Why Australia’s Property Market is the Hottest Investment Right Now!

The Safe Haven: Why Aussie Property is the Top Investment Choice | Latest August Trends

Welcome to this week’s property market update for Australia.

With recent share market turmoil, many are seeking stable investment opportunities.

In this blog, we'll explore the latest trends, highlight affordable suburbs, discuss the surge in housing finance, and reveal why Australia is home to some of the largest and most spacious homes in the world.

Read on to discover how the property market is faring and why it could be your best investment choice right now.

Affordable Suburbs: Opportunities Abound

While house prices are tipped to keep rising, there are still plenty of affordable options to be found.

According to recent data, 25 cities with populations over 50,000 have a median house price below $750,000.

These locations boast quality infrastructure and abundant employment opportunities, making them ideal for homebuyers and investors alike.

Pressley, a renowned property analyst, highlights, "This time five years ago, there were numerous locations across Australia where you could buy a low-maintenance house for $500,000 or less. In 2024, the new benchmark is circa $750,000."

Some top affordable locations include:

• Maitland, about 20km northwest of Newcastle
• Geelong and Hobart
• Perth and Mandurah in Western Australia
• Toowoomba and Cairns in Queensland
• Darwin in the Northern Territory

Despite rising house prices, 500 Australian municipalities have a median apartment value below $750,000, making them accessible for many buyers.

Property: A Safe Haven Amid Market Turmoil

This week’s share market collapse, wiping off over $160 billion, has reinforced Australia’s property market as a safe haven.

Stocks closed down 3.7% on Monday, the biggest fall since the pandemic era, driven by fears about the US economy and a potential recession.

In contrast, the property market has shown remarkable stability.

CoreLogic's latest figures reveal that national home values rose by 0.5% in July, marking the 18th consecutive monthly increase.

During the quarter, values are up by 1.7%. Despite the national rise, three capital cities recorded slight declines in median values in the past quarter:

• Melbourne: down 0.9%
• Hobart: down 0.8%
• Darwin: down 0.3%

However, Perth values increased by 2%, Adelaide by 1.8%, Brisbane by 1.1%, and Sydney by 0.3%.

Westpac Private Bank’s inaugural Prestige Property report emphasizes that prestige property is now considered a critical asset class.

Surge in Housing Finance

Housing finance is currently sitting above decade averages in almost every area of Australia.

CommSec’s State of the States report shows significant increases:

• Western Australia: up by 37.8%
• Queensland: up by 32.3%
• South Australia: up by 19.7%
• Victoria: up by 14.6%
• New South Wales: up by 13.9%
• Tasmania: up by 8.6%
• ACT: up by 2.7%
• Northern Territory: down by 7.1%

PEXA’s latest Mortgage Insights Report indicates that 509,955 new property-related loans were issued in FY2024, a 6% increase from the previous year, while refinancing was down by 11.9%.

ABS monthly lending figures show investors are continuing to charge into the market, with the total value of new investor loans up by 30.2% year on year.

Maurice Tapang, economist at the Housing Industry Association (HIA), notes, “Various segments of the housing market are increasingly active, with lending to first home buyers, owner-occupiers, and investors increasing in the first half of 2024.”

House Prices Continue to Climb

July saw house prices throughout Australia reach new peaks.

PropTrack’s figures show that while July is typically the slowest month for house price growth, nationally, house prices were up by 0.8%.

This led to a 6.28% increase over the past 12 months, with Perth leading the pack with prices up by 23%, followed by Adelaide at 15%, Brisbane at 14%, Sydney at 7%, Darwin at 4%, and the ACT at 1%.

Melbourne saw a slight decrease of 1%, and Hobart was down by 2%.

Paul Ryan, senior economist at PropTrack, remarks, “The growth in Perth is quite astonishing.”

He attributes the softness in Melbourne and the ACT to a solid flow of new properties entering the market.

With rental availability remaining low, Ryan believes prices will continue to rise.

The unit markets have also performed well over the past 12 months, with price growth in most capital cities. The strongest growth was seen in:

• Perth: 19%
• Brisbane: 17%
• Adelaide: 12%

Australia: The Home of McMansions

Australia has emerged as the home of the McMansion, with a new study showing it has some of the largest houses and smallest households in the world.

The study reveals that two-thirds of Australian homeowners live in houses averaging 214 sq m. This is followed by:

• New Zealand and the United States: around 200 sq m
• Canada: 181 sq m
• Malta: 160 sq m
• Cyprus: 141 sq m
• Denmark: 137 sq m

Despite the large home sizes, Australia has an average household size of 2.5 people, with nearly half the population living in two to three-person households.

Almost a quarter of households accommodate just one person.

The study by The Perfect Rug ranks countries based on average square meterage and household size.

A spokesperson notes that overcrowding is a significant issue for many countries, including Greece, New Zealand, and Mexico.

Census figures indicate there are only 15 suburbs in Australia with a housing density higher than 110 homes per hectare.

If you're looking to buy your first home, upgrade, or invest, now is a fantastic time to explore your options. Property remains a stable and reliable investment, even during uncertain times.

Cheers,

Rasti

The Architect of Property Wealth

P.S. If you’d like to discuss your personal circumstances and how property investing may work for you, book a one-on-one conversation with me here. Alternatively, join our educational workshop on "Pay Off Your Mortgage in 10 Years" by registering here.