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House rents grow through pandemic while apartment returns plunge

apartment

A two-speed residential rental economy has emerged post-COVID-19 with apartment owners in the eastern mainland states the biggest losers as a growing number of tenants opt for the space and security of houses.

New data from MRI Software, which tracks real-time rental performance across 4000 real estate offices, reveals the average national house rent has risen through the pandemic to $526 – 4 per cent more than in late 2019.

The reverse is true for apartment rents, which fell 7 per cent on a national basis over the same period due to border closures, few domestic tourists, a lack of business travel, no foreign students and stock oversupply in certain CBDs.

Josh Symons, Residential Industry Principal at MRI, said the increased number of people working from home has also had a major impact.

“Many people have been looking to get more space so they have that work-life balance even while working from home,” Mr Symons said.

“I think another critical point is that expats have returned, moved back into their houses and pushed those tenants out into the market.

“Because you have got this inflection point of people wanting more space, demand has been rising while supply has been decreasing.”

He added that not only have apartments fallen, but it also takes longer to rent an apartment than a house.

In December 2019 the average time between apartment tenancies was four weeks, but it is now more than six weeks. This metric has remained stable for houses at five weeks.

Apartment owners in Melbourne, Sydney and Brisbane have been hardest hit.

Melbourne’s apartment rents have steadily declined in the past 18 months, falling 17 per cent from an average of $493 pre-COVID-19 to $412 in early June.

Apartment rents fell by 8 per cent in Sydney and 4 per cent in Brisbane.

 apartment

In all other capital cities, apartment rent grew over the past 18 months. The strongest increases were in Perth and Hobart, both up by 8 per cent, while Adelaide apartment rents edged ahead by 2 per cent, the same as the Gold Coast.

House rents increased in all markets except Melbourne, where they dropped 4 per cent to $455, making it one of Australia’s lowest-cost rental markets.

The Perth market played catch-up as demand caught up with supply and the city had the biggest rental increase of 8 per cent for house rents, which reached an average of $451.

That is still the second-lowest capital city rent, but in a sign that increases will continue in Perth, the average rent on new leases in the metro area is now at $516.

Adelaide remains Australia’s cheapest housing rental market despite a 5 per cent increase in rents to an average of $416.

Hobart house rents rose 2 per cent to $507, significantly slower than unit growth in the city.

Already high rents on Gold Coast houses increased a further 1 per cent to reach $665, much more than in near-neighbour Brisbane, where the average rent grew 2 per cent to reach $483.

The cost of renting a Sydney house was up 2 per cent over the past 18 months, with the average rental rate at a national high of $729.

 

Article Source: www.afr.com

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Market Place

Property Prices Climb $50,000 Over Quarter

Property Prices

Runaway property prices have continued to surge at a breakneck pace, lifting by 6.7 per cent, or $50,000, in the June quarter.

According to the Australian Bureau of Statistics, property prices are now up 16.8 per cent year-on-year after being supercharged by ultra-low interest rates, government stimulus, forced household savings and elevated demand for bigger homes.

Australian Bureau of Statistics head of prices statistics Michelle Marquardt said prices had also been bolstered by low levels of stock on the market being met with strong demand and properties transacting at an increasingly rapid rate.

“With the exception of Hobart and Darwin, capital cities continued to see house price rises outpace those of attached dwellings such as apartments and units,” Marquardt said.

“Price growth for both property types is being driven by the upper segments of the market.”

Sydney median property prices grew faster than the national average again, up 8.1 per cent, or $81,000 in value, to now be 19.3 per cent higher than for the same period last year.

Property prices in Canberra lifted by 8.2 per cent across the quarter, followed by Melbourne, up 6.1 per cent; Brisbane, 5.7 per cent; and Hobart, 6.3 per cent.

