The property is back in the news and is back in the news.
But in a very different way than last year.
Rather than worrying about the Armagedon property, commentators are now wondering what will be the strength of the markets. According to a recent forecast by SQM Research, housing prices could rise more than 15% in Melbourne and Sydney next year.
After two years of hardship, Australian housing markets are on the rise and are now posting positive growth for four consecutive months.
Three interest rate cuts, tax cuts, housing uncertainty, more positive media, and looser overly strict bank lending guidelines combined to generate a significant improvement.
Buyers have once again borrowed money and are looking for a new home or a new investment, and sellers are returning to the market with shyness.
This month, Corelogic announced the largest monthly increase in its national home value index since May 2015.
Nationally, property values ??recorded a fourth consecutive month of growth in October, up 2.9% from the previous quarter.
However, our markets are fragmented – while the real estate markets of Sydney and Melbourne post a sharp recovery (both with a gain of more than 5% in value in the last quarter), as shown in the chart below of Corelogic, other states are still lagging behind.
Sydney Real Estate Market
The Sydney real estate market is on the move after posting its fastest turnaround in decades.
Since their trough in May, house values ??in Sydney have recovered 5.3% of the 14.9% correction recorded in recent years.
Despite this increase, the value of housing in Sydney is about the same as it was three years ago. However, if it continues to grow as fast as it did recently, it could reach new heights by the middle of next year.
House prices in Sydney rose by 1.8% over last month (+ 5.0% from last quarter), while unit prices increased by 1.2% (+4, 2% compared to the last quarter.)
The recovery trend is mainly concentrated in the premium segment of the housing market, where values ??fell earlier. Over the last three months, the properties of the top quartile in Sydney have increased by 5.9% while the properties of the bottom quartile have increased by only 3.2%.
Although the value of housing is increasing, rents continue to fall, down 0.1% in October to be 1.8% lower in one year.
However, the following measures confirm that the housing market in Sydney continues to improve:
• The average time of selling a home is now 38 days (an improvement over 44 days a year ago) and
• Vendors update their properties by an average of 4.4% to affect a sale (6.2% a year ago)
• 6.8% fewer properties sold in the last 12 months compared to the previous year
Investors are abandoning the off-plan apartment sector for a number of reasons, including construction standards, but many of those who signed on this plan a few years ago are having trouble accepting evaluations whose completion is well below the contract. price at a time when banks are more reluctant to lend on these properties.
The beginning of this new cycle is the perfect time to buy an investment property in Sydney, which offers investors the opportunity to purchase well-established apartments in the eastern suburbs, the northern part of the north coast and the west center at a price lower than they could have. paid several years ago.
Melbourne Real Estate Market
House prices in Melbourne have recovered more than half of their losses from the recent housing slowdown, showing the fastest recovery ever recorded.
Values ??rose 2.3% in October. This is the largest monthly change since the end of 2009, allowing the market to grow 6% since the discovery of a floor in May.
House prices in Melbourne rose by 2.4% over the last month (+ 5.7% over the last quarter), while unit prices rose by 2.0% (+ 5% on the last quarter.)
Melbourne's high-quality buildings lead the recovery trend with higher quartile values ??up 7.1% in the three months ended October, compared to 3.8% for the fourth quarter. lower quartile.
The following indicators confirm the gradual improvement of the housing market in Melbourne:
• Average time to sell a home is 32 days (33 days a year ago) and
• Vendors update their properties by an average of 4.4% to affect a sale (4.9% a year ago)
• 15.9% fewer properties sold in the last 12 months than in the previous year
But Melbourne's real estate market is highly fragmented, with rising values ??in the central and peripheral suburbs while the cheaper outer suburbs are still languishing.
The overall value of properties will be underpinned by a robust economy, employment growth, the highest population growth in Australia and the influx of 35% of migrants abroad.
Remember … Melbourne is one of the 10 fastest growing cities in the developed world, and its population is expected to increase by about 10% over the next four years.
Brisbane Real Estate Market
The Brisbane housing slowdown was relatively superficial compared to the two major capitals, with local stocks only 1.6% lower than their peak in April 2018.
However, this development followed a relatively modest growth cycle, with growth in the value of Brisbane housing averaging only 0.8% per year over the last five years.
The Brisbane stocks recorded their fourth consecutive month of subtle gains.
Housing prices in Brisbane rose 0.9% over last month (+ 1.0% from last quarter), while unit prices rose 0.8% (+1, 7% from last quarter.)
The following indicators show that the housing market in Brisbane is a bit slow:
• The average sale time of a home is 59 days (38 days ago) and
• Vendors update their properties by an average of 4.6% to affect a sale (4.5% a year ago)
• 13.3% fewer properties sold in the last 12 months compared to the previous year
Faced with rising rates of migration, control of supply and the generally affordable level of housing, Brisbane's housing market fundamentals look healthier than those of most other capitals.
At the same time, the strong underlying demand for homebuyers and investors from the southern states, at a time when yields are attractive and the affordability of housing is relatively healthy and puts a floor on real estate prices.
Brisbane's economy relies on large projects such as Queen's Wharf, HS Wharf, TradeCoast, Cross River Rail, the second airport runway and the Adani coal mine, but the growth of job will not start for a few years
Adelaide Real Estate Market
The value of housing in Adelaide has been tended down for much of this year, but rose 0.4% in October.
