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September Property Market Update

Updated: Jun 16, 2020

Our analysis of the latest September market data released suggests that the market is more resilient than the media suggest. News that property prices are ‘crashing’ is exaggerated. While we have seen prices across some states soften relative to strong gains over the past decade, Brisbane, Adelaide, Perth and Hobart are seeing property value increases year-on-year.


We have highlighted the key drivers in the property market for the key states. Understanding these movements will help you know where to look to invest or purchase your first home.



 


Melbourne


We have seen strong performance in the Melbourne property market over the last five years, with growth of more than 41% across the period that peaked in November 2017. Current property values are now 3.5% below their peak.


Key figures:



Whilst we believe that Melbourne property prices are expected to continue to soften in next months, a combination of factors will prevent significant price falls. Increasing migration, robust economic performance and higher jobs growth will support the property market.

 

Sydney


Dwelling values in Sydney fell by 1.2% over the past three months. The property market has been affected by the same factors that have caused the softening in the Melbourne market; slowing wage growth and caps on investor loan growth recently.


Key figures



The Sydney property market is down 5.6% over the year and it is expected to drop further. The more expensive segment of the market has weighed on overall price growth as houses priced $2 million and over have seen the greatest fall in prices, while those under $500,000 have remained unchanged.

 

Adelaide


Property price growth in Adelaide has seen an increase of 1% over the year in contrast to other major capital cities in Australia. Price growth has come from lower-end and middle market properties rather than the historically higher-valued properties.


Over the past 5 years, Adelaide property prices have increased by 15.6% and 31% across the decade. Property in Adelaide remains more affordable than the other Australian cities. When coupled with the new tax benefits for investors/home owners and increased infrastructure spending released in the latest South Australian budget, prices are expected to continue rising.


Key figures



 

Our conclusion and future projections

Nationally, the property market has decreased by 2% over the year. The Australian property market appears to be divided in two at the moment: on the one hand, prices are slowing gradually in Melbourne and Sydney, while on the other hand, Adelaide, Brisbane, Perth and Hobart are bucking this trend. We see Adelaide and Hobart as the two cities with greatest potential price growth over the next 5 years.


Sources: CoreLogic

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