Untitled-1.jpg

The Urban Developer’s latest Gold Coast housing market insights reveals that conditions on the Gold Coast are cooling, with values now falling faster than almost anywhere else in Queensland...

Brisbane housing market update April 2023.jpg

The Urban Developer’s latest Brisbane housing market insights reveal that the city’s property prices are now 11 per cent below the record high, which was set in June 2022.

Sydney home prices April 2023 update.jpg

The Urban Developer’s latest Sydney housing market insights reveal the city’s home values have clawed back lost ground but still sit 11.2 per cent below their record high set in January 2022…

df5df956-b1ff-4e93-b824-12cd9494cf25

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>A surge in housing stock sitting on the market for up to 60 days may indicate the beginning of the capital city market downturn due to the impact of Covid-19.</p><p>Australia&#x27;s residential property listings increased by 3.7 per cent in March, from 296,770 listings in February to 307,847, according to SQM data.</p><p>SQM managing director Louis Christopher said the March result shows residential property listings are starting to accumulate. </p><p>“I note the surge of stock that has been on the market between 30 and 60 days, [m]ay reflect the start of a capital city housing market downturn due to the health and economic impact of Covid-19,” Christopher said. </p><p>“Listings that have been on the market for between 30 to 60 days surged by 74 per cent, suggesting sales activity did slow during March.”</p><p>Listings were up in all capital cities, with the largest increase in Darwin, at 15.6 per cent, followed by Canberra at 11 per cent and Sydney 10.5 per cent.</p><p>Hobart had the smallest increase of 2.4 per cent.</p><p><strong>Stock on the market</strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><table><thead><tr><th>City</th><th>March 2020 total </th><th>Monthly change %</th><th>Yearly change %</th></tr></thead><tbody><tr><th>Sydney</th><th>29,209</th><th>10.5%</th><th>-22.8%</th></tr><tr><th>Melbourne</th><th>36,125</th><th>5.7%</th><th>-14.0%</th></tr><tr><th>Brisbane</th><th>29,992</th><th>3.9%</th><th>-11.3%</th></tr><tr><th>Perth</th><th>23,591</th><th>8.5%</th><th>-16.1%</th></tr><tr><th>Adelaide</th><th>16,042</th><th>3.9%</th><th>-7.6%</th></tr><tr><th>Canberra</th><th>4,169</th><th>11.0%</th><th>-15.4%</th></tr><tr><th>Darwin</th><th>1,717</th><th>15.6%</th><th>-16.1%</th></tr><tr><th>Hobart</th><th>2,041</th><th>2.4%</th><th>-18.5%</th></tr><tr><th>NATIONAL</th><th>307,847</th><th>3.7%</th><th>-13.2%</th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sup><sub><em>Source: SQM Research</em></sub></sup></p><p>Capital city asking prices increased by 0.7 per cent for houses and increased 0.6 per cent for units during March, with house asking prices now averaging $990,500 and units at $577,000.</p><p>&quot;I also note though the rise in asking prices for the month, so quite a number of vendors have not really adjusted their pricing expectations as yet,” Christopher said.</p><p>Capital city asking prices posted increases of 8.8 per cent for houses and 2.1 per cent for units, a year ago. </p><p>Darwin and Hobart both recorded the highest increases for houses of 3.1 per cent, and the highest price increase in units was Sydney and Perth with 0.8 per cent increase.</p><p>Brisbane fared less well, with decreases in both house and unit prices – 0.1 per cent for houses and 0.5 per cent for units. </p><p>Canberra and Hobart posted declines in unit prices of 2.2 per cent and 3.5 per cent respectively but recorded house price increases of 0.4 per cent and 3.1 per cent respectively.</p><p>Adelaide posted declines in house prices of 0.9 per cent but unit prices were up by 0.3 per cent.</p><p>The results reveal further <a href="https://theurbandeveloper.com/articles/auction-withdrawals-coronavirus">cracks in the housing market</a>, after 45 per cent of house auctions were withdrawn on what should have been one of the busiest weekends of the year.</p><p>Homebuyers hoping for a drop in property prices due to knock-on effects from coronavirus could be disappointed, with CBRE&#x27;s <a href="https://theurbandeveloper.com/articles/auction-withdrawals-coronavirus">latest</a> market update pointing out that Australian property has traditionally fared relatively well during global economic shocks.</p><p>Australian property prices were ultimately boosted by the 1987 Black Monday sharemarket crash, while house prices and sales volumes rebounded by 19 per cent in 2009 after the global financial crisis. </p></div></div></div></div></div>

Despite a slight uptick in monthly figures, Australia’s residential property listings are down almost 14 per cent compared to 12 months ago...

