As of 31st March 2022 - Property Market Update - searchpartyproperty

As of 31st March 2022 – Property Market Update

The national monthly growth rate has rebounded slightly, with house values up 0.7% over March. This is despite the country’s two biggest markets both seeing a drop in median prices. But, with most of the smaller capitals experiencing stronger conditions, the general growth trend has continued for an 18th consecutive month.

Source: Core Logic

This has really highlighted the two-speed nature of the national property market at the moment. While it seems that every capital has passed through its cyclical peak, Sydney and Melbourne are leading the downward trend. By contrast, Brisbane and Adelaide continue to report good numbers and the growth rate in these locations is largely holding steady.

Source: Core Logic

Regional property markets also continue to perform well, easily outstripping the capitals on a combined basis. Regional South Australia has been a particular standout over the last month, with growth numbers hitting a new cyclical high. Regional Queensland and regional NSW also continue to see consistently strong growth figures.

Source: Core Logic

Supply continues to be a significant driver of market performance, with advertised stock in Sydney and Melbourne largely returning to normal levels. By contrast, new listings continue to be well down in Brisbane, Adelaide, and regional areas. This, along with affordability and buyer sentiment, will be the major watchpoints for investors over the next few months.

Source: Core Logic

On the rental side, yields are continuing to rebound from the historically low levels seen late last year. While this recovery is slow – gross yields were up 0.02% over March – it is expected to continue for the foreseeable future. Unit rents are also rising significantly faster than house rents as international migration restarts and inner-city areas come back to life.

A closer look at current market performance

Acknowledging how greatly market performance is varying across the country, we want to take a state-by-state look at recent results:

  • ACT: Canberra property continues to perform quite well, despite new listing volumes currently exceeding the 5-year average. Median prices in the capital are up 3.1% over the last 3 months and 21.6% over the last year. The local rental market is also very strong, with the median gross rental yield currently sitting at 3.8% – comfortably above the national average.
  • Northern Territory: Darwin is currently seeing the strongest supply of new properties, with listing volumes sitting well above the 5-year average. Despite this, the local market is performing well, with dwelling values up 0.8% for the month and 10.6% for the year. And the local rental market is extremely strong, with Darwin and regional NT delivering yields of 6.0% and 7.0% (respectively).
  • NSW: Nowhere is the two-speed nature of the national property market more on display than in NSW. While the median price in Sydney declined over the last month, in regional NSW, it was up 1.8%. This is largely being driven by supply, with new listings higher than average in Sydney, but lower in regional areas.
  • Queensland: By contrast, Queensland is seeing strong performances all around. In Brisbane, median prices are up 2% for the month and 29.3% for the year. In regional Queensland, dwelling values are also up 2% for the month and 25.5% for the year. This is due to a combination of factors – most significantly, the limited supply, high demand, and reasonable affordability.
  • South Australia: As noted above, regional SA has been surprisingly strong over the last month, with the median price increasing by 2.8%. Adelaide also continues to perform quite well, with dwelling values up 1.9% for the month and 26.3% for the year. This is primarily due to the limited supply (new listings are down almost 20% in Adelaide) and relative affordability.
  • Tasmania: The apple isle has been one of the strongest performers over the last year, with Hobart’s median price up 22.3%. Dwelling values in regional Tasmania are also up 27% over the same period. However, growth has slowed significantly over the last few months, as demand has eased, and the supply of new listings has increased.
  • Western Australia: While growth has been relatively modest in Perth (11.6% over the last year), it has accelerated over the last month. Similarly, in regional WA, median prices have increased 0.6% over the last month, and 9.3% over the last year. This is being driven by the reopening of the state’s borders, which has helped reignite the local property market.
  • Victoria: Much like NSW, Victoria is seeing a clear difference between the performance of the capital and regional markets. That said, this gap is much smaller, with prices in regional Victoria only up 0.9% for the month and 20.2% for the year. This is considered to be a direct result of COVID restrictions, which have limited long-term growth potential.

Suburb Spotlight: Beenleigh (QLD)

Beenleigh Night Markets, Must Do Brisbane

Once the heart of Queensland’s lucrative sugarcane industry, Beenleigh has undergone a significant image overhaul over the last few decades. First, its location halfway between Brisbane and the Gold Coast made it the ideal stopping point for tourists. Then, it needed to fight the stigma that came from being a predominantly working-class area with a strong connection to law enforcement.

As a result of this transformation, Beenleigh is now seen as an attractive option for young families and first-home buyers. In addition to being an easy commute from two large commercial centres, the town enjoys strong transport links. It also offers a great range of local amenities, including multiple shopping centres, schools, theatres, and sports facilities.

Property in Beenleigh is also quite affordable, with the median house price currently coming in at just under $430,000. This is despite prices increasing 6.4% over the last quarter and 22.92% over the last year. Units have also seen strong results, with the median price up 28.14% over the last two years, to $255,000.

In even better news for investors, Beenleigh has a significant rental population (45.3%) and a traditionally low vacancy rate. This has driven up the median rent rate, with houses attracting $375 per week and units getting $300 a week. Given the affordability of local property, this equates to yields of around 4.5% and 6.1% (respectively).

At Search Party Property, we specialise in developing tailored investment strategies and will work with you to come up with a suitable plan of attack. We also regularly assess your strategy ensuring that it is fit for purpose and delivering the desired results.

Book your 30 minute property investment assessment here.