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Queensland Leads On Population

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Australians flocked to Queensland during the pandemic and the trend towards warmer climes is tipped to continue – to the detriment of NSW, Victoria and South Australia. But strong overseas migration into those states will keep their populations ticking higher, with Melbourne also on track to pip Sydney as the nation’s largest city by 2031-32, according to government projections. The number of people calling Melbourne home will increase from 5 million to 6.1 million over the next decade, about 400,000 people ahead of Sydney, which has been Australia’s most populous city since Federation. However, Australia’s two most populous states will play bridesmaids to their northern neighbour, with the latest Population Statement showing Queensland forecast to be the fastest growing state until at least 2023-24. And while Victoria is expected to grow due to migration, Queensland will continue to experience the largest inflow of people from other states and territories in line with broader national population growth.

Gold Coast Suburbs Tipped To Rise

Homebuyers priced out of beachside suburbs are driving growth in outlying pockets of the Gold Coast where home values are still rising. Traditionally dubbed ‘bridesmaids’ to the more popular markets, ten rising star suburbs were identified across the northern and southern stretches of the Coast, and out to the Hinterland. Bonogin was the Coast’s standout market of the last three months, notching up impressive median house price growth of 29%, PropTrack’s latest Market Trends report shows. While the Hinterland suburb’s new buy-in of $1.38 million was more than the other suburbs to make the list, it remained lower than the comparable southern suburbs of Tallebudgera and Currumbin Valleys, which both boomed recently and now sit at $1.83 million and $1.5 million. The Gold Coast’s other rising star suburbs were Ashmore, Currumbin Waters, Reedy Creek, Nerang, Oxenford, Upper Coomera, Tamborine, Elanora, and Helensvale. Each had notched up house price growth over three months, with a minimum of 100 sales over the year.

 

Quote of the Week

“Those unsure about the way forward should not give up on their aspirations to own a house but could consider a variety of steps along the way. The journey to owning your forever home may take time and require trade-offs – options like buying an apartment, a duplex, a smaller house or even moving to a location slightly further afield to take that first step on to the property ladder.”

Great Southern Bank’s chief customer officer, Megan Keleher

 

Regions Lead 2022 Price Growth

Regional Australia continued to outperform the capital cities in 2022, with dwelling values rising marginally last year in the Combined Regions, compared to a 6.9% decline in the Combined Capitals. That’s according to CoreLogic data, which shows the Combined Regions recorded a 0.1% increase in dwelling values in 2022, helped by a 2.2% increase in regional apartment markets. Across the house markets, the Combined Regions fell just 0.2% while the Combined Capitals decreased 7.4%. The outstanding house markets last year were in South Australia: the median price for Adelaide rose 9.6%, while Regional SA increased a nation[1]leading 17.7%. Other markets to record annual increases in their median house prices included Perth (4%), Darwin (4.5%), Regional WA (5.6%), Regional Tasmania (3.1%), Regional Queensland (1.2%) and Regional Northern Territory (2.7%). Among the unit markets, those to record annual growth in median prices included Brisbane (6.7%), Adelaide (14%), Darwin (4%), Perth (1.1%) Canberra (2.6%), Regional Queensland (4.5%), Regional SA (6.7%) and Regional WA (8.3%)

 

Rent Increases Push Up Yields

A new report forecasts double-digit growth in rents this year for 11 of the 14 major residential markets across Australia. Knight Frank’s Outlook Report 2023 says a combination of factors has resulted in a supply crunch that will help drive up rents: population growth has continued to add to demand, augmented by a rise in the proportion of households renting and a 17.8% decline in new dwelling construction. Rental yields continued to rise towards the end of 2022. CoreLogic says the national gross rental yield for all dwellings was at 3.8% (4.5% for regional markets and 3.6% for capital cities). CoreLogic’s Tim Lawless says: “Rental yields moved through record lows at the beginning of 2022 due to housing values rising at a faster pace than rents. Since then, gross yields have been on a rapid recovery trajectory.” Rents rose 10.2% in 2022, rising across every broad region and housing type of the country. SQM Research records higher growth, with rents up 17%

 

Consumers Optimistic On Prices

Australian consumers collectively have shrugged off the negative forecasts of economists, with a key consumer sentiment survey showing that more people expect house prices to rise than fall in 2023. The Westpac-Melbourne Institute House Price Expectations Index shows a sharp uplift in the public’s property price expectations, with the index surging 27.6%. This is at odds with high-profile economists who predict “the downturn” will continue, but consumers have a better track record in forecasting property prices than bank economists. Westpac senior economist Matthew Hassan was left baffled by the shift in consumer sentiment and claims consumers will be disappointed – but Hassan has a particularly poor record in predicting house prices. Westpac forecast that Australian property prices would fall 10% in 2020, but prices rose. The bank predicted a 4% rise in prices in 2021, but they increased more than 25%. Hotspotting and other specialist real estate analysts like Louis Christopher of SQM Research and Simon Pressley of Propertyology are forecasting price growth in 2023.

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