3fa62a73-9cf2-47e7-9a99-6be212c3f725

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="ci cl"><p>Land prices are escalating as supplies dwindle nationally, with prices going up 32 per cent in Greater Sydney in the past 12 months. </p><p>The HIA-Corelogic Residential Land Report data showed land prices nationally had increased 12.6 per cent in the past year—the strongest surge in prices since 2006. </p><p>HIA economist Angela Lillicrap said the result had been expected given the meteoric rise in new building approvals over the period in the wake of the federal government’s HomeBuilder stimulus package.</p><p>“A significant increase in the price of land indicates that supply is not keeping pace with demand,” Lillicrap said.</p><p>“Over the year to September 2021, the median price of land in Australia increased by 12.6 per cent. This is the strongest annual increase since 2006.”</p><p>“In Greater Sydney alone, the median price of residential land increased by 32.2 per cent over the year to September 2021.</p><p>“Land will be the biggest constraint on building activity over the next couple of years. The current shortage of land will impact the industry at a time when the broader economy needs construction to help pull it forward.”</p><p>Across the combined capital cities there was a 14.7 per cent increase, while regional price increases were at 8.6 per cent across the year, indicating the constrained land supplies in capital cities nationally.</p><p>Corelogic’s head of research Tim Lawless said the record levels of building approvals in concert with the constraints involved with bringing newly subdivided land to market had made land price surges inevitable. </p><p>“What is more counter-intuitive is the trend towards fewer land sales through 2021, a pattern that is evident across each of the state capitals despite strong demand,” Lawless said. </p><p>“<a href="https://www.theurbandeveloper.com/articles/peak-peaking-peaked-reading-australias-housing-market">Softer volumes are more a reflection of short supply</a> rather than a lack of demand, which helps to explain the sharp rise in land values at a time when the volume of land sales is reducing.”</p><p>And in good news for construction firms, the <a href="https://www.theurbandeveloper.com/articles/forecast-supply-chain-issues-persist-to-2023">pipeline for new house builds is galvanising in 2022</a> off the back of a boost in new home sales in December. </p><p>HIA economist Tom Devitt said sales of new detached homes increased 11.3 per cent in December, and it was the fifth consecutive monthly increase, despite the end of HomeBuilder in March 2021 </p><p>“This is the highest level of new home sales since 2011, excluding the three largest spikes associated with HomeBuilder,” Devitt said. </p><p>“Sales in the final quarter of 2021 were also 25.5 per cent higher than the previous quarter.</p><p>“Underlying demand for housing remains exceptionally strong as the pandemic continues to push households toward lower density living. It appears that the more time people spend under lockdown and working from home, the higher is the demand for detached housing and renovations activity.”</p><p>Devitt said the market was in a “super cycle” of housing demand across the country. </p><p>“<a href="https://www.theurbandeveloper.com/articles/sig-group-tarneit-melbourne-housing-estate-development">The constraint on home building is not demand but the availability of land</a>, labour and materials. The shortage of labour and materials has led to construction timeframes increasing significantly,” Devitt said. </p><p>“As a result, the volume of approved-but-not-yet-commenced work is at its highest level in over a decade.”</p><p>Queensland enjoyed a bumper three months to December 2021 with sales figures 49 per cent higher than the previous quarter. Victoria recorded a 36.8 per cent increase across the quarter, followed by New South Wales (30.2 per cent) and South Australia (11.2 per cent). </p><p>Western Australia chalked up a minor downturn, falling 8.8 per cent in the December quarter. </p></div></div></div>

Land prices are escalating as supplies dwindle nationally, with prices going up 32 per cent in Greater Sydney in the past 12 months...

CoreLogic’s research director Tim Lawless explains when a market has peaked, the biggest factors impacting Australia’s housing in 2022 and the trends property watchers should be keeping an eye on this year.

