May property market wrap-up: what’s happening in Australia’s capital cities

May property market wrap-up: what’s happening in Australia’s capital cities

Whether you’re investing, looking to buy your first home or looking to sell up, it’s always a good idea to keep an eye on trends in the property market. But keeping track of it all can be a challenge, so to make it simple for you, here’s a short snapshot of the market in each capital city right here:

Sydney

The roaring Sydney property market cooled a little during May, with the monthly clearance rate dropping to 71.6%, down from 73.3% in April. But the weaker clearance rates don’t necessarily mean any less demand for Sydney properties, or lower price tags – the median auction sale price was $1.3 million during the month. Instead, dropping clearance rates reflect the flood of listings that have entered the market.

There was an average 735 homes listed for auction each weekend in May – a standout record for the month, which previously set its high in 2015, with 702 auctions. And the high number of listings doesn’t seem to be slowing, as June opened with a massive 789 listings and a clearance rate of 74% on the weekend.

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Melbourne

Down in Melbourne, the number of properties going up for auction is even higher than in Sydney. The month averaged a record 959 auctions each weekend – the previous high for the month was set in May 2015, averaging 927 each weekend.

But unlike Sydney, the clearance rate for the month held more or less steady at 75.1% and some people are tipping a growing market for Victoria’s capital in 2017, thanks to strong job growth and underlying factors like a solid local economy and low supply of housing. The median auction sale price in May was $900,000, which is expected to hit $1 million by the end of next year.

Still, for the next few months, I’d expect slightly lower clearance rates and property prices in both the Sydney and Melbourne markets, until the situation with investment and interest-only lending stabilises.

Brisbane

In Brisbane, the average clearance rate was 46.5% over May, and the median auction sale price came in at just over $770,000. Low demand and high supply – particularly of apartments – has traditionally kept Brisbane an affordable option for buyers.

But that might be about to change. The number of new apartments entering the market has begun to slow, and prices will likely also begin to stabilise. By May, the median price point had increased by 2.5% over 12 months, and while that’s well below the 10.4% growth of the Melbourne market, Brisbane may be a spot to keep an eye on in the future.

Canberra

The Canberra housing market has been seeing some growth lately, thanks in large part to an increase in borrowing. Property prices remained relatively low in May at a median of $721,000, while the clearance rate averaged 72.8%.

The catch is, much of the borrowing bolstering the Canberra market has been investor activity, while first home buyer loan growth was more subdued. Efforts from lenders and regulatory authorities to clamp down on investment lending hasn’t seemed to put much of a damper on the Canberra market just yet, but a slowdown could be on the cards.

Adelaide

The Adelaide market is still struggling, particularly when compared with booming hubs like Sydney and Melbourne. Prices are low, with a median auction sale price of just $595,000 during May, and so are clearance rates, at an average of 63% for the month.

Those figures might reflect what is essentially a lack of demand for housing in Adelaide, which comes as little surprise, considering less than 8,000 new jobs were generated in the city last year.

Perth

Perth has been experiencing a bit of a slump in recent months as the mining boom draws to a close. An oversupply of housing and negative job growth – the city lost more than 4,000 jobs last year – are mainly to blame.

Property prices fell by 0.5% in May, and have declined by 10% since the peak month of December 2014. And although there’s one bright spot – unit values in Perth rose by 1.7% in May – there are no signs of a major recovery for the market just yet.

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Hobart

The Tasmanian capital has a lot going for it – increasing tourism, a relatively well-controlled supply of housing and tight vacancy rates among its selling points.

During May, Hobart property was still relatively cheap – the median property price in May was $350,000 – but property values have recently been increasing at the fastest rate since November 2004. Further growth is expected in the coming year or so and many experts are pegging Hobart as a property hotspot for 2018.

Darwin

Up in Darwin, it’s very much a buyers market at the moment – house prices have fallen 8.8% over the year, the highest decline of all the capital cities. But while affordable prices may make it easier for buyers to enter the market in Darwin as opposed to places like Sydney or Melbourne, demand is lacking.

As in Perth, a large part of the reason for languishing demand is that job growth is slow in Darwin, where just 153 jobs were created last year.

May property market wrap-up: what’s happening in Australia’s capital cities was last modified: June 8, 2017 by Steve Jovcevski

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