Rent control in Queensland could have a very different impact on the market than intended, according to the Real Estate Institute of Queensland.
The institute’s chief executive Antonia Mercorella said such a policy could in fact make the situation worse.
“We are acutely aware of the devastating impacts of the rental crisis and against that backdrop, it’s understandable that some tenants’ advocates are proposing rent control as a solution but rent control is not the panacea that many argue it to be,” Mercorella said.
“Rent control is a short-sighted solution to a complex problem and could in fact significantly deter property investment and reduce rental supply at a time when we’re already in a rental crisis.”
Concerns around housing affordability, availability and the cost of living have prompted calls for a rent-control policy in Queensland.
Calls for rent increases to be tied to inflation plus 10 per cent and limited to once a year were made last week by advocacy groups Tenants Queensland and the Queensland Council of Social Services.
It means asking the state government to intervene in the private rental market.
Median rents have risen 80 per cent at Gladstone, 51 per cent at Noosa and 33 per cent on the Gold Coast since 2018 with Brisbane’s house and unit rents increasing by 33 per cent and 23 per cent respectively prior to the pandemic.
The data is tracked quarterly by the Residential Tenancies Authority in Queensland.
“Unless we limit rent increases, hardworking Queensland renters will continue to be put at risk of homelessness and subjected to opportunistic rent increases in a hot market,” Tenants Queensland chief executive Penny Carr said, estimating that 30 per cent of renters would be protected by a rent control policy.
Mercorella is concerned rent control will mean property investors will not have the ability to pay their own bills with their rental income limited, potentially scaring investors off the market and limiting the already diminished rental supply further.
“It’s unsustainable to assume property investors will keep meeting free-market-driven cost increases such as mortgage repayments, rates, repairs and maintenance, and insurance, while artificially capped rents create a hard limit on their return to cover such expenses,” Mercorella said.
“Given regular mum and dad property investors provide the vast majority of housing for our state’s rental community, with the government’s social housing supply program accounting for under 4 per cent, it needs to be recognised that the contribution of property investors to housing Queenslanders is vital.
“If even a small percentage of investors were to sell their properties or withdraw them from the permanent rental market, this would have a material impact on the Queensland rental sector.”
▲ Rents across Queensland have increased significantly since the pandemic began with the amount of rental housing available slowly declining.
Mercorella said the state government needed to intervene to address the housing supply issue.
“This is not a problem that has emerged overnight and while Covid has had a role to play, the number of dwellings being built in Queensland has diminished considerably over the last five years and our future pipeline is also likely to fall short of demand,” she said.
“Until we are able to achieve a greater balance between the demand for rental housing and supply, and introduce greater diversity of housing, we won’t be able to fix this critical problem we are facing.
“What’s needed is a concerted effort from all levels of government to create the right environment to sustain existing established rental stock and to build new housing each year that matches targets based on detailed population forecasts.”
The rental housing crisis has hit people hard with an Australian Housing and Urban Research Institute report finding that renters are 125 per cent more likely to enter housing stress than homeowners.
It also found that renters are less likely to recover from it within the first year with a probability of doing so at only 39.4 per cent.
“Renting is much more insecure than homeownership,” UNSW’s City Futures Research Centre deputy director, Hazel Easthorpe, said.
“It’s a particularly insecure tenure in Australia, more so than in many other countries, because of our limited protections for renters, including allowing no-grounds terminations and unlimited rent increases.”
Housing stress occurs when a person in the bottom 40 per cent of income distribution is spending more than 30 per cent of their before-tax income on housing, something that is more likely to occur as the cost of living increases.
Brisbane and Hobart house prices have fallen sharper and faster than ever before after a “specular upswing” through COVID-19, according to property analysts CoreLogic.
Key points:
- Property values dropped 10.9 per cent in Brisbane, and 9.3 per cent in Hobart
- Both cities saw values soar during COVID-19
- The decline was steeper still in Sydney, but the NSW capital is yet to break records
The cities are the only two capital markets to set record declines — but the drop has barely made a dent on pandemic gains, according to the company’s home value index.
Values rose 43 per cent in Greater Brisbane after a pandemic population surge, but have gone down 10.9 per cent from its peak in June 2022 to January 28.
In Hobart, prices dropped 9.3 per cent in the past eight months after a five-year upswing.
Tim Lawless, from CoreLogic, said the two markets had a similar rise and rapid fall.
“They’re both relatively affordable markets — at least, they were prior to the pandemic — and they both recorded quite spectacular rises in housing values through the upswing.
“Another similarity is that they were both seeing very strong interstate migration rates that have now pulled back to some extent. Hobart of course, also broadly falls into that lifestyle category, that many areas of south-east Queensland could also be described as.”
Nationally house prices dropped 8.6 per cent since the Reserve Bank of Australia began raising interest rates.
In Sydney, prices dropped nearly 14 per cent, but it was not yet record-breaking in the capital, Mr Lawless said.
“Through the previous downturn, for example, which ran between the middle of 2017 and the middle of 2019, Sydney housing prices were down nearly 15 per cent through that trough,” he said.
“So Sydney is not quite at a record level of decline, but it’s probably a matter of time considering we’re still seeing values falling at around 1 per cent month-on-month in that market.”
‘Buyer’s market’
Recent home owners may find their property is worth less now than what they paid, but Mr Lawless said it’s unlikely many would go into negative equity.
“Typically, most home owners would have at least a 10 per cent deposit if not a 20 per cent deposit, which means there is some insulation in this downturn. The thing to keep in mind is most home owners in Brisbane are still sitting on a substantial amount of equity.
“We’re still seeing Brisbane housing prices about 28 per cent above what they were before the pandemic.”