733d72b5-17ea-41c7-9443-96dab4de353f

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Sydney and Melbourne dwelling prices are <a href="https://theurbandeveloper.com/articles/sydney-home-prices-set-to-pick-up-8pc-in-2020">forecast to drive</a> the nation&#x27;s housing market bounce back next year.</p><p>SQM Research tips Sydney could rise between 10 to 14 per cent and Melbourne 11 to 15 per cent over 2020.</p><p>The latest Housing Boom and Bust Report expects most of Australia’s capital cities to record dwelling price rises over next year, as a result of the <a href="https://theurbandeveloper.com/articles/rba-hints-at-historic-interest-rate-cut">RBA’s interest rate cuts</a>, a <a href="https://theurbandeveloper.com/articles/apra-relaxes-home-lending-rules">relaxing of credit restrictions</a> and Australia&#x27;s ongoing strong population growth rate.</p><p>“These factors are expected to drive the national housing market into 2020,” SQM managing director Louis Christopher said.</p><p>Latest ANZ and Corelogic research shows <a href="https://theurbandeveloper.com/articles/housing-affordability-to-deteriorate-over-2020">housing affordability </a>peaked in June, with forecasts property prices could reach record highs in the first half of 2020 if they continue at current rates. </p><p>National dwelling values were 6.5 times higher than gross annual household incomes in June, the lowest level since December 2013, according to ANZ and Corelogic.</p><p>Christopher’s housing report notes the base case forecast is for Australia’s dwelling prices to rise between 7 per cent to 11 per cent.</p><p>“Which is a strong bounce back from the price falls recorded over 2018 and the first half of 2019,” the report notes. </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><table><thead><tr><th>CITY</th><th>12-months to 31 Oct-2019: All dwellings</th><th>2020: Base-Case</th><th>2020 Scenario 2</th><th>Scenario 3</th><th>Scenario 4</th></tr></thead><tbody><tr><th>Perth</th><th>-8.7%</th><th>3%-to-6% </th><th>4% to 7%</th><th>3% to 6%</th><th>-6% to -2%</th></tr><tr><th>Brisbane</th><th>-1.1 %</th><th>3% to 6%</th><th>4% to 7%</th><th>3% to 6%</th><th>-3% to 1 %</th></tr><tr><th>Darwin</th><th>-9.2 %</th><th>-5% to -2%</th><th>-4% to -1%</th><th>-5% to -2%</th><th>-7 % to -3%</th></tr><tr><th>Melbourne</th><th>-1%</th><th>11% to 15%</th><th>12% to 17%</th><th>5% to 9%</th><th>0 to 4%</th></tr><tr><th>Sydney</th><th>-2.5%</th><th>10% to 14%</th><th>11% to 16%</th><th>4 % to 8%</th><th>0 to 4%</th></tr><tr><th>Adelaide</th><th>-0.9%</th><th>1% to 4%</th><th>1% to 4%</th><th>1% to 4%</th><th>-2% to 2%</th></tr><tr><th>Hobart</th><th>2.6%</th><th>5% to 8%</th><th>6% to 9%</th><th>4% to 7%</th><th>3% to 6%</th></tr><tr><th>Canberra</th><th>2%</th><th>3% to 7%</th><th>4% to 8%</th><th>2% to 5%</th><th>4% to 7%</th></tr><tr><th>Capital City Average (weighted)</th><th>-2.5%</th><th>7% to 11%</th><th>8% to 13%</th><th>4% to 7 %</th><th>-1% to 3 %</th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sub><sup>^</sup></sub> <strong><sup><sub>Base Case</sub></sup></strong><sup><sub>: Cash rate unchanged at 0.75%. Economy recovering. AUD ranges between US$0.65–US$0.75 NO APRA Intervention until late 2020 at the earliest.</sub></sup></p><p><strong><sup><sub>Scenario 2</sub></sup></strong><sup><sub>: RBA cuts to 0.50% by April 2020. Trade wars tentatively stabilised. Economy stable. No APRA intervention </sub></sup></p><p><strong><sup><sub>Scenario 3</sub></sup></strong><sup><sub>: Same as Scenario One, however: APRA intervention occurs mid-2020.</sub></sup></p><p><strong><sup><sub>Scenario 4</sub></sup></strong><sup><sub>: Trade talks collapse. Economy weakening. RBA cuts cash rate to zero by end 2020.</sub></sup></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>SQM’s base case forecasts assume no changes in interest rates and no intervention by the Australian Prudential Regulation Authority. </p><p>It also assumes a recovering Australian economy that has responded to this year’s rate cuts along with reduced international trade tensions. </p><h2><strong>Sustainable recovery? </strong></h2><p>“The Sydney and Melbourne housing markets have recorded a sharp turnaround in the second half of 2019,” Christopher said.</p><p>But despite strong price rises forecast, Christopher expects APRA will not immediately intervene. </p><p>“However we have some misgivings on the sustainability of this new recovery,” he said. </p><p>“Sydney and Melbourne are rising from an overvalued point. Long term, our two largest housing markets look vulnerable and forever reliant on cheap credit. </p><p>“Housing debt, while falling compared to GDP over 2019, is still very high. Better value can definitely be found elsewhere such as Perth and Brisbane,” he said. </p><p>Following the downturn in Perth’s housing market SQM expects the recovery in the mining sector will see the Western Australian capital record dwelling price rises of between 3 to 6 per cent next year.</p><p>Brisbane is also expected to benefit from the recovery in mining investment, forecast to record price rises of between 3 to 6 per cent.</p></div></div></div></div></div>

