By Stephen Johnson, Economics Reporter For Daily Mail Australia
02:34 20 Nov 2023, updated 03:29 20 Nov 2023
Suburbs in Australia’s biggest cities have experienced double-digit house price rises during the past year despite aggressive interest rate hikes from the Reserve Bank.
A new CoreLogic report has revealed 82.4 per cent of Australia’s 4,506 suburbs with houses and units saw price rises in the three months to October.
That increase occurred before the Reserve Bank of Australia raised interest rates in November for the 13th time in 18 months, having paused since July, taking the cash rate to a 12-year high of 4.35 per cent.
With immigration at record-high levels, suburbs of Sydney, Melbourne, Brisbane, Adelaide and Perth have seen double-digit price rises during the past year, with big surges too during the past three months.
CoreLogic head of research Eliza Owen said strong population growth meant house prices were climbing ‘despite high interest rates and weakening economic conditions’.
‘Migration trends from both overseas and interstate favour more housing demand,’ she said.
In Sydney’s north, Thornleigh house prices climbed by 19.7 per cent over the year and by 3.3 per cent over the quarter to $1.848million.
Strathfield in the city’s inner-west has seen its median house price climb by 15.3 per cent during the past year, and by 4.6 per cent on a quarterly basis, to $3.627million.
Nearby Five Dock, on the Parramatta River, saw an 8.4 per cent increase over three months, taking the mid-point price to $2.691million.
Those suburbs are significantly above greater Sydney’s $1.397million median, in a city that receives a bigger share of overseas migrants and international students.
But the big increases weren’t confined to wealthy postcodes either with house prices at Bankstown, in the city’s south-west, soaring by 15 per cent over the year, and by 3 per cent over three months, to $1.341million.
The story was similar in Blacktown, in the city’s west, where prices have risen by 14.1 per cent over the year and by 2.7 per cent during the quarter to $939,829.
In Melbourne, Murrumbeena in the city’s south-east saw its mid-point house price climb by 12.4 per cent over the year and by 3.7 per cent over three months to $1.722million.
This was much stronger than greater Melbourne’s 2.2 per cent annual increase, taking the mid-point house price up to $937,736.
In Brisbane, double-digit increases were a lot more common in a city that receives more population growth from interstate rather than overseas migration.
Middle-distance postcodes had big increases with house prices at Macgregor climbing by 19.7 per cent over the year and by 9.3 per cent over three months to $1.556million.
Coorparoo in the city’s inner south saw its mid-point house price climb by 15 per cent over the year and a 7.3 per cent over three months to $1.538million.
This upmarket suburb is significantly dearer than greater Brisbane’s $860,465 mid-point.
The more affordable satellite city of Logan is also going up in value with house prices at Meadowbrook climbing by 14.9 per cent over the year and 7.6 per cent over three months to $697,994.
On the Gold Coast, Gilston house price have climbed by 17 per cent annually and by 4.5 per cent over three months to $1.081million.
Adelaide had double-digit price rises too with house values at beachside Taperoo rising by 12.7 per cent over the year and by 8.5 per cent on a quarterly basis to $617,139.
In the city’s inner-east, house prices at Toorak Gardens have soared by 12.3 per cent annually and by 8.9 per cent over three months to $2.295million, making it by far the South Australian capital’s most expensive postcode.
Perth is also a thriving market with prices at Yokine in the city’s inner north climbing by 17.3 per cent during the past year, and by 5.6 per cent over the quarter, to $842,876.
More than 400,000 migrants moved to Australia in the year to August, on a net basis.
If this continued, the overseas influx of skilled migrants and international students would surpass Treasury’s prediction of 315,000 arrivals for 2023-24.
Australia’s inflation rate of 5.4 per cent in the year to September is the highest in the OECD after New Zealand, and is significantly above the RBA’s 2 to 3 per cent target.
By Stephen Johnson, Economics Reporter For Daily Mail Australia
00:39 02 Nov 2023, updated 00:43 02 Nov 2023
- Sydney, Brisbane, Perth house prices in double-digit surge
- This is occurring despite Reserve Bank’s 12 interest rate rises
- Record immigration coinciding with fall newly built homes
- READ MORE: Brutal message to Prime Minister on population
House prices in Australian cities are surging by double-digit figures in less than a year despite a dozen interest rates rises.
This is occurring as record-high immigration coincides with a 40 per cent plunge in building approvals in little more than two years, as construction companies collapse.
Sydney, the recipient of a large share of overseas migration, saw its median house price climb by 10 per cent in the year to October to $1.397million.
The CoreLogic data also showed a 12.1 per cent rise since January, highlighting how the market bottomed out early this year and has since turbocharged, rising for nine straight months.
Brisbane has seen its mid-point house price rise by 10.3 per cent since the start of 2023 to $860,465, putting it further beyond the reach of average-income earners.
Perth, Australia’s most affordable state capital city market, saw its median house price soar by 11.1 per cent since January to $660,069.
