PROPERTY A
PUBLICATION
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ISSUE 13
WHAT’S INSIDE 2-3: Insights: Market remains hot to kick off FY22 4-5:
Feature: Regions benefit from Melbourne and Sydney exodus
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Analysis: Low interest rates driving record refinance volumes
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Social: Disrupting the cycle of homelessness
10-11:
Innovation: Previewing this year’s PropertyX Awards
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Australia’s property market posts strong gains to kick start financial year By the PEXA Insights team
A wet winter and further COVID-19 based restrictions have not dampened Australia’s red-hot property market, with strong yearon-year sale settlements results across both the east and west coasts of Australia, according to recent findings by the PEXA Insights team.
Although slightly down on the record numbers we witnessed in June to close out the financial year, Western Australia (61% up year-on-year), Victoria (55% up year-on-year), Queensland (53% up year-on-year) and New South Wales (43% up year-on-year) have continued to see booming momentum in property sale settlements. Western Australia and Queensland have once again illustrated a renewed strength to their respective property markets, continuing the momentum demonstrated throughout 2020 after years of soft growth. New South Wales regained its mantle as the highest volume state, with more
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than 20,500 sale settlements in July, just edging out a charging Victoria (more than 20,300 sale settlements). Victoria’s figures were even more impressive given the end of stamp duty concessions on 30 June, offered by the State government as part of its COVID-19 support package.
will flatten in line with falling listings as the impact of the current restrictions bite,” said PEXA Insights Senior Research Manager, Mike Gill.
“We expect the momentum to But will the New South Wales property continue in Western Australia, albeit at a reduced rate coming off recent juggernaut continue? The strong July results were delivered during a period highs. However, uncertainty remains across the east-coast with a number of lockdown, however as restrictions of strict lockdowns in play throughout further tighten and extend, the future August,” said Gill. looks uncertain. For the latest Australian property “New South Wales has witnessed a remarkable recovery since the national trends, visit: lockdown in March last year, however, www.pexa.com.au/insights. it is expected that sale settlements
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From city to country By Jarrod McAleese
Melburnians and Sydneysiders alike are departing the nation’s two biggest capital cities in significant numbers, according to the latest Australian Bureau of Statistics (ABS) data.
Figures released this month, detailing current housing finance, building approval and interstate migration rates, confirm the continuation of a trend that’s been synonymous with the COVID-19 pandemic thus far. “More than 60,000 people departed Melbourne and Sydney to other parts of the country in the 12 months to March 2021,” said Housing Industry Association Chief Economist, Tim Reardon. Notably, the change of scenery being sought by residents appears to be a permanent one – a pattern amplified by the freeze on country-to-country movement.
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is compounded by the loss of overseas migration that has underwritten economic growth in Victoria for the past decade,” Reardon said. But where are these residents headed? The answer: off to the regions. With working from home firmly established as the new normal and as consumers spend more time at home than ever before, the city to country shift is proving increasingly popular. “Regional areas have seen a greater increase in building approvals than capital cities as the population shifts toward lower density areas,” said Reardon. And this is a pattern confirmed by the latest settlement data from PEXA.
