Property Weekly Pulse with Rasti:
Week Ending 26 Apr ’24
Boost in Property Sector Confidence
The latest Procore/Property Council Survey unveils a significant rise in confidence within the Australian property industry. Matthew Kandelaars of the Property Council of Australia highlights the impact of stable interest rates and improved finance accessibility on the market’s stability. Despite obstacles like inefficient state planning systems, Kandelaars emphasises the need for collaborative efforts across government levels to meet housing targets and enhance sector investment. Key findings from the survey include:
● There is an upward trend in house price growth expectations, the highest since December 2021.
● Concerns about housing supply and affordability were expressed, with over 40% of participants identifying it as a critical issue for both federal and state governments.
Dramatic Price Increases in Select Regions
Property prices have seen unprecedented growth over the past four years, significantly outpacing the previous period. Anne Flaherty from PropTrack identifies a “once-in-a- generation” market boom, driven by low borrowing costs and lifestyle changes during the pandemic. Highlighted regions with substantial price increases include:
● Elizabeth North: Up 151%
● Davoren Park: Up 142%
● Smithfield Plains: Up 132%
● Other notable areas like Camillo and Armadale in Western Australia, and Mount Coolum and Hope Island in Queensland.
Top Picks for First-Time Property Investors
The Active Property Investors Report from Commonwealth Bank sheds light on preferences among new investors, showing a gravitation towards capital cities. The report highlights:
● Sydney CBD and surrounding areas like Haymarket as top locations.
● Consistent popularity of certain postcodes in Melbourne and Sydney’s North West.
● An average investor profile: 43 years old with loans averaging slightly over $500,000.
Stabilising Construction Costs
According to the CoreLogic’s Cordell Construction Cost Index, construction costs are showing signs of normalisation:
● Only a 0.8% increase in Q1 2024, with a year-on-year growth of 2.8% in 2023.
● Kaytlin Ezzy from CoreLogic predicts subdued cost growth ahead, benefiting from lower-than-average dwelling approvals.
Global Perspective: Australia’s Strong Performance
Australia stands among the top four globally for house price growth over the past five years, as reported by the International Monetary Fund. The Australian Financial Review anticipates further price increases:
● Expected national growth of approximately 5% in 2024.
● Particularly strong growth anticipated in Perth, with a potential 16% rise.
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