Greetings from Scoutable and welcome to our first Quarterly Wrap Up which replaces our previous monthly version.
I hope you are well.
Market Update
The Reserve Bank of Australia left the cash rate at 3.6% at its April meeting. The pause was a welcome relief for borrowers after ten consecutive rate hikes. The Reserve Bank did however mention that further rate rises may be required to tame inflation.
CoreLogic’s national Home Value Index reported an increase of 0.6% in dwelling values across Australia in March 2023. This is the first month-on-month growth since April 2022, and was led by a 1.4% gain in Sydney.
Looking across Q1 2023, Sydney reported a 0.4% gain, Melbourne -0.9% and Brisbane -1.7% in the Home Value Index. Sydney is leading the chart in showing signs of rebounding from the recent market downturn.
See below CoreLogic Home Value Index results as at 31st March.
On the ground, we are seeing a strong uplift in buyer confidence. This, combined with low stock levels (20% below the five-year average), tight rental conditions and the return of overseas migration, is fuelling the market to potentially start an upwards march in capital growth. However, it is still a little too early to tell if we have reached the bottom of the market. Factors which could stall the growth include; 30% of fixed interest loans yet to be exposed to rate increases, tight credit / reduced serviceability and weaker economic activity (households pulling back on spending).
Rental Update
Australia’s rental market index grew 2.5% over Q1 2023, a further increase to the 2% seen in Q4 2022. The annual growth over 12 months to March 2023 is 10.1%, equivalent to a rental increase of $52 per week or $2,727 per year. Vacancy rates tightened to 1.1% in March.
CoreLogic reported ‘With the total rental listings trend holding substantially below average through 2022 and into 2023, limited supply continues to be an important factor pushing rental values higher. Over the four weeks to April 2nd, the total count of national dwelling rental listings came in just under 95,000; -17.3% below the levels recorded over the same period last year and -36.3% below the previous five-year average. Combined with the strongest net overseas migration on record, the shortage in rental listings has seen the national vacancy rate tighten once again to a new record low of 1.0% in February and 1.1% in March, down from 1.3% in December’.
See below CoreLogic Q1 2023 National rental index.
Government News
NSW has a newly elected Labor government after the elections in March. The Labor party made the following promises in regards to the property sector.
Will introduce a new first homebuyers scheme, no stamp duty will be paid on properties up to $800k, and it’ll be discounted on properties up to $1m.
They will abolish stamp-duty reforms which passed last year which give first home buyers the option of paying stamp duty, or, a cheaper annual land tax (on properties up to $1,500,000).
Proposing a $30 million build-to rent scheme on the south coast targeting public land for development
Tenant reforms including (not limited to), ban of secret bidding, portable bond scheme, drafting of legislation to introduce reasons for eviction.
It will be interesting to see what reforms are actioned.
If you would like to discuss the property market further, please get in touch.
Until next quarter,
Kellie Landrey | Principal Buyers Agent
IN THE NEWS
WHERE ARE PROPERTY PRICES FORECAST TO HEAD NEXT?
https://www.smh.com.au/property/news/where-are-property-prices-forecast-to-head-next-20230419-p5d1k6.html
HOUSE PRICES RISE FOR THE FIRST TIME IN 11 MONTHS IN MARCH, WHILE CHRONIC RENTAL SHORTAGE CONTINUES
https://www.abc.net.au/news/2023-04-03/corelogic-property-prices-rents-march-2023-rise-prices/102177578
BRONTE HOUSE PRICE RECORD SMASHED WITH CIRCA $30M SALE
https://www.realestate.com.au/news/bronte-house-price-record-smashed-with-circa-30m-sale/
FEATURE PROPERTY
75 BYRNE AVENUE, RUSSELL LEA, NSW
Russell Lea is a small suburb in the inner west of Sydney, located 8 kilometres west of Sydney's CBD. It is a quiet suburb of tree lined streets and waterfront homes.
Situated across the road from Lysaght Park - a waterfront park on Drummoyne Bay, 75 Byrne Avenue is a low set home on 455sqm land. The freestanding, single level home comprises four bedrooms, two bathrooms, formal lounge and dining, kitchen, family room, swimming pool and parking for two cars (one garaged).
Whilst the home is in liveable condition, there is potential to add value through renovation while maintaining some of its midcentury charm.
Built by the vendor nearly sixty years ago, this is the first time the home has been on the market. The current price feedback is circa $3,000,000.
If you'd like to know more about this property or any others, please get in touch.
