This week’s Australian Property Market Update – Latest Data, State by State 29th March

Residential property market momentum has continued to surge through late March.

Australia PropertyWith the month not quite over, prices across the five capital cities have already eclipsed last month’s 2.1% gain, rising 2.6% so far this month.

We’re well on track for double-digit growth this year with some markets likely to achieve this much sooner than the end of the year.

And auction clearance rates remain above long-term averages.

Positive market momentum was not stifled at all by a lift in auction numbers to the busiest weekend for a number of years.  

Sydney’s auction clearance rate remained very punchy at 89.1%, clearly remaining at if not even higher than the trend seen over recent weeks. 

Melbourne’s preliminary auction clearance rate moved a tad higher at 83.8%.  

A sense of FOMO — fear of missing out — continues to be a major factor in spurring housing markets across the country, as buyer demand well outweighed available housing supply.

Property prices in our 5 Capital Cities have risen 0.6% this week but, as always, results vary around Australia.

Sydney property prices rose 0.8% in the last week alone – up 3.6% in the last quarter and Sydney’s auction market remains strong clearing well over 90% of auctions in many parts of the city.

Melbourne property prices rose 0.6% last week, up 3.5% in the last quarter and weekend auction clearance rates remained strong over the weekend.

Brisbane, Adelaide, and Perth prices all made strong gains over the last month.

Heatmap

Price Through PandemicHousing Inflation

The number of properties for sale in Australia is beginning to dry up.

At the time of increased demand, buyers are experiencing a lack of good properties available for sale which is driving FOMO (fear of missing out).

The chart below from NAB shows that the supply of new properties coming on to the market was following the seasonal pattern and levels of new listings of recent years, with the notable exception of Perth and partly Melbourne.

At annual year-to-date growth of 1.4% for the 28 days to 14 March, new Melbourne property listings are hardly breaking any speed records.

In the case of Perth, listings are up a sizeable 34.3%, but from a low base from what was the tail end of a property market on the back foot for almost a decade.

Syd MelbBris Adel

It will be interesting to see how potential sellers respond to the higher prices and if this increases the number of new property listings.

Maybe sellers are holding back wondering if they can get more for their properties later on down the track, while other sellers are probably keen to buy first in this fast-moving market and therefore holding back putting their properties up for sale.

Either way…strong demand at a time of limited supply must lead to property price growth.

Capital City Sale

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 March 29th provided by NAB, Corelogic, and realestate.com.au.

What’s happening in our property markets?

The REA Buyers Index

The REA Insights Buyer Demand continues to trend lower despite a record-high year-on-year increase.

Rea Buyer

According to Cameron Kusher, the fall in demand over the week was uniform, with falls recorded in every state and territory.

Perhaps a little surprising is the fact that since demand peaked earlier this year, demand for houses has recorded a larger overall fall (-7.3%) than demand for units (-5.2%).

While weekly demand is trending lower, the year-on-year increase has never been higher due to the COVID-19 lockdowns that were happening this time last year.

National buyer demand is 72.8% higher than a year ago, with increases recorded in all states/territories except for Australian Capital Territory.

It’s possible we’re seeing demand decline because the most active users on realestate.com.au have now purchased, particularly given we are seeing high weekly sales volumes.

I still expect demand to remain at elevated levels over the coming weeks and months, however, don’t be surprised if an increase in stock and a lift in sales activity causes the index to moderate.

The REA Rental Demand Index

The REA Insights Rental Demand Index rental demand falls for the seventh consecutive week.

Rea Rent

According to Cameron Kusher, rental demand hit peak in mid-January this year and has since fallen by -19.5% since then.

To put this fall into some perspective, when the nation entered lockdowns last year, rental demand fell by -22.8% in the space of three weeks.

The current decline in rental demand has been much more elongated than the one we saw last year, but is almost as deep.

Despite this elongated decline in rental demand, demand is currently much higher than it was a year ago – up 41.8% nationally from where it was at the depths of lockdowns last year.

Victoria and South Australia are currently seeing record-high year-on-year increases in rental demand.

With first-home buyer lending at it’s highest share of new lending since 2009 and international border closures also contributing to reduced demand for rental accommodation, it is reasonable to expect that rental demand will continue to drift lower over the coming weeks and months.

Median property prices

Capital City Median

Median House And Unit


NOW READ: Why Bluechip property will rebound strongly in 2021


Vendor Metrics

Vendor metrics suggest we’re into a seller’s market with the number of days to sell a property decreasing (a sign of the tight supply situation), and vendor discounting (it’s easier for them to sell) at realistic levels.

The shortage of good properties on the market is seeing properties selling quickly with minimal discounting.VendorTime On Market

Our Rental Markets

Rental market conditions remain diverse, with significant differences between the regions and housing types.

From a geographic perspective, the tightest rental markets are Darwin and Perth, where both house and unit rents are recording double-digit annual growth.

Chnage In Rent

Tim Lawless research director of Corelogic explains…

“Rents are rising at a record-setting pace across both Perth and Darwin, with the quarterly trend up 5.9% and 7.7% respectively.

Rental prices in Perth and Darwin started surging higher in September last year.

The monthly growth in rents across Perth quickly accelerated from an already high 1.1% in September 2020, to 2.0% by March 2021.

Darwin rents have risen by an average 2.1% per month for the past seven months, including a 2.4% lift in March 2021.

Both these markets have seen a recent history of low housing investment which has kept rental supply low at a time of rising demand.

Although rents are surging in these cities, it is off the back of a long period of rental value declines. Perth rents remain -16.0% ($80/week) below the 2013 peak and Darwin rents remain -24.6% ($150/week) below their 2014 peak.”

