Market Update May 24 – Perth Surges, Brisbane Now 2nd Priciest City for Houses & All Dwellings, Passing Melbourne & Canberra, & Much More! (Ep.262)

Formerly the “Property Planner, Buyer and Professor” podcast

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Show notes

 

1. Home Value Index Results

Mike kicks off this episode, and the Trio chat about the ferocity of the Perth market and they ponder the nature of cyclic markets. Is Perth cyclic? And is this city sharing a pattern with any other cities, or is Perth unique? And how is it possible that rental growth is still strong when investors are buying up?

Brisbane’s outperformance is noteworthy too, with this beautiful city taking the lead on Melbourne.

Source: CoreLogic

 

2. Rental Market

Hobart’s decline in rents defies most of the nation, but Cate explains some of the driving forces at play. Namely, the sea-change/sea-change moves during lockdown are reversing for many, and combined with the update in overseas holiday activity (to the detriment of domestic travel), cities like Hobart are experiencing different trends to most of our other capital cities.

Source: CoreLogic

Mike tackles yields and marvels at the combined capitals average yield, but as Cate reminds listeners, average yields are not a perfect measure because the ratio of houses/units across our cities varies greatly. If only Core Logic could give us a separate measure for houses versus units!

Source: CoreLogic

3. Listings

And what is happening with listings? We have more new listings than previous years, but our total listing figures are below historical levels. This tells us that buyer demand is strong, and is soaking up the listings faster than they are hitting.

 

Source: CoreLogic

While the Spring market has returned after two years of glitches to ‘the norm’ over COVID, some things have changed. Cate talks through some of these, including off-market listings.

“Such a tale of eight cities”, says Mike as he compares the difference in listing volumes across several capital cities.

 
Source: CoreLogic
But by drawing our listener’s attention to the three data sets, (new listings, old listings, total listings), in triplicate they tell a very interesting story. Cate ponders the viability of gauging the retraction of old listings when it comes to identifying markets that may be over-heated.
4. Consumer Sentiment

This month’s Westpac Consumer Sentiment Index is reasonably unchanged from last month. There is no doubt that the affects of higher interest rates are biting for many households. However, as Cate says, “It’s a bit of a boring chart, but right now, boring is good.”

 

Source: Westpac Melbourne Institute

5. Lending indicators

Lending indicators are showing some strong numbers; with the exception of construction. Despite investor numbers coming off a low base, Dave explains that buyers are making decisions now that it’s obvious that the risk of interest rate increases is lower.

Source: ABS

Cate shares an interesting chart that segments funding into construction, established, land, new builds and alterations/repairs. There is no doubt that the pain of the construction industry is showing up in the data.

 

 

Source: ABS

The bond yields shows that the rate today is predicted by the markets to be the ‘new norm’. Dave steps the listeners through some of the charts, including the unemployment data.

Source: Investing.com

6. Unemployment

“Unemployment has often been the collateral damage as the RBA has been increasing rates to bring down inflation, but this time they are trying a different tact, and they’ve actually said that”, states Dave.

 

Gold Nuggets

Cate Bakos’s gold nugget: Buyers have to consider a broad picture before they circle in on one city that’s doing well. Getting our hands on the rate of change of old listings offers a bit of valuable insight.

David Johnston’s gold nugget: Market updates talk about the monthly market gyrations, but ultimately it’s about the big picture and the long term that really matters. And what’s right for your personal circumstances is vital. Understand your own strategy and understand the price point that’s right for you.

 

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