Price Trend Line = Houses v Units 

The graphs above represent a trend line of the median price performance at capital city level. Source = CoreLogic.  Note the above graphs don’t represent ‘prices’ but show ‘price changes’ over time.

Houses – Darwin was the clear price increase front runner over the past four weeks, resulting in an increase of 2.0% for houses.  Perth landed a 1.6% increase, and Brisbane was consistent with 1.1%.  Sydney, Canberra and Adelaide experienced a 0.9% increase, with Melbourne bringing up the rear at 0.5% (though many would say this is a good result after the past two years).  Hobart was borderline with no change to their prices.  

Units – When it comes to units, Brisbane was the winner with an increase of 1.7%, and Perth at 1.5%.  After these two locations, the next group are bunched together – Darwin 0.9%, Adelaide 0.7%, Hobart + Melbourne at 0.6%, Sydney 0.5% and Canberra coming in last with the only decrease in price of -0.2%.  Given there’s a higher level of supply of units, you could argue we’re really seeing some affordable options for at least six of the eight major areas.  The ever present issue with units though is the fact that anything over 2 bedrooms requires a big jump in price.

FORECAST 

From an Outlook perspective and the direction prices will head – there’s no doubt the trend will be for further increases.  A point of clarification though, we are experiencing an emerging two speed market for the housing (not unit) market with the divide at the $3 million mark.  Properties under $3M and particularly properties closer to $1M are moving almost at Covid-like speed, meaning properties are selling within a week of listing.  Properties over the $3 million mark are starting to take a while to sell and the purchasing is nuanced.  Of course, the market change we’re all watching roll out relates to the new Home Guarantee Scheme - for more details click here.  There’s also another big story playing out – see the ‘combined dwellings’ forecast below for more on this.

Rents - Houses v Units

Once again, please note the graphs below show ‘price changes’ not actual pricing [ eg – even though Darwin looks to be ‘on top’ this means it’s increasing faster than other locations, not that it’s more expensive.]  Overall rents look to be stabilising.  As we edge towards the end of the year, we definitely have a trend of stabilisation or very minimal change in the levels of rental returns.  If we can start to make a dent on supply, rents could relax further however this isn't expected to occur in the short term.

Vacancy Rate

This data is drawn from SQM Research.  It represents the total vacancy rate in each major city.  A ‘healthy’ rate is around 2.5%. Anything below this means the amount of properties available for rent is not sufficient to meet the amount of people who want to rent in that particular area.  As you can see, all areas of Australia need more rental properties (all areas are under 2%), although supply is getting closer to healthier levels in Melbourne and Canberra. 

Employment levels are an important indicator of economic health, and something the RBA monitors closely when deciding what to do with interest rates.  This information should also be monitored by property buyers as a leading indicator of locations to avoid or consider for their next purchase. 

The sweet spot for a good level of unemployment – where there’s enough jobs for those who want them - will hover between 4 and 5% depending on the rate of jobs turning over.

Anything below 4% would be considered to be low unemployment and would suggest a strong jobs market, attracting workers which increases demand for housing and pushes capital growth and rental returns upwards.

Anything in the 4.5% and upwards would reflect high unemployment which will indicate economic struggles, leading to weaker property price growth and eventually declines.

Population Growth 

This graph shows the change in population by State over the last reporting period.  The data includes changes caused by both overseas migration and also where Australians are moving from one state to the other.  Overall Australia had 667,000 migrant arrivals in 2023 -2024, a slight decrease over the previous 2022-2023 year of 739,000.

Building Approvals

The graphs below show the monthly dwellings approved in each State and Australia-wide, and also the percentage change.  In 2024, the Australian Federal Government announced a target of delivering 1,200,000 homes by 2029 and to achieve this we need to build 240,000 dwellings (houses and units) per year.  As you can see, we’re falling drastically behind on this target.

RBA Cash Rate (Interest Rate)

3.60%

Australian Dollar

1 AUD = 0.66 USD

Dwelling Values Trend Line

The graph above shows the price trend line for houses and units combined – referred to as the ‘dwellings’ line.  While this information is useful, it’s important to remember to look at pricing at suburb level and review pricing for your specific property type in order to identify opportunities and know what price to offer for your next purchase.

Looking at performance for the combined totals of units and houses, it was a line ball call for the best performer over the past four weeks. Darwin led the price increases at 1.7% and Perth was a very close second with 1.6%.  Next on the list of increases when considering the mixed total of houses plus units is Brisbane with a strong 1.2% uplift (and an impressive jump of 12.7% over the past 12 months), then Adelaide at 0.9%, Sydney at 0.8%, Canberra at 0.7%, Melbourne at 0.5%, and Hobart with 0.1% increase.

FORECAST : 

This month marks the seventh straight month of gains, with the increases starting from February 2025 when the RBA announced the first rate cut.  Expectations of another decrease in the cash rate is starting to fade, while whispers for a potential increase have begun.  This could be the only hand brake the property market has at present.

As mentioned above, everyone is attuned to the impact the new Home Guarantee Scheme will have on prices, and this will have an inflationary impact on prices at the lower end of the market.  But there’s another big story brewing, and that’s the difference between the prices for property in Perth and Adelaide.  Both these locations were hoping to win the Federal Government contract as the main submarine hub, and in September it was announced that Perth was chosen and allocated $12 billion as a down payment to kick things off.  No surprise really, because Perth is on a massive, sustained growth spurt, while Adelaide is . . . not.

Of course, where you buy depends on your personal requirements as well as what’s happening in the market so book in for a Property Clarity Chat if you would like more tailored, personal recommendations.

If you’re looking for a more detailed review of the market, check out the information below.