Key takeaways
April is a holiday month with Easter, school holidays and Anzac Day interrupting our housing markets.
However, last weekend's auction results confirmed the strength and the depth of our property markets - there were 1,952 auctions held on the weekend, roughly on par with the week prior (1,985), but returning a lower preliminary clearance rate of 72.7%.
Australia’s housing is so horribly undersupplied that I've rarely encountered a supply-demand inflection point like this.
Sydney property prices increased 0.1% over the last week, increased 0.3% over the last month and are 9.1% higher than they were 12 months ago.
Melbourne property prices remained flat over the last week, also remained flat over the last month, and are 3.0% higher than they were 12 months ago.
Brisbane property prices increased by 0.2% over the last week, increased 0.9% over the last month and are 16.0% higher than they were 12 months ago.
Overall, Australian capital dwelling prices increased by 0.5% over the last month and are now 9.8% higher than they were 12 months ago.
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.
This current property cycle has been driven by an undersupply of good properties relative to current demand pushing up property values and rents.
Recently Oxford Economics gave their home price forecast for the next three years, and as you can see from the table in the article, they are very bullish on how our housing markets are going to perform moving forward.
Despite all the challenges thrown at them, our housing market has kept rising for 15 months in a row now.
Not only have house prices risen strongly, but so have rents. And there seems to be no relief in sight for tenants.
The chronic housing shortage is being exacerbated by low building approval levels and immigration that remains at very high levels.
April is a holiday month with Easter, school holidays and Anzac Day interrupting our housing markets, and over the weekend, the preliminary auction clearance rate slipped a little on similar auction volumes week-on-week.
There were 1,952 auctions held last weekend, roughly on par with the week prior (1,985), but returning a lower preliminary clearance rate of 72.7%.
The volume of auctions held is well down from the pre-Easter period when the weekly volumes peaked at 3,519, but well above a year ago when 1,708 auctions were held.
See Corelogic's full auction report below.
However, there is still strong depth in our housing markets, considering this reasonably generally strong auction clearance results.
Easing inflation and the prospect of a rate cut in the next year are buoying vendor hopes and buyer appetites for property.
Recently Oxford Economics gave their home price forecast for the next three years, and as you can see from the table below, they are very bullish on how our housing markets are going to perform moving forward.
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.
This week, CoreLogic reports that:
- Sydney property prices increased 0.1% over the last week, increased 0.3% over the last month and are 9.1% higher than they were 12 months ago.
- Melbourne property prices remained flat over the last week, also remained flat over the last month, and are 3.0% higher than they were 12 months ago.
- Brisbane property prices increased by 0.2% over the last week, increased 0.9% over the last month and are 16.0% higher than they were 12 months ago.
Overall, Australian capital dwelling prices increased by 0.5% over the last month and are now 9.8% 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 April 15th 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 15th April 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 April 2024.
Sydney
| Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
|---|---|---|---|---|
| All Houses | 1,904.307 | -3.307 | 0.8% | 7.5% |
| All Units | 791.461 | -3.066 | -0.6% | 4.1% |
| Combined | 1,456.126 | -3.594 | 0.5% | 6.4% |
Source: SQM Research
Melbourne
| Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
|---|---|---|---|---|
| All Houses | 1,260.998 | -1.478 | 0.5% | 7.3% |
| All Units | 605.967 | 0.113 | -0.1% | 2.5% |
| Combined | 1,056.563 | -1.182 | 0.4% | 6.2% |
Source: SQM Research
Brisbane
| Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
|---|---|---|---|---|
| All Houses | 1,077.234 | 2.094 | 1.3% | 13.8% |
| All Units | 596.796 | 1.304 | 2.1% | 18.3% |
| Combined | 957.663 | 1.801 | 1.4% | 14.3% |
Source: SQM Research
Perth
| Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
|---|---|---|---|---|
| All Houses | 973.768 | 5.740 | 2.0% | 17.8% |
| All Units | 508.540 | 0.760 | 2.9% | 17.7% |
| Combined | 852.883 | 4.362 | 2.2% | 17.6% |
Source: SQM Research
Adelaide
| Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
|---|---|---|---|---|
| All Houses | 883.690 | 4.210 | 0.8% | 14.5% |
| All Units | 447.729 | 6.171 | 0.9% | 12.8% |
| Combined | 805.502 | 4.548 | 0.8% | 14.3% |
Source: SQM Research
Canberra
| Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
|---|---|---|---|---|
| All Houses | 1,177.841 | 4.409 | -2.2% | 13.1% |
| All Units | 596.458 | 1.667 | -0.3% | 1.0% |
| Combined | 967.095 | 3.048 | -1.8% | 9.8% |
Source: SQM Research
Darwin
| Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
|---|---|---|---|---|
| All Houses | 669.481 | -3.481 | 1.6% | 0.4% |
| All Units | 371.343 | 0.323 | -1.8% | -2.1% |
| Combined | 552.543 | -2.013 | 0.7% | -0.3% |
Source: SQM Research
Hobart
| Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
|---|---|---|---|---|
| All Houses | 792.368 | -6.550 | -0.9% | -0.3% |
| All Units | 501.847 | -0.484 | -1.1% | -2.5% |
| Combined | 748.689 | -5.681 | -0.9% | -0.6% |
Source: SQM Research
National
| Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
|---|---|---|---|---|
| All Houses | 916.691 | 3.178 | 0.9% | 11.0% |
| All Units | 538.838 | 1.784 | 0.7% | 6.5% |
| Combined | 835.938 | 2.818 | 0.9% | 10.3% |
Source: SQM Research
Cap City Average
| Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
|---|---|---|---|---|
| All Houses | 1,362.621 | -3.641 | 0.6% | 8.5% |
| All Units | 668.818 | 0.589 | -0.4% | 5.7% |
| Combined | 1,158.833 | -2.618 | 0.4% | 7.8% |
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.
