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Property market update November 2019

BMT team — Mon, 04 Nov 2019 03:55:32 +0000

Property values deliver largest month-on-month gain since 2015 A surge in property values in October has delivered the largest month-on-month gain since 2015, CoreLogic’s national index data shows. Property values National dwelling values jumped by 1.2 per cent throughout October, delivering the fourth consecutive month of increased values and the largest month-on-month gain since May 2015. Melbourne overtook Sydney to claim the title of the best performing capital city, recording a 2.3 per cent increase in dwelling values over the month. Melbourne’s October growth is the largest consecutive gain for the city since November 2009. A tighter market combined with strong population growth relative to other cities has assisted the solid rebound. Dwelling values are trending higher across most of the capital cities as lower mortgage rates and improved credit conditions continue to encourage buyers. Dwelling values increased in Sydney (1.7 per cent), Hobart (0.9 per cent), Brisbane (0.8 per cent), Canberra (0.6 per cent), Adelaide (0.4 per cent) and Darwin (0.3 per cent). The worst performing city was Perth, declining by 0.4 per cent over the month. While the downwards trend in Perth has continued, the market is showing an improvement in the rate of decline. Both Perth and Darwin have been weakening since mid-2014, with Darwin down a cumulative 31 per cent and Perth values 22 per cent lower. The median value now stands at $435,119 for Perth and $394,132 for Darwin. Outside the capital cities, Launceston was the top performer for change in dwelling values. Property values in the Tasmanian city increased by 4.7 per cent. The Mackay and Whitsunday region in Queensland wasn’t far behind, recording a 4.4 per cent rise over the month. Rental rates CoreLogic data revealed slowing rental markets throughout October. Over the three months to October, rental rates fell across five out of the eight capital cities. The sharpest declines were found in Darwin, where rental rates were 1 per cent lower for the quarter. Sydney’s rental market also suffered, recording a 0.7 per cent decline in rent prices and the lowest rental yields (3.2 per cent) of any capital city. Adelaide and Brisbane emerged as the top performers. Rental rates increased by 0.3 per cent and 0.2 per cent respectively over the quarter. The current rental conditions are a combination of multiple factors including a rise in rental stock, increased construction skewed toward rental accommodation and higher first home buyer activity. Auction clearance rates Auction clearance rates remained relatively unchanged, pushing 70 per cent and consistently showing strong demand. There were just under 2,000 capital city homes taken to auction in the week ending October 20, 75.6 per cent of which returned a successful result according to preliminary results. Finance and interest rates Lower mortgage rates and improved access to credit are having a positive affect on the national property market as the rebound continues to gather momentum. The Reserve Bank of Australia #RBA has decided to leave the cash rate unchanged at a record low of 0.75 percent. #interest #rates #recordlow pic.twitter.com/fxcjYompFv — BMT Tax Depreciation (@BMT_Tax_Dep) November 5, 2019 Despite a subdued rental market, property investors are seeing improved cash flow as a result of falling mortgage rates. Over the quarter, average rents fell by 0.5 per cent across the capital cities while the gross yields dropped to 3.99 per cent. The average fixed rate mortgage also declined to 3.6 per cent, roughly matching the rental returns. Commercial property Commercial property is likely to become a stronger investment over the next 18 months, according to a report by AMP Capital, with most asset classes set to offer solid returns. Similarly, Australian Bureau of Statistics data from August showed commercial building approvals soared by 54 per cent to their highest point in three years. Australian office sales also soared to $17.9 billion in the first three quarters of 2019, showing strong growth in the sector. On the contrary, commercial primary producers and agricultural businesses could be facing tax changes liken to ‘the removal of negative gearing’. The tax legislation denies owners of vacant land the ability to claim holdings costs such as interest, council rates, land taxes and insurance as tax deductions. Property developers, foreign owners, farmers and trusts are said to be among those hit the hardest by the NSW government crackdown.

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Hobart property market set to stabilise

BMT team — Thu, 05 Sep 2019 00:17:26 +0000

While national property prices were plummeting at their steepest decline since the global financial crisis earlier this year, Australia’s island state was defying the odds. Tasmania has experienced significant capital growth in recent years, with Prime Minister Scott Morrison dubbing it the ‘turnaround state’. Hobart in particular has gone from strength to strength, only recently starting to cool off after years of exponential growth. Low supply of dwellings, low median price, tight vacancy rate and an upswing in tourism have all contributed to the city’s property boom. In this article we will look at: Hobart property values Hobart property listings Hobart vacancy and rental rates Hobart property market trends Hobart property values Hobart dwelling values continued to rise over the last month, with the latest CoreLogic data showing a 0.5 per cent increase in values during August, the third successive month of capital gain for the city. Hobart also topped CoreLogic’s list of top ten performers, recording a 3.1 per cent annual increase. Canberra placed second with 1.2 per cent. Over the past five years Hobart’s dwelling values have skyrocketed by 35.9 per cent, more than 10 per cent higher than Melbourne and 15 per cent higher than Sydney. According to the Australian Bureau of Statistics (ABS), Hobart property prices have been rising at an average rate of 4.6 per cent a year — the fastest of all Australian capitals. Despite solid growth, the median price of property ($465,535) remains relatively affordable in comparison to other capital cities like Sydney ($790,072) and Melbourne ($626,703). While the city has experienced enormous growth, the latest CoreLogic figures indicate prices are beginning to stabilise and it’s likely the property market will lose its momentum over the next twelve months. Hobart property listings Hobart had 298 new listings in August, a 12.4 per cent decline in comparison to the same period last year. However, overall there were 1,060 properties listed for sale, a 6.9 per cent increase over the past twelve months. The median time on the market for houses was 39 days, while units recorded a median of 42 days. Hobart vacancy and rental rates Hobart has the hottest renal market in the country and has experienced a 5.5 per cent increase in rental conditions over the past twelve months. The asking rental price for Hobart is $443.50, 9 per cent higher than the same time last year and 29.8 per cent higher than three years ago. Along with this, the city’s residential vacancy rate is currently just 0.5 per cent. Hobart property market trends The number of tourists visiting Tasmania has continued to grow, with 1.32 million visitors travelling to the state over the twelve months to March 2019, according to Tourism Tasmania. With steady visitation growth, Hobart is seeing a trend of investors converting private rental properties into short-stay accommodation. A recent University of Tasmania report recorded a 288 per cent increase in entire properties being listed on short-stay accommodation websites in the city from July 2016 to 2018. Given the city’s tight vacancy rate and rental conditions, reducing existing rental stock could further acerbate Hobart’s household rental stress. In July, the Master Builders Association said regulatory and cultural change to embrace higher-density housing was vital to Tasmania’s future.