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Australian housing values grew 22.1 per cent last year and the market is showing signs this extraordinary rate of growth, not seen since the 1980s, is slowing across most of the capital cities.</p><p>Yet as the rate of dwelling value appreciation slows, capital city and broad rest-of-state markets are still to peak, causing plenty of speculation about whether this will occur in 2022 and mark the start of a downturn.</p><p>Corelogic research director Tim Lawless explains when a market has peaked, the biggest factors impacting Australia’s housing in 2022 and the trends property watchers should be keeping an eye on this year.</p><h2><strong>When to call a peak in housing values</strong></h2><p>“To categorise a market peak across a region, we would generally be looking for a consistent trend in negative monthly movements,” Lawless said. </p><p>“To date, the quarterly trend remains positive across the major regions, with the only exception being Darwin houses, which is the only capital city housing sector to record a negative quarterly change.</p><p>“The Darwin reading can be more volatile than other cities due to the small size of the market, so it may be too early to call a peak in this market even though the quarterly growth rate has turned negative.”</p><h2><strong>Peak vs peak rate of growth</strong></h2><p>“Although we can’t see any evidence that specific housing markets have peaked, it is clear that most markets have moved through a peak rate of growth,” Lawless said.</p><p>“What I mean by that is the point at which markets achieved their biggest monthly growth rate. We saw most of the capitals moved through a peak rate of growth around March last year.”</p><p>Sydney’s monthly growth rate peaked at 3.7 per cent in March and has since reduced to 0.3 pert cent.</p><p>Melbourne’s monthly growth rate peaked at 2.4 per cent in March, reducing to -0.1 per cent in December, the first monthly decline since Oct 2020.</p><p>Perth’s monthly growth rate peaked at 2.7 per cent in February. After recording only a single month of decline, -0.1 per cent in October 2021, the monthly rate of growth has reaccelerated to reach 0.4 per cent in December.</p><p>Hobart’s monthly growth rate peaked at 3.3 per cent in March and dropped to 1.0 per cent in December.</p><p>Darwin moved through a peak rate of monthly growth in April at 2.7 per cent and was at 0.6 per cent in December.</p><p>Canberra moved through a monthly peak in March at 2.8% and was at 0.9 per cent in December.</p><h2><strong>Market exceptions and future expectations</strong></h2><p>“The only broad regions avoiding a slowdown in the pace of growth in housing values are Brisbane, Adelaide and regional Queensland,” Lawless said.</p><p>“These markets are benefitting from a healthier level of affordability compared with the largest capitals along with a positive demographic trend and consistently low advertised stock levels.</p><p>“We could see our two biggest capital city markets Sydney and Melbourne hit their peak later this year although the timing is highly uncertain and depends on a broad range of influences.”</p><p><strong>Historic periods of decline to trough for house prices</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/59209b94-c04d-4841-b949-c33d1bb621ff.jpg" width="800"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sub><sup>^Source: Corelogic</sup></sub></p><h2><strong>Three main factors </strong></h2><p>“There are a lot of moving parts that will affect the trajectory of housing outcomes,” Mr Lawless said.</p><p>The three biggest factors to impact market movements are:</p><p>1. Policy-related factors such as interest rates and credit availability.</p><p>2. Market factors like the trend in advertised stock levels and housing affordability.</p><p>3. Economic factors such as labour market conditions and wages growth.</p><p>“Arguably, the surge in Covid cases associated with the Omicron variant could push some of these policy tightening decisions back, with APRA or the RBA unlikely to tighten their policy settings with so much uncertainty associated with the latest case numbers,” Lawless said.</p><p>“There is also some downside risk from a delayed economic recovery associated with less spending activity and heighted uncertainty, although a slower than forecast economic recovery implies rates would stay lower for longer.”</p><h2><strong>Key signals a market is approaching its peak</strong></h2><p>“Normally, housing growth trends will gradually slow before moving into a correction phase, which is what we are seeing at the moment,” Lawless said. </p><p>“However, this isn’t always the case. During periods of shock such as the GFC or early in the pandemic, housing trends turned quite sharply into negative territory.”</p><p>Other signs to watch for include:</p><p>• rising advertised stock levels</p><p>• affordability constraints</p><p>• weakening auction clearance rates, and</p><p>• softening vendor metrics such as longer days on market and larger levels of discounting.</p><p>“It’s fair to say we are currently seeing a softening in all of these metrics, albeit from an historically high base,” Lawless said.</p><p>“We also consider macro factors, which could have an impact on housing demand such as the potential for higher interest rates or tighter credit policies. </p><p>“Both of these factors have a high level of uncertainty at the moment, especially considering the latest wave of Covid cases associated with Omicron which could weigh down economic activity.”</p><p><strong>Historic periods of decline to recovery for house prices</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/48493c2c-c497-4697-9837-1c9911d71d42.jpg" width="800"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sup><sub>^Source: Corelogic</sub></sup></p><h2><strong>What to expect after a market peak</strong></h2><p>“Once a market peaks, the typical trend is that values will experience a period of decline,” Lawless said.</p><p>“The duration and severity of the decline is dependent on a broad range of both macro and micro factors.”</p><p>Since the late 1980s, Australia has experienced national downturns that have ranged in severity from a -1.0 per cent peak to trough decline in 2015-16.</p><p>This was a temporary correction following the first round of credit tightening via APRA’s 10 per cent speed limit on investment lending, to the most recent -8.4 per cent decline experienced during the 2017-19 downturn.</p></div></div></div></div></div>

  Corelogic research director Tim Lawless explains when a market has peaked, the biggest factors impacting Australia’s housing in 2022...

