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_outlineAffordability 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 demonstrates that the Dream is very much alive.
The Deposit Stars report shows that there are attainable options for young buyers in all our city and regional markets, including the biggest and most expensive cities.
And the finance data indicates our property markets remain as active as ever.
A report from the Housing Industry Association in August 2024 noted that “various segments of the housing market are increasingly active, with lending to first-home buyers, owner occupiers, and investors increasing in the first half of 2024”, based on the latest ABS lending data.
HIA economist Maurice Tapang said: “This increase in lending is partially driven by first home buyers. The number of loans issued to FHBs in the June quarter was 5.8% higher than the March quarter.”
This reflects ABS data on the broader market encompassing all types of residential real estate loans up to the end of June 2024.
One of the reasons home ownership is often declared beyond the reach of the average consumer is that most reports are based on unrealistic parameters.
As I comment in the Deposit Stars report, most analysis on affordability is based on the size of a 20% deposit to buy a house at the median price in our major cities and how long it would take to save such a deposit.
These reports preclude the possibility of smaller deposits, particularly with the help of government programs.
They overlook the reality that most people entering the market for the first time buy houses in the lower price ranges well below the city’s median price.
And they usually ignore the preference of many buyers for attached dwellings – apartments, townhouses and units - and not only because they’re cheaper.
Many of the locations featured in the Canstar report reflect a growing phenomenon in Australian real estate: the rise of attached dwellings as the home of choice by more and more buyers.
A range of cohorts are opting increasingly for units and townhouses, including downsizers, lifestyle buyers, migrants and first-home buyers.
One of the features that draws growing numbers to apartments is location appeal. Not only do attached dwellings allow people to access property in good locations at cheaper prices than houses, but the average unit is better located than the average house.
The “Measuring Home Price Differences” report by Infrastructure Victoria found that units consistently trump houses on proximity to desirable features.
The report says: “Units are located closer to selected infrastructure types, on average, than houses and townhouses.”
This is one of multiple factors driving higher demand for units – challenging the dominant paradigm of real estate (that houses always outperform units and townhouses on capital growth).
That is undoubtedly changing.
Recently Ubank, which is a division of National Australia Bank, published a survey which found more than half of Gen Z and Millennials who don’t own a home are looking to make a move on the property market within the next five years.
56 per cent of survey respondents – all Australian Gen Z and Millennials between the ages of 18 to 43 – aim to purchase their first property within the next five years.
Nine out of 10 respondents agrees that purchasing a home was one of their goals in life – although most acknowledged it won’t be easy.
In addition to all that, research from the Commonwealth Bank confirms that ownership remains an ambition and that the number of first-time buyers going it alone is growing.
According to data from the big four bank, 40 per cent of first home buyers purchased their property alone in the first six months of 2024 – without going in on the purchase with a partner, friend, or family member.
That’s a jump from the 35 per cent of first-time buyers doing the same in 2019.
So there is compelling evidence that home ownership not only remains a primary goal for young Australians, but that it is being achieved in growing numbers.