21 Australia Pty Ltd CON tr I b U t O r S Chris Gray Corelogic Realestate.com.au
Century 21 Australia (02) 8295 0600
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GrOWtH COOLS IN AUStr ALIAN HOUSING VALUeS tHrOUGH WINter AS meLbOUrNe meDIAN SLIpS beLOW pertH AND ADeLAIDe
BY CORELOGIC
National home values increased 0.5% in the month of August, the 19th consecutive month of increase in home values. However, the pace of growth is showing clear signs of slowing.
National home values increased 0.5% in the month of August, representing the 19th consecutive month of increase in home values and slightly above the downwardly revised 0.3% increase seen through July.
However, the pace of growth is showing clear signs of slowing with the quarterly increase in national home values (1.3%) now less than half the rate of growth in the same three month period of 2023 (2.7%).
At a high level, there is still more demand for housing than available supply, but the flow of advertised supply and demand are becoming increasingly balanced. Supply levels vary markedly from region to region, with total listings in Melbourne about –25% higher than the previous five–year average, while total listings in Perth and Adelaide are down on the five–year average by more than –40%.
Capital growth across the cities remains diverse. Monthly gains were led by a 2.0% increase in Perth, followed by strong rises of 1.4% in Adelaide and 1.1% in Brisbane. Monthly growth in Sydney was a mild 0.3%. Four capital cities saw a monthly decline in home values, led by a –0.4% dip in Canberra, –0.2% in Melbourne and Darwin, and a mild –0.1% fall in Hobart.
Quarterly growth eased in most capital cities through winter. In Brisbane, there was a more pronounced slowdown in the quarterly growth rate between May (4.1%) and August (2.9%), suggesting an easing in demand across this increasingly less affordable market.
CoreLogic’s Head of Research, Eliza Owen, noted that while seasonality may have contributed to weaker value growth through winter, affordability constraints are a key factor behind the broader slowdown.
“The seasonally adjusted Home Value Index had a stronger result through the three months to August, at 1.7%. But this is still down from the 3.3% lift seen in the winter of 2023,” she said.
Ms Owen noted that the high levels of growth in Perth, Adelaide and Brisbane would be difficult to sustain.
“Housing values cannot keep rising at the same pace in the mid–sized capitals of Perth, Adelaide and Brisbane when affordability is becoming increasingly stretched, particularly in the context of elevated interest rates, loosening labour market conditions and cost of living pressures.”
The ongoing o ut performance of ‘cheaper’ markets reiterates a strain on demand. The lower quartile of the combined capit al city market, which makes up the most
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affordable 25% of dwellings, rose 2.7% in the three months to August, compared to a 0.3% lift across the upper quartile.
In a similar demonstration of demand being deflected towards lower price points, the quarterly change in unit values was higher than houses in five of the eight capital cities. Across the more granular SA3 markets, growth trends have also been highest in relatively affordable pockets like Canterbury in Sydney (up 13.3% in the past year), Kwinana in Perth (up 31.4%), and the Springwood ‑ Kingston market in Brisbane (up 25.5%). More of the buyer pool may be skewed to the lower–priced segment of the market, supporting values at the more affordable end of the pricing spectrum.
The median dwelling value in Melbourne has been overtaken by Adelaide and Perth, making Melbourne’s median the third lowest among the capital city markets. The Adelaide median is now $790,800 and Perth’s is now $785,250, compared with $776,044 in Melbourne. In August, Adelaide and Perth saw increases in the median dwelling value of
$13,600 and $15,300 respectively, against a – $3,100 fall in the Melbourne median.
“This is the first time that Perth’s median dwelling value has been higher than Melbourne’s since February 2015, when the city was just coming off the highs of an iron–ore boom. It is also the first time in CoreLogic’s forty–year median dwelling value series that Adelaide has had a higher median than Melbourne.”
It is worth noting that the median dwelling value is highly skewed by the portion of units in each market. Melbourne’s median is weighed down by the composition of housing in the city, where around a third of homes are units, compared with about 16% of homes in Perth and Adelaide. The median house and unit values across Perth and Adelaide are still lower than in Melbourne.