b1b3d93c-2ff2-4771-a878-77ace0698b04

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Australian rents have increased 8.9 per cent year-on-year during the past 12 months, the fastest pace of growth since 2008, while Darwin recorded price rises in excess of 20 per cent.</p><p>Regional rents experienced greater growth than their city counterparts in the September quarter, recording an average 2.2 per cent rise, while capital cities increased 1.7 per cent.  </p><p>Darwin rents grew 20 per cent over the past 12 months, while Brisbane, Perth and Adelaide all recorded strong price growth.</p><p>Corelogic research director Tim Lawless said the strong demand for detached housing a lack of supply due to historically low levels of investor activity during the pandemic had driven rental prices higher.</p><p>“Renters are clearly looking for lower density housing options, with house rents rising at more than double the pace of units rents over the past year, however this trend is starting to narrow,” Lawless said. </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Capital city rent prices</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>Median rent</th><th>YoY change</th><th>Yield</th></tr></thead><tbody><tr><th>Sydney</th><th>$595</th><th>7.2%</th><th>2.45%</th></tr><tr><th>Melbourne</th><th>$450</th><th>1.8%</th><th>2.76%</th></tr><tr><th>Brisbane</th><th>$491</th><th>9.7%</th><th>3.93%</th></tr><tr><th>Adelaide</th><th>$440</th><th>8.3%</th><th>4.06%</th></tr><tr><th>Perth</th><th>$478</th><th>14.5%</th><th>4.33%</th></tr><tr><th>Hobart</th><th>$507</th><th>12.8%</th><th>3.89%</th></tr><tr><th>Darwin</th><th>$561</th><th>20.9%</th><th>6.17%</th></tr><tr><th>Canberra</th><th>$663</th><th>9.6%</th><th>3.92%</th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sub>^Source: Corelogic Quarterly Rental Review</sub></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Corelogic research director Tim Lawless said the strong demand for detached housing a lack of supply due to historically low levels of investor activity during the pandemic had driven rental prices higher.</p><p>“Renters are clearly looking for lower density housing options, with house rents rising at more than double the pace of units rents over the past year, however this trend is starting to narrow,” Lawless said.</p><p>“National house and unit rents [were] rising at the same rate over the September quarter at 1.9 per cent.”</p><p>“Another factor that may be contributing to rental demand is that more renters are working from home, which could be driving a trend towards smaller rental households as tenants look to maximise their space and working environment during Covid.”</p><p>Migration to regional areas has led to a boom in rent prices with regional rents rising 2.2 per cent over the September quarter and 12.5 per cent over the past 12 months, the highest increase ever recorded (since records began in 2005).</p><p>“Demographic data is showing a clear trend towards regional population growth, driven by a combination of more people leaving cities for the regions, but also fewer people moving from the regional areas to the capitals,” Lawless said.</p><p>“With regional housing rents rising 12.5 per cent over the past year at a time when household incomes have hardly budged, it’s likely that rental affordability is becoming a lot more challenging in some of the most popular regional markets.”</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/8d288f7b-70db-4c58-8174-1496d2a2f4e2.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ Sydney investment properties are recording some of the lowest yields in the country at 2.45 per cent. </span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Adelaide remains Australia’s most affordable city to rent at $440 per week, while lockdown-ravaged Melbourne came in as the second most affordable with an average rent of $450 per week.</p><p>The skyrocketing value of properties against a backdrop of lower rent increases has led to a drop in gross yields from 3.77 per cent to 3.29 per cent in the past 12 months.  </p><p>Darwin has the country’s highest gross rental yield at 6.17 per cent, followed by Perth at 4.33 per cent, Adelaide 4.06 per cent, <a href="https://www.theurbandeveloper.com/articles/south-east-queensland-land-stock-plummets-70pc-in-year">Brisbane 3.93 per cent</a>, Canberra 3.92 per cent and Hobart at 3.89 per cent. </p><p>Sydney (2.45 per cent) and Melbourne (2.76 per cent) have the <a href="https://www.theurbandeveloper.com/articles/unit-yields-outstrip-houses-as-rents-rebound">lowest gross rental yields</a>.</p><p>Although rental growth has eased quarter-on-quarter, Lawless said expected rents would rise nationally for the “foreseeable future” and rental affordability could become an issue.</p><p>“Data to March shows renters were spending an average of 28.7 per cent of their household income on rental payments, which is slightly above the decade average of 28.1 per cent,” he said.</p><p>“<a href="https://www.theurbandeveloper.com/articles/sydney-housing-market-update">Rental affordability has deteriorated further from there,</a> which is likely to see more renters looking towards higher density rental options where renting tends to be more affordable.”</p></div></div></div></div></div>

Australian rents have increased 8.9 per cent year on year over the past 12 months, the fastest pace of growth since 2008...

