Prestige property prices drop in these Aussie capitals
Kanebridge News
Share Button

Prestige property prices drop in these Aussie capitals

By Robyn Willis
Mon, Aug 8, 2022 9:17amGrey Clock < 1 min

Buyers in the market for a prestige property may do well to monitor auction results in coming weeks with modest falls recorded in Australia’s two largest capital cities at the top end of the price range.

Chief economist for Ray White, Nerida Conisbee says both Sydney and Melbourne have seen downward pressure at the higher end of the market in the 12 months to June, according to Ray White Research. 

Sydney experienced a 2.8 percent drop for properties more than $3 million, while in Melbourne, it’s 12.5 per cent in the same price range. However, this was tempered by steady prices in other sectors of the market, with Sydney and Melbourne seeing a total decline in property prices of 1.2 percent and 2.5 percent respectively.

The top end capital Darwin, experienced the greatest overall drop across all price points, recording a 5.3 percent fall.

For investors looking for properties less than $1 million, Ms Conisbee said there has been a modest 1.5 per cent fall in Sydney, perhaps reflecting the consecutive interest rate hikes of recent months. Prices for mid range properties (between $1 million and $3 million) have remained steady.

Ms Conisbee said price increases are set to continue to slow over the remainder of the year, making for a calmer market.



MOST POPULAR

Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts

Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’

Related Stories
Property
The locations where apartment rents are picking up the pace
By Bronwyn Allen 05/03/2024
Property
Hong Kong Takes Drastic Action to Avert Property Slump
By ELAINE YU 01/03/2024
Property
The Australian capitals experiencing world-class price growth in luxury real estate
By Bronwyn Allen 29/02/2024
The locations where apartment rents are picking up the pace

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.

MOST POPULAR

Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts

Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’

Related Stories
Property
What Aussies Are Doing To Cope With The Cost-of-living Crisis
By Bronwyn Allen 09/11/2023
Money
Investing in Nature Is Gaining Traction. Will It Be Enough?
By ABBY SCHULTZ 10/01/2024
Money
How to Handle Making More—or Less—Money Than Your Friends
By JULIA CARPENTER 09/02/2024
0
    Your Cart
    Your cart is emptyReturn to Shop