Investment Property Market Snapshot
Latest industry statistics and analysis.
SQM Research revealed capital city asking rents over January rose 0.9 per cent to $555 p/w for houses, while unit asking prices rose 0.7 per cent to $440 p/w: Canberra ($606 p/w houses / $442 p/w units), Sydney ($730 / $520), Darwin ($549 / $419), Brisbane ($448 / $368), Adelaide ($378 / $293), Hobart ($383 / $343), Melbourne ($522 / $396) and Perth ($422 / $322).
Canberra and Hobart record best yields
According to the Domain State of the Market Rental Report, Canberra recorded the highest gross rental yield for units in the December 2017 quarter at 5.8 per cent. Hobart recorded the highest yield for houses at 5.34 per cent: Sydney (3.08 per cent for houses / 3.83 per cent for units), Melbourne (3.2 / 4.41), Brisbane (4.64 / 4.92), Adelaide (4.53 / 5.18), Perth (4.18 / 4.36), Canberra (4.37 / 5.8), Darwin (4.91 / 5.67) and Hobart (5.34 / 5.52).
Vacancy rates rise
The national residential vacancy rate was 2.5 per cent in December, according to data released by SQM Research. All capitals, except Hobart which remained the tightest market at 0.3 per cent, recorded increased vacancy rates over the month: Adelaide (1.5 per cent, up from 1.4 per cent), Perth (4.6 / 4.5), Melbourne (2.1 / 1.8), Brisbane (3.8 / 3.4), Canberra
(1.3 / 1.0), Sydney (2.6 / 2.1) and Darwin (3.5 / 2.8).
Investor loans continue to slow
Housing finance figures released by the ABS show investor housing commitments rose a seasonally-adjusted 1.5 per cent in November 2017 to $12.185 billion (in trend terms, which excludes alterations and additions but includes refinancing, commitments were down 0.3 per cent). The value of investment loans was down 8.3 per cent compared to a year ago.
Growth in rental yields flat
Data from CoreLogic for the 2017 December quarter showed rental rate increases were flat for the combined capital cities, down slightly from 0.1 per cent growth in the previous quarter. Annual growth across the combined capitals was 2.6 per cent (higher than the
1.1 per cent growth recorded in the 2016 calendar year) while median rental yield was
3.32 per cent. Quarterly rental yields in regional areas were up 1.2 per cent on the quarter, with the median rental yield at 4.94 per cent.
Mortgage arrears lessen
According to credit ratings agency Moody’s, the number of Australian borrowers 30 days behind on prime mortgages dropped to 1.54 per cent in the September 2017 quarter from 1.62 per cent in the June quarter. Non-bank mortgage arrears were also down from 2.85 per cent to 2.59 per cent, while non-conforming loan arrears were also down to 3.3 per cent from 3.55 per cent.
Perth becomes most affordable place to rent
A survey from the Property Club has revealed Perth is the most affordable capital to in which to rent. Based on the median weekly rent for a house at $350, the proportion of full-time adult weekly earnings to service the rent was 19.4 per cent in WA. Adelaide was the next most affordable at 23.8 per cent, Brisbane at 25.6 per cent, Hobart at 26.4 per cent, Melbourne at 26.7 per cent, Canberra at 27.8 per cent and Darwin at 29.3 per cent. Sydney was the least affordable at 34.2 per cent.
Home values decline
National dwelling prices declined 0.3 per cent in December to a median value of $548,817, according to CoreLogic’s Hedonic Home Value Index. Overall, dwelling values rose 4.2 per cent for the year but growth was slower than in previous years (up 5.8 per cent in 2016 and up 9.2 per cent in 2015).
Building approvals jump
Figures from the ABS show building approvals rose 11.7 per cent in November, boosted by a spike in apartment and townhouse construction activity in Victoria, WA and Tasmania. Approvals for private houses fell 2 per cent while approvals for ‘other dwellings’ were up 30.6 per cent. Overall, total building approvals were up 17.1 per cent over the 12 months to November.