The Property Planner’s Monthly Market Update: April 2024

Welcome to the Property Planner’s Monthly Market Update, your comprehensive resource for the latest insights and trends in the real estate and economic landscape!

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Home Value Growth over April

April’s increase takes the current growth cycle into its 15th month, with housing values up 11.1% since the trough in January last year.

Source: CoreLogic

PERTH

We aren’t seeing any signs of heat coming out of the Perth housing market just yet, in fact the quarterly pace of growth, at 6.0%, is approaching the cyclical highs seen during the pandemic when interest rates were at rock bottom

BRISBANE

On the other hand, we are seeing the pace of gains slow across the Brisbane market, easing below the 1% mark to 0.9% in April for the first time in 12 months.

Affordability pressures may be impacting the pace of growth across the city, following a nearly $300,000 increase in values since the onset of COVID in March 2020, the largest dollar value increase of any capital.

QUARTILES

Almost every capital city is recording stronger growth conditions across the lower value range of the market

  • Darwin, where housing affordability is less challenging, is the exception
  • While Sydney’s lower quartile and broad middle of the market are showing the same quarterly change at 1.7% compared with a 0.5% rise in upper quartile dwelling values.

HOUSES VS UNITS

The shift towards stronger conditions across lower value markets can also be seen between the housing types, with growth in unit values outpacing house values over the past three months

  • Hobart was the only city where houses recorded a larger gain than units over the past three months.

 

Source: CoreLogic

REGIONS

Regional markets have shown a slightly stronger quarterly growth rate over the past five months than their capital city counterparts, following a 10-month period where the combined capitals index was outperforming.

While Regional Victoria (-0.1%) was the only rest of state market to record a decline in values over the rolling quarter.

Source: CoreLogic

Annual growth trends

  • Perth: 21.1%
  • Brisbane: 16.1%
  • Adelaide: 14.0%
  • Combined capitals: 9.4%
  • Sydney: 8.7%
  • National: 8.7%
  • Combined regional: 6.4%
  • Melbourne: 2.8%
  • Canberra: 2.1%
  • Darwin: 1.9%
  • Hobart: -0.4%

 

Rental Market

Nationally, rents were up 0.8% in April, a slightly lower rate of growth relative to February and March when the national rental index rose 0.9% and 1.0% respectively.

  • The slowdown in rental growth is likely to be partly seasonal, with the first quarter of the year generally coinciding with a lift in student demand and new leases at the beginning of the year
  • Additionally, as we move through the peak in net overseas migration we could see rental demand gradually easing.
  • Although rental growth may be tapering, supply remains extremely short and the trend towards smaller households seen through COVID has been slow to reverse, further amplifying rental demand
  • It is likely rental growth will remain well above average for some time yet.

Source: CoreLogic

Yields – In April, the national gross rental yield rose to 3.75%, the highest reading since October 2019, up from a record low of 3.16% in January 2021.

Vacancy rates – National – 1.1%, after 1.0% last month

  • Canberra – 1.7%, after 1.6% last month
  • Hobart – 1.4%, after 1.3% last month
  • Sydney – 1.2%, after 1.1% last month
    • CBD – 4.2%, after 3.9% last month
  • Melbourne – 1.1%, after 1.1% last month
    • CBD – 3.2%, after 3.0% last month
  • Darwin – 1.1%, after 1.4% last month
  • Brisbane – 1.0%, after 1.0% last month
    • CBD – 2.5%, after 2.3% last month
  • Perth – 0.6%, after 0.5% last month
  • Adelaide – 0.6%, after 0.5% last month

Source: SQM Research

Dwelling Sales

  • Home sales look to have moved through a cyclical peak in November last year.
  • Although the monthly trend in home sales is highly seasonal, the less seasonal six-month trend has remained relatively flat since the November rate hike.
  • Estimated sales over the past three months are tracking 8.6% higher than at the same time last year, and about 5.1% above the previous five-year average.
  • However, it is likely a combination of worsening affordability and low sentiment will keep a lid on the volume of sales until interest rates start to track lower

 

Listings Activity

TOTAL listings

SQM Previous 12 months (from April 2024)

  • Nationally – listings are up 5.6% over the year
  • Biggest drop in annual listings
    • Perth – -27.4%
    • Adelaide – -12.2%
    • Brisbane – -8.3%
  • Biggest increase in annual listings
    • Canberra – 29.9%
    • Melbourne – 17.7%
    • Hobart / Sydney – 12.8%

NEW listings

SQM Previous 12 months (from April 2024)

