This week’s Australian Property Market Update – Latest Data, State by State 1st March

House prices surged across Australia through the month of February.  

In fact price growth is accelerating with Corelogic reporting they haven’t seen property values grow this fast since 2013.

Dwelling prices grew nationally by 2.1% in the month of February, but this doesn’t reflect the granular nature of our property markets where in some locations property values grew considerably more.

Sydney property prices rose 2.5% in the last month – up 3.6% in the last quarter and Sydney’s auction market remains strong clearing well over 80% of auctions for the fourth week in a row, with volumes pushing higher too.

Melbourne property prices rose 2.1% in the month of February, up 3.5% in the last quarter  including 0.6% this week, and weekend auction clearance rates remained strong for last weekend’s Super Saturday of auctions. Melbourne is still making up price falls during last year’s extended lockdown and down 1.3% in annual terms.

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

property values 1st March 2021

Month on month dwelling values

 

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

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

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

The charts below show how the number of new properties coming onto the market (listings) are slowing down.

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.

New Listings

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 February 22nd provided by NAB,  Corelogic, and realestate.com.au.

What’s happening in our property markets?

The REA Buyers Index

The REA Insights Buyer Demand Index which measures the volume of high-intent buyers on realestate.com.au, rose by 3.1% last week, hitting a new record high.

Rea Buyer

According to Cameron Kusher, demand increased across all states and is at record levels in New South Wales, Victoria and Queensland.

 Compared to the same time last year, demand for properties for sale is up 45.1%, Kusher said: Houses Property Market

At a national level, year-on-year demand is trending quite flat. Looking at the specific states demand is trending lower in Victoria, Western Australia, Northern Territory and Australian Capital Territory and trending higher in Queensland and Tasmania.

Sales volumes continue to climb each and every week and are now at levels similar to those seen in spring of last year.

At the same time the stock of properties listed for sale remains quite low.

As a result we expect the strong demand for properties for sale to persist over the coming weeks.

The REA Rental Demand Index

The REA Insights Rental Demand Index which measures the volume of high-intent renters on realestate.com.au, fell by -0.8% last week.

Rea Rent

According to Cameron Kusher, rental demand fell last week across most states, with Victoria and South Australia the only states that saw an increase.

Rental demand is now -11% below peak and lower across all states. Houses Of Different Size With Different Value On Stacks Of Coins. Concept Of Property, Mortgage And Real Estate Investment.

Although rental demand is trending lower, this is an occurrence we see each year.

Further, rental demands remains considerably higher than a year ago, up 22.2%.

Rental demand is higher than it was a year ago across all states, however, we’ve seen the largest increase in Victoria, which was the market that was also most heavily impacted by COVID-19 last year.

The market is continuing to move out of the busiest time of the year and, as a result, I expect demand to continue to fall in coming weeks.

But there is a flight to quality.

The shortage of A-grade homes and investment properties compared to the number of buyers out looking for them means that property values in certain locations are steadily creeping up.

On the other hand B grade (secondary) properties are selling at a discount and no one really wants C grade properties.

Homes For Sale

Properties listed for sale For Sale

At a time when buyers are returning to the market as confidence rises, the overall number of properties listed for sale is down 18% over the last year.

This lack of good properties for sale at a time when many interested buyers have returned to the market is one of the reasons property prices have, in general, held up well.

This confirms what we are finding on the ground Metropole that well-located properties are selling quickly with a queue of buyers waiting for them.

 

Homes For Sale

Median property prices

Capital City Private
Median House Price


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.

 

Vendor metrics

Our Rental Markets

Corelogic report as follows….

The disparity in rental markets across Australia has been extreme.

At one end of the spectrum we have extremely tight rental conditions in cities such as Perth and Darwin where both house and unit annual rental growth is above 10%.

At the other end are the unit rental markets of Sydney and Melbourne where rents have plunged over the last year, down -5.3% in Sydney, and -8.0% lower in Melbourne.

In a similar vein to housing values, rental markets are stronger within the detached housing sector relative to the unit sector.

