This week’s Australian Property Market Update – Latest Data, State by State 22nd Feb

House prices continue to rise across Australia through the month of February.  

In fact price growth is accelerating. Property 2

Prices in four of the five big capital cities are already over 1% higher over this month.

Sydney property prices have risen 1.6% so far this month, including another 0.7% this past week, the auction market-clearing well over 80% of auctions for the third week in a row, with volumes pushing higher too.

Melbourne property prices are up 1.1% so far this year, including 0.6% this week, and weekend auction clearance rates remained strong despite over 1,000 auctions last weekend. Melbourne is still making up price falls during last year’s extended lockdown and down 1.8% in annual terms.

Brisbane, Adelaide, and Perth prices all made gains of 0.1-0.5% this past week.

Property Heat Map 22nd Feb

Housing Inflation Resi Prices Through Pandemic

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 listings curves in Sydney and Melbourne tilted lower in gradient this past week, through it’s not clear how much this was affected by the lockdown in Victoria.

What is evident is that new property listings in Adelaide, and Perth have flattened off in recent weeks, a hint that if prospective supply has any say in price determination, then prices will continue to get support.

Strong demand at a time of limited supply must lead to property price growth.

New Listings Sydney Melbourne New Listings Bris Adelaide Perth

 

 

 

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 has fluctuated between increases and falls over the past four weeks, with a decline of -0.5% recorded last week.

Rea Insights Buyer

According to Cameron Kusher, Queensland, Western Australia, and Northern Territory were the only states in which demand for properties rose last week.

 Buyer demand in Queensland remains at record high levels. Kusher said:

Despite recent volatility, buyer demand remains 43% higher than it was this time last year. Australia Property

Although demand is much higher than it was a year ago, the trend in the year-on-year change is reducing at a national level and across all states.

Over the coming weeks I expect will continue to see heightened levels of demand with open homes as busy as ever and auction clearance rates sitting at boom-time levels.

Further, sales volumes are much higher than they were a year ago, prices are rising and while new supply is rising it remains lower than over recent years.

Buyers are continuing to compete for a relatively shallow pool of properties listed for sale while at the same time, the historic low borrowing costs are attracting more purchasers into the real estate market.

The REA Rental Demand Index

The REA Insights Rental Demand Index fell last week, declining by -3.4%.

Rea Insights Rent

According to Cameron Kusher, Western Australia was the only state in which demand didn’t fall, posting a significant 9.8% increase.

Following its peak in mid-January, rental demand has now fallen by -10.3%. House Model On Top Of Stack Of Money As Growth Of Mortgage Credit, Concept Of Property Management. Invesment And Risk Management.

Although rental demand has been trending lower over recent weeks, it remains 22.5% higher than this time last year.

Western Australia and Northern Territory are the only states in which demand is trending higher on a year-on-year basis.

After the initial January rush in demand, the coming few weeks have historically seen demand for rental accommodation soften, and there’s no reason to expect this year will be any different.

While demand is expected to fall over the coming weeks, we anticipate that it will remain elevated relative to a year ago.

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 19.1% 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.

Capital City Sale

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.

Time On Market

Our Rental Markets

Rent

After last year’s softness in the wake of the pandemic, Sydney’s rental markets seem to be stabilising again.

Vacancy rates remain on the high side (by Sydney’s standards), but detached houses asking rents look to have turned up, with hints even that apartment rents may also be stabilising. 

The continued economic recovery is playing its part, jobs returning, providing the wherewithal for rental demand to resume.

Melbourne’s rental vacancy rate remains more elevated, the state economy now recovering after the hits from the extended lockdown, with a hint that asking rents for detached houses maybe now starting to level out. 

The stand-out turnaround market has been Perth with a sub 1% vacancy rate, levels not seen since the heady days of the resources boom earlier last decade with the expansion of iron ore capacity and major LNG projects.

The Adelaide rental market also looks tight with asking rents rising in real terms.

After some initial jitters early in the pandemic, Brisbane’s vacancy rate has been declining since, now supporting asking rents, especially for houses.

Vacancy Rates Asking Rents

Auction clearance rates

 

There were 2,094 homes scheduled for auction across the combined capital cities this week, up from 1,496 over the previous week.

Of the 1,754 results collected so far, 84.4 per cent have reported a successful result, down from last week’s preliminary auction clearance rate of 86.1 per cent which revised down to 77.1 per cent at final figures.

Over the same week last year, 2,517 homes were taken to auction and 72.7 per cent of reported results were successful. sold sale

Melbourne was host to 1,061 auctions this week, up from 635 over the previous week, while this time last year a higher 1,248 homes were taken to auction.

Of the 908 results collected so far, 82.2 per cent were successful, down from last week’s preliminary clearance rate of 87.8 per cent, which revised down to 70.6 per cent at final figures.

The large revision last week was partly due to a spike in withdrawn auctions while the city was in lockdown, with 25.3 per cent of reported auctions returning a withdrawn result.

So far this week, just 6.4 per cent of reported auction results were withdrawn across the city.

In Sydney, 769 homes were taken to auction this week, compared to 625 over the previous week and 963 this time last year.

The preliminary clearance rate came in at 88.2 per cent this week, up from the previous week’s preliminary clearance rate of 87.5 per cent, which revised down to 83.9 per cent at final figures. This time last year, 74.5 per cent of reported auctions were successful.

It is likely that Sydney’s final auction clearance rate will come in above 80.0 per cent for the third consecutive week.

Across the smaller cities, Canberra recorded the highest preliminary clearance rate at 92.4 per cent, followed by Adelaide (85.4 per cent) and Brisbane (79.4 per cent).

Auction markets are set to be tested on larger volumes next week, with CoreLogic tracking close to 2,500 capital city auctions scheduled to be held.

Capital City Auctions

Weekly Clearance

Regional 1

Regional 2

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 22nd Feb' 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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