SQM Research tips Sydney could rise between 10 per cent to 14 per cent and Melbourne 11 per cent to 15 per cent.

f31c945f-df9a-40d7-b5cf-0ebb3c5ebac2

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>The residential property market in Australia continues to be challenged by social distancing measures and weaker economic activity, with preliminary clearance rates falling to 29.3 per cent during the Easter long weekend.</p><p>Corelogic figures recorded a very subdued 636 homes scheduled for auction across the nation’s combined capital cities—a figure which, even in the midst of the coronavirus downturn, isn&#x27;t in itself unusual given that the Easter weekend is traditionally one of the quietest weeks of the year.</p><p>But the preliminary auction clearance rate of 29.3 per cent is the lowest preliminary result recorded since Corelogic commenced auction reporting in 2008, dragged down by a withdrawal rate of 57 per cent as the market continues to feel the impact of coronavirus containment measures banning on-site auctions and viewings.</p><p>And the preliminary clearance rate—collected from 472 results so far—is likely to plunge even lower, and withdrawal rates higher, as more results are collated, according to Corelogic’s analysts.</p><p>“Looking forward, we are expecting the withdrawal rate to ease as fewer auctions are scheduled, with vendors preferring private treaty methods of sales, or preferring to defer their listing until some certainty returns to the market and economy.”</p><p>CoreLogic head of research Eliza Owen said that despite the short-term outlook, there was still cause for optimism.</p><p>“Looking ahead, the next few months will present an unprecedented challenge to the auction market and the housing market more broadly. </p><p>“However, once the virus is contained, property is looking increasingly better-placed for a recovery because of the high levels of monetary and fiscal <a href="https://theurbandeveloper.com/articles/coronavirus-delays-federal-budget-15bn-loans-to-businesses">stimulus </a>available.”</p><p><strong>Weekly clearance rates, combined capital cities</strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/65bcbed4-8ebc-44e0-8759-d77825f810b3.png" width="1838"/></picture><div><span style="align-content:left;opacity:0.8">▲ Combined weekly auction clearance rates for all capital cities in April showing a preliminary rate of 29.3 per cent.</span><span style="float:right;opacity:0.8">Source: CoreLogic </span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>For now, the monetary, fiscal and social <a href="https://theurbandeveloper.com/articles/coronavirus-eviction-moratorium">policies </a>rolled out by the federal and state governments may already be helping to <a href="https://theurbandeveloper.com/articles/new-fiscal-policies-shift-the-outlook-for-rental-housing">soften the blow</a> for the rental market, at least temporarily.</p><p>SQM data shows Australia’s residential rental vacancy rate remained stable at 2.0 per cent in March, with the total number of vacancies Australia-wide now at 67,371 vacant residential properties.</p><p>Most states recorded minor 0.1 per cent declines in vacancy rates, with the exception of Sydney, Melbourne and Darwin, which were stable.</p><p>SQM managing director Louis Christopher said the minor decline in most capital cities’ vacancy rates for March was somewhat surprising given the uncertainty around the economy. </p><p>“With job losses, a freeze in migration and an expected sharp rise in short-term accommodation vacancies,we are likely to record significant increases in rental vacancy rates as 2020 progresses. </p><p>“Let’s keep in mind our methodology requires a property to be advertised for three weeks or longer before we regard it as unoccupied,” Christopher said.</p><p>Capital city asking rents decreased by 3.2 per cent for houses and 2.9 per cent for units for the week ending April 12, with asking rents of $544 per week for houses and $428 per week for units.  </p><p>“I also note the 3.2 per cent drop in asking rents for houses over the month, which may well be as a result of many short-term accommodation dwellings <a href="https://theurbandeveloper.com/articles/domain-rents-listings-increase">entering </a>into the longer-term leasing market, and overall, a sign of things to come,” Christopher said.</p><p>Sydney, Melbourne, Brisbane and Hobart all recorded decreases in asking rents for both houses and units over the month. </p><p>Perth and Adelaide were the only capital cities to record rent increases for both houses and units, with asking prices in Perth increasing by 1.9 per cent for houses and 0.8 per cent for units. </p><p>Adelaide recorded a 0.3 per cent increase for houses and 1.4 per cent for units.</p><p>Canberra and Darwin recorded increases in house asking rents with Canberra increasing by 2.6 per cent and Darwin 0.1 per cent, however, both cities had declines in unit prices over the month—Canberra  by 0.1 per cent and Darwin by 0.6 per cent. </p><p>While the impact of the Covid-19 pandemic on the residential property market remains <a href="https://theurbandeveloper.com/articles/coronavirus-impact-property-unclear-unemployment-rate-10pc">unclear</a>, the Reserve Bank&#x27;s April Financial Stability Review has pointed to Australia&#x27;s &quot;strong starting position&quot; for dealing with what&#x27;s in store.</p></div></div></div></div></div>