Rents Houses

change in rents - UNits

Tim Lawless research director of Corelogic explains…Rent

“The strength in Perth and Darwin’s rental sector can be attributed to a mix of low supply, due to a recent history of low investor participation, and rising demand as interstate migration trends move into positive territory.

The opposite trends in Sydney and Melbourne have seen rental markets weaken; higher rental supply due to a recent history of investor exuberance, weaker demand from negative interstate migration and, more recently, a demand shock from closed international borders where Melbourne and Sydney were the primary recipients of migrant arrivals.

However, the weak conditions across Sydney and Melbourne unit markets look to be turning.

Sydney’s rental index for units has recorded two successive months of mild rises, while Melbourne unit rents edged higher in February after falling for nine of the previous ten months.

The improvement in unit rents across Australia’s two largest cities is likely to be at least partially seasonal as demand from domestic students generally rises early in the year, but could also be attributable to more people returning to work in the inner cities as well as workers in some of the hardest hit industries such as hospitality, food and accommodation services returning to employment.

Until international borders re-open and migration rates return to their pre-COVID levels, a more substantial improvement in inner city apartment rents is unlikely.”

Weaker rental conditions in Sydney and Melbourne relative to rising home values is evident in the gross rental yields, with yields across both cities falling to fresh record lows in February.

Gross rental yields in Sydney were recorded at 2.9% at the end of February, while in Melbourne yields averaged 3.0%. Every other capital city is recording gross rental yields around the mid-4% mark or higher, implying positive cash flow opportunities are more likely in these markets.

 

rental yields

Auction clearance rates

Just under 2,500 homes taken to auction across the combined capital cities.

sold sale

There were 2,451 homes taken to auction across the combined capital cities this week, up from 2,128 over the previous week, although lower than this time last year when 3,026 auctions were held.

Of the 2,053 results collected so far, 81.9 per cent reported a successful result, down from last week’s preliminary auction clearance rate of 84.4 per cent, which revised down to 79.6 per cent at final figures.

Over the same week last year, 73.9 per cent of reported auctions were successful across the combined capital cities.

The final auction clearance rate has held above 75.0 per cent since auction reporting re-commenced in late January after the seasonal slowdown and this week will likely be no exception despite higher volumes.

In Melbourne, 1,273 homes were taken to auction this week, compared to 1,095 over the previous week and 1,612 this time last year.

Of the 1,091 auction results collected so far, 77.7 per cent were reported as successful, down from the previous week’s preliminary clearance rate of 82.2 per cent, which revised down to 77.4 per cent at final figures.

This time last year, 74.8 per cent of reported auctions were successful. Sydney was host to 844 auctions this week, increasing from 768 over the previous week, although lower than this time last year when 1,087 homes were taken to auction across the city.

The preliminary clearance rate came in at 88.9 per cent this week, up slightly from the previous week’s preliminary clearance rate of 88.2 per cent, which revised down to 83.4 per cent at final figures.

This time last year, 76.6 per cent of reported auctions were successful.

It is likely that Sydney’s final clearance rate will come in around the low to mid 80 per cent range for the 4th consecutive week.

Across the smaller cities, Canberra recorded the highest preliminary clearance rate at 84.7 per cent, followed by Adelaide (82.5 per cent) and Brisbane (79.0 per cent).

 

Screen Shot 2021 03 01 At 4.43.28 Pm

Auction clearance rates

regional auction clearance results

 

 

Now is the time to take advantage of the opportunities that will present themselves as the market moves on in 2021

Metropole

Sure the markets are moving on, but not all properties are going to increase in value. 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.

In “interesting” 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.

Remember the multi award winning team of property investment strategists at Metropole have no properties to sell, so their advice is unbiased.

Whether you are a beginner or a seasoned property investor, we would love to help you formulate an investment strategy or do a review of your existing portfolio, and help you take your property investment to the next level.

Please click here to organise a time for a chat. Or call us on 1300 METROPOLE.

Source of graphs and data: CoreLogic.

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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 1st March' have 23 comments

    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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