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By Michael Yardney
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This week’s Australian Property Market Update – Latest Data, State by State May 28th 2024

key takeaways

Key takeaways

Inflation is easing, but it’s doing so more slowly than previously expected and still remains high.

The Reserve Bank expect that inflation will remain higher than the target range for some and is therefore vigilant to upside risks but, on balance, it's likely rates will remain on hold for a long time.

The preliminary clearance rate across the combined capitals came in at 71.5% last weekend , 40 basis points higher than the previous week (71.1%)

The volume of capital city auctions was roughly in line with the prior week, with 2,163 auctions held (2,146 the week prior) but well up on the same week a year ago when 1,887 auctions were held.

This week, CoreLogic reports that:

Sydney property prices increased 0.1% over the last week, increased 0.5% over the last month and are 7.3% higher than they were 12 months ago.

Melbourne property prices increased 0.1% over the last week, also increased 0.1% over the last month, and are 2.0% higher than they were 12 months ago.

Brisbane property prices increased by 0.4% over the last week, increased 1.2% over the last month and are 15.9% higher than they were 12 months ago.

Overall, Australian capital dwelling prices increased by 0.7% over the last month and are now 9.0% higher than they were 12 months ago.

Our combined capital cities have increased in value by 10.2% over the last year. That's very different to the pessimistic forecasts of double digit price falls made by the RBA and many of the bank economists only 12 months ago

And it's likely property prices and rents are going to keep increasing throughout 2024.

This current property cycle has been driven by an undersupply of good properties relative to current demand pushing up property values and rents there was nothing in last week's budget to suggest there will be any significant change in the near future.

Unfortunately, the undersupply properties is going to persist for some time with all commentators that there is no way we're going to hit the housing targets required to meet our demand.

Inflation is easing, but it’s doing so more slowly than previously expected and still remains high.

The Reserve Bank expect that inflation will remain higher than the target range for some and is therefore vigilant to upside risks, stating:

“The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain, and the board is not ruling anything in or out. The board will rely upon the data and evolving assessment of risks.”

“We don’t think we necessarily have to tighten again. But we can’t rule it out. If we have to, we will. If we really think that inflation is going to be persistent and significantly above our forecast, we will tighten again.”

They also said:  “Inflation will need to be persistently and significantly above their forecast” for them to raise rates.

In other words, interest rates won’t rise if there are short-term upticks or blips. but will only increase again if significnat factors are persistent.

So what factors will the RBA take into account?

Dr Andrew Wilson has provided the following matrix of factors and concludes that, on balance, interest rates will remain steady for quite some time.

Current Rate Decision Variable 27 May

Combined capital city auction volumes hold steady week-on-week

Remember... Auction clearance rates are a great "in time" indicator of both buyer and seller sentiment.

The preliminary clearance rate across the combined capitals came in at 71.5% last weekend , 40 basis points higher than the previous week (71.1%) which was revised down to 65.4% once finalised.

The volume of capital city auctions was roughly in line with the prior week, with 2,163 auctions held (2,146 the week prior) but well up on the same week a year ago when 1,887 auctions were held.

The higher auction count relative to a year ago is reflected more broadly in CoreLogic listings data which shows the flow of new listings over the past four weeks to be 17% higher than a year ago and almost 7% above the previous five year average.

See Corelogic's full auction report below.

This week, CoreLogic reports that:

  • Sydney property prices increased 0.1% over the last week,  increased 0.5% over the last month and are 7.3% higher than they were 12 months ago.
  • Melbourne property prices increased 0.1% over the last week,  also increased 0.1% over the last month, and are 2.0%  higher than they were 12 months ago.
  • Brisbane property prices increased by 0.4% over the last week, increased 1.2% over the last month and are 15.9% higher than they were 12 months ago.

Overall, Australian capital dwelling prices increased by 0.7% over the last month and are now 9.0% higher than they were 12 months ago.

Clearly, the property cycle is moving on driven by an undersupply of good properties relative to steady demand from buyers.

Weekly Change 27 May

Monthly Change 27 May

12 Month Change 27 May

Source: CoreLogic May 27th 2024

Of course, these are "overall" figures - there is not one Sydney or Melbourne or Brisbane property market.

And various segments of each market are performing differently.

