Key takeaways
Australia’s housing is so horribly undersupplied that I've rarely encountered a supply-demand inflection point like this.
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, albeit more slowly.
Sydney property prices increased 0.1% over the last week, increased 0.4% over the last month and are 10.0% higher than they were 12 months ago.
Melbourne property prices remained flat over the last week, but increased 0.2% over the last month, and are 3.8% higher than they were 12 months ago.
Brisbane property prices increased by 0.3% over the last week, increased 0.9% over the last month and are 15.8% higher than they were 12 months ago.
Overall, Australian capital dwelling prices increased by 0.6% over the last month and are now 10.2% higher than they were 12 months ago.
This current property cycle has been driven by an undersupply of good properties relative to current demand pushing up property values and rents.
The depth of buyer appetite was again shown by this week's strong auction clearance rates despite 2,723 properties being put to auction as demand from buyers keeping up with the increased number of properties put to auction.
Australia’s housing is so horribly undersupplied that I've rarely encountered a supply-demand inflection point like this.
The depth of buyer appetite was again shown by this week's strong auction clearance rates despite 2,723 properties being put to auction as demand from buyers keeping up with the increased number of properties put to auction.
Easing inflation and the prospect of an earlier-than-expected rate cut are buoying vendor hopes and buyer appetites for property.
However beneath these headline results, housing market performance remains diverse around the country.
Moving forward, demand is going to continue to outstrip supply for some time to come as we experience high levels of immigration at a time when we’re just not building anywhere as many properties as we require.
At the same time, the cost of construction of delivering new dwellings will keep increasing not only because of supply chain issues and the lack of sufficient skilled labour but also because builders and developers will only commence new projects if they are financially viable and currently new projects will need to come on line at considerably higher prices than the current market price,
It will be much the same for our rental market where the supply / demand equation is so far out of balance that we’ve experienced an unprecedented rental crisis with historically low vacancy rates and skyrocketing rents and this will continue into 2024.
On the auction front, with 2,723 capital city homes going under the hammer last weekend, it was the second busiest week of auctions so far this year.
The preliminary clearance rate held up well under higher supply, coming in at 74.0%, 1.2 percentage points higher than the previous week’s preliminary clearance rate (72.8% which was revised down to 68.0% on final numbers).
See Corelogic's full auction report below.
- Sydney property prices increased 0.1% over the last week, increased 0.4% over the last month and are 10.0% higher than they were 12 months ago.
- Melbourne property prices remained flat over the last week, but increased 0.2% over the last month, and are 3.8% higher than they were 12 months ago.
- Brisbane property prices increased by 0.3% over the last week, increased 0.9% over the last month and are 15.8% higher than they were 12 months ago.
Overall, Australian capital dwelling prices increased by 0.6% over the last month and are now 10.2% 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.
Source: CoreLogic March 18th 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.
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 18th March 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 March 2024.
Sydney
Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
---|---|---|---|---|
All Houses | 1,887.405 | -4.722 | -1.7% | 10.6% |
All Units | 793.750 | 0.850 | 0.0% | 5.1% |
Combined | 1,447.330 | -2.480 | -1.4% | 9.0% |
Source: SQM Research
Melbourne
Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
---|---|---|---|---|
All Houses | 1,253.380 | 7.620 | 1.5% | 7.9% |
All Units | 605.689 | 1.311 | 1.2% | 2.0% |
Combined | 1,051.434 | 5.653 | 1.4% | 6.6% |
Source: SQM Research
Brisbane
Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
---|---|---|---|---|
All Houses | 1,059.581 | 4.401 | 1.8% | 11.8% |
All Units | 580.478 | 0.822 | 0.5% | 15.7% |
Combined | 940.439 | 3.511 | 1.6% | 12.2% |
