Property price cutting has nearly doubled and tripled in Australia’s two largest cities, new data shows, signalling a slowing housing market.
More than 13 per cent of property listings in Sydney and 10.7 per cent in Melbourne had their prices discounted in April, according to Domain data.
This was up from 6.7 and 3.7 per cent respectively from April 2019, equating to nearly double the amount of discounts in Sydney and almost three times the amount in Melbourne.
“It’s a good leading indicator of where prices are going to go,” Domain senior research analyst Nicola Powell said.
“When you see an increase in the proportion of listings with a discount, it normally means that you’re going into a softening market.”
March saw a jump in the proportion of listings discounted which has eased in April
Percentage of live listings with asking prices discounted
All capital cities across the country saw a higher percentage of properties being discounted in April 2020 compared with April 2019.
But the percentage of discounted properties was the highest in March this year as the economy went into a rapid hibernation amid the escalating COVID-19 outbreak.
“March was particularly a turning point, we saw that in other market indicators and the fact that we had the ban on open homes and auctions and the economic shutdown,” Dr Powell said. “The positive thing for April is that percentage has now started to ease.”
All cities besides Darwin and Hobart saw more than 10 per cent of listings discounted in March, with Sydney reaching 14.1 per cent and Melbourne 12.6 per cent.
Adelaide was the next most marked-down city at 11.1 per cent in March, while Canberra, Perth and Brisbane saw between 10 and 10.6 per cent of properties take a price cut.
In April, all cities saw the percentage of properties with price cuts slip – with all besides Sydney and Melbourne seeing property discounts of less than 8.3 per cent.
Dr Powell said the few new properties listed in April were potentially priced more competitively than those in March, which were likely to have been listed earlier in the year in a rising market.
“We were perhaps seeing vendors coming to the market being a little bit more bullish in terms of the prices they wanted to achieve,” she said.
Most capitals had a jump in listings discounted in March with fewer properties discounted in April
Percentage of live listings that have had the asking price revised down
While the percentage of properties with price reductions was higher than it was during the 2017-19 downturn in Sydney and Melbourne, Dr Powell said the dollar amount reduction was relatively similar.
“When you look at the percentage of price edits, it’s actually more or less the same, and in some cities the percentage is actually smaller than this time last year,” she said.
Most capitals saw prices revised between 3 and 5 per cent, with Hobart slightly higher at 5.2 per cent and Darwin recording a higher percentage of 8.2.
While the number of listings discounted jumped, the amount of the price discount has eased
Percentage of median price edit
Sydney’s Northern Beaches region, which includes suburbs as far south as Manly and as far north as Palm Beach, saw the highest proportion of discounted properties in the country at 17.6 per cent in April.
That number was up from 10.5 per cent in April last year, and from an 18-month low of 5.8 per cent in September 2019.
Prices in the area were coming down from a high peak (the median house price in the area is $1.97 million, up 18.6 per cent on the previous year), Joshua Perry from Belle Property Dee Why said, which meant widespread discounting was expected.
“There’s always some owners who aren’t adjusting, but most are now seeing that what is happening now is a fair price,” Mr Perry said.
He said inspection and auction restrictions being lifted meant there was more confidence from both buyers and sellers.
A rising number of listings have prices discounted during downturns
Sydney, percentage of listings with prices discounted against annual house price growth
The Mornington Peninsula and Melbourne’s inner south saw the highest proportion of discounted properties in Victoria and were tied for the second-highest across the country, along with Newcastle in NSW, at 14.3 per cent.
McEwing Partners director Dean Phillips said the Mornington Peninsula had seen a high number of holiday homes turn over since the beginning of COVID-19 restrictions with people becoming more realistic about the price of their properties.
“They’re not trying to profiteer as they were prior to COVID,” Mr Phillips said. “They’re selling for genuine reasons and we are seeing a return to a genuine real estate market.”
The regions where prices had been discounted the most deeply included Shepparton in Victoria where buyers could expect a 9.4 per cent discount, Daly – Tiwi – West Arnhem in the Northern Territory at 9 per cent and the Southern Wheatbelt in Western Australia at 8.7 per cent.
This article is republished from www.domain.com.au under a Creative Commons license. Read the original article.
Buyer Demand Builds in the Outer Suburbs
Buyer demand has significantly jumped compared to last year across all capital cities aside from Melbourne.
The Domain buyer demand indicator shows that the market has rebounded in recent months—revealing the top suburbs piquing buyer interest.
Houses and apartments in the outer-suburban areas of Sydney, Melbourne, Brisbane and Perth, were the highest in demand for the month up to 6 September.
This follows a state of hiatus caused by caused by Covid which is ongoing in Victoria where restrictions have stopped inspections and dropped listings.
Domain senior research analyst Nicola Powell said they tracked people who were most likely to buy, indicated by shortlisting, sending inquiries, inspecting and frequently viewing photos.