The more expensive parts of our capital cities are likely to outperform this year as the local residence will, in general, have more equity in the properties they are selling, and they won't be as sensitive to high interest rates and the high cost of living as the outer and new suburbs.

Monthly Change In Hvi

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 20th May 2024 provided by CoreLogic, and realestate.com.au.

Property asking prices

Property asking prices are a useful leading indicator for housing markets - giving a good indication of what's ahead.

Here is the latest data available for May 2024.

Sydney

Property type Price ($) Weekly Change Monthly Change % Annual % change
All Houses 1,930.568 0.172 2.2% 9.5%
All Units 804.603 5.397 0.6% 6.5%
Combined 1,476.713 2.278 1.8% 8.4%

Source: SQM Research

Melbourne

Property type Price ($) Weekly Change Monthly Change % Annual % change
All Houses 1,257.368 3.532 -0.3% 6.8%
All Units 605.063 -1.563 0.0% 2.6%
Combined 1,053.572 1.940 -0.2% 5.8%

Source: SQM Research

Brisbane

Property type Price ($) Weekly Change Monthly Change % Annual % change
All Houses 1,099.962 0.977 1.4% 14.8%
All Units 610.969 2.231 1.4% 19.5%
Combined 978.188 1.290 1.4% 15.4%

Source: SQM Research

Perth

Property type Price ($) Weekly Change Monthly Change % Annual % change
All Houses 988.327 3.372 0.5% 18.1%
All Units 516.188 2.012 1.7% 17.7%
Combined 865.560 3.018 0.7% 17.9%

Source: SQM Research

Adelaide

Property type Price ($) Weekly Change Monthly Change % Annual % change
All Houses 902.602 -6.502 0.6% 15.0%
All Units 469.409 5.790 1.9% 12.6%
Combined 824.902 -4.298 0.7% 14.8%

Source: SQM Research

Canberra

Property type Price ($) Weekly Change Monthly Change % Annual % change
All Houses 1,204.559 7.297 2.8% 15.0%
All Units 596.448 0.552 0.1% 0.7%
Combined 983.717 4.848 2.2% 11.2%

Source: SQM Research

Darwin

Property type Price ($) Weekly Change Monthly Change % Annual % change
All Houses 663.579 0.219 -0.5% -2.3%
All Units 370.995 2.338 0.3% -2.5%
Combined 548.782 1.051 -0.3% -2.4%

Source: SQM Research

Hobart

Property type Price ($) Weekly Change Monthly Change % Annual % change
All Houses 785.352 -0.898 -0.8% -0.2%
All Units 535.588 4.139 3.5% 3.0%
Combined 747.767 -0.140 -0.4% 0.0%

Source: SQM Research, May 2024

Source: SQM Research

National

Property type Price ($) Weekly Change Monthly Change % Annual % change
All Houses 919.805 0.354 0.8% 9.6%
All Units 545.364 1.463 1.3% 7.0%
Combined 839.714 0.591 0.9% 9.2%

Source: SQM Research

Cap City Average

Property type Price ($) Weekly Change Monthly Change % Annual % change
All Houses 1,378.349 -3.433 1.4% 10.3%
All Units 681.495 6.297 0.2% 7.8%
Combined 1,173.454 -0.572 1.2% 9.7%

Source: SQM Research

The value of property asking prices as a leading indicator for housing markets is quite significant.

In fact it's more valuable than median prices which can be quite misleading.

Let's delve into why this is the case and how it impacts the real estate market.

  1. Early Market Sentiment Indicator: Asking prices often reflect the current sentiment of sellers in the real estate market.
    If sellers are confident, they might set higher asking prices, anticipating strong demand.
    Conversely, if sellers are uncertain or perceive a market downturn, they might lower their asking prices to attract buyers.
    This makes asking prices a real-time indicator of market sentiment, often preceding changes in actual sales prices.
  2. Predictive of Future Price Trends: Trends in asking prices can be predictive of where the actual property prices are headed.
    For example, a consistent rise in asking prices over a period can signal an upcoming rise in transaction prices.
  3. Impact of Economic Factors: Economic factors such as interest rates, employment rates, and broader economic health influence asking prices.
    For instance, changes in the Reserve Bank of Australia's policies or shifts in the job market can quickly reflect in the asking prices, providing insights into how these factors are influencing the housing market.
  4. Regional Variations: In a diverse market like Australia's, asking prices can also provide insights into regional disparities.
    For instance, the property markets in Melbourne and Sydney might behave differently from those in Brisbane or Perth. Asking prices can give early indications of these regional trends.
  5. Influence of Supply and Demand: Asking prices are also a response to the balance of supply and demand in the market.
    In areas with limited supply and high demand, asking prices tend to be higher and vice versa.

