Property values on the Gold Coast continue to shine with new figures showing three quarters of the region’s suburbs chalked up price growth in the September quarter. Home prices increased by 5% or more in eight suburbs, with Bonogin the best performer with its median house price up by almost 10%. Unit prices did not fare so well in some suburbs, with Palm Beach’s median down more than 8% for the quarter to $943,859, which is still 22% higher than the same time last year. Some developers may have delayed new projects on the Gold Coast as a result of escalating construction costs, but Urbis figures from July show 458 off[1]the-plan apartment sales done in the 12 months to the first quarter of 2022, with 57 projects under construction. The UDIA’s latest market report says the most popular Gold Coast suburbs for sale in the past 12 months are the more affordable areas; Pimpama with 731 sales, Upper Coomera, 675, and Coomera, 572.
Olympic Level Housing For SSC
The Sunshine Coast is set to gain 350 new permanent homes in the lead up to the 2032 Olympic Games. A satellite athlete’s village will be built ahead of the games, with the homes to remain in place afterwards. Both the Queensland Premier and the Olympic Games Committee have been touring the Sunshine Coast to assess infrastructure needs ahead of the Games. The village will be built in the new Maroochydore City Centre, which is being developed by the Walker Corporation. Queensland Premier Annastacia Palaszczuk says the village will be a legacy beyond the Games. “We are working with the developers and we’re looking at working with councils about how we can get online more affordable options for housing which I think is key,” she says. “What we saw with the example at the Commonwealth Games where we built the Games village is what we built is now used for a whole range of accommodation.”
Quote of the Week
“Once interest rates have stabilised, higher yields coupled with lower values and stronger buying conditions, could entice more investors to enter the market, which would ultimately help raise rental supply.”
CoreLogic Research Analyst Kaytlin Ezzy
Slim Pickings For Renters
There are slim pickings for tenants with concerns some will be forced to accept sub-par properties as it becomes harder than ever to find a rental property in many Australian cities. The national vacancy rate is stuck at 0.9% for the third month in a row, while a vacancy rate of 3% is considered a balanced market. Figures from Domain show Sydney’s vacancy rate fell to 1.1% in September while Melbourne held steady at 1.3%. But it is the smaller capital cities where tenants are really struggling to find a rental with vacancy rates of just 0.6% in Brisbane, 0.5% in Hobart, 0.4% in Perth and a near non-existent 0.3% in Adelaide. NAB head of market economics Tapas Strickland says it will continue to be tough on renters. He says rents will continue to rise because of increasing interest rates, higher international migration numbers and fewer properties being developed as a result of materials shortages and rising building costs
Yields Are Bouncing Back
While bad news for renters the good news for landlords is that rents are growing faster than home prices leading to better yields. The latest NAB sentiment survey, which polls property industry professionals, predicts rents will grow by 3.5% in the next 12 months and 3.8% nationally in the next two years. CoreLogic Research Analyst Kaytlin Ezzy says rental yields are bouncing back. She says nationally during the September quarter dwelling yields grew by 24 basis points to 3.57%. Although yields are now above the record lows recorded in February (3.21%) they are still well below the pre-pandemic decade average of 4.24%. Ezzy says with interest rates expected to continue rising throughout the first half of 2023, putting downward pressure on house prices, it’s likely yields will continue to improve. “Once interest rates have stabilised, higher yields coupled with lower values and stronger buying conditions, could entice more investors to enter the market, which would ultimately help raise rental supply.”
Clearance Rates On The Rise
Auction clearance rates are on the rise, hitting their highest level since May with a national clearance rate last week of 63.4%. The number of properties being offered for auction is also on the increase, up 11.2% on the previous week and 36.7% higher than the week before that. The smaller capital cities continued to record the strongest results with Canberra recording the highest clearance rate of 70.9%, followed by Adelaide 69.7%. Melbourne’s clearance rate was 66.1% while Sydney’s was 61.3%. Brisbane’s auction clearance rate took a dive, to 49.4%. Despite the growing number of auctions, CoreLogic says last week’s auction activity is still significantly below the number of auctions held this time last year, when selling conditions were stronger and clearance rates were higher. Louis Christopher of SQM Research says it is now clear that clearance rates bottomed out in July, and he expects the remainder of the spring selling season to be better than it was initially expected to perform
