Edition #12 - Top Suburbs Revealed For FHB's, Rental Market Eases But Still At Record Highs & Time To Build A House Is At 15 Year High
Sam Giardina - Mortgage Broker
Director & Mortgage Broker at Clio Financial | Available 7 days - 0422 269 868
Spring Property Market Sees Surge from First-Home Buyers and Investors
This spring, interest from first-home buyers and investors is heating up the property market. PropTrack data reveals demand spikes in affordable suburbs with high enquiry volumes.
The Australian Bureau of Statistics found a 30% year-over-year increase in home loan commitments from investors, while first-home buyer commitments rose by 2%, signalling buyer confidence.
Popular Suburbs for First-Home Buyers Affordability drives demand, with most hotspots for first-home buyers under a $1 million median price. Melbourne suburbs like Tarneit ($650,000 median), Point Cook, and Hoppers Crossing are popular for houses. In Sydney, Marsden Park offers relative affordability at $985,000, while unit-seeking first-home buyers favor suburbs like Parramatta, Ryde, and Campsie.
Investor-Focused Suburbs Investors are also targeting affordable areas, with high demand for houses in outer suburbs like Battery Hill (Sunshine Coast), Tarneit, and Greenbank. For units, inner-city areas like Melbourne CBD and Parramatta remain attractive.
This season’s market activity shows clear trends: first-home buyers and investors are prioritizing affordability, with outer suburbs favoured for houses and city-adjacent areas for units.
Rental Market Eases, But Challenges Remain as Rents Hit Record Highs
Although rental price growth has slowed and rental listings have improved over the past year, weekly rents remain at record highs, with supply still limited. PropTrack’s September report shows median weekly rents up 1.6% for the quarter and 7% annually, the slowest yearly growth since September 2023.
New rental listings have increased by 8.6% over the past year, providing renters with more options. However, total listings remain below the 10-year average, keeping the strain on renters high. Many are seeking relief by moving to more affordable areas or entering the housing market. Data suggests demand is rising for lower-priced rentals, with cheaper listings seeing faster turnover.
Regional markets face growing pressure, with declining listings and faster rent growth than capital cities. This trend could sustain high rent prices in regional areas for the foreseeable future.
In response, more renters are considering buying, with first-home buyer loan approvals up 9.8% year-over-year. While rising investor activity may bring relief, long-term stability hinges on building more homes to address supply constraints.
Construction Delays Extend Build Times Amid Rising Material and Labor Costs
Home construction in Australia is taking nearly 50% longer than four years ago, with build times at their highest since 2010. Recent Australian Bureau of Statistics data reveals current averages of 13 months for houses, 16 for townhouses, and 33 for apartments, attributed to material and labour shortages and rising costs.
Supply issues with essential materials like steel and timber, which saw price surges of 42% and 24% in 2022, have been a major factor. Though supply chains have mostly stabilized, some shortages, such as copper, continue, and prices remain high post-pandemic. Labor shortages in construction have also contributed significantly. Despite wage increases, an aging workforce and a decline in apprenticeships have left 85% of companies struggling to find skilled workers. These shortages have impacted the government’s ambitious goal of building 1.2 million homes over the next five years.
State-level data shows some promising shifts. Queensland saw a 17% drop-in apartment build times and shorter times for townhouses, while Victoria’s apartment build times stabilized. However, apartment construction in NSW increased by 17%, signalling ongoing delays there.
Without policy adjustments to address labour gaps and building costs, Australia’s housing market will likely face continued strain, driving prices higher and exacerbating the housing shortage. Investing in apprenticeships and skilled migration could help meet housing demand, despite recent signs of stabilization.
Sam Giardina - Finance Broker - Clio Financial
PH: 0422 269 868
W: www.cliofinancial.com.au
DISCLAIMER: This article is intended for informational purposes only and does not constitute financial advice. The content is based on current market data and research but may not be applicable to your personal circumstances. Before making any financial decisions or taking action, you should consult with a qualified financial advisor.