Melbourne, another major recipient of overseas immigration, has seen a more subdued 4.1 per cent increase since January, taking the median house price to $937,736.
But the double-digit house price increases since the start of 2023 in Sydney, Brisbane and Perth have occurred despite the Reserve Bank of Australia raising interest rates 12 times since May 2022.
Another rate increase is expected on Melbourne Cup Day next week, that would take the cash rate to a 12-year high of 4.35 per cent, with the 5.4 per cent inflation pace in September still well above the RBA’s 2 to 3 per cent target.
Real estate values are surging, despite the sharp increase in monthly mortgage repayments during the past 18 months.
AMP chief economist Shane Oliver said house prices were climbing as the supply of new housing failed to keep pace with rapid population growth.
‘Australian home prices rose again in October, with the supply shortfall on the back of record immigration,’ he said.
‘The rebound in prices reflects a far worse than expected shortfall of supply relative to underlying demand for homes as immigration rebounded driving the fastest population growth rate since the 1950s at the same time that the supply of new dwellings slowed.
‘This accentuated already tight rental markets, forcing rents up and driving renters to consider buying.’
In the year to August, 413,530 permanent and long-term migrants arrived in Australia.
This intake, including skilled migrants and international students, looks set to surpass Treasury’s 315,000 forecast for 2023-24 made in the May Budget.
During the last financial year, only 168,231 private homes were built, with 27,213 finished in June 2023, an 11 per cent drop from 30,685 in March 2022.
With an average of 2.5 people per home in Australia, the 420,578 people they would theoretically house was well below the annual population increase of 563,200 in March, covering both net overseas migration and births minus deaths.
The housing shortage is set to continue with 8,338 new houses approved in September, a sharp 39 per cent drop from 13,717 in May 2021 when Australia was still closed to foreigners.
The slowdown in new homes, both being built or completed, is also occurring as higher building costs leads to construction company collapses.
CoreLogic research director Tim Lawless said while Sydney prices reflected the surge in overseas migration, house prices were going up in smaller capital cities because of interstate migration.
‘Additionally, Perth and Brisbane have the benefit of positive interstate migration that likely supports purchasing demand more directly than overseas migration,’ he said.
Sydney residents are leaving for smaller capital cities and regional areas to escape the congestion from rapid population growth.
The Regional Australia Institute revealed that in the year to September, 80 per cent of Australians leaving a big city for a regional area came from Sydney, with the data based on Commonwealth Bank customer accounts.
The group’s chief executive Liz Ritchie said this showed people were moving for lifestyle reasons.
‘It suggests that the bigger our cities get, the stronger the draw to our wonderful regions becomes,’ she said.
By Max Aitchison For Daily Mail Australia
01:21 11 Oct 2023, updated 02:12 11 Oct 2023
A flashy real estate agent has been mercilessly mocked for flogging a suburban home while posing alongside a McLaren which costs more than the property itself.
Khalid Sarwari, director of Only Estate Agents in Narre Warren, around 40km south-east of Melbourne‘s CBD, recently uploaded a video to social media to advertise a house he was selling in nearby Pakenham with an asking price of $650,000.
Posing in a three-piece suit featuring a pocket-watch chain, an orange tie and enormous sunglasses, Mr Sarwari tells the audience ‘this property is ready to go’.
There is a gratuitous shot of a white McLaren 720S – believed to belong to Mr Sarwari – which he later hinted cost $680,000.
‘The owners are very motivated to sell…,’ he says to the camera.
‘They’ve updated a lot of the things inside, freshened up most of the home including replacing all the blinds,’ Mr Sarwari adds, as the camera pans to the post box with a flaking number ’13’ peeling off it.
The video, which has racked up almost 60,000 views, was flooded with tongue-in-cheek jokes from Aussies on social media.
‘Are you doing a morning shift before your own wedding?’ wrote one.
Others were more to the point.
‘I’m not sure if you realise but in that suit, wearing sunglasses and flashing the car just makes people cringe,’ wrote one.
Another accused him of being an ‘insecure soul’.
‘The narcissism is overcooked. It’s not a car promo. You’re there to sell a house, not a delusion,’ they wrote.
Mr Sarwari was not to be outdone, however.
He gamely responded to most comments, describing his McLaren as ‘just a lazy run about’ car.
He also appeared to boast about the car’s value when someone asked him about the lease repayments.
‘No idea,’ he responded. ‘But most banks have calculator on the site, punch in $680,000 (and) you should get the figures.’
He told one critic who likened his style and inspiration to the 2013 Martin Scorsese-directed black comedy featuring Leonardo DiCaprio that ‘Wolf of Wall Street is child’s play my friend’.
He also appeared to join in one user’s mockery of the house.
One commenter said they thought ‘board shorts and a Hilux would have suited (the property) better’ to which Mr Sarwari responded: ‘Singled and a VL Turbo?’
The property does not appear to be sold despite the flashy marketing video.
Daily Mail Australia approached Mr Sarwari for comment.
