Raine & Horne: Market Report August 2017

August, 2017

NSW Real Estate Review

With apartment prices on Sydney’s Lower North Shore now topping the $1 million mark, Greenwich, remains one of the city’s best kept real estate secrets.

“If you’re seeking long-term growth on the Lower North Shore, then ‘unfashionable Greenwich, with a median apartment price of $760,000 represents great value,” said David Hill, Principal of Raine & Horne Crows Nest. “Moreover, once the new Gore Hill Business Park is completed on the site of the old ABC studios, it’s fair to expect this will create thousands of new jobs, which will necessitate improved public transport for the Greenwich area.

“More jobs and better transport add up to long-term capital growth on par with other Lower North Shore suburbs such as St Leonards, Crows Nest, Naremburn, Wollstonecraft and Waverton.” The median apartment price for Wollstonecraft is $950,000 and $1.1 million in Waverton. In St Leonards, the median apartment price is $910,000 and $935,000 in Naremburn, according to Raine & Horne.

The traditionally cooler July market conditions failed to take the heat out of Inner West real estate. “Vendors still achieved robust results if they were prepared to price their properties sensibly to meet buyer demand, noted Paul Pettenon, Principal Raine & Horne Concord.

Paul said more off-market sales, and slightly fewer numbers at Saturday open for inspections proved dominant trends. “All the same, there are still at least 2 buyers interested in every property, with sought-after houses and apartments selling well,” he said.

Queensland Real Estate Review

The REIQ quarterly rental vacancy rate data for the June quarter has revealed a tightening in inner Brisbane, as well as a tightening through much of regional Queensland, indicating a recovery is on the cards in the state’s flatter markets.

The Brisbane LGA’s vacancy rate fell from 3.7% in the March quarter to 3.3%, moving to a healthy range. Inner Brisbane, which is overwhelmingly dominated by apartments, fell from its all-time high of 4.4% in March to 3.5% in the June quarter.

Elsewhere, the Logan market tightened from 2.8% to 2.2%. Redland eased a sliver, from 2.5% to 2.6%, which underscores its reputation as a healthy investment market.

The Gold Coast (1.7%) and the Sunshine Coast (1.2%) remained tight, while Toowoomba eased slightly, from 2.9% to 3.2%. However, this is still a strong market.

Bundaberg tightened from 4.6% to 3.6%, which is another sign economic fortunes for the coastal town are improving. Gladstone eased slightly from March to June, with the vacancy rate at 6.5%. This is good news because it confirms last quarter’s dramatic tightening from 9.9% in December to 6.4% in March, is a genuine trend.

Mackay improved sharply, dropping from 6.4% in March to 4.5% June on the back of employment growth according to REIQ.

Western Australia Real Estate Review

Perth upgraders have more opportunity in affluent suburbs such as Peppermint Grove, Applecross and North Coogee, according to a report from Real Estate Institute of Western Australia (REIWA).

Peppermint Grove recorded the biggest annual average change in its median house price over the past five years, shifting from $3,750,000 (year to April 2012) to $3,350,000 (year to April 2017).

“Buyers are looking for opportunities in areas with a good lifestyle scene, cafes and restaurants. We are seeing buyers placing more importance on proximity to good public schools,” said Hayden Groves, President of REIWA. “Suburbs such as Applecross, Nedlands and Peppermint Grove are within the catchment for some of Perth’s best public schools. Due to the easing in median house prices of these suburbs, the opportunity is there to secure your ideal family home if you have the means,” said Hayden.

There’s also good news for sellers in Applecross, City Beach, Nedlands and Peppermint Grove, as properties are selling quicker than five years ago.
In 2012, it took on average 120 days to sell a property in Peppermint Grove for instance. Now, average days-on-market for these suburbs is 90 days.

South Australia Real Estate Review

Sales have significantly rebounded across metropolitan Adelaide and regional South Australia in the second quarter of 2017, according to a recent report from Real Estate Institute of SA.

Following the release of the Valuer-General’s median house price data for the 2017, REISA said that sales were up across the entire state with metropolitan Adelaide recording a solid 6.9% increase in sales over the last three months.