Melbourne home values have now declined for six consecutive months. Ms Owen noted there were a wide range of factors contributing to Melbourne’s softer market conditions, but it is not the only market in decline.
“The increased tax burden on investment property owners in
Victoria, as shown in an annual fall in the number of investment loans secured in the state reported by the ABS, may be dissuading some demand. But it’s not the only factor at play.”
Hobart and Canberra dwelling values are also in decline, with interstate migration trends have been weak across Victoria, Tasmania and the ACT in recent years. These markets also had a stronger run up in price growth throughout the 2010s, so it’s harder to sustain demand while interest rates are high.
“Supply is also a big factor for Victoria, where the state saw more dwelling completions over the past decade than any other state or territory. ACT also saw a spike in unit completions from 2019 to 2023, which has helped keep downward pressure on the overall dwelling market.”
Relief for renters is in sight as rent growth slows to a halt. The national CoreLogic hedonic rent index was unchanged for a second consecutive month in August, and rent values declined in Sydney for a second consecutive month.
Click here to read the full article
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Once
WHY bLUe–CHIp prOpertIeS Are A SAFe INVeStmeNt IN UNCertAIN eCONOmIC tImeS
BY CHRIS GRAY, CEO, YOUR EMPIRE
When the economy becomes unpredictable, many investors look for safe places to put their money. While stocks and cryptocurrencies can be risky and volatile, one type of investment has consistently proven to be more reliable: blue–chip residential properties. These are median priced properties located in the best, most sought–after areas, and they tend to hold their value even when the economy is shaky. But why are blue–chip properties so stable, and why should investors consider them a good option during tough times?
WHAT ARE bLUE–CHIP PROPERTIES?
Blue–chip prop erties are properties located in highly desirable areas, usually in affluent suburbs or city centres. These areas have strong demand, limited supply, and are often filled with amenities like good schools, shopping, parks, and transportation links. They tend to attract wealthy buyers and renters, which helps keep th eir value high.
Examples of blue–chip locations in Australia might include suburbs like Bondi Beach in Sydney, St Kilda in Melbourne, or Teneriffe in Brisbane. These areas are consistently popular with people who want to live in great neighbourhoods, which makes these properties more stable investments than homes in less prestigious locations.
bLUE–CHIP PROPERTIES SHOW STRENGTH IN HARD TIMES
One of the best reasons to invest in blue–chip properties is that they have a long history of holding up well, even during economic downturns. In difficult times, like the Global Financial Crisis (GFC) in 2008 or the recent COVID–19 pandemic, properties in these prime areas either kept their value or recovered quickly after an initial dip.
For example, during the GFC, while many housing markets around the world saw sharp declines, properties in blue–chip areas experienced smaller drops or even increases in value. The same was true during the COVID–19 pandemic. While many parts of the real estate market slowed down, blue–chip properties bounced back quickly as demand remained strong.
This stability is largely due to the limited availability of these properties. Prime locations don’t have much room for new development, which means the supply of homes remains low, while demand stays high. This creates a protective effect on the prices, making it less likely for blue–chip properties to lose significant value, even during economic challenges.
SUPPLY AND DEMAND WORK IN FAVOUR OF bLUE–CHIP PROPERTIES
One of the key reasons blue‑chip properties remain steady investments is the basic rule of supply and demand. There is a limited number of properties available in these prime areas, and often strict zoning laws or heritage prote ctions prevent new
development from happening. This keeps the supply tight.
At the same time, there is always high demand for these properties. Wealthy buyers and investors continue to look for homes in these locations, even when the economy is uncertain. Unlike other segments of the market, where buyer interest may drop, blue–chip properties stay in demand because of their long‑term appeal and desirable locations.
This high demand and limited supply keep prices stable and make blue–chip properties less risky than other types of real estate investments, particularly those in newer or less–established areas.
