August 09, 2021

#113: Property demand continues to outstrip supply, the global housing boom, international borders, how Darwin has taken Australia by storm

37 minutes

https://propertyplanning.com.au/propertyplannerbuyerprofessor/ In this week's episode, Dave, Cate and Pete take you through: 1. Value growth tapers over July National housing values increased a further +1.6% in July. Although still a strong result, value growth has been tapering from the recent peak in March 2021, where value growth reached +2.8% for the month. The trio explore the drivers contributing to the dissipating steam in the market, from affordability, seasonal factors and recent lockdowns in major capital cities. 2. Annual growth rates inch closer record highs CoreLogic annual growth rates report +16.1% growth for the national market over the last 12 months. This is not far off the standout year of 2003, where growth reached +19.3%. The trio discuss the likelihood of 2021 topping this record high, where already for the months of January through to July this year, growth has achieved +14%. Annualised, a forecasted figure of +21% results, but what impact will the lockdowns have? 3. Hobart, Darwin and Canberra over 20% The nation's smallest capital cities of Hobart, Darwin and Canberra are leading the pack for annual growth. Interestingly, Darwin is at the top of the ladder recording a whopping +23.4% annual growth, but is also the cheapest capital city with a median price of $486,054. Darwin's history has been volatile in terms of property price increases and decreases, so no one is suggesting to jump on board the Darwin bandwagon. The trio wonder whether the large increase in property listings for Darwin, (which is up +39% from last year), indicates that Darwin property owners are taking advantage of the growth spurt to jump ship. 4. Housing boom takes on the world Of the 40 countries covered by the OECD, only 3 have experienced declining house prices in the first three months of 2021. This is the smallest proportion since the OECD began tracking this data in 2000. This global phenomena can be put down to all the stimulus money floating around, as countries fight off the economic impacts of the pandemic. Despite our friends in New Zealand abolishing negative gearing and implementing macro prudential measures to take the heat out of the market, prices continue to rise. This indicates that it's not investors who are driving up prices. 5. Lending indicators continue to show increased activity from investors Recent ABS data shows that new loan commitments relating to housing fell overall -1.6% in June. First home buyers took the biggest hit, falling -7.8%, while investors showed a modest increase of +0.7%. The trio discuss buyer fatigue, increasing unaffordability and the end of government incentives which mark the shift. However, investors make up 28.7% of the current residential property lending market, which is still a way off 2015 levels of 45% which sparked APRA intervention. 6. Regionals continue steady growth Regional cities continue their strong growth run, posting +1.7% growth vs capital cities +1.6%. Whilst covid certainly sparked an 'escape from the city attitude', the trio pose the question whether the increased dwelling sizes and affordability to purchase larger homes are actually what's driving regional interest. 7. Property listings tell the story of demand far outstripping supply The number of listings that have been on the market for over 6 months has reduced drastically, down 49.8% from the last year. This indicates that demand is so strong, less desirable properties are being snapped up due to the current level of competition in the market. The past 12 months has seen...

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