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!
Stay informed and ahead of the curve with our expert analysis, helping you make well-informed decisions in the ever-evolving property market.
Sentiment Soars in Victoria
The “time to buy a dwelling” index in Victoria jumped 31.5% to its highest level in nearly three years.
Why are Victorians turning optimistic and could be the portend for a market turnaround?
Source: Westpac Melbourne Institute
Hobart’s Rebound
Hobart saw a 0.8% increase after three straight months of decline.
Could this be the beginning of a sustained recovery for the city or is this growth short-lived in the face of broader market trends?
Source: CoreLogic
Rental Yields Hit Record Levels in Melbourne
Melbourne’s rental yields surpassed Brisbane and Adelaide for the first time since CoreLogic has been keeping records, sitting at 3.68%.
Is this the signal investors have been waiting for that Melbourne prices are ripe for the taking relative to Sydney, Brisbane and Adelaide?
Source: CoreLogic
Listings Drop in Melbourne and Hobart
New listings fell by 5.3%, while older stock is being absorbed faster than usual in Melbourne.
Listing numbers often correlate with market direction in prices and serve as a barometer for price direction and value growth.
This drop could signal that Melbournians are hesitating to sell due to concerns about lower prices restricting supply and putting upward pressure on prices in the future.
This is another key metric to track for the Melbourne market as we head into 2025.
If we look a little deeper, Hobart’s new listing have now fallen by 12.1% and this has correlated with an impressive positive price growth of 0.8% over the month.
Canberra’s new listings are also in negative territory at 5.8%, could Canberra be on the verge of a market turn?
Source: CoreLogic
Capitals vs Regions
Regional markets outperformed combined capitals this month, with regional prices growing 0.6% compared to 0.2% for capitals.
Is this a sign of enduring demand for regional properties or could it be a temporary anomaly influenced by Sydney and Melbourne’s slight downturns, given these two cities account for 50% of the capital cities market?
Our take is that this number is somewhat of a red herring. As the graph below shows, the rolling annual change for capitals vs. regionals now aligns, following a period where combined capitals had been outpacing regional markets
Source: CoreLogic
Buyers Opting for Affordable Entry-Level Properties
The bottom quartile of property prices is outperforming in nearly all capital cities except Canberra, driven by strong demand for entry-level properties due to affordability constraints.
This trend may present a unique opportunity for upgraders and high-end investors to secure properties in the upper price quartile at competitive prices before demand rebounds. Such a shift is likely to be triggered as we approach and move beyond the first anticipated rate cut which, based on our current economic analysis, is more likely to occur around mid-2025 rather than early in the year.
Source: CoreLogic
Slowing Rental Pressures
Rental growth slowed to just 0.2% in October, though vacancy rates remain tight at 1.8%.
This brings rental price growth back in line with long-term averages – a welcome relief for renters.
And for investors?
It might mean a break from being treated like pariahs by various governments.
Let’s not forget, the majority of investors are everyday Mums and Dads working to secure their financial futures without relying on government handouts, while also shouldering much of the responsibility for providing rental housing.
Is this the beginning of a new normal for rental growth or could tight vacancy rates reignite upward pressure?
Source: CoreLogic
Economic Resilience
Employment rose by 36,800, keeping the unemployment rate steady at 4.1%.
The RBA’s mission to ‘thread the needle’—keeping unemployment low while taming the inflation dragon—is working so far.
But what’s the cost?
The cost is higher rates for longer.
Rates are now taking longer to fall because the RBA didn’t raise them as quickly or as high as many other Western economies, several of which have already started cutting rates.
There’s always a sting in the tail.
For the ALP government, this delay could be politically costly.
With an election due by May 2025, the hoped-for rate cut good-news story may not arrive in time.
Ironically, their previous push against higher rate hikes could now deny them the pre-election win of falling rates.
Be careful what you wish for, as they say.
What does this all mean for the timing of rate cuts?
And will inflationary pressures ease fast enough to bring relief sooner rather than later?
Source: ABS
Inflation Stickiness
With inflation stubbornly high in services along with low unemployment, experts predict the first rate cut might not come until mid-2025.
Could this delay create more opportunities for buyers to secure properties ahead of any potential market rebound, particularly in Melbourne and Sydney?
Source: ABS
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