Investment Property Market Snapshot
Latest industry statistics and analysis.
Rental yields improving
According to CoreLogic’s Hedonic Home Value Index for February, gross rental yields were starting to repair with the national yield at 3.5 per cent for houses and 4.2 per cent for units: Canberra (4.2 per cent houses / 5.5 per cent units), Darwin (5.7 / 6.3), Hobart (5.0 / 5.1), Perth (3.8 / 4.3), Adelaide (4.2 / 5.0), Brisbane (4.2 / 5.4), Melbourne (2.6 / 3.9) and Sydney (2.9 / 3.7).
Asking rents rise
Capital city average asking rents rose 0.2 per cent for both houses and units over March, according to SQM Research. The average asking price for houses rose to $563 p/w and to $444 p/w for units. Hobart continued to record the highest rises in asking prices, up 3.1 per cent to $471.60 p/w for houses and up 2.6 per cent to $368 p/w for units – taking the change over the previous twelve months to +18.6 per cent for houses and +21.7 per cent for units.
Investor loans lift
Figures from the ABS show the value of both owner-occupier (+0.5 per cent) and investor (+1.1 per cent) mortgages increased over January. Despite the rise, the value of investor finance was down 12.1 per cent year-on-year. Data from APRA also showed that interest-only mortgages only accounted for 15.2 per cent (or $15.272 billion) of the $100.3 billion in mortgages written over the December quarter, which was a historic low.
Vacancy rates drop
The national vacancy rate fell to 2.2 per cent in February, down from 2.3 per cent in January, according to SQM Research. Rates fell in Melbourne (1.4 per cent from 1.8 per cent), Canberra (0.8 / 0.9), Brisbane (3.4 / 3.6), Adelaide (1.4 / 1.5) and Perth (4.1 / 4.4). Sydney was steady at 2.3 per cent, while both Hobart (0.5 / 0.4) and Darwin (3.3 / 3.1) recorded rises in vacancies.
Housing prices continue decline
National housing values fell for the fifth straight month in February, according to CoreLogic. Nationally values were down 0.1 per cent over the month to a median value of $552,316. Only Hobart recorded a rise in value (+0.7 per cent), while Adelaide held steady. All other capitals recorded falls: Darwin (-0.9 per cent), Sydney (-0.6), Canberra (-0.3), Perth (-0.2), and Melbourne and Brisbane (both -0.1).
Property price growth slows
Data from the ABS for the December 2017 quarter showed residential property prices rose
5 per cent through the year to December, with growth easing from the September (+8.3 per cent) and June (+10.2 per cent) quarters. The total value of Australia’s 10 million residential dwellings increased $92.9 billion to $6.9 trillion.
Brisbane tops list of capitals for investment
Brisbane has been named the capital city with the best investment prospects in 2018, garnering 46.1 per cent (up from 44 per cent in 2017) of votes in the Property Investment Professionals of Australia’s 2018 Member Survey. Melbourne was the second pick with 19.23 per cent (down from 29 per cent) and Perth came in third with 15.38 per cent (up from 3.7 per cent) of respondents saying it offered the best property investment prospects for 2018. Just 3.85 per cent (down from 11 per cent) cited Sydney as offering solid investment prospects.
According to the Adelaide Bank/REIA Housing Affordability Report, affordability declined nationwide in the December quarter. The proportion of household income needed to meet loan requirements rose from 30.3 per cent in the September quarter to 31.6 per cent Australia-wide (rises were recorded in each state and territory). The average loan nationwide rose to $399,055, up 4.6 per cent for the quarter. Despite the rise in unaffordability, the number of loans was up 1.5 per cent (only WA and NSW did not record rises).
Investors sell at a loss
According to CoreLogic’s Pain & Gain Report for the December 2017 quarter, 11.3 per cent of investor-held properties were sold at a loss (compared to 7.5 per cent of owner-occupier properties). In the capital cities, 9.3 per cent of investor properties sold at a loss (6.7 per cent of owner-occupier), while 15.3 per cent of regional properties resulted in losses (9.8 per cent of owner-occupier).
$1M+ properties on the rise
Data from CoreLogic’s Property Pulse revealed that in the 12 months to December 2017, 16.1 per cent of all houses and 9.5 per cent of all units sold for more than $1 million. In 2016, 14.8 per cent of houses and 8.1 per cent of units were in the $1M+ club. Across the capital cities, 23.8 per cent of houses and 11.6 per cent of units sold for more than $1M (up from 21.7 per cent and 9.8 per cent respectively the year before). In the regions, the figures were 4.6 per cent of houses (up from 3.8) and 3.8 per cent of units (up from 3.6).