Week Ending 27 October ’23
Property Weekly Pulse with Rasti Vaibhav
Each week Rasti monitors the various news outlets to get a feel for the stories that influence how the property market is tracking.
Australia’s housing market is buzzing as 2023 draws to a close. With rising confidence and intriguing price patterns, this week’s update reveals pivotal shifts and opportunities in the property landscape. Dive in for the latest scoop on Australian properties up to 27 October ’23 and arm yourself with essential insights.
A Surge of Confidence
- Rising confidence levels among property professionals.
- Predicted 8% growth in capital city dwelling values by year’s end.
Confidence is back in Australia’s housing landscape. The recent NAB Residential Property survey indicates a refreshed sense of optimism regarding the future of housing. The market seems ripe for an uptick, with property professionals exuding the highest confidence in two years. However, the ever-climbing building costs remain a constraint for some in the construction sector.
The data is clear: NAB economists are revising their growth expectations upwards. Over the past quarter, property prices have surpassed anticipations. By the end of this year, the forecast is bright: an approximate 8% rise in capital city dwelling values. As we venture into the new year, an additional 5% spike is anticipated in 2024, mainly driven by the balance of housing demand over supply, even as we adjust for increasing rates. An essential financial update looms, with the RBA expected to hike rates to 4.35% this November.
Building Cost Dynamics
- 20% surge in home-building costs until September 2022.
- Recent figures show the slowest growth in construction costs in four years.
One of the mainstays of the property market, construction, has seen its challenges. Australians have witnessed a 20% price escalation in home-building just this past year, thanks to Covid’s ripple effects on trades and materials. Yet, there’s light at the end of the tunnel. The Cordell Construction Cost Index (CCCI) reveals a silver lining: the growth rate of construction costs is decelerating. In fact, the September quarter witnessed merely a 0.5% increment, the minutest since mid-2019. This marks the fourth consecutive quarterly slowdown in residential construction costs.
Delving deeper into the data, John Bennett, the Construction Cost Estimation Manager, shares that the cost paradigm is shifting. While material costs seem stable, labor costs face newer challenges.
The Tug-of-War: Fewer Listings, More Prices
- 12.3% dip in new property listings in September.
- Buyer demand and prices surge.
It’s a paradoxical scenario. While buyer enthusiasm and prices soar, new property listings are on a decline. According to Domain, many areas are witnessing robust price growth due to this imbalance. Ray White’s chief economist, Nerida Conisbee, provides some insights. Though new listings saw a tiny uptick between June and August, there’s been a subsequent drop.
Upcoming Price Boom in Numerous Suburbs
- So far, a 4.3% increase in property prices this year.
- Almost 500 suburbs saw double-digit price growth.
There’s a wave on the horizon. PropTrack data spells out that hundreds of suburbs are set for a property price surge. Factors like subdued listings combined with greater demand – all bolstered by high migration rates – are propelling prices upwards. Interestingly, regions that are still within affordable brackets are seeing the most traction. Take, for instance, Riverview, Queensland; it reported a stellar 24% median value rise this year, yet its median house price is a modest $446,000.
Swifter Property Sales on the Horizon
- Six-day drop in the average days a property stays on the market compared to January 2023.
Properties are being snapped up quicker than just a year ago. CoreLogic’s recent figures reveal this trend. Eliza Owen, CoreLogic’s Head of Research, opines that the market is in a rejuvenation phase, bringing back the urgency factor. As 2023 wraps up, stability is expected in market conditions. However, some cities like Perth and Brisbane are ahead of the curve, reporting even shorter sale times.
Rasti Vaibhav, author of The Property Wealth Blueprint, weighs in:
This latest intel on Australia’s property landscape is not just numbers and data; it’s about understanding the market’s pulse, gauging opportunities, and making informed decisions. Let’s chat if you’re eager to discuss how property investing aligns with your circumstances or want a deeper dive into this space. Book a one-on-one conversation here (https://getrare.com.au/ready) or attend one of our educational workshops here (https://getrare.com.au/workshop). Let’s navigate this journey together.