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Property Listing Shortfall Squeezes Prices

Property Listing

Residential stock is being cleared out nationwide as the number of buyers outstrips sellers and listings continue to fall.

Property listings fell 6.3 per cent in May and are down 19.2 per cent on last year, according to data from SQM Research.

The low level of stock is continuing to squeeze the market with house prices rising in all capital cities and regional areas.

Old stock on the market is also getting moved—the number of properties on the market for more than 180 days was down 44 per cent on the year and by 9.2 per cent in May.

Total property listings

City May 2021 Monthly Change Yearly Change
Sydney 27,440 -3.5% -8.7%
Melbourne 40,958 -7.4% -1.4%
Brisbane 23,519 -7.1% -18.4%
Perth 22,075 -1.7% 1.5%
Adelaide 12,033 -7.1% -21.4%
Canberra 3250 -9.7% -21.7%
Darwin 1430 2.9% -13.5%
Hobart 1346 -11.2% -36.1%
National 245,953 -6.3% -19.2%

^Source: SQM Research May 2021

SQM Research managing director Louis Christopher said property listings fell in May due to strong market conditions.

“The downward trend in old listings suggests strong absorption rates, so new property listings are not completely offsetting the falls in old listings,” Christopher said.

“This is indicating there are more buyers than sellers in the market, which is fuelling the property boom.

“This is contributing to strong growth in asking prices, particularly in regional and coastal locations, such as the NSW Mid North Coast and on the Gold Coast.

“The trend is also pronounced in the inland regions, such as the Murray Region.”

Christopher said with interest rates looking set to remain low for 2021, and many households awash with cash as the jobless rate continues to fall, SQM expected to see sustained gains in house prices for the rest of the year.

This week, the Reserve Bank of Australia decided to keep the cash rate at 0.10 per cent for the seventh month in a row.

“Housing markets have strengthened further, with prices rising in all major markets,” the bank said.

“Housing credit growth has picked up, with strong demand from owner-occupiers, especially first-home buyers. There has also been increased borrowing by investors.

“Given the environment of rising housing prices and low interest rates, the bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.”


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Locals snap up Gardner Vaughan Group’s Monterey apartments in Kangaroo Point

A Locals buyer who purchased the four-bedroom, three-bathroom penthouse at Monterey said the home ticks all the boxes

Locals are snapping up apartments in Gardner Vaughan Group’s latest Brisbane apartments, Monterey at Kangaroo Point.

The development, which looks out to Brisbane CBD’s skyline and beyond to the mountains, has seen increased interest from locals searching for properties in a premium location.


Monterey Kangaroo Point 9 Lambert Street, Kangaroo Point QLD 4169

With its beautiful tree-lined streets, Mowbray Park, Raymond Park and the Kangaroo Point Cliffs all on your doorstep, the home is set amongst an ideal backdrop.

A local buyer who purchased the four-bedroom, three-bathroom penthouse at Monterey said the home ticks all the boxes.

“Our family has resided in Kangaroo Point for the past few years, and we love the location!”

“Monterey offers amazing amenities with the rooftop and pool and gym on level one. The Northern aspect, boutique building and high-quality construction with Cross Laminated Timber [CLT] made it an easy decision to purchase the penthouse”, they said.

The use of radiata pine in the CLT method is an innovative wood product developed in Europe over 30 years ago, according to the developers.

The choice of CLT for Monterey was a carefully considered decision, providing benefits to the construction process and its residents, including high strength-to-weight ratio, low embodied energy and reduced stress impacts.

The renewable resource also sequesters carbon and enhances thermal properties.

“As long-term residents in Kangaroo Point, there is a real shortage of modern, luxury boutique buildings available”, said another local buyer, who purchased a four-bedroom, three-bathroom residence on the sixth floor.

“The developer has a great track record and we have confidence in them pioneering this new CLT design,” they added.

Designed by architects Hayes Anderson Lynch, the riverside development features full-height glass, sustainable principles and is the first timber multi-story construction in Kangaroo Point.

Derived from a response to the subtropical climate, the form of the building considers the orientation of the sun, prevailing summer breezes and winter winds.


Monterey Kangaroo Point 9 Lambert Street, Kangaroo Point QLD 4169

“Recessed, shaded balconies are skirted by brass perimeter screens that provide both sun shading and added privacy. At the ground floor, the driveway and services are tucked to one side, giving way to the light filled, glazed lobby”, said Hayes Anderson Lynch’s Elizabeth Anderson.

The angles and ribboning of the balustrade design maximises views and delivers a residence that embodies the synergy between design, sustainability and natural beauty.

“Monterey not only offers the North-East aspect and river views, but it affords the privacy and security with fewer neighbours in the building”, a third local buyer said, who is downsizing from their sub-penthouse in Macleay Towers.

Monterey truly encompasses Brisbane’s vision for “buildings that breathe.”


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Housing investors to pick up slack as first home buyers retreat: AFG

Housing investors

One of the country’s biggest mortgage brokers, AFG, expects Housing investors will continue returning to the market, helping to fill the gap left by retreating first home buyers.

After figures this week showed house prices surged again last month, the chief executive of wholesale broker AFG, David Bailey, said investors were making up a bigger share of its new lending and he expected the trend had further to run.

While banks have predicted the rapid growth in house prices will slow this year, Mr Bailey said he had not seen a softening in lending activity, which was being mainly driven by people upgrading to a new home.

“Coming through the other side of the pandemic … my view is that as first home buyers — particularly who look at apartments and smaller places and so forth — come out of the market, that volume will probably be replaced by investors,” he said.