Clearance rates fell to a record low of 29.3 per cent during Easter as residential property markets continue to feel the impact of Covid-19 ...

Covid Polarises Residential Rental Market with inner ring/CBD hard hit while the overall rate stabilises 

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Central business districts have taken another blow, with residential vacancy on the rise and rent falling by 3.1 per cent for houses and down 5.5 per cent for units during September.</p><p>Melbourne is at a new all-time high of 10.8 per cent, the Brisbane CBD vacancy rate also increased to 12.5 per cent, however Sydney is slowly dropping, from 12.9 per cent in August to 12.8 per cent in September, according to SQM Research.</p><p>This is the polar <a href="https://theurbandeveloper.com/articles/covid-creates-two-speed-rental-market">opposite</a> of the extremely tight markets seen in Australia’s other capitals and regions, which sit below one per cent.</p><p>On a national scale, residential rental property vacancy is at a mere 2 per cent, with 70,389 vacant properties, down from 2.1 per cent in September 2019.</p><p>Rent has also moved up by 4.8 per cent for houses and 1.7 per cent for units on average during the past year.</p><p><strong>Residential vacancy rates</strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><table><thead><tr><th>City</th><th>Sept 2020 vacancy rate</th><th>Sept 2019 vacancy rate</th><th>Rent Sept 2020 - houses, units</th><th>12 month change - houses, units</th></tr></thead><tbody><tr><th>Sydney</th><th>3.5%</th><th>3.2%</th><th>$611.7, $452.1</th><th>-8.9%, -8.9%</th></tr><tr><th>Melbourne </th><th>3.8%</th><th>2.0%</th><th>$515.3, $390.2</th><th>-2.2%, -5.1%</th></tr><tr><th>Brisbane</th><th>2.0%</th><th>2.3%</th><th>$467.4, $377.1</th><th>1.1%, -0.6%</th></tr><tr><th>Perth</th><th>0.9%</th><th>2.7%</th><th>$473.1, $362.3</th><th>6.8%, 7.6%</th></tr><tr><th>Adelaide</th><th>0.8%</th><th>0.9%</th><th>$416.9, $315.3</th><th>5.1%, 1.9%</th></tr><tr><th>Canberra</th><th>0.9%</th><th>1.0%</th><th>$623.9, $479.8</th><th>1.4%, 3.8%</th></tr><tr><th>Darwin</th><th>2.9%</th><th>0.7%</th><th>$526.6, $369.0</th><th>1.5%, -3.3%</th></tr><tr><th>Hobart</th><th>0.6%</th><th>0.6%</th><th>$454.5, $382.6</th><th>4.4%, -5.2%</th></tr><tr><th>Capital </th><th>2.1%</th><th>1.8%</th><th>$463.0, $369.0</th><th>4.8%, 1.7%</th></tr><tr><th>Average</th><th>2.0%</th><th>2.1%</th><th>$527.0, $411.0</th><th>-3.1%, -5.5%</th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sub><sup>^ Source: SQM Research</sup></sub></p><p>SQM Research managing director Louis said the population is still looking to stay away from the large cities. </p><p>“We think this trend may soon reverse, but to what extent remains a mystery,” Christopher said.</p><p>“Elevated rental vacancy rates in Sydney and Melbourne continue to push city rents downwards—this is particularly the case in the CBD and inner-ring suburbs close to the CBDs. </p><p>“However, outside Sydney and Melbourne vacancy rates are falling again.</p><p>“And then when we consider regional locations, vacancy rates have fallen below 1 per cent which really represents the point of little to no rental vacancy.”</p><p>SQM research for September also shows residential listings are down a further 1.2 per cent on the month and down 7.4 per cent on the year.</p><p>Despite initial predictions of huge falls in house prices early on in the pandemic, the residential market has been buffered by government stimulus packages, with the market starting to <a href="https://theurbandeveloper.com/articles/house-price-drop-starts-to-slow">ease </a>and even turn around in some cities.</p><p>However, the Reserve Bank expects rental growth to remain <a href="https://theurbandeveloper.com/articles/rental-growth-to-remain-subdued-through-2021-rba">subdued </a>through 2021 as restrictions on international migration affect vacancy rates.</p><p>Migration will have the biggest impact on metropolitan markets while regional and satellite markets experience a increase in <a href="https://theurbandeveloper.com/articles/sunshine-coast-property-market-records-growth">transactions </a>and rental <a href="https://theurbandeveloper.com/articles/r-residential-vacancy-rates-tighter-then-pre-covid">growth</a>. </p></div></div></div></div></div>

