Summary
- Australia’s housing markets are strong at the beginning of the year, backed by easing inflation and potential rate cuts.
- Despite a surge in late summer auctions, buyer activity remains robust, leading to positive outcomes for sellers in most major cities.
- Capital city values have surged by 10.2% over the past year, defying earlier predictions of significant declines.
- Property prices and rents are anticipated to continue rising in 2024, albeit at a slower pace.
- Sydney, Melbourne, and Brisbane have experienced varying degrees of price increases, driven by an undersupply of properties relative to demand.
Australia’s housing market is facing an unprecedented imbalance between supply and demand, presenting a significant inflection point.
Recent strong auction clearance rates reflect renewed confidence among buyers, despite the increased number of properties on the market.
Factors such as easing inflation and the possibility of an earlier rate cut are further fueling optimism among both vendors and buyers.
At Metropole, we’re witnessing an unprecedented level of enquiries from investors and home buyers, indicating a much stronger start to 2024 than anticipated.
This turnaround follows a period of cooling markets in late 2023, characterized by rising supply and declining demand.
However, beneath the surface, housing market performance varies across the country.
Looking ahead, demand is poised to outstrip supply for the foreseeable future, driven by high levels of immigration and inadequate property construction.
Construction costs are also on the rise due to supply chain issues, labor shortages, and financial viability concerns for new projects.
The rental market mirrors this imbalance, experiencing a crisis with historically low vacancy rates and soaring rents, expected to persist into 2024.
Despite a large number of properties going to auction, preliminary clearance rates remain strong, indicating continued market resilience.
While the trend in auction clearance rates remains above late 2023 levels, there has been a slight softening since February, signaling potential adjustments in the market dynamics.
Here are the recent property price changes for Sydney, Melbourne, and Brisbane:
– Sydney:
– Weekly increase: 0.2%
– Monthly increase: 0.5%
– Yearly increase: 10.5%
– Melbourne:
– Weekly increase: 0.1%
– Monthly increase: 0.1%
– Yearly increase: 3.9%
– Brisbane:
– Weekly increase: 0.2%
– Monthly increase: 0.8%
– Yearly increase: 15.6%
In summary, Australian capital dwelling prices rose by 0.6% in the last month, marking a 10.4% increase compared to twelve months ago. This upward trend in the property cycle is largely attributed to an undersupply of quality properties, coupled with consistent demand from buyers.
Indeed, these figures represent the overall trends, but it’s important to recognize the diversity within each market. Different segments of Sydney, Melbourne, and Brisbane may exhibit varying performances.
In particular, the more affluent areas of our capital cities are expected to excel this year. Residents in these areas typically have greater equity in their properties, rendering them less susceptible to factors like high interest rates and living costs compared to outer and newer suburbs.
Property asking prices
Property asking prices are a useful leading indicator for housing markets – giving a good indication of what’s ahead.
| Property Type | Price ($) | Weekly Change | Monthly Change (%) | Annual Change (%) |
| All Houses | $1,897,326 | $11,574 | -1.8% | 10.8% |
| All Units | $792,901 | $1,499 | -0.4% | 6.0% |
| Combined | $1,452,917 | $7,186 | -1.5% | 9.3% |
Here’s the latest data for Sydney in February 2024:Source: SQM Research
Melbourne:
| Property Type | Price ($) | Weekly Change | Monthly Change (%) | Annual Change (%) |
| All Houses | $1,245,400 | $9,649 | 1.1% | 6.7% |
| All Units | $604,028 | $1,372 | 1.2% | 1.3% |
| Combined | $1,045,424 | $6,877 | 1.1% | 5.5% |
Source: SQM Research
Brisbane:
| Property Type | Price ($) | Weekly Change | Monthly Change (%) | Annual Change (%) |
| All Houses | $1,058,399 | $2,809 | 2.2% | 11.5% |
| All Units | $579,656 | $1,344 | 0.7% | 15.4% |
| Combined | $933,301 | $2,355 | 2.0% | 11.9% |
Source: SQM Research
Perth:
| Property Type | Price ($) | Weekly Change | Monthly Change (%) | Annual Change (%) |
| All Houses | $956,215 | $3,946 | 2.9% | 16.2% |
| All Units | $490,508 | $9,147 | 1.9% | 14.7% |
| Combined | $835,291 | $5,222 | 2.8% | 15.8% |
The significance of property asking prices as a leading indicator in housing markets surpasses that of median prices due to several key reasons:
- **Early Market Sentiment Indicator:** Asking prices reflect sellers’ current sentiment in the real estate market. High asking prices may indicate seller confidence and anticipation of strong demand, while lower asking prices may signal uncertainty or a potential market downturn. Thus, asking prices provide real-time insights into market sentiment, often preceding changes in actual sales prices.
