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The Real Estate Institute of Australia’s (REIA) Real Estate Market Facts Report provides a snapshot of how the nation’s property market fared in the June quarter.
On the rental front, the report of Australia’s peak real estate body revealed Darwin as the Australian city with the highest vacancy rate (3 per cent), after vacancies rose 0.9 per cent over the three months to June, followed by Canberra (2 per cent) and Hobart (1.8 per cent).
Outside this trio of markets, the number of available rentals rose to 1.5 per cent in Sydney, 1 per cent in Brisbane and 0.8 per cent in Perth. Adelaide reported the nation’s lowest vacancy rate (0.6 per cent). In defiance of national trends, Melbourne’s vacancy rates dipped to 2.1 per cent.
Even with rental markets loosening over the three months to June, Leanne Pilkington, deputy president of the REIA, explained: “The weighted average median rent for three-bedroom houses in the eight capital cities increased to $553 per week, a quarterly increase of 3.2 per cent but an increase of 9.9 per cent in the past year.”
She said rising rents were driven by high demand, hot competition and an overall lack of competition, with rents for two-bedroom dwellings increasing to $563 nationally, representing a quarterly increase of 3.6 per cent and an annual rise of 18.7 per cent.
The report found yields were stronger for other dwellings than houses, exemplified in Sydney, where a three-bedroom home collects an annual yield of approximately 1.8 per cent, while this figure jumps to 3.8 per cent in two-bedroom other dwellings.
Moving away from the rental market, Ms Pilkington said sales activity maintained strong results even in the face of significant lending and economic headwinds.
“The median house price for the eight capital cities increased to $977,236 over the quarter, but declined 3.4 per cent over the year,” she said.
In Sydney, Brisbane, Adelaide, Perth, Hobart and Darwin, median house prices rose – with the NSW capital reporting the largest increase (5.3 per cent), while prices went the opposite direction in Melbourne and Canberra.
Unique challenges faced by regional Australia meant “mixed results were experienced across all accommodation types,” she noted.
“Notable movements across home sales over the past year include Broome (+7 per cent), Geelong (-7.5 per cent), Launceston (-3.6 per cent), Port Lincoln (+16.3 per cent), Cairns (+3.3 per cent) and Wollongong (-8.3 per cent). Other dwellings in Alice Springs recorded 9 per cent growth in the past year,” she said.
On the rental front, Newcastle and Wollongong reported significant rises of 8 per cent and 10 per cent respectively across two-bedroom homes, with rents also rising for three-bedroom homes in Alice Springs (5.5 per cent).
Significant rental rises for three-bedroom homes were reported in Mt Gambier (51 per cent) and Port Lincoln (21.2 per cent).
Ms Pilkington argued that getting housing policy settings correct is more important now than ever, considering the continued strong growth across the housing market.
“National cabinet has rejected rent freezes and controls; inflation had returned to the RBA’s target band with the cash rate on hold; and the Housing Australia Future Fund passed Parliament,” she noted.
“It is with a return to a more moderate economic and political outlook will pressures on our housing system also moderate, which we hope to see bear out in future quarters,” Ms Pilkington concluded.
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