While demand for property seemed to subside somewhat in April according to the REA Group Property Demand Index, the month of May saw demand for housing reach a new record high.
The latest figures from REA Group suggest more price growth in major cities, despite other reports, such as the CoreLogic Home Value indices for the same period showing small declines in value along with softening markets for Sydney and Melbourne.
The report says the drivers behind this increase in the demand index are not exactly as expected, with APRA telling banks to restrict lending, increases in lending rates by banks and negative press about rising debt levels, but demand is not slowing, and that it appears to be an imbalance in demand and supply driving further price growth across our capital cities.
Nerida Conisbee, Chief Economist for realestate.com.au says, “The Australian residential market feels almost bulletproof at the moment with continued increases in demand setting us up for even more price growth in our major cities, despite the constant speculation based on median price figures that the market is set to collapse.”
Most popular suburbs
REA’s chief economist Nerida Conisbee from realestate.com.au says the most popular suburbs searched on the real estate portal have large, affordable homes on a big block close to shops, schools and public transport.
“People on realestate.com.au engage most with this type of property and so many of the most in- demand suburbs over the past six months have these characteristics,” Conisbee said.
“The three strongest markets continue to be Tasmania, New South Wales and Victoria. Western Australia and Northern Territory are still behind the rest of Australia and while Northern Territory appears to have turned a corner with demand up, year-on-year demand continues to drop in Western Australia.”
Farmborough Heights in Wollongong is the most popular suburb in Australia over the past six months, with Sydney money driving the strong demand. The suburb has always been aspirational for people in Wollongong, but Sydney affordability escapees are looking there to get the type of homes and the lifestyle they want.
While housing affordability remains an issue in national focus, expensive suburbs also featured in the top 10 for many states, including North Balgowlah on Sydney’s every-popular northern beaches suburbs and the Melbourne beachside suburb of Middle Park.
National top 10 suburbs in demand (buy)
1 Farmborough Heights NSW 2526
2 The Basin VIC 3154
3 Narraweena NSW 2099
4 Allambie Heights NSW 2100
5 Unanderra NSW 2526
6 Yallambie VIC 3085
7 Croydon Hills VIC 3136
8 Middle Park VIC 3206
9 Briar Hill VIC 3088
10 North Balgowlah NSW 2093
State-by-state
New South Wales
Moderate 4.7 percent month-on-month increase in dwelling demand.
Price growth is still up. Demand is up. Premium suburbs (beach and harbour) are still well sought after with the demand spreading to Wollongong
Rental demand tracking the same as buying demand with a 4.9 percent increase.
Victoria
For Melbourne buyers, suburbs in the outer north-east are now all in the top 10 most in demand with people looking for large blocks, large homes at more affordable pricing. Non-price conscious buyers are still attracted to beachside or west to Gladstone Park
Demand from buyers and renters both in the green at 5.7 and 5.4 percent increases respectively.
Queensland
Gold Coast property demand has fallen with only one suburb in the top 10. Inner city suburbs of Brisbane back in demand with big block, big land interest driving growth in the outer suburbs
Buyer and rental demand recorded the highest month on month increase with 8.5 and 10.8 percent respectively
South Australia
REA analysis indicates that while the SA market is doing ok it is certainly not seeing quite the same heat that is seen in Melbourne and Sydney. The exception to this are suburbs in the inner south where we are seeing very high levels of demand
An upswing in buyer demand of 5.6 percent for the month has seen the year-on-year demand move into the green with a positive number. The corresponding rental demand increase of 9.2 percent (one of the country’s highest) has pegged back the decline of previous months ot be a net zero demand change in the last 12 months
Tasmania
Interstate and overseas money continues to find Tasmania’s affordability and lifestyle irresistible. REA suggests that it is unlikely that this level of demand growth is being sustained by local demand alone with Chinese demand increasing by 70 percent over the past year.
Buyer demand is up 58 percent over last year and rental demand has increased by a staggering 91.8 percent over the past 12 months
Western Australia
Western Australia may be a tough market at the moment, but for the premium suburbs, demand is high. These are all overwhelmingly either in the inner west or on the northern beaches.
Buyer demand had an upturn with a 3.5 percent increase and WA is now the only state with negative year-on-year demand. Rental demand was solid with a 6.2 percent increse in the month
ACT
The report shows that not a single southside suburb of Canberra made it into the top 10 list for property seekers looking in Australian Capital Territory.
Year-on-year Buyer demand increase is just behind Tasmania at 48.2 percent with the rental market still showing high demand nudging 70 percent increase in demand over the last 12 months
Northern Territory
The Northern Territory has recorded increases in month-on-month and year-on-year demand for both purchaser and renter demand. The report suggests that the increases are not rapid, but rather more steady which is more sustainable in the long term.
