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Australian housing market momentum continued to bound along this week despite lingering COVID infection wobbles in Melbourne and Sydney.
Major capital city property prices rose another 0.4% this week, up 1.2% so far in June, up 11.4% year to date.
All our capital cities in line for double-digit property price growth this year.
Since Stage 4 lockdowns were eased last year Sydney property values grew the fastest at 15.0%.
Even Melbourne prices rose 8.5% since then, including a 0.4% gain this past week as on-site auctions cranked up again with a preliminary auction clearance rate of 71.5%.
Clearly, buyers are still out in force – owner-occupiers, investors, and first home buyers – at a time when available supply is struggling to keep up, keeping pushes prices higher.
- Sydney properties increased 0.5% over the last week alone, up 1.7% over the month to date and 14.4% this year alone.
- Melbourne properties increased in value by 0.4% over the week and are up 9.2% this year alone, and
- Brisbane housing prices increased 0.5% over the last week and 10.9% so far this year.
Overall property values around Australia have increased 10.9% over the last 12 months.
This surge in property value has caused all our major banks to forecast 20% to 30% rises in property values around Australia this cycle with strong growth continuing for some time and then slowing down over the next couple of years.
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.
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 below year-ago levels across the capital cities.
At the same time “time on market” continues to decline.
These are signs that property values will continue to rise.
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 June 21st provided by NAB, Corelogic, and realestate.com.au.
What’s happening in our property markets?
The REA Buyer Deman Index
The REA Insights Buyer Demand Index has remained broadly flat over the past month, at levels almost 50% above the average seen over 2019.
The level of buyer demand fell by 1.1% last week and is now just over 10% below the historic peak recorded in mid-February this year.
According to Paul Ryan, demand in Melbourne increased by 1.1%, despite continued lockdowns, showing that buyers are mostly looking past current restrictions.
Demand changes across the country were mixed, with disruptions to the market due to the Queen’s Birthday long weekend.
Demand is roughly at the same level as seen this time last year – but demand for units has been the stand-out, sitting 9% higher than a year ago.
While the number of high-intent buyers on realestate.com.au rebounded strongly in 2020 following the end of country-wide lockdowns, in 2021 demand has increased further, spurred by continued low borrowing costs and increases in stock coming onto the market.
Demand is likely to remain at elevated levels over the coming weeks and months as interest in the property market remains high.
However, this additional stock will likely lead to more buyers finding new homes, which in turn could weigh on the overall level of demand.
The REA Rental Demand Index
The REA Insights Rental Demand Index, was unchanged this week
Rental demand in Victoria increased strongly, and is now at a higher level than before the most recent COVID-19 lockdown began.
According to Paul Ryan, changes in other states were mixed, in a week that included the Queen’s Birthday long weekend.
Median property prices
NOW READ: Why Bluechip property will rebound strongly in 2021
Vendor Metrics
Vendor metrics confirm we’re in 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.
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
The inner-city unit markets have struggled since borders were closed to international students, visitors, and those who would have sought holiday work, for example in hospitality, on farms, and elsewhere.
Melbourne and Sydney’s inner-city markets remain very weak with rents still falling. 
Compared to pre-pandemic levels, Melbourne’s inner-city unit rents were down 27.7% as of April 2021, Sydney rentals down 18.2%. Inner-city prices for such units remain flat.
The absence of new international students and some pandemic preference for less congested and near-city living remain headwinds.
This recent Federal Budget was built on the assumption that international borders will remain essentially closed until mid-2022 so little immediate relief on this front seems likely.
Inner-city rents in Brisbane have not been as soft as in the two larger cities but still fell a net 3.0% from pre-pandemic levels.
Perth though has tightened, even in inner-city markets that have shown a net rental increase of +2.1%.
While Sydney and Melbourne’s inner-city rental markets remain soggy, prices of units across these cities covering the broad array of suburban units, continue rising, evidenced by reports of demand from owner-occupiers, first home buyers, and investors.
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.
Last weekend’s auction clearance rates
Auction clearance rates remained strong this weekend despite a flood of properties being put on the market.
Dr. Andrew Wilson of My Housing Market was tracking 2,323 auctions in the major auction capitals this weekend, which was predictably well above last weekend’s Queen’s Birthday record of 1,413 and significantly higher than the 1,019 homes auctioned over the same weekend last year when Covide slowed things down.
All our capital cities delivered strong auction clearance rates with Brisbane being the stand-out performer with a preliminary auction clearance rate of 88.8% from the 107 auctions conducted (and that’s a big number for Brisbane.)
Other preliminary clearance rates (as reported by Dr. Andrew Wilson’s Auction Insider) were:-
- Sydney – 80.8%
- Melbourne – 74.4%
- Adelaide – 85.6%
- Canberra – 81.8%
Source of graphs and data: CoreLogic, NAB and REA and Dr. Andrew Wilson – My Housing Market 31st May 2021
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'This week’s Australian Property Market Update – Latest Data, State by State 21st June 2021' have 34 comments
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