- Also read:This week’s Australian Property Market Update – Latest Data, State by State April 16th 2024
- Also read:Melbourne property market forecast for 2024
- Also read:Brisbane’s property market forecast for 2024
- Also read:Sydney property market forecast for 2024
- Also read:Latest property price forecasts for 2024 revealed. What’s ahead in our housing markets in the next year or two?
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 slips across similar auction volumes week-on-week
There were 1,952 auctions held last week, roughly on par with the week prior (1,985), but returning a lower preliminary clearance rate of 72.7% (75.9% the previous week revising down to 67.0% once finalised).
The volume of auctions held is well down from the pre-Easter period when the weekly volumes peaked at 3,519, but well above a year ago when 1,708 auctions were held.
Melbourne hosted the most auctions last week, with 855 homes going under the hammer, returning a preliminary clearance rate of 70.8%,
similar to the previous week’s result of 70.6% which revised lower on the final results to 62.8%.
827 homes were taken to auction in Sydney, with 74.3% successful on the early numbers, well down from the previous week’s spike in the preliminary clearance rate which reached 81.6%, revising down to 70.4% on the final numbers.
Adelaide was by far the strongest auction market, with a preliminary clearance rate of 87.8%, up from 76.9% over the previous week (finalised at 73.3%).
Brisbane recorded a preliminary clearance rate of 77.0% last week, up from 75.0% (finalised at 67.5%), while in Canberra, 58.6% of auctions have been reported as successful so far, down from 61.8% over the previous week (finalised at 60.3%).
Overall, auction clearance rates are holding reasonably firm, slightly above the long-run average of 67.8% on the preliminary clearance rate.
Capital city dwelling values are trending higher at the rolling four-week rate of about 0.5%, a slight reduction on the end of March rate (0.6%), with stronger conditions holding in Perth (+1.8%), Adelaide (+1.2%) and Brisbane (+0.9%).
We are expecting around 1,900 auctions to be held this week across the combined capital cities.
| City | Clearance Rate | Total Auctions | CoreLogic auction results | Cleared Auctions | Uncleared Auctions |
|---|---|---|---|---|---|
| Sydney | 74.3% | 827 | 631 | 469 | 162 |
| Melbourne | 70.8% | 855 | 641 | 454 | 187 |
| Brisbane | 77.0% | 105 | 74 | 57 | 17 |
| Adelaide | 87.8% | 79 | 41 | 36 | 5 |
| Perth | n/a | 6 | 5 | 3 | 2 |
| Tasmania | n/a | 2 | 1 | 0 | 1 |
| Canberra | 58.6% | 78 | 58 | 34 | 24 |
| Weighted Average | 72.7% | 1,952 | 1,451 | 1,053 | 398 |
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 | $1,053.56 | 3.44 | -0.1% | 10.2% |
| All Units | $710.44 | 0.56 | 1.3% | 8.8% |
| Combined | $849.89 | 1.73 | 0.6% | 9.5% |
Source: SQM Research
Melbourne
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $740.52 | -2.52 | 0.0% | 11.4% |
| All Units | $559.31 | -0.31 | 1.2% | 8.7% |
| Combined | $634.03 | -1.22 | 0.6% | 10.0% |
Source: SQM Research
Brisbane
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $716.67 | -0.67 | 0.3% | 6.6% |
| All Units | $577.65 | 2.35 | 1.4% | 10.4% |
| Combined | $654.11 | 0.69 | 0.7% | 8.1% |
Source: SQM Research
Perth
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $782.05 | -3.05 | 0.4% | 16.9% |
| All Units | $593.27 | 4.73 | 2.8% | 16.3% |
| Combined | $703.18 | 0.20 | 1.2% | 16.7% |
Source: SQM Research
Adelaide
| Property Type | Rent $) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $629.87 | 0.13 | -1.3% | 10.0% |
| All Units | $468.12 | 3.88 | 2.2% | 15.4% |
| Combined | $574.22 | 1.42 | -0.3% | 11.6% |
Source: SQM Research
Canberra
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $772.54 | 7.46 | 2.1% | 0.8% |
| All Units | $574.13 | 1.87 | -0.3% | 2.8% |
| Combined | $664.94 | 4.43 | 0.9%1.7 | % |
Source: SQM Research
Darwin
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $718.08 | 5.92 | -0.2% | -0.5% |
| All Units | $492.25 | -10.25 | 0.0% | 3.3% |
| Combined | $583.61 | -3.71 | -0.1% | 1.4% |
Source: SQM Research
Hobart
| Property Type | Rent 9$) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $536.86 | -3.86 | 0.0% | -0.3% |
| All Units | $461.36 | -1.36 | -1.1% | -5.1% |
| Combined | $506.52 | -2.85 | -0.4% | -2.1% |
Source: SQM Research
National
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $692.00 | 0.00 | 0.6% | 8.8% |
| All Units | $541 | 1.00 | 1.7% | 10.2% |
| Combined | $621.84 | 0.46 | 1.0% | 9.4% |
Source: SQM Research
Cap City Average
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $833 | -1.00 | -0.1% | 10.2% |
| All Units | $628 | -1.00 | 1.3% | 9.2% |
| Combined | $723.85 | -1.00 | 0.5% | 9.8% |
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.
