Politicians Are Making Aussie Homes Unaffordable—Here’s How
Hotspotting
There’s endless commentary about housing affordability in Australia but very little awareness that the fundamental issue is the high cost of creating new homes – and that our politicians are the cause of the problem. The value of dwellings across the nation is underpinned by the cost in building new ones – and, in Australia, that cost is incredibly, ridiculously high. And it’s high because of the policies of our elected representatives, at all levels of government, but particularly state government politicians. Right now, after massive increases in building costs in recent years, you...
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Is Population Growth Misleading for Property Investors?
Hotspotting
How relevant is population growth data for people choosing where to buy? According to the theories espoused by some, the best places to buy are the ones with the highest population growth. But the evidence suggests otherwise. For example, take a look at the latest data on population growth across Australia, published by the ABS recently. It shows that one of the states with the highest population growth has been one of the worst performers recently on price growth, while one of the states with the lowest population growth has been one of Australia’s best performers on price growth. For the...
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Home Approvals Drop as Australia Faces Housing Shortage
Hotspotting
The latest Australian Bureau of Statistics data has recorded a decline in the number of dwelling approvals across the country. Total dwelling approvals saw a drop of 6.1 per cent in the month of August, at a time when Australia needs to be building a lot more homes. According to ABS head of construction statistics, Daniel Rossi, private dwellings excluding houses were the main contributor to the decline – in other words, there has been a big decrease in approvals for attached dwellings like units and townhouses. This has resulted in a 16.5 per cent fall in approvals for those types of...
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Unit Surge Powers Sydney Market
Hotspotting
The rise and rise of the unit market is keeping the Greater Sydney market busy, although below the exceptional levels seen in some of the other market jurisdictions across Australia. Unit markets are considerably more positive than house markets in our most expensive capital city and the market share of attached dwellings continues to rise. In our latest analysis, well over half of all residential sales across Greater Sydney are attached dwellings. In most of the Greater Sydney municipalities where sales activity is strong, it’s the unit markets that are most active. Outer ring house...
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Patchy Growth in Regional NSW
Hotspotting
The Regional New South Wales market overall is solid, without excelling at the levels seen in other regional areas like Queensland and Western Australia, but with individual out-performers. There is hesitancy in the Regional NSW market overall. It has a high number of locations where buyer activity is lukewarm and price performance below the levels seen elsewhere in the nation. It’s noteworthy, however, that Regional NSW has seen better performance in its unit markets than its house markets, which is part of a national trend. Overall sales levels have improved, continuing a pattern of...
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Second-Wind Markets: Strategies for Savvy Investors - Webinar Replay
Hotspotting
Are you ready to capitalise on Australia’s next big wave of growth? Join us for an exclusive webinar hosted by Tim Graham of Hotspotting.com.au with special guest Zen Christofi of Reventon as we dive into Second-Wind Markets: Strategies for Savvy Investors. In this insightful session, you’ll discover: What are Second-Wind Markets? Gain a clear understanding of post-boom correction phases and why some markets are positioned for renewed growth. National Overview of Second-Wind Markets Explore key factors driving the resurgence of these markets, from interest rates to housing shortages...
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Million Dollar Hotspots
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...
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ANZ's Late Price Guess
Hotspotting
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...
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Unit Surge Unstoppable
Hotspotting
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...
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Mastering Property Management in Today's Market with Corinne Bohan of Image Property
Hotspotting
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_outlineThe 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 trend is dominating markets across Australia.
For example, there is a stark contrast in the Sydney market. In simple terms, unit markets are pumping and house markets are not - and the market share of attached dwellings continues to rise.
In most of the Greater Sydney areas where sales activity is strong, it’s the unit markets that are most active. Outer ring house markets are generally subdued, suggesting that those seeking affordable options are choosing apartments and townhouses.
The dominance of attached dwellings in Sydney market performance can be seen in various metrics. While 45% of locations with house markets have positive (rising, recovery, consistent) rankings in this analysis, 67% of unit markets are positive.
This coincides with further evidence that a growing share of dwelling sales in the Greater Sydney market are attached dwellings. Comparing the June Quarter results for the past four years, the market-share of units was 48% in 2021, 50% in 202, 52% in 2023 and 54% in 2024. There’s a pretty clear pattern emerging there.
Sydney’s experience, with attached dwellings outperforming detached, is part of a strong national trend that is also evident in other cities and some of the regional jurisdictions.
In the Brisbane City LGA, elevated demand for units is driving overall activity. In Melbourne, which overall continues to under-achieve, a key exception is provided by inner-city unit markets. And Canberra is experiencing a similar scenario.
While just over half of Canberra markets overall have positive ratings, 78% of unit markets have rising, recovery or consistent classifications based on sales activity trends. Of the 36 unit markets in our Canberra analysis, only 3 have negative ratings.
While only 35% of house markets are classified as rising markets, 61% of unit markets in Canberra have this rating.
Affordability is likely a major driver of this trend. Canberra has a median house price close to $1 million (PropTrack data), higher than Melbourne and Brisbane. But its median unit price is $605,000, notably cheaper than Melbourne, Brisbane and Sydney, and on a par with Adelaide. The market share of units is rising year by year and attached dwellings now account for 44% of dwelling sales in Canberra, compared to 41% in 2021.
In booming Perth, the strongest markets in Perth now are well-located locations with a major presence of attached dwellings.
While the most popular house markets for home buyers and investors (mostly those at the affordable end of the market) are a little less buoyant than earlier in the Perth up-cycle, the focus is switching for affordable units.
Perth started this boom with a reputation as the most affordable capital city housing market. After a couple of years of stellar price growth, that’s no longer the case. Perth is now well above Hobart and Darwin with its median house price and challenging Adelaide.
Perth now has a median house price of around $800,000, but its median unit price is in the low $500,000s, still well below that of Hobart and Adelaide.
When the bargain suburbs have house medians above $500,000, the big attraction that caused the stampede starts to fade. So now buyers in Perth, increasingly, are looking at unit markets, which are less competitive than the house markets.
So now units are capturing a growing market-share in Perth, similar to the scenarios in Sydney, Melbourne, Brisbane and Canberra.
And units are out-performing.
In the new Spring edition of the Price Predictor Index, 29% of Perth house markets are3 classified as rising but almost 50% of unit markets are ranked as rising, based on trends with sales activity.
Clearing, the trend with more and more buyers opting for attached dwellings over detached houses, is gathering momentum.
It’s a major paradigm shift in Australian real estate – and at Hotspotting we believe this trend is here for the long term.