Residential property prices

City Mar 21 to Jun 21 % change June Qtr 20 to Jun Qtr 21 % change
Combined 6.7%▲ 16.8%▲
Sydney 8.1%▲ 19.3%▲
Melbourne 6.1%▲ 15%▲
Brisbane 5.7%▲ 14.6%▲
Adelaide 5.3%▲ 14.2%▲
Perth 4.8%▲ 15%▲
Hobart 6.3%▲ 17.7%▲
Darwin 4.6%▼ 12.8%▲
Canberra 8.2%▲ 19.1%▲

^Source: Australian Bureau of Statistics

Corelogic figures last week showed nationwide housing values continued to rise, up 1.5 per cent in August, but down from the record 2.8 per cent national gain in March.

CommSec chief economist Craig James said the total value of Australia’s 10.68 million dwellings was now $8924.6 billion after growing by $596.4 billion in the June quarter.

“Australia has almost 10.7 million homes [and] quite sensationally the average value of those homes has lifted to an average dwelling price of $835,700 in just three months,” James said.

“For those paying off their homes or who own them outright, that represents an amazing lift in wealth levels, thus underpinning increased spending on discretionary purchases.”

Commonwealth Bank estimated that the average number of people per home decreased from 2.42 people to 2.41 people in the recent quarter while the number of homes grew by 79,900 during the past two quarters despite Australia’s population growing by just 42,200.

The bank’s economists expect national dwelling prices to rise by 8 per cent across 2021 and 6 per cent in 2022, and a result “tilted towards stronger outcomes” was more likely.

The bank said that even if the Reserve Bank started taking its foot off some low interest rates, such as the benchmark three-year bond, that would still not dampen the booming prices.

The Reserve Bank’s cash rate, which steers the interest rate on mortgages offered by retail banks, remains at a record low interest rates of 0.1 per cent for what it predicts to be as long as four years.

Property Prices

▲ The national average deposit needed to secure a mortgage is now $100,000—an increase of 16 per cent since January, 2019. 

RBA governor Phillip Lowe used a speech on Tuesday to push back against suggestions that rate hikes and tougher lending standards could be used to quell house prices.

“While it is true that higher interest rates would … see lower housing prices, they would also mean fewer jobs and lower wages growth,” Lowe said.

“This is a poor trade-off in the current circumstances.

“It is also relevant that broader measures of household wealth have increased recently.

“Housing prices are 19 per cent higher than they were before the pandemic and Australian equity prices are around 10 per cent higher.

“This lift in the net wealth of the household sector is one of the things that suggest that once the restrictions are eased, households will be well placed to start spending again.“

Household savings are also expected to hit at least $200 billion this year as lockdowns keep Australia’s two largest cities shuttered.

In the June quarter, the household savings ratio—the percentage of unspent disposal income—fell below 10 per cent for the first time in more than a year to be half of where it was the same time a year earlier.

While many households paid down debt in the early days of the pandemic, but $93 billion in largely housing-related debt has since been added.

“More broadly, society-wide concerns about the level of housing prices are not best addressed through increasing interest rates and curbs on lending,” Lowe said.

“While monetary policy is contributing to higher housing prices at the moment, the way to address these concerns is through the structural factors that influence the value of the land upon which our dwellings are built.”

 

Article Source: www.theurbandeveloper.com

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Brisbane

Is this Brisbane’s best art deco home? Historic house draws buyers nationwide

Brisbane’s best art deco home

Money can’t buy you love, but it can buy you Brisbane’s best art deco home with a back story so romantic it’s making buyers swoon.

Once the residence of award-winning Australian author David Malouf, the three-level abode at 19 Arran Avenue, Hamilton, hit the market just days ago for the first time in 15 years – and it’s offering more than just double brick and mortar, but the memories of a celebrated writer who penned his best works from within its walls.

Mr Malouf, whose father commissioned the exquisite three-level property back in 1947, wrote the semi-autobiographical novel Johnno before writing the prize-winning epic The Great World in 1990. He penned several other novels at his beloved Hamilton home before engraving his signature into one of the cabinets.

Brisbane’s best art deco home

19 Arran Avenue, Hamilton. Photo: Place Estate Agents Ascot 

It’s a tantalising tale that has mesmerised dozens of home-hunters from across the country ahead of the September 8 auction, selling agent and Place Estate Agents Ascot director Drew Davies said, with the rooftop terrace, bespoke features and an exquisite renovation further igniting appetite for the house that’s being dubbed an architectural marvel.