However, it's important to note that while asking prices are a valuable indicator, they should not be used in isolation.

Other factors like actual sales prices, time on the market, auction clearance rates, and economic conditions also play crucial roles in understanding the property market dynamics.

READ MORE: The latest median property prices in Australia’s major cities

Last weekend's auction report

Combined capital city auction volumes hold steady week-on-week

The preliminary clearance rate across the combined capitals came in at 71.5% last week, 40 basis points higher than the previous week (71.1%) which was revised down to 65.4% once finalised.

The volume of capital city auctions was roughly in line with the prior week, with 2,163 auctions held (2,146 the week prior) but well up on the same week a year ago when 1,887 auctions were held.

The higher auction count relative to a year ago is reflected more broadly in CoreLogic listings data which shows the flow of new listings over the past four weeks to be 17% higher than a year ago and almost 7% above the previous five year average.

Capital City Auction Statistics 27 May

Melbourne moved through a fourth week where more than 1,000 auctions were held, with 1,025 homes going under the hammer.

At the same time last year 844 auctions were held, highlighting the pick-up in Melbourne listing activity.

More broadly, the number of new listings added to the Melbourne market over the past four weeks was 35% higher than a year ago and 24% above the previous five-year average for this time of the year.

747 auctions were held in Sydney, up from 725 the previous week and 698 a year ago.

The preliminary clearance rate slipped a little lower last week, to 72.7%, continuing an easing trend that has been evident since the first week of May.

Last week’s preliminary clearance rate is the lowest of the year to date.

Adelaide was the busiest of the smaller auction markets, hosting 149 auctions, only one more than Brisbane (148 auctions held), while the ACT was host to 82 auctions (highest volume since the last week of April).

Only nine auctions were held in Perth and 3 in Tasmania.

The preliminary clearance rate across Adelaide has held high, but at 78.4% was the lowest since the last week of April.

Brisbane’s early clearance rate, at 69.5%, was on par with the previous week (69.6%) and the ACT rose to 59.3% from 57.1% the prior week.

We are expecting the number of auctions to rise this week, with close to 2,400 auctions currently scheduled, while the following week is set to see a sharp drop with closer to 1,300 auctions being marketed.

City Clearance Rate Total Auctions CoreLogic auction results Cleared Auctions Uncleared Auctions
Sydney 72.7% 747 596 433 163
Melbourne 71.2% 1,025 756 538 218
Brisbane 69.5% 148 95 66 29
Adelaide 78.4% 149 74 58 16
Perth n/a 9 5 2 3
Tasmania n/a 3 3 2 1
Canberra 59.3% 82 54 32 22
Weighted Average 71.5% 2,163 1,583 1,131 452

Source: CoreLogic

Our rental markets

Nationally, rents were up 0.8% in April, a slightly lower rate of growth relative to February and March when the national rental index rose 0.9% and 1.0% respectively.

Across the individual capitals, dwelling rents rose over the past three months in most cities, with Darwin recording the only fall.

Despite an uptick in gross rental yields, investors with a high amount of leverage are likely to be facing a negative cash flow on their property.

Annual Change In Rents Houses

Annual Change In Rents Units

Gross Rental Yield Dwellings

Sydney

Property Type Rent ($) Weekly change Monthly change  12 Months change
All Houses $1,056.70 -4.70 -0.1% 9.5%
All Units $707.44 -2.44 -0.4% 7.3%
Combined $849.41 -3.36 -0.2% 8.4%

Source: SQM Research

Melbourne

Property Type Rent ($) Weekly change Monthly change  12 Months change
All Houses $744.95 0.05 0.2% 10.5%
All Units $559.05 -0.05 0.2% 7.6%
Combined $635.74 -0.01 0.2% 9.0%

Source: SQM Research

Brisbane

Property Type Rent ($) Weekly change Monthly change 12 Months change
All Houses $716.41 -0.41 0.1% 6.5%
All Units $581.65 2.35 0.7% 10.5%
Combined $655.77 0.83 0.4% 8.1%

