Australian Property Update – January 2024

Gold Coast Market To Rise in 2024

 

Property Prices on the Gold Coast are tipped to rise by a further 4% in 2024, even though the pace of price growth will slow.

The median house value now sits at more than $1.1 million and the median unit value is more than $720,000.

Knight Frank director of residential project sales, Alison Hedger tips house price growth of 4% in 2024 and a further 6% in 2025.

She says weekly rents remain on an upward trajectory, vacancies are low, and property prices continue to surge with more people moving to the Gold Coast.

“There is a significant number of cash buyers in the market coming from interstate who are seeking to downsize and make their low maintenance, high amenity living a reality,” she says.

According to Juwai IQI managing director Daniel Ho, Asian buyers also remain very interested in the Gold Coast market.

He says Chinese buyer enquiries were up by 138% in the third quarter of 2023 compared with the same period in 2022.
 

 

Homeowners $300,000 Richer

The majority of vendors did extremely well in 2023, with new data showing residential property sellers achieved nearly $300,000 in gross profits in the September quarter.

The latest CoreLogic Pain and Gain Report shows the portion of profitable home sales increased in the September quarter, with 93.5% of all sales now achieving a higher price than the property was bought for.

This is the highest rate of “profit-making sales” since the July 2022 quarter.

The September quarter results have CoreLogic head of research Eliza Owen already predicting the December results will also be significant as home values rose by 1.4% in October and November.

Adelaide had the highest proportion of profit-making sales with 98.5% of properties achieving a higher price than owners originally paid, followed by Hobart (97.6%), ACT (97.4%) and Brisbane (97.3%).

In Melbourne, 91.3% of sales were for a profit, 91.1% in Sydney,  90% in Perth and 69.7% in Darwin.

The report shows those who sold within three years of buying were more likely to take a loss.

 

When Rates Will Drop

The Commonwealth Bank is tipping a drop in interest rates of nearly 1 percentage point by the second half of 2024.

CBA chief economist Stephen Halmarick, believes cuts will start in September 2024, dropping rates to 3.6%.

He also predicts a further 75 basis point drop in 2025 when inflation sits within the Reserve Bank of Australia’s target of 2% to 3%. This he says will bring the cash rate back to 2.85%.

“Markets have shifted to our view that the global monetary policy tightening cycle is at an end and that 2024 will see interest rate cuts from some of the major central banks, especially the US Federal Reserve and the RBA,” Halmarick says.

Halmarick says the pace of global inflation began to slow in mid-2023 and he expects that to happen even further this year.

In November 2023 the RBA’s Statement on Monetary Policy predicted that the level of inflation would fall to 4% by June 2024.

 

Rents Keep Rising

Rents are expected to keep rising in 2024, as new analysis reveals tenants are paying up to 11.5% more than they were at this time last year.

Data from PropTrack shows record low vacancy rates are continuing to drive rents up.

It says rents in the combined capital cities are up even higher, 13.2%, with tenants paying an average of $600 a week.

PropTrack senior economist Angus Moore says there are some signs rental increases are starting to slow in some areas.

 

“But we’re still seeing very strong growth in places like Perth, Sydney and Melbourne. So, we’re far from out of the woods for renters,” he says.

Median asking rents for houses were highest in Sydney at $750 per week and lowest in Melbourne and Hobart at $550 per week.

The ACT had a median asking rent of $680 per week for houses, Darwin, $660, Brisbane and Perth $620, and Adelaide was $560 per week.

“Rents have been growing very quickly, and we would expect that to continue in at least the near term,” Moore says.

 

QUOTE OF THE WEEK

PropTrack senior economist Angus Moore

“We’re still seeing very strong growth in places like Perth, Sydney and Melbourne. So, we’re far from out of the woods for renters.”

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