July 18, 2022

#162: Market Update June 22 - Why the RBA needs to be mindful of going too hard too fast on rate rises, top capital city performers over the

47 minutes

Got a question for the trio? - https://zfrmz.com/uLtjhyBskV96PY6eJfaI https://propertyplanning.com.au/propertyplannerbuyerprofessor/ In this week's episode Dave, Cate and Pete take you through: 1. Markets across Australia dip further over June For capital cities already in retraction, the rate of decline has increased over June, while those still experiencing value growth have seen a definitive slow-down in the rate of price increases. Sydney in particular has made the headlines, with a median dwelling price drop of 1.6% over June, the largest monthly fall since 1989. The trio discuss the fact that these circumstances are not unusual after a period of rapid price growth. 2. Upper quartile feeling the pinch As is typical of rising and falling markets, the upper quartile is leading the price declines and feeling the pinch more than the lower quartile. This has a significant impact on median values, as statistically, the bigger numbers are removed from the data pool. However, it's important to note that quality property is still in high demand, particularly if it sits within the median price range and buyers should not expect a bargain. A key example is entry level family homes where there is simply not enough stock to cover the demand. 3. How capital cities have fared over the last 40 years Cate shares some interesting data collected from the REIA showing annual value growth for each capital city since 1980. Whilst a 1% differential in annual growth compounded over 40 years will make a significant difference to the end result, it's important to remember that there are many facets to consider when investing, such as vacancy rates, insurances, maintenance costs and rental returns. Although one capital city may have performed better than another over the long-term, price points are significant and could mean that it's better to purchase a high-quality asset in a lower performing city vs a low-quality asset in a high-performing city. 4. Market cycle trends The trio discuss the trends in market peaks, which cities were the first to move and how these moves correlate with population size for the corresponding cities. 5. Taking a critical eye to data and median values The trio discuss data and differences between the nation's data houses: REIA, ABS and CoreLogic. As an interesting note, Brisbane is gaining on Melbourne in median values for all dwellings, but a closer look at the data shows that it's not all that it seems... 6. Rollercoaster rents The trio discuss the case of Darwin which has had large swings in annualised rents over the last year, resembling one of the scariest roller coasters in the theme park. Melbourne units lead the charge for rental increases, which suggests that people are migrating back to the city and a supply-side issue could be brewing. To add to the pressure cooker, vacancy rates tighten further across most capitals. How will this impact the property market and who are the buyers likely to jump into the fray? Stay tuned to find out. 7. Listings follow the annual trend and dwelling sales return to normalcy Following the usual seasonal winter trajectory, listings have dropped in Melbourne, Sydney, Adelaide and Canberra. The trio discuss the curious case of Hobart, which has seen a very large increase in listings year on year. Although being a smaller city, it doesn't take many transactions to register some serious numbers. In terms of dwelling sales, the figures are tracking back towards the 5-year average, after a spike in activity last year following an uptake in lifestyle decisions that were put on hold during covid. 8...

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