Property Weekly Pulse with Rasti:
Week Ending 3 May ’24
Welcome to the latest insights from the Australian property market! This week, we delve into the trends and transformations shaping the landscape from Queensland’s booming home loan sector to the bustling auction floors across capital cities. Whether you’re a first-time buyer or a seasoned investor, our roundup provides essential data and expert commentary that will help you make informed decisions in this dynamic market. Join us as we explore key opportunities and challenges in real estate investment today.
Home Financing Hotspots in Queensland Lead the Charge
Queensland has emerged as the front-runner in home financing, with the Commonwealth Bank of Australia’s recent economic analysis highlighting a 21.1% increase in home loan values compared to the long-term average. This growth not only showcases Queensland’s robust market but also positions it ahead of other states in terms of owner-occupier loans in the last quarter. The spotlight on Queensland includes:
● Strong growth: Home loan values soaring above the decade average.
● Leading the states: Outperforming other regions in owner-occupied lending.
Western Australia and South Australia follow closely, showing significant increases of 17.5% and 14.2%, respectively, above their decade averages. Despite a general uptrend, the Northern Territory saw a decrease, down by 15% from the decade average, indicating varied regional dynamics.
Auction Market Defies Seasonal Cooling
As we move into cooler weather, the auction market remains unexpectedly warm, with clearance rates steadfastly above 70%. Last weekend’s preliminary figures from CoreLogic showed a 72.9% clearance rate, with nearly 1,950 properties up for auction across capital cities, marking a rise from last year. Noteworthy points include:
● Sydney’s lead: Achieving the highest clearance rate at 78.3%.
● Strong performance in Adelaide and Brisbane: Notably high clearance rates of 76.4% and 71.7%.
This trend underscores the ongoing vitality of Australia’s auction markets, particularly in Sydney’s inner west and Melbourne’s outer east, where clearance rates soared to 92.6% and 83.3%, respectively.
Discovering Value in Proximity: Sydney’s Affordable Suburbs
The latest from PropTrack reveals intriguing data on affordability within mere kilometres of major city CBDs. Their Affordability Hotspots Report identifies areas where a significant portion of homes remains within financial reach for average earners:
● Sydney’s affordable gems: Parramatta, Canterbury, Mount Druitt, and Liverpool.
● Melton shines in Victoria: Offering affordability with convenient city access.
● Affordable options in Queensland and Adelaide: Highlighting Rocklea and Port Adelaide.
This focus on proximity and affordability is crucial for prospective buyers aiming to balance lifestyle with budget.
Urgent Call for Tax Reforms in Home Building
The Housing Industry Association (HIA) has voiced a potent argument for slashing taxes on home construction to address Australia’s housing crunch. Tim Reardon, HIA’s Chief Economist, stresses the importance of governmental action to mitigate the stifling effects of prolonged high interest rates and excessive taxation, which can constitute up to 50% of new home costs. Reardon’s critique extends to recent legislative proposals, emphasizing that genuine reform should encourage investment in new housing, not restrict it.
First Home Buyers: A New Route via Superannuation
Starting September 15, the First Home Super Saver Scheme offers a novel path for first- home buyers to gather a deposit through their superannuation funds. This initiative allows participants to make voluntary contributions, which are taxed less than regular income, thereby accelerating savings for a home deposit. Highlights include:
● Tax-efficient saving: Leveraging superannuation for pre-tax contributions.
● Flexibility: Funds can be used for both new and existing homes across Australia.
● Contribution caps: Up to $15,000 per financial year can be withdrawn.
This scheme represents a significant support structure for first-home buyers navigating thecomplex terrain of home ownership.
Rasti Vaibhav, The Architect of Property Wealth,
