This Week in Real Estate – 27th October 2023
Gold Coast Rent Rises
Some of the Gold Coast’s most affordable suburbs have been hit hardest by rent rises. PropTrack’s quarterly rent data report shows a typical weekly rent for a Gold Coast unit is now $630 – 14.5% higher than it was 12 months ago and house rents are $780 per week, which is 11.4% higher.
Renters in affordable suburbs, such as Pacific Pines are doing it even tougher with their average rents up by 30% to $650 a week. PropTrack economist, Paul Ryan, says migration to southeast Queensland, has resulted in higher demand for rental properties on the Gold Coast.
“There’s fierce competition for affordable rentals across the Gold Coast, and that is not unique to the region but is a trend across Queensland and the country,” Ryan says. “Affordability is pushing more renters to units and that has meant a lot of the cheaper parts of the Gold Coast have seen really strong growth over the past year and particularly over the past quarter.
Quote Of The Week
“As interest rates are higher, people’s borrowing power has dropped, shrinking some buyers’budgets, meaning regions that remain comparatively affordable are in demand.”
PropTrack senior economist Eleanor Creagh
Confidence has returned to the Australian housing market according to the latest NAB Residential Property survey. It says expectations for a housing market recovery over the next few years have strengthened, with confidence levels among surveyed property professionals rising to their highest levels in two years.
However a number of those surveyed in the construction industry say they still feel hamstrung from starting new residential developments by the high cost of building. NAB economists say they have revised their expectations of property price growth upwards, after accounting for stronger than expected outcomes over the past three months. They are predicting capital city dwelling values will be up by around 8%by the end of the year.
“We continue to see prices rising a further 5% in 2024 with ongoing strength in housing demand relative to supply outweighing the impact of the ongoing pass-through of higher rates.” They also expect the RBA to lift rates to 4.35% at the November meeting.
Building Costs Ease
The rising cost of building a new home has finally started to ease. Australians building a home faced 20% increases in the year to September 2022, as Covid-induced trade and materials shortages drove up costs.
The latest Cordell Construction Cost Index (CCCI) shows construction costs are now rising at their slowest rate in four years and says this may be an early sign that pressures are stabilising within the building sector. The report tracks the cost to build a typical dwelling and says costs only increased by0.5% in the September quarter – the smallest increase since June 2019.
“This is the fourth consecutive slowdown in the quarterly pace of growth for residential construction costs,” the report says.
Construction Cost Estimation Manager, John Bennett, says cost pressures in construction are shifting from an issue of materials to labour. “While material costs appear to have stabilised in general, labour costs have had a number of new pressures applied,” he says.
Listings Down Prices Up
The number of new listings hitting the market has slowed, despite increased buyer demand and rising prices. Analysis by Domain says as a result many locations are experiencing strong price growth. It says for the month of September, the number of new listings across combined capital cities was down 12.3%, and it is down 0.7% on the same time last year.
Ray White chief economist Nerida Conisbee says while there was a slight increase in listings from June to August, new listings have slowed since then.
“It’s a bit problematic because there’s a lot more buyers out there but at the same time, we generally expect more sellers this time around but we’re not seeing that continuing to occur as we move into late spring,” she says.
Conisbee believes the low listings will continue through to the end of the year.She says realistically, if someone wants to sell before Christmas, they’re going to need to do that within the next two weeks.