A bizarre job advertisement for a property inspector has been shared online, with many questioning its legitimacy.
The advertisement, for a rental property inspector position with National Rental Inspections (NRI) in Victoria, was posted on Seek last week and lists requirements such as owning “a car that works 96 per cent of the time” and being “able to pay to put fuel in it”.
A sense of humour was also listed as a requirement, alongside owning an iPad “that works” and having a “minor interest in real estate.
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Applicants were also advised they must “be able to alphabet, sentance, punctuate and grammar way better than me, i dont need to, i have staff….(sic)”.
No experience is required for the job, with training provided.
While the advertisement said hours could be built around your family life, “this is not school hours”.
“We can work around your family, but you cannot have three months off over Christmas and two weeks off every other month for school holidays,” the listing said.
“We are actually very awesome to work with/for and have an amazing team but we are just growing and need more inspectors.”
Social media users were unsure about the advertisement’s legitimacy, with one user saying: “This has to be satire, surely?”
Others said they thought such a role would usually be filled by real estate agents.
“I note there is no requirement to know and understand tenancy laws,” one person said.
“This is like a ‘comedy’ sketch, but where nothing is funny,” another person said.
Amid a national housing crisis, many raised concerns about the outsourcing of this role to a third-party provider and about a contractor unknowingly entering their home.
While real estate agents must have a real estate licence, they are permitted to bring a third party onto the property for a purpose such as photography or valuation, according to a Consumer Affairs Victoria spokesperson.
No licence required
An agent’s representative can perform any of the legal functions of that estate agent in Victoria with written authority.
The representative does not need to apply for a licence, but their employer must verify they are eligible to be an agent’s representative.
The education requirements to work as an agent’s representative vary depending on the person’s experience in the industry, but can include up to 15 units of study towards a certificate in Real Estate Practice.
To be an agent’s representative, a police check is also required and being found guilty of fraud, dishonesty, drug trafficking or violent offences may impact eligibility.
An agent’s representative must be at least 18 years old and must not be insolvent under administration, not be the cause of a successful claim against the Victorian Property Fund or a corresponding fund and not be a represented person under the Guardianship and Administration Act 1986.
They also must not be subject to a Victorian Civil and Administrative Tribunal declaration making them ineligible, and not the subject of an order by any regulatory body in or outside Victoria that would disqualify them.
NRI is an independent property inspection service, operating across the country.
A spokesperson for the NRI confirmed the job’s legitimacy, and also that it had previously been posted.
When asked how many agencies the organisation worked for and how many properties were inspected, the NRI spokesperson said that information was “privileged”.
The listing said NRI completed more than 50,000 inspections last year.
The kind of training provided to staff was also “privileged”.
By Rachel Ward For Australian Associated Press and Stephen Johnson, Economics Reporter For Daily Mail Australia
Updated: 00:30 28 Aug 2023
- Fears Australia’s property market is flooded with dirty money
- A flow of dirty money could be driving up property prices
Australia’s real estate industry is the go-to sector for money laundering and more professionals should be compelled to report dodgy transactions, an anti-corruption group says.
Transparency International Australia says a flow of dirty money into the country could be pushing house prices up even higher but the real estate industry disputes the claim.
The federal government is consulting on a push to include accountants, lawyers and real estate agents in legislation that forces certain professions to report suspicious transactions to authorities.
The anti-corruption group backs the push as existing laws are focused on other areas including casinos and the financial sector.
Transparency International Australia chief executive Clancy Moore said Australia’s existing anti-money laundering rules were among the weakest in the world.
‘Australia’s real estate sector is now the go-to-destination for criminals to park their illicit money,’ Mr Moore said.
‘Several high-profile cases, media reports and AFP busts have demonstrated how kleptocrats, crooks and corrupt officials from countries including China, Cambodia and PNG use Australia’s property market to launder their dirty money and hide their crimes.’
The comments come ahead of a National Integrity Summit in Melbourne this week that will explore integrity, corruption and governance issues.
Real Estate Institute of Australia president Hayden Groves hit back, saying the main factor behind home and rental prices was a severe shortage of housing supply.
‘The Australian Federal Police and the Australian Government currently can’t demonstrate any evidenced-based link between money laundering and Australian property values, or the scale on which money launderers are operating, despite many requests from our industry to understand this better,’ Mr Groves said.
He said the industry group was committed to playing its role in the fight against capturing money launderers and was working with the government on the appropriate reporting of suspicious individuals.
House prices have risen in Sydney for the sixth straight month despite an interest rate surge because of record-high immigration – making it hard for first homebuyers to enter the real estate market.
In Australia’s most expensive capital city market, the median value rose by another one per cent to an even more unaffordable $1,333,985 in July, CoreLogic data showed.
Sydney house prices have risen in every month since February even though the Reserve Bank has, since May 2022, raised rates 12 times to an 11-year high of 4.1 per cent.
In other major capital cities, the house prices began rising again in March.
