Unveiling the Secrets of Australia's Diverse Property Market: What You Need to Know
Monday 24th June
The Australian property market isn't a monolith; it's a collection of varied and dynamic markets, each with its own set of fundamentals. Understanding these nuances is key to making informed real estate decisions. This week, we're excited to bring you insights from two compelling sources: the Gold Coast Bulletin and renowned property expert Michael Yardney of Metropole.
The Multi-Speed Nature of Australia's Property Market
As highlighted in Saturday's Gold Coast Bulletin, the Australian property market's performance varies significantly across cities, states, and regions. For instance, in the 12 months to May 31, Perth saw a staggering 22% rise in median home values, while Melbourne saw a modest 1.8% increase, and Hobart experienced a slight decline of 0.1%.
City-Specific Changes in Median Home Values:
Perth: +22%
Brisbane: +16.3%
Adelaide: +14.4%
Sydney: +7.4%
Darwin: +3.5%
Canberra: +2%
Melbourne: +1.8%
Hobart: -0.1%
Regional Changes in Median Home Values:
Western Australia: +14.8%
Queensland: +11.8%
South Australia: +10.6%
NSW: +4.3%
Tasmania: +0.4%
Victoria: -0.6%
Key Factors Driving These Disparities
Interest Rates:
CoreLogic's data indicates that expensive city markets like Sydney were impacted by rate rises earlier than others. For instance, Sydney home values declined shortly after the first rate rise in May 2022, while more affordable markets, like Adelaide, continued to rise.
Market Cycles:
Rising rates triggered downturns in Hobart, Canberra, Sydney, and Melbourne, following significant price growth. Conversely, Perth experienced a protracted downturn after the mining boom ended in 2014, and its recent price growth is seen as a long-awaited catch-up.
Supply and Demand:
High demand for homes is universal, but supply constraints vary. Perth, Brisbane, and Adelaide face significant supply deficits, with stock levels more than 40% below the five-year average. Conversely, Hobart and Melbourne have high stock levels, suppressing price growth.
New Home Building:
Victoria's higher home-building completion rate has subdued price growth compared to other states. This reflects stronger uptake of grants and schemes like the First Home Owner Grant and HomeBuilder scheme during COVID-19.
Interstate Migration:
COVID-19 and the shift to remote work led many to move from expensive cities like Sydney and Melbourne to more affordable markets in South-East Queensland and Western Australia, boosting demand and prices there.
Overseas Migration:
Record-high net overseas migration in 2023 impacted rental markets more than home values, particularly in NSW and Victoria, where rents have risen faster than property values.
Affordability:
Despite high price growth, Perth, Brisbane, and Adelaide offer great value compared to Sydney, Canberra, and Melbourne, attracting more families and investors.
Employment:
Strong employment growth in Western Australia and Queensland is driving housing demand and price increases.
Insights from Michael Yardney's Metropole
Michael Yardney, a top thought leader in Australian property, provides a graphical analysis of these trends. His recent report highlights various property trends and offers a deeper dive into the factors influencing market movements.
Future Outlook
CoreLogic expects the large price growth gap between markets to persist, given strong fundamentals in Perth and continuing oversupply in Melbourne and Hobart. However, the cyclical nature of the property market means that it's only a matter of time before buyers are drawn back to the currently weaker markets, causing prices there to start rising again.
Dive Deeper into the Data
For a comprehensive look at these trends, check out the full report with detailed charts and analysis from Michael Yardney and Metropole.
🔗 Everything you need to know about the Australian property market in 20 Charts
Stay informed and ahead of the curve with these valuable insights into the ever-evolving Australian property market.
By understanding these diverse factors, you can make better-informed decisions in the dynamic and multifaceted Australian property market. Enjoy these in-depth reports and stay tuned for our weekly property updates!