Bumper auction weekend a litmus test for property market. Image: istock

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Next weekend is shaping up to be a litmus test for Australia’s property market with more than 2700 auctions scheduled across the nation. </p><p>So far buyer take-up has remained in step with supply with 83 per cent of the 2232 properties sold at auction nationally last weekend. But this weekend auctions markets will be tested across substantially higher volumes, according to Corelogic’s Tim Lawless.</p><p>“[This] will be the most auctions held since the first week of April last year when 3209 auctions were held. The large number of auctions will provide a timely test for the depth of housing demand,” Lawless said.</p><p>“Prospective buyers could be more thinly spread with so many auctions being held, potentially dampening the clearance rate.</p><p>“I’m expecting the results will remain strong, but potentially come in slightly lower relative to the previous weeks where the weighted average clearance rate across the capital cities has held around the 80 per cent mark for most of the year to date.”</p><p>Lawless said the low supply of advertised housing set against strong buyer demand had created urgency among homeseekers but that it would slow down over the coming months. </p><p>“We are expecting affordability constraints together with a wind-back of incentives and a lift in overall advertised stock levels will contribute to a slowing of housing market exuberance,” he said.</p><p>Last weekend Canberra was the best performing market with 95 per cent of properties sold at auction. Clearance rates have continued their upwards trajectory from an all-time low during lockdown last year, this week reaching highs not seen since 2015. </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>National weekly clearance rate</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/ca6d504d-5f3d-4189-ba61-271a2fcc6fcd.png" width="800"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sub>^Source: Corelogic</sub></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>New home sales have also surged ahead with the Housing Industry Association reporting a 1.7 per cent growth on sales for the same time last year. </p><p>“Sales in the three months to February 2021 were higher by 60.5 per cent than in the same three months the previous year,” HIA economist Angela Lillicrap said.</p><p>“This strong result reflects the significant impact of HomeBuilder on demand for detached housing.</p><p>“HomeBuilder was the catalyst for improving consumer confidence in the housing market. </p><p>“Record low interest rates and rising house prices are sustaining market confidence into 2021. This strong level of consumer confidence combined with the demographic shift to regional areas is driving ongoing demand for new detached homes.”</p><p>Lillicrap said they were anticipating another surge in new house sales at the end of this month, but not to the same heights as December 2020.  </p><p>Federal Minister for Housing Michael Sukkar said the extension of the HomeBuilder scheme to the end of this month had been key to maintaining momentum in the construction sector.</p><p>“HomeBuilder has delivered a secure pipeline of construction work that will keep hundreds of thousands of tradies in work who would have otherwise been facing the unemployment queue,” Sukkar said.</p><p>“The extension of HomeBuilder…also ensures there will be a steady pipeline of construction activity through to 2022.”</p></div></div></div></div></div>

This weekend is shaping up to test Australia’s property market with more than 2700 auctions...

Buyers are looking further afield for house and land opportunities in regional centres. Image: istock

<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 growing appetite for space outside the cities is feeding the land rush in regional centres like Ballarat where the council is grappling with the prospect of a further 50,000 people moving to the region over the next 20 years.</p><p>The City of Ballarat Council has forecast it needs a further 20,000 new dwellings to accommodate the population growth and has released the Ballarat Housing Strategy to assess greenfield development opportunities, infill in existing residential areas and higher density in the CBD, while maintaining the historic town&#x27;s heritage.</p><p>As land reserves dry up the council has announced it will expand its growth corridors to free up more greenfield sites, which RPM Real Estate Group Sales director Rod Anderson said was needed to maintain affordability.</p><p>Anderson said for places like Ballarat stocks were not replenished quickly enough to meet demand.</p><p>“We’ve closed off 12 estates in the past 12 months and we haven’t been able to replenish that in a timely manner,” Anderson said.</p><p> “We would sell about 22 lots per month on average in 2016. In 2021 we are selling 136 per month. We’ve got 30 buyers turning up to buy 20 lots, so people are missing out.”</p><p>According to the City of Ballarat Council the city will need more than 20,000 dwellings over the next 20 years, putting pressure on the council to find growth corridors. </p><p>While population growth in Ballarat has been typically driven by travel and migration, the council is anticipating the impacts of the Covid-19 pandemic will have a long-lasting and uncertain impact on population and economic growth of Ballarat. </p><p>The council wants a planning pathway to ensure a 15-year supply of residential land is maintained given the value of construction to the local economy.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Stock overhang in Ballarat</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/c7e1b8ce-7277-4e47-826c-20bc2fa4aaa8.png" width="800"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sub>^Source: RPM Real Estate</sub></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Exodus to regional areas hurts affordability</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>But the next few years could be difficult with diminishing land supplies and an overheated regional market, which is markedly <a href="https://theurbandeveloper.com/articles/home-loan-arrears-mortgage-deferral-ends">less affordable</a> according to Housing Industry Australia economist Angela Lillicrap.</p><p>“Regional areas experienced a larger decline in affordability than the capital cities (in the December quarter). The regional index fell by 3.7 per cent in the quarter to return to the level it was in December 2019,” Lillicrap said.</p><p>“With the onset of Covid-19, consumer preferences have shifted towards detached housing and regional areas.</p><p>“Preliminary migration data shows more Australians left the capital cities in each of the first three quarters of 2020 than at any other time since records began in 2001. This involved an acceleration of retirement plans and fewer people moving to urban centres for work or education.”</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/856d7bf4-e52a-49a4-84f8-40aa59c66bbb.png" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ Ballarat is Victoria&#x27;s third-largest city and has become a commutable satellite city. Image: istock</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><br><strong>Maintaining affordability is key to sustainable growth</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Anderson said the Ballarat rail line upgrade was a key investment in the region that allowed commuters to travel from the regional satellite city into Melbourne in just over an hour. He said the <a href="https://theurbandeveloper.com/articles/melbourne-growth-corridors-booming-homebuilder">HomeBuilder </a>package had helped to boost sales, along with the regional first home buyers grant of $20,000.  </p><p>“Affordability has certainly been the key as well as opportunity. I think it’s quite sustainable (growth) with the infrastructure and affordability on offer.”</p><p>RPM Real Estate research manager Michael Staedler said figures showed a sustained growth in people moving regionally for more space and a cheaper buy in. He said Ballarat and Bendigo were modelling their growth corridors on Melbourne and Geelong, ensuring there were job opportunities flowing to the regions to entice first home buyers and upgraders to move. </p><p>Corelogic’s executive director of research Tim Lawless said regional housing values rose at more than four times the pace than capital city markets over the 12 months to January.</p><p>“Corelogic’s combined regionals index was up 7.9 per cent over the 12-month period compared with a 1.7 per cent lift in combined capital city home values,” Lawless said.</p><p>“As more Australian’s look for properties outside of the capital cities, an imbalance between demand and supply is placing upwards pressure on housing prices.  This is most apparent in markets like Richmond-Tweed, which includes high profile towns such as Byron Bay and Tweed Heads.</p><p>“Demand for regional housing can be attributed to a range of factors. Generally, prices are cheaper than their capital city counterparts, housing densities are typically lower which is likely to be appealing amid a global pandemic, and many workers have a newfound appreciation and ability to work remotely which is supporting additional demand.”</p><p>The Ballarat Housing Strategy is currently out for community consultation.</p></div></div></div></div></div>