Inner-ring suburbs of Melbourne, Sydney and Brisbane are hard hit by the pandemic while the overall rate drops to 2 per cent...

c954f1d3-a0fe-4336-bb5c-7cbad21be50e

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Sydney and Melbourne CBD rental vacancy rates remain elevated despite falls in January, as <a href="https://theurbandeveloper.com/articles/australian-housing-values-reveal-divergent-capital-city-regional-markets">demand</a> for inner-city property is expected to remain affected by international border closures and potential city lockdowns this year. </p><p>But in 2021, regional Australia is largely expected to remain a landlord’s market, SQM Research released on Tuesday found.</p><p>While the data shows Melbourne recorded the highest vacancy rate of all the capital cities, Melbourne’s vacancy rate dropped over the month of January to 4.4 per cent from 4.7 per cent in December. </p><p>This time last year, Melbourne’s vacancy rate was 2.1 per cent.</p><p>Sydney also recorded a fall in vacancies over January with the rental vacancy rate sitting at 3.2 per cent.</p><p>Sydney’s CBD rental market also recorded falls, with vacancy rates down to 6.2 per cent after being as high as 16 per cent in May last year. </p><p>SQM chief executive Louis Christopher says the results are “more evidence” the worse is over for landlords in Sydney and Melbourne rental markets. </p><p>“The falls in vacancy rates for the month in those two cities, combined with the increased tightness in other cities and regions, has now brought rental vacancy rates down to below where they were prior to the Covid-19 outbreak,” Christopher said.  </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><table><thead><tr><th>CITY</th><th>JAN 21 VACANCIES</th><th>JAN 2021  VACANCY RATE</th><th>DEC 20 VACANCIES</th><th>DEC 20 VACANCY RATE</th></tr></thead><tbody><tr><th>SYDNEY</th><th>24,309</th><th>3.2%</th><th>27,251</th><th>3.6%</th></tr><tr><th>MELBOURNE</th><th>27,432</th><th>4.4%</th><th>28,754</th><th>4.7%</th></tr><tr><th>BRISBANE</th><th>5,886</th><th>1.7%</th><th>6,190</th><th>1.8%</th></tr><tr><th>PERTH</th><th>1,808</th><th>0.8%</th><th>1,899</th><th>0.9%</th></tr><tr><th>ADELAIDE</th><th>1,405</th><th>0.7%</th><th>1,458</th><th>0.7%</th></tr><tr><th>CANBERRA</th><th>579</th><th>0.8%</th><th>753</th><th>1.1%</th></tr><tr><th>DARWIN</th><th>262</th><th>0.8%</th><th>282</th><th>0.9%</th></tr><tr><th>HOBART</th><th>192</th><th>0.6%</th><th>175</th><th>0.6%</th></tr><tr><th>NATIONAL</th><th>71,297</th><th>2%</th><th>76,658</th><th>2.2%</th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sup>^ SQM Research National Rental Vacancy Rates</sup></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>“Now to be clear, CBD rental vacancy rates in both Sydney and Melbourne remain elevated, despite recent falls. And we remain of the view that there will not be a complete reversal of the sharp rise in rental vacancy rates experienced in these locations in earlier 2020,” he said. </p><p>Christopher says demand for inner-city property will remain affected by the closure of the international border as well as ongoing caution on future city lockdowns. </p><p>“This will mean 2021 will remain largely a tenant’s market in the inner cities but will also very much remain a landlord’s market for regional Australia.”</p><p>SQM notes that nationally, there are now fewer vacancies compared to January last year, just prior to the first Covid outbreak in Australia.</p><p>The national residential rental vacancy rate decreased by 0.2 per cent over the month of January 2021 to 2 per cent. This time last year it was 2.1 per cent. </p><p>The total number of vacancies Australia-wide is now 71,297 vacant residential properties. </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div></div></div>

