If you think rents are high, you haven’t seen anything yet! | Property Insiders [Video]

Key takeaways

Despite all challenges, the housing market has kept rising for 15 months in a row, and there is no relief in sight for tenants. Dr Andrew Wilson shares the data from his latest, My Housing Market Rental Report, which shows that capital city rental markets continued to report tight vacancy rates and higher rents for both units and houses over March.

February retail sales were up by only 0.3% over February but up 1.6% over the year. These levels remain elevated compared to the 2022 post-COVID sales boom.

The post-Easter holiday national weekend auction market reported a clearance rate of 64.7%, which was lower than the 66.4% reported over the pre-Easter holiday weekend.

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.

In this week’s Property Insider chat with Australia’s Dr. Andrew Wilson, we discussed details of his latest Rental Market report, and we also discussed some of the latest data that will affect our housing markets, including retail sales figures, home building approvals and last weekend’s Auction results.

Rents still rising

Watch this week’s Property Insiders video as Dr Andrew Wilson shares the data from his latest, My Housing Market Rental Report.

He explains that capital city rental markets continued to report tight vacancy rates and higher rents for both units and houses over March, in what remains a nightmare environment for tenants seeking accommodation.

Dr. Wilson explains that the rental markets continue to produce tough results for tenants with high and rising rents and tight vacancy rates – although unit vacancies are showing early signs of rising from record low levels.

Despite this slight increase in vacancy rates for units, they’re still nowhere near the 2% vacancy rate one needs to have a balanced market, meaning sustained relief for tenants from rent increases remains unlikely over 2024.

February retail sales up again

Watch this week’s Property Insiders chat as Dr Andrew Wilson explains how he believes rising interest rates have not really dampened our economy.

For example, retail sales are tracking at levels 40% higher than before Covid.

Retail sales were up by only 0.3% over February but up 1.6% over the year.

Of course, inflation and immigration help drive these figures higher.

Levels remain elevated compared to the 2022 post-COVID sales boom.

This follows an increase follows 1.1% rise over January.

ABS proposes Swift concerts behind rise.

Home building approvals down

Watch this week’s property inside a video where Dr Andrew Wilson and I discuss how the total number of private dwellings approved fell 3.5% over February.

Of course, in the current market, just because a development receives building approval doesn’t mean it will come out of the ground any time soon.

Most new apartment developments are not financially viable at current market rates.

This means the chronic shortage of houses and apartments will not disappear any time

soon.

This shows up dramatically in the following chart, which clearly shows how the number of building approvals is down 55.2% from 10 years ago.

Interestingly, Melbourne is getting more than its fair share of building approvals, and this extra supply is part of the reason why Melbourne’s housing market has not performed as strongly as other states.

Of course, there are many other factors involved in Melbourne's housing market performance, as we discuss in this week’s Property Insider chat.

• Volatile units are down 24.9% but houses are up 10.7%
• NSW tops - up by 23.4%
• Annual growth levels remain chronically depressed and quarterly trends now falling

More positive auction results despite Holiday distractions

Weekend auction markets have reported more positive results generally following the return from the Easter holiday break and despite the distractions of school holidays in Melbourne and Brisbane.

Adelaide had the strongest auction clearance rate of 73.5%.

Auction clearance results for the other capitals were:- Melbourne - 65.9%; Brisbane -57.8%; Sydney - 72.1% and Canberra - 54.2%.

The post-Easter holiday national weekend auction market reported a clearance rate of 64.7% which was lower than the 66.4% reported over the pre-Easter holiday weekend – and well below the 74.9% recorded over the same post-Easter holiday weekend last year.

Post-Easter holiday national auction numbers were predictably lower with 1863 listings versus the pre-Easter holiday Super Saturday weekends 3000, but significantly above the 1426 listed over the same post-Easter weekend last year.

Weekend auction markets have commenced the April school holiday period with more positive results generally despite continuing high numbers of listings compared to the same time last year.

About Michael Yardney Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media.