The growing appetite for space outside the cities is feeding the land rush in regional centres like Ballarat...

There are more empty homes in Melbourne than will be built for public housing according to the 10th Speculative Vacancies report by Prosper Australia.

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Homeowners are continuing to desert city centres, boosting house prices outside of capital cities in 2021.</p><p>Corelogic’s data for January has highlighted the national uptick of home values, up 0.9 per cent over the past month. But this has been driven by a strong tree change trend.</p><p>Housing values have now surpassed <a href="https://theurbandeveloper.com/articles/house-prices-surge-towards-pre-covid-highs">pre-Covid levels</a> by 1 per cent, and the index is 0.7 per cent higher than the previous September 2017 peak.</p><p>Sydney and Melbourne recorded a very moderate rise in property values in January, up 0.4 per cent, while their regional counterparts were up to 1.6 per cent higher.</p><p>Corelogic research director Tim Lawless said the <a href="https://theurbandeveloper.com/articles/house-prices-fall-corelogic-covid">divergence</a> between city and country housing demand in New South Wales and Victoria was more significant than other states.</p><p>“Internal migration data shows more people are leaving Sydney and Melbourne for regional areas, resulting in a transition of activity from the metro regions to the outer fringe and regional markets. </p><p>“This demographic trend is further compounded by the demand shock of stalled overseas migration. As Melbourne and Sydney historically receive the vast majority of overseas migrants, these metro areas have been the hardest hit by this demand shock.”</p><p>Lawless said housing affordability and lifestyle upgrade was drawing homeowners out of the cities, along with the advent of remote working arrangements. </p><p><strong>Corelogic house price index: January</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>Month</th><th>Quarter</th><th>Annual</th><th>Total return</th><th>Median value</th></tr></thead><tbody><tr><th>Sydney</th><th>0.4%▲</th><th>1.6%▲</th><th>2.0%▲</th><th>4.6%▲</th><th>$879,299</th></tr><tr><th>Melbourne</th><th>0.4%▲</th><th>2.1%▲</th><th>-2.1%▼</th><th>1.1%▲</th><th>$692,162</th></tr><tr><th>Brisbane</th><th>0.9%▲</th><th>2.5%▲</th><th>4.0%▲</th><th>8.3%▲</th><th>$527,826</th></tr><tr><th>Adelaide</th><th>0.9%▲</th><th>3.3%▲</th><th>6.5%▲</th><th>10.8%▲</th><th>$473,170</th></tr><tr><th>Perth</th><th>1.6%▲</th><th>3.8%▲</th><th>3.4%▲</th><th>8.0%▲</th><th>$484,280</th></tr><tr><th>Hobart</th><th>1.6%▲</th><th>3.7%▲</th><th>6.8%▲</th><th>12.1%▲</th><th>$523,932</th></tr><tr><th>Darwin</th><th>2.3%▲</th><th>6.6%▲</th><th>11.4%▲</th><th>17.3%▲</th><th>$426,215</th></tr><tr><th>Canberra</th><th>1.2%▲</th><th>3.7%▲</th><th>8.5%▲</th><th>13.5%▲</th><th>$686,524</th></tr><tr><th>Combined capitals</th><th>0.7%▲</th><th>2.2%▲</th><th>1.7%▲</th><th>5.1%▲</th><th>$659,731</th></tr><tr><th>Combined regionals</th><th>1.6%▲</th><th>4.7%▲</th><th>7.9%▲</th><th>12.8%▲</th><th>$428,919</th></tr><tr><th>National</th><th>0.9%▲</th><th>2.8%▲</th><th>3.0%▲</th><th>6.6%▲</th><th>$583,157</th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sup><sub>^Source: Corelogic Hedonic Home Value Index</sub></sup></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>CommSec economist Ryan Felsman said regional home prices climbed by 1.58 per cent in January after December’s 1.63 per cent gain—the biggest lift in 17 years. </p><p>Regional home prices surged 7.9 per cent in the year to January—the strongest annual growth rate in 16 years. Corelogic data also shows that in 46 of the 88 larger regional towns, home prices were at record highs to begin 2021.</p><p>Corelogic&#x27;s Tim Lawless said there had also been a big shift towards houses outperforming units, with national house values increasing 3.5 per cent over the past six months compared to unit prices, which were unchanged.</p><p>“Demand for units has diminished through Covid-19 amid record low levels of investor participation and changing living preferences. </p><p>“At the same time supply levels are heightened in some precincts. While demand and supply remain imbalanced we are likely to see units continue to underperform relative to detached housing markets,” Lawless said.</p><p>Darwin house prices have bucked the capital city trend charting a course for a 2.3 per cent increase in January.</p><p>The moderate increase in house values is set against a backdrop of low listings and rising buyer activity. </p><p>The number of listings added to the market nationally over the past month was 3.3 per cent lower than the same period a year ago, and 13.3 per cent below the five-year average.</p><p>Low interest rates have been a key factor in supporting the <a href="https://theurbandeveloper.com/articles/low-rates-could-push-house-prices-up-30pc-rba-">housing market recovery</a>. Mortgage rates are likely to remain at record lows for the foreseeable future, with little chance of a rate rise this year. </p></div></div></div></div></div>

