Residential property market momentum has continued to surge through the start of April.
As we hit the middle of the month we can see the five capital cities have already eclipsed last month’s 2.1% gain, rising 2.8% so far.
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 while our auction clearance rates have fallen a little, they still 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 month but, as always, results vary around Australia.
Sydney property prices rose 0.5% in the last week alone – up 6.3% 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 0.2% last week, up 4.9% 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.
The number of properties for sale in Australia have seasonally peaked
Listings seem to have (seasonally) peaked into the winter recess, though prospective new supply seems to be holding up stronger in Melbourne and Perth, the former still possibly playing some degree of catch up while the Perth market more fully wakens after its multi-year slumber.
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 12 April, 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.
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.
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 April 12th provided by NAB, Corelogic, and realestate.com.au.
What’s happening in our property markets?
The REA Buyers Index
The REA Insights Buyer Demand buyer demand remains heightened but has been trending lower in recent weeks.
According to Cameron Kusher, the fall in demand over the week was uniform, with falls recorded in every state and territory.
Perhaps a little surprisingly, demand for units is up the most over the past year (74.6%), although demand for houses has also seen large increases (54.1%).
While weekly demand is trending lower, demand remains higher than seen through much of 2020, particularly when compared with a year ago, when national lockdowns were just ending.
National buyer demand is 57.2% higher than a year ago, with increases recorded in all states and territories.
It is possible demand has declined as more active users on realestate.com.au successfully find and purchase properties, given we have seen higher weekly sales volumes since the market has opened in 2021.
Demand is likely 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 has been falling since the January peak.
According to Cameron Kusher, since the peak in rental demand earlier in the year, the index has fallen -26.4%.
Median property prices
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.
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.
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.
Auction clearance rates
Auction volumes rose across the combined capital cities this week with 2,170 homes taken to auction, increasing on the 845 auctions held over the Easter week.
The higher volumes saw an improvement in the preliminary auction clearance rate with 79.9% of homes selling, upon the 79.4% preliminary figure last week, which revised down to 77.1% at final collection on Wednesday. 
Over the same week last year, it was not only Easter that dampened auction activity, but also the imposition of social distancing measures which included the banning of on-site auctions.
Under these conditions, a lower 634 auctions were scheduled and only 30.6% cleared with 56% withdrawn.
In Melbourne, 1,035 auctions were held across the city this week returning a preliminary auction clearance rate of 77.2%.
The week prior saw a lower 211 auctions held and a final auction clearance rate of 73.5% and one year ago 88 auctions were held and 20% sold. Sydney recorded a preliminary auction clearance rate of 82.8% this week as volumes rose.
There were 814 auctions held across the city, upon the Easter week’s 404 auctions held when an 82% success rate was achieved according to final figures.
One year ago, 413 auctions were held and a 32.1% clearance rate was recorded.
Adelaide, Brisbane, and Canberra all recorded preliminary auction clearance rates above 80% this week, Canberra was the better performer with a 9 0.1% preliminary result.
In Perth and Tasmania, 50% or less auctions were successful over the week.
Now is the time to take advantage of the opportunities the current property markets are offering.
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.
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Source of graphs and data: CoreLogic, NAB and REA
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'This week’s Australian Property Market Update – Latest Data, State by State 12th April' have 25 comments
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