Sydney and Melbourne CBD rental vacancy rates remain elevated despite falls in January, as demand for inner city property is expected...

Brisbane property prices will rise of regardless of which of the four scenarios that could play out next year with changes to the cash rate, inflation and APRA action, seeing the city catch up with Melbourne and Sydney.

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Brisbane property prices will start to catch up to Melbourne and Sydney’s regardless of what happens with inflation and interest rates rises.</p><p></p><p></p><p>An upsurge for prices in the Queensland capital is tipped as an outcome of four 2022 scenarios released by SQM Research in Christopher’s Housing Boom and Bust Report.</p><p></p><p>The forecasting showed property prices would slow next year, agreeing with <a href="https://www.theurbandeveloper.com/articles/cba-bank-predicts-house-price-drop-10pc">the big four banks’ predictions</a>, however, some cities would fare better than others.</p><p></p><p>Brisbane would record the largest dwelling price rises during 2022, supported by expected strong interstate migration flows and relatively good housing affordability. </p><p></p><p>The price falls would be led by “overvalued” houses in Sydney and Melbourne, as they were sensitive to even minor intervention by the banking regulator, the Australian Prudential Regulatory Authority.<strong></strong></p><p></p><p></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>The scenarios</strong></h2><p><strong>Scenario 1: </strong>the cash rate would remain unchanged, quantitative easing would scale back, headline inflation at 3 to 5 per cent and further APRA action would happen by June 2022.<strong></strong></p><p><strong></strong></p><p><strong>Scenario 2: </strong>second half year cash rate rises 0.25 to 0.50 per cent, quantitative easing would scale back, headline inflation at 4 to 6 per cent and further APRA action would happen by June 2022.<strong></strong></p><p><strong></strong></p><p><strong>Scenario 3: </strong>the cash rate would remain unchanged, quantitative easing would scale back, headline inflation at 3 to 5 per cent and there would be no APRA action.<strong></strong></p><p><strong></strong></p><p><strong>Scenario 4: </strong>cash rate rises 0.25 to 0.50 per cent in the first half of the year, quantitative easing would scale back, headline inflation at 4 to 6 per cent and further APRA action would happen by March 2022.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Capital city dwelling price change forecasts</strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><table><thead><tr><th>City</th><th>Scenario 1</th><th>Scenario 2</th><th>Scenario 3</th><th>Scenario 4</th></tr></thead><tbody><tr><th>Perth</th><th>+3 to +7%</th><th>+2 to +6%</th><th>+5 to +10%</th><th>+1 to +6%</th></tr><tr><th>Brisbane</th><th>+8 to +14%</th><th>+8 to +14%</th><th>+9 to +16%</th><th>+3 to +6%</th></tr><tr><th>Darwin</th><th>-4 to +1%</th><th>-5 to 0%</th><th>-2 to +4%</th><th>-6 to +1%</th></tr><tr><th>Melbourne</th><th>-4 to +1%</th><th>-5 to 0%</th><th>-2 to +4%</th><th>-6 to +1%</th></tr><tr><th>Sydney</th><th>-2 to +4 %</th><th>-3 to +3%</th><th>+3 to +8%</th><th>-7 to -2%</th></tr><tr><th>Adelaide</th><th>+4 to +8%</th><th>+4 to +8%</th><th>+6 to +11%</th><th>+1 to +6%</th></tr><tr><th>Hobart</th><th>-3 to +2%</th><th>-4 to +1%</th><th>+2 to +7%</th><th>-5 to 0%</th></tr><tr><th>Canberra</th><th>+5 to +9%</th><th>+5 to +9%</th><th>+7 to +12%</th><th>+1 to +6%</th></tr><tr><th>Capital cities weighted average</th><th>0 to 5%</th><th>-1 to +4%</th><th>+3 to +8%</th><th>-4 to +1%</th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sub>^Source: SQM Research</sub></p><p>The modelling also predicted home prices in regional Australia would correct, particularly for inland communities, as people returned to the capital cities.</p><p>Meanwhile, rent would rise in all capital cities over and above the consumer price index.</p><p></p><p></p><p>SQM Research managing director Louis Christopher said the housing market was already showing signs of passing its peak.</p><p></p><p>“If the Australian housing market does not slowdown by mid-2022, APRA will likely keep intervening in home lending until the market does slowdown,” Christopher said.</p><p></p><p>“We cannot afford another year of 20-per-cent-plus gains across the national housing market. </p><p></p><p>“And so, to ensure a soft landing for the market, it is best we see additional intervention sooner rather than later to rein in property valuations.”</p><p></p><p>The Reserve Bank of Australia has said<a href="https://www.theurbandeveloper.com/articles/interest-rate-hike-exposure"> interest rates were likely to hold</a> in 2022 but APRA intervention could occur as early as next month.</p></div></div></div></div></div>

