Clearance rates at 60 per cent or above usually mean prices are rising, while anything below indicates falls.

The lowest clearance rates across greater Melbourne included the inner suburbs (57.3 per cent), inner south (56 per cent), south-east (55.5 per cent), west (49.8 per cent) and Mornington Peninsula (52.2 per cent).

Christopher said these price falls showed vendors were compromising on price to get a sale over the line.

“It is slowly swinging towards a buyers’ market and our forecast for Melbourne is a modest to moderate decline in house prices to continue [in 2024],” he said.

While the market has changed, it’s not all smooth sailing for buyers. Higher interest rates and cuts to borrowing power make it tough for some to make an offer.

CoreLogic’s head of residential research Eliza Owen said conditions were still tough for buyers, who wanted to borrow enough to get into a market where house prices were still high.

However, they, and home sellers could be in a much better position next year if interest rates fall.

“Depending on whether interest rates fall and how much they fall, we may see a flurry of transaction activity when that reduction in the cash rate begins,” Owen said.

Jellis Craig Stonnington partner Michael Armstrong believed Melbourne’s market had shifted in favour of buyers, but only for certain types of properties.

Renovated or new homes are still selling quickly, Armstrong said. There were fewer of these properties on the market, so listings attracted more competition from buyers.

 

Apartments or homes in need of work were offering buyers more time to negotiate and less competition, he said.

“The sale of unrenovated stock is more in favour of buyers because they take a little longer to sell, and buyers can get a better deal – same with land value properties [tear down and rebuilds],” he said.

The changing market has been both a blessing and a nervous time for Danielle North and husband Nick Stebbing, who benefited from the conditions and managed to buy a family home in Brunswick last weekend.

But the couple, both 47, plan to sell the Kingsville house they have owned since 2008, and plan to update it first, to make it more attractive to potential buyers.

 

“I am really nervous about selling,” North said.

“It’s not in a fit state to sell,” Stebbing said. “We’ll have to get a bridging loan to get things moving, and fix it up over the holidays.”

While they were happy with their Brunswick buy, closer to their children’s school, rate rises cut their budget and meant they had to adjust their expectations.

“We had to lower our standards,” Stebbing said. “Mostly places in our price range were not in a good state,” North added.

Wheatley Finance’s Andrew Wheatley, who helped North and Stebbing buy their Brunswick home, said some buyers had to rethink their approach to the market because of higher interest rates.

Some were being forced out of the market, as they couldn’t qualify for a mortgage, meaning there is less competition for more affordable properties.

“In the desirable suburbs of Melbourne, it feels like nothing’s changed,” Wheatley said. “But if you move to what first homebuyers are looking at, properties with a price range of $400,000 to $750,000 like a two-bedroom apartment or a townhouse, or a new build in the outer suburbs, there’s no rush or pressure to buy. I’d say it’s more of a buyers’ market.”

Source : TheAge

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Melbourne house prices are tipped to rise up to $37,000 in 2024.

But a landlord exodus driven by rising state government taxes that is part of the reason more homes have hit the the market than in any other city over the past year will see the city lag behind almost every other capital.

The PropTrack Property Market Outlook Report has forecast 1-4 per cent for the city’s property market in the next 12 months that could bring the median house price to more than $950,000.

PropTrack economic research director Cameron Kusher said while Melbourne was expected to attract less home price growth than Sydney, Brisbane, Adelaide and Perth, it could potentially double the about $17,000 (1.9 per cent) growth the Victorian capital unexpectedly notched in 2023. They had been forecast to decline 7 per cent this year.

Mr Kusher said despite the fastest increase to interest rates since at least the 1990s, rising costs to build new homes and Victoria accounting for a substantial portion of the nation’s incoming migration would combine to drive home values up.

“The fact we are at or near peak interest rate levels could see more people looking to buy next year,” he said.

Home price growth is on the cards in 2024, but Melbourne will lag behind other capitals.

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While the Outlook report has flagged a tough year for first-home buyers around Australia, Mr Kusher said record-low rental vacancy rates could drive some of them to find a way to buy a home and escape from increasingly uncertain tenancies.