Melbourne house prices have been rising for five straight months, increasing in July by another 0.3 per cent to $923,881.
In Brisbane, house prices last month rose by another 1.4 per cent to $819,832.
Perth values rose by one per cent to $625,969.
Adelaide’s recovery began in April but monthly increases since then have been bigger with prices in July rising by another 1.4 per cent to $722,793.
Darwin prices rose for the third straight month in July, increasing by 0.5 per cent to $583,913.
But prices fell in the smaller capital cities that don’t receive a large intake of new migrants, with Hobart prices in July slipping by 0.1 per cent to $696,570 as Canberra prices dropped by 0.3 per cent to $958,950.
House prices are rising as higher interest rates cause a drop in building approvals, making property an even scarcer commodity in the big cities during a time of rapid population growth.
The COVID-19 experience (and several lockdowns) has proven that many Australians can do their jobs in their pyjamas, without ever needing to set foot in the office again.
Key points:
- $425 billion of superannuation money is invested in unlisted assets like office buildings
- Office property has posted its “worst quarterly decline since 2009”, figures show
- Prices are expected to keep falling with less demand for office space
It has been a huge relief for those who simply want to focus on the job, without the pressure to engage in “water cooler banter” and discuss what they did on the weekend.
But this increased flexibility has led to a sharp rise in empty office space across CBDs worldwide, which could affect their retirement savings.
“Every major superannuation fund has an element of exposure to commercial real estate,” said Dwight Hillier, the managing director of valuation services at Colliers.
“Moving forward, there will be pressure on returns for those super funds”.
Earlier this month, the nation’s second-largest super fund, The Australian Retirement Trust (ART), wrote down the value of some of the office towers in its property portfolio by as much as 15 per cent.
The construction industry’s super fund, Cbus, had a similar experience — downgrading the value of some of its commercial real estate by more than 10 per cent.
Despite that, both funds managed to deliver a solid annual return for their members (at 10 and 8.95 per cent respectively), as strong gains on the share market offset their commercial property writedowns.
‘Australian market thinks it’s different’
The decline in the value of office buildings owned by Australia’s super funds looks very tame compared to what’s happening overseas.
For instance, the world’s biggest asset manager Blackstone sold its 49 per cent stake in a lower Manhattan skyscraper (One Liberty Plaza) for $US1 billion — which was a steep discount of 33 per cent (considering the building was valued at $US1.5 billion six years ago).
In addition, a study by consulting firm McKinsey estimated that the shift to work-from-home will likely wipe off $1.17 trillion from the value of office buildings in major global cities in the next seven years.
It was based on a survey of nine megacities (including Beijing, Houston, London, New York, Paris, Munich, San Francisco, Shanghai and Tokyo), showing that demand for office space would be 13 per cent lower, compared to pre-pandemic (2019) levels.
The value of commercial properties in Australia rises “very quickly during a market upswing”, Mr Hillier said.
But he noted, somewhat quizzically, that Australian prices seem to fall (or get written down) “quite slowly” during a downturn, compared to other nations.
“We have seen more sentiment-based valuation and pricing happening in US and UK markets,” he added.
“But for whatever reason — I think it’s cultural — the Australian market thinks it’s different.”
“Unfortunately, in this cycle, we have a lot more global capital [in Australia], so that point of difference is probably reduced”.
“The total [peak to trough] write-back across the broader office market will be between 10 and 20 per cent.”
Like other super funds, Cbus and the Australian Retirement Trust are expecting the value of their office buildings to keep falling in 2023, but nowhere near that degree.
The ART’s chief investment officer Ian Patrick said it greatly depends on the “quality” of the office asset.
“A [high-quality] building that is leased to a government tenant with 10 years left to run on the lease is very different to a building that’s rented to a whole bunch of small companies where the outstanding lease term is very short,” Mr Patrick said.
‘Overshooting’ on the upside and downside
The superannuation industry has been criticised for lacking transparency in the way it determines the value of unlisted assets like privately owned buildings, infrastructure and stakes in companies that are not listed on the share market.
In the nine months to September, the value of unlisted property funds surged by almost 19 per cent, according to figures from the Property Council of Australia.
But those same figures also showed a nearly 20 per cent plunge in the value of property funds listed on the stock exchange.
“Listed markets obviously trade daily, so they’re more exposed to momentum and sentiment in the market,” said Brett Chatfield, the chief investment officer of Cbus.
“Whereas unlisted valuations are typically on a quarterly cycle, so you can see some short-term deviations.”
Mr Chatfield also pointed out that listed markets often “overshoot on the upside” when markets are doing well — and they “overshoot on the downside” when markets are faring poorly.
His counterpart at the ART, Ian Patrick, also defended the valuation practices of super funds, which update their unlisted asset valuations every three months.
“I think ‘big super’ is doing a very solid job on the frequency of revaluation and transparency of the process,” Mr Patrick said.
“Bear in mind, most buildings have longer-term leases, so something more frequently than quarterly doesn’t really exhibit much change in terms of transparency.
