This Week in Real Estate – 23rd April 2022
“Stellar Performance” Continues
While property price growth is strong on the Gold Coast, the pace of growth has eased slightly compared with last year.
The latest CoreLogic home value index shows property prices increased 2% in March.
CoreLogic’s Eliza Owens says Queensland has continued to show “stellar growth performance”.
The strongest unit market in the past year was Oxenford where median unit prices increased by 10%.
Gold Coast agents say fewer homes are being offered for auction and there is a slight softening of buyer inquiry.
Ray White Surfers Paradise CEO Andrew Bell says for the past two years agents were desperate for more owners to list their properties for sale to meet the demand.
“There is simply not a sufficient supply of properties to meet the demand, and as a result property prices and rental prices have had a sudden surge that has added substantially to this current discussion about the rapid rise in the cost of living,” he says.
Crane Index Hits Record Levels
Building materials and tradies may be hard to come by, but the latest Rider Levett Bucknall Crane Index reveals there’s still plenty of construction under way, with Brisbane and the Gold Coast prominent.
It says a record 813 cranes were operating throughout Australia in the past six months which is 13% higher than the previous record.
Domenic Schiafone of RLB says the number of cranes shows the remarkable resilience of the construction industry.
He says it has coped with supply chain disruptions, increased shipping and freight costs, material price increases and reduced workforces as a result of Covid. The majority of the cranes counted are operating within capital cities, with Sydney the busiest with 348 in use.
It is followed by Melbourne with 192, Brisbane 79 and Perth 55. There were 40 on the Gold Coast, 31 in Canberra and 16 in both Adelaide and the Sunshine Coast. Wollongong and Newcastle both had 12 cranes in operation and Darwin has two. Construction work increased by 1.8% last year.
Many Markets Still Raging: CoreLogic
Australia’s housing market has started to move from one speed – flat out – to a two-speed market, according to CoreLogic head of research Tim Lawless.
Lawless says house price growth in Sydney and Melbourne has flattened in recent months, although other capital cities and major regions are still showing very strong results.
Property prices are still rising at boom levels in smaller capital cities such as Brisbane and Adelaide with prices increasing about 20% a year.
Perth price growth is also starting to pick up speed, which Lawless says is partially as a result of Western Australia reopening its border in recent months.
Regional markets are also performing well as population growth results in high demand and low supply.
Lawless says some markets will feel the effects of a variety of factors including worsening affordability, rising costs of living and more stock coming onto the market.
But he says open borders and the gradual return of overseas migration is another positive factor which will lift housing demand.
Price Cap Lifted For FHB Scheme
A lift in the price caps within the Federal Government’s Home Loan Deposit Scheme means home buyers will have a broader range of properties they can now buy.
The scheme helps first-home buyers purchase a property with a 5% deposit without needing to pay costly lenders’ mortgage insurance.
The cap will rise by $100,000 across capital cities and major regional centres, except in the ACT where it will increase by $250,000.
This will bring the cap to $900,000 in Sydney, $800,000 in Melbourne, $700,000 in Brisbane and $750,000 in the ACT. In Perth, Adelaide and Darwin it will be $600,000.
It’s expected the lifting of the caps will increase demand for apartments and entry-level houses.
Prime Minister Scott Morrison says increasing the caps means even more Australians will have the opportunity to buy their own home.
“Saving to buy a house has always been hard work and we know as prices have increased it’s been getting harder,” he says.