And although Brisbane’s stock levels are about 40 per cent lower than average, Mr Lawless said it was still a buyer’s market.
“At the moment buyers do have time on their hands, there’s no real urgency to buy into the market like what there was a back in 2020 and 21. They can negotiate and if they don’t get the price they think is fair market value they can move on to the next property .
“For sellers, they really need to be realistic about their pricing expectations.”
Renting in a capital city in 2023 is set to become harder as increasing demand and insufficient supply continue to drive up prices, experts predict.
Key points:
- Enquiries per rental listing is up more than a third in Australia’s capital cities
- Meanwhile the number of rental listings is down 26.3 per cent
- Experts say the most effective way to ease rental pressures is through housing investment
Brendan James has felt the consequences of the tightening rental market firsthand.
The 32-year-old musician was told his rent would go up by more than 22 per cent at the end of his lease agreement.
Come April, Brendan’s two-bedroom unit in Kedron, on Brisbane’s north side, will go from $440 to $540 a week.
He said he was told the increase would bring the property in line with similar apartments in the building.
While he said he could bear the cost of the increase, he is moving out on principle.
“It’s just gouging … I don’t think for a place of this size the interest rate increase really justifies as [a] 22 per cent increase in rent,” he said.
“I’m not getting $100 more a week income either.
“Maybe it’s just stubbornness on my behalf but I don’t think this place is worth close to $600 a week.”
Instead he will move into a friend’s place on Brisbane’s south side.
It’s not ideal — he’s moving further away from family and into a house, instead of a unit which he prefers.
But he says “beggars can’t be choosers”.
“What can I actually do in this situation? I don’t have the capital to go and buy — I’ve let that dream go a long time ago — but I’d love to be able to rent and not move back to mum’s place at 32.”
The rental market is tightening in Australia’s capital cities
A new rental report released on Thursday from PropTrack found demand for rentals has intensified in the capital cities, with enquiries per listing up 31.1 per cent.
But while demand grows, the supply of properties becoming available for rent remains historically low.
Combined capital city rental listings are down 26.3 per cent year-on-year to the lowest they’ve been since February 2003.
Sydney and Melbourne have had the biggest decline in the number of properties available for rent, and the biggest increases in enquiries on a per-listing basis.
Economic researcher Cameron Kusher, who wrote the report, said many people had left the Sydney and Melbourne markets during the pandemic.
“Now they’re coming back and also a lot of people that migrate to Australia from overseas are coming into those cities and exacerbating the shortage of supply,” he said.
“But keep in mind rents in Sydney and Melbourne have barely moved from where they were at the start of the pandemic.”
Over the 12 months to December 2022, Brisbane and Adelaide recorded double-digit rental growth, with Brisbane growing 11.4 per cent and Adelaide 11.8 per cent.
“Queensland does see overseas migration settle … largely in south-east Queensland, but nowhere near as many end up in this region as we see ending up in Sydney in Melbourne,” Mr Kusher said.
“We’re still seeing really strong interstate migration into Queensland from other states and territories.
“And we think that might ease off a little bit, but it’s likely to still be very much positive going forward.”
The report’s data gives a slightly different picture for regional Australia, where markets have seen demand for rentals ease and enquiries per listing fall by a third.
Regionally, total rental listings were 9.8 per cent higher year-on-year, the largest annual increase since June 2014.
But rental prices are increasing no matter where you live.
Rents in capital cities are up 10 per cent year-on-year in December, compared with 7.1 per cent for regional areas.
Are more property investors the solution?
The PropTrack report said the most effective way to alleviate rental pressures in the short-term was to encourage more investment in housing.
Shaun Bond, an economist from the University of Queensland, said corporate investors could play an integral role in alleviating the current pressure in the rental market.
“In Australia we call it the build-to-rent market, where we have large investors who build large apartment buildings that could be rented out,” Professor Bond said.
“That would help bring on large amounts of supply relatively quickly.
“Institutional investors have large amounts of capital that they could deploy in this area, plus they’re going to be more stable in terms of ownership.
“In Australia, the rental markets are heavily dominated by very small investors and as we’ve seen in this current rental crisis, at some point some of those investors would be happy to sell out and then those properties go into home ownership.”
Mr Kusher said planning for more supply could take about five years.
He said the quickest solution is to get more investors to buy residential properties that already exist and make them available for rent.
“If we look at the share of lending to property investors, it’s been below its long-term average since early 2017.
“There’s been a number of factors driving that; banks have charged investors higher interest rates, we’ve had credit-growth limits on interest-only and investor lending, state governments have put up land tax on investments and all of this combined has seen fewer investors entering the market but also more investors exiting the market.”
Mr Kusher said the best way to increase supply in the long term was to build more homes, specifically for rent.
“The way they increase supply is to get more people buying those investment properties or build a lot more properties and make them available for rent,” he said.
How did we get here, and what happens next?
Professor Bond said house prices were one of the biggest factors driving rental price increases.
“What we’ve seen with the increase in house prices, and very strong increase in house prices in some regions, is many landlords taking the opportunity to sell out of their investments,” Professor Bond said.
“So that is reducing the number of properties that are available to rent.”
Professor Bond said there had been strong interstate migration in Australia, including Queensland, where properties were being bought to live in.
“It’s great to see that families have that opportunity to secure a property, but where that was previously rented, it means that that house is no longer available to another tenant.”
Professor Bond also pointed to problems in the construction industry, including supply chain issues as well as financial difficulties within construction firms.
“Just at the time when we really need these new homes or new apartments for people to rent to cope with those big population increases in some parts of the country, the construction industry is having enormous difficulties, and they haven’t been able to keep up with supply.”