Brisbane property prices will start playing catch up to Melbourne and Sydney regardless of what happens with inflation and interest rates...

Brisbane House

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="ci cl"><p><strong>The Brisbane residential market is showing some signs of recovery, as vacancy rates continue to fall across the Queensland capital. </strong></p><p>The number of vacant properties in Brisbane dropped below 10,000 to 9774 — to 3 per cent from 3.2 per cent in March, according to SQM Research data.</p><p>The national vacancy rate was unchanged at 2.1 per cent. </p><p>Asking rents for units in the Queensland capital also picked up in April, marking a slight 0.4 per cent increase to $367.80 despite asking rents for houses falling over the month to $446.40 (-0.3 per cent).</p><p>The slight fall in rental vacancies comes as demand for prestige property in Brisbane led to a 3.6 per cent price growth over the past year.  </p><p>Related reading: <a href="https://theurbandeveloper.com/articles/capital-city-housing-prices-clock-first-annual-fall-in-five-years">Capital City Housing Prices Clock First Annual Fall in Five Years</a></p><p>Melbourne saw a fall in its vacancy rate to 1.3 per cent in April representing 7,317 vacancies, down from 1.4 per cent. </p><p>Sydney’s rate was steady at 2.3 per cent representing 15,809, but up from 1.7 per cent a year earlier, while Canberra rose to 474 vacancies from 392 last month.</p><p>Adelaide dropped from 1.4 per cent vacancy to just 1.3 per cent, leaving 2,427 vacancies in April while Hobart’s vacancy rate inched higher to 0.7 per cent representing 219 vacancies from March’s 191.</p><p>“While vacancies remain tight, this is the sixth straight month of vacancy increases, signaling that the worse now could be over for Hobart tenants,” SQM Research managing director Louis Christopher said.</p><p>“We are finally seeing some rent relief in Hobart where asking house rents fell by 2.8 per cent over the month to 12 May, with a slight uptick in the vacancy rate there. </p><p>Related reading: <a href="https://theurbandeveloper.com/articles/10000-apartments-abandoned-in-saturated-brisbane-market-bis">10,000 Apartments Abandoned in Saturated Brisbane Market: BIS</a></p><p>“In Sydney too, we are seeing some relief in rental costs […] but high rents remain a constraint for many renters, with unit asking rents still rising in most capital cities, apart from Darwin and Perth,” Christopher said.</p><p>Capital city asking rents for houses rose fell over the month to 12 May 2018 by 1.6 per cent to $554 a week, while unit asking rents rose 0.5 per cent to $445 a week. </p><p>The asking rent for a three-bedroom house in Sydney remained the highest in the nation at $726 a week while for units it stands at $525. Canberra follows at $619 a week for houses and $442 for units. </p><p>In Melbourne, asking rents for houses were down over the month by 0.7 per cent to $534 while unit asking rents rose by 0.7 per cent to $410.</p></div></div></div>

The Brisbane residential market is showing some signs of recovery, as vacancy rates continue to fall across the Queensland capital.  The number of 

