Ray White Now August 2022

After experiencing the most rapid rise in house prices ever recorded, interest rates have now calmed the market. Nationally, the median house price in Australia peaked in April at $732,500 and has come back to $729,000, a decline of 0.5 per cent. Not exactly a crashing market but clearly one in a different cycle, where most markets are now seeing declines in prices. While prices are slowing, we’re not seeing similar conditions in rental markets. Australian advertised rents for  houses are up 27 per cent since the start of the pandemic and aren’t expected to slow any time soon. As yet, these higher advertised rents aren’t showing up among existing tenants and as a result it’s not a component of higher inflation.  This, however, is expected to show up later this year and will be another driver of high inflation. High rental growth is a problem for renters but once it feeds into inflation and hence interest rates, it will also be problematic for mortgage holders. Ideally, the peak of inflation will come in by the end of the year at which time we’ll start to see a slow down in those rate rises.

This month in Ray White Now, we take a look at the state of each capital cities’ housing markets. While Sydney is leading the way for price falls with the median down 6.7 per cent since the peak in December, Adelaide’s momentum  continues for now and the city is yet to hit its post pandemic peak. Meanwhile, a construction crisis is coming in at a difficult time for the rental market. Rents are rising rapidly but the supply of new housing will be constrained by rising  construction costs and a flow on impact to the viability of new projects. With the 2021 Census of Population and Housing now out, we investigate our most international suburbs. While North Americans and Europeans show a fondness for our beaches, the suburbs that have the highest proportion of overseas born by country are far more mixed. Finally, with commercial property transactions hitting a record high in the 2021/22 financial year, we provide a state by state wrap for
this sector.After experiencing the most rapid rise in house prices ever recorded, interest rates have now calmed the market. Nationally, the median house price in Australia peaked in April at $732,500 and has come back to $729,000, a  decline of 0.5 per cent. Not exactly a crashing market but clearly one in a different cycle, where most markets are now seeing declines in prices. While prices are slowing, we’re not seeing similar conditions in rental markets. Australian  advertised rents for houses are up 27 per cent since the start of the pandemic and aren’t expected to slow any time soon. As yet, these higher advertised rents aren’t showing up among existing tenants and as a result it’s not a component of higher inflation. This, however, is expected to show up later this year and will be another driver of high inflation. High rental growth is a problem for renters but once it feeds into inflation and hence interest rates, it will also be problematic
for mortgage holders. Ideally, the peak of inflation will come in by the end of the year at which time we’ll start to see a slow down in those rate rises.

This month in Ray White Now, we take a look at the state of each capital cities’ housing markets. While Sydney is leading the way for price falls with the median down 6.7 per cent since the peak in December, Adelaide’s momentum  continues for now and the city is yet to hit its post pandemic peak. Meanwhile, a construction crisis is coming in at a difficult time for the rental market. Rents are rising rapidly but the supply of new housing will be constrained by rising construction costs and a flow on impact to the viability of new projects. With the 2021 Census of Population and Housing now out, we investigate our most international suburbs. While North Americans and Europeans show a fondness for our beaches, the suburbs that have the highest proportion of overseas born by country are far more mixed. Finally, with commercial property transactions hitting a record high in the 2021/22 financial year, we provide a state by state wrap for
this sector.

We hope you enjoy this month’s Ray White Now and we’re proud to be providing you with relevant, timely and interesting content and data in 2022.