Ironically, their chances might be improved by landlords selling off rental homes at an accelerated level this year, as Melbourne has more homes for sale than any other capital in part thanks to their exodus.

“There are quite a lot of investors looking to exit Melbourne and Victoria because there are quite a lot of taxes,” he said.

From next year, investment property owners will be hit with increased land tax costs as the state government implements a series of levies to try and recoup Covid-era budget losses.

Real Estate Buyers Agents Association of Australia Victorian representative Luke Assigal echoed the landlord sell off commentary and said he expected the trend could be even more pronounced as planned new taxes on investment and secondary properties came to fruition in the new year.

Homes like 2 Cunneen St in the Bendigo suburb of Long Gully could be set for price gains in 2024. The home is currently listed for $440,000-$480,000.

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Speaking as part of REBAA’s end of year analysis for 2023, Mr Assigal said he believed even an uptick in investor sales next year wouldn’t slow the market and predicted there could be as much as 6 per cent growth — about $55,000 for Melbourne’s $917,000 median-priced home.

But he said the fate of first-home buyers in the new year could rest with the Australian Prudential Regulation Authority, who he said could price many back into the market by reducing assessment rates for home loans from the current 3 per cent above the home loan rate of the day.

An interest-rate cut could also drive demand, and Mr Assigal said either scenario could make Melbourne’s undervalued far west, from Werribee to Hoppers Crossing, and outer northern suburbs, like Epping, hot property.

He added that regional areas around Ballarat, followed by Bendigo and Geelong, could also benefit from squeezed homebuyer budgets.

Source : RealEstate.com.au

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Although Australia’s property market is in the midst of multiple crisis, overseas property seekers are showing their interest, according to PropTrack.

PropTrack’s Overseas Search Report – October 2023 found that buy searches are up 11.5% in the past three months and rent searches are up 7.8%.

Buy and rent searches are now well above pre-pandemic levels and are on track to continue rising now that migration has returned to previous levels, according to PropTrack senior data analyst, Karen Dellow.

Overseas searches for properties on realestate.com.au

In September, The Property Tribune reported that Australia ranked in the top 10 most valuable property markets across the globe.

Renewed interest from China

In the year leading up to September 2020, interest from China severely diminished, falling by 53%.

However, in March 2023, searches for properties to purchase skyrocketed, and returned to pre-pandemic levels. This has also held true for rental searches from China, nearly doubling the volumes seen before the pandemic.

This increase is largely driven by the return of students and migrant workers, according to the report.

In July 2023, arrivals from migrant workers and students hit the highest level since January 2020, averaging around 265,000 new arrivals per month over the last six months.

Furthermore, a quarter of buy and rent searches from overseas come from New Zealand, and their interest has been increasing monthly.

Annual change in buy and rent search volumes from overseas property seekers – September 2023

“Rental searches in particular are a leading indicator of overseas migration and have mirrored the trend of permanent and student arrivals to Australia, illustrating new arrivals’ relationship with the rental market,” said Dellow.

Overseas property seekers are eyeing Melbourne

For the past six months, Melbourne has ranked as the number one searched location on realestate.com.au

“Which is hardly surprising considering it is the first port of arrival for many migrants and is also a major centre of commerce and study,” said Dellow.

The Gold Coast has also attracted a high level of demand from overseas buyers; even among interstate migrants, the Gold Coast emerged as a clear favourite.

Top 20 locations for overseas property seekers

Source : ThePropertyTribune

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The housing crisis in Australia continues unabated, with issues such as land scarcity and interest rate rises contributing to the scale of the problem.

Other impediments to homeownership, such as home prices far outstripping wage growth, have further compounded the crisis.

Supply issues especially remain a thorny challenge across the country; Perth’s property market is struggling mightily with this, as property listings on REIWA fell to a 13-year low in June.

Moreover, the national vacancy rate has dropped to a record low of 1.1%.