As for what happens next, Mr Kusher expects demand to continue.
“I think in 2023 we’re going to see an ongoing slowdown and an easing of rental market conditions in regional areas of the country,” Mr Kusher said.
“But I think in the major capital cities — Sydney, Melbourne, Brisbane, Adelaide, Perth — we’re going to see rental conditions tightened even further as more people come back to those cities and rental demand escalates.
“And this could even carry on into 2024.”
The COVID-19 pandemic has had a profound impact on the Australian property market.
It caused the housing boom no-one saw coming.
So what was it like to work in the real estate industry during this period of unprecedented national growth?
Brisbane auctioneer Justin Nickerson talked of a crazy time when selling property required “no real skill”.
“Anyone could have sold property last year,” he said.
“They were fun days, but we knew they were never going to last.”
Pandemic with ‘opposite’ effect
Real Estate Institute of Queensland (REIQ) chief executive officer Antonia Mercorella said there were “plenty of analysts and economists who were predicting the market would drop 20 to 30 per cent” at the onset of the pandemic.
“The exact opposite happened,” she said.
“It made for an incredibly busy time for real estate professionals and keeping up with demand was difficult.”
The Queensland capital alone experienced its strongest growth in 30 years.
Prices escalate overnight
The COVID-19 housing boom was fuelled by unique factors.
Many people took advantage of low interest rates and the extra financial support coming from government stimulus packages designed to buoy the economy at a time of mass job furloughs and business collapses.
The boom was also nationwide, which was quite an unusual occurrence.
“Generally capital cities and regional areas are at different stages on the property cycle clock,” Brisbane real estate agent Stuart McCrea said.
“During the boom, the whole country was stuck at 12 — I haven’t seen that before.”
Mr McCrea clearly remembered the first open home that made him realise something was happening with the market.
“It was October 2020, and there was a crowd outside the door and down the street,” he said.
“Usually an open home takes half an hour; this one took me two hours to get everyone’s details.”
And that was just the beginning.
“I had several examples of clients selling their homes and telling me they were not turning up to work on Monday. They had made so much money on the sale they could retire early,” Mr McCrea said.
“If I sold a house and settlement was 30 to 60 days, I could often get more money for the property before it even settled.
“I could say to the new owner, ‘Do you want to sell it again and make $150,000?’.
“The market was just moving so quickly.”
Frantic auction scenes
A common feature of any housing boom is high auction clearance rates.
“Most Saturdays I was doing 18 auctions a day. That’s roughly one every half hour,” Mr Nickerson said.
He facilitated many memorable sales but one that stuck out was a property that sold the same day Brisbane was announced as host of the 2032 Olympics.
“There was an extra buzz in the air,” he said.
“The home got launched as a private treaty but there was so much interest after the first open home, the sellers decided to go to auction.
“We had an opening bid that came in miles and miles ahead of the 14 other offers.
“Effectively the property sold in three minutes.”
Agents ‘hoping it would end’
Mr McCrea said everyone buying property in that period knew they were “paying too much but if they didn’t someone else would”.
“I remember people buying properties that broke street records but within six months that price looked like a bargain,” he said.
Record levels of interstate migration also helped fuel prices in south-east Queensland.
“There was a real fear of missing out,” Ms Mercorella said.
“Not only were prices escalating, but we also started to see concerning behaviour.
“People were making unconditional offers that were well above their budget.”
Mr McCrea was always conscious the market would eventually start to cool.
“I was actually hoping it would end,” he said.
“It was like being on a holiday. You know you’ve got to get home eventually.”
Shift signalled end of boom
There was one open home in February this year that marked the start of the market cool-down, Mr McCrea recalled.
“As I pulled up to the home, I actually thought I had the wrong time because there weren’t any people waiting for me,” he said.
“There was a shift where people stopped thinking prices would just keep rising.”
Just a few months later in May, the Reserve Bank announced its first interest rate rise in more than 11 years.
Seven more have followed.
Ms Mercorella said it remained a “good, healthy market but no doubt agents have got to work harder”.
Mr Nickerson welcomed the challenge.
“What has come back now is the need for a real skill set and this is satisfying,” he said.
As COVID hit and the Reserve Bank cut interest rates to record lows to stimulate the economy, Aaron Doull and his wife Saori took out an $850,000 loan to buy their first home.
Most of their mortgage was fixed at a 2.2 per cent interest rate.
But next year, when the couple come off that fixed loan, they’ll face variable interest rates of around 6 per cent. That’s well above the 2.5 per cent serviceability buffer that their loan was based on.
Mr Doull says they’ll need to find another $1500 a month to service their mortgage, at a time when they’d like to be planning for their first child.
“If we do decide to have kids and my wife stops working, I think it’s going to be a lot more challenging without her salary as well,” Mr Doull says.
Mr Doull reckons they have about six months worth of savings to get them through interest rates of around 6-7 per cent.
“We don’t know what the future holds, or where we could be in one or two years’ time,” he says.
“We could be back having to rent and going through the rental system all over again, which isn’t really an enjoyable place to be.”
Fortunately the couple’s three-bedroom apartment in the waterside Sydney suburb of Drummoyne has significantly increased in value since they bought it, which makes Mr Doull feel slightly more secure.
He’s also grateful they didn’t max out their borrowing capacity. Despite Mr Doull’s partner being on JobKeeper payments at the time, the banks were willing to lend them almost $1.3 million.
“If that had happened we would be up for a fortune in interest, and we would be selling now.”
‘It’s very bad’
Experts estimate almost 300,000 borrowers who took out home loans in the two years to May are at serious risk of default or forced sales.
