Brisbane house prices continued to grow in April with new figures showing it continues to lead Australia in terms of annual price growth. PropTrack’s national home price index shows Brisbane home values increased 27% in the 12 months to the end of April. It says Brisbane is still among the most affordable markets in Australia with a median house price of $762,000 compared with $1.3 million in Sydney to $902,000 in Melbourne. PropTrack economist Paul Ryan says Brisbane and Adelaide are benefiting from demand for affordability, larger homes and lifestyle trends. As a result, he says, they should be not affected much by interest rate rises. According to auctioneer Justin Nickerson, buying and selling via auction continues to gain strength in Brisbane. “The big change this year is the quantity of bidders has dipped,” he says. “Last year you might have eight bidders, now you’ll get four, but they are strong bidders. That’s all we need to get the transaction done.
Gold Coast Vacancy At Record Lows
Rental vacancies have dipped even lower on the Gold Coast, dropping to 0.4%, according to the Real Estate Institute of Queensland. The REIQ’s Residential Vacancy Report for the March 2022 Quarter says it is the lowest ever on the Gold Coast. It classifies rental markets with a vacancy rate between 0% and 2.5% as tight. The Gold Coast vacancy rate was 3% at the same time in 2020. REIQ CEO Antonia Mercorella says investors have been selling properties to owner occupiers during the pandemic which means that fewer properties are available for rent. She is concerned upcoming State Government rental reforms will continue to undermine investor confidence and encourage more investors to sell. “With record low vacancy rates, and 36% of our population renting their homes, we can’t afford to reduce the appeal of investing in Queensland,” she says. “That’s why we’ll continue to advocate for fair and balanced legislation that maintains a level playing field for both investors and tenants.”
Quote of the Week
“Demand for new homes continues to be driven by a shortage of homes and an acutely tight rental market that has resulted in rapid house price and rental growth. Tighter lending conditions have had minimal impact on the market to date.”
HIA Economist Tom Devitt
More New Homes Being Built And Sold
The number of new homes being built and sold continues to increase despite rising costs of construction and building industry turmoil. The latest HIA New Home Sales report shows new home sales increased by 3.9% in March compared with the previous month. Over the year the number of new home starts increased by 30.5%. The report says that, despite a difficult start to the year, with a shortage of tradies due to Covid illness and materials shortages, new home sales continue to be strong. In fact it is the second strongest quarter since 2016. HIA Economist Tom Devitt says demand is driven by a shortage of homes and an extremely tight rental market. In the past quarter, New South Wales sales increased 78% compared with at the same time in 2019, before the pandemic. Sales in Queensland increased 33% during the same period, Victoria 19%, Western Australia 15%. South Australia was the only state to experience a decline.
RBA Lifts Official Rate To 0.35%
After months of speculation the Reserve Bank of Australia has lifted its official cash rate for the first time in more than a decade. It has increased from a record low 0.1% to 0.35%. The increase follows the announcement last week that inflation increased to 5.1% in the year to June. Property Investment Professionals of Australia chair Nicola McDougall says the minor increase in the cash rate is unlikely to impact the vast majority of borrowers. “It’s important to understand that at 0.35%, the cash rate is still below what it was before the pandemic, and well below the 2.0% to 2.5% it was throughout the majority of the Sydney property boom that ended about five years ago,” McDougall says. She says anyone borrowing to buy a property has been assessed at being able to make repayments 3% above current rates. Mortgage Choice’s David Zammit says the question now is which lenders will be the first to pass on the rate rise
Auctions Thrive In March Quarter
Sellers achieve on average a higher price if they sell their property under the hammer compared with if they had accepted the highest offer prior to auction, according to new analysis. It says sellers achieved on average an extra 11.7% by going ahead with the auction. Adelaide recorded the biggest gap between sales methods of 13.6% followed by regional Australia with a difference of 12.3%. In Melbourne the difference is 11.4% and in Sydney 11.3%. Gold Coast properties sell under the hammer on average for 11.2% more, while in Brisbane the difference is 10.3%. CoreLogic data shows auctions are still a popular method of sale. It says 23,748 homes went under the hammer in the first three months of 2022, which is the busiest March Quarter since their records began in 2008. There were 19,004 capital city homes taken to auction in the first quarter of 2021. The capital city clearance rate for the March Quarter was 70%