Investment Property Market Snapshot
Latest industry statistics and analysis.
Yields flat, rates on the rise
According to CoreLogic’s Rental Report, during the December quarter all capital cities (except Canberra) and regional markets recorded stronger annual rental returns. Nationally, rents rose 0.3 per cent over the quarter, with increases recorded in Melbourne (+0.3 per cent), Adelaide (+0.9), Hobart (+2.1) and Canberra (+1.6), while rental rates were lower in Sydney (-0.3 per cent), Brisbane (-0.1), Perth (-0.7) and Darwin (-0.5). Median weekly rents increased 0.1 per cent over the final quarter and 2.7 per cent over the calendar year to $420 for houses and $425 for units.
Vacancy rates drop
The national residential vacancy rate fell 2.3 per cent in January to 74,113, down from 2.5 per cent in December 2017, according to SQM Research. Vacancy rates fell in Melbourne (from 2.1 per cent to 1.8), Sydney (2.6 to 2.3), Canberra (1.3 to 0.9), Brisbane (3.8 to 3.6), Perth (4.6 to 4.4) and Darwin (3.5 to 3.1). Hobart recorded a rate of 0.4 per cent, up from 0.3 per cent, while the rate remained ready in Adelaide at 1.5 per cent.
Asking rents up
SQM Research revealed capital city asking rents in February rose 0.2 per cent to $562 p/w for houses and 0.5 per cent to $443 p/w for units: Canberra ($615 p/w houses / $436 p/w units), Sydney ($744 / $525), Darwin ($554 / $413), Brisbane ($449 / $368), Adelaide ($382 / $296), Hobart ($405 / $358), Melbourne ($528 / $402) and Perth ($426 / $325).
RBA warns about interest-only loans
With many interest-only loans set to expire between 2018 and 2022, the Reserve Bank says many investors will struggle to meet more conservative lending standards when their current agreements expire. The RBA notes that currently 40 per cent of mortgages don’t require any repayment of the loan principal and if investors cannot afford to move to principal and interest repayments or qualify to extend the interest-only period, they could find themselves in financial stress.
More women are investors
Westpac’s Home Ownership Report has found that 16 per cent of women have purchased an investment property, compared to 13 per cent of men. It was also found that 22 per cent of women are likely to consider adding to their investment portfolio with property, compared to 11 per cent of men. The investment potential of a property was considered a necessity by 35 per cent of women, compared to 10 per cent of men.
Airbnb listings soar
According to independent monitoring website Inside Airbnb, there has been an 87 per cent rise in total listings on Airbnb across Australia in the last 12 months. There has also been a big jump in the number of entire homes available (making up 70 per cent of all listings) and commercial listings, such as serviced apartments run by PMs, on the platform.
Chinese investment plummets
Chinese investment into Australian commercial property fell 60 per cent in 2017, according to Cushman & Wakefield’s annual China Outbound Investor Intentions Survey. The data revealed total investment fell from $6.97 billion in 2016 to $2.83 billion last year.
Sydney ranked amongst top cities for foreign investment
Sydney has ranked 9th in a survey of the top cities for foreign real estate investment. London ranked as the number one city in the Association of Foreign Investors in Real Estate (AFIRE) 26th annual survey, edging out New York. Berlin (3rd), LA (4th), Frankfurt (5th), Paris (6th), Seattle (7th), Shanghai (8th) and Toronto (10th) rounded out the top 10. Australia dropped from 4th to 5th ranking as the country considered the most stable for real estate investment (US was 1st, Germany 2nd, Canada 3rd and the UK 4th).