December 13, 2021

#131: Has the influx of listings dampened the market, why December is a great time to buy, early predictions for 2022, will Hobart and regio

43 minutes

https://propertyplanning.com.au/propertyplannerbuyerprofessor/ In this week's episode Dave, Cate and Pete take you through: 1. A look into recent market cycles The Property Professor shares some research from ABS home value index data on property market movements over the last 5 years. Cycles are a key component of the property market and they are difficult to predict. However, when property prices do drop, the declines are generally not as large in magnitude as the increases. 2. Consumer spending and impact on the property market The household savings ratio is now up to 19.8% from 11.8% last quarter due to the Sydney and Melbourne lockdowns. Inflation is starting to increase, but this may only be transitory, as spending increases once lockdowns are lifted, but as savings decrease, people will tighten their belts once again. If listings decline in the new year, we may see buyer conditions stiffen and prices increase if consumer confidence remains high. Supply and demand ratios are anticipated to tighten if listings decline. 3. Property market further softens over November Australian housing values increased a further 1.3% in November, gradually losing steam from March's high. With the exception of Brisbane and Adelaide, monthly growth for each capital city has declined to 1.1% or less. Perhaps with growing unaffordability, investors are turning to Brisbane and Adelaide, both of which are the star performers currently. 4. Rents and vacancy rates Darwin and Hobart are still rocketing along, but the rate of growth in rents is starting to come down. Investors have flocked to these markets, meaning that rental stock is increasing, and this has consequently taken some of the heat out of the growth. A 2% vacancy rate is considered equilibrium, while Perth, Adelaide, Canberra, Darwin, Hobart are all below 1% vacancies, (indicative of a tight rental market) hence causing pressure in these markets. 5. Houses vs units The median price gap between houses and units is the highest on record. Based on median values, capital city houses are now 37.9% more expensive than capital city units. However, the difference in the quarterly rate of growth between houses and units is now the narrowest it has been since October 2020, with only 1.6 percentage points between the two broad housing types. If you're looking to purchase a quality unit, now is probably as good a time as any to buy, considering the gap is likely to shorten in the future. However, the trio warn against buying "any" unit. There are good units and, well... not so good units. It's imperative to know the difference. 6. New listings rise but total stock remains low A rise in the number of homes available for sale is a key factor driving the slowdown in capital growth. New listings are up 34% from the same time last year and 15.7% above the 5 year average. However, total listings are still 15.4% below this time last year and 24% below the 5 year average, indicating that buyer demand is soaking up the new stock on the market as well as the old. Listings that have been on the market for over 180 days have dropped a drastic 51% from this time last year. 7. Growth in regions continues to burgeon on Over the month of November combined regions achieved 2.2% growth and this is not just because of the COVID-induced escape from the city. Now affordability issues are forcing people to consider and aim for regional property, with the support of infrastructure upgrades and lifestyle factors that attract newcomers. It will be interesting to watch this space over the next few years. 8. People are still pessimistic about now being a good time to buy...

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