Treechangers Boost Regional Values in 2021

67ef840c-dc0f-4187-bf78-42716520437e

<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 housing values may not decline significantly in 2020, although figures show buying and selling activity in the market has fallen sharply.</p><p>When it comes to population growth and Queensland’s property market, the state has been<a href="https://theurbandeveloper.com/articles/domain-rents-listings-increase"> leading</a> the nation for net interstate migration, with a strong upward trajectory.</p><p>Speaking on the Covid-19 impact on the housing market, Corelogic’s Tim Lawless said Queensland has overtaken Victoria, which had previously held the mantle for the number of net interstate arrivals. </p><p>“Of course Queensland has some exposure to overseas migration, but nowhere near as much as say New South Wales or Victoria,” Lawless said, speaking at <em>The Urban Developer’s</em> virtual residential summit on Tuesday. </p><p>“I think Queensland is in a very good position in that it won’t be as impacted by a downturn in overseas migration numbers, which in turn of course probably won’t impact the rental markets quite as severely as Sydney or Melbourne.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Queensland dwelling approvals by sector</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/c4cdb2c8-5372-4863-933c-8fde7526a477.png" width="1576"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>While Brisbane’s housing market was into its upswing for residential property from mid-2019, Lawless said the depth and duration of this “market pause” depends on how well the coronavirus is contained, and how long the shutdown period lasts.</p><p>Figures show the pipeline of new supply coming into Queensland’s market was tracking lower in late 2019, with the supply pipeline well below average.  </p><p>“Implying the potential for an undersupply down the track…although demand from overseas migrants is set to drop,” Lawless said.</p><p>“As new unit supply is absorbed and values rise, the proportion of off-the-plan settlement valuations lower than the contract price is moderating, but still high.” </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Brisbane unit values remain 11.1 per cent below 2010 peak</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/b8db5d34-f7be-4893-b403-286ee4c90935.png" width="1558"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>“New housing supply under construction has fallen with pending detached supply back around the decade average and unit supply dropping below the decade average,” Lawless said.</p><p>Brisbane unit values are 11.1 per cent below the peak of 2010, and Brisbane house values to date continue to track solidly.</p><p>While the next few months present an unprecedented <a href="https://theurbandeveloper.com/articles/coronavirus-employment-shock-34m-housing-market">shock</a> to the economy, Lawless said it otherwise has strong fundamentals. </p><p>“The institutional <a href="https://theurbandeveloper.com/articles/coronavirus-employment-shock-34m-housing-market">response</a> is about &#x27;building a bridge&#x27; to the recovery phase, with stimulus totalling about 16.5 per cent of GDP.</p><p>“Previous economic shocks have seen housing values relatively insulated, while volumes are more susceptible to volatility.” </p><h2><strong>Reduction in supply levels should help protect housing values</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>New listing numbers, based on agent activity, is likely to settle around half of what it normally would be for this time of year, with new listings expected to further fall substantially.</p><p>“In some ways that’s a positive,” Lawless said.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>New listings likely to fall in coming months</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/a67b8564-4ccf-401f-bd02-146a10697c9d.png" width="1552"/></picture><div><span style="float:right;opacity:0.8">CoreLogic</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>“As we see buyer numbers retreating to the sidelines, seeing a reduction in supply levels should be another factor that helps protect housing values. </p><p>“But for the industry, for real estate agents particularly, and for any industries peripheral to a transaction like building and pest inspectors, and removalists, conveyancers, and finance, obviously less transaction activity is going to heavily impact those sectors.” </p><p>New listing numbers are down about 25 per cent in Brisbane, compared to last year. </p><p>Lawless noted that the ANZ-Roy Morgan weekly reading on consumer sentiment dropped dramatically over the past four weeks, but showed a bounce back over the most recent two weeks.</p><p>“Low consumer confidence and social distancing measures have impacted transaction activity, with Australians likely to temporarily put high commitment decisions on hold.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div></div></div>