Accountant Kennedy Weldemariam estimates more than 100 of his clients will need to sell their homes because of interest rate increases.
Most of them are first home buyers and from multicultural communities in Melbourne’s outer-western suburbs.
“It’s very bad, especially in the emerging communities, because of lack of financial literacy,” Mr Weldemariam says.
“Every time the interest rate goes up, the stress goes up, and the demand goes up,” he says.
“They come and knock on our office, and they say, ‘What is my future? Is my bank going to take the property?'”
Mr Weldemariam’s clients were too worried about their financial situation to go on the record.
The ABC has spoken to half a dozen other people for this story who are either actively selling or thinking about putting their property on the market because of rate increases, who were also unwilling to be interviewed for the same reason.
“We talk about exit strategy most of the time,” Mr Weldemariam says, referring to the advice he’s giving his clients who are struggling with rate rises.
“We talk about their budget, about disposable income, about their repayments, and if it’s getting tighter, we advise them to sell it.”
Mr Weldemariam says one of his recent clients is a single mum with two kids who already works multiple jobs.
“She has gone from paying $2,000 a month [in mortgage repayments] to more than $3,000 a month,” he says.
After paying her mortgage what’s leftover is no longer enough to cover her family’s expenses — she needs to find an extra $200 short a month to cover costs. When rates rise another 25 basis points, she’ll be short around $500 a month.
Mr Weldemariam says for clients like her selling the property and renting is a better option.
“I told her that if you can’t get enough money to pay for all your expenses, then you are better to sell it [her house], you have to prepare yourself for these things.”
For Mr Weldemarim, the blame largely sits with the banks and regulators like APRA for allowing people to borrow too much.
“The banks are hungry for business, always,” he says.
“This type of risk is not good for the bankers and is not good for the consumers also,” he says.
“We need the bankers to take more responsibility in educating the clients about the risk side of things.
“If they prepared for an interest rate of 10 per cent, it would not be a problem.”
‘Human nature’
Increasing the serviceability buffer for borrowers is generally unpopular among those who make money from property sales, but it’s something Brisbane buyer’s advocate Wendy Russel supports.
“Serviceability buffers do need to be increased,” Ms Russell says.
“I feel that it’s human nature that people want to buy the best house that they can afford. So they’re constantly stretching the budget.”
Between December 2014 and July 2019, the buffer was 2 percentage points, but with a 7 per cent interest rate floor.
At the moment, that buffer is 3 percentage points above current mortgage rates, until late last year it was 2.5 per cent.
Like Ms Weldermariam, Ms Russell says a 10 per cent interest rate floor would provide better protection from future rate rises.
“I think it needs to be minimum 10 per cent, in my opinion.”
As people from southern states escaped lockdowns and Queensland’s property market boomed, Ms Russell saw firsthand how buyers were willing to do whatever it took to get a foot on the property ladder.
“In the heat of the moment, it’s very easy to just keep bidding and place another bid,” she says.
“And they don’t think about the ramifications of what that might look like later down the track when obviously interest rates do rise.”
Forced sales to compound house price falls
Before rates started rising, around a third of gross household income was needed to service a mortgage, according to data analysis by CoreLogic and ANU Centre for Social Research and Methods.
After recent rate rises households are, on average, spending around 41.5 per cent of their income on mortgage repayments.
If you assume further rate rises, but no change in income or property prices, it could go as high as 44 per cent, according to the data.
|
Date |
National median dwelling value |
Assumed Mortgage rate |
Assumed Mortgage rate |
Monthly mortgage repayment |
Monthly median household Income (gross) |
Portion of income required to service mortgage |
|---|---|---|---|---|---|---|
|
April 22 |
$767,869 |
2.41% |
Average new owner occupier variable reported by the RBA in April ’22 |
$2,399 |
$7,280 |
32.9% |
|
Nov 22 |
$714,475 |
5.08% |
Average new owner occupier variable reported by the RBA in Oct ’22, plus 50 basis points |
$3,096 |
$7,462 |
41.5% |
|
June 23 |
$714.474 |
5.71% |
Average new owner occupier variable reported by the RBA in Oct ’22, plus 113 basis points (assumes the cash rate peaks at 3.73% in June 2023, based on median outcome of major bank forecasts) |
$3,321 |
$7,462 |
44.5% |
CoreLogic Head of Research Eliza Owen says it’s those on lower incomes who’ll be hit hardest by rate rises.
“If you have a relatively high income, you could be spending 50-60 per cent of your income on your housing costs, and you still have plenty of money leftover,” Ms Owen says.
“But for those who bought into the market, perhaps when prices were near their highest, they’re facing these rising interest costs and they’re overextended.”
Ms Owen expects forced sales to increase next year as borrowers come off record low fixed interest rates.
“If we see more people needing to sell in 2023, it could compound the price falls that we’re already seeing as a result of interest rates,” she says.
“The housing market trajectory follows the cash rate – so with expectations that that peaks in mid 2023, that’s when we could start to see a floor in the housing market.”
Low rates unlikely to exist again
Economist Warren Hogan, a current adviser to Judobank, and former Treasury adviser and Chief Economist at ANZ, says Australia is in uncharted territory.
“The recession in the 1990s was the last real financial crisis we had and was mainly focused on commercial properties,” Mr Hogan says.
“And that is a very different proposition compared to the residential housing market.
“These record low interest rates, not only no longer exist in the market in late 2022, but are unlikely to exist again.”
He believes banks, the regulators and even the government may have to intervene to stop widespread forced sales.
“There is a real risk in this cycle in 2023, that we see tens of thousands of people having to get out of properties and can no longer afford their mortgages.”
