Rateseeker February 2023 Property News Round-up
While we enter the second month of 2023, there have been a number of recent developments within the residential property sector.
In the midst of the national rental crisis, the market has taken a turn to favour investors as vacancies fall over 30% in over the last year. This drop in available dwellings has caused a huge surge in rental prices, to the detriment of potential rental applicants.
Home building approvals are also on the slow down as construction costs increase, with a reduction of nearly 17% compared to the previous year. Although numbers of approvals have been up and down, the trend has shown there is a clear overall decrease.
Although housing prices have fallen slightly in recent times, property prices are still higher in most parts of the country than pre-pandemic prices, meaning that deposit requirements are higher. Buyers are now having to dig much deeper to put down a 20% deposit.
Data has also revealed that depending on the city, the recent property price downturn starting in May 2022 has shown signs of slowing. With the nation’s average property price dropping only 1.0% in January 2023, it has been the smallest month on month drop since prices started to fall.
Missed the latest property news? Don’t miss out, here are the biggest stories below.
Rental vacancies plummet by over 34.2%
The rental market has taken a favourable turn towards property investors, with the number of vacant rental properties falling drastically by one-third over the last 12 months.
Between January of 2022 and 2023, the number of rental vacancies across Australia fell dramatic 34.2% from 47,977 to 31,592, according to SQM Research.
Simultaneously , the vacancy rate – a term that measures the share of untenanted rental properties – took a dive from an already extremely low 1.6% to just 1.0%.
Vacancy rates vary from city to city, but they are considerably low all over the country, ranging from 0.4% in Perth to 1.6% in Canberra.
Looking to take advantage of the current investor-favoured market? Get in touch with our team of expert brokers to discuss how we can help with an investment loan.
Home building approvals take a hit as construction costs increase
Recent data from the Australian Bureau of Statistics reveals that new residential construction approved over the last year has been steadily declining.
Building approvals dropped by over 16.7% with 188,765 approvals issued in 2022 compared to 226,629 from the previous year. Despite approval numbers fluctuating over the last year– higher in some months, lower in others – it’s clear that approvals were on a downward trend.
Experts such as Tim Reardon, Housing Industry Association Chief Economist believe that the expected consequences of the HomeBuilder grant contributed to the majority of the decline in 2021. As construction costs increased, consumers were also faced with a change in needs and preferences due to the erosion of the pandemic-driven desire for space.
Although builders are still working through a significant load of work in their pipelines, the decrease in building approval numbers likely won’t affect building activity until later this year.
If you’re looking to renovate or rebuild your current home and need a construction loan, get in touch with our team of loan experts and we can help you find out how much you can borrow.
Overcoming the rising deposit barrier in 2023
Although there’s been a recent slump in property prices lately, prices are still higher in most areas of Australia than prior to the pandemic, meaning that deposit requirements are higher.
Recent data from Domain compared property prices in the December quarters of 2019 and 2022, revealing that buyers had to fork out tens of thousands of dollars more today in order to purchase a property with a 20% deposit.
Check out the increase in 20% house deposits for our four biggest cities below:
– Sydney $55,709 increase between 2019 and 2022
– Melbourne $25,995
– Brisbane $43,560
– Perth $25,697
While the deposit barrier is still quite high, it’s not insurmountable.
Looking to purchase your next property soon? Get in touch with us at Rateseeker, we can help ease the stress when entering the market and provide expert guidance on how you can make your home loan work best for you
National price falls slowing down, depending on the city
Data has revealed emerging evidence that the housing market downturn, which began in May last year and swept the nation, is slowing down.
According to data from CoreLogic Australia has, the nation’s median property price fell 1.0% in January – the smallest month-on-month decline since June 2022.
On the other hand, while the national median price dropped 4.1% in the October quarter, it fell only 3.2% in the January quarter.
Here’s how much prices fell in each capital city in both the three months to January and the three months to October:
Nonetheless, while prices are still falling, they’re doing so at a decreasing rate.
Looking to enter the property market to build wealth and start your homeowner journey? Get in touch with our expert brokers who can help guide you through the process and secure the sharpest loan in town.
Are rising interest rates wrecking havoc on your home loan repayments?Refinancing may be a suitable option if it has been some time since you’ve reviewed your loan.
We’re experts at finding the right home loan for every individual’s circumstances. Get in touch and speak to one of our experienced mortgage specialists for personalised help, guidance and the sharpest rates for your home loan.
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