“These results indicate that Adelaide continues to be Australia’s steadiest and possibly most reliable real estate market,” said Michael McDonald, General Manager, SA, Raine & Horne. Moreover, the Adelaide median dwelling price is $434,000, which was up 0.1% in the 3 months to 31 July, according to CoreLogic.

In the June Quarter, 4,458 houses settled in the Adelaide metropolitan area, which is significantly up from the previous quarter and almost the same as the June quarter in 2016. Sales across the entire state were significantly better than the previous quarter, and only slightly down against the same quarter last year. “This a great result, given the cooler months are not usually a time when the real estate markets in South Australia shine,” said Michael. “However, with the potential stock that normally comes onto the market before the start of spring, we expect the positive trend for Adelaide house prices to continue.”

Suburbs that have recorded the largest growth over the last 12 months include Gulfview Heights, Kensington Gardens and Sellicks Beach. Clarence Park, Glenunga and Daw Park, are other big movers, noted the REISA research.

Victoria Real Estate Review

Large homes in Melbourne’s middle ring suburbs were standout performers in the June quarter, with the chase for space driving buyers further from the city, according to the latest Real Estate Institute of Victoria data.

Four-bedroom homes in Melbourne’s middle ring outpaced other property types and regions in June, increasing 6.5% to a median of $1,150,000. Reservoir and Mill Park in the city’s north experienced some of the strongest quarterly price growth for this property type, up 8.2 and 7.7% respectively.

Meanwhile, four-bedroom homes in the outer suburb of Keysborough experienced the largest price growth citywide, up 17.1% to a median of $900,000 – an increase of more than $130,000 on March figures.

“There’s no doubt that the Melbourne real estate market is enjoying a purple patch with annual growth currently running at 15.9%, which is easily outperforming Sydney,” said Randolph Clements, Managing Director, Raine & Horne Victoria. “At the epicentre are suburbs within a 6 kilometre radius of the CBD, while demand for family homes in the middle ring suburbs makes plenty of sense too. This housing market appeals to buyers as it is significantly more affordable than inner city suburbs where the median house price is closer to $2 million,” said Randolph. “Moreover, lot sizes for houses are often larger than the inner suburbs, and you won’t be left wanting for infrastructure and amenities, as Melbourne’s middle ring suburbs are every well-established.”

Randolph noted that some regions outside a 15 kilometre radius of the CBD are not as hot as suburbs closer to the city. “There’s a saying ‘The nearer the bone, the sweeter the meat’ and this applies to Melbourne real estate.”

Tasmania Real Estate Review

The Tasmanian property market is on track to exceed last year’s results, with the number of sales in the first half of the year 17.5% stronger than the same period in 2016, according to the REIT.

At the same time, CoreLogic reports that capital values in Hobart are up 6.5% over the past year. Only growth results in Sydney (12.4%), Melbourne (15.9%) and Canberra (12.9%) have been stronger.

Indeed, the REIT says median prices increased across all regions with Launceston up 4.3% in the June Quarter, while values in North West Centres grew by 4.2%.

Northern Territory Review

Darwin real estate has turned the corner, according to Glenn Grantham, General Manager of Raine & Horne Darwin, with the latest data from the Real Estate Institute of Northern Territory (REINT) showing the market recorded sales growth in the June 2017 quarter.

This is a second quarter in a row of sales growth, which demonstrates that confidence is returning to the Darwin market,” said Glenn.

The REINT’s Northern Territory Real Estate Local Market Report (RELM) Report shows that residential house sales increased across the Greater Darwin region by a healthy 3.9%, which is up by 15.9% compared to last year. In addition, the median house price jumped 1.9% to $540,000 for the quarter.

Inner Darwin led the recovery with a massive jump of 57.1% in sales volumes for the quarter and the Darwin North Coastal region, which saw volumes go up by 6.2%.

The unit results were even better with sales volumes up 16.8% for Greater Darwin, while the median price rose by 9.3% from the previous quarter. Inner Darwin sales led the way with volumes up by 44.8%, with then median up by 17.2%.

Away from the capital, Palmerston house volumes slipped a little in the June quarter dropping by 2.5%, but this is still 23% better than twelve months ago. In Alice Springs, house volumes increased by 18.3% from the March Quarter and 47.9% compared to the same time in 2016.