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Sydney and Melbourne’s property markets are coping well with the post lockdown surge in listings of properties for sale.
But there are clear signs that house price growth is slowing down in our two big capital cities.
With only a few days to go, Sydney house prices have risen 0.9% so far in November, well down on the 1.5% rise last month and the average price gain of 2.5% monthly average to October this year.
With volumes ramping up significantly in Melbourne, prices have risen 0.6% after last month’s 1.0% and the 1.5% monthly year-to-date average to October.
Meanwhile, Brisbane-Gold Coast and Adelaide prices continued to rise strongly.
Prices are up 2.7% this month after 2.5% through October in Brisbane-Gold Coast and 2.3% in Adelaide after 2.0% in October.
After dipping 0.1% in October, prices have nudged fractionally higher in Perth.
Not surprisingly auction clearance rates slipped on the weekend in the two largest capital cities where buyers have more choice of properties than I’ve had for a long, long time.
Of course, the big news now is the recently discovered Omicron Covid strain which has already made its way into Australia and markets will be waiting for news, especially on transmissibility and any vaccine resistance.
Here’s what happened to property prices…
- Sydney property prices have kept moving higher, up another 0.1% in the last week, up 0.9% for the month to date, and up 25.8% over the last 12 months.
- Melbourne house prices increased 0.1% over the last week, up 0.6% for the month to date, and up 16.2% over the last 12 months.
- Brisbane house prices increased 0.9% over the last week, up 2.7% for the month to date, and 26.4% over the last year.
The number of properties for sale in Australia is still in short supply
The supply of properties for sale just can’t keep up with demand.
In many locations around Australia for every new property coming onto the market for sale, 1.4 properties are being sold.
Capital city demand continues at a vigorous rate, with buyers out in force – owner-occupiers, investors, and first home buyers – at a time when available supply struggling to keep up.
The table below shows how the stock of advertised properties is well below year-ago levels across all capital cities.
At the same time “time on market” continues to decline.
These are signs that property values will continue to rise moving forward.
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 November 29th provided by Corelogic, and realestate.com.au.
Monthly Listings Report
Across the combined capital cities, there was the highest number of new listings on record, with new listings across the capital cities jumping 21.9% MoM, according to the PropTrack Listings Report November 2021.
Nationally, it was the busiest month for new listings since October 2018, with new listings up 16.3% MoM.
While October is a seasonally strong month for new listings, the easing of restrictions in Melbourne, Sydney, and Canberra after months of lockdowns, as well as the return of in-person property inspections in mid-September, supported seller confidence and brought many sellers back to the market who had been hesitant to list.
These factors drove a wave of new listings in Melbourne (+35% MoM), Canberra (+30.2%), and Sydney (+26.2%).
Key findings:
- New listings lifted sharply in Sydney (26.2% MoM) to record levels in October, following strong growth in September, as well. New listings also lifted 14% (MoM) in regional NSW.
- New listings surged 35.0% (MoM) in Melbourne in October as sellers continued to return to the market after in-person inspections resumed in mid-September. October is also typically the seasonal peak of the spring selling season in Melbourne.
- Buyers searching in Brisbane had more choice in October, with new listings picking up 7.4% month-on-month. October is seasonally a strong month for new listings in Brisbane.
- New listings lifted in Adelaide (7.5% MoM) in October, consistent with what is typically one of the strongest months of the year for new listings. This new supply coming to market lifted total listings 5.0% (MoM) in October.
- New listings picked up across WA in October, with new listings in Perth up 13.0% month-on-month and 4.6% in regional WA.
- New listings declined in Hobart (-7.1% MoM), bringing total listings down 1.9% month on month. While above the lows seen a few months ago, available stock remains very limited in Hobart, with total listings down 30% compared to a year ago.
- New listings in Darwin moderated in October, down 10.3% (MoM), after strong growth in September.
- New listings in Canberra jumped 30.2% month-on-month in October, after a 42.1% increase in September. These increases come as seller confidence returned amid eased restrictions on in-person inspections in mid-September.
Source: www.realestate.com.au
Sales up as post-lockdown buzz grips market
Strong demand drives the time taken to sell a property to its fastest level in at least five years, while average views per listing surge to a new historic high, according to the PropTrack Housing Market Indicators Report.
Easing restrictions and the spring selling season supported strong activity in the housing market in October.
Nationally, weekly sales volumes reached their highest level this year at the end of October and volumes are much higher right around the country than at the same time last year.
