Perth and Brisbane heading into property market upswing: Louis Christopher

Perth and Brisbane heading into property market upswing: Louis Christopher
Larry SchlesingerDecember 8, 2020

The capital cities of Australia’s resource states are leading the property market recovery, according SQM Research managing director Louis Christopher.

Christopher places Perth houses and units at 6.30 on the property clock, indicating the market has just bottomed out and heading into an upswing, and Brisbane houses and units at six o’clock, indicating the market has bottomed out.

His assessment of the Perth market is based on falling listings and a tightening rental market.

Perth house and unit prices have also stopped falling, says Christopher.

In its September stock-on-market report, SQM found that Perth online residential listings declined by 3% to 17,517. Year-on-year they are down 14.6%, the biggest decline of the mainland capital cities (excluding the much smaller Darwin market).

SQM also found that the Perth vacancy rate tightened from an already very low 0.7% in July to 0.6% in August, with just 1,177 properties available for rent (compard with more than 2,600 in Adelaide and nearly 12,000 in Melbourne). Apart from Darwin (0.5%), Perth has the tightest rental market in Australia.

This tightening vacancy rate resulted in median house rents increasing by $10 to $450 per week over the August quarter, with weekly rents for units, apartments and villas rising by $20 to $430 per week, according to the latest REIWA data.

Christopher says Brisbane has bottomed out due to falling listings volumes and house prices no longer falling.

According to SQM Research, Brisbane online residential listings are down 8% year-on-year to September, with the vacancy rate at a tight 1.5%.

 


Investors looking to get into the Sydney market at the bottom of its cycle may have missed out, according to Christopher.

Christopher has Sydney houses at seven o’clock on the property clock, with units slightly further ahead at 7.30, indicating houses are well on their way to rebounding.

In both the case of houses and units listings are falling with SQM recording 2.9% fall in Sydney listings in September to be down 13.1% year-on-year to 30,408 properties for sale.

In both house and unit markets he says evidence of a recovery can be seen in rising Sydney auction clearance rates, which was 63% over the weekend.

However, Sydney houses are not making a homogenous recovery, with prestige houses stuck at four o’clock, according to Christopher, indicating they still have some way to fall.

Sydney units are slight further ahead of houses in the property cycle due to the introduction of the $15,000 first-home buyer handout, which applies to new homes, including apartments, marketed off the plan.

The Melbourne property market (houses and units) is assessed as having some way to go before bottoming out – at five o’clock on the property clock.

Melbourne listings are still elevated and are not falling," says Christopher.

“There is some evidence of a rise in clearance rates, but no real evidence of a rise on prices, he says.

SQM has Melbourne online residential listings up 3.2% year-on-year to September to 51,564 properties listed for sale.

Adelaide and Canberra are assessed as flat property markets and at the same point in the property cycle as Melbourne (five o’clock).

In the case of Adelaide, Christopher says that “listings are still elevated, yet they are no longer rising at rapid rate.

“There is no evidence yet of increased buyer demand and prices are flat.”

In Canberra, apart from listings remaining high and prices flat, Christopher says the “outlook is uncertain due to the federal budget”.

Darwin is assessed as the only capital city market that has already rebounded (at nine o’clock) and heading towards it its peak.

“There has been a strong lift in Darwin house and unit prices starting in the first half of this year.

“Stock levels are falling rapidly. The rental market very tight,” he says.

SQM Research shows a 25.9% decline in Darwin properties available to purchase, with online listings falling from 1,616 in September 2011 to 1,198 currently.

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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