“The current health crisis has changed the way we use our homes, and for some altered our purchasing decisions and property wish lists,” Powell said.
“And while Covid-19 lockdowns sent buyer demand into a state of hiatus, activity from people likely to buy has rebounded in all capital cities apart from Melbourne.”
Top greater Sydney suburbs
|1.||Hawkesbury demand increase since Covid||Rouse Hill-McGraths Hill||Wollondilly (Houses)|
|2.||Rouse Hill-McGraths Hill||Pennant Hills-Epping||Richmond-Windsor (Houses)|
|4.||Hornsby||Eastern Suburbs-south||Gosford (Units)|
|5.||Dural-Wisemans Ferry||Warringah||Hawkesbury (Houses)|
Top greater Melbourne suburbs
|1.||Whitehorse-west||Mornington Peninsula||Macedon Ranges (Houses)|
|2.||Macedon Ranges||Cardinia||Manningham-east (Houses)|
|3.||Manningham-east||Knox||Mornington Peninsula (Units)|
|4.||Mornington Peninsula||Maroonah||Yarra Ranges (Houses)|
|5.||Yarra Ranges||Kingston||Frankston (Units)|
Top south-east Queensland suburbs
|2.||Nundah||Coolangatta||Noosa hinterland (Houses)|
|3.||Carindale||Redcliffe||Gold Coast hinterland (Houses)|
|4.||Surfers Paradise||Ipswich inner||Noosa (Units)|
Meanwhile major gains have been made in national vacancy rates to pre-Covid levels with outer suburbs also showing the most improvements.
Residential property prices dropped by 1.8 per cent in the latest quarter according to the Australian Bureau of Statistics.
In Perth, Mundaring houses and Wanneroo units topped the list, Canberra’s Weston Creek was listed for houses and Gungahlin for units. Litchfield, Darwin topped the list in the Northern Territory for both houses and units.
Hobart was the only other city to record a fall in activity over the four week period to 6 September, along with Melbourne, where the most demand was seen for Sorrell-Dodges Ferry and Hobart.
Noosa’s Most Expensive Homes in Hot Demand from Buyers Across the Globe
The COVID-19 storm has spawned a hurricane of home sales across some of the Sunshine Coast’s hottest tourist magnets as property punters report unprecedented buyer action from city-based sea-changers in search of a pandemic-free paradise.
The rise of remote work and virtual inspections amid record low interest rates has further sparked the coastal migration with popular hub Noosa clocking millions of dollars in sight-unseen sales alone during the past month.
Adrian Reed, from Reed & Co Estate Agents in Noosa, said buyers from Brisbane to as far away as Hong Kong had pounced on the region’s high-end market, with the agency transacting $60 million in sales from April until August.
“It feels like there’s a gravitational pull towards those idyllic locations … and this trend has continued throughout COVID,” Mr Reed said.
“We sold $26 million in the past couple of months alone sight unseen.
“They are buying from abroad and domestically and then from Brisbane … and I think it’s likely to continue.”
He said the skyrocketing sales action had particularly centred around Noosaville, with $6 million of off-market property sold in the past six weeks.
The agency also clocked the latest Noosaville record for the spectacular mansion at 32-36 The Anchorage, which fetched $12 million. The property features 13 bedrooms and was the former home of the late businessman and founder of Hayco, Donald Hay.
Dan Neylan, from Dowling and Neylan agency in Noosa, said in his 27 years of real estate experience he’d never seen such incredible buyer activity.
“The average time on market for us has shrunk back to three weeks and most of our auctions are not even getting to auction,” he said.
“We had a sale for an apartment on the weekend where the reserve was expected to be $5.5 million but it sold for almost $6.5 million.
“Our biggest one was the sale of 46 Seaview Terrace which was Pat Rafter’s previous home – and that was sold in excess of [a record] $17 million at the end of May to the Rudds. They just saw the long-term value of Noosa.”
Mr Neylan said interstate buyers were particularly snapping up homes like hot cakes with the agency handling more sight-unseen sales than ever before.
He said many home hunters claimed the growing work-from-home-movement had finally allowed them to have a remote career from an idyllic place – and they were wasting no time pouncing on regional, coastal destinations.
“The future for us is pretty rosy and that’s going to last for the next two or three years and by then the international airport will be finished,” he said.
Tom Offermann, from Noosa’s Tom Offermann Real Estate, agreed the fierce buying storm was set to continue during spring with Brisbane buyers competing against interstate and overseas house hunters.
“This winter was like no other and out of the disruption caused by COVID came a storm of buying activity,” he said.
“We’re also seeing capital growth rates between 10 and 15 per cent … with the hot locations typically on the riverfront and the beachfront.”
Mr Offermann said last week’s sale of apartment 1 at Noosa’s prestigious Little Cove for a cracking $6.3 million following 38 bids from eight buyers, was the perfect example.
“This sale capped off another very successful week … with a string of high-value sales which included two breaking $10 million.