“And I think that then becomes a policy issue.
“And of course, the burden will have to be shared between not just the individuals involved, but also the shareholders of banks – they’ll take a hit, and potentially the taxpayer, depending on how severe the problem becomes.”
Mr Hogan says intervention could involve restructuring the terms of loans to keep people in their houses, or a way for people to sell out in a property market without incurring huge debts.
‘It is his job’
However, Mr Hogan isn’t convinced increasing serviceability buffers for lending is the silver bullet.
He says APRA should be brought back into the Reserve Bank so regulatory and monetary policy is not set in isolation.
“The RBA as the central bank should have responsibility not just for the cost and supply and price of money, but also for the regulation of the financial system that operates around that,” he says.
“We did get to a point last year when the RBA was cutting rates and people were concerned about this exact situation playing out with rates being so low, that the governor said that it’s not his job to worry about where house prices are going, implying it was APRA’s.
“I think it is his [RBA Governor Phillip Lowe’s] job.
“And I think that would be best formulated by APRA being under the auspices of the RBA and the RBA governor having responsibility for bank regulation as well.”
Sydney’s house prices have effectively become unaffordable for the average resident and some other capital cities are not far behind, but one city is offering a better deal for people willing to make a move.
New data shows only 11 suburbs in Sydney have a median house price sitting at or below the borrowing capacity for buyers, based on the average income of about $90,000.
In Canberra there are only six, while in Hobart there are 10 and in Darwin there are 23.
Melbourne has 54, while Adelaide has 124 and Brisbane has 125.
But Perth has a much bigger availability with 216.
The metric is based on the assumption a single income buyer has a 20 per cent deposit saved, with a borrowing capacity based on $2000 per month in expenses and post-tax income based on their state’s average annual earnings.
PropTrack economist Angus Moore told NCA NewsWire every capital city faced a slightly different scenario.
SYDNEY
Mr Moore said it was widely understood Sydney was a very expensive city.
“For someone on average earnings for NSW, which is about $93,000 or a little bit over if you’re working full-time, there’s not an awful lot of suburbs that fall under what you could currently borrow with that sort of income,” he said.
“Now, many people have more than one income earner, so this is not necessarily saying no one can afford to buy in Sydney.
“But it is, I think, quite indicative of the fact that Sydney is an expensive housing market, even relative to its reasonably high income.”
Mr Moore said people struggling to buy a house might be better off looking for a unit.
“Not everyone will be looking for a house. Some people will want units – those are more affordable,” he said.
The top five affordable suburbs are:
- Emerton – $700,000
- San Remo – $697,5000
- Mannering Park – $690,000
- Airds – $688,000
- Blackett – $688,000
MELBOURNE
The Victorian capital faced a similar situation, Mr Moore said.
“It’s not quite as expensive as Sydney, so there is a few more suburbs that fall under that threshold,” he said.
“Many of these are in the west and northwest part of Melbourne, where there is a lot of development and a lot of new homes being built, and these tend to be a bit more affordable.
“But even so, many of these suburbs are sitting around $600,000 to $700,000 median house prices, which is still really quite expensive.”
The top five affordable suburbs are:
- Mernda – $685,000
- Epping – $680,000
- Sunbury – $680,000
- Warneet – $680,000
- Cranbourne West – $676,000
BRISBANE
Mr Moore said Brisbane was a more affordable city than Sydney and Melbourne.
“It’s gotten a lot more expensive in the past couple of years,” he said.
“We’ve seen very strong growth in Brisbane, as a lot of people have moved there in the past two years, even more so than usual.
“But even so, it does remain more attractively priced than Sydney and Melbourne for houses and for dwellings broadly.
“There’s a lot more suburbs that fall under that threshold of what someone on an average income, working full-time could afford to borrow and purchase.”
The top five affordable suburbs are:
- Bahrs Scrub – $660,000
- Augustine Heights – $660,000
- Meadowbrook – $653,000
- Lawnton – $651,000
- Acacia Ridge – $650,000
PERTH
Western Australia’s capital has a more unique scenario, with average full-time earnings at more than $100,000 per year.
“It’s actually quite a high average income state … in part, that’s because of a number of very high-paying jobs in the mining sector that help drag up that average,” Mr Moore said.
“But what that means is when we look across Perth, which is not as expensive as Sydney and Melbourne, given that average incomes are higher, there is a lot more that’s affordable for someone looking to buy in Perth.”
Mr Moore said there had not been the same up tick in prices for Perth, as seen in similarly sized capitals like Adelaide and Brisbane during the pandemic.
In part, that was because it was difficult to get into WA when the hard border was up, but also due to it being far from the east coast, Mr Moore said.
“It makes living there and commuting to Sydney once every fortnight a bit more difficult than is the case from somewhere like Brisbane,” he said.
The top five affordable suburbs are:
- The Vines – $780,000
- Murdoch – $767,000
- Bedford – $764,000
- Guildford – $760,000
- Jandakot – $760,000
ADELAIDE
Mr Moore said Adelaide was in the “same boat” as Brisbane in being a relatively affordable city.
“Across Adelaide, median dwelling price, not necessarily homes, is $650,000 versus $760,000 in Brisbane, so it is a more affordable city,” he said.
“It is also a lower income state, so that means borrowing capacities on this metric are lower – it’s the lowest average income state behind Tasmania.”
Mr Moore said much like Brisbane, Adelaide prices had grown extremely quickly across the pandemic.
“It’s been one of the better performing cities even this year, even as prices have turned down,” he said.
“Much like Brisbane, it’s benefited from a lot of people moving to it from Sydney and Melbourne, seeking larger homes.”
