The national property market continues to be a tale of very different states and cities, with some strength in areas like Canberra and Hobart, and clear weakness in Sydney and Melbourne.
The positive news for property owners is that the latest commentary from national valuers Herron Todd White is that both Sydney and Melbourne are approaching the bottom with their respective property clocks, signalling they have nearly found their lowest levels.
While for those in Adelaide and Hobart, it looks like those markets are poised to see the most short-term growth.
New South Wales
Prices have eased across New South Wales and Sydney is getting very close to nearing the very bottom of the property clock, according to Herron Todd White. Given that Sydney is Australia’s most expensive property market, there are different segments of buyers who are looking to capitalise on the downturn in prices.
First home buyers are generally trying to target properties under the $650,000 mark and there has been interest in both units and detached houses. Upsizers are still active in the market as many growing families are forced to look for more space. While the prestige buyers are still present around Sydney and homes at the top end are still seeing considerable interest.
It continues to be a buyer’s market in Melbourne at the moment and many are using that as an opportunity to take their time and find exactly what they are looking for. That lack of urgency is hurting prices, but according to the HTW property clock, Melbourne is now at the very bottom.
In Melbourne, first home buyers are also making up a good portion of the market, with many trying to get a foot in the door. Buyers are looking to purchase around amenities and near employment opportunities.
In terms of the property clock, Brisbane is sitting towards the bottom, in the same sort of position as Melbourne. However, there are pockets where the fundamentals remain strong and according to the HTW, Brisbane is really the ‘poster child’ for fundamental drivers.
There are still strong areas in and around Brisbane, but you will need to look at the distance from the CBD as a key factor, along with access to the river and, of course, good schools.
Across Adelaide, the fundamental drivers appear to be in place for some decent growth in the coming 12 months. On the property clock, THR sees Adelaide and its surrounds in a rising market.
The various sections of the market, including first-home buyers, are using this opportunity to find good entry-level homes, while unit values are also starting to move higher after being towards the bottom of the property clock.
The Perth market continues to struggle on the back of the end of the mining boom and this is weighing on property prices. The outer suburbs of Perth continue to be very weak and that is being hurt by first home buyers looking to build rather than purchase an equivalent priced home that is already established.
Perth sits at the bottom of the property clock and has been in that position for some time. Without the fundamental drivers to lift demand, there is still a ways to go before we might see some upside.
Darwin continues to see some of the weakest conditions for many years. Population outflows as the mining sector has slowed down continue to weigh heavily on prices and it finds itself in a similar state to the Perth market.
With the weakness in prices, rental yields are strong and coupled with interest rates at a historic low of 1.25 per cent, Darwin property remains attractive for investors and home buyers alike.
According to HTW, the Canberra property market has been in a solid position from the end of 2018 to early 2019.
Most Canberra suburbs have maintained median price points for standard dwellings, while medium density and units have seen small declines. Generally, purchasers are looking for large blocks within established suburbs that provide access to good education and employment services.
The Hobart market continues to be one the strongest in the country and is still rising, according to the property clock from HTW.
The Hobart market has been one of the strongest across the board in the last five years and they believe there are still some sub-sections of the market that will keep prices strong, albeit not as much as previous years.