CoreLogic research director, Tim Lawless, said the National Housing Finance and Investment Corporation (NHIC), forecasts the national housing market is likely to be undersupplied to the tune of 106,300 dwellings over the next five years.

However, the addition of granny flat units to dwellings across Australia’s three largest capital cities could go some way toward easing the housing shortage.

“For policy makers and government, granny flats present an immediate and cost-effective opportunity to deliver much needed housing supply within existing town planning guidelines.”

Tim Lawless, CoreLogic research director

“For homeowners, the addition of a second self-contained dwelling provides an opportunity to provide rental housing or additional accommodation for family members, while at the same time, increasing the value of their property and potentially attaining additional rental income.”

Archistar co-founder, Dr Benjamin Coorey, said granny flats present a cost-effective opportunity to boost housing supply for growing capital populations close to existing infrastructure such as railways, bus routes, and major road networks for state and local governments.

“While building regulations for secondary dwellings differ state to state, this unlocks a combination of accessibility and opportunity to fast track affordable housing options for all demographics, particularly essential workers in industries such as the health care sector,” he said.

Archistar, Blackfort, and CoreLogic have assessed every residential block across Sydney, Melbourne and Brisbane to ascertain how many individual properties have building potential for a self-contained two-bedroom unit.

Sydney’s results

Lawless gave a dire forecast for Sydney’s supply, and said that Sydney’s household formation is forecast to outpace supply from 2025, with the most significant undersupply expected to persist until 2026 at a deficit of 15,900 dwellings.

Sydney is home to the most granny flat development opportunities, however, with 242,081 existing residential dwellings fitting the zoning, land area, and existing home position requirements to build a granny flat, according to the analysis.

The top five council regions for the most granny flat development opportunities were found to be:

• The Central Coast (41,569/17.2% of all potential sites).
• The Northern Beaches (19,884/8.2% of all potential sites).
• Hornsby (18,344/7.6% of all potential sites).
• Blacktown (17,909/7.4% of all potential sites).
• Ku-Ring-Gai (14,617/6.0% of all potential sites).

Melbourne’s results

Although Sydney’s supply outlook is not fortuitous, Lawless said Melbourne’s is set to be even worse.

“Melbourne is expected to face a major housing shortage from 2023 to 2027, with a deficit of 23,800 dwellings, which is nearly twice the anticipated shortfall of 12,100 new dwellings in Sydney during the same period,” he said.

Within Melbourne’s broad regions, the municipalities for the most potential for numerous granny flat development sites were:

• The Mornington Peninsula (23,870/10.4% of all potential sites).
• Casey (16,861/7.4% of all potential sites).
• Monash (13,960/6.1% of all potential sites).
• Knox (13,741/6.0% of all potential sites).
• Manningham (13,063/5.7% of all potential sites).

Brisbane’s results

As a point of difference from the other two capital cities, Lawless said Brisbane’s housing supply shortfall is more imminent at a housing supply deficit of 3,100 dwellings this year.

The top five Brisbane suburbs with the highest potential for granny developments were:

• The Gap (2,986/48.8% of all potential sites).
• Alexandra Hills (2,789/46% of all potential sites).
• Redbank Plains (2,479/30.3% of all potential sites).
• Albany Creek (2,378/44% of all potential sites).
• Rochedale South (2,215/42.3% of all potential sites).

Source : ThePropertyTribune

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The Australian property market saw new listings leap 9.4% in August, according to the latest Ray White listings report written by Ray White data analyst, William Clark.

This will be music to the ears of many property-buying hopefuls, particularly in view of July’s sauntering pace, but total listing figures are not as rosy. Recent CoreLogic data showed that while new listings rose across winter, total advertised supply levels are still well below last year, across the combined capitals.

Early start to the spring selling season

New listings tend to pick up around spring, while the winter months are typically slower.

However, with the solid uplift in new listings across August, experts have declared that the spring selling season has begun early.

New listings rose again last month

Although new listings petered out in the latter half of 2022, current trends indicate that it will be improbable that 2023 will follow suit.