“We also rely on external, professional valuers and rotate them on a regular basis every three years.”
‘Worst decline’ since the GFC
Some of Australia’s largest superannuation firms have invested as much as 12 per cent of their members’ funds into commercial properties, which have seen their value fall sharply in the past year.
Vacancy rates at Sydney and Melbourne CBD offices jumped to 12-month highs in the June quarter (at 14.4 and 16.2 per cent, respectively), the latest research from property firm Jones Lang Lasalle has revealed.
The rise in vacancies has contributed to a significant fall in Australia’s commercial property values.
“After months of speculation about when the market will see significant falls in value for the office sector, they have finally arrived,” according to a report written by Benjamin Martin-Henry, MSCI’s head of real assets research in the Pacific.
“The one-month capital growth for June alone came in at -5.2 per cent, which drove the worst 12-month total return since early 2010.”
He also said it was the “worst quarterly decline since 2009”, at the depths of the global financial crisis.
The MSCI report also noted that “office funds recorded an annual total return of -4.4 per cent” (due to a 7.9 per cent drop in the value of office properties and a rental income return of 3.7 per cent).
‘Delayed and deprioritised’ regulator
In recent months, the Australian Prudential Regulation Authority (APRA) has warned that super funds need to improve their valuation processes over concerns their assets may be over-inflated.
However, APRA itself has come under fire for not doing enough to scrutinise how industry funds value their unlisted assets — like office buildings, shopping centres, toll roads and investments in startups which are not listed on the share market.
By the end of 2022, around $425 billion (18.5 per cent) worth of superannuation money was invested in unlisted assets.
A review by the Financial Regulator Assessment Authority (FRAA), commissioned by the federal government, found that APRA’s lack of sufficient oversight could result in super fund members losing money due to “unfairly reduced” or “inflated” balances.
It noted there was also a perception that APRA’s focus on the issue had been “delayed and deprioritised”.
The FRAA spoke with “external stakeholders” who were concerned that APRA had only started writing to super funds about their inflated valuations of tech startup Canva, in particular — as a response to ongoing media coverage of the issue, rather than the regulator’s “proactive identification”.
“The valuation of unlisted assets is important due to the potential consequences on members’ fund balances,” the FRAA said in its report, released earlier this month.
“If members decide to switch asset allocations or withdraw funds, and assets have not been appropriately valued, the amount withdrawn may not reflect the asset’s true value.
“Remaining fund members may then be left with an unfairly reduced or inflated balance, and new members may overpay as they enter the fund.”
Sellers’ strike
Director of research at Rainmaker Information Alex Dunnin says it’s hard for superannuation funds to value unlisted assets (and office buildings especially) because there’s currently a “sellers’ strike”.
“There’s so much nervousness. We’re not sure about interest rates or inflation have stabilised yet,” Mr Dunnin said.
“Valuers tend to estimate what a property is worth based on what other similar properties are selling for.
“But one of the problems we’re seeing is that there just aren’t many commercial properties being sold and bought, so we’re not really sure what they’re actually worth.
“It’s like trying to judge what all the properties on my street are worth when only one house, was sold a year ago.”
Last month, one of Australia’s biggest owners of office towers, Dexus, downgraded the value of its diversified portfolio by $1 billion.
In addition, Dexus was one of the rare landlords that decided to sell one of its 26-storey office towers in the Sydney CBD for a significant loss.
It sold the 44 Market Street building for $393.1 million to a Hong Kong private equity firm (a 17.2 per cent discount to its book value).
In contrast, other owners have been marketing their office buildings intensively — but withdrawing them from sale because they failed to attract a decent price from potential buyers.
REST Super, for example, tried to sell its Melbourne Docklands office building (717 Bourke Street) for around $490 million. But it withdrew the sale late last year because the best offer it received was much lower than that.
Reassuringly, Mr Dunnin believes superannuation returns will be solid in the near future.
“We should remember that office property is only half of the property investment market.
“The industrial sector — factories and warehouses — is booming, and delivering returns that are two to three times higher than what office properties are delivering right now.
“And we need those warehouses to deliver all those online goods that we’re buying and selling.
“So investing in property is still a good thing to do.”
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By Ashley Nickel For Daily Mail Australia
02:26 24 Jun 2023, updated 02:36 24 Jun 2023
- Median prices in several suburbs are similar to 2013
- North Ryde, Sydney, increased by two per cent
- St Kilda, Melbourne, increased by seven per cent
- Glandore, Adelaide, increased by 10 per cent
New data has revealed the surprising suburbs in each state where Aussies can get their hands on a home for the same price they would have paid in 2013.
Units and houses in several suburbs around Australia have stayed at similar median prices for the last 10 years largely due to more availability of accommodation.
Research by PropTrack shows the median unit price in Regents Park, 22km from Sydney‘s CBD, has increased by 14 per cent to $383,500 since 2013.
Similarly, median unit prices in North Ryde, in Sydney’s north, have only increased by two per cent to $745,000.
