By Simon Pressley, Propertyology Head of Research
Recent analysis of official data by Propertyology confirms that growth cycles have either just begun or are fast approaching in large parts of Australia. Here’s the proof.
“I got in to the office this morning and there were 16 email enquiries for that property sitting in my inbox; I only listed it on the internet yesterday afternoon. Some of those people phoned me before I’d had my morning coffee and we already have 3 offers to buy this property”. This is a (paraphrased) transcript of a real conversation that Propertyology Head of Property Acquisitions, Bryan Loughnan, had with a real estate agent this week.
This time last year the property market of the location in question was dead flat but, our buyer’s agents have firsthand knowledge of 10 per cent growth over the last 6 months. We are working very hard under extremely tight conditions to get as many investors as we can in to this particular market during this early stage of its growth cycle.
But don’t expect to read about this exciting location (and others like it) on your device. The keyboard warriors – most who have an extremely insular view of property markets that doesn’t extend past Sydney and Melbourne – appear to have words like ‘downturn’ and ‘softening’ locked on repeat.
We all know that Sydney commenced its growth cycle in late-2012, Melbourne in 2013, Hobart and Canberra’s cycle started in 2015. People forget that most of the rest of Australia has sat in neutral for several years. The winds are changing and here’s bucket loads of proof!
One of the dozens of metrics that Propertyology analyses is the average time that it takes for properties to sell (days-on-market). One number for a month in isolation is of some use however, the trend across a number of months tells us whether a market is softening (like Sydney and Melbourne), tightening, or already producing price growth.
Reviewing trends of property markets of Australia’s 550 city councils (411 of which are outside of our 8 capital cities) makes an absolute mockery of the gross generalisations made by the likes of economists, banks, and the mainstream media.
New South Wales
It’s a different story outside of the state’s capital city than within Sydney itself.
Coastal regional markets such as Lismore and Coffs Harbour continue to tighten although Port Macquarie and Byron are easing.
As the below chart shows, properties are selling much quicker now than 2 years ago in several NSW inland locations. Good economic conditions and affordable housing have created strong buyer confidence which has already translated to price growth in Bathurst (4 per cent growth), Dubbo (2 per cent), Maitland (6 per cent), and Muswellbrook (7 per cent).
This is consistent with the positive economic trend which Propertyology flagged some time ago.
One of the strongest markets in Australia right now is Orange. Days-on-market have declined from 81 to 51 over the last 2 years and the median house price has already increased by 11 per cent over the last 12 months. What downturn?
As for Sydney, generally speaking, it’s taking longer for properties to sell in most of the city. Auction clearance rates have also progressively reduced from the high-70s at the start of 2017 to roughly 50 per cent in June 2018.
The average time that it currently takes to sell a house in Greater-Brisbane (which includes Ipswich, Logan, Moreton Bay, Redland, and Brisbane CC) is similar now to 2 years ago.
Gold Coast (from 52 days 2 years ago to 38 days now), Sunshine Coast (50 days down to 40 days), and Cairns (67 to 55) have tightened while Toowoomba has softened slightly.
Queensland’s biggest improver is Mackay. 2 years ago it took 80 days to sell a house and that’s now down to 50 days. We’ve been saying for some time that the mining sector has rebounded quite strongly.
While the Sunshine State still desperately lacks confidence, in the main we see ‘upside’ right across the state!
Tasmania, Northern Territory & ACT
Canberra’s current average selling time of 42 days is significantly lower than 2 years ago although it has hovered at current levels for the past 12 months. We feel that Canberra is now right at the back end of its growth cycle.
Houses are turning over a bit quicker now in Darwin however, a recovery seems quite some time away. The property market in Alice Springs, where the median house price is similar to Perth and Adelaide, has significantly tightened and already produced 2.3 per cent price growth over the last 12 months.
Each of the 7 municipalities that make up Greater-Hobart continue to tighten (5 of them are now selling in less than 20 days), meaning that price growth still has quite some way to go before Hobart’s cycle ends. Tassie is full of positives!
Buyer activity within Greater-Perth is quite patchy. Most metrics are trending in a positive direction although there’s still an awful lot of stock. While the market in the west is currently flat, that’s an improvement on the price declines from the last few years. Glass-half-full.
The Western Australian economy definitely appears to have stabilised and we are seeing it translate through to property metrics. The locations featured in the chart below represent a good cross section of the state. 8 out of 8 locations have shown significant improvement in days-on-market. Doom and gloom?
Port Hedland is the biggest improver, a clear sign that the state’s most important industry sector, mining, is well and truly on the rebound.
Generally speaking, South Australia has performed much like Queensland over the last decade – underwhelming. Like Brisbane, we continue to wait for Adelaide’s growth cycle to kick in to gear. But mild growth is better than negative growth – no downturn here!
The average time to sell a house has reduced over the last 2 years in most municipalities, further evidence that property markets across South Australia are tightening, not softening as those keyboard warriors would suggest.
Within Greater-Melbourne, the average time to sell a house is mostly lower than 2 years earlier. Closer analysis shows that a reversal of this trend commenced in April 2018.
As with most other states, several locations away from the capital city completely defy the one-brush-fits-all media negativity and have significantly tightened.
Propertyology has been saying for a few years that investors would be wise to explore the fundamentals of property markets across regional Australia.
A typical house in Ballarat is now selling in half the time that it took 2.5 years ago. House prices in Ballarat increased by 7 per cent over the last 12 months – the only Australian capital city to surpass that is Hobart. Who said regional markets never grow?
Victoria’s Bass Coast, which includes towns such as Wonthaggi, have seen house prices increase by 11 per cent to $435,000 over the last 12 months. The long list of locations that have produced recent double-digit growth will surprise most people.
Geelong has performed well for 3 years now. That market remains tight!
The average number of days to sell a house in Australia’s unofficial fruit bowl, Shepparton, has reduced enormously from 135 days to 65 days over the last 2 years. South Gippsland, Warrnambool and Mildura (one of Australia’s most diverse agriculture precincts) have also tightened significantly.
The locations listed in this report is by no means a full list of all markets in Australia. It does however, provide a balanced summary of the performance of a wide range of markets in each state and territory.
It’s time for the keyboard warriors to start playing a different tune. Blind Freddy can see that the direction which property markets are heading in large portions of Australia is indeed towards positive territory.
Propertyology is a Brisbane-based buyers agency and (national) property market research firm. We help everyday people to invest in strategically-chosen locations all over Australia. Australia’s only analysts to forecast Hobart’s remarkable recovery before the current boom, our buyer’s agents are actively investing in a few locations that resemble what Hobart looked like in 2014. Like to know more? Contact us here.
By Simon Pressley, Propertyology Head of Research