With the Queensland Housing Summit to commence this week industry stakeholders are calling for desperate action to alleviate the state’s housing crisis. REIQ CEO Antonia Mercorella says there is no “overnight solution” because of the scarcity of land, labour and buildings supplies. But she says the Summit has an opportunity to change a range of policies which will reduce pressure on the market and restore property investor confidence. “There are immediate actions we could be taking now to tap into existing supply through incentives, such as providing stamp duty relief to downsizing over 55s – a win-win which allows them to move to easier-upkeep homes, while opening up housing stock for younger-growing families,” she says. It comes as analysis from demographer Dr Elin Charles-Edwards, shows the housing crisis is causing a generational change to the way we live. “There is a growing number of younger and older Queenslanders who are having to change their living arrangements because of the housing crisis,” she says.
Gold Coast Vacancies Stabilise
The Gold Coast’s rental market may finally have stabilised with new figures showing vacancy rates have increased in almost every suburb. At the same time average weekly rental costs are starting to fall according to data from SQM Research. It says vacancy rates in the northern Gold Coast suburbs are up on average by 0.9% in September after sitting at just 0.4% for much of the year. On the southern Gold Coast, average weekly rents for houses are now $949 a week which is 10% lower than three months ago. SQM Research Managing Director Louis Christopher says the figures show the rental market is “turning a corner” on the Gold Coast. “Potentially we’re seeing a peak in the rents after what’s been an unprecedented rise in rental activity on the Gold Coast,” he says. “What we could be seeing now is a return to more normal conditions where the region is more influenced by seasonal factors. Southport has the lowest vacancy of 0.2%
Quote of the Week
“There is a growing number of younger and older Queenslanders who are having to change their living arrangements because of the housing crisis.”
Demographer Dr Elin Charles-Edwards
Spring Clearance Rates Bloom
Auction clearance rates are once again on the rise with the latest figures showing 65.9% of properties sold under the hammer in the past week. Melbourne had the highest clearance rate of 75% followed by Adelaide, 69.7% and Sydney 61.9%, Canberra, 56.1%, Brisbane, 49% and Perth 46.2%. CoreLogic predicts auction activity will hold steady this coming week with 1810 homes set to go to under the hammer. Volumes are down on the same time last year (2940) with only 1815 scheduled auctions this coming week. Sydney is expecting the busiest week with 718 homes scheduled for auction across the city, up 5.4% on last week. At this stage Melbourne, which has been significantly impacted by flooding, has 695 homes set to go under the hammer, down 6.5% on last week and about half what was offered at the same time last year. Brisbane will be the busiest smaller capital city with 162 auctions scheduled to occur this week.
Houses And Units Bridge Divide
Houses may have accounted for the lion’s share of property price growth in 2021, but a softening market and more demand for units is narrowing the property price divide. In 2021 house prices increased 25.5% compared with 7.7% for units. CoreLogic data shows now that gap between house and unit prices is narrowing in most capital cities. The premium for Sydney houses over units dropped by 2.2% in July, in Brisbane it dropped by 2.4% and Adelaide 2.2%. Canberra recorded the most significant change of 5% while Melbourne had the smallest drop of just 0.6%. CoreLogic economist Kaytlin Ezzy says as the property market moves toward a downward phase of the cycle, the gap between houses and units continues to narrow. “While houses typically outperform units during the upswing of the cycle, they have also historically recorded larger declines through the downswing,” she says. Low supply of new unit stock means unit values may continue to rise and the gap tighten further.
Investors Are Back
Improving rental yields and an easing of the frantic demand means property investors are back in the market. Arjun Paliwal of buyer’s agency InvestorKit says he is experiencing an increase in inquiries from investors in the recent months. “Many of them feel like they might be missing out on opportunities to pick up properties with improving rents. They also want to get in before the rest of the pack catch on,” he says. “The smaller rate increase this month also gave them some confidence that interest rates will soon stabilise and even trend lower, which will again kick-start the market, so they want to get in before that happens.” According to Domain figures investors who secure a property with a 4.34% gross rental yield should be able to cover their mortgage repayments on an average standard variable rate loan. Domain’s chief of research and economics, Nicola Powell says yields will continue to improve because property prices are likely to suffer further.
