The Real Estate Institute of Australia (REIA) recently released its Real Estate Market Facts for the June Quarter 2024 and it was full of facts and statistics of varying levels of interest dependent upon one’s inclination toward such things.
I have noted some key facts below for reference:
• Australia’s median house price is up over the quarter 1.5% to $1,049,136
• Hobart’s median house price is up over the quarter 2.8% to $735,000
• Hobart’s 3 bedroom house quarterly median rental is $525 per week, this actually reflected a reduction from the last quarter of 4.5%
• Hobart’s vacancy rate is stable at 2.4%
The above is a continuation of rising house prices, rising rental values, and low vacancy rates which have been seen for some time now. In the case of rental vacancy rates, anything below 3.0% reflects a strong demand for rental property. This continues to be the case across Australia and here in Tasmania.
The median house price reported in Launceston decreased 3.1% over the past quarter which reflects some anecdotal signs of a market softening to an extent but one that is still supported by good levels of demand and has perhaps just seen some tempering from the high prices proceeding, and the impact of higher cost of living and interest rates on borrowers’ capacity to purchase.
Over the past year, the median house price in Launceston has decreased 0.7% so any market adjustment is taking time. Other dwellings (units and apartments) decreased in Launceston by 13.7% for the quarter but increased by 3.8% for the year. This better reflects the variances that can occur with medians than the market, the more relevant figure here would be the 3.8% increase for the year I expect. This is likely supported by affordability and low vacancy rates, and high demand from renters for rental property meaning there remain investors in the market for units and apartments.
Median rents for houses in Launceston decreased by 2.1% for the quarter and decreased for the year by 2.5%, this is consistent with the above-noted decrease in median house prices. Other dwellings saw a decrease in median rentals for the quarter of 2.5% while the annual change in median rentals showed an increase of 2.6%, this is based on 2-bedroom dwellings.
Please note all statistics above have been taken from the Real Estate Institute of Australia, Real Estate Market Facts June Quarter 2024 Report and I would like to credit this excellent report.
Housing prices remain strong across Australia and vacancy rates are low. This is also the case within our immediate market in Launceston and more broadly across Tasmania. With housing now the key cost of living concern for voters (as referenced in The Australian article, Newspoll: Housing Crisis Hits PM as Labour Loses Ground by Simon Benson, 22nd September 2024) and with current levels of housing supply failing to meet demand, particularly when paired with increased numbers of immigration to Australia, pressure is growing on the Federal Government to do something, ideally with more foresight and intergenerational strategy than just another grant.
Market forces will ultimately have some impact (hopefully) and new entrants to the property market will see opportunity open as a result, some moderation in median house prices and rentals accompanied by a rising vacancy rates and increased levels of housing supply would all be welcome on the affordability front. As would moderating inflation and following that a reduction in interest rates. Ideally Government can leave the RBA alone to make decisions on interest rates while it focuses on what it has at its disposal to reduce inflation and to support an increase in housing supply (and not just throw money at purchasers which is immediately reflected in higher prices for dwellings). Shelter is a basic human need, yet in Australia it competes as an asset class as well. This does not mean that we need to have a market where affordability reduces year on year.
Please note the above information contained within this blog reflects my personal observations only, the information is not intended as financial advice and should not be relied upon as such.