Source: SQM Research

Perth

Property Type Rent ($) Weekly change Monthly change 12 Months  change
All Houses $787.38 -2.38 -0.1% 16.8%
All Units $610.99 4.01 2.6% 16.9%
Combined $713.72 0.29 0.8% 16.9%

Source: SQM Research

Adelaide

Property Type Rent $) Weekly change Monthly change 12 Months change
All Houses $643.82 1.18 1.7% 11.3%
All Units $487.04 6.96 3.3% 16.1%
Combined $589.92 3.17 2.2% 12.8%

Source: SQM Research

Canberra

Property Type Rent ($) Weekly change Monthly change 12 Months change
All Houses $770.89 7.11 0.2% -1.4%
All Units $565.93 -0.93 -0.9% 1.1%
Combined $659.72 2.75 -0.3% -0.3%

Source: SQM Research

Darwin

Property Type Rent ($) Weekly change Monthly change 12 Months change
All Houses $700.57 10.43 0.9% -1.4%
All Units $520.26 -30.26 -0.2% 3.6%
Combined $593.23 -13.79 0.4% 1.2%

Source: SQM Research

Hobart

Property Type Rent 9$) Weekly change Monthly change 12 Months change
All Houses $530.15 -2.15 -1.7% -0.6%
All Units $459.02 -0.02 0.6% 2.4%
Combined $501.58 -1.30 -0.9% -1.3%

Source: SQM Research

National

Property Type Rent ($) Weekly change Monthly change 12 Months change
All Houses $694.00 -3.00 -0.1% 9.5%
All Units $540.00 -2.00 -0.4% 8.9%
Combined $622.46 -2.54 -0.2% 9.3%

Source: SQM Research

Cap City Average

Property Type Rent ($) Weekly change Monthly change 12 Months change
All Houses $835 -4.00 -0.5% 9.6%
All Units $628 -1.00 0.2% 8.3%
Combined $724.80 -2.40 -0.2% 9.0%

Source: SQM Research

Sellers of good properties are on strike

Earlier in the year, more sellers put their properties on the market, feeling confident than inflation was under control and interest rates were heading down, however now the expectation of an interest-rate cut has been pushed out to the end of the year or early next year

There is now an acute shortage of A-grade homes and investment-grade properties for sale.

Capital City Properties For Sale 27 May

Listings 12 Month Change 27 May

Source: Corelogic May 2024

The charts below show the lack of property listings available for serious buyers at present, and with home buyers back in the market well located properties are being snapped up quickly.

But not all properties are selling well- there is currently a flight to quality.

Property listings for sale provide a useful real-time indicator of seller sentiment and general market confidence.

However, this year sellers have erred on the side of caution before listing with the flow of new listings consistently below average since spring last year.

Number Of Homes For Sale Combined Capital Cities

Source: CoreLogic May 2024

Vendor metrics


As the following chart shows, houses are still being snapped up quickly by eager buyers.

Median Days On Market 3 Months To April 2024

At a national level, properties are taking slightly longer to sell than they were during the property boom of 2020 and 2021.

However, the number of days to sell a property is still relatively low (a sign of the tight supply situation for good properties), and vendor discounting is still at very low levels.

In general, houses are selling quicker than apartments, but the shortage of good properties on the market is seeing A-grade properties selling quickly with minimal discounting.

Median Vendor Discount 3 Months To April 2024

 

ALSO READ: Latest property price forecasts revealed. What’s ahead in our housing markets in the next year or two?

About Michael Yardney 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.
78 comments

I own 4 properties around Brisbane. Is it a good time to sell properties or shall I wait till the interest rates start to come down? In other words, is it likely to be more profitable for me to hold properties or am I better off selling now?

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Western Australia has the strongest economic momentum, unchanged from the October 2023 survey ranking according to State of the States comparison. Currently 3.11% pop growth. Prices tipped to Increase by a further 30% by mid 2027. A great time to ...Read full version

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Hi Michael, I am an Australian citizen living overseas. We left Australia in 1996 and have a property in Sydney. We have a great estate agent who has managed the property for us. We would really like to sell it soon, but the CGT for non-residents sel ...Read full version

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