Indicators of buyer demand show property seekers are extremely motivated.
Search volumes continued to pick up in October and reached record highs in mid-October.
Strong competition from buyers has seen the median number of days on-site – the median time a property is listed on realestate.com.au before we are advised it has sold – reach its fastest level on record.
In October, the median time a property was listed was just 31 days, a full week faster than in September.
Days on site declined particularly sharply in Melbourne as its lockdown began to ease and in-person property inspections resumed in mid-September.
This rapid pace of sales is consistent with strong demand from buyers and a relatively limited stock of houses available for sale – particularly in regional areas.
Source: www.realestate.com.au
What’s happening in our property markets?
Median property prices
Vendor Metrics
Vendor metrics confirm that despite the lockdowns, we’re in a seller’s market with the number of days to sell the property very low (a sign of the tight supply situation), and vendor discounting (it’s easier for them to sell) at very low levels.
In general, houses are selling better than apartments, but the shortage of good properties on the market is seeing properties selling quickly with minimal discounting.
Our Rental Markets
While rental growth is slowing, we’ve still experienced the highest rental growth in over a decade.
Growth in rental rates eased over the second quarter of 2021, with the national rental index rising by 2.1% over the 3 months to June compared to a 3.2% rise over the March quarter.
While rental growth has slowed over the recent months and quarters, the latest figures take national rental rates 6.6% higher over the year; the highest annual growth in dwelling rents since January 2009.
Regional rents continued to outpace capital city rents over the second quarter of 2021, with regional dwelling rents rising by 2.7% against a 1.9% rise in capital city rents.
This was a 1.4 percentage point reduction in the rate of growth quarter on quarter for the combined regionals, and a 1 percentage point reduction for the combined capital cities.
Despite the easing in growth in recent months, regional Australia recorded an annual rate of rental growth of 11.3% in June 2021.
Last weekend’s auction clearance rates
The volume of scheduled auctions today reached new highs across Sydney, Canberra, and Adelaide, marking the busiest auction week for the combined capitals since CoreLogic records commenced in 2008.
Dr. Andrew Wilson of My Housing Market reported Canberra as the stand-out performer with a preliminary auction clearance rate of 87.6% from 112 auctions.
Other preliminary clearance rates (as reported by Dr. Andrew Wilson’s Auction Insider) were:-
- Adelaide – 77.4%
- Sydney – 77.2%
- Brisbane– 72%
- Melbourne – 69.8%
Source of graphs and data: CoreLogic, REA, and Dr. Andrew Wilson – My Housing Market 29th of November 2021.
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'This week’s Australian Property Market Update – Latest Data, State by State November 29th' have 46 comments
October 26, 2021 Kay
Hi Michael, I am looking to buy investment property and planning to live in it in the next 5 years, what is the best area for capital growth near Liverpool or Campbelltown
October 26, 2021 Michael Yardney
Kay – even within the 2 suburbs you’ve mentioned there are areas that will outperform other neighbourhoods and then there are A, B and C grade properties – just naming a suburb could lead you astray – so I never do that – sorry
September 8, 2021 Michael Yacoub
Great update Michael, I always get great value from reading your blog.
People are buying properties now without proper planning or structure. We have potential clients calling us wanting to set up a SMSF within half an our and without a statement of advice or proper planning. Also some clients don’t know which entity to buy their investment properties under and why. I wander if you can include in future blogs about these issues and some tips etc. this will help people avert costly mistakes. Cheers
September 8, 2021 Michael Yardney
Thanks Michael – I agree, starting with a plan is important and you are correct, many beginning investors think they can just set up an SMSF without correct and independent advice and that’s just not right is it?
August 28, 2021 Kun
I am considering buying an investment house on the north beaches of Cairns. Is it still a good time after this year’s growth in price?
August 28, 2021 Michael Yardney
I don’t know your personal circumstances so can’t give you investment advice, but my general advice would be that Cairns is definitely not a good investment grade location.
It might be a lovely place to vacation and even a good place to live, but the market is too small to be “investment grade.” Steer clear of it
July 25, 2021 Luke
Hi
I have a nice house in Baulkham Hills. I want to sell and move up north and out of Sydney. Should I wait till this lock down is over or do it now. I can wait a couple of months if needed but want to get the best price. I am also worried about once I sell how can I move as Sydney is locked down!