“The 220,000 building approvals in 2020/21 is the most in a financial year since 2017/18. Given that the population is moving, but importantly, electing to build new homes, it is unlikely that they intend to return to Sydney or Melbourne. “ABS Housing Finance data also shows that there were 94.4 per cent more loans issued for construction of a new home than in the previous financial year. This is the most loans ever issued for construction in a 12-month period. “HomeBuilder and other grant programs have also ensured that there were more loans issued to first home buyers in 2020/21 than in any previous financial year. “The shift in population out of Melbourne is a new trend and one that
“There’s clearly been heightened activity in our regional areas, with sale settlements outside of capital cities up 36% in New South Wales, 28% in Victoria, and 23% in Queensland yearon-year. “Close to 80% of capital city settlements procured were funded with a new loan, compared to only 66% for regional settlements, suggesting metropolitan homeowners are moving to regional areas to take advantage of lower priced properties, flexible working arrangements and a change in lifestyle,” said PEXA Insights Senior Research Manager, Mike Gill. Whether this persists into FY22 and beyond remains to be seen – but for now, it’s clear that while coronavirus remains a feature of our lives, homebuyers are favouring the serenity and space away from major hubs. 5
Property refinances hit record highs as Australians take advantage of low interest rates By the PEXA Insights team
Savvy property owners across Australia’s east-coast have taken advantage of record low interest rates, with more than 256,000 refinance settlements occurring across the 202021 financial year, surging above the previous year’s levels in Queensland, New South Wales and Victoria, according to analysis released by PEXA, Australia’s leading digital property settlement platform. 6
PEXA’s east-coast refinance report found refinance activity in New South Wales saw the steepest rise, up 15% year-on-year to over 101,000, while Queensland volumes also increased by 12% year-on-year, with more than 48,000 refinances settled. Victoria recorded the most refinances of any other state with more than 106,000, just surpassing its northern neighbour, however witnessed lower year-on-year growth (under 4%). In June 2021, New South Wales (approximately 11,000 refinances) and Queensland (approximately 5,000) both recorded two-year record highs for volumes of refinances settled within a month.
PEXA’s Senior Research Manager, Mike Gill, said: “We witnessed a significant spike in refinances in June 2020 following the Reserve Bank of Australia’s rare double rate cut in March of that year. We have seen elevated levels of refinancing activity since then across all eastern states. “The recent records set in June 2021 within New South Wales and Queensland coincide with public commentary of a potential interest rate rise sooner than previously forecast by the Reserve Bank. These numbers suggest consumers may be wanting to lock in the best deal possible before any upward movement”. PEXA’s latest report also analyses the monthly net positions of financial institutions when it comes to refinances. Prior to the onset of COVID-19 restrictions in March 2020, non-major banks held a dominant position for refinances across all eastern states.
This trendline changed during the national lockdown, with major banks moving into the stronger position, however, latest analysis suggests that non-major financial institutions are beginning to reclaim market share. The major banks lost their winning position for refinances in the December 2020 quarter across all eastern states. Throughout the calendar year 2021, major banks were level with non-major banks in New South Wales and Victoria, while in Queensland the non-major banks have moved ahead. With almost half the country experiencing a level of lockdown at the time of issuing its latest report, the PEXA Insights team will continue to closely monitor the property market and the effects of snap COVID-19 lockdowns.
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Disrupting the cycle of homelessness By Jarrod McAleese
The Big Issue’s Community Street Soccer Program is held weekly to provide marginalised individuals with the opportunity to play football in a safe, supportive environment.
During the two-hour sessions, players take part in training and a friendly match, facilitated by a dedicated team. The premise of the initiative, as described by North Melbourne head coach Danilo Guerrero Diaz, is simple. “It’s about uniting people who are experiencing homelessness or marginalisation by using the language of football – the world game. It’s an opportunity for them to come to us, switch off from their daily life, and leave feeling happier than when they arrived,” said Diaz. Having been involved with The Big Issue for more than six years, Danilo has seen a number of people come and go. And throughout his stint, he’s observed first-hand that it takes time for the program to accomplish its overarching goal – helping people. “The outcomes that we’re trying to achieve, the change that we’re hoping to drive, it’s hard to see in the short term. On the day, everyone’s having
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fun and laughing, and you see results immediately – the smiles, energy and camaraderie. “But those stories of transformation, they take time. I knew one participant for four years. When he first joined, he was homeless, and his social life was non-existent. Now he’s got a stable home, a full-time job, and he’s coming down to visit me every Wednesday he’s got off work because he’s doing so well. “These guys can come from any walk of life, but if you commit to them and give them a chance, they can succeed,” said Diaz. The true reality of homelessness Homelessness is undoubtedly a crisis in Australia – every night, more than 116,000 people nationwide are without a place to call home. In addition, our lack of social housing is well documented, with underinvestment over the past two decades leaving Australia well short of the average provision of social housing recommended by the Organisation for Economic Co-operation Development (OECD).
