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#266: Market Update Jun 24 – Record House Price Expectations, Mid-Size Capitals Soar & Finding Rental Growth Equilibrium
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Mike kicks off this episode, and the Trio unpack the latest stats. Brisbane, Adelaide and Perth continue to be the star performers, with Perth taking up first place with an annualised growth rate of 23.6%.
On the flip side, Cate shares her coalface findings on Melbourne's climate, citing opportunities as "low hanging fruit." Cate describes some of the interstate investor interest in Melbourne as speculative and opportunistic. Dave raises the point that interstate migration has played a key role in some of the growth data also, as have investors whose purchase and selling activity has been triggered by tax and legislation changes.
While the pace of growth of rents has slowed, rents are still all positive, and with the exception of Darwin, Canberra and Hobart, our rents are still out-pacing CPI. The Trio reflect on Peter Koulizos's sage observation in past years; rents are only just catching up after a long period of limited growth.
Mike wonders what the driving force is for rental growth easing. Could it be a supply and demand factor? Are more people cohabitating? Have rents reached a natural cap based on affordability? The Trio debate some of the possibilities, including re-partnering of couples following the COVID response.
And what is happening with listings? We have more new listings than previous years, but our total listing figures are still below historical levels. However, the increasing number of 'old listings' in Victoria is showing signs of total supply potentially outpacing buyer demand.
This month's Westpac Consumer Sentiment has some changes since last month. As Cate says, "Everybody seems to think that the next twelve months isn't looking so rosy but they can visualise good times ahead of that."
Dave distils consumer sentiment into states and territories. Time to buy a dwelling index had the largest declines in the capital cities that have recorded the highest price gains. The Trio tackle a conflicting driver of sentiment; the wealth effect.
Mike cites the 'crane index', which is a crude measure of building activity and supply. It is as basic as counting the cranes on the city landscape.
The Trio uncover two interesting extra charts. The cash rate target vs cumulative change in national home values proves Peter Koulizos's point that there is not a direct correlation between house price growth and interest rates.
The chart below shows the difference between median monthly rent value and mortgage repayment for the equivalent property. It illustrates the huge differential between the mortgage repayments and the rental payments for the same dwelling.
And... time for our gold nuggets...
David Johnston's gold nugget: Dave wants Core Logic do conduct a deep dive analysis into the Victorian market purchaser/investor activity following recent land tax changes.
Cate Bakos's gold nugget: Cate would also love access to our various state and territory revenue offices to understand the impact of the reforms and taxes, particularly on overseas investors.
Mike Mortlock's gold nugget: Mike shares the importance of buying when you are ready, as opposed to attempts to time the market. While the white noise and doomsayer stories float around in the media, it's important for investors to keep a long term focus.
Shownotes: https://www.propertytrio.com.au/2024/07/15/ep-266-june-market-update/
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Mike kicks off this episode, and the Trio unpack the latest stats. Brisbane, Adelaide and Perth continue to be the star performers, with Perth taking up first place with an annualised growth rate of 23.6%.
On the flip side, Cate shares her coalface findings on Melbourne's climate, citing opportunities as "low hanging fruit." Cate describes some of the interstate investor interest in Melbourne as speculative and opportunistic. Dave raises the point that interstate migration has played a key role in some of the growth data also, as have investors whose purchase and selling activity has been triggered by tax and legislation changes.
While the pace of growth of rents has slowed, rents are still all positive, and with the exception of Darwin, Canberra and Hobart, our rents are still out-pacing CPI. The Trio reflect on Peter Koulizos's sage observation in past years; rents are only just catching up after a long period of limited growth.
Mike wonders what the driving force is for rental growth easing. Could it be a supply and demand factor? Are more people cohabitating? Have rents reached a natural cap based on affordability? The Trio debate some of the possibilities, including re-partnering of couples following the COVID response.
And what is happening with listings? We have more new listings than previous years, but our total listing figures are still below historical levels. However, the increasing number of 'old listings' in Victoria is showing signs of total supply potentially outpacing buyer demand.
This month's Westpac Consumer Sentiment has some changes since last month. As Cate says, "Everybody seems to think that the next twelve months isn't looking so rosy but they can visualise good times ahead of that."
Dave distils consumer sentiment into states and territories. Time to buy a dwelling index had the largest declines in the capital cities that have recorded the highest price gains. The Trio tackle a conflicting driver of sentiment; the wealth effect.
Mike cites the 'crane index', which is a crude measure of building activity and supply. It is as basic as counting the cranes on the city landscape.
The Trio uncover two interesting extra charts. The cash rate target vs cumulative change in national home values proves Peter Koulizos's point that there is not a direct correlation between house price growth and interest rates.
The chart below shows the difference between median monthly rent value and mortgage repayment for the equivalent property. It illustrates the huge differential between the mortgage repayments and the rental payments for the same dwelling.
And... time for our gold nuggets...
David Johnston's gold nugget: Dave wants Core Logic do conduct a deep dive analysis into the Victorian market purchaser/investor activity following recent land tax changes.
Cate Bakos's gold nugget: Cate would also love access to our various state and territory revenue offices to understand the impact of the reforms and taxes, particularly on overseas investors.
Mike Mortlock's gold nugget: Mike shares the importance of buying when you are ready, as opposed to attempts to time the market. While the white noise and doomsayer stories float around in the media, it's important for investors to keep a long term focus.
Shownotes: https://www.propertytrio.com.au/2024/07/15/ep-266-june-market-update/
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