continue to increase as there is a minimal new supply of properties set to enter the market in the medium-term future.
Sydney
Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
---|---|---|---|---|
All Houses | $1,051.83 | -1.83 | 0.7% | 10.8% |
All Units | $705.04 | 1.96 | 1.2% | 9.9% |
Combined | $845.95 | 0.42 | 1.0% | 10.3% |
Source: SQM Research
Melbourne
Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
---|---|---|---|---|
All Houses | $742.07 | 0.93 | 0.8% | 14.9% |
All Units | $556.22 | 3.78 | 2.0% | 10.0% |
Combined | $632.81 | 2.60 | 1.4% | 12.4% |
Source: SQM Research
Brisbane
Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
---|---|---|---|---|
All Houses | $716.24 | 0.76 | -0.8% | 7.0% |
All Units | $572.32 | 2.68 | 0.9% | 10.3% |
Combined | $651.48 | 1.62 | -0.1% | 8.3% |
Source: SQM Research
Perth
Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
---|---|---|---|---|
All Houses | $780.43 | 1.57 | 0.1% | 17.8% |
All Units | $578.17 | 0.83 | 1.1% | 14.4% |
Combined | $695.90 | 1.26 | 0.4% | 16.7% |
Source: SQM Research
Adelaide
Property Type | Rent $) | Weekly change | Monthly change | 12 Months change |
---|---|---|---|---|
All Houses | $638.38 | -0.38 | -0.1% | 12.9% |
All Units | $457.72 | -3.72 | 1.4% | 12.7% |
Combined | $576.18 | -1.53 | 0.3% | 13.0% |
Source: SQM Research
Canberra
Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
---|---|---|---|---|
All Houses | $751.84 | -0.84 | 0.1% | -1.6% |
All Units | $575.89 | 1.11 | 1.0% | 2.1% |
Combined | $656.44 | 0.22 | 0.5% | 0.1% |
Source: SQM Research
Darwin
Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
---|---|---|---|---|
All Houses | $710.66 | -8.66 | -1.4% | -0.2% |
All Units | $497.04 | 4.96 | -0.1% | 9.3% |
Combined | $583.42 | -0.55 | -0.7% | 4.4% |
Source: SQM Research
Hobart
Property Type | Rent 9$) | Weekly change | Monthly change | 12 Months change |
---|---|---|---|---|
All Houses | $539.88 | 3.12 | -1.1% | -1.9% |
All Units | $465.98 | 0.02 | 0.7% | -3.1% |
Combined | $510.18 | 1.88 | -0.5% | -2.4% |
Source: SQM Research
National
Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
---|---|---|---|---|
All Houses | $688.00 | 0.00 | 0.1% | 8.2% |
All Units | $534 | 2.00 | 1.3% | 9.9% |
Combined | $616.41 | 0.93 | 0.6% | 8.9% |
Source: SQM Research
Cap City Average
Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
---|---|---|---|---|
All Houses | $834 | 0.00 | 0.4% | 11.6% |
All Units | $624 | 2.00 | 1.1% | 9.9% |
Combined | $722.16 | 1.07 | 0.7% | 10.8% |
Source: SQM Research
Vendor metrics
As the following chart shows, houses are still being snapped up quickly by eager buyers.
At a national level, properties are taking slightly longer to sell than they were during the property boom of 2020 and 2021.
However, the number of days to sell a property is still relatively low (a sign of the tight supply situation for good properties), and vendor discounting is still at very low levels.
In general, houses are selling quicker than apartments, but the shortage of good properties on the market is seeing A-grade properties selling quickly with minimal discounting.