This Week in Real Estate -3rd February 2023
Qld To Crack $4m Median
Queensland is nudging closer to achieving its first $4 million median suburb with analysis by PRD showing already four suburbs have breached the $3 million median mark.
Sunshine Beach on the Sunshine Coast was the first to break the barrier, although it has now slipped to $2.65 million. Inner Brisbane suburbs Teneriffe ($3.4m) and New Farm ($3m) remain in the “$3m median club” with Gold Coast suburb Mermaid Beach ($3.3m).
PRD chief economist Dr Diaswati Mardiasmo says given the low stock and high demand it will not be long until the state achieves its first $4m median suburb.
“In places like New Farm and Teneriffe, houses are very hard to come by. It’s really attracting a different demographic now – young high-net-worth professionals and a lot of the downsizers because it offers them the lifestyle they want,” she says.
“I wouldn’t be surprised if we close in on $4m quickly. It’s attracting top dollar and there are a lot of buyers looking.”
Shortages Push Gold Coast Prices
Increasing demand from renters and buyers is still not enough to stop many Australian builders going bust, according to leading developer Harry Triguboff.
Triguboff says builders are hamstrung by tough state and local government planning policies, rising costs and consecutive interest rate rises.
His company, Meriton Apartments, is building a 76-level building on the Gold Coast and prices have already risen by 10% since November.
He says Chinese buyers are showing keen interest and “the market is getting stronger by the hour”.
“More immigrants and a lot more foreign students have arrived and are paying very good rents,” he says.
Triguboff says he has never seen the Surfers Paradise market perform so well.
He would like to build more throughout Australia but says it is becoming harder to get approvals.
“The tragedy which is unfolding is that many fine builders are going broke,” he says. “That is another reason for prices rising. As these builders go broke, there is less built.”
Quote of the Week
“The housing market downturn lost momentum in the December Quarter. This suggests that the peak rate of the quarterly decline has passed, as the September Quarter bore the brunt of the initial shock of rising interest rates and exorbitant inflation levels causing house prices to fall.”
Domain chief of research Nicola Powell
Prices Rise In Most Cities
House prices in most Australian cities are still on rise, with smaller capitals performing particularly well.
The latest property price report from Domain shows that prices increased in the December Quarter in five of the eight capital cities.
Darwin recorded the biggest median price increase of 3.3% followed by Perth (1.1%), Melbourne (0.7%), Hobart (0.6%) and Adelaide (0.2%).
Of those five capital cities, all but Melbourne also achieved price growth in the past 12 months.
Sydney’s median dropped by 2.1% during the quarter, while Brisbane was down 1.8% and Canberra 0.3%.
The Domain analysis says the market downturn lost momentum during the December Quarter with the combined capital city median value dropping just 0.7%.
“This suggests that the peak rate of the quarterly decline has passed, as the September Quarter bore the brunt of the initial shock of rising interest rates and exorbitant inflation levels causing house prices to fall at the fastest quarterly rate on record,” it says.
Foreign Buyer Interest Rises
Overseas residents are keen on snaring a slice of Australian property with new analysis showing an increase in online searches.
Online searching from overseas is now higher than it was before the pandemic, according to PropTrack, with interest from India and New Zealand in particular on the rise.
There has been a 20% increase in searches on realestate.com.au from overseas based residents compared with 2019, with searches for rental properties in particular rising.
Rental searches have risen by 65% in the past year and searches to buy have increased by 10% during the same period.
PropTrack economist Angus Moore says with migration to Australia quite strong, it is not surprising more people based overseas are looking to secure a home in Australia.
New Zealand accounted for 30% of all international search activity last year. Rental searches from New Zealand rose by 76% and buying by 13%.
Searches from India are also on the rise, up by 79% for rentals and 48% for buyers.