Figures from SQM Research revealed that during the 12 months to the start of February, residential housing prices in Sydney increased by 11.5% to $1,249,900 with units growing by 8.5% to $698,300.
In comparison, Melbourne’s house price jumped by 11.4% to $803,200, and unit prices rose 6.7% to $475,700. Moreover, with strong buyer demand and a lack of stock, many Raine & Horne agents are expecting Sydney’s real estate values will continue to soar.
In Sydney’s inner city, Raine & Horne City Living’s Matthew Mifsud told realestate.com.au he expected to see growth rates in the inner city of around the 7 to 10% mark for the first half of 2017.
Meanwhile, Terry Brandtman, Principal of Raine & Horne Randwick, says the housing sales market is very tight in the eastern suburbs. “The market is strong with entry level units selling for $800,000,” said Terry. “It’s the proximity of this region to the CBD and the beaches that make Randwick, Clovelly and Coogee perennial favourites with owner-occupiers and investors.”
Peter Diamantidis, Sales Manager, Raine and Horne St Marys said most properties in his region were selling in less than two weeks. Raine & Horne St Mary’s services the corridor between St Marys and the Blue Mountains in Sydney’s west. “Therefore, stock levels are significantly below the highs of 2009 when there were around 130 on the market at any one time,” said Peter. “Buyers want to move in to this area for its schools, shopping centres and proximity to several major road thoroughfares such as the as the M4 and the Greater Western Highway. The impending opening of the new airport at Badgerys Creek is a major attraction for shrewd investors with a long-term outlook.”
With the autumn selling season imminent, Steve Worrad, General Manager, Queensland, Raine & Horne believes the outlook is very positive for the state’s real estate markets.
“Brisbane dwelling prices have started 2017 in positive territory,” said Steve, who nominates the Gold Coast and Carindale, which is 8 kilometres from Brisbane, as patches to watch in 2017. “Ipswich is another area to monitor, where it’s possible to buy houses for under $370,000.”
Interstate downsizers are also making their presence felt. “We are seeing more retirees who have sold up in Sydney and Melbourne. They can buy in South East Queensland and have plenty of money left over for a decent retirement lifestyle.
Another regional town to watch in 2017 is Mackay. “Vacancy rates have fallen to single figures, which savvy investors looking for affordable assets and decent returns will duly note.” According to Raine & Horne, the median house price in Mackay is $265,000 with median weekly rents of $275.
First home buyers continued to be active in the Perth property market in the December quarter 2016, according to the latest data from the Real Estate Institute of WA (REIWA).
In the traditional first home buyer market, house sale transactions below $500,000 were up 12% compared to the September quarter, lifting from 49% of total house sale transactions to 55%. Similarly, in the unit market, activity below $500,000 increased from 65% of total transactions to 71%.
“Unlike markets on the east coast, WA is still very much the ‘land of opportunity’ for first home buyers, with plenty of affordable housing options available to help prospective buyers take the leap into home ownership,” REIWA President Hayden Groves said.
In more good news for homeowners, stock levels in the Perth metropolitan area fell 2% in the December quarter compared to the September quarter, with 13,886 properties listed for sale. This figure is also down 3% compared to the same time in 2015. “The decline in listings over the quarter can be attributed to a 6% in the number of properties listed for sale in the $360,000 to $500,000 price range,” Hayden said.
It was five days quicker on average to sell a home in Perth the December quarter 2016 than it was in the September quarter 2016, down from 67 in the September quarter to 62 days in the 3 months to December.
At the same time the Western Australian Government has increased the First Home Owners Grant for those building or buying new properties from $10,000 to $15,000 in 2017. The government has relaxed the eligibility criteria for the low deposit Keystart home loans too, in a further boost for first timers seeking a new home in Perth.
CoreLogic Home Value Index results released in early February confirmed Melbourne’s dwelling values posted a 0.8% rise in the first month of 2017.
Over the rolling quarter, the Victorian capital produced a strong growth result of 2.4% in the three months to 31 January. Over the last 12 months, Melbourne dwelling values increased by 11.8%, with only Sydney producing a higher rate of annual growth.
Inner city suburbs such as Port Melbourne, St Kilda, South Yarra, Richmond, Carlton and Fitzroy are worth watching, according to the latest Month In Review report from valuer, Herron Todd White.
After two challenging years for the real estate market in Darwin, the number of buyers has increased threefold in the first month of 2017, according to Raine & Horne Darwin.
“We hosted an average of 4.5 groups at every open home in January. We were lucky to attract an average of 1.5 groups over the last two years,” said Glenn Grantham, General Manager, Raine & Horne Darwin. “More significantly, increased enquiries are converting to sales, with one of our agents, Adam Gulliford, selling 4 properties in the first two weeks of 2017,” said Glenn.
Adam’s sales include a unit at 2/2 Coronation Drive, Stuart Park, which is under contract. This property was marketed for offers over $425,000, according to Glenn.
Raine & Horne Darwin sold a 3-bedroom home at 5 Kapok Court, Karama, for a price significantly above the advertised price of $399,000. “This property hit the market on Tuesday, 17 January, and sold 3 days later.”
“Moving up a level, we sold a modern 5-bedroom home at 194 Hutchison Road, Herbert, valued above $700,000. This property sold well above price expectations,” said Glenn.
Typically, investors from the southern states underpin improved real estate market conditions in Darwin. However, most properties are currently being secured by Territorians rather than New South Welshmen, Queenslanders or Victorians, commented Glenn.
Inner city and suburban fringe suburbs are expected to be Adelaide real estate hot spots in 2017, according to Michael McDonald, General Manager SA, Raine & Horne.
“Inner city suburbs such as Norwood, Beulah Park and Unley on the southern tip of the CBD, which are traditionally high performers, are likely to enjoy decent capital growth this year above 5%,” said Michael. “We also expect that homes priced below $500,000 located on Adelaide’s metropolitan fringes, where first and second time buyers dominate, will enjoy decent liquidity and growth in 2017.”
Already the Adelaide market has produced some gains in 2017 due to a combination of a stronger economic outlook for the city, lower interest rates, its reputation for producing consistent capital growth and competitive yields. “With many new developments and infrastructure projects in progress, people have put behind the closures in the manufacturing sector that dominated headlines over the past few years and are recognising that Adelaide real estate is affordable and capable of producing decent income returns,” said Michael.
Some economic commentators are forecasting increased growth in the property market throughout the greater Hobart and Launceston regions, according the latest Month In Reviewreleased by Herron Todd White (HTW) in early February.
Hobart has the tightest vacancy rates in the country, noted the valuation firm, as well as a more controlled housing supply pipeline and increased migration and tourism. These factors have Hobart on track to be Australia’s best performing capital city property market in 2017, said HTW. In fact, Hobart started the year with the largest month-on-month gains of +1.4%, edging out Sydney (+1.0%) and Melbourne (+0.8%), according to the CoreLogic Home Value Index.
A shortage of stock is a key theme in Hobart, and this is driving shorter selling periods and higher sale prices, advised Herron Todd White. As such the valuation firm is tipping that 2017 is the year “we see an increase in properties going to auction due to many properties having multiple offers only a few days after being listed.”