Australian Property Market Soars to a Ground-Breaking New High

Australian Property Market Soars to a Ground-Breaking New High

Australia’s property marketing and housing prices haven’t just recovered. They’ve blown any previous records out of the water, and this booming market doesn’t show any signs of stopping! With property prices rising fast, a new GDP record for Australia to date and exciting upcoming news for new investors, we’re confident to say that the property market has made an outstanding comeback from its lowest point two years ago. Read below to find out more about the latest updates from these past several months.

Property Prices Rise Fast Throughout Australia

Remember the property boom in 2003? Well, that was the last time property prices were rising this fast. According to CoreLogic, they revealed home values are now sitting at an all-time high record. Across Australia, the median property price jumped 2.1% this February, which was the most considerable month-on-month change since 2003. Additionally, in early March, CoreLogic saw a rising 5.7% since October last year amid a price growth trajectory that cared little for the economic recession and the lockdown crisis. While the onset of COVID-19 was an undeniable circuit breaker, its impact was thankfully short-lived.

According to CoreLogic’s head of Residential Research, Eliza Owen, she stated that:

It’s not just Sydney that has seen a significant increase in property prices. Owen’s statement rings true across all of Australia’s major capital cities. As seen in the following chart below, prices rose in every major capital city and every rest-of-state region- a phenomenon that hasn’t happened since 2010.

With these vital statistics in mind, Rateseeker is advising all future homeowners to a home loan pre-approval in place as soon as possible in a rising property market.

Even as housing prices hit new highs, the demands for home loans continue to grow at Home loans continue to boom at an alarming pace, driven by the surprising and enthusiastic demand from first-time buyers for 2021. In early January, Australians took out a record amount of mortgages, according to the Australian Beauau of Statistics’ most recent data. From their research, they discovered the following:

• Home loan commitments hit $28.8 billion – a staggering 44.3% increase from the year prior.
• Owner-occupier loans reached $22.1 billion (up to 52.3%)
• Investment loans reached $6.6 billion (up to 22.7%)

The following statistics proved that Home loan demand was driven by record-low interest rates, rising property prices and government incentives.

Australia Sets Economic Growth On Record

If you’re looking for concrete evidence that Australia has well and truly bounced back from the COVID-19 recession, then look no further than the following chart and statistics below.

As per the graph, the Australian economy increases exponentially to 3.4% in the September 2020 quarter. According to the latest Australian Bureau of Statistics data, there was a slight decrease of 3.1% in the December quarter. This is the first time in recorded Australian history that GDP has grown faster than 3% in successive quarters. Nevertheless, the Australian economy still went backwards in 2020 to 1.1%, due to the negative March and June quarters (lockdown period).

This month, the governor of the Reserve Bank, Philip Lowe, stated that the following back-to-back increases in GDP had exceeded trend forecasts.

“They reflect the success that Australia has had on the health front, the very large fiscal and monetary policy support, and the flexibility of Australians in getting on with their lives and businesses,” he said.

“As a result, we are now within striking distance of recovering the pre-pandemic level of output.”

Most Capital Cities Are Now Landlords’ Markets

Since the transition into 2021, many property investors are discovering that they are now in a firm position to move up the ranks in the property market, with five of Australia’s capital city rental markets tilted heavily in favour of landlords.

According to SQM Research, the city of Hobart is leading the way with an astounding vacancy rate of just 0.6%. This means only 0.6 out of every 100 rental properties are vacant, meaning that it’s tough for tenants to find a new property, pushing pressure on rental prices upwards. Current statistics show that Adelaide runs second with a vacancy of 0.7%, followed by Canberra sitting at 0.8% and Perth sitting at 0.9% as leading landlords’ markets.

Conversely, Sydney (3.3%) and Melbourne (4.5%) are very much tenants’ markets with rental prices seeing their steepest drop in more than 15 years, giving new tenants the chance to negotiate almost hundreds of dollars off asking prices. The median asking rent for apartments in Greater Sydney units is currently back when they were in 2013, falling $25, over the December quarter to $470 a week. Meanwhile, the median asking price for Melbourne units dropped by $12 to $388 per week.

In Brisbane, however, the balance of tenants’ markets and landlords’ markets are evenly split at 1.5%

Nevertheless, rents are on the rise in many other parts of Australia, along with property prices, which means landlords are enjoying a double win!

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