The top five affordable suburbs are:
- Aberfoyle Park – $621,000
- Hewett – $620,000
- Seacombe Gardens – $620,000
- Woodville North – $620,000
- Largs North – $617,500
HOBART
Tasmania’s capital was one of the more difficult cities to purchase a home on this metric, Mr Moore said.
“In part, because it is actually a reasonably expensive city now,” he said.
“It too saw a big kick up in prices across the pandemic.”
The top five affordable suburbs are:
- Claremont – $585,000
- Rokeby – $553,500
- Chigwell – $529,500
- Primrose Sands – $525,000
- Bridgewater – $485,000
CANBERRA
The nation’s capital is the highest income jurisdiction, with average full-time earnings of more than $100,000.
Even so, prices in Canberra were very expensive, Mr Moore said.
“In part, because it is a very high income city with lots of people on stable, high income jobs in the public sector,” he said.
“As a result, we see quite expensive prices and as a result, there’s very few suburbs that fall under what someone on full-time earnings could afford.”
The top five affordable suburbs are:
- Richardson – $800,000
- Lawson – $785,000
- Banks – $785,000
- Phillip – $750,000
- Charnwood – $720,000
DARWIN
Average incomes in the Northern Territory were reasonably high, Mr Moore said.
“They’re not that far behind some of the eastern states, so on that metric, this ends up looking reasonably affordable,” he said.
“Because it’s a small city, on this metric, it’s not maybe as good a way to measure how affordable Darwin is.”
The top five affordable suburbs are:
- Zuccoli – $585,000
- Wagaman – $580,000
- Humpty Doo – $580,000
- Jingili – $570,000
- Rosebery – $570,000
While the prospect of owning a home may seem like a distant dream for many first-home buyers, new data has found three of five major Australian cities still have properties available for less than $500,000.
For those trying to break into the market, property advisory group Suburbanite says suburbs in Brisbane, Adelaide and Perth are the best bet for finding a house without breaking the bank.
WATCH THE VIDEO ABOVE: Best suburbs for breaking into the housing market.
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Prices in Queensland creep higher closer to Brisbane, where homes exceed the $600,000 median.
Only 35 minutes out of the CBD, Petrie in the Moreton Bay area is Suburbanite’s hot suburb where a first home buyer can break into the market with a current median unit price of $405,000.
In Western Australia, Clarkson is Suburbanite’s top pick for Perth with a median house price of $469,000, the family-friendly area offers plenty of modern housing stock just 30 minutes north of the CBD.
“It’s great for families that have that balance of lifestyle and access to work and employment,” Suburbanite’s Anna Porter told Sunrise.
Hackham West is Suburbanite’s pick in South Australia, with the suburb offering a median house price of $446,000.
Porter said Adelaide property prices were generally lower than other major cities in Australia, but prices have grown significantly in the last two years, pricing first-home buyers out of the market.
“Hackham offers a really easy commute into the city if you’ve got mum or dad working in the city and it’s a nice family-friendly area with affordability for a free-standing house,” she said.
Prices in New South Wales and Victoria top the list with median house prices soaring above $1 million.
If affordability is the highest priority, Suburbanite suggests heading further out.
Porter says Geelong and the nearby suburb of Armstrong Creek ($778,000 median house price) and Wollongong and nearby Fair Meadow ($659,000 median unit price) offer cheaper alternatives close to the big cities.
Barriers to entry
While these suburbs may provide options for first-home buyers to get a foot in the door, research shows saving for a first home has never been harder.
The 2022 Domain First Home Buyer Report, released earlier this year, revealed the time it takes a young couple to save a 20 per cent deposit for an entry-level home had blown out to record levels nationwide.
Over the past decade, house prices across the capitals have jumped by 101 per cent and unit prices by 52 per cent on average
With wages failing to keep up with rising property prices, first-home buyers face significant financial hurdles when trying to break into the property market.
Domain found it now takes about five years and eight months to save for a house in a capital city – 11 months longer than it took a year ago.
“Conditions have rapidly changed in most cities for entry-level buyers vying for a house,” Domain’s chief of research and economics Nicola Powell said.
“The average wage growth in each city and interest accrued on savings have been unable to match the leap in prices. The time to save is based on a couple, so those looking to purchase on their own will find the time to save double.”
Heartbreaking video of a wombat attempting to swim in floodwaters.
Sydney Melbourne Hobart Brisbane suburbs with real estate house prices rising despite property crash
House prices in some suburbs across Australia are rising despite a property crash and soaring interest rates.
The median house price grew in several suburbs of Sydney and Melbourne from July to September, as well as in some areas of Hobart and Brisbane.
The findings were revealed in property data business PropTrack’s latest Home Price Index September 2022 report.
It found that although price drops were widespread in general, the pace of falling values had eased and some suburbs had even seen house prices rise.
The Oakleigh suburb in Melbourne saw house prices rise more than any other suburb in the city
In Sydney, Rouse Hill, 43 kilometres north-west of the Sydney central business district, saw the highest rise in the period, with house prices rising 24.08 per cent
National prices were down only 0.19 per cent, the smallest price fall since national prices started to dip in April 2022.
Sydney and Melbourne – which have been leading price falls across the country – saw falls ease.
However, regional areas in South Australia and Tasmania continue to defy national falls, hitting new price peaks in September.
In NSW, buyers are paying an average of more than $100,000 higher than they were in June.
The suburbs where values continued to grow were mostly in cheaper western areas or eastern zones where prices were lower than in neighbouring areas, according to the PropTrack data.
Most of the areas that saw rises also didn’t see prices soar when Covid lockdowns and rock bottom interest rates fuelled an unprecedented price boom last year.
