Capital City Market Outlook
Republished from Matusik Missive
End of the market upswing. Now being constrained by buying and rental affordability, plus low rental yields. Yet, sales demand still exceeds resale supply. New housing supply remains relatively tight.
We are forecasting a 5% to 7.5% lift in house values and rents over the next twelve months. The current rate of growth (as at Late March) is unsustainable. We anticipate that attached dwelling values, and rents too, could rise by 2.5% to 5% over the same period.
Still in a market upswing. Somewhat constrained by low affordability and poor rental yields. Strong population and local job growth keeps buyer demand above resale supply. New housing supply also remains relatively tight.
We are forecasting a 7.5% to 10% lift in house values. Attached dwelling values should rise by 2.5% to 5%. Weekly rents for houses are expected to rise by 2.5% to 5%, with attached dwelling rents up between 0% to 2.5%, over the next twelve months.
Still in recovery, but a mild and spasmodic one. A recovery in sales, not necessarily price or rental growth. Good affordability, with some migration and investor interest, now, from interstate, could see things improve. But the lack of local job growth and the new apartment overhang is dampening our forecast.
We are forecasting a 5% to 7.5% lift in house values. Attached dwelling values are likely to fall by -5% to -2.5%. Little rental growth (0% to 2.5%) for houses. Attached dwelling rents (apartments) are expected to fall by up to 10% over the next twelve months.
Also in recovery, but like Brisbane, not a strong one. Adelaide’s housing market has recently lost momentum. Falling job numbers are largely to blame, resulting in lower population growth. But jobs have recently bounced back and if job growth can be sustained, then Adelaide’s housing recovery should regain momentum.
However, we aren’t forecasting great things for Adelaide over the next twelve months. We expect a 2.5% to 5% lift in house values, with rental growth for both houses and attached stock up to 2.5%. Little change (0% to 2.5%), in attached dwelling values.
Not all residential markets are in the same place. Some are improving, whilst others are in decline. The position and strength of each market, and its outlook, is largely determined by three things – demand, supply and external factors.
External factors do come into play in Sydney and Melbourne, for example, where the markets are being influenced by overseas buying. This is having an impact not only on new stock, but on the existing housing market as well. Other capitals are not similarly affected.
In short, most capitals are expected to see a continued lift in dwelling prices (and in particular for houses), over the next twelve months. Our rental forecast is much more mixed.
Our reporting uses twelve benchmark indicators that define the state of supply and demand in each city. There is a clear logic behind our forecasts.
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About the author
Michael Matusik is director of independent property advisory Matusik Property Insights. He is independent, perceptive and to the point; has helped over 550 new residential developments come to fruition and writes his insightful Matusik Missive.