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Property market update – February 2017

BMT team — Wed, 08 Feb 2017 23:05:06 +0000

Property values 2017 kicked off with continued growth in house prices according to CoreLogic’s Home Value Index. Combined capital city dwelling values increased by 0.7 per cent in January and as a result, values are 10.7 per cent higher than this time last year. Over the three months to January, it was Hobart which surprising led the capital cities in terms of the greatest increase in values. Tasmania’s capital saw dwelling values increase by 5.8 per cent, reaching a median dwelling price of $366,000. Sydney and Melbourne continue to be consistent performers in terms of dwelling price growth. Over the three months to January values rose by 2.7 and 2.4 per cent respectively in these cities. The current median dwelling price for Sydney is $850,000 while in Melbourne it sits at $640,000. Darwin was the only capital city where dwelling values experienced a fall, declining by 1.7 per cent during the month of January to a median dwelling price of $490,000. Residential property listings The latest data from SQM Research indicates that the number of residential property listings available fell during the month of January. According to the report, the biggest drop was experienced in Sydney and Melbourne, where listings declined 6.6 and 12.3 per cent during the month respectively. Nationally, there was a 3.0 per cent decrease in the number of residential properties listed. The only capital city which experienced an increase in listings over January was Darwin, with a 1.5 per cent increase. Auction clearance rates Despite the slowdown in residential property listings reported by SQM Research, the latest CoreLogic auction clearance rates indicate that the market will gather momentum after the seasonal holiday slowdown. Already there has been an increase in the number of auctions across the capital cities over the past week, with 867 auctions reported for the week ending the 5th of January compared with just 368 auctions during the previous week. From the 867 auctions tracked, CoreLogic reported a preliminary clearance rate of 70.8 per cent, down slight from the 71.6 per cent recorded for the last week of January. Rental rates Figures from the latest SQM Research Weekly Rental Index for the week ending the 4th of February show that over the month of January weekly rents for houses decreased by 1.4 per cent whilst weekly rents for units increased by 0.3 per cent. Of the capital cities, Canberra and Hobart led the way with the most significant increases in weekly rents for houses and units. Canberra experienced a 2.2 per cent increase in house rents and a 0.4 per cent increase in unit rents while Hobart saw a 2.3 per cent increase in house rents and a 0.7 per cent increase in unit rents over the month. Asking rents for Sydney houses increased by 0.2 per cent over January. However, the New South Wales capital city also saw a decline in asking rents for units of 0.2 per cent. No other capital cities experienced a decrease in weekly rents during the month. However, the asking rents for Darwin, Brisbane and Adelaide units experienced no changes when compared with the previous month. Rental vacancies The most noteworthy news regarding vacancy rates reported recently were figures reported by the Property Council of Australia. According to the Property Council’s Office Market Report, there was a slight lift in office vacancy rates from 10.5 to 10.4 per cent. The Australian Central Business District (CBD) office vacancy rate has remained steady over the six months to January 2017, falling from 11.0 per cent to 10.9 per cent. Demand for office space has been strong in all capital cities and particularly in Brisbane, where the Property Council reported that office space in the city CBD is now more than five times higher than historical levels. The Sunshine Coast and the Gold Coast office markets have also recorded sharp declines in vacancies, with the two cities now sitting at 6.9 and 12.2 per cent office vacancy respectively. Sydney and Melbourne CBD’s continue to demonstrate a strong office market performance, with vacancy rates of 6.2 and 6.4 per cent respectively. Building approvals The Australian Bureau of Statistics (ABS) released the latest buildings approvals data for December 2016 in February. According to the report there were 17,327 dwellings approved in December, a fall in approvals of 1.2 per cent when compared with the previous month in seasonally adjusted terms. The drop follows a 7.5 per cent jump in approvals reported in November and the numbers of dwellings approved is 11.4 per cent lower than the same time one year ago. Finance and interest rates At the first board meeting of the year by the Reserve Bank of Australia (RBA) it was decided to leave rates on hold at 1.5 per cent. The decision was widely anticipated after all seventy two Economists surveyed by Reuters indicated they expected the cash rate to stay put. Despite record low interest rates, property investors may continue to face difficulties with new loan applications and requests to refinance. Just yesterday Commonwealth Bank subsidiary, Bankwest, announced it has again tightened their lending policies for property investors.

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