Hotspotting
Household wealth in Australia keeps rising and the key reason for that is residential property – which accounts for 68 per cent of the total wealth of Australian households. New data from the Australian Bureau of Statistics (ABS) shows that total household wealth has reached $16.5 trillion. Now, that number doesn’t mean much to the average observer, so here are some other numbers that give it some context. That household wealth figure represented a 1.5 per cent rise in the June quarter and the current level of the highest on record. It’s 9.3 per cent higher than a year ago, and it means...
info_outline ANZ's Late Price GuessHotspotting
ANZ, the worst forecaster on property price outcomes in the nation, has just published its forecasts for what will happen with house prices in 2024. Yes, that’s right. They’ve published, in October, forecasts for house prices this year, a couple of months before the end of the year. Why have they done this? Because it’s the only chance ANZ has of getting it right with its property price forecasts. Essentially what it has done with these “predictions” is take the existing situation and extrapolate it two months into the future. So, you will be amazed to learn that they’re...
info_outline Unit Surge UnstoppableHotspotting
The biggest paradigm-changing trend in Australian real estate, the rise and rise of apartments, is confirmed by the latest price data from the usual suspects – and is reflected in our choices for the latest edition of our most popular report, the National Top 10 Best Buys report. The latest price data from CoreLogic shows that unit prices are rising faster than house prices. While news media, in its predictable fashion, focussed on the perceived negatives in the CoreLogic Home Value Index published in October, my analysis of the figures is that they provide further evidence that rising...
info_outline Mastering Property Management in Today's Market with Corinne Bohan of Image PropertyHotspotting
Join us for an insightful and essential webinar hosted by Terry Ryder, Founder of Hotspotting, and Corinne Bohan, Managing Director of Image Property, as they dive into the crucial role of professional property management in today’s rapidly changing rental landscape. In this engaging session, you'll discover: Building Your Winning Team: Learn why investors must focus on assembling a strong management team before growing their property portfolio and how a first-rate property manager can be a game-changer, especially in the face of evolving regulations. Navigating the Rental Market: Gain...
info_outline Price Predictor Index Spring Edition: Units ThrivingHotspotting
The new Spring edition of The Price Predictor Index provides emphatic confirmation of the most compelling trend in Australian real estate: the escalating demand for apartments and their challenge to houses on capital growth performance. We have been speaking about the rise and rise of apartments for the past 18 months and there is a growing body of evidence which confirms that more and more buyers are opting for attached dwellings: units, apartments and townhouses. Our analysis of sales activity data for the latest quarter for the Spring edition of The Price Predictor Index reveals that this...
info_outline Canstar: The Dream Is AliveHotspotting
Affordability is the most-debated and the most confused issue in residential real estate. While the rental shortage and rising rents occupies the minds of many, the property issue that occupies the most space most often in news media and in the minds of Australian consumers is housing affordability. It has been this way for years, indeed for decades. And while the so-called Great Australian Dream is often declared dead, with young people doomed to a lifetime of renting, the evidence suggests otherwise. I recently finished working on a report with financial comparison website Canstar which...
info_outline The Art of Buying Against the Grain with Arjun Paliwal of InvestorkitHotspotting
In this episode of the Hotspotting Podcast, Tim Graham sits down with Arjun Paliwal, the Managing Director of Investorkit and a two-time REB Buyers Agency of the Year winner. Arjun shares insights on his unique approach to property investment, focusing on "buying against the grain." Here are some of the key topics discussed: Episode Highlights: Introduction to Arjun Paliwal: Arjun kicks off by talking about his journey in the property industry, how he scaled Investorkit, and the importance of innovation in finding investment hotspots. The Concept of 'Buying Against the Grain':...
