Investment Property Market Snapshot

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Rents steady, yields compress
According to Domain’s State of the Market Report, median asking prices for rents held steady in the September quarter: Sydney ($550 p/w both houses and units); Melbourne ($420 p/w houses, $400 p/w units); Brisbane ($400 houses, $370 units); Darwin ($520 houses, $400 units); Adelaide ($360 houses, units +1.7 per cent to $295); Hobart ($320 units, +4.2 houses to $375); Canberra ($420 units, +1 houses to $505); Perth ($300 units, -2.8 houses to $350).
With the exception of Canberra (house yields up 0.4 per cent to 4.33 per cent and units up 1.1 per cent to 5.77 per cent), rental yields were generally down: Sydney houses -1.1 per cent (3.12 per cent), units +0.4 per cent (3.86 per cent); Melbourne houses -1.2  (3.34), units -1.1 (4.47) ; Brisbane -0.5 houses (4.67), units -3.5 (4.93); Adelaide houses -1.5 (4.51), units -1.4 (5.18); Perth houses -1.1 (4.08), units -2.3 (4.37); Hobart houses -1.3 (5.29), units +0.7 (5.53); Darwin houses -1.7 (4.88), units -0.8 (5.65).
Investor lending rises
The latest ABS Housing Finance data has revealed investor lending rose 4.3 per cent to $12.633 billion in August. Lending to investors was up 6.5 per cent from a year earlier. It was the largest monthly total since March 2017 and the greatest in percentage terms since November 2016.
Vacancy rates steady
Data released by SQM Research showed the national residential vacancy rate was 2.2 per cent in September. Hobart continued to have the tightest market with a rate of 0.4 per cent, while Perth had the highest at 4.5 per cent. Vacancy rates were up in Sydney (2.1 per cent), Melbourne (1.9), Brisbane (3.2) and Darwin (2.7). Adelaide (1.6) and Canberra (1.0) saw no change over the month.
Rental growth accelerates, gross rental yields slow
CoreLogic’s Monthly Housing and Economic Chart for October revealed rents were 2.9 per cent higher over the year, with capital city rents up 2.8 per cent and regional market rents up 3 per cent. Gross rental yields were recorded at 3.6 per cent nationally in September; 3.3 per cent across the combined capital cities and 4.9 per cent across the combined regional markets.
October asking rents up marginally
Capital city asking rents in October rose 0.2 per cent to $550 p/w for houses, according to SQM data. Rents for units remained steady at $438 p/w.
Rent-vesting hotspots
Comparison website Mozo has revealed the top seven suburbs to invest in while renting. Rental yields, property price movements, vacancy rates and housing supply rates were used to determine the hotspots: 1. Madeley (WA), 2. Tewantin (Qld), 3. Scullin (ACT), 4. Liverpool (NSW), 5. Brooklyn Park (SA), 6. Trevallyn (Tas) and 7. Sunbury (Vic).
Overseas migration continued to grow
Demographic data from the ABS showed a large jump in net overseas migration over the March 2017 quarter – up 36 per cent on the March 16 quarter. NSW (40.3 per cent) and Victoria (36 per cent) accounted for the lion’s share of immigrants. Victoria also recorded the greatest increase in the number of interstate migrants (the highest on record), followed by Queensland, Tasmania and the ACT, with all other states and territories recording net losses.
Investor mortgage rates increase
Interest rates for investor lending increased over the September quarter, according to RateCity’s Rates of the Nation report. Interest-only loans were up 0.1 per cent to 5 per cent for an average variable rate, up 0.08 per cent to 4.61 per cent for average three-year fixed rate and up 0.09 per cent to 5.02 per cent for average five-year fixed rate.