Formerly the “Property Planner, Buyer and Professor” podcast
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1. Home Value Index Results
Brisbane, Adelaide and Perth continue to be the star performers, with Perth taking up first place with an annualised growth rate of 23.6%.
Source: CoreLogic
2. Rental Market
While the pace of growth of rents has slowed, rents are still all positive, and with the exception of Darwin, Canberra and Hobart, our rents are still out-pacing CPI.
The Trio reflect on Peter Koulizos’s sage observation in past years; rents are only just catching up after a long period of limited growth.
Source: CoreLogic
Mike wonders what the driving force is for rental growth easing. Could it be a supply and demand factor? Are more people cohabitating? Have rents reached a natural cap based on affordability? The Trio debate some of the possibilities, including re-partnering of couples following the COVID response.
3. Listings
And what is happening with listings? We have more newlistings than previous years, but our total listing figures are still below historical levels. However, the increasing number of ‘old listings’ in Victoria is showing signs of total supply potentially outpacing buyer demand.
Source: SQM Research
This month’s Westpac Consumer Sentiment has some changes since last month. As Cate says, “Everybody seems to think that the next twelve months isn’t looking so rosy but they can visualise good times ahead of that.”
Dave distils consumer sentiment into states and territories. Time to buy a dwelling index had the largest declines in the capital cities that have recorded the highest price gains. The Trio tackle a conflicting driver of sentiment; the wealth effect.
Mike cites the ‘crane index’, which is a crude measure of building activity and supply. It is as basic as counting the cranes on the city landscape.
Source: Westpac Melbourne Institute
5. Cash Rate and Home Value Growth
The Trio uncover two interesting extra charts. The cash rate target vs cumulative change in national home values proves Peter Koulizos’s point that there is not a direct correlation between house price growth and interest rates.
6. Rent vs Mortgage Repayments
The chart below shows the difference between median monthly rent value and mortgage repayment for the equivalent property. It illustrates the huge differential between the mortgage repayments and the rental payments for the same dwelling.
Source: CoreLogic
Gold Nuggets
David Johnston’s gold nugget: Dave wants Core Logic do conduct a deep dive analysis into the Victorian market purchaser/investor activity following recent land tax changes.
Cate Bakos’s gold nugget: Cate would also love access to our various state and territory revenue offices to understand the impact of the reforms and taxes, particularly on overseas investors.
Mike Mortlock’s gold nugget: Mike shares the importance of buying when you are ready, as opposed to attempts to time the market. While the white noise and doomsayer stories float around in the media, it’s important for investors to keep a long term focus.
Resources
The Property Planner’s Monthly Market Update: June 2024
And if you’ve enjoyed this show, take a listen to these eps:
- Ep. 10 – Why Your Approach and Assessment of Risk is Paramount to Property Success
- Ep. 12 – Property Cycle Management
- Ep. 18 – When to Hold and When to Fold
- Ep. 60 – Why Established Properties Out-perform
- Ep. 158 – How Interest Rate Cycles Have Impacted the Property Market Since 1990 When the RBA First Started Targeting the Cash Rate and Some Predictions on What Will Happen this Time