Brisbane housing values may not decline significantly in 2020, but new listings are likely to fall in coming months. Brisbane property market 

9f0c3fb2-dd86-45e1-9959-7844835308cc

<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>Sydney and Melbourne dwelling values have now recorded respective falls of 14.5 per cent and 10.9 per cent since peaking in late 2017. </strong> </p><p>But, as the downturn becomes “geographically diverse” with more regions across the country recording declines in values, Corelogic’s index results reveal the decline in home values has <a href="https://theurbandeveloper.com/articles/housing-downturn-pace-eases-in-march">slowed pace in recent months</a> also led by major markets Sydney and Melbourne&#x27;s falling values now “losing steam”.</p><p>Corelogic’s head of research Tim Lawless says the improvement in the rate of decline can be attributed to an easing in the two major capital cities&#x27; market downturn where values were previously falling much faster. </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></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/ac6a507d-71d8-4da0-990f-3250adb7f60a.png" width="1670"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>“In December last year, Sydney dwelling values were down -1.8 per cent, with the pace of month-on-month falls progressively moderating back to -0.7 per cent in April,” Lawless said.  </p><p>“Similarly, Melbourne values were down -1.5 per cent in December, with the rate of decline improving to -0.6 per cent in April.”  </p><p>National dwelling values declined by half a per cent for the month of April, taking Australia’s annual dwelling values down 7.2 per cent, the largest annual fall since the 12 months to Feb in 2009, which was associated with the GFC.</p><p>The Reserve Bank will meet for its monetary policy decision on May 7, talk of a rate cut is at 50-50. Lawless says the prospect for <a href="https://theurbandeveloper.com/articles/unusual-for-falling-property-prices-amid-low-interest-rates-rba-says">lower interest rates</a> could also support an improvement in housing market activity.</p><p>Related: <a href="https://theurbandeveloper.com/articles/vital-signs-zero-inflation-means-the-reserve-bank-should-cut-rates-as-soon-as-it-can-on-tuesday-week">Zero Inflation Means the Reserve Bank Should Cut Rates as Soon as it Can, on Tuesday Week</a></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/6667a67e-3c98-4eb7-bba5-36f4a81ad2b6.jpg" width="920"/></picture><div><span style="align-content:center;opacity:0.8">Capital city listings haven&#x27;t been this high at this time of the year since 2012. Lawless says this gives buyers a wide range of choice and bargaining power.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Canberra was the only capital city that didn&#x27;t experience dwelling declines in April, according to Corelogic data. </p><p>While regional areas of Tasmania, Victoria and South Australia which also avoided declines. </p><p>“We are seeing further evidence that the worst of the housing market conditions are now behind us,” Lawless said.  </p><p>“Values are still broadly declining, however the pace of decline has moderated since December last year and there are some tentative signs that credit flows have improved, albeit from a low base.” </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></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/302541db-014b-4313-bc2c-eba372502214.png" width="1564"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Related: <a href="https://theurbandeveloper.com/articles/up-to-650000-interest-only-borrowers-trapped">Interest-Only Borrowers Caught In A Trap: Morgan Stanley</a></p><p>According to ABS figures, lending to households for dwellings, excluding refinancing, increased 2.7 per cent on a seasonally adjusted basis in February. Lawless says any sign of <a href="https://theurbandeveloper.com/articles/take-a-deep-breath-and-look-at-the-facts-westpac-boss-brian-hartzer-says">improving credit availability</a> is a welcome outcome for the housing market, particularly given restricted credit was a major component to the slowing housing sector. </p><p>Investors currently comprise 18.2 per cent of the value of mortgage demand, reveals ABS stats, this is down from 30 per cent in late 2014 and down from the decade average of 25 per cent.</p><p>Across the capital cities, annual figures show Sydney and Melbourne are both now recording double-digit annual declines, at 10.9 per cent and 10 per cent, respectively. </p><p>Perth is down 8.3 per cent and Darwin has recorded an annual decline of 7.1 per cent.</p><p>While the largest gains are in Hobart (+3.8 per cent) and Canberra (+2.5 per cent). Adelaide is the only other capital city to remain in the black for the past twelve month period (+0.3 per cent).</p></div></div></div></div></div>

