Market Update released by SQM Research reveal that the number of residential vacancies increased during June. Nationally, vacancies increased to 2.3 per cent, which translates to 69,258 properties available for rent across Australia.
Auction Clearance Rates Rise Despite Winter’s Grip Throughout July, the national auction clearance rate recorded a 3.5 per cent rise. If the trend remains on track, a return to clearance rates over 70 per cent nationally could be on the cards for spring. Sydney and Melbourne’s auction markets are considered a barometer of residential real estate demand nationally. As such, Sydney’s continued revival, whereby clearance rates exceeded 77 per cent, indicates improved conditions over the previous
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month. In Melbourne, the third week of July produced a clearance rate of 74.3 per cent, the highest for the month. Adelaide recorded a 68.4 per cent clearance rate in July’s third week, also confirming a rising trend for the month. At the same time, Brisbane achieved 51.1 per cent, rising from 45.2 the previous weekend. The overall outlook bodes well for spring. Rental Vacancies Up Figures recently
The result reflects an upward trend in vacancies around the country, the figure representing the highest result since the December 2013 seasonal spike. This certainly provides some respite for tenants who have been faced with a tight market for a lengthy period. How Many Days? Across Australia, the average number of days that it takes to sell an appropriately priced property is now 58.5 days. Naturally, conditions vary between capital cities: Sydney – 30 days Melbourne – 43 days Brisbane – 63 days Adelaide – 61 days Perth – 64 days Hobart – 77 days
We put Darwin – 88you daysfirst Canberra – 42 days Price Growth To Slow Erosion in economic confidence threatens to slow the rate of housing price growth, despite affordability remaining at historic highs. Prices growth has been trending down recently, despite strong auction clearance rates. This could foreshadow a moderation of the market as stock supplies increase in spring. Current prices are considered well supported and there is no indication evident that prices have peaked in the property cycle. Top Investment Spots New research shows that the outer suburbs of capital cities can offer better returns for investors. Traditionally, investors have tended to prefer inner city properties, as they are perceived to be more popular with tenants.
Foreign Property Investor Taxes Mooted The possibility of special charges being imposed on foreign property buyers investing in Australian real estate should be under consideration, according to a federal parliamentary inquiry. With new UBS data showing foreign investors are likely fuelling Australia's housing boom potentially buying up to 40 per cent of all new homes and up to one in eight Australian sales overall - the inquiry discussed what the possible effects of a special tax, fee or increased stamp duty on foreign buyers may be. Committee chair Liberal MP Kelly O'Dwyer asked about the potential impact of the charge at the inquiry, following
industry representatives indicating increased charges in cities including Singapore and Vancouver had changed the investment preferences of international real estate investors. However, Reserve Bank of Australia (RBA) assistant governor Christopher Kent told the inquiry that rising house prices in the past 12 months have been driven by low interest rates and a growing population, rather than foreign investors. In response to a possible special tax on foreign investors, Mr Kent said he couldn't “speak for the bank as a whole, [but] would it have an impact? One would imagine at the margins that it would".
Vendor Discounting The percentage discount from a home seller’s initial asking price varies considerably around the country. This provides an indication as to local expectations and buyer responsiveness.
Brisbane Houses – 5.8% Brisbane Units – 5.1% Adelaide Houses – 5.2% Adelaide Units – 6.9% Perth Houses – 4.4% Perth Units – 4.3% Hobart Houses – 7.7% Hobart Units – 7.8%
The national wrap up:
Darwin Houses – 7.6% Darwin Units – 5.2%
Sydney Houses – 4.6% Sydney Units – 3.9%
Canberra Houses – 3.4% Canberra Units – 7.7%
Melbourne Houses – 5.3% Melbourne Units – 5.2%
Source: RP Data
If the move were to been given the green light, it would raise extra revenue for the federal coffers while also curbing excessive property demand from overseas. The inquiry also recommended that extra data be collected around whether buyers are citizens, permanent residents, temporary residents or overseas investors. First National Real Estate has been invited to address the Housing Economics Committee
concerning foreign investment in residential real estate in August. Not every major OECD economy like Australia chooses to maintain a foreign investment framework, but policies that promote transparency and enhance confidence in residential property are considered paramount to continued Australian economic prosperity. Sources: REB Online + FNRE