“There’s also been a string of nine sales between $5 million and $12 million but we can’t announce them yet because they haven’t settled.”
Despite the strong selling activity Mr Offermann said their agency was running at about 50 per cent of their normal stock levels, with nervous vendors still reluctant to pull the trigger amid the global uncertainty
This article is republished from https://www.domain.com.au/ under a Creative Commons license. Read the original article.
Brisbane Property Market Update – August 2020
The latest Corelogic Data shows overall dwelling values in Brisbane declined -0.1 per cent, but houses were stable and the decline came from the unit sector, down -0.3 per cent. Since January, Brisbane house values have reported an increase of 1.6 per cent, despite the pandemic, and yet unit values have slipped -1.8 per cent.
This stability has been seen in Brisbane, despite very early predictions from many of price falls across all Australian markets. The price changes in Melbourne have been more pronounced, with -4 per cent coming off the value of houses and -2.2 per cent off units over the last three months. On this basis, it seems that the performance of the housing market is intrinsically linked to the number of coronavirus cases in a particular region and the subsequent policies in place around social distancing. Stage 4 shutdowns seem to have had a big impact in Melbourne.
That said, in Brisbane, despite small cluster outbreaks from time to time, our strict border control measures appear to be keeping the virus under control. Most of us are able to return to the labour market, sentiment is fairly strong and we seem to be able to move around with a certain degree of freedom. This is all very positive for our local property market as well.
According to SQM Research, listing volumes are still 9.7 per cent lower in Brisbane than they were 12 months ago, and in the last month alone (between July and August 2020) listing volumes were down a further 5.1 per cent so we expect transactions volumes will remain low for some time yet, simply due to limited supply.
New research from realestate.com.au has revealed that Queensland property seekers are the most confident buyers in Australia. In Brisbane the suburbs with the highest views per listing according to realestate.com were as follows:
• Ashgrove Qld 4060
• Kalinga Qld 4030
• Qld 4155
• Holland Park Qld 4121
• Tarragindi Qld 4121
• Stafford Heights Qld 4053
We can confirm from being on the ground that these areas have strong demand from buyers with many properties going to multiple offer very soon after being listed. These are some of the areas that are outperforming, with upward pressure on prices. The high number of buyers, combined with limited listings, tends to have this effect.
The rental market in Brisbane remains resilient also at this time. We are seeing the vacancy rate at a city level continuing its downward trajectory, after an initial spike from March to April 2020.
Since then, rental markets have tightened, with many markets across Greater Brisbane experiencing the tightest vacancy for many years. We are also seeing multiple applications from prospective tenants being submitted on properties for rent, illustrating the shortage of quality rental properties available.
There remain some “at risk” locations in certain pockets of Brisbane. For example, postcode 4000 (which includes the Brisbane CBD) has a local vacancy rate of 13 per cent, which is extremely high-risk for an investor who may be looking at buying into that market.
While there is no evidence of distressed properties coming to the market in Brisbane, there continues to be talk about the economic cliff that is apparently ahead of us. Once JobKeeper and JobSeeker payments ease, and mortgage repayment deferrals stop, perhaps some people may need to sell as they are no longer able to hold their property. We remain of the opinion that different markets around Australia will be impacted in different ways.
According to a recent NAB announcement, Australian Home Loan deferrals are broadly in line with the total portfolio spread. This means the exposure of some states to potential “forced selling” is much less than other states around the country.
Queensland makes up approximately 17 per cent of the total number of NAB Home Loan facilities and 16 per cent of the total Home Loans that have been deferred across Australia. Compare that with NSW/ACT, which makes up 38 per cent of the total portfolio but 40 per cent of the total deferrals, and Vic/Tas, which makes up 31 per cent of the total portfolio and 32 per cent of the total deferrals. Then there is WA and SA/NT with much lower exposure again.
This provides a greater level of confidence for property owners and property buyers in Brisbane, given our exposure is a lot less than other locations around Australia.
Shane Oliver, AMP chief economist, also updated his forecasts recently for Australians’ property market. His thoughts are that Sydney and Melbourne are more exposed to price falls given their higher dependence on international migration, higher debt-to-income ratios, higher price-to-income ratios and greater investor penetration.
Over recent years, Brisbane’s growth has been underwhelming compared with Sydney and Melbourne, for example. While the other capitals experienced amazing capital appreciation, Brisbane property values remained quite flat. This is because local drivers of supply and demand vary considerably between different locations. Different property markets behave in different ways during various market conditions, so there is no reason to expect the outcomes to differ considerably throughout this pandemic.
Brisbane properties are more affordable and our income-to-debt ratio is a lot lower. The amount of our take-home income that we spend on our mortgages here in Brisbane is also a lot lower. Property markets around the country are all responding differently as a result of the pandemic, and at this stage we remain optimistic about the performance of Brisbane in the months ahead.
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