February was a strong month for the property market throughout Australia. Some states saw house and apartment prices bounce back quite quickly after a small dip in the latter half of 2019, and the introduction of further support for first home buyers has brought first home buyers strongly back into the market, meaning that there are more buyers than ever looking for a new home. Lets look at the HTW national property clock to see how each local market is performing.
As you can see in the property clocks above, the Sydney market is increasingly strongly. The property cycle has turned extremely quickly for the Sydney market, with demand strong and auction clearance rates again at very high rates, indicating strong demand that is pushing prices higher.
The HTW report highlights a trend that buyers are opting for small houses. Over the past five to ten years, more home owners have been looking to buy smaller, low maintenance properties. This has been driven by increasing numbers of young professionals and families entering the market, and more downsizers who are looking for a smaller property to maintain. This shift towards lower-maintenance living is seen in the high demand for apartments, duplexes, townhouses, and over 55s developments, and in increasing numbers of ‘granny flats’ being built.
Another big shift has been the increase in remote workers or ‘digital nomads’. These are the people who can complete their work from anywhere, and so make use of flexible workplaces and improved technology to buy a home where they really want to live. The HTW report says that “The Blue Mountains, for example, continues to attract families and professionals from the Sydney basin. With large family dwellings and large garden blocks available for the cost of a unit in many Sydney metropolitan areas, people are relocating to get more bang for their buck and take advantage of flexible working arrangements”. Increased demand of this nature is also being felt even further afield in larger regional towns such as Bathurst or Orange.
The apartment and housing markets throughout Queensland are a mixed bag right now. The Brisbane housing market is showing signs of recovery, while the apartment market is still at the bottom of the cycle according to HTW. On the Gold Coast, the housing market is rising, while the apartment market is beginning its recovery. The Sunshine Coast has both markets easily in the rising market zone, and is currently one of the strongest in the Sunshine State.
Brisbane is seeing an increase in first home buyers entering the market, according to the HTW report. The $15,000 state government first home buyer grant (which is limited to new property) and federal government deposit scheme are helping to boost their numbers. Add to that the low interest rates and it is easy to see why first timers on the property ladder are active and motivated. The lower price point for Brisbane property when compared to Sydney and Melbourne also adds to the appeal for FHB’s.
The Gold Coast is a very different market. Most buyers are those looking to upgrade (ie. on their second or third home) or to downsize. HTW highlight the fact there prices are currently quite stable as “purchasers [are] either looking to renovate and flip for a quick profit as there is steady local demand for recently renovated, just move in, nothing to do type houses”.
The Sunshine Coast market is the ‘it’ spot for downsizers right now. As per the last Australian Bureau of Statistics report, 42% of the population is between 40 — 70 years old. The impact that this population segment is having on the market is pretty sizeable. As HTW says, “this market is pretty clear about what it wants. They don’t want the hassle of looking after large homes and yards. They want the flexibility of being able to socialise with friends, play golf, go fishing and travel”. This has lead to smaller properties with better affordability around the area.
If you’re in the ACT, Herron Todd White is telling us something you’re bound to already know: demand is outstripping supply, and it’s making homes expensive. The housing market is sitting at the peak of the property cycle right now, and while the apartment market is on its way down, it’s still expensive to buy (or rent) in Canberra. Part of this is due to the highly mobile population, but mostly is down to the fact that there are too many people wanting to live in the country’s capital city. The population broadly speaking comprises young singles and couples looking for a place to live for the short term, families with young children and those with teenagers looking for a second or third dwelling and retirees.
Affordability remains the key factor driving demand with affordable units providing options in the City CBD and town centres of Belconnen, Woden and Gungahlin all of which have shopping facilities, cinemas and restaurant and cafe precincts. In summary, demand is good in all sectors and properties that offer buyers move in ready dwellings with modern kitchens and bathrooms and no projects that have access to local facilities provide a smooth transition from one property to another no matter who the buyer is.
The Herron Todd White property clocks are showing us that Australia is set to have a strong year in the property market. Of course, recent scares on the financial markets due to COVID-19 and oil prices are making this previously clear future a little more murky, but it remains to be seen how much house and apartment prices will be affected.