Rising Listings & Investor Confidence: Australia’s Property Trends

Date Published : 16th? Oct 2024

The Australian property market is experiencing significant changes, with rising listings, fluctuating prices, and shifts in rental demand.

Whether you're an investor, homeowner, or renter, understanding these trends is crucial to making informed decisions.

In this update, we’ll break down the key developments shaping the market right now and explore how they could impact you moving forward.

Let’s dive into the latest insights and what they mean for your property journey.

Property Listings Surge: What’s Behind the Increase?

The latest report from PropTrack shows that new property listings for September 2024 reached their highest volume for the month since 2015.

According to Cameron Kusher, Director of Economic Research at REA Group, listings rose by 2.8% nationally, with several factors influencing this rise:

• Anticipated interest rate cut delays: Many sellers who expected rates to drop this year realised that may not happen until 2025, prompting them to list their properties now.
• Higher property equity: With rising house values, many owners are choosing to sell and capitalise on their increased equity.
• Rental market ease: The rental market is loosening up, giving sellers more confidence to rent between selling and purchasing their next home.

In some cities, the year-on-year increase in listings is staggering:

• Canberra: A 19.8% rise in new listings.
• Sydney: Up 17.9%.
• Perth: Rising by 17.7%.

Yet, other areas like Brisbane, Adelaide, and Darwin have seen lower listing numbers, showing that the market is moving at different speeds across the country.

Property Prices Continue to Soar in Certain Suburbs

While new listings are rising, property prices in some key areas are also hitting new highs. PropTrack’s analysis shows strong performance in the following suburbs:

• Armadale, Perth: A massive 42.9% growth in house values year-on-year.
• Davoren Park, Adelaide: Nearly 38% increase.
• Gables, Sydney: 33% growth.
• Kingston, Brisbane: 29.2% rise in house values.

According to Eleanor Creagh, PropTrack’s Senior Economist, these suburbs share a few common characteristics:

• Tight supply and high demand: Buyers are flocking to areas with more affordable properties.
• Strong migration: Higher population growth due to migration has increased demand for housing, pushing prices up.

Creagh highlights that affordability and supply issues remain crucial drivers of price increases, saying, “Addressing the supply of suitable homes across the country is of paramount importance.”

Investors Return to the Market: A Positive Shift

Investors are once again flocking to the market. The ABS (Australian Bureau of Statistics) reports that almost $12 billion in investment loans were written in August 2024—a 1.4% increase compared to July and a remarkable 34.2% increase from August 2023.

Mish Tan, Head of Finance Statistics at ABS, explains that this surge brings the value of investment loans close to its 2022 peak. Tan notes:

• Queensland: Leading the charge with 7.9% growth in new investment loans during August.
• South Australia: Up 5.1% in new commitments.
• New South Wales: Steady since July, but other states have seen declines, such as:Tasmania: Down by 9.1%.Western Australia: 8.3% decrease.Victoria: Slightly down by 2.7%.

With such a substantial rise, the data indicates a strong rebound in investor confidence, particularly in Queensland.

Rental Growth Eases, But High Prices Remain

After several months of skyrocketing rental prices, tenants are finally seeing a bit of relief. According to Domain’s latest report, rental growth has stalled across most capital cities:

• Vacancy rates remain tight: Less than 2% vacancy in most capital cities, but rental demand is starting to ease.
• Record-high rents: Tenants are still facing historically high rents, but the pace of growth is slowing.

What’s driving the shift?

• Affordability pressures: Many tenants are turning to house-sharing or intergenerational living to alleviate the financial strain.
• Net overseas migration: Down by 19% since its March 2023 peak, easing some of the pressure on rental demand.

This change in the rental market could offer temporary relief to tenants, but with vacancy rates still low, it remains very much a landlords’ market.

Unit Prices Set to Rise Amid Supply Shortages

The CBRE report predicts that the 23% price gap between newly built and existing apartments will begin to close over the next 18 months.

With supply tight and construction costs high, existing units are becoming an attractive option for investors. Sameer Chopra, CBRE’s Head of Research, explains:

• Construction costs have surged: Apartment values haven’t kept up, but this gap will likely close.
• Vacancy rates expected to drop further: By 2029, vacancies could fall to 1.2%, from today’s 1.9%.

Chopra points out that existing apartments offer significant investment potential, especially in high-demand areas where new developments are few and far between.

It’s clear that the Australian property market is undergoing major shifts, whether it’s the rise in new listings, surging prices in key suburbs, or the renewed interest from investors.

There’s a lot to take in, but this could be an opportune time to assess your own position and plan your next move.

If you’re looking to navigate these changes and understand how they may impact your personal circumstances, I’d love to chat with you, book a time with me here.

Whether it’s diving deeper into property investing or exploring your options, I’m here to help. If you’re interested for more education, join one of our educational workshops on Properties in SMSF: https://getrare.com.au/smsf.

Warm regards,

Rasti

Your Architect of Property Wealth