Rouse Hill, 43 kilometres north-west of the Sydney central business district, saw the highest rise in the period, with house prices rising 24.08 per cent.
Quakers Hill saw prices rise by 17.98 per cent, Edmondson Park units were up by 14.14 per cent and Melonba prices rose 12.09 per cent.
‘Affordability is a key driver in this market,’ said PropTrack economist Paul Ryan. ‘As rates go up and people’s borrowing power has dropped, they go for what’s still affordable.’
PropTrack revealed 18 suburbs in Hobart recorded positive growth in the September quarter. They were led by Kingston Beach with a 19.06 per cent change
Other areas that saw growth included new Blacktown suburbs Nirimba Fields and Melonba, where house values lifted 6-12 per cent.
Houses in these suburbs were about $200,000 cheaper than the Sydney average.
Meanwhile, just over three-quarters of suburbs had a drop in house values and more than 90 per cent had a drop in unit values.
In Melbourne, median house prices grew in 279 suburbs from July to September.
Oakleigh led the list with a 6.2 per cent upswing, followed by Belgrave Heights with 5.66 per cent and Hughesdale in the city’s south east with 5.64 per cent.
PropTrack senior economist Eleanor Creagh said the larger size of properties in some high-performing suburbs was contributing to their popularity.
‘We have seen preference shifts continued since the onset of the pandemic, many people are looking for larger homes, bigger block sizes and more space,’ Ms Creagh said.
Meanwhile, Hobart was the only capital city where prices increased for the month of September, up 0.05 per cent, while the combined capitals eased 0.22 per cent.
PropTrack revealed 18 suburbs in Hobart recorded positive growth in the September quarter.
They were led by Kingston Beach with a 19.06 per cent change and Margate with 18.8 per cent.
In SA, 113 towns and suburbs recorded growth in their median house price over the past three months.
Seven out of the report’s top 10 locations were outside metropolitan Adelaide, with houses in Cleve recording the greatest increase in home value in the last quarter across the state.
The median house price rose by 24.14 per cent to reach $256,556.
The state’s other top gainers in the past quarter were Streaky Bay, which recorded a median house price increase of 17.08 per cent, Peterborough 9.69 per cent, Morgan 8.70 per cent, Ceduna 8.21 per cent and Quorn 8.18 per cent.
Lewiston, a semirural suburb, was the state’s top metropolitan performer and home values rose 23.99 per cent.
Hewett, Two Wells and Willaston were the other top-performing house areas in Greater Adelaide.
‘SA’s housing market has outperformed on a relative basis, benefiting from population flows, relative affordability advantages and remote work trends,’ Ms Creagh said.
‘We have also seen preference shifts since the onset of the pandemic, where people have desired larger homes and bigger block sizes,’ she said.
Controversial soldier Ben Roberts-Smith has flown commercial to The Queen‘s funeral in London, rather than accompanying Prime Minister Anthony Albanese on his VIP jet.
The Victoria Cross recipient left Brisbane for London on Thursday morning after both he and the three other Australian recipients of the country’s highest honour were invited to The Queen’s funeral.
Mr Albanese separately extended invitations to 10 ‘everyday citizens’ who were invited by Buckingham Palace to attend the September 19 service – including horse trainers Gai Waterhouse and Chris Waller, and Australian of the Year Dylan Alcott.
That group will also be flying to the UK on Mr Albanese’s jet on Thursday.
Ben Roberts-Smith checked in to his commercial flight to attend The Queen’s funeral in London on Monday
Queen Elizabeth greets Victoria Cross recipient Corporal Ben Roberts-Smith in 2011
Mr Roberts-Smith, 43, and three other living Australian Victoria Cross recipients were invited separately by the Victoria Cross and George Cross Association
Mr Roberts-Smith, 43, and other Australian Victoria Cross recipients were invited separately by the Victoria Cross and George Cross Association.
The Queen was patron of the association since it began in 1956, and asked before her death that all living members be invited to her funeral.
Afghanistan veterans Mark Donaldson and Daniel Keighran and Vietnam veteran Keith Payne are the other three Australian war heroes invited.
As they were invited separately to Mr Albanese’s entourage they must make their own way to London, but the Defence Department said the government would cover the cost of their flights ‘upon request’.
Mr Donaldson will represent the quartet in an order of chivalry procession on the day of the funeral and sit in the knave of Westminster Abbey for the funeral.
The other three, including Mr Roberts-Smith, will sit elsewhere in the church farther away from proceedings. All are invited to see The Queen lying in state.
Mr Robert-Smith being invited, as a Victoria Cross recipient, was uncontroversial but some Australian diplomates were reportedly annoyed he accepted it.
This is despite him declining being possibly seen as failing to honour The Queen’s wishes in extending the invitation.
Australian High Commission officials in London expected he would decline to attend while dogged by accusations of war crimes and a high-profile trial, and are concerned that he will be there.
His invitation has also been met with outrage from some reporters at Nine, despite it being automatic due to his medal.
Mr Roberts-Smith is awaiting judgement on a defamation case against Nine, the Sydney Morning Herald, and The Age after he sued them for a series of reports accusing him of murdering Taliban prisoners in Afghanistan, which he strongly denies.
As they were invited separately to Mr Albanese’s entourage they must make their own way to London, but the government will cover the cost of their flights ‘upon request’
Dressed in brown boots, jeans and a grey jacket, the towering ex-corporal walked alone with several bags before checking in and proceeding through security
Dressed in brown boots, jeans and a grey jacket, the towering retired corporal walked alone with several bags before checking in and proceeding through security.
