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 – Nationally, we’re now into our fifth consecutive month of increases delivering 2.7 percent for the combined capitals over the past 12 months.  At major capital level, all areas increased except Hobart but the blip of the past six months trend line is . .surprisingly Darwin.  There is a mini frenzy occurring  – which doesn’t take much because it’s a pretty small market.  Unless you want to live there, it’s not a place I would recommend for investment purchases as there’s no sustainable drivers for capital growth.

Units – Sales to 30 June resulted in units matching houses in an upward price trend for all areas up except Hobart.  The big issue with units is the growing gap between house and unit prices.  Of course, as we have pointed out in our Market Watch podcast, a key difference is there’s a higher percentage of one and two bedroom units, where houses have typically three or more bedrooms.  However, there’s definitely a great opportunity to well located units at sometimes less than a quarter of the price of houses in the same location.

FORECAST -  We now have the perfect property market storm brewing [apologies to those of you on the east coast who experienced the recent east coast low].  The RBA is expected to announce another drop to the cash rate this month, and coupled with the low stock levels the Spring market looks set to take off – particularly in Brisbane, Sydney, and Perth.

Rents - Houses v Units

Once again, please note the graphs below show ‘price changes’ not actual pricing [ eg – even though Perth 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, with very minimal change over the past couple of months.  Interestingly, Darwin is experiencing a bit of a spike for houses and units.  

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 

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)

3.85%

Australian Dollar

1 AUD = 0.65 USD

Dwelling Values Trend Line

The graph above shows the price trend line for houses and units combined.  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.

FORECAST : As mentioned above, all major areas are moving upward apart from Hobart, though we’re hearing reports from agents that buyer numbers are increasing. Darwin is continuing to outperform, though a smaller number of sales is creating a data blip that will be a trap for buyers who think they’re onto a long term trend.

From an ‘outlook’ / what’s next perspective – there’s now no doubt we’re seeing a trend shift upwards.  The next RBA announcement is expected to see the cash rate reduced again, and buyers are more confident with world events starting to settle down. If you’re planning to buy property within the next six months, you should ensure you have your finances ready to go as buyers will need to be nimble to beat the competition during the Spring market.  It’s still too early to see reasonable changes in Melbourne so we’re not recommending this as a good opportunity yet, and we would recommend continuing to avoid Canberra, Hobart, Adelaide and even Darwin.  Of course, where you buy depends an your personal requirements as well as what’s happening in the market so book in for a strategy session if you would like more tailored, personal recommendations.

If you’re looking for a more detailed review of the market or how it will play out for your particular situation, check out the information below.