Source: SQM Research
Perth
Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
---|---|---|---|---|
All Houses | 954.414 | -1.801 | 1.7% | 15.8% |
All Units | 497.004 | 6.496 | 3.0% | 16.8% |
Combined | 835.644 | 0.354 | 1.9% | 15.8% |
Source: SQM Research
Adelaide
Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
---|---|---|---|---|
All Houses | 874.293 | 3.763 | 1.2% | 13.8% |
All Units | 443.387 | -3.087 | 1.3% | 16.0% |
Combined | 797.026 | 2.534 | 1.2% | 14.0% |
Source: SQM Research
Canberra
Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
---|---|---|---|---|
All Houses | 1,204.100 | 2.337 | 0.3% | 17.0% |
All Units | 598.427 | -0.052 | -0.7% | 0.7% |
Combined | 984.932 | 1.473 | 0.0% | 12.7% |
Source: SQM Research
Darwin
Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
---|---|---|---|---|
All Houses | 659.100 | 0.500 | -0.6% | -3.4% |
All Units | 378.168 | 0.165 | 0.7% | 0.9% |
Combined | 548.932 | 0.369 | -0.3% | -2.4% |
Source: SQM Research
Hobart
Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
---|---|---|---|---|
All Houses | 805.965 | 3.632 | 1.2% | 1.7% |
All Units | 505.110 | -1.474 | -0.9% | 2.0% |
Combined | 760.776 | 2.865 | 1.0% | 1.7% |
Source: SQM Research
National
Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
---|---|---|---|---|
All Houses | 908.057 | -1.759 | 1.3% | 10.8% |
All Units | 534.897 | -1.282 | 0.5% | 5.9% |
Combined | 828.369 | -1.657 | 1.2% | 10.0% |
Source: SQM Research
Cap City Average
Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
---|---|---|---|---|
All Houses | 1,351.430 | -2.636 | 0.2% | 11.1% |
All Units | 669.278 | 0.083 | 0.8% | 5.7% |
Combined | 1,151.278 | -1.838 | 0.3% | 9.9% |
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.
- 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. - 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. - 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. - 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. - 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
Preliminary clearance rate holds up under higher supply
With 2,723 capital city homes going under the hammer last week, it was the second busiest week of auctions so far this year.
The preliminary clearance rate held up well under higher supply, coming in at 74.0%, 1.2 percentage points higher than the previous week’s preliminary clearance rate (72.8% which was revised down to 68.0% on final numbers).
Sydney was the only capital city to record a lower preliminary clearance rate, with 74.8% of auctions returning a successful result so far, down from 76.2% over the previous week (revised down to 71.1% on final numbers) and the lowest preliminary clearance rate so far this year.
Although the trend in clearance rates has been softening across Sydney, the success rate remains above the decade average of 72.2% on the preliminary rate and 68.1% on the final rate.
Melbourne’s preliminary clearance rate recorded a solid bounce back, rising to 72.4% after the previous week’s long weekend saw the preliminary clearance rate drop to 66.2% (revising down to 61.9% on final numbers).
Last week’s early result was the second highest so far this year, after the second week of February (73.1%).
With 1,387 auctions held, this was also the second-highest number of auctions held so far this year.
The preliminary clearance rate was up across the smaller capitals as well, led by Adelaide with a stunning 92.6% preliminary clearance rate.
Brisbane’s clearance rate came in at 71.9%, while Canberra’s preliminary clearance rate came in at 69.9%.
There were 181 auctions held across Brisbane last week, 159 in Adelaide, 110 in Canberra and 19 in Perth.
Four of the eight auctions reported in Perth so far were successful, while we are yet to receive the results of the three auctions in Tasmania.
City | Clearance Rate | Total Auctions | CoreLogic auction results | Cleared Auctions | Uncleared Auctions |
---|---|---|---|---|---|
Sydney | 74.8% | 864 | 652 | 488 | 164 |
Melbourne | 72.4% | 1,387 | 1,067 | 772 | 295 |
Brisbane | 71.9% | 181 | 114 | 82 | 32 |
Adelaide | 92.6% | 159 | 81 | 75 | 6 |
Perth | n/a | 19 | 8 | 4 | 4 |
Tasmania | n/a | 3 | 0 | 0 | 0 |
Canberra | 69.9% | 110 | 73 | 51 | 22 |
Weighted Average | 74.0% | 2,723 | 1,995 | 1,472 | 523 |
Source: CoreLogic
Our rental markets
Our rental markets have been tightening further over the last few months, with vacancy rates for both houses and apartments extremely low across the country and asking rents rising rapidly.