July 25, 2021 Michael Yardney
Luke – that’s a real dilemma isn’t it? It could be difficult put your property on the market now, during lockdown. The ones being sold at present have been on the market for a little while. Similarly there will be little stock for you to look at in the next few weeks. It seems to make sense to wait a month or two till the waters are calmer
July 6, 2021 Vabene
Thank you Michael and team for the informative and interesting data sets and commentary. There is one thing that does make it slightly harder to get full value is that the Gold Coast (where I live and invest) is rarely mentioned and or lumped in with Brisbane. It’s a completely different market in so many ways, let alone a city of 660,000 which makes it bigger than Hobart, Canberra, and Darwin. The median prices on the Gold Coast, let alone Rental data is significantly different to Brisbane (which no doubt includes Ipswich, Moreton shire and surrounds).
The demand for housing on the Gold Coast (and Sunshine Coast) is certainly higher than Brisbane. Would be appreciated if your data included Australia’s 6 largest city as well as the smaller capitals already mentioned.
July 6, 2021 Michael Yardney
I understand your frustration, however I’m just reporting with the data houses report, and they rarely give details of the Gold Coast market on its own
June 24, 2021 Sarah
Hi Micheal, My name is Sarah I was thinking of buying in Norlane, Geelong, Victoria. Could you see a real growth in this suburb.?
June 25, 2021 Michael Yardney
Sarah, I’m glad you’re considering getting involved in the property market, but this is a very shallow question.
To ensure you don’t make a mistake we must answer ask much deeper questions and I must know a lot more about you. You are making the typical mistake of starting with a location or a property rather than the big picture “plan” that strategic investors use.
For example I don’t know whether this is for your home or as an investment. I don’t know your budget, your risk profile, or your timeframes. For what it’s worth… Norlane is not on my radar
He’s not on my radar
May 25, 2021 RK Property Partner
Really trustworthy blog. Please keep updating with great posts like this one. I believe choosing right property management company and investing in real estate is not easy task. After reading this I am a little bit clearer about this and going to read again to get the full meaning.
Keep sharing, Thank you.
May 24, 2021 AAH
Hi Michael,
I have been following your blog for years, I want to buy investment property in melbourne between, 600 to 700k, options are either craigieburn side or diametrically opposite in Frankston / Seaford. One of other melbourne blogger I follow said on a video log that dont go beyond carrum coz its too far. Any thoughts? Where would I get better return between the two
May 25, 2021 Michael Yardney
You’re making them same mistake most beginning investors make and that’s why they never get past there first or second property.
You’re starting with a location rather than with a strategic plan (I guess I’m making some assumptions here) so it would be terribly wrong to answer your question without understanding what your endgame is, what your risk profile is, what your cash flow situation is, what your long-term plans are etc etc — there are at least 10 other factors we have to take into consideration before making a recommendation
Having said that we have helped many clients over the last couple of months my great investment properties in your budget range yet I would not consider either of the two options you mentioned. Would you like my team at Metropole to help you? If so please leave your details here and discover your options
May 18, 2021 Brett
I am struggling to understand the graphs regarding demand for owning homes and rental properties. What form of measurement is the index relative to? How can the total number of renters and buyers not be an addition of both units and houses?
May 18, 2021 Michael Yardney
overall about 70% of Australian one there own home – around 50% without a mortgage.
Around 26% of our population rent their property and around 4% are in some form of social or public housing
May 11, 2021 Vaughan Felton
What a great resource you are! I have a property in Bulimba that I am thinking of selling to free up some cash. I have had it for 6 years but I feel I am pulling the trigger too soon. Any thoughts maestro?
May 11, 2021 Michael Yardney
Property values in Bulimba are likely to keep rising for another year or 2, so it really depends on what you are planning to do with the cash – maybe it would be better to refinance and access your equity.
SO you needs to work the numbers carefully – that’s what we do when we build a Strategic Property Plan for our clients
May 4, 2021 Bahee
Our syndicate is a small time developer/investors. Lately I am focusing at St Marys, NSW.
The price of a townhouse yet to pickup even though with the Western Sydney airport and St Marys being the main interchange. Is there a reason for that?. We just bought a land to build 12 townhouses (yet to go through DA application).