“It’s hard not to get wrapped up in the romance of that story,” Mr Davies said.

“But buyers also love the fact that it retains all the characteristics of a true art deco home … and it’s had more interest from Melbourne and Sydney people than any other home I’ve listed.”

With art deco brick homes as rare as hens’ teeth in Brisbane, Mr Davies said, savvy home hunters could fully appreciate the incredible opportunity – an opportunity he said was enhanced by the home’s high-end renovation that in today’s market was worth a small fortune.

“Any time you’re dealing with a renovation for a brick house, the price can skyrocket. This renovation by architect Philip Horwood has been done to the highest level – from the bespoke kitchen, the feature skylights in … and the rooftop terrace that has glass panelling – it’s just stunning, and it’s hard for me not to fall in love with it,” Mr Davies said.

“You would need to be having very serious chats with the bank to build something like that today.”

The art deco dream abode is bound to fetch a pretty penny at auction amid a property boom that’s catapulting prices in high-end homes across the city, ensuring a tidy profit for the current owner who snapped it up for just $950,000 back in July 2006.

And considering the home’s list of features, there’s no doubt the next custodian will feel it was money well spent.

Perched on a hill, the secluded property boasts gun barrel views of the Brisbane River – best seen from that full-floor rooftop terrace that’s accessed via a spiral staircase.

Brisbane’s best art deco home

The Darren James kitchen. Photo: Place Estate Agents Ascot 

Then there are the leadlight windows, double terrace doors and a stunning kitchen styled by Darren James that features rosewood cabinetry and Brazilian granite benchtops.

Defying the struggles of many a light-challenged brick abode, Mr Davies said the home was luminescent thanks to the eight skylights, with additional features including an opulent main suite with a dual shower, inset spa and a bidet.

“[At 637 square metres] it’s a big chunk of land, too, and it’s an extremely private location as well … that’s been a big drawcard,” Mr Davies said.

With buyer interest from couples and downsizers growing by the day, he said it was tough to say just how many bidders would throw up their hands next Wednesday, however with soaring interstate interest, there was a good chance the home’s next owner could hail from one of the nation’s two biggest cities.

“I continue to see a massive shift towards interstate buyers. Since Friday last week, I have transacted three sight unseen sales to interstate buyers alone,” Mr Davies said.

“The market couldn’t be hotter.”

The auction of 19 Arran Avenue will be held at a special Place Estate Agents in-room event at the Revival Art and Design Gallery at 3/17 Greg Chappell Street, Albion, at 6pm.

 

Article Source: www.domain.com.au

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Brisbane

$5 million New Farm, Brisbane apartment sale tops weekend auction results

New Farm

Ray White’s auction secured a $5.025m for a Moray St, New Farm apartment

A $5.025m New Farm apartment sale topped weekend apartment results.

It was a dress circle Moray St, New Farm apartment.

The 339sqm four bedroom, two bathroom apartment at 4/29 Moray Street, New Farm sold through Ray White New Farm agents Matt Lancashire and Patrick Goldsworthy.

Its view spans the length of the Story Bridge, from Kangaroo Point to Fortitude Valley.

 New Farm

Trellis 20 Edmondstone Street, South Brisbane QLD 4101 

It was one of five tightly held whole floor apartments in the 2004 L’stage complex which won the HIA’s apartment complex of the year.

The agency also put another New Farm, Brisbane apartment but failed to find a buyer.

The bidding stopped at just over $7m when auctioned through Ray White on Friday.

The two-storey Brisbane penthouse at 11/170 Bowen Tce was passed in at $7.25m, well below advised expectations of a $10m sale.

 New Farm

Bide 21 Longland Street, Newstead QLD 4006 

It cost $3.6m off-the-plan in 2013.

CoreLogic calculated there were 359 apartment and townhouse auction listings over the weekend.

There was a national 61 percent auction clearance rate from the 279 results.

Just on 100 had been sold before auction given lockdown circumstances in the major capitals.

Sydney was the strongest market with 83 percent success rate with Brisbane at 43 percent and Melbourne on 30 percent.

 

Article Source: www.urban.com.au

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