Meanwhile, the average price of a unit in Greater Sydney is up 54 per cent to $787,000 when compared with the 2013 price.
The price is even steeper for those looking to buy a free-standing house which averaged $615,000 in 2013 but now costs $1.3million.
PropTrack economist Angus Moore said the stable market in specific suburbs is attributed to a large number of high-rise buildings being built in the early 2010s, meaning there’s plenty of property to go around.
‘The prices would be more affordable, which may be appealing to some buyers,’ he told the Daily Telegraph.
‘The affordability actually shows what would be possible if they built more housing in other areas.’
Outside of the city several mining, rural and flood-affected towns have stayed at similar prices in the last 10 years.
Deniliquin, a small town near Echucha on the NSW-Victoria border, was severely hit by floods in the 2022 record weather event.
The devastation has caused the median price in the town to fall to the same price as in 2013 with units at $146,500.
The median price of a house in Cobar, a mining town in central NSW, has fallen by four per cent since 2013 to $200,000.
Several areas around Melbourne have reamined surprisingly stable in the last 10 years with the median price of a unit in the city itself only increasing by five per cent to $520,000.
Carlton, one suburb north of the city’s CBD, has seen the median price of units drop by five per cent to $436,000 while nearby Abbotsford has fallen by 12 per cent to $525,000.
The biggest dip in median unit prices around the state was recorded in Travancore, just 6km north of the CBD.
In 2013 the median price for a unit in Travancore sat at $501,250 but has fallen by an incredible 33 per cent to just $338,000 in 2023.
Several Melbourne residents attribute the suburb’s stability to the fact it is mostly forgotten about in favour of other trendier suburbs.
Another surprising suburb where the median unit price has stayed largely the same is St Kilda.
In 2013 the median price for a unit was $470,000. By 2023 the median price had increased by just seven per cent to $502,725.
Brisbane’s property market has picked up considerably more but there are still a few suburbs where prices haven’t jumped by much.
Fortitude Valley, known as Brisbane CBD’s nightlife area, has seen a dip in median unit prices since 2013.
Units in the suburb cost a median price of $420,000 a decade ago and now sit at $401,500.
The median price of a unit in Stafford, 12km north of the CBD, has risen by just 7 per cent since 2013 to $441,500.
Mr Moore said the consistency of pricing in several Brisbane and Melbourne suburbs is also due to an oversupply of property available.
‘House prices have tended to grow a lot faster than unit prices,’ he said.
‘This was especially true during the pandemic and (lockdowns) when people favoured larger properties.’
Median prices have stayed the most consistent in regional areas of Queensland – including along the Whitsundays coast with the median cost of a unit in Airlie Beach only rising by six per cent to $440,000.
The biggest property market falls in the state when comparing 2013 to 2023 were, by far, in the Gladstone region.
In 2013 the median price of a unit in Gladstone Central was $472,500 but dropped by 51 per cent compared to 2023 with the median price now $230,000.
In 2013 the median price of a unit in Gladstone Central was $472,500 but dropped by 51 per cent compared with 2023, with the median price now $230,000.
Similar falls can be seen in the town’s coastal regions with house price in Barney Point falling by 25 per cent.
Several rural areas around Queensland have also suffered steep median price declines.
Units in Emerald, 270km west of Rockhampton, fell by 43 per cent to $200,000 and houses in outback hub Longreach dropped by 12 per cent to $225,000.
The most steady suburbs in South Australia are mostly out of Adelaide but a few key suburbs have kept the city affordable.
The median price of a unit in Edwardstown, 8km south of Adelaide’s CBD, has risen by just 10 per cent to $280,000 while nearby Glandore has also risen by 10 per cent to $345,000.
Unit prices in Hackham, in Adelaide’s south, saw the second biggest drop in the entire state with the median in 2013 sitting at $229,500 while the 2023 median dropped by 35 per cent to $150,000.
By Stephen Johnson, Economics Reporter For Daily Mail Australia
01:13 22 Jun 2023, updated 01:59 22 Jun 2023
- Domain tipping big house prices increases
- Immigration fuelling growth as rates rise
House prices are tipped to soar in the coming year despite the aggressive rate hikes because of high immigration.
Property market group Domain is forecasting a six to nine per cent surge in Sydney house prices between now and June 2024 and a two to five per cent increase in unit values.
Melbourne house prices were tipped to increase by zero to two per cent as Brisbane values went up by one to four per cent.
Even the smaller capital cities were tipped to see an increase with Adelaide house prices forecast to rise by two to five per cent as Perth prices climbed by one to three per cent.
Hobart house prices were predicted to rise by three to five per cent as apartment values increased by one to three per cent.
Canberra house prices were expected to rise by two to four per cent.
The predictions are being made even though the Reserve Bank has already raised rates 12 times since May 2022, marking the most aggressive hikes since 1989.
