The Property Planner’s Monthly Market Update – November 2021

The Property Planner’s Monthly Market Update – December 2021

1. Nov index results 

Source: CoreLogic (1 Dec 2021)

A. National values

  • Australian housing values increased a further 1.3% in November, after 1.49% in October, 1.51% in September and 1.5% in August, and 1.6% in July
  • 14 consecutive months where the national home value index recorded positive value growth
  • 2% higher over the past 12 months.
  • The annual growth rate is now tracking at the fastest pace since the year ending June 1989.
  • Above 20% – Hobart 27.7%, Sydney 25.8%, Brisbane 25.1%, Canberra 24.5% and Adelaide 21.4%
    1. Sydney and Brisbane have not overtaken Canberra for annual growth
  • Darwin 16.7%, Melbourne on 16.3% and Perth 14.5%

According to CoreLogic’s research director, Tim Lawless.

  • Although values are continuing to rise, the November result was the softest outcome since January when values rose 0.9%.
  • Since a cyclical peak in the rate of growth in March, when housing values rose at 2.8%, there has been a notable trend towards milder price growth.
  • Slowdown in the pace of growth is due to a number of reasons. “Virtually every factor that has driven housing values higher has lost some potency over recent months.
    • Fixed mortgage rates are rising,
    • Higher listings are taking some urgency away from buyers,
    • Affordability has become a more substantial barrier to entry and
    • credit is less available.

B. Month Highlights

Growth over November

  • National – 1.3%
    • remains positive across all capitals except Darwin
    • Combined capitals – 1.1% – 1.38% last month
    • Combined regionals – 2.2% – 1.87% last month
  • Brisbane – 2.9% growth from 2.54% last month
    • Has the highest growth for the month after being consistently around the 2% mark since May this year
  • Adelaide – 2.5% after 2.0% last month
  • Hobart and Canberra – 1.1%
    • Hobart 2.0% last month and 2.3% in September and August
    • Canberra 1.94% last month
  • Sydney – 0.9%
    • Down from 1.50% last month, 1.9% in September and 1.8% in August
  • Melbourne – 0.6%
    • Down from 0.99% last month
  • Perth – 0.2%
    • Up from negative 0.11% last month
  • Darwin – negative 0.4%
    • Down from 0.42% last month

Median values

  • National – $698,170
  • Combined capitals – $783,557
  • Combined regional – $527,322
  • Capitals –
    • Sydney – $1,090,276
    • Canberra – $882,519
    • Melbourne – $788,484
    • Hobart – $676,595
    • Brisbane – $662,199
    • Adelaide – $558,179
    • Perth – $528,540
    • Darwin – $493,047

2. Rents 

Source: CoreLogic ( 1 Dec 2021)

  • The trend in rental growth has held reasonably firm since April, with the monthly change in national rents holding between 0.6% and 0.7%, well above the decade average monthly movement of 0.2%.
  • Every capital city and rest-of-state region recorded a rise in dwelling rents over the month, with house rents generally continuing to record a faster rate of growth than units.
  • Melbourne is one of the few exceptions, where unit rents have risen at a faster pace than house rents over four of the past five months.
  • “Melbourne’s unit sector was previously recording the weakest rental conditions of any capital city, with rents plunging -8.5% between March 2020 and May 2021.
  • It seems that more tenants are taking advantage of the renewed affordability of unit rentals, especially across inner-city precincts where rents had previously fallen sharply,” Mr. Lawless said.
  • Although rents are rising, gross rental yields have continued to reduce as housing values rise at a faster rate than rents.
  • Nationally, gross rental yields fell to a new record low in November, reaching 3.23%.
  • “Gross rental yields reached a new record low across every capital city and broad rest-of-state region in November implying a growing imbalance between the costs associated with owning a home versus renting a home,” Mr. Lawless said.
  • “With mortgage rates also extremely low, such a small yield profile is not overly concerning at the moment, however as investment activity increases along with the growing potential for higher interest rates, we could see more investors once again relying on a negative gearing strategy over the medium to long term,” Mr. Lawless continued.