Weaker rental conditions can be seen in the unit sector, both at a macro level and across the sub-regions of each city.

Overall, unit rents have been showing weaker conditions relative to houses throughout the COVID period to-date.

Since March last year, capital city house rents are up 5.2% while unit rents are down -3.8%.

The biggest drag on unit rents are Melbourne and Sydney, where unit rental conditions have been much weaker due to the demand shock caused by stalled overseas migration and international border closures.”

Sydney unit rents have posted a subtle rise over the past three months, while unit rents in Melbourne have held firm over the same period.

With housing values rising faster than rents, gross rental yields have been trending lower.

Most regions are still showing a gross yield higher than typical mortgage rates, implying some opportunity for positive cash flow investments.

Sydney and Melbourne stand out as having a much lower yield profile.

Both cities have seen gross yields fall to new record lows in March, with Sydney recording a gross yield of 2.7% and Melbourne dropping below the 3% mark for the first time on record.

Dwellings

Auction clearance rates

There were 3,791 homes taken to auction across the combined capital cities this week, the busiest auction week since the week ending 25th March 2018 when 3,990 capital city homes were taken to auction.

In comparison, last week saw 2,710 auctions held across the combined capitals, while at the same time last year, 3,289 homes were taken to auction.

The higher volumes saw the preliminary clearance rate strengthen, with 84.4 per cent of auctions recording a successful result, up from last week’s preliminary clearance rate of 82.0 per cent, which revised down to 80.9 per cent at final figures. Buy Home In Australia

Over the same week last year, a final clearance rate of just 37.3 per cent was recorded across the combined capitals as withdrawal rates surged amidst COVID-related restrictions.

This week last year, 50.2 per cent of auctions were reported as withdrawn, while just 4.1 per cent of auctions have been reported as withdrawn so far this week.

There were 1,899 auctions held in Melbourne over the week, and of the 1,663 results reported so far, 83.8 per cent have been successful.

Last week saw 1,322 homes taken to auction across the city, returning a final clearance rate of 78.8 per cent.

This time last year, 1,565 auctions were held across the city.

Sydney was host to 1,392 auctions this week, increasing from 1,025 over the previous week, and 1,279 this time last year.

The preliminary clearance rate came in at 89.1 per cent this week, increasing on the previous week’s preliminary clearance rate of 87.5 per cent, which revised down to85.0 per cent at final figures.

Sydney’s final auction clearance rate continues to maintain strength, holding above 80 per cent for the past 7 weeks and onceagain this week is likely to be no different once final results are collected.

Across the smaller auction markets, Canberra recorded the highest preliminary clearance rate at 86.3 per cent, followed by Adelaide at 73.9 per cent.

Auction volumes are set to fall next week due to the Easter long weekend, with CoreLogic currently tracking around 880 auctions across the combined capital cities, while the Easter period last year saw 634 homes taken to auction.

Capital City Auction

Weekly Clearance Rates

 

Regional 1

Regional 2

Now is the time to take advantage of the opportunities the current property markets are offering.

Metropole

Sure the markets are moving forward, but not all properties are going to increase in value at the same rate. And some sectors of the market will continue to languish.

Now, more than ever, correct property selection will be critical.

You can trust the team at Metropole to provide you with direction, guidance and results.

Whether you’re a beginner or an experienced investor, at times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that’s what you exactly what you get from the multi award winning team at Metropole.

We help our clients grow, protect and pass on their wealth through a range of services including:

  1. Strategic property advice. – Allow us to build a Strategic Property Plan for you and your family.  Planning is bringing the future into the present so you can do something about it now! Click here to learn more
  2. Buyer’s agency – As Australia’s most trusted buyers’ agents we’ve been involved in over $4Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney and Brisbane bring you years of experience and perspective – that’s something money just can’t buy. We’ll help you find your next home or an investment-grade property.  Click here to learn how we can help you.
  3. Wealth Advisory – We can provide you with strategic tailored financial planning and wealth advice. Click here to learn more about we can help you.
  4. Property Management – Our stress-free property management services help you maximise your property returns. Click here to find out why our clients enjoy a vacancy rate considerably below the market average, our tenants stay an average of 3 years, and our properties lease 10 days faster than the market average.

Source of graphs and data: CoreLogic, NAB and REA

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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. Visit Metropole.com.au


'This week’s Australian Property Market Update – Latest Data, State by State 29th March' have 25 comments

    Avatar

    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. 🙂

    Reply

      Michael Yardney

      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

      Reply

    Avatar

    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?

    Reply

      Michael Yardney

      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

      Reply

    Avatar

    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?

    Reply

      Michael Yardney

      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.

      Reply

    Avatar

    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

    Reply

      Michael Yardney

      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?

      Reply

    Avatar

    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?

    Reply

      Michael Yardney

      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.

      Reply

    Avatar

    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.

    Reply

      Michael Yardney

      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

      Reply

    Avatar

    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

    Reply

      Michael Yardney

      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

      Reply

    Avatar

    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

    Reply

      Michael Yardney

      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

      Reply

    Avatar

    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

    Reply

      Michael Yardney

      June 2, 2020 Michael Yardney

      I update the top section of this blog weekly and the lower half, state by state section monthly

      Reply

    Avatar

    May 16, 2020 ANN HOME

    Very informative. Thank you for sharing.

    Reply

    Avatar

    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.

    Reply

      Avatar

      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.

      Reply

        Michael Yardney

        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.

        Reply

    Avatar

    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

    Reply

    Avatar

    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.

    Reply

      Michael Yardney

      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

      Reply


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