The housing slowdown in Adelaide has been moderate compared to most other capitals. Property values ??peaked in Adelaide in December 2018, and since then housing values ??have declined slightly by 1.2%.
House prices in Adelaide rose by 0.5% compared to last month (+ 0.1% compared to the last quarter), while unit prices fell by -0.4% (0% compared to last quarter.)
Signs of a slowing real estate market in Adelaide include:
• The average selling time of a house is 53 days (instead of 49 a year ago)
• Vendors update their properties on average by 5.6% to affect a sale (5.1% a year ago)
• 3.6% fewer properties sold in the last 12 months than in the previous year
Although things seem reasonable for Adelaide properties in the near future, over the next few decades, most of the long-term employment growth, economic growth and population growth of Australia will be performing in our four major capitals, which means that there are better places for creating wealth in the long run. this Adelaide.
Perth Real Estate Market
Perth recorded a further decline in home values, down 0.4% from last month and 8.7% from last year, a 21.6% drop from the previous year. peak reached in June 2014.
House prices in Perth were down 0.4% from last month (-1.8% from last quarter), while unit prices fell -0.8% (-1 , 1% from last quarter.)
The persistent weakness of the Western Australian housing market can be attributed to a combination of poor economic and demographic conditions, masked by the lack of consumer confidence.
Perth is now the most affordable capital, but it is far too early for a counter-cyclical investment in the west – I can not see prices rising significantly for several years.
However, Perth's rental market has tightened with rising housing demand, resulting in a 2.4 per cent increase in Perth rents over the past year.
Signs of the current recession in the Perth housing market include:
• The average sale time of a home is 60 days (57 days ago) and
• Vendors update their properties by an average of 6.3% to affect a sale (6.7% a year ago)
• 4.5% fewer properties sold in the last 12 months than in the previous year r
Hobart Real Estate Market
Hobart has been the best performing real estate market over the past three years, but its boom is now over.
CoreLogic figures show that prices are stabilizing. House prices in Hobart were up 0.9% from last month (+ 1.2% vs. last quarter), while unit prices increased 1.0% (+ 0.2% last quarter report.)
It is likely that the Hobart market will continue to lose momentum in the future.
Signs of the Hobart real estate market slowdown include:
• The average selling time of a house is 26 days (11 days ago)
• Vendors update their properties by an average of 3.4% to affect a sale (3.2% a year ago)
• 7.1% fewer properties sold in the last 12 months compared to the previous year
Darwin Real Estate Market
The Darwin real estate market, which peaked in August 2010, is still suffering from the effects of the end of our mining boom with a very gloomy job market and a lack of migration and infrastructure spending.
House prices in Darwin rose 0.7% from last month (-1.5% from last quarter), while unit prices fell -0.4% (-0 , 5% compared to the last quarter.)
Current values ??are 30.8% lower than their historical highs and it is unlikely that we would see these types of real estate prices over the next decade.
However, there are signs that Darwin's recession subsides slightly:
• The average selling time of a home is 78 days (68 days a year ago) and
• Vendors update their properties on average by 9.3% to affect a sale (7% a year ago)
• and a slight increase in sales at Darwin (4.2%) compared to 12 months ago
The small size of Darwin's market makes it more susceptible to local events and Darwin generally has a higher and more variable vacancy rate, resulting from a large and transient population.
Darwin has no significant growth relays on the horizon and it would be best to avoid investors.
Canberra Real Estate Market
The Canberra real estate market has been a "silent market", the value of housing has increased by 2% over the last year and has now reached a new high.
House prices in Canberra increased by 0.8% compared to last month (+ 2.9% compared to the last quarter), while unit prices rose by 0.1% (+ 0, 4% from last quarter.)
The following vendor indicators show that Canberra is performing a little slower than it was a year ago, but its steady growth is expected to continue until 2020:
• The average selling time of a home is now 35 days (33 days a year ago) and
• Vendors update their properties by an average of 3.3% to affect a sale (2.3% a year ago)
• 9.2% fewer properties sold in the last 12 months compared to the previous year.
What remains to be done?
The real estate markets of Melbourne and Sydney surprised most commentators by the force of their resurgence.
But what are we waiting for next year?
Well … even stronger price growth, according to SQM Research's annual housing boom report, which suggests that most Australian capitals will benefit from interest rate cuts and looser credit restrictions. credit to record a rise in housing prices compared to 2020 with Sydney and Melbourne leading the charge.
According to SQM's baseline forecast, house prices will increase by 7% to 11%, which represents a sharp rebound from the price declines recorded between 2018 and the first half of 2019.
Their basic forecasts do not assume any change in interest rates and, most importantly, no intervention by the Australian Prudential Regulatory Authority (APRA).
SQM predicts that property values ??in Sydney will increase by 10% to 14% and that real estate prices in Melbourne will increase from 11% to 15% next year
It is also expected that other cities will record price increases.
Source: Report on the boom and the chaos of housing of the SQM in 2020
Source of all other graphs and data: CoreLogic
Michael Yardney is a director of Metropole Property Strategists, which creates wealth for his clients through independent and impartial advice and defense of property rights. He is a successful author, one of Australia's leading experts in wealth creation through real estate and writes the Property Update blog.