3. Vacancy rates 

Source: SQM (16 Nov 2021)

  • Vacancy rates fell to a ten-year low of 1.6% over the month of October 2021 from 1.7% in September.
  • Melbourne with the highest vacancy rate at 3.3%, down from 3.5% in September
  • Sydney with second-highest vacancy at 2.6%, down from 2.7%
  • Then Brisbane 1.4% – no change from last month
  • Canberra 0.8% – no change
  • Darwin 0.7%, up from 0.6% last month
  • Adelaide, Perth – 0.6% – no change
  • Hobart – 0.4%, down from 0.5%

4. Listings 

Source: CoreLogic (1 Dec 2021)

  • A rise in the number of homes available for sale is a key factor driving the slowdown in capital growth.
  • Nationally, the number of new listings added to the market over the four weeks ending November 28th was tracking 15.7% above the five-year average – the highest level since late 2015.
  • “Fresh listings are being added to the market faster than they can be absorbed, pushing total active listings higher. More listings imply more choice and less urgency for buyers,” Mr. Lawless said.
  • “Although inventory levels are rising, the upwards trend is from an extremely low base.
  • The total number of active listings has increased by 67.3% since early September, but stock levels remain -24.0% below the five-year average for this time of the year.
  • We expect inventory levels will continue to normalize into 2022 which should see selling dynamics gradually shift away from vendors, providing buyers with some additional leverage at the negotiation table.”
  • As listings rise we are also seeing a subtle softening in vendor metrics such as the median number of days it takes to sell a property and auction clearance rates. Capital city homes are showing a median time on the market of 25 days, up compared with a recent low of just 21 days in May.
  • At the same time, auction clearance rates have trended lower, with the capital city weighted average reducing from the low 80% range in early October to the low 70% range by late November.
  • “The rise in listings and softening of key vendor metrics implies the housing market may be moving through peak selling conditions, however, it will be important to see if this trend towards higher listings continues after the festive season,” Mr. Lawless said

5. Consumer sentiment – time to buy a dwelling 

Source: Westpac Melbourne Institute (11 Nov 2021)

Time to buy a dwelling index

  • Reached 91.1 points in November, after 83.3 points in October, 96.7 points in September, 88.9 in August, and July 96.9 points.
  • As of October, the index had declined 37% from its peak in November 2020 of 132

Comments from Westpac Melbourne

  • A clear sign that rising prices and deteriorating affordability were weighing on buyer sentiment,
  • Particularly amongst owner-occupiers and prospective first home buyers.
  • The Index bounced back by 9.4% this month to 91.1 points.
  • It remains at a weak level overall, still down 31% compared to a year ago but maybe signaling some very early signs that some potential buyers are anticipating better prospects for affordability.

6. Lending indicators 

Source: ABS (2 Dec 2021)

New loan commitments

  • % of Owner Occ – 67.1%
  • % of Investors – 32.9%
  • % of first-time buyers (as % of owner occ) – 26.15%


  • Fell 2.5% for Housing overall
    • Fell 4.1% for owner occ
    • Increased 1.1% for investors
  • First home buyers fell 4.8%, after falling 1.9% in September, 4.9% in August, 7.6% in July, and falling 7.8% in June.

Investors up to 32.9%, creeping up from 31.74% September, 30.85% August, 29.11% in July. Still below levels where APRA stepped in at 46% in 2015

  • Total new mortgage commitments slipped 2.5 percent from September – to a seasonally adjusted $29.57 billion, as total owner-occupier loans fell 4.1 percent and first home buyer lending shed 4.8 percent, for a fifth month of decline.
  • New investor lending, by contrast, rose 1.1 percent to $9.73 billion in October, marking the 12th straight month of expansion.

7. Unemployment


Source: ABS (11 Nov 2021)

  • Unemployment rate increased to 5.2% from 4.6%.
  • Underemployment rate increased to 9.5% from 9.2%.
  • Participation rate increased to 64.7% from 64.5%.

