The growing divide between Australia’s property markets has been highlighted again in a new report from realestate.com.au.
The latest Property Outlook Report shows that while prices across Australia have risen 0.9 per cent on average, that figure does little to highlight the growing differences between the major capital cities.
Data from realestate.com.au and CoreLogic shows that while the Sydney and Melbourne declines are being widely reported, Sydney fell 7.4 per cent year on year to June 2018, Melbourne actually grew by 0.5 per cent. And the market elsewhere in the country continues to soar – prices in Hobart rose by 16.1 per cent year-on-year.
Realestate.com.au Chief Economist Nerida Conisbee said there were several factors affecting the Australian property market, notably changing fiscal conditions overseas, the Financial Services Royal Commission and a reduction in the number of local and offshore investors.
“The likely outcome over the next six months is continued moderation of pricing in Melbourne and Sydney, while our other markets will hold up a lot better,” said Ms Conisbee.
“Predictions that median prices will decline by about 10 per cent seems a bit light in Sydney, given that prices have already dropped by 7.4 per cent. Melbourne is likely to see declines this year, however, at this stage, it is unlikely to be as extreme as in Sydney, particularly given that on a year-on-year basis, we are still seeing a very slight increase.
“On the positive side, the Australian economy is very slowly heading back to growth mode and as the development pipeline has slowed dramatically, particularly for apartments, this means less property will be available to buy. These will provide buffers to negative changes in the market, something that was not occurring the last time we saw big declines post the global financial crisis.”
Other capital cities also fared better than Sydney. Brisbane saw a 1 per cent rise in prices overall, with an increase in housing balancing out the fall in apartments. The report states that with the increased infrastructure planned for the region, that figure is expected to rise.
Adelaide saw a 3 per cent rise in prices, with apartments bringing the figure down slightly, and a 2.7 per cent rise in demand. The crown of most affordable city fell from the head of Hobart to land in Adelaide, with job growth and minimal development being named as the two main factors behind booming prices.
“Affordability in Hobart is dropping and it’s starting to become problematic for first-home buyers. A rise in traditional rental housing moving to short-term rentals and increases in jobs means that there is less rental accommodation for the growing population,” said Ms Consibee.
Darwin’s prices continue to fall, but rising demand in the capital shows it may be on a turning point. Similarly, while prices in Perth continued to fall, it saw the third highest increase in demand over the last 12 months, topped only by Hobart and Canberra.
Our nation’s capital showed steady growth, with a rise in demand of 16.2 per cent and a price jump of 7.7 per cent. Unusually, the increases in demand for apartments and houses are almost on par.