Economists at Westpac, NAB and ANZ expecting two more hikes in July and August that would take the cash rate to a 12-year high of 4.6 per cent – up from an 11-year high of 4.1 per cent now.
Dr Nicola Powell, Domain’s chief of research and economics, said high immigration would drive a house price recovery, even as interest rates kept on rising.
‘Population pressures will lead the charge in factors driving housing demand and property prices higher over the next 12 months,’ she said.
‘Australia has seen an exponential increase in temporary and permanent migration since the international border reopened in late 2021 to alleviate skills shortages.
‘Of course, unlike natural population growth, those arriving from overseas aren’t already housed.
‘This puts us in a position where in the next financial year alone, nearly 130,000 extra dwellings will be needed, with the eastern seaboard receiving the largest share of migrants.’
Australia’s population last year grew by 1.9 per cent, with a net migration increase of 387,000, which included the permanent intake of skilled migrants and the long-term cohort of international students.
Only Canada with its 2.7 per cent growth pace, and Singapore with a 3.4 per cent are embarking on a steeper pace of population growth among the rich-world countries.
Treasury is expecting a record 400,000 migrants to move to Australia this financial year, which has led to most cities having an ultra-tight vacancy rate.
Sydney’s median house price fell by 9.2 per cent in the year to May, to $1.294million, CoreLogic data showed.
It had peaked at $1.417million in April 2022 before the Reserve Bank began hiking rates in May 2022 for the first time since November 2010.
Dr Powell said Sydney house prices would peak again within a year from now.
‘Sydney’s recovery will be slow but steady after steep downturns in 2022,’ she said.
‘House prices will be at a new record high by the end of the next financial year.’
Brisbane’s mid-point house price has fallen by an annual pace of 11.1 per cent to $792,125 but Dr Powell is expecting it to hit a record high by June next year.
A similar phenomenon was expected in Adelaide where house prices have slipped by just 0.5 per cent over the year to $704,448.
But Melbourne was expected to see slower growth in a market where house prices didn’t grow as much during the pandemic, owing to longer lockdowns, and have fallen during the past year to $911,007.
‘Melbourne house prices will remain relatively stable over the next financial year,’ Dr Powell said.
Reserve Bank of Australia Governor Philip Lowe last month told a Senate economics committee hearing that housing supply was failing to keep pace with population growth.
‘The population’s increasing by two per cent this year. Are there two per cent more houses? No,’ Dr Lowe said.
‘The rate of addition to the housing stock is very low.
‘We’ve got a lot of people coming into the country, people wanting to live alone, it doesn’t work.
‘The way that this ends up fixing itself, unfortunately, is through higher housing prices and higher rents.’
Dr Powell said while construction company collapses would hurt the supply of new homes, higher interest rates would keep a lid on property price rises.
‘When you combine this with unprecedented headwinds in the construction industry and unseasonably weak listings, this has contributed to a forecast of continued tight housing supply that drives up market competition,’ she said.
‘While prices are expected to rise, affordability will contain the pace of growth, as the likes of rapidly rising interest rates and ongoing mortgage serviceability challenges continue to play out in a complex and dynamic market.’
Geelong house prices remain in negative territory, lagging Melbourne where growth is the fastest in 15 months, PropTrack data shows. But there are signs things are turning around.
The latest PropTrack Home Price Index showed home values dropped 1.18 per cent in the three months to the end of May to reach a $767,000 median dwelling value.
The region’s median house price dipped 1.29 per cent, while unit values were close to steady, losing only .04 per cent in median value.
Market conditions have further improved in May following five consecutive months of price growth.
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PropTrack senior economist Eleanor Creagh said home price growth had been stronger in the capital cities than regional areas this year.
PropTrack senior economist Eleanor Creagh.
“This is a continuation of the trend that we’ve seen so far this year in terms of capital city markets really taking up the mantle with respect to price growth and outperforming regional markets,” Ms Creagh said.
“We saw in May that capital city markets recorded points .45 per cent growth whereas regional areas are at .03 per cent, so capital city markets are really driving the upswing in home prices at the moment. “
Melbourne house prices grew .22 per cent in May, the fastest monthly rise since February last year.
Ms Creagh said stronger housing demand in Melbourne was likely bolstered by very tight rental markets and the strong rebounding net overseas migration concentrated in capital cities.
“But also it has been the case in prior downturns, where markets that lead the downturn also lead the upswing,” she said.
“That would be another reason why we’re seeing capital city markets coming to the forefront or taking up the mantle with respect to price growth at the moment.
“Regional home prices really outperformed over the past three to four years, so I wouldn’t say it was unusual to potentially see a period of underperformance after such an extraordinary outperformance which was really infused by a very unique combination of circumstances.”
Harcourts North Geelong agent Joe Grgic said he felt the market was on the cusp of change in Geelong.
“There are still certain sectors of the market that are at different speeds, but we are seeing better numbers, more committed buyers,” he said.
Five bidders were in the crowd at this Belmont auction last weekend, one of two to attract such interest on the day in a sign of rising demand for homes in Geelong.
