Strong Markets Hold The Line
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Strong Markets Hold The Line

Sellers return to the housing auction market in significant numbers.

By Kanebridge News
Mon, Oct 25, 2021 10:04amGrey Clock 2 min

The national auction market continued to record strong results at the weekend despite the usual increase in mid-spring listings which, this year, has been amplified by the end of lockdowns in major capital cities.

The national clearance rate was higher at the weekend – up to 84.7% from 83.9% and well above the 77.3% reported over the same weekend last year.

National auction numbers were higher again at the weekend, rising from the previous Saturday’s 1970 to 2048 – ahead of the 1083 auctioned over the same weekend last year.

Although the market continues to record boomtime results, Sydney’s weekend auction market was sharply lower at the weekend recording a clearance rate of 77.0% — below the previous weekend’s 83.6% and lower than the 78.8% recorded over the same weekend last year.

It marks the first time the NSW capital’s clearance has fallen below 80% for the first time in 12 weeks.

Higher auction numbers have impacted clearance rates with 721 homes listed for auction at the weekend – up from 677 the previous weekend and 637 for the same weekend in 2020.

Sydney recorded a median price of $1,685,000 for houses sold at auction at the weekend – marginally higher than the $1,675,000 reported over the previous Saturday and 22.5% higher than the $1,375,000 recorded over the same weekend last year.

With the city coming out of lockdown, Melbourne’s fortunes shifted with the city recording a clearance rate of 80.4% on Saturday – higher than the previous weekend’s 77% and the first time its result has eclipsed Sydney’s since early July.

A total of 994 homes were listed for auction at the weekend – similar to the 993 reported over the previous weekend and well above the 304 for the corresponding weekend in 2020.

Melbourne recorded a median price of $1,048,000 for houses sold at auction at the weekend which was higher than the $969,500 recorded over the previous weekend and 13.5% higher than the $923,000 recorded over the same weekend last year.

Data powered by Dr Andrew Wilson of My Housing Market.



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Stronger demand in some areas is pushing unit rents up faster than houses

By Bronwyn Allen
Tue, Mar 5, 2024 3 min

Renters are returning to the apartment market, leading to higher growth in weekly rents for units than houses over the past year, according to REA data. As workers return to their corporate offices, tenants are coming back to the inner city and choosing apartment living for its affordability.

This is a reversal of the pandemic trend which saw many renters leave their inner city units to rent affordable houses on the outskirts. Working from home meant they did not have to commute to the CBD, so they moved into large houses in outer areas where they could enjoy more space and privacy.

REA Group economic analyst Megan Lieu said the return to apartment living among tenants began in late 2021, when most lockdown restrictions were lifted, and accelerated in 2022 after Australia’s international border reopened.

Following the reopening of offices and in-person work, living within close proximity to CBDs has regained importance,” Ms Lieu said.Units not only tend to be located closer to public transport and in inner city areas, but are also cheaper to rent compared to houses in similar areas. For these reasons, it is unsurprising that units, particularly those in inner city areas, are growing in popularity among renters.

But the return to work in the CBD is not the only factor driving demand for apartment rentals. Rapidly rising weekly rents for all types of property, coupled with a cost-of-living crisis created by high inflation, has forced tenants to look for cheaper accommodation. This typically means compromising on space, with many families embracing apartment living again. At the same time, a huge wave of migration led by international students has turbocharged demand for unit rentals in inner city areas, in particular, because this is where many universities are located.

But it’s not simply a demand-side equation. Lockdowns put a pause on building activity, which reduced the supply of new rental homes to the market. People had to wait longer for their new houses to be built, which meant many of them were forced to remain in rental homes longer than expected. On top of that, a chronic shortage of social housing continued to push more people into the private rental market. After the world reopened, disrupted supply chains meant the cost of building increased, the supply of materials was strained, and a shortage of labour delayed projects.

All of this has driven up rents for all types of property, and the strength of demand has allowed landlords to raise rents more than usual to help them recover the increased costs of servicing their mortgages following 13 interest rate rises since May 2022. Many applicants for rentals are also offering more rent than advertised just to secure a home, which is pushing rental values even higher.

Tenants’ reversion to preferring apartments over houses is a nationwide trend that has led to stronger rental growth for units than houses, especially in the capital cities, says Ms Lieu. “Year-on-year, national weekly house rents have increased by 10.5 percent, an increase of $55 per week,” she said.However, unit rents have increased by 17 percent, which equates to an $80 weekly increase.

The variance is greatest in the capital cities where unit rents have risen twice as fast as house rents. Sydney is the most expensive city to rent in today, according to REA data. The house rent median is $720 per week, up 10.8 percent over the past year. The apartment rental median is $650 per week, up 18.2 percent. In Brisbane, the median house rent is $600 per week, up 9.1 percent over the past year, while the median rent for units is $535 per week, up 18.9 percent. In Melbourne, the median house rent is $540 per week, up 13.7 percent, while the apartment median is $500 per week, up 16.3 percent.

In regional markets, Queensland is the most expensive place to rent either a house or an apartment. The house median rent in regional Queensland is $600 per week, up 9.1 percent year-onyear, while the apartment median rent is $525, up 16.7 percent.

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