This Week in Real Estate – 30th April 2022

Qld Property Sales Total $39bil

Queensland chalked up the highest value of property sales in Australia during the first quarter of 2022, with $39 billion worth of transactions.

The latest PEXA Property Insights report shows there were 51,458 sales settled during the first three months of the year in Queensland.
PEXA Insights head of research Mike Gill says the report also shows that buyers have returned to capital city markets in the past quarter.

“Throughout the Covid pandemic, regional areas boomed, however with restrictions significantly relaxed, it appears Australian homebuyers have refocused on the metropolitan regions,” he says.

The report says there was $150 billion worth of sales along the east coast of Australia in the first quarter of 2022.

The Queensland region to record the highest sales during the period is Toowoomba with 835 sales, followed by Surfers Paradise 810 and then Mackay with 784. Two non-regional markets made the top ten. They were Beenleigh with 602 sales and Ipswich with 540 sales.

Gold Coast $million Club Grows

The number of properties on the Gold Coast fetching seven-figure price tags has significantly increased during the pandemic.

More than 5,600 properties sold during the 12 months to April for $1 million or more. That’s a 67.4% increase on the 3,778 $1m-plus sales in the previous year.

According to Jason Adcock of Adcock Prestige, 193 properties sold for more than $4 million.

He says the figures show a surge in Gold Coast property values in the past 12 months and that sellers have done extremely well during one of the biggest boom periods in its property market’s history.

Adcock says it could be a sign that the Gold Coast now had a much more stable property market than it did in the past.

He says many of the $1m-plus sales were suburban homes which offer buyers, particularly those from Sydney and Melbourne, much more value for money than they would get in their home state.

Rent Crisis Remains Despite Investor Rise

A return of investors is unlikely to help ease Australia’s rental crisis in the short term.

The value of investor lending hit a record high for the first two months of 2022, according to the Australian Bureau Statistics, but it is likely not enough to offset the number of investors who sold properties during the pandemic.

Monthly spending by investors in January was $10.9 billion, the highest since April 2015. It dropped slightly in February to $10.75 billion.

PropTrack director of economic research Cameron Kusher says the investor market has rebounded because of rapidly rising rents, improved yields and property price growth potential.

“The data seems to suggest that a lot of those investors who sold out of the market previously sold to owner-occupiers rather than investors,” Kusher says.

“So, we’ve had this spinning out of the overall supply of rental stock.”

Vacancy rate data from both Domain and SQM Research puts the national vacancy rate at just 1% in March.

Cheaper For FHBs To Buy Than Rent

The rental crisis and rising rents mean it is now cheaper to buy than rent for about 40% of first-home buyers, particularly those in regional areas.

A survey from Great Southern Bank reveals more than two in five recent homeowners are paying less on their mortgage than they did when they were renting.

Great Southern Bank’s chief customer officer Megan Keleher says many home buyers over-estimate how much it costs to manage their home loan.

“Our research shows that many first-home buyers were actually spending more on rent than they do on a mortgage – and this trend is only likely to increase in the current rental market,” she says.

The research shows almost twice as many recent homeowners living in regional areas experienced a drop in their housing costs (44%) compared with an increase (26%).

It also shows 37% of homeowners who are living in and around CBDs experienced a decrease in costs while 40% experienced an increase.

Foreign Buyers Return To Aust Market

Foreign buyers are returning to the Australian market, with a new NAB survey revealing they now account for 7.9% of the demand for new homes.

The lift is the third consecutive quarterly increase of foreign buyers and the highest level since mid-2020s although still below the peak demand of nearly 17% at the height of the housing boom in 2014.

The survey shows first-home buyers still dominate the new housing market, although their share of total sales fell to a two-and-a-half year low of 40% in the first quarter of 2022.

NAB is predicting a moderate increase in Australian house prices this year with Sydney and Melbourne recording only small increases.

It expects prices to drop in 2023 and says Sydney and Melbourne could experience price drops of more than 11%.

The NAB report, however, has a track record of inaccurate forecasting, wrongly predicting major price decline in 2020 and only moderate growth in 2021.