“People are really wanting to get a home, whether that’s more competition at auction, multiple buyers on a private treaty. It feels more like 2019.
Mr Grgic said there has been an increase in investor activity and more first-home buyers are comfortable with entering the market.
“Even though my belief is there probably will be another one or two more rate rises, buyers are sensing that the rate hike cycle is coming to an end,” he said.
“And because of that, now is the time to get in because once rates start dropping, there’s a lot of people who are holding back waiting to get into the market and they’ll jump in at the same time and that’ll cause prices to go up.”
By Stephen Johnson, Economics Reporter For Daily Mail Australia
06:22 29 May 2023, updated 06:54 29 May 2023
- In Sydney, it takes 14.3 years to save for deposit
- Takes a decade in most Australian capital cities
Australians looking to buy a house in one major city need to spend 14 years saving up for a 20 per cent mortgage deposit, new data shows.
Those wanting to get into the property market in most major cities will need to save for at least a decade to afford a home with a backyard, an ANZ-CoreLogic housing affordability report released on Monday revealed.
That’s based on the median, or middle, household income covering what couples in each city typically earn between them to get the middle-market house.
While rising interest rates have brought down prices, houses in Australia’s biggest cities are still unaffordable unless those looking to buy their first home consider a more far flung capital city.
Otherwise a working couple earning six figures between them will continue to struggle as high immigration pushes up prices again during a rental crisis.
Sydney
Those looking to buy in Australia’s most expensive big city typically need to spend 14.3 years saving up a 20 per cent mortgage deposit – the level of savings needed to avoid having to pay costly lenders mortgage insurance.
Saving up the required $250,751 is a big ask in Sydney, where the median house price is $1,253,759.
But it was even worse a year ago, when it took 17.1 years to save up for that deposit, back when interest rates were still at a record-low of 0.1 per cent.
Since then, the Reserve Bank’s 11 interest rate rises in a year have caused a 12 per cent price drop.
The deposit-saving calculations were based on a prospective home buyer putting aside 15 per cent of their salary, a year, to hit that savings goal.
In Sydney, the median weekly household income was $2,077, or $108,000 a year, in the 2021 Census.
Australia’s most overcrowded city is so unaffordable a new borrower would be spending more than half, or 51.6 per cent, of their income on mortgage repayments, and that’s based on the combined values of houses and units.
Melbourne
Melbourne was a little less unaffordable, taking 11.4 years to save up for a mortgage deposit in a city where $907,220 is the median house price, following a 10.1 per cent annual decline.
This is in a city where $1,901 is the mid-point weekly household income, adding up to $98,852 a year.
Brisbane
In Brisbane, it took 10.1 years to scrape together the necessary funds, in a city where $781,881 is the median house price, following an 11.8 per cent drop during the past year.
The Queensland capital has a median weekly household income of $2,068, or $107,536 annually.
Perth
Perth was a little more affordable with prospective borrowers needing to save up for 7.7 years in a city where the median house price is $599,240, following a small 1.5 per cent increase that has defied the interest rate rises.
The resources-rich city has a median weekly household income of $1,865, or $96,980 a year.
But in most parts of Australia, it takes at least a decade to save up for a mortgage deposit.
Hobart
While Hobart’s median house price of $692,361 is much cheaper than Sydney or Melbourne, it still takes 10.8 years to save up for a deposit.
That’s because the city’s mid-point household income is $1,542 a week or $80,184 a year.
The typical combined salary for a working couple in Tasmania is less than Australia’s average, full-time salary of $94,000 for one person.
Adelaide
Adelaide is in a similar position, with a saving time of 10.8 years in a city with a median house price of $697,909 and a mid-point weekly income of $1,365 or $70,980 a year.
Canberra
Canberra’s median house price of $946,463 is dear by national standards but saving up for a deposit typically takes 9.6 years in a city where the median weekly income is much higher at $2,419 or $125,788 a year.
Darwin
Darwin, with a median house price of $573,534, is the most affordable capital city market, and it takes just 6.5 years to save up for a mortgage deposit in a place where the mid-point weekly household income is $2,209 or $114,868 a year.
The alternative
Young Australians struggling to save up for a 20 per cent deposit can buy a more affordable apartment or apply for the federal government’s First Home Guarantee.
First Home Guarantee applicants only need a five per cent deposit, with the taxpayers underwriting the rest.
House prices last month rose in every state capital city, following an influx of international students and skilled migrants.
‘Looking forward, given low vacancy rates and high immigration, rents are likely to continue to rise solidly,’ the report said.
‘Overseas migration patterns suggest that demand will remain skewed to Melbourne and Sydney markets, while expensive regional markets are likely to plateau against affordability constraints.’
The national rental vacancy rate is an ultra-tight 1.1 per cent.
The Treasury Budgets papers forecast a record net annual overseas migration level of 400,000 in 2022-23, followed by another 315,000 in 2023-24, with the bulk of visitors settling in Sydney and Melbourne.