#126: Analysing 30 years of cash rate rises and the impact on property prices, why rents are increasing but yields reducing, what's happening with Brisbane & Adelaide, impact of listings on supply, national growth rate stabilises and more - Market update
Manage episode 306650090 series 2905854
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https://propertyplanning.com.au/propertyplannerbuyerprofessor/ In this week's episode, Dave, Cate and Pete take you through: 1. Do cash rate rises slow down house prices? The Property Professor shares his recent research covering the last 30 years of cash rate rises and the effect on property prices. Is there a correlation? Listen to find out and visit the show notes to see the data! 2. Housing growth consistent over the last 3 months Nationally housing values increased a further 1.5% in October, which is in line with growth over September and August. Although slowing down from March's peak, 1.5% monthly growth annualised is still a whopping 18%. For most capitals, growth has slowed down since March, except for Adelaide and Brisbane, which have both increased. This is possibly because median values are lower in these cities, while other capital cities become less affordable. 3. Brisbane takes the mantle for highest month on month growth, but Hobart is still going strong Housing values grew 2.54% in Brisbane, while Hobart is coming down from extreme highs, posting a very strong 2%. Interestingly, property prices in Hobart are quite high relative to the rest of the nation, yet average incomes are 15% lower than national incomes. This points to money from the mainland being invested in Hobart and also indicates retirees and remote working sea-changers embracing the apple isle. 4. Regionals still outperforming capitals Growth in our regions has consistently been higher than capitals, which is shown in annual, quarterly and monthly growth figures. This indicates there is a still a drive to escape to the regions, but we wish there was more data! Where is the money coming from? The Property Buyer shares her purchasing experiences in Geelong, where three quarters of buyers in the current market are Melbournian. 5. Holiday locations and the great escape Interest in Queensland and key holiday destinations such as Noosa has continued burgeoning ahead. However, the trio warn that historically holidays locations have big runs of growth and then harsh corrections. 6. Will we see a rush of money to the property market? The trio discuss the March peak rate of growth and at the time, we were feeling secure and believing covid was behind us. Then comes the delta strain and further lockdowns dampening growth. With vaccination rates picking up, boarders re-opening and holidays around the corner, it seems like we're heading into another period of optimism that covid is in the rear view mirror. 7. Rental yields reducing as housing values soar Melbourne unit rental growth, (which reached as low as negative 13%), have finally recovered and is now in positive territory. However, even though rental growth is increasing, this has not kept pace with housing values, so rental yield as a percentage of the value of the property is actually decreasing. The average yield for houses in Sydney and Melbourne is likely as low as it's ever been, with rental yields at 2.20% and 2.40% respectively. This is one, (of many possible) indicators that the market is heated. 8. Listings on the rise but still at extremely low levels Compared with the last 6 years, total listings in 2021 are the lowest in number. Old listings (properties that have been on the market for over 180 days) have halved year on year for most capital cities, as old stock is snapped up. Thankfully, new listings have seen an uptick over October with the end of Melbourne and Sydney lockdowns and vendor confidence in the spring market conditions increasing. 9. Consumer sentiment in the property market...