Indeed, all major cities recorded growth from July, signally how strong this trend was across Australia. Notably, Melbourne and Sydney reported a significant increase in new listings.

The Agency CEO Geoff Lucas told The Property Tribune that listings across the East Coast of Australia were up 22% on last year, with solid momentum in the previous seven days.

“This is in line with our sales growth which is also up 22% on last year and we anticipate that listings growth will continue in the coming months,” he said.

New listings movements for capital cities

Listings in regional Australia followed the same pattern, having recorded the same surge in new listings. Regional Queensland remained the most dominant non-capital city market, with the Gold Coast bringing in substantial new monthly listings.

However, new listings in regional Australia were still trailing behind the low listings of 2022.

New listings movements for regional Australia

Ray White listing authorities, which refer to the point when vendors have signed a listing but the listing is still not advertised, have been essentially unchanged, as authorities did not rise in August as they did in July.

Authorities are considered a strong lead indicator for future listings, having around a week’s lead before authorities become published listings.

Listing authorities

Sydney listings

Top growth and decline suburbs

Sydney’s new listings rose by 11.6% in August 2023, and 5.4% from July last year.

Tallawong and Colebee were the best-performing suburbs in terms of new listings, with stock spiking by 275% and 233%, respectively.

Pemulwuy had the sharpest decline in stock, with an 88% year-on-year (YoY) drop.

Melbourne listings

Top growth and decline suburbs

New listings in the Victorian capital grew month-on-month (MoM) by 17.2% and 5.8% YoY. While regional listings fell YoY, listings improved compared to July’s numbers.

Travancore and Diggers Rest had a 133% and 100% boost in stock, while Box Hill South had a 58% slump.

Brisbane listings

Top growth and decline suburbs

Listings rose MoM, albeit on a lower scale than the same month last year. Listings in regional Queensland followed the same pattern.

Waterford’s stock shot up by 80%, while St Lucia witnessed a 77% reduction in listings.

Adelaide listings

Top growth and decline suburbs

Like in Brisbane, Adelaide’s stock improved MoM, but trailed behind listings the same month last year.

The top growth suburb for Adelaide was Banksia Park, where listings increased by 200%. On the flip side, the top decline suburb was Aberfoyle Park, where stock contracted by 74%.

Perth listings

Top growth and decline suburbs

While Perth’s new listings rose by 6.8% from July, they remained 3.7% under August last year. Regional listings decreased by 7.6% between May and August, and are down by 31.5% YoY.

Forrestdale was the highest-growth suburb, with a 175% increase in listings, while Midvale followed closely with a 150% surge in new stock. Meanwhile, listings in Waikiki shrank by 70%, the most considerable decline in Perth.

Hobart listings

Top growth and decline suburbs

August was an excellent month for Hobart, which saw stocks rise by 14.8%, Australia’s most significant MoM growth. Nonetheless, the new listings are still depressed by 5.8% compared to August last year.

Battery Point had the most significant rise in listings, with 75% more stock available, while Sandy Bay has 38% fewer homes to purchase.

Darwin listings

Top growth and decline suburbs

Darwin’s new listings grew by 26.5% in August but still lagged behind YoY, with a 30.7% decrease from last year.

New listings increased in the top-performing suburb, Parap, by 25%. Bakewell had the steepest decline in listings, with a 73% fall.

Canberra listings

Top growth and decline suburbs

New listings soared by 31.2% MoM and 11.5% YoY in Canberra.

Harrison led the pack with a 175% YoY jump in listings, while Mawson had the highest decrease of 64%.

Source : ThePropertyTribune

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If there was a property market World Cup, no Australian city would have qualified for the 2023 event.

When it comes to property market performance globally, Australia’s state capitals are nowhere to be found among the top 32 cities in the world, the number of representatives that would typically play in a sporting world cup tournament.

Adelaide’s annual residential dwelling increase of 6.0 per cent ranked it 35th among the 150 cities assessed as part of the Knight Frank Global Residential Cities Index (2023 Q1) released this week.