May 4, 2021 Michael Yardney
There is no reason for property values to rise just because there’s a new airport coming up. No one wakes up in the morning and things “i want to live near an airport” I wouldn’t be investing in those locations that have always underperformed
March 9, 2021 Joe
Hi. Love your website, fantastic resource. I recently moved to Oz, so figuring out lay of the land and me and my partner are currently figuring out where we want to base ourselves. I have $200k in savings that I had earmarked for a property, and wondering if I can make this work for me in an investment sense. Not sure where I’d even start on this journey as I have no experience. Any advice very welcome. Thanks Michael. 🙂
March 9, 2021 Michael Yardney
Joe – since you’re new to Australia seek independent professional advice. Are you an Australian citizen or permanent resident – that makes a huge difference in the type of property you can buy
December 19, 2020 Lisa
Hi Michael, we’ve had a townhouse in Kedron for 5 years that we purchased for $520k and is only valued at $580k. It’s neutrally geared – would you suggest selling to look at land / something with more CG potential or better to hold for longer?
December 19, 2020 Michael Yardney
Lisa – Kedron is a good area but clearly your property has underperformed. There are a number of different neighbourhoods in Kedron some of which do not perform as well as others and obviously some properties in these locations will outperform others. There are too many variables to take into account for me to answer this correctly without a lot more information, but we have some spreadsheets and frameworks we can use to help give you the right answer.if you’d like help making the decision, please email me michael at metropole.com.au and I’ll set things up for you
December 2, 2020 Rod
Hi Michael,
I’m interested to get your thoughts on Newcastle and Hunter Region areas. Newcastle now has the 4th highest median property price in the country. Massive growth opportunity (area) or have people missed the boat?
December 2, 2020 Michael Yardney
Rod, there’s no doubt the Newcastle in the Hunter region great locations to live, but I have found in the past when locations grow too fast, they then revert back.
Just see what happens when Brisbane property prices were almost the same as Sydney a couple of decades ago and are now half of Sydney and similarly when Perth’s median property price was almost the same as Sydney’s and is now half of Sydney’s median price.
At the price you would have to pay to get investment great properties in Newcastle, I think they’re better long-term opportunities elsewhere.
November 17, 2020 Richard Jones
Hi Michael,
In the past couple of days it has been reported an increase of 18% in Perth’s property market 2021 – 2023. After years of negative growth and lowest house prices across the nation, could you provide some comments on why such a big % increase is expected and will it last? – Many thanks Richard
November 17, 2020 Michael Yardney
Richard, I didn’t make that forecast so I can’t really comment. Who did? Possibly “an expert’ chasing a headline.
Don’t believe all the forecast you hear. Think about it – did all those forecasts “experts” made at the beginning of this year come true?
October 13, 2020 Ben
I wish Core Logic would present current statistics, and not ones which are 2-3 months old. A lot has happened since August. I also appreciate that your focus is the big markets of Sydney and Melbourne, but perhaps these posts could improve with a contribution from expert writers who know something about the rebounding regional markets – not just the major state capitals?
October 13, 2020 Michael Yardney
Ben – thanks for your thoughts. Much of this Corelogic data is updated weekly.
You’re right – we don’t cover the the regional market much do we.
October 6, 2020 Linnet Marshall Joseph
I found this blog pretty helpful. It’s really sad to see the kind of impact Covid-19 has had on all the sectors and specifically the real estate sector. I personally feel that the sudden re-appearance of Covid cases in Australia may lead to a further decline in the property prices and may take a while to bounce back. The future is always uncertain and unreliable. Luckily, I came across a real estate agent Broadbeach who is a great advisor with excellent market knowledge. I will be taking his help in making my investment decision for the right property at the right time because the current scenario doesn’t seem to be going well for making investment decisions and without the proper guidance from a real estate advisory help, property investment may be risky.
October 6, 2020 Michael Yardney
Linnet yes it’s a shame what’s happened to our beautiful country – be careful, most Real Estate agents are great at selling properties but very, very poor at giving investment advice. They are not licensed to, nor trained to and should not even ventured down that path. In today’s very challenging market to be careful who you seek advice from
August 5, 2020 Philip
The spike in search for property listings is not due to interested buyers but by an increase in distressed sellers checking out what their failed investment is now worth on READ and how much they have lost. Winter should normally be quiet season for property sales. It is unusual to see an increase in property sales volumes in winter. Can only be explained by distressed sellers
August 5, 2020 Michael Yardney
I can see why you might come to that conclusion by looking at one stat in isolation – that’s why we look at the complete picture and Corelogic and independently Dr. Andre Wilson keep track of buyers and transactions – there ARE more genuine buyers around. REA believes so also becuase they keep coming back to the same property on search
July 21, 2020 Geoff Hadley
With the record levels of existing household debt, falling real wages, rising permanent unemployment, contracting bank credit, declining immigration, contracting GDP, depletion, of superannuation, ineffectiveness of the first home buyer and other assistance schemes (only leads to inflated prices) absence of investors, over supply of units (of dubious quality) abismal rental prospects, 1.2 million vacant properties and a persistent declining world economy, why would I expect the general property market to rise. Granted premium properties will hold up but what about the vast new estates and over valued areas like Perth and Darwin? What happens when the present support schemes finish in Sept or later next year. What happens when the supposed V shaped recovery turns out to be an L with stagflation and real unemployment/under employment >8%. We can’t all afford to buy in Middle Park? And what happens when interest rates rise in the next 5 – 6 years.?