Hobart homes

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Population growth and limited rental supply has made Hobart Australia’s best performing capital property market.</strong></p><p>Hobart was the only capital city to reach double-digit annual growth in house and unit rental prices, according to Domain’s rental report which analysed the national rental figures for the final quarter of 2017. </p><p>Rents rose 6.8 per cent over the quarter and 12.9 per cent year-on-year. The increase translated to a $45 increase in rent since the same the figures were recorded in 2016 – a $395 a week expectation.</p><p>Median unit rental prices grew 6.3 per cent over the quarter and 13.3 per cent annually, to $340 per week. </p><p>“Hobart currently has strong levels of migration and not enough rental supply to keep pace,” Domain data scientist, Dr Nicola Powell said.</p><p>Investors in Hobart property are enjoying the best gross rental yields in the country, house rental yields are 5.34 per cent while units are 5.52 per cent – falling just behind Darwin and Canberra.</p><p>Canberra recorded a result of 5.80 per cent over the quarter, closely followed by Darwin at 5.67 per cent. </p><p>Houses in the Tasmanian suburb of Chigwell returned a rental yield of 7.9 per cent and have a median value of $237,217 which made it the most affordable suburb to invest in. Chigwell as a Tasmanian suburb to invest in was closely by Warrane (6.6 per cent yield) and Glenorchy (6.3 per cent yield).</p><p>In contrast, major capitals like Sydney and Melbourne currently offer median house rental prices of $550 and $425 respectively. However, in comparison to Hobart’s status, Sydney’s rental market experienced a drop over the quarter despite steady prices which has foreshadowed a tightening of its rental market in 2018. In Melbourne, spiking population numbers have put pressure on rental stock and therefore prices, resulting in its record high $425 on its way to mirroring Sydney’s situation.</p><p>SQM research’s latest figures revealed that Hobart’s dwelling vacancy was the lowest in the country at 0.7 per cent. </p></div></div></div>

Hobart City

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Hobart’s economic boom has led to a housing crisis, with the city posting a vacancy rate of just 0.3 per cent, according to new data from SQM Research.</strong></p><p>The national residential vacancy rate fell to 2.3 per cent in January as renters secured homes for the start of the new year. Hobart’s vacancy figures had fallen from 0.7 per cent a year ago.</p><p>Asking rents in Hobart rose more than other cities in Australia, increasing by 5.1 per cent and 5.3 per cent for houses and units respectively, reflective of the shortage.</p><p>This came off the back of a 6.8 per cent rise in rents during the final quarter of 2017, where Hobart’s median unit rental prices grew to $340 per week.</p><p>Population growth and limited rental supply has made Hobart Australia’s best performing capital property market.</p><p>Related reading:<a href="https://theurbandeveloper.com/articles/commons-hobart-tasmanias-carbon-positive-development"> The Alternative Development Model Lands in Hobart</a></p><p>“We are seeing very tight rental conditions in Hobart, which is putting strong upward pressure on rents,” SQM Research managing director Louis Christopher said.</p><p>“We’ve seen falls across all cities, as students prepare for their first semester of study and lease new homes, and workers also secure new rentals, especially in Canberra which has a transient workforce and Sydney too.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/16a9832a-3f15-41d4-87b9-24a7c8c2dd9d.jpg" width="1387"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>The vacancy rate dropped in Canberra to 0.9 per cent down from 1.3 per cent in December, while asking rents were at $616 a week for houses and $436 for units.</p><p>Melbourne’s vacancy rate dropped to 1.8 per cent from 2.1 per cent while Sydney’s dropped to 2.3 per cent from 2.6 per cent.</p><p>Related reading: <a href="https://theurbandeveloper.com/articles/commercial-construction-to-bolster-residential-downturn">Commercial Construction to Bolster Residential Downturn</a></p><p>Elsewhere, the vacancy dropped in Perth to 4.4 per cent from 4.6 per cent in December, but it is remains the highest of any capital city. </p><p>Christopher said the vacancy numbers highlighted tighter rental markets in most capital cities, which was to be expected in the first month of the year as renters found new rental homes.</p><p>“While Sydney’s vacancy rate has dropped, it is still well up on levels this time last year. </p><p>“If the vacancy rate holds at this level in coming months, Sydney will be more of a tenant’s market in 2018 and rental growth could continue to ease.”</p><p>Capital city asking rents over the month to 20 February 2018 rose 0.2 per cent to $562 a week for houses. Unit asking rents rose 0.5 per cent to $443 a week. Over the year, asking house rents rose by 1.3 per cent while asking rents for units increased by 2.8 per cent.</p></div></div></div></div></div>

Hobart’s economic boom has led to a housing crisis, with the city posting a vacancy rate of just 0.3 per cent, according to new data from SQM Research

SQM RESEARCH