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The Sydney market remained flat in October, with subdued results also reported around the rest of the country (both regional and combined capital cities). However, the past 12 months have seen the combined capital city all dwelling values still increase by 7% and regional areas increase by 4.9%. As we have mentioned previously, the slowing market is due to the tougher legislation introduced by APRA in tightening lending policies for investors.
Let’s take a look at how each capital city performed in October.
Sydney:
Capital Growth (all dwellings): - 0.5% ⬇︎
Median Dwelling Price (all dwellings): $905,917 ⬇︎
Gross Rental Yield, Houses: 2.8% -
Gross Rental Yield, Units: 3.6% -
New South Wales Un-employment Rate (September): 4.6% ⬇︎
Property Cycle, Houses: Starting to Decline
Sydney, after it’s bumper run of capital growth, looks to now have finally cooled and in some areas, minor declines have been recorded. As a combined market, we predict growth to continue to slow and plateau. There are markets within markets, which due to other factors such as infrastructure, employment and demand will see some areas continue to climb. Rental yields remain unchanged from September, however, as the price of property stagnates, we will see the yields climb to reflect this which is great for investors currently in the market.
Melbourne:
Capital Growth (all dwellings): 0.5% ⬆︎
Median Dwelling Price (all dwellings): $710,420 ⬆︎
Gross Rental Yield, Houses: 2.6% -
Gross Rental Yield, Units: 3.9% -
Victorian Unemployment Rate (September): 6.0% ⬇︎
Property Cycle, Houses: Approaching Peak of Market
Although growth in Melbourne has also slowed, it continues to be a buoyant market and more resilient than it’s northern neighbour, Sydney. There are a number of factors such as record high migration, strong jobs growth and (somewhat) more affordable housing than Sydney which is keeping this market in steady growth. Auction clearance rates also remain above 70%.
Brisbane:
Capital Growth (all dwellings): 0.2% ⬆︎
Median Dwelling Price (all dwellings): $490,525 ⬆︎
Gross Rental Yield, Houses: 4.2% -
Gross Rental Yield, Units: 5.2% -
Queensland Unemployment Rate (September): 5.9% ⬆︎
Property Cycle, Houses: Start of Recovery
Brisbane, continues its slow and steady run, with a small all dwellings increase of 0.2% in October and a yearly increase of 3.5% for houses. The major price discrepancy between Sydney and Brisbane property prices has seen interstate migration to QLD from NSW triple in the past three years. If it continues, mid-2018 will see Queensland’s population exceed five million for the first time. Definitely a positive for house price growth.
Adelaide:
Capital Growth (all dwellings): 0.0% -
Median Dwelling Price (all dwellings): $430,303 ⬆︎
Gross Rental Yield, Houses: 4.1% -
Gross Rental Yield, Units: 5.0% -
South Australian Unemployment Rate (September): 5.8% -
Property Cycle, Houses: Rising Market
Adelaide, much like Brisbane, is a slow and steady market with equal supply and demand levels (the same number of properties for sale vs. the number of people looking to purchase a property). Whilst we much prefer to see this skewed to a high demand market, we are still seeing small growth annually of 5% for houses. Government funding and infrastructure are up in South Australia, so positive signs for the future.
Canberra:
Capital Growth (all dwellings): - 0.1% ⬇︎
Median Dwelling Price (all dwellings): $582,882 ⬆︎
Gross Rental Yield, Houses: 4.1% -
Gross Rental Yield, Units: 5.3% -
Australian Capital Territory Unemployment Rate (September): 4.4% ⬇︎
Property Cycle, Houses: Rising Market
Although Canberra has taken a small dip in growth this month, our key indicators continue to point to a very robust market. Property research house SQM have also predicted growth of 9% for houses, with all major property economists giving this hot spot the thumbs up for property growth in 2018. In other exciting news, Canberra was recently voted by Lonely Planet as the third hottest global destination to visit in 2018!
Hobart:
Capital Growth (all dwellings): 0.9% ⬆︎
Median Dwelling Price (all dwellings): $396,393 ⬆︎
Gross Rental Yield, Houses: 5.0% ⬇︎
Gross Rental Yield, Units: 5.1% ⬇︎
Tasmanian Unemployment Rate (September): 5.7% ⬇︎
Property Cycle, Houses: Rising Market
Hobart continues it’s bullish run and is again the best performing capital city over the past three months, with all dwellings capital growth of 3.3%. Hobart still holds the mantle for the lowest median dwelling value across all capital cities, combine that with strong yields and it’s definitely an exciting market. We continue to see mainland investors from Sydney and Melbourne using their property windfalls to purchase in the apple isle pushing prices up.
Perth:
Capital Growth (all dwellings): 0.0% -
Median Dwelling Price (all dwellings): $462,624 ⬇︎
Gross Rental Yield, Houses: 3.8% -
Gross Rental Yield, Units: 4.3% -
Western Australian Unemployment Rate (September): 5.7% ⬇︎
Property Cycle, Houses: Approach Bottom of Market
The Perth downturn continues to slow, with no movement in all dwellings capital growth. A positive for this market is the rate of annual losses is continuing to slow. It’s still a market we only recommend for the investor with an appetite for risk. However, one that we watch with excitement as the declines continue to stabilise.
Darwin:
Capital Growth (all dwellings): -1.6% ⬇︎
Median Dwelling Price (all dwellings): $437,910 ⬇︎
Gross Rental Yield, Houses: 5.8% ⬆︎
Gross Rental Yield, Units: 5.8% ⬆︎
Northern Territory Unemployment Rate (September): 4.1% ⬆︎
Property Cycle, Houses: Bottom of Market
Darwin continues its downward trend and although we believe the cycle is reaching the bottom of the market our key indicators still don’t point to any positive signs of improvement. Rental yields are the highest in Australia at 5.8% for houses (and units), which is due to property prices dropping faster than rents.
Combined Capitals:
Capital Growth (all dwellings): 0.0% -
Median Dwelling Price (all dwellings): $650,930 ⬆︎
Gross Rental Yield, Houses: 3.5% ⬆︎
Gross Rental Yield, Units: 4.1% ⬆︎
Australian Unemployment Rate (September): 5.5% ⬇︎
When presenting states, regions, and properties we provide our clients with the most relevant and latest data so they can make an informed purchasing decision.
Milk Chocolate was founded seven years ago by Richie Ragel and Michael Cleary, to purchase residential and commercial property in Australia on behalf of our clients, looking for a home or investment property. To see how we can help you get in touch here.
Thanks, Michael
Source: CoreLogic / Australian Bureau of Statistics / Herron Todd White
*Unemployment rates with the exception of the Northern Territory and Australian Capital Territory are seasonally adjusted estimates.
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