August 24, 2024
Migration Hits New High
new phase of internal migration, with more people choosing fe, according to the latest Regional Movers Index (RMI)
saw 27% more people moving from cities to regions than the nd that has outpaced pre-Covid migration patterns
Regional Australia Institute (RAI), highlighted that this sustained growing importance of regional areas for the nation’s future ow the new frontier, vital for our net zero transition and long-term
in movement, city-to-regional relocations are 16% above prenal-to-regional moves are up 10% The RMI report, a partnership ealth Bank and RAI, also identifies emerging regional hotspots NSW's South Coast
d that regions like Lake Macquarie offer an attractive lifestyle with rvices and job opportunities As regional growth continues, overnments, industry, and communities is crucial
AffordabilityDrivesApartmentDemand
In the past three months, apartments have outpaced houses in price growth across almost every Australian capital city, with Darwin and Canberra being the exceptions due to higher supply levels.
This trend also extends to regional NSW and Victoria, where apartments outperformed houses, while in regional Queensland, the price growth difference was minimal
This shift is unusual, as houses typically appreciate faster due to land value However, current market dynamics, including strained affordability from rising interest rates, are pushing more buyers toward apartments With lenders applying a 3% buffer to home loan rates, many buyers find it difficult to finance a house in high-value markets like Sydney, leading them to opt for apartments or townhouses instead
In addition, strong demand from investors and first-home buyers is driving apartment prices higher New home loan data shows a surge in loans to investors, while first-home buyers, often supported by family, are also a significant market force. A shortage of new apartment supply further fuels this trend
For those considering apartments, benefits include less financial pressure, better locations, and the potential for strong capital growth
“It’s probably the easiest (capital city) market to buy in at the moment,” - referring to Melbourne.
MoreBuyersEmbraceRentvesting
With soaring property prices and high interest rates, "rentvesting" is becoming an increasingly popular strategy for first-time buyers. Sydney resident Hayley McCoy, after struggling to save for a home deposit, turned to rentvesting buying an investment property in Brisbane while continuing to rent in Sydney. Although it felt unconventional, McCoy's decision allowed her to build equity in a more affordable market
Rentvesting is growing, especially among younger Australians seeking creative ways to enter the property market Analysis by Mozo shows that 6 8% of first-home buyers in 2024 are also investors, up from 4 2% in 2020 Financial experts like Helen Baker emphasize the importance of careful planning, as balancing mortgage payments with rent and navigating potential rate increases can be challenging Rentvesting offers a foot in the property market, but it comes with risks, including higher interest rates on investment loans and the possibility of negative cash flow
McCoy's experience underscores the need for thorough financial planning, as rental income may not always cover mortgage repayments
MarketConfidenceRiseswithListings
Buyer confidence in Australia is on the rise, despite high property prices and interest rates forcing many to make significant compromises
The latest Mortgage Choice Home Loan Report reveals that 83% of prospective buyers feel positive about purchasing a property, up from 70% last quarter The increase in confidence comes as more homes hit the market, giving buyers greater choice. However, challenging conditions such as record-high prices and interest rates are leading many to adjust their expectations Three out of five buyers are looking to regional areas or further from city centres, with many opting for smaller homes, apartments, or duplexes The search process is taking longer, with 62% of buyers facing delays and a third needing multiple pre-approvals
Despite economic uncertainty, buyers are focusing on when the timing is right for them, rather than trying to predict interest rate movements
PropertyListingsSurgeinJuly
Recent data from PropTrack also shows a surge in new property listings, helping slow the pace of price growth while providing buyers with more options across the country.
Frustrated home seekers have been given a boost as property listings across Australia surged in July, providing more housing options and easing competition
PropTrack data shows that new listings in capital cities increased by 10% over the month, with total listings now 14 4% higher than a year ago More listings are expected in the coming months as the spring selling season begins
PropTrack’s Director of Research, Cameron Kusher, noted that Sydney and Melbourne are becoming “buyer’s markets” after a prolonged period favouring sellers “It’s probably the easiest (capital city) market to buy in at the moment,” Kusher said, particularly referring to Melbourne
In smaller capitals like Brisbane, Perth, and Adelaide, sellers still have the upper hand, but the rise in listings is expected to reduce market pressure Kusher explained that this increase in listings is partly due to the Reserve Bank’s decision to delay an interest rate cut, which “forced the hand” of struggling homeowners to sell