Our June Results
The sign savvy home buyers and investors have been waiting for is on the horizon after a rocky 12-months in property. Most Australian capital cities reported a downturn in home values last year, however recent industry data shows the rate of decline is losing momentum.
According to CoreLogic data, national dwelling values for the quarter to May 2019 were down 1.5 per cent, however a closer look at individual cities such as Sydney and Brisbane, shows more specific movement.
Brisbane home values were down 1.4 per cent by the end of the quarter and down 2.3 per cent for the year to May 2019. Overall, Brisbane’s combined unit and house values remains 2.4 per cent lower than the April 2018 peak.
The good news for current Brisbane house hunters and investors is that house values are expected to see a correction this year according to the CoreLogic-Moody’s Analytics June quarter Housing Forecast Report. The analysis showed that house prices should be bouncing back in 2019 with apartment prices predicted to experience a mild price correction over the same period. With the worst of the downward trend behind it, Brisbane’s apartment market is ripe for investors and is tipped to transition by 2020 with a projected 5.6 per cent price rise.
CoreLogic’s head of research Tim Lawless recently described Brisbane’s once-troubled apartment market as “starting to look healthier”.
Another positive sign for Brisbane investors is that despite slow rental growth for the quarter, it is nevertheless up 1.5 per cent across all dwellings with a gross rental yield of 4.6 per cent. Buyers are also in the driver’s seat with Brisbane’s time on market pushing out from an average of 36 days in May 2018 to 55 days by May 2019.
Sydney purchasers have been holding out for a plateau in property prices and while dwelling values still fell in the quarter to May 2019 by 2 per cent, the drop was less severe than preceding quarters. Over the 12-months to May, Sydney values dropped by 10.7 per cent with CoreLogic’s figures showing property prices are now 14.9 per cent lower than their peak in July 2017. Of Sydney, Mr Lawless recently said; “it looks like the bottom of the cycle is just around the corner”.
The CoreLogic-Moody’s Analytics report showed that after dropping 5.5 per cent in 2018, and with further declines in 2019, Sydney’s house values are forecast to begin a slow recovery in 2020. Apartment values could decline further this year, but are expected to increase by as much as 4 per cent by 2020.
While there has been no rental growth in Sydney, with combine dwelling asking rents down 2.9 per cent in 12 month, the radical drop in rents that had been predicted at the start of the year has not eventuated. Twelve-month yields are sitting at 3.5 per cent.
Another positive for Sydney buyers is that the average days on market has shifted from 33 days in May 2018 to 50 by the end of May 2019 giving them more negotiating power.
For more on market trends and activity please reach out to us on 1300 420 160 or email: [email protected]