The chairman of the Australian Prudential Regulation Authority (APRA), Wayne Byres, also said on Wednesday he expected investors would continue returning to the housing market.

Appearing before Senate estimates, Mr Byres said the fact owner-occupiers and first home buyers had driven the market until recently was a positive trend, but investor lending was now on the rise.

“Certainly the commitments to investors had been very low through 2020, but they’ve started to pick up again in recent months, so I think we’ll see them start to come back to the market,” Mr Byres said.

Lending to housing investors is being closely watched by regulators, who have warned banks not to cut their loan standards as low interest rates cause prices to surge. When APRA has put the brakes on previous housing booms by introducing credit restrictions, the measures were targeted at investors.

Mr Bailey said the share of AFG’s new lending going to property investors had risen from 21.3 per cent in the first quarter to 24.9 in the current quarter so far, but this was still well below its historical average of about 35 per cent.

Mr Bailey made the comment as AFG on Wednesday said it would take a 7 per cent stake in the neobank Volt for $15 million, and it announced Volt would supply some of AFG’s white-label loans. Volt also said its next chairman would be Graham Bradley, former chair of HSBC Australia and listed companies including Stockland and Graincorp.

In a further sign of investor activity lifting, the chief executive of mortgage broker Alan Hemmings said inquiries from investors were up by about 50 per cent compared with last year. He said this could be a response to some lenders cutting interest rates on investment loans.

“It may also be due to investors seeing opportunity in the market with the RBA continuing to state it will keep interest rates low for the foreseeable future and continued speculation of property price increases,” Mr Hemmings said.

The strengthening conditions in the housing market were also underlined by credit rating agency Standard & Poor’s, which said arrears rates for lower-risk borrowers had fallen to 0.94 per cent in March, down from 1.03 per cent a year earlier.

Director at S&P Global Ratings Erin Kitson said ultra-low interest rates, government stimulus, and a refinancing boom had allowed customers to build up financial buffers, and helped some struggling borrowers to move out of arrears.

“Given the low level overall, we are not expecting a big uptick in arrears as borrowers come off their mortgage deferral arrangements,” Ms Kitson said.

Ms Kitson said that in previous housing booms, the retreat of first home buyers had been followed by stronger lending to investors. She said investors were typically more able to access credit because they were likely to already own property, and had higher incomes.


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Best and Worst Suburbs For Rental Properties Revealed

rental properties

Australia’s rental Properties is tightening, finally reaching pre-Covid levels, however some suburbs are faring better than others.

The vacancy rate fell in May for the second consecutive month and now sits at 1.7 per cent. The last time rates were this low was February, 2020 according to research by Domain.

The report showed Sydney’s vacancy was at March, 2020 levels and Melbourne, while considerably high, was rapidly falling from its 5.4 per cent peak in December last year.

Adelaide and Brisbane had the lowest level of vacancy since the records began in 2017 while Canberra and Perth were close to record multi-year lows.

Worst places for rental property owners

Rank Sydney Vacancy Melbourne Vacancy Brisbane, Gold Coast Vacancy Perth Vacancy Adelaide Vacancy
1 Paramatta 4.6% Melbourne City 8.6% Brisbane Inner 3.4% Perth City 1.4% Adelaide City 4.7%
2 Auburn 4.4% Stonnington-East 7.8% Sherwood-Indropilly 2.5% Cottesloe-Claremont 1.5% Prospect-Walkerville 0.9%
3 Strathfield-Burwood-Ashfield 3.9% Whitehorse-West 6.1% Brisbane Inner-West 2.3% South Perth 1.1% Holdfast Bay 0.9%
4 Canterbury 3.9% Stonnington West 5.8% Nathan 2.2% Belmont-Victoria Park 1.1% Norwood-Payneham-St Peters 0.8%
5 Ku-ring-gai 3.2% Boroondara 5.6% Mt Gravatt 2.1% Canning 1% Burnside 0.7%

Best places for rental property owners

Rank Sydney Vacancy Melbourne Vacancy Brisbane, Gold Coast Vacancy Perth Vacancy Adelaide Vacancy
1 Camden 0.3% Yarra Ranges 0.2% Capalaba 0.2% Kwinana 0.3% Gawler-Two Wells 0.1%
2 Blue Mountains 0.4% Nillumbik-Kinglake 0.4% Caboolture Hinterland 0.3% Wanneroo 0.4% Marion 0.1%
3 Wyong 0.4% Maroondah 0.4% Nerang 0.3% Serpentine-Jarrahdale 0.4% Playford 0.2%
4 Gosford 0.6% Cardinia 0.4% Coolangatta 0.3% Cockburn 0.4% Tea Tree Gully 0.2%
5 Campbelltown 0.6% Mornington Peninsula 0.5% Wynnum-Manly 0.4% Swan 0.4% Salisbury 0.2%

^Source: Domain rental vacancy report, May 2021

Despite performing relatively poorly, Melbourne vacancy rate tightened more than any other capital, from 4.2 per cent in April.

Domain senior research analyst Nicola Powell said extended lockdowns in the state would impact the city.

“Vacant rental listings may increase in regions with a high proportion of people working in the hospitality and tourism sectors,” Powell said.

“Those who have had a significant reduction in hours may be forced to cut costs and move in with family or friends.

“Vacancy rates are also likely to remain particularly weak in areas with a higher proportion of short-term rentals as ongoing outbreaks affect interstate travel and sentiment towards travelling to Greater Melbourne.”

Home owners in Melbourne were trying to get ahead of the curb with the rate of homes selling before auction doubling.

Meanwhile, in a rare occurrence, house prices were on the rise in every capital city during May and 97 per cent of sub-regions.


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