sleeping in different places every night and they don’t know where they’re going to end up in the evening… it’s unstable. “When you’ve got a home, it’s a massive step forward. Having that ability to say ‘I’m going home tonight. I know where my soccer boots are. I know where my soccer gear is, and I’ve got a place to leave them at the end. It’s my house, that’s my home’ … that makes a huge difference. “You’re able to open your eyes and think about what you want to do next week, next month, in a year’s time… it gives you a base to build from,” said Diaz. What needs to happen Given the vastness of this issue, there’s no single solution or quick fix that will instigate the change needed in society. But it’s clear that permanent, sustainable housing is the real game-changer for those experiencing hardship. “We’ve had people visit us from overseas who have shared many different ideas and potential solutions. You place people in a home, and everything else falls in place.
In 1991 social housing stock stood at 7.1 per cent of total housing in Australia, “I’m a humble football coach. That’s and by 2018 this had fallen to 4.2 per what I do. Are things that simple? Of cent. This is 2.9 per cent below the course not. But I know that stable latest available OECD average. housing is 100% the answer to the problem,” said Diaz. Diaz has witnessed just how debilitating homelessness can be – and the importance of stable housing when it comes to generating true progress. “It’s a terrible situation. It’s like free-falling – everything’s moving, everything’s changing. People are
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PROPERTY INNOVATIVE AWARDS 2021
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PropertyX Awards 2021 preview PEXA’s annual PropertyX Innovate Awards, which celebrate influential businesses across the sector, including legal practitioners, panel law firms, developers, financial institutions and industry partners, is officially welcoming nominations.
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Now in its fourth year, the program acknowledges organisations spearheading the continued transformation of the way property is bought and sold in Australia. A panel of judges with vast expertise and experience across numerous sectors has been assembled for 2021, including: • Kylie Davis, Founder & President, Proptech Association Australia • Karen Finch, CEO of Legally Yours, Vice President of the Australian Legal Tech Association • Ayala Domani, General Manager, Future Business, AGL • Ben Ross, Co-Founder, Propel Ventures • Geoff Rohrsheim, Co-Founder, Hatch Creations • James Foster, Chief Executive Officer, Ezypay • Tom Dreyfus, Co-Founder & Chief Executive Officer, Josef As industry members from across the country begin to prepare their submissions, we caught up with Kristan Conlon, Partner, McCullough Robertson Lawyers – one of 2020’s award winners. The national law firm was recognised for its exceptional adaptability amidst the COVID-19 pandemic, innovating its operations while displaying outstanding commitment to its customers and community. Conlon explains that there was a key pillar that underpinned this successful transition.
“Effective communication was really critical for us – both internally within our teams and externally with our clients. Technology helps enable us, particularly in the current climate, but there still needs to be that drive to ‘pick up the phone’, check in and ensure you’re aligned. “Regardless of your working environment, establishing that connection with those around you is key – that’s where your trust is built and all your best outcomes stem from that,” said Conlon. Property in Australia is experiencing significant change – with COVID-19 accelerating widespread digitisation throughout the country. And Conlon feels that now more than ever, the onus is on practitioners to keep up. “I think the pandemic is going to continue to challenge how we operate as lawyers – the pace of our work is going to increase exponentially. “Each step in the process for property is speeding up drastically – and it’s really up to us within our profession to continue to innovate and move with the environment around us,” said Conlon. Nominations for this year’s PropertyX Innovate Awards close at 11.59pm AEST on Monday 30 August 2021.
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PROPERTY INNOVATIVE AWARDS 2021
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The PropertyX Innovate Awards are back to celebrate innovation across the PEXA network and acknowledge game changers and pioneers within the industry. Tell us how your business has innovated, invented, transformed, created or adapted in the last 12 months and you could be recognised at the fourth annual PropertyX Innovate Awards ceremony. The PropertyX Innovate Awards celebrate businesses in six different categories for practitioners, panel law firms, developers, financial institutions and industry partners. Entries close Monday 30 August 2021.
SUBMIT YOUR NOMINATION TODAY