He described the late Monarch as ‘magnificent’, adding that she was ‘stoic leader’ and ‘a lovely lady’.
‘I had an immense respect for her and she was someone I admired greatly. In every interaction I had with The Queen she was warm, insightful and engaging,’ he said.
‘She was a magnificent monarch, a stoic leader, and importantly just a lovely lady. I feel extremely honoured to be fortunate enough to pay my respects to The Queen and humbled that she saw fit to include the Victoria Cross recipients in her funeral procession.’
The decorated digger said it was a ‘surreal’ experience and that he was ‘taken aback’ by her ‘kindness’ and ‘intelligence’ when he met Her Majesty in 2011 to be awarded his medal.
‘She sort of dropped her handbag on the double-seated couch and pointed for me to sit down, and I assumed that she would sit opposite me,’ he recalled to the West Australian.
‘But she sat right next to me and grabbed my arm and started talking to me about just having just flown back from the Commonwealth Heads of Government Meeting at that time.’
Australian High Commission officials didn’t believe Mr Roberts-Smith was going to attend the funeral and are uneasy about his presence given his court battle
Mr Roberts-Smith is awaiting judgement on a defamation case against Nine, the Sydney Morning Herald, and The Age after he sued them for a series of reports accusing him of murdering Taliban prisoners in Afghanistan, which he strongly denies
The Age, Sydney Morning Herald and 60 Minutes journalist Nick McKenzie marked the occasion by tweeting that Mr Roberts-Smith has been the ‘subject of multiple… alleged war crimes investigations by the Australian Federal Police.’
No charges have ever been laid against Roberts-Smith.
Proceedings in the Federal Court case ended on July 27 after more than 100 days of hearings.
Other Australians invited on Mr Albanese’s jet include 2022 and 2021 Senior Australian of the Year Valmai Dempsy and Dr Miriam-Rose Ungunmerr Baumann AM, 2022 Australian of the Year Local Hero Shanna Whan, 2022 Queensland Local Hero Saba Abraham, and Tasmanian Local Hero Kim Smith APM.
Trudy Lin, Young Australian of the Year, from South Australia, and Western Australia’s 2021 Australian of the Year Professor Helen Milroy will also be part of the delegation.
Danny Abdallah – who stunned Australia by forgiving a drunk and drug-addled driver who fatally ploughed into his three children and their cousin them 2020 – will also fly with the group on the PM’s plane.
Mr Roberts-Smith casts a constroversial figure after a series of allegations following his rise to prominence after receiving the Victoria Cross
The towering ex-corporal walks through Brisbane International Airport on Thursday morning
Mr Albanese also offered a space on his flight to Gai and Robert Waterhouse, champion racing figures who had a personal relationship with The Queen.
Mr Waterhouse told the Sydney Morning Herald it was ‘very gracious’ of the PM to invite them aboard the VIP jet.
‘We have known the Queen and the Queen Mother for a long time, since Gai trained Clarence House for the Queen Mother, and we have had a long-standing relationship with them,’ he said.
‘Gai also trained Carlton House and Bold Sniper for the Queen, and we have had the privilege of taking afternoon tea with the Queen and her mother at Royal Ascot and others on a number of occasions. They were remarkable people.
‘It is a very sad occasion, but we were very pleased to be commanded by the Lord Chamberlain to her majesty’s committal. It was very gracious of the prime minister to invite us to travel on his plane.’
Also on Mr Albanese’s plane are leaders of Pacific Islands nations whom the PM said could hitch a ride with him to save their small countries the expense.
CIMIC Group has signalled its confidence in Brisbane’s fringe office market, listing a 14-storey commercial tower it is yet to break ground on.
Australia’s biggest construction firm, formerly Leighton Holdings, lodged plans for KSD2, a Cox Architecutre-designed commercial tower at 12 Hercules Street on a 2325sq m site earlier this year, but is yet to receive approval from Economic Development Queensland.
The development is being listed on a fund-through offering, which is subject to development application approval, according to Cushman & Wakefield agent Mike Walsh, who is marketing the property alongside Peter Court and Frederic Le Fanue.
It is the fifth and final portion of the Hamilton Harbour redevelopment, which was originally masterplanned by Cox in 2008.
Walsh said KSD2 was expected to have an estimated end value of $160 million upon completion in 2026.
The Hamilton Northshore area has been earmarked for the 2032 Olympic Games athletes village and is expected to become a hub of activity between the airport and Brisbane’s CBD in the lead up to the Games.
“This new office tower is located in one of Inner-Brisbane’s most exciting and promising urban renewal precincts,” Walsh said.
“It offers a proxy for exposure to bond-like inflation protected income security, with the lease underpinned by CIMIC Group Operating Companies for at least 10 years post practical completion in 2026.”
The commercial tower will comprise 14,307sq m of commercial space with three retail tenancies at the ground plane, a rooftop terrace and 170 car parking spaces.
Cushman and Wakefield agent Peter Court said the precinct would be a gateway to the CBD and the new commercial tower would be targeting green credentials and depreciation benefits.
“Brisbane is experiencing a major growth phase underpinned by historic interstate migration, more than 100,000 jobs created since March 2020 and generational infrastructure investment including the Airport runway duplication and preparation for the 2032 Brisbane Olympics,” he said.
The Hamilton Harbour development already included 600 residential apartments, a five-storey commercial building and a significant retail offering, which included medical, dental, food and beverage, and a Woolworths Metro.
According to the architectural report the building will offer views in nearly all directions, with three street frontages and an “integrated and fully activated hub”.
The property is being offered for sale on a fund-through basis via International Expressions of Interest, which close at 4pm on October 20.