STRONG RENTAL DEMAND PROVIDES CONSISTENT INCOME
Another benefit of blue–chip properties is the strong rental demand they attract. Even during tough economic times, people still want to live in these desirable areas. Renters, especially high–income earners, continue to seek out homes in blue–chip locations because of the lifestyle and amenities these areas offer.
During periods of uncertainty, many people prefer renting rather than buying, which can increase the demand for rental properties in these high–demand areas. This means that even if property prices are flat, investors can still count on a steady rental income from their blue–chip investments.
A SAFE PLACE TO PARK WEALTH
Blue–chip properties are also seen as a safe place to store wealth. During times of economic uncertainty, many investors want to protect their money in assets that will hold their value over the long term. Blue–chip real estate offers
this security because it is a tangible asset that usually appreciates in value over time.
For those with a mix of different investments, blue–chip properties can provide balance. Stocks, for example, can be very unpredictable and rise or fall rapidly, while blue–chip properties tend to move at a slower, more steady pace. This makes them a good way to offset the risks of other investments.
THINKING LONG–TERM
Investing in blue–chip properties is about playing the long game. Unlike speculative investments that rely on quick profits, blue–chip real estate is all about holding onto the property for many years and watching its value grow steadily. Investors in these properties are less concerned with short–term fluctuations and more focused on long–term growth and consistent returns.
This long–term focus matches well with the reality of economic cycles. Even when markets slow down or experience downturns, blue–chip properties tend to recover quickly and continue to rise in value over the years. Investors who are patient and hold onto their blue–chip properties are likely to see solid returns in the future.
In summary, blue–chip properties remain a strong and stable investment option, even during uncertain economic times. Their limited supply, high demand, and desirable locations make them less vulnerable to market downturns. With strong rental demand, the ability to store wealth, and long–term growth potential, blue–chip properties stand out as one of the most reliable ways to invest in real estate. For those looking for a safe investment that offers both security and growth, blue–chip real estate remains a top choice.
A b OUT THE CONTRI b UTOR
Chris Gray is CEO of Your Empire, a buyers’ agency that buys homes and investments for time–poor professionals – searching, negotiating, renovating and managing property on their behalf. Chris has spent over 10 years as the host of ‘Your Property Empire’ on Sky News Business channel, where he’s interviewed various heads of property research companies and major industry figures. Chris is a qualified accountant, buyers’ agent and mortgage broker. For more information, visit www.yourempire.com.au and follow Chris on Facebook: @ChrisGraySydney
Image:
Ungermann on Unsplash
t H e 35 SUb U rb S
WI t H t He CHe A pe St
FA m ILY HO me S
WI t HIN 25K m S OF
A CAPITAL CITY
Family homes with three or four bedrooms can still be found at relatively affordable prices in suburbs between 8 and 25 kilometres of a CBD, new data shows, despite Australia's rapidly rising property prices.
New data from PropTrack's August Home Price Index revealed that house prices rose by 0.3% over the month, marking 20 consecutive months of growth. In the past 12 months, prices have increased by 6.4%.
Price growth in capital cities continues to outpace regional areas,
BY ME GAN LIEU , ECONOMIC ANALYST, REA GROUP REALESTATE.COM.AU
a trend that has persisted for the past year and is predominantly driven by house prices. Houses in the capitals typically cost 6.8% more, while houses in the regions cost 5.4% more than in August 2023.
This reflects the strong demand from buyers for houses in metropolitan areas.
With competition increasing between those looking to buy, it is becoming more difficult to secure an affordable property in Australia's cities. However, there are still a number of suburbs that are relatively close to CBDs where houses are competitively priced.
To identify these locations, we examined 'middle ring' suburbs, which are within the second closest third to their respective CBDs, with the cheapest three and four‑bedroom houses.
In Sydney, three bedroom houses were the most affordable in Smithfield, Fairfield and Granville among suburbs located 12 25kms from the city centre. Median sale prices were $985,000, $1,035,000 and $1,058,000 respectively.
