This Week in Real Estate – 23 March 2024
Cash Buyers Big On Coast
Broadbeach on the Gold Coast recorded the highest value of cash property purchases in Australia, according to research by electronic conveyancing firm PEXA.
It shows Broadbeach topped the eastern states with $1.33 billion spent on cash purchases.
The latest Cash Purchases Report says purchases without a loan now account for 28.5% of the total value of all sales in Australia with more than 140,000 properties sold to cash-only buyers.
PEXA chief economist Julie Toth says Queensland proved to be very popular with cash buyers with 52,177 properties purchased that way in 2023.
Surfers Paradise was also in the top ten as well as Hope Island, Biggera Waters and Southport.
In terms of the number of sales 42.6% of all settlements in Broadbeach were to cash buyers.
PEXA says those buying with cash tended to be older and retired.
“They tend to have lower household incomes, but they also have fewer dependants and are more likely to be ‘asset-rich’, with accumulated property, savings and superannuation to fund their next purchase,” Toth says.
Bridges For Northern Gold Coast
Three green bridges are proposed for the northern Gold Coast to get students walking and their parents off the busy M1 during peak times.
Gold Coast City planning committee chair Mark Hammel says the bridges would allow up to 6000 school students to walk or cycle safely to schools in the precinct.
“With close to 6000 school kids living in the various suburbs around the division, it is clear from the design of these green bridges that they would offer a genuine alternative to getting to and from school,” Hammel says.
The bridges could connect different sections of Ormeau to the rail network at the Yatala train station. The project would require State Government funding.
“These green bridges would form important links between housing estates in our community to local schools, parks and playgrounds and public transport, while also taking traffic off the road and encouraging a healthy lifestyle,” Hammel says.
He says the State Government could incorporate the bridges into a future Exit 45 upgrade.
Vacancy Rates Hits New Low
The national vacancy rate has hit a new record low with predictions that the scarcity of rental properties will drive rents up further.
Data from PropTrack shows that in February the national rental vacancy rate fell to 1.07% and was below 1% in Brisbane, Adelaide and Perth.
Its analysis says the number of rental properties available for rent is now 57% lower than it was at the start of the pandemic.
The high demand means rental properties on average are listed for only 18 days before securing a new tenant.
PropTrack senior economist Angus Moore says the only thing that will ease the rental market is more stock.
“That is a slow process,” he says. “The government has a housing target of 1.2 million new homes in five years, but unfortunately we are not building enough to meet that.”
“Until then, we don’t see relief for renters in the near term, and with the market this tight, it will only result in further price hikes.”
New Home Sales Rise
Sales of new homes nationally increased by 5.3% in February according to new data from the Housing Industry Association (HIA).
The HIA New Home Sales report is a monthly survey of the largest volume home builders, it shows the increase as in most of the large states.
HIA Chief Economist, Tim Reardon says given the weakness of January data, it is not too surprising to see an uptick in February.
While sales did increase, they still remain at low levels according to Reardon.
“The higher borrowing costs are compounding the elevated cost of land and construction, drying up the pipeline of new home building work despite the significant pent-up demand for housing,” he says.
New home sales increased by 8.4% in Queensland, 6.3% in Victoria and 5% in Western Australia.
Sales dropped by 5.5% in South Australia during the month.
The new figures mean that quarterly sales are up in Western Australia (+39.9%), Queensland (+20.4%) and New South Wales (+16.0%).
Build-To-Rent Rising
The build to rent sector is on the rise according to the JLL Apartment Market Overview Q4, 2023.
It shows that the unit pipeline is increasing with nearly 60% of build to rent projects in Victoria, 24% in Queensland and 11% in NSW.
JLL says it is a way for developers to better deal with rising construction costs.
“The BTR project pipeline continues to grow, buoyed by the advantage of no pre-sales period,” the report says.
“But the BTR pipeline is still small and not large enough to offset the decline in Build to Sell supply.”
JLL head of living, capital markets, Jack Bergin, says investors are showing a strong desire to be part of the sector.
But he says further regulatory support is needed to support project viability and unlock the full potential of build-to-rent sector and deliver new housing.
The report says while BTR in Australia remains in its infancy it has gained momentum and drivers such as a tight rental market and low build to sell supply levels, support the need for more of it.
QUOTE OF THE WEEK:
Westpac managing director of mortgages Damien MacRae
“While some buyers have paused their housing plans, the intention to buy remains strong and prospective buyers are becoming more ruthless with their goals.”