Sydney, Melbourne and Hobart, meanwhile, would be staring at relegation to the lowest league on offer.

The lacklustre performance of Australian cities was mirrored by the overall performance of international property markets.

Average annual growth across the 150 cities included in the Knight Frank Global Residential Cities Index averaged 3.1 per cent in Q1 2023, down from the 6.6 per cent recorded in the previous quarter, and well below the recent peak of 11.6 per cent, achieved in Q1 2022.

Unique inflationary conditions in Türkiye resulted in three of that country’s cities recording triple-digit growth over the year, while European cities Zagreb, Budapest and Skopje each delivered property price growth above 20 per cent.

Among Australian cities, Perth followed Adelaide in 45th place with its 5 per cent growth. From there it was all negative territory and rankings in the hundreds. Darwin placed 112th (-2.2 per cent), Brisbane came in at 118 (-3.8 per cent), Canberra 133rd (-6.4 per cent), just ahead of Melbourne (136; -6.8 per cent) and Sydney (138; -7.4 per cent). Hobart bettered just seven cities on the list as it ranked 143rd with prices falling 8.7 per cent.

Source: Knight Frank Research, Macrobond.

A tough year for property globally

Annualised price growth across the Knight Frank Global Residential Cities Index has fallen sharply in recent quarters, from a high of nearly 12 per cent at the beginning of 2022, when cities around the globe were experiencing a bounce in demand for accommodation following pandemic lockdowns.

The Knight Frank report found that among all 150 cities prices rose on average by 3.1 per cent in the 12 months to March 2023 but with the slowdown in price growth accelerating.

More than half (51 per cent) of the cities in the index saw prices fall over the most recent three-month period, with seven markets seeing prices fall by more than 5 per cent.

According to Statista, the global inflation rate in 2022 was 8.7 per cent and so far in 2023 has averaged 7.0 per cent, far outstripping the broad measure of global property price growth.

The Knight Frank report said the key issue for all markets remains the outlook for inflation, interest rates and economic activity.

“The Federal Reserve in the US seems to be closing in on peak rates in the current cycle, as inflation across the US slows rapidly,” the report noted.

“Other central banks will likely follow through 2023, with falls in Eurozone and UK inflation lagging the US by between three and six months.”

Liam Bailey, Knight Frank’s Global Head of Research, said the slowdown in housing markets is unsurprising given the shock of higher interest rates in developed economies.

“Our latest results confirm that more than half of key global city markets saw prices fall in the most recent three-month period,” he said.

2024 may bring brighter real estate news

Looking ahead, the remainder of 2023 is seen to be sluggish at best, with more upside to world property markets expected to evolve in 2024.

“We need to expect further price falls through 2023 as markets adjust to higher debt costs, however, the downward shift in inflation in the US and other economies points to improving economic conditions,” Mr Bailey said.

“Economic fundamentals – wage growth and economic expansion – should permit a return to growth for most markets from 2024.”

The global economy will expand 3 per cent this year, down from 3.5 per cent last year, the International Monetary Fund (IMF) said in its latest World Economic Outlook on 24 July.

That’s a 0.2 per cent upgrade from its April projection. The IMF noted that global economic activity in the first quarter of the year proved resilient. Energy and food prices have come down sharply from their war-induced peaks, allowing global inflation pressures to ease faster than expected.

The IMF, which earlier this year labelled Australia’s property market the second riskiest in the world, has said balance of risks remain tilted to the downside.

“Interest rates are now in contractionary territory, weighing on activity, slowing the growth of credit to the non-financial sector, increasing households’ and firms’ interest payments, and putting pressure on real estate markets,” it reported in its Outlook.

“Core inflation, meanwhile, remains well above target and is declining only gradually. Nevertheless, stronger growth and lower inflation than expected are welcome news, suggesting the global economy is headed in the right direction,” the IMF concluded.

Source : AustralianPropertyInvestor

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Among those who lost money, the median loss widened to $40,000, compared to $33,500 in the June quarter, CoreLogic’s Pain and Gain Report for the September quarter found.

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