Get real! I would appreciate an answer. Maybe I an wrong.
Geoff
July 21, 2020 Michael Yardney
Thanks for your comment Geoff- I agree with all the issues that you have mentioned – there are a lot of headwinds that will hold back your economy and our property markets.
But there isn’t one Australian property market, and interestingly there are still a number of suburbs where property values are increasing in value, well outperforming the averages (I guess that’s how averages work – some outperform and some are underperform)
I’ve always learnt taking a long-term perspective is important when investing, and I’m not really sure that in this particular blog I suggest of the property market is going to increase in the short-term – in fact I said the opposite.
With regard to your comment about interest rates. I really hope they will increase in a few years time, because the only reason interest rates are going to increase is because our economy will be booming, property values will be increasing, unemployment will be very low and wages will have risen considerably. So the RBA will need to raise interest rates to slow down the boom. that’s the economic cycle
June 2, 2020 Craig Poole
IN todays report you quote “Sydney house values increased by 0.3% last month (+15.8% over the last year)” however the reported data in the ear;y part of the report and the news states that values fell by 0.4%? Can you help me understand the difference between the two stats against the same apparent period.
Thanks
June 2, 2020 Michael Yardney
I update the top section of this blog weekly and the lower half, state by state section monthly
May 16, 2020 ANN HOME
Very informative. Thank you for sharing.
March 24, 2020 Michael
I think that’s about 27 State by State market updates in a row, where you’ve told us there will be a downturn in Tasmania.Which has still yet to eventuate. It’s all good and well that say that the growth has ‘dropped by 2%’ or what have, but when that’s 7% growth down to 5% growth, still out performing most of the country.
May 27, 2020 Long Time Fan Losing Faith
While once a massive Yardney fan, credibility is in question at the moment, and not because you’re not seeing the future (no one can), but for continually stating the boom is over, the markets on the slide, yet as Michael March 24 states, doesn’t eventuate. Surely self-analysing and learning from our errors makes us better at what we do moving forward? Instead of the cut and paste job for Hobart and to a lesser extent Darwin. Perhaps those areas are too far away for you to profit from their investors? It;s also interesting that you pick and choose which graphs some cities appear in. Come on mate, you’re better than that.
May 27, 2020 Michael Yardney
Thanks for letting me know your thoughts.
Yes I don’t comment a lot about Darwin and Hobart, because it’s really difficult to write something different every month about these very, very small market.
While no doubt the re are opportunities in most property markets around Australia, I have only been prepared to “risk” my money in the three big capital cities and that’s the only place we Recommend our clients invest.
Since we don’t have any properties for sale and my only interested in ensuring our clients don’t lose money, going with the big long term trends has stood us well for over 40 years. I’m happy to stand on that track record.
December 25, 2019 Rio Siva
Hi Michael,
I recently read that the Queensland government might bring the following laws which do not favor property owners. Is this true and how likely this is going to happen??
The Queensland Government has announced Stage 1 of its proposed rental reform, with changes to include:
– Forcing property owners to consent to pets
– Allowing tenants to modify properties without consent
– Forcing property owners to renew tenancies indefinitely
– Introduction of minimum housing standards requiring the rental property and its inclusions to meet prescribed standards and to be in a certain state of repair.
Thanks,
Rio
December 18, 2019 Tam
We have recently been looking at Boondall and surrounding suburbs in Brissy and have found that there seems to have been up to a 5% increase in basic entry level properties and even a bigger increases for some quality or well presented entry level properties.
December 18, 2019 Michael Yardney
Sure Tam – but be very careful – entry level properties in this location are NOT likely to be long term “investment grade” properties