  • Over the year NEW listings are up 10.6% nationally
  • Capitals with highest increase in new listings
    • Melbourne – 27.9%
    • Sydney – 26.6%
    • Canberra – 24.5%
    • Brisbane – 18.4%

OLD listings

SQM Previous 12 months (from April 2024)

  • National – up 8.8% annually
  • Annually
    • Largest decrease in Perth -54.9% and Brisbane -31.3%
    • Largest increase in Hobart 37.0%

DISTRESSED listings

SQM Previous 12 months (from April 2024)

  • Decreased -9.3% nationally over the year
  • Annual increases
    • TAS – 27.0%
    • VIC – 16.8%
    • NSW – 7.2%

Consumer Sentiment

Consumer Confidence is very weak, sitting at its lowest level for the year.

  • Consumer confidence was virtually unchanged, decreasing 0.3pts to 80.2pts.
  • The four-week moving average fell 0.8pts to 80.5pts.

Consumer confidence among people paying a mortgage

  • Despite the RBA keeping the cash rate unchanged at last week’s meeting, consumer confidence fell 3.8pts for those paying off a mortgage – around 76
  • Confidence amongst this group is at a 2024 low, and is once again weaker than confidence amongst renters.
  • This may be linked to recent discussion that rates will remain higher for longer.

Similarly, the time to buy a major household item index was also at a 2024 low – 67.1

  • We’ll be looking to see if confidence picks up following tonight’s Budget, which will contain a range of cost-of-living measures.

 

Source: ANZ-Roy Morgan

Lending indicators

New loan commitments

In March 2024 in seasonally adjusted terms, the value of new loan commitments:

  1. Rose 3.1% for Housing overall – yearly change 17.9%
    1. Rose 2.8% for owner occupier – yearly change 11.4%
    2. Rose 3.8% for investor – yearly change 31.1%

Source: ABS

Refinancing

In March 2024 in seasonally adjusted terms, the value of external refinancing:

  • for total housing fell 2.5% to $16.0b and was 24.9% lower compared to a year ago
  • for owner-occupier housing fell 3.1% to $10.3b and was 27.8% lower compared to a year ago
  • for investor housing fell 1.4% to $5.7b and was 19.0% lower compared to a year ago

Source: ABS

Personal loans

In March 2024 in seasonally adjusted terms, the value of new loan commitments:

  • for fixed term personal finance rose 3.9%, after a fall of 0.5% in February
  • for road vehicles rose 4.3%
  • for personal investment rose 1.2%

Categories that are increasing

  • Road vehicles
  • Personal investment
  • Household and personal goods

Source: ABS

Construction

In March 2024

  • Business construction (a typically volatile series) – Fell -41.9%, and was -19.0% lower than a year ago
  • Owner occupier finance – For the construction of new dwellings up 3.2% and was 4.3% higher compared to a year ago

Source: ABS

Unemployment

In seasonally adjusted terms, in March 2024:

  • unemployment rate increased to 3.8%.
  • participation rate decreased to 66.6%.
  • underemployment rate decreased to 6.5%.

Source: ABS

RBA CASH RATE

At it’s meeting on Tuesday 7th May, the Board decided to leave the cash rate target unchanged at 4.35 per cent and the interest rate paid on Exchange Settlement balances unchanged at 4.25 per cent.

Market predictions on upcoming rate changes:

Trading dayNo changeDecrease to 4.10%
7 May95%5%
8 May100%0%
9 May100%0%

 

INFLATION

Monthly Inflation – March 2024

  • The monthly CPI indicator rose 3.5% in the 12 months to March
  • The most significant price rises were
    • Alcohol and tobacco (+6.1%)
    • Housing (+5.2%)
    • Transport (+4.5%)
    • Food and non-alcoholic beverages (+3.5%),
  • The annual movement for the monthly CPI indicator excluding volatile items and holiday travel was 4.1% in March, up from the rise of 3.9% in February.
    • This series excludes Fruit and vegetables, Automotive fuel, and Holiday travel and accommodation.
  • Annual trimmed mean inflation was 4.0% in March, up slightly from 3.9% in February.

Source: ABS

Quarterly Inflation – March quarter 2024

  • The Consumer Price Index (CPI) rose 1.0% this quarter.
  • Over the twelve months to the March 2024 quarter, the CPI rose 3.6%.
  • The most significant price rises this quarter were
    • Tertiary education (+6.5%)
    • Secondary education (+6.1%)
    • Medical and hospital services (+2.3%)
    • Rents (+2.1%),

Source: ABS

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