The ABS’s recent release of building activity around the country has shown a return to construction volumes last experienced in 2018. The seasonally adjusted figure for the final quarter of 2020 indicates 51,055 dwellings were commenced—33,761 of which were detached houses. The 16,049 ‘other’ dwellings (including apartments and townhouses) continue to be a far cry from the last peak in Q1 2018, when the figure was 28,702.
In late March this year, the Australian Bureau of Statistics released their regional population statistics for the 2019-20 financial year. This 12-month period is uniquely interesting to us because it includes the first six months of the coronavirus pandemic, as well as the first three months of border closures.
Australian property prices have surged at the fastest monthly pace in 32 years. Record-low interest rates, far from making homes more affordable, have caused house and apartment values to climb in every capital city market. So why is that?
All of a sudden, everyone is an expert on Brisbane. Property news feeds are filled with article after article on opinions and so-called facts on what’s happening in this city. Before you decide that this is another one of those articles, let me tell you it’s not.
With the first quarter of 2021 behind us, CoreLogic have released the March 2021 results of their capital city home value index. All Australian capitals experienced price index increases over the month for both houses and units, indicating that many Australian property investors are better off now than they were a month ago. In some areas, the growth experienced over the month of March 2021 would usually be considered a decent amount for a year. Hobart units, for instance, grew 4.9 percent over the month, while Sydney houses grew by 4.32 percent.
I thought of writing this article after a recent conversation with Fiona, our Client Services Manager, about an upcoming project settlement. The project is amazing! It’s an iconic building in a strong growth area. The challenge we face is that there is nothing remotely similar to compare it to on value. I mentioned to Fiona that valuers will struggle to accurately value the project. A valuer’s sole job is to value a property using comparable sales as evidence for the ‘market value’ they place on a purchase. To make it even more difficult for the valuer, those sales must have occurred in the last three months. The biggest frustration I have with valuations is that they can cause doubt in the minds of investors. Sometimes, people will not invest in a property which actually represents amazing value—solely because of recent comparable sales data which clouds their confidence in their investment.
There has been a lot of talk about COVID-19 driving property price movements in regional areas recently. However, it is always a good idea to move a level or two up and look at the dominant themes in order to get clarity. This applies to all markets—be it stocks, commodities, precious metals or property.
Who would’ve thought that by March 2021 I’d be sitting here encouraging investors to get into the market as soon as possible? Prices are moving daily. Demand is so high developers are asking for stock back as retail enquiry is outpacing supply.
Sydney is Australia’s most populous city, so it’s no wonder we hear a lot about the number of people leaving. Aside from the coronavirus pandemic, Sydney’s exodus was largely an interstate and intrastate occurrence, meaning that those leaving Sydney mostly moved elsewhere in New South Wales or Australia. Growth in Sydney’s population is therefore largely attributed to net increases in overseas migration.