Sydney and Melbourne’s dwelling values have now recorded respective falls of 14.5 per cent and 10.9 per cent since peaking in late 2017.  

House Prices 

<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>Australia’s residential market is moving through a soft landing, with the pace of decline in home values easing in March. </strong></p><p>Australian home values have held firm, with strength in regional areas offsetting falls across capital cities, according to Corelogic’s latest Hedonic Home Value Index.</p><p>Sydney’s market recorded the sharpest fall, with an annual 2.1 per cent decline in the house prices in the year to March. Month-on-month Sydney and Melbourne dropped only 0.3 per cent in March, with Brisbane (+0.1 per cent), Perth (+0.3 per cent) and Darwin (+1.0 per cent) recording increases after falls during February.</p><p>Corelogic head of research Tim Lawless said that softening in the Australian housing market in March was largely due to weaker conditions in Sydney.</p><p><strong>Related reading:</strong> <a href="https://theurbandeveloper.com/articles/cost-of-residential-land-in-australia-hits-record-high">Cost of Residential Land in Australia Hits Record High</a></p><p>“However, most other capitals are also recording subtle falls. Dwelling values were steady over the quarter in Brisbane and have continued their strong run of growth across Hobart, up +3.4 per cent,” Lawless said.</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/410da73a-9761-450b-bb4f-fc47760a5635.png" width="1365"/></picture><div><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>Prices in regional areas rose 0.4 per cent last month where prices across the nation’s capitals fell 0.2 per cent overall.</p><p>The unit sector across Sydney and Melbourne has shown strong conditions relative to detached housing. </p><p>The fall in home values was slighter than expected, with the Australian housing marketing showing every sign of recording a “soft landing” after prices peaked in September 2017.</p><p><strong>Related reading:</strong> <a href="https://theurbandeveloper.com/articles/battle-of-the-states-which-australian-city-will-be-on-top-in-2018">Battle of the States: Which Australian City Will be on Top in 2018?</a></p><h2><strong>Return of investors?</strong> </h2><p>Lawless said that lenders have overshot APRA macroprudential benchmarks, with the banks looking to regain some of their lost market share. </p><p>“One factor supporting this deceleration in value declines could be an improvement in credit availability for investors and interest only borrowers</p><p>“Credit aggregates from the Reserve Bank show growth in credit for investment housing increased at an annualised pace of just 2.3 per cent over the three months to February; well below the APRA benchmark speed limit of 10 per cent.” </p><p>Despite the potential improvement in credit availability for investors, rental yields remain low and credit policy is likely to be firmly under the spotlight following the banking Royal Commission.</p><p>“Even though the housing market is close to finding a floor, the prospects for a rebound in capital gains are unlikely.”</p><h2><strong>RBA cash rate steady </strong></h2></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/27f55c59-99ab-4461-9cea-5bd38c82bff5.png" width="1541"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>The Reserve Bank has maintained the cash rate at 1.5 per cent for the 19th consecutive month. The decision at Tuesday’s RBA board meeting was widely expected by economists. </p><p>RBA Governor Philip Lowe said that the low level of interest rates is continuing to support the Australian economy.</p><p>Lawless said that the housing market conditions are likely moving further down the RBA’s list of priorities.</p><p>“The controlled slowdown in the housing sector is likely to be a welcome outcome from the RBA, who are more likely to be focussing on labour markets, where the rate of unemployment, although lower than a year ago, crept higher, from 5.4 per cent to 5.5 per cent in February.</p><p>“Despite the hold decision from the RBA, mortgage rates remain close to historic lows, particularly for owner occupiers who are paying down both their interest and principal.”  </p><p>While the RBA has flagged the next move in interest rates will be a rise, it remains likely that any hike to the cash rate is well in the future.</p><p></p></div></div></div></div></div>

Sydney’s housing market is close to “finding a floor”, according to the property researcher Corelogic.

TIM LAWLESS