- **Predictive of Future Price Trends:** Trends in asking prices can forecast future movements in actual property prices. Consistent increases in asking prices over time may foreshadow rising transaction prices, providing early indications of potential price trends.
- **Impact of Economic Factors:** Asking prices are influenced by various economic factors such as interest rates, employment rates, and overall economic health. Changes in monetary policies or shifts in the job market can swiftly manifest in asking prices, offering insights into how economic conditions are shaping the housing market.
- **Regional Variations:** Australia’s diverse market exhibits regional disparities, and asking prices can unveil these variations. For example, property markets in Melbourne and Sydney may behave differently from those in Brisbane or Perth, with asking prices providing early signals of regional trends.
- **Influence of Supply and Demand:** Asking prices respond to the balance of supply and demand in the market. Areas with limited supply and high demand typically command higher asking prices, while those with abundant supply and lower demand may see lower asking prices. Therefore, asking prices reflect the dynamics of supply and demand in the housing market.
However, it’s essential to consider asking prices alongside other factors such as actual sales prices, time on the market, auction clearance rates, and broader economic conditions. Together, these indicators offer a comprehensive understanding of the property market dynamics and facilitate informed decision-making for buyers, sellers, and investors.
Our rental markets
Our rental markets have been tightening further over the last few months, with vacancy rates for both houses and apartments extremely low across the country and asking rents rising rapidly.
Asking rents for houses in capital cities have seen annual increases in the “double digits,” while for units, new asking rents are rising even faster, exceeding 20% in Sydney, Melbourne, and Brisbane.
Australia’s population has surged by approximately 620,000 people in the past financial year, surpassing projections by a hundred thousand, marking the highest growth in history. This substantial 2.8% expansion in the 15 plus age group is straining rental markets significantly.
The influx of overseas students and individuals on graduate visas, which grew by over three hundred thousand in the last financial year, is exacerbating the pressure on rental markets. Particularly, inner-city rental markets, favored by international students, are witnessing a rebound in rents after a pandemic-induced slump when international borders were closed.
Although the pace of rental growth is expected to decelerate, current vacancy rates indicate that rents will continue to rise due to limited new supply entering the market in the medium-term.
Sydney:Melbourne:
| Property Type | Rent ($) | Weekly Change | Monthly Change (%) | 12 Months Change (%) |
| All Houses | $1,049.32 | $0.68 | 0.3% | 12.2% |
| All Units | $701.17 | $1.83 | 1.2% | 10.5% |
| Combined | $842.63 | $1.40 | 0.8% | 11.4% |
| Property Type | Rent ($) | Weekly Change | Monthly Change (%) | 12 Months Change (%) |
| All Houses | $740.29 | $3.71 | 0.4% | 15.7% |
| All Units | $550.89 | $3.11 | 2.9% | 10.8% |
| Combined | $628.94 | $3.40 | 1.7% | 13.2% |
Brisbane:
| Property Type | Rent ($) | Weekly Change | Monthly Change (%) | 12 Months Change (%) |
| All Houses | $716.97 | -$3.97 | 0.3% | 7.4% |
| All Units | $550.89 | $3.11 | 2.9% | 10.8% |
| Combined | $628.94 | $3.40 | 1.7% | 13.2% |
Perth:
| Property Type | Rent ($) | Weekly Change | Monthly Change (%) | 12 Months Change (%) |
| All Houses | $779.21 | -$4.21 | -0.2% | 16.8% |
| All Units | $574.69 | $0.31 | 1.0% | 16.4% |
| Combined | $693.73 | -$2.30 | 0.2% | 16.7% |
Source: SQM Research
If you’re like many property investors with Create Real Estate, you’re likely pondering the best course of action in today’s market.
Are you considering buying, selling, or perhaps waiting it out?
Rest assured, the experts at Create Real Estate are here to offer you tailored direction, and tangible results.
Whether you’re just starting out in property investment or you’re a seasoned investor, during uncertain times like these, having a trusted advisor is paramount. At Create Real Estate, we pride ourselves on taking a comprehensive approach to your wealth creation journey. Our multi-award-winning team is committed to delivering personalized solutions that align with your goals and aspirations.
Choose Create Real Estate for expert guidance and unparalleled support in navigating today’s dynamic property market.