info_outline Listing LeapHotspotting
Australian real estate has been characterised by three different types of shortage which have put upward pressure on rents and prices. Those are the shortage of rental properties, the shortage of new dwellings under construction and the shortage of homes listed for sale. While the shortage of rental homes and the under-supply of new homes persists, there has been recent improvement in the number of homes listed for sale by vendors. SQM Research finds that the number of residential property listings nationwide rose by 8% in August, bringing the total to almost 250,000 properties, up from...
info_outline Airbnb FurphyHotspotting
State governments across Australia have no meaningful policies for easing the chronic under-supply of rental properties – but they do have a talent for using the rental shortage as an excuse to raise extra revenue from the housing market. One of the primary tactics they use is to scapegoat a section of the community and blame them for the problem that they, the politicians, have created – and then hit the demonised group with new taxes and pretend that they’re doing it to deal with the rental shortage. The worst offender in this regard, although not the only one, is the State Government...
info_outline CoreLogic IllogicHotspotting
CoreLogic is one of Australia's leading sources of data on residential real estate matters, although increasingly overshadowed by other, smarter data organisations like PropTrack. CoreLogic has lots of statistics about housing markets but when it comes to analysis and commentary, CoreLogic is very often a source of illogic. Their problem, like so many companies that comment on Australian housing markets, is that they employ economists to analyse real estate and the outcome very often is kindergarten analysis. Here’s a recent example: According to , property markets outside the capital...
info_outlineCoreLogic is one of Australia's leading sources of data on residential real estate matters, although increasingly overshadowed by other, smarter data organisations like PropTrack.
CoreLogic has lots of statistics about housing markets but when it comes to analysis and commentary, CoreLogic is very often a source of illogic.
Their problem, like so many companies that comment on Australian housing markets, is that they employ economists to analyse real estate and the outcome very often is kindergarten analysis.
Here’s a recent example:
According to CoreLogic’s Regional Market Update, property markets outside the capital cities are experiencing a slowdown in value growth because, they say, fewer people are moving from the cities to the regions and because of the elevated interest rate environment.
Regional markets saw dwelling values increase by 1.3% over the three months to July.
CoreLogic economist, Kaytlin Ezzy, said this means the pace of growth has eased from recent peaks.
She noted, however, that growth trends across Australia’s 50 largest regional markets have become increasingly diverse, including 11 regions which saw values rise by more than 3% in the quarter.
So here’s what wrong with that analysis, for want of a better word.
Firstly, they have made the common error of placing great significance on short-term data. The rate of price growth, overall on average across regional Australia, is less than it was a few months earlier, apparently, therefore they say that the market is declining.
But price graphs are seldom smooth and future months may see a return to higher price rises. It’s always unwise to declare a new trend based on one recent set of short-term figures.
Secondly, they claim internal migration to the regions is no longer happening as strongly as before. The latest Regional Movers Index, jointly published by the Commonwealth Bank and the Regional Australia Institute, strongly disagrees with that statement. It shows that Australians continue to relocate from Sydney and Melbourne to regional areas in large numbers.
Thirdly, the claim that elevated interest rates are causing a decline is farcically stupid. The RBA started lifting the official interest rate in May 2022 and it rose steadily (by a total of four percentage points) until November 2023. So interest rates have been elevated for over two years – and there has been no further rise in the past nine months – but now, according to Core Illogic, elevated interest rates are causing a decline in regional property markets.
And how does that theory sit alongside the reality that, according to Core Illogic, 11 regions recorded a rise of more than 3% in the latest quarter?
They say that “if you torture statistics enough, they’ll tell you anything you want to hear”.
That’s particularly true for economists who subscribe to the theory that everything that happens in residential real estate is caused by interest rate trends, notwithstanding lots of compelling evidence to the contrary.
The truth is that we still have a situation where many of Australia’s strongest property markets for price growth are in the regional areas, headed by boom regional centres like Bunbury, Mandurah and Geraldton in Western Australia, and Rockhampton, Toowoomba and Townsville in Queensland.
Regional Australia continues to provide the best options for investors seeking affordable prices, higher rental yields and good prospects for capital growth, provided you choose your location with care.