Investment Property Market Snapshot
Latest industry statistics and analysis.
Asking rents up
Data released by SQM Research showed capital city asking rents in December were up
0.4 per cent to $550 per week for houses, while unit asking rents fell 0.5 per cent to $437 per week: Canberra ($606 p/w houses / $433 p/w units), Sydney ($728 / $519), Darwin ($535 / $410), Brisbane ($443 / $366), Adelaide ($379 / $290), Hobart ($382 / $322), Melbourne ($515 / $395) and Perth ($420 / $321).
Rental yields remain at low levels
CoreLogic’s November Hedonic Home Value Index revealed national gross rental yields remained at low levels – 3.46 per cent for houses and 4.09 per cent for units. The highest yield was Darwin at 5.8 per cent and the lowest Melbourne at 2.9 per cent: Canberra (4.4 per cent houses/5.3 per cent units), Darwin (5.7 / 5.9), Hobart (5.0 / 5.0), Perth (3.8 / 4.3), Adelaide (4.1 / 5.0), Brisbane (4.1 / 5.2), Melbourne (2.6 / 3.9) and Sydney (2.9 / 3.6).
Vacancy rates rise
SQM Research data revealed the national vacancy rate rose slightly in November to 2.2 per cent. Hobart’s vacancy rate remained the lowest at 0.3 per cent, while Adelaide (1.4 per cent) and Brisbane’s (3.4 per cent) rates remained unchanged. Sydney recorded the largest rise, up from 1.8 per cent to 2.1 per cent. Increases were also recorded in Melbourne (1.8 per cent), Canberra (1.0 per cent) and Perth (4.5 per cent).
Interest-only loans decline
Data from APRA’s September Quarterly ADI Property Exposures indicated that interest-only loans had declined to an historic low of 16.91 per cent (down 44.84 per cent over the quarter). The percentage of interest-only loans for the quarter was 35.35. In June 2015, 45.65 per cent of all new loans approved by banks were interest-only, that figure is now 16.69 per cent (down 48.65 per cent over the quarter).
Investors still favour established homes
According to research from Mortgage Choice, the majority of investors are choosing to purchase established homes over off-the-plan properties. The 2017 survey found 76.9 per cent of investors purchased an existing dwelling, compared to 23.1 per cent who bought a new build.
Foreign investors targeted in SA
In late 2017, the SA Government announced that a 7 per cent foreign investor surcharge (in addition to stamp duty) would be implemented from 1 January 2018. This figure was higher than the 4 per cent surcharge proposed in the July state budget. The surcharge will apply to all contracts executed by foreign investors after 1 January and also apply to investors who have already signed contracts but not finalised the sale.