Asking rents across the capital cities for houses had been rising in annual terms in the “double digits”, while for units, new asking rents are rising at faster rates, at over 20% in Sydney, Melbourne and Brisbane.
The recently released National Accounts showed that Australia’s population has grown by around 620,000 people in the past financial year.
That’s the highest number in history and a hundred thousand more than what the May federal budget projected.
This record 2.8% expansion in the 15 plus age group of our population is placing a great strain on our rental markets.
The number of overseas students and also people on graduate visas in Australia has increased by just over three hundred thousand in the last financial year.
In particular rents have been rebounding across inner-city rental markets (popular with international students) after slumping during the pandemic when international borders were closed.
While the pace of rental growth is likely to slow down, with current vacancy rates rents will continue to increase as there is a minimal new supply of properties set to enter the market in the medium-term future.
Sydney
Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
---|---|---|---|---|
All Houses | $1,054.16 | 4.84 | 1.3% | 11.9% |
All Units | $703.58 | 2.42 | 1.5% | 10.3% |
Combined | $846.03 | 3.40 | 1.4% | 11.1% |
Source: SQM Research
Melbourne
Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
---|---|---|---|---|
All Houses | $741.14 | 0.86 | 0.5% | 15.1% |
All Units | $552.70 | 2.30 | 2.3% | 10.3% |
Combined | $630.36 | 1.71 | 1.5% | 12.6% |
Source: SQM Research
Brisbane
Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
---|---|---|---|---|
All Houses | $713.73 | -3.73 | -0.7% | 6.9% |
All Units | $571.40 | 2.60 | 0.7% | 10.9% |
Combined | $649.68 | -0.88 | -0.1% | 8.5% |
Source: SQM Research
Perth
Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
---|---|---|---|---|
All Houses | $778.11 | -1.11 | -0.2% | 17.4% |
All Units | $580.10 | 5.90 | 1.7% | 16.9% |
Combined | $695.35 | 1.82 | 0.4% | 17.3% |
Source: SQM Research
Adelaide
Property Type | Rent $) | Weekly change | Monthly change | 12 Months change |
---|---|---|---|---|
All Houses | $638.38 | -0.38 | -0.1% | 12.9% |
All Units | $457.72 | -3.72 | 1.4% | 12.7% |
Combined | $576.18 | -1.53 | 0.3% | 13.0% |
Source: SQM Research
Canberra
Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
---|---|---|---|---|
All Houses | $751.84 | -0.84 | 0.1% | -1.6% |
All Units | $575.89 | 1.11 | 1.0% | 2.1% |
Combined | $656.44 | 0.22 | 0.5% | 0.1% |
Source: SQM Research
Darwin
Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
---|---|---|---|---|
All Houses | $719.33 | 0.67 | -1.6% | 0.7% |
All Units | $492.08 | -0.08 | -2.6% | 9.4% |
Combined | $583.97 | 0.23 | -2.1% | 5.0% |
Source: SQM Research
Hobart
Property Type | Rent 9$) | Weekly change | Monthly change | 12 Months change |
---|---|---|---|---|
All Houses | $543.75 | 0.25 | 0.3% | -1.3% |
All Units | $463.96 | 1.04 | -0.9% | -3.5% |
Combined | $511.69 | 0.57 | -0.1% | -2.1% |
Source: SQM Research
National
Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
---|---|---|---|---|
All Houses | $688.00 | 0.00 | 0.0% | 8.3% |
All Units | $532 | -4.00 | 0.4% | 8.6% |
Combined | $615.48 | -1.86 | 0.2% | 8.5% |
Source: SQM Research
Cap City Average
Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
---|---|---|---|---|
All Houses | $834 | 2.00 | 0.8% | 12.1% |
All Units | $622 | 3.00 | 1.6% | 10.5% |
Combined | $721.10 | 2.53 | 1.2% | 11.4% |
Source: SQM Research
Vendor metrics
As the following chart shows, houses are still being snapped up quickly by eager buyers.
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.