You simply can’t escape the doom and gloom stories about the property market right now.
In the mainstream media, we’ve been bombarded with every possible fatalistic prediction and scary scenario – it’s enough to have investors and homeowners alike shaking in their boots!
However, there are a few important things to note.
Sure, prices have taken a downward turn – but not in the dramatic way the network news would like you to believe. The majority of price falls have been occurring in just two cities – Sydney and Melbourne – with other parts of the country continuing to hold strong. In Brisbane, Canberra and Hobart, there’s no a mad panic, because prices in these cities are steady and stable.
In fact, in the year to September, property values in Hobart actually gained 9.3 per cent, while in Canberra a modest 2 per cent growth was certainly preferable to the dips seen elsewhere.
Let’s take a look around the nation, and examine the current state of play of the property market in our capital cities…
It dragged the rest of the country kicking and screaming into the real estate boom, and now Sydney is proving to be ahead of the pack once again, leading the downturn in property prices. The market in our largest capital peaked in 2017, with median values now sitting at $976,365 for houses and $734,900 for units.
Overall dwelling values are down 6.1 per cent over the past 12 months, with 1.5 per cent of this loss occurring in past three months. Houses are falling with greater speed than apartments, with standalone properties losing 7.6 per cent, while those in high-density living have only seen a dip of 2.6 per cent. Buyer confidence is also low, with activity down almost 20 per cent.
It’s important to remember that the past five years have seen median dwelling values in Sydney increase by 51 per cent – so in the scheme of things, the current slump is no more than a blip on the radar. Even factoring in the price slide since 2017, the average annual growth over the past decade is sitting at a healthy 6.2 per cent.
Never one to let Sydney steal the limelight, Melbourne has also peaked – a little later than Sydney, towards the end of last year. Property values across our most liveable city currently hover at around 4.4 per cent below the peak of the boom, and it’s the top end of the market that’s suffering the most, with high-end properties falling by 6.7 per cent over the past 12 months.
Days on market have increased, from 30 days to 41 since this time last year, and vendor discounting is also on the rise. With a median unit price of $552,250 and a median house price a touch under $800,000, the downward trend certainly hasn’t been the opportunity to break into the market that first homebuyers have been hoping for – yet.
Again, like Sydney, the current conditions haven’t done much to dampen the longer-term effects of the boom, with values up a whopping 77.3 per cent over the past decade.
Properties are selling faster and vendors are holding firm on their prices up in Brisvegas, where the market has reached a new all-time high. The median house price is now $539,374, while units are sitting at $380,866. Migration and development is set to drive prices higher in the coming years, and the signs are looking positive for those who own properties in the sunny Queensland capital.
Over in the West, they’re probably scratching their heads and wondering what the rest of us are going on about – after all, the post-mining boom slump that hit Perth in 2014 is old news, with the market finally beginning to flatten out. In the 12 months to September, dwelling values sunk by a modest 2.8 per cent – leaving the median unit price at $390,326 and the median house price at $475,774. Selling times and vendor discounting has remained fairly steady, although apartment oversupply is putting a damper on investment strategies. Like Adelaide, it’s likely to be slow going for any hope of growth in the Perth market.
Values have stagnated in Adelaide, with yearly figures showing property prices are up just 0.7 per cent. This modest gain has left the median unit price sitting at $324,932, while the median house value is $466,636. There’s no sign of any dramatic, cliff-edge property slump in the City of Churches, but nor do economic or employment stats point to notable growth – a steady, uneventful 2019 seems to be on the horizon.
They’ve been suffering cruel taunts from the mainland for decades, but finally it’s been Tassie’s turn to shine! In the past 12 months, property values in Hobart are up a huge 9.3 per cent, at historic highs of $370,609 for units and $464,515 for houses. However, with job and income growth unable to keep pace with these changes, it’s unlikely the high gains will continue. The rental market in Hobart is also strong, with investors reaping rewards to the tune of 4.9 per cent.
Our nation’s capital has had a strong quarter, with values rising by 1 per cent over the past three months, and 2 per cent for the year. While this is more positive news that we’re seeing from Sydney and Melbourne, it’s still a noticeable slowing from the previous years’ growth of 7.8 per cent. The median house price in Canberra is currently $686,582, and a unit in the hub of Aussie politics will set you back $443,791. Houses have seen the most growth, creeping up 3.1 per cent over the past year and 1.2 per cent this quarter, while units have actually lost 1.4 per cent since 2017.
The 3.7 per cent downturn in Darwin dwelling values over the past 12 months has seen the median house price fall to $505,414, and the median unit price drop to $309,654. However, house owners need not fear – it’s the unit market that is dragging the citywide averages down. Houses are in fact up 2.3 per cent since this time last year, while units are down a disparaging 15 per cent. This may be bad news for owner-occupiers, but investors will be pleased to note that strong yields of 5.6 per cent are still on offer in the NT capital.
Data source: CoreLogic