8. RBA annoucement

At its meeting today, the Board decided to:

  • maintain the cash rate target at 10 basis points and the interest rate on Exchange Settlement balances at zero percent
  • continue to purchase government securities at the rate of $4 billion a week until at least mid-February 2022.

RBA minutes

  • Economy forecasts
    • The Australian economy is recovering from the setback caused by the Delta outbreak.
    • High rates of vaccination and substantial policy support are underpinning this recovery.
    • Household consumption is rebounding strongly and the outlook for business investment has improved.
    • The emergence of the Omicron strain is a new source of uncertainty, but it is not expected to derail the recovery.
    • The economy is expected to return to its pre-Delta path in the first half of 2022.
  • Wages
    • Leading indicators point to a strong recovery in the labour market. Job advertisements are at a historically high level and there are reports of firms finding it difficult to hire workers.
    • Wages growth has picked up but, at the aggregate level, has only returned to the relatively low rates prevailing before the pandemic.
    • A further pick-up in wages growth is expected as the labour market tightens.
    • This pick-up is expected to be only gradual, although there is uncertainty about the behaviour of wages as the unemployment rate declines to historically low levels.
  • Inflation
    • Inflation has increased, but, in underlying terms, is still low, at 2.1 percent.
    • The headline CPI inflation rate is 3 percent and is being affected by higher petrol prices, higher prices for newly constructed homes, and the disruptions in global supply chains.
    • A further, but only gradual, pick-up in underlying inflation is expected. The central forecast is for underlying inflation to reach 2½ percent over 2023.
  • Bond yields
    • Globally, bond yields have declined over the past month due to concerns about the Omicron variant.
    • The Australian dollar exchange rate has depreciated and is around its lows of the past year.
    • Financial conditions in Australia remain highly accommodative, with most lending rates around record lows.
    • At its February meeting, the Board will consider the bond purchase program.
    • By mid-February, the RBA will hold a total of $350 billion of bonds issued by the Australian Government and the states and territories, with these holdings providing significant support to the economy.
    • In reaching its decision in February, the Board will be guided by the same three considerations that it has used from the outset of the program:
      • the actions of other central banks;
      • how the Australian bond market is functioning; and, most importantly,
      • the actual and expected progress towards the goals of full employment and inflation consistent with the target.
  • Cash rate
    • The Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 percent target range.
    • This will require the labour market to be tight enough to generate wages growth that is materially higher than it is currently.
    • This is likely to take some time and the Board is prepared to be patient.

9. GDP/Savings

Source: ABS (1 Dec 2021)

  • The Australian economy fell 1.9% in seasonally adjusted chain volume measures
    • reflecting reduced activity due to extended lockdowns across NSW, Victoria and the ACT
    • This fall followed four consecutive rises since the 6.8% fall recorded in June quarter 2020 when the entire country was in lockdown. GDP in the September quarter of 2021 was 0.2% below December 2019 pre-pandemic levels.
  • Household saving ratio increased to 19.8% from 11.8%
  • Household spending fell 4.8% this quarter in contrast to the steep decline of 12.1% recorded through the national lockdown in June quarter 2020.
  • Spending on services fell 5.8%. Hotels, cafes and restaurants (-21.2%), recreation and culture (-11.8%) and transport services (-40.8%) experienced significant declines, affected by trading and movement restrictions.

10. Wage price index

In September quarter 2021 the seasonally adjusted WPI:

  • Rose 0.6% this quarter and 2.2% over the year.
  • The private sector rose 0.6% and the public sector 0.5%.

Wage growth by industry

  • Professional, scientific, and technical services recorded the largest quarterly rise of any industry of 1.3%. The annual rate of growth of 3.4% for this industry was both the highest across all industries in the quarter and the highest for this industry since December quarter 2012.
  • Mining recorded the lowest quarterly rise of 0.4%.
  • Electricity, gas, water, and waste services recorded the lowest through the year rise of 1.2%, the slowest rate since the commencement of the series.

If you’d like to discuss your property plans or mortgage strategy, please get in touch with us here.

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