Three bedroom houses in Dallas, Coolaroo and Deanside were the most competitively priced middle ring suburbs in Melbourne.
Goodna, Collingwood Park and Woodridge had the cheapest three bedrooms houses within 10 24kms of the Brisbane CBD. They cost $506,000, $581,000 and $588,000, well below the city's median sale price of $850,000.
In Adelaide, three bedroom houses in Parafields Gardens, Para Hills and Ingle Farm cost between $630,000 and $650,000, which was among
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the cheapest suburbs located 8 16kms from the CBD.
The most affordable four bedroom houses within 12 25kms of Sydney's CBD were found in the Smithfield, Guildford and Yagoona. They typically sold for $1.1 $1.2 million which was noticeably lower than Sydney's median sale price of $1.4million.
In Melbourne, Truganina, Deanside and Hoppers Crossing ranked highest in affordability for four bedroom houses located 11 24kms from the city centre. Median prices were $680,000, $690,000 and $691,000 respectively.
Goodna, Boronia Heights and Collingwood Park had the cheapest four bedroom houses among Brisbane's middle ring suburbs.
In suburbs between 10 20kms from Perth's CBD, Gosnells, Kenwick and Maddington had the most competitively priced four bedroom houses. They cost between $600,000 and $625,000.
Originally published on realestate.com.au by Megan Lieu, Economic Analyst at REA Group
Click here to read the full article
CHEAPEST MIDDLE-RING SUbURb S FOR THREE-bEDROOM HOUSES *
*Source: PropTrack. Only includes suburbs with >= 30 sales in the 12 months ending July 2024. Excludes Darwin and Canberra due to low sales volumes.
** Source: PropTrack. Only includes suburbs with >= 30 sales in the 12 months ending July 2024. Excludes Darwin and Canberra due to low sales volumes. Only 2 middle ring suburbs in Hobart met the inclusion criteria.
CHEAPEST MIDDLE-RING SUbURb S FOR FOUR-bEDROOM HOUSES**
H OW tO m AK e
YOU r re N tAL
pr O pert Y F ee L
LIK e A HO me
Renting a home can come with a different set of challenges to purchasing one, especially when it comes to making the space feel like your own. There are some clever ways you can create a comfortable and ‘homey’ environment without making permanent changes.
PERSONALISE YOUR SPACE
Even without the ability to paint or make structural changes, you can still add personal touches to your rental. Display mementos, souvenirs, art or photos in your home. For hanging art or pictures, use command strips from your local hardware store. These strips adhere without damaging the walls or affecting your bond and they come off cleanly.
RUG UP
You can add warmth and style with rugs, which can cover unattractive flooring and better define separate
living spaces. Choose larger area rugs for broad spaces or smaller ones for specific spots like under a coffee table or beside the bed.
DRESSING YOUR WINDOWS
Curtains can also enhance and soften the look of a room. If your rental has unappealing blinds, consider using tension rods or command hooks to hang your own curtains, but make sure to check with your property manager first.
GET CONNECTED
A reliable internet connection is essential in today’s world, and nothing makes you feel more at home than snuggling up in front of the TV with your favourite streaming service. If your rental isn’t yet connected, coordinate with the property manager to get it sorted. Placing your router in an elevated position and away from interference like microwaves can make a great deal of difference in the quality of your wifi.
INVEST IN YOUR LIVING AREA
The living room is often where you spend the most time beside the bedroom, so it’s worth investing in. Choose multifunctional furniture, such as a sofa bed or an ottoman with storage, to maximise space. Throw and cushions are a simple way to dress up or change the look of a space with a splash of colour or pattern.
CUSTOMISE YOUR LIGHTING
Lighting plays a crucial role in setting the mood of your home. Use a mix of light sources, such as floor lamps beside reading chairs or sofas, and table lamps on side tables or desks. Wall sconces can highlight artwork or architectural features while saving space and adding a touch of sophistication. Opt for warm light bulbs instead of harsh white lights to create a more inviting atmosphere. A well lit home not only enhances comfort but also helps you feel more settled in your new space.
