12 months of real estate in review
In Australia, we’re resilient when it comes to buying and selling residential property. Interest rate rises and cost-of-living increases in 2023 barely had an impact. The main impact was a reduction in the number of people selling, which was (and is) due in large part to mortgage switching costs.
Australia-wide, property prices grew by 8.1%, with gains in most capital cities. The highest rises were in Sydney (11.1 per cent), Perth (15.2 per cent), and Brisbane (13.1 per cent), with Brisbane starting to feel the effects of winning the right to host the 2032 Olympic Games. Hobart and Darwin both saw modest falls. Hobart prices continued to decline over the year, while Darwin ended the year with gains of 3.7%.
Across regional markets, values rose 4.4%.
Petrie real estate market
The Petrie real estate market has a total of 3,359 residential properties, made up of:
- 218 flats & units
- 162 townhouses & villas
- 10 duplexes, and
- 2,969 houses.
In Petrie, property prices have grown by 65.6% over the past 5 years and grew by 10% in 2023. Further growth is forecast in 2024 with Petrie being named by realestate.com.au as one of 17 must-watch-suburbs in Australia in 2024.
Encouragingly, despite pressures on cost, Australia-wide, dwelling values are 31.3% above where they were before the pandemic. Prices are still the highest they’ve been for decades in most cities and regions in Australia. According to CoreLogic figures for the week ending 11 February, auction clearance rates were up in all capital cities, with a weighted average clearance rate of 68.3%.
This time last year, we assumed Australians would move on from the slump in 2022 by the end of 2023. As it happened, we saw continual growth throughout the year.
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Consumer sentiment
As of 23 February, the ANZ-Roy Morgan Consumer Confidence index was at 83.2 points, below the 1973-2024 average of 110.7. In general, buyers and sellers are optimistic; however, the war in Ukraine, the devastation in the Middle East, the US election in November, and the continued spectre of a recession combine to create uncertainty.
While the US economy is strong, Germany, Finland, the UK and Ireland are in technical recession (two consecutive quarters of negative growth), while France showed little growth over the second half of 2023.
The Australian economy has slowed almost to a stop. However, our population growth – primarily through immigration – has helped us narrowly avoid a technical recession. February saw a marked growth in property values, while current interest-rate stability is inspiring confidence in buyers and sellers alike.
Record immigration spurs Brisbane’s economy amid housing challenges
In 2023, Australia experienced its highest immigration on record, surpassing 500,000 new arrivals. Queensland emerged as a hotspot for migration, witnessing unprecedented population growth, particularly in Brisbane. The state welcomed nearly 300,000 new residents over three years, with 120,000 arriving from interstate, making it the top destination for migrants in Australia.
Queensland achieved a historic net overseas migration of 84,000 and interstate migration of 32,260, reflecting its allure to both international and domestic migrants. Notably, Queensland has consistently gained population through net interstate migration since June 1981, with over 20,000 migrants arriving from New South Wales in the past year alone.
Brisbane’s designation as an Olympic city has thrust it into the global spotlight, attracting migrants seeking employment opportunities. Simultaneously, its relative affordability compared to other major Australian cities is drawing in domestic and interstate buyers.
This influx of migrants has stimulated economic activity but also poses challenges, notably in housing construction. Despite the surge in population, the construction sector has witnessed a decline over the past three years, leading to the collapse of several building companies.
In summary, Queensland, particularly Brisbane, is experiencing remarkable demographic shifts and economic growth driven by unprecedented immigration levels and its status as an Olympic city. However, managing this rapid population growth presents challenges, particularly in housing and infrastructure development.
Homeowner Update
The economy in 2024
Heading into 2024, Australia is facing a sluggish economy, rising unemployment, lower exports and a drop in imported consumer goods as Australians reined in their shopping.
We know from experience that Australian mortgage holders will sacrifice much to retain their property so a slow-down in consumer spending was only to be expected.
Property auctions and clearance rates 2023
CoreLogic’s 2023 Auction Market Review released in February this year showed 96,177 homes went under the hammer across the combined capitals last year. This represented an -8.0% drop on 2022 and the lowest number of auctions annually in three years. However, the 2023 clearance rate was 64.9%, up from 61.2% in 2022.
For the week ending 4 February 2024, CoreLogic noted 1,671 auctions last week, the second-busiest start to the auction season on record with clearance rates of Sydney ‒ 70.6%; Melbourne ‒ 67.1%, Brisbane ‒ 67.2%, Adelaide ‒ 74.1% and Canberra ‒ 58.6%. Properties that went to auction in Perth and Tasmania (all) were passed in.
Property market movements in 2024
While spring is often noted as a peak selling season, figures bear out that autumn is the season that delivers the best sales results. So look for a bump in average sale prices from March onwards and a further bump in September/October as the weather warms up again and days grow longer.
Property Investor Update
Rental listings in 2024
According to Eliza Owen, Head of Research at CoreLogic, rent values rose steadily to July last year at which point values began to ease in capital cities. Slowing in regional centres has been evident since April last year. Note ‘slowing’; the market isn’t going backwards, just not rising exponentially as it had been doing.
Owen suggests that slowing growth will be a key housing market trend for 2024 and offers three reasons.
- The cash rate is expected to fall, which could increase investment and first home buyer activity. Rents move with interest rates, and interest rates could be on the way down either this year or next. Rent values and interest rates tend to move in tandem.
- Income growth is expected to slow, which might prompt a change in housing preferences.
- Stretched rental affordability could see movements to more affordable areas.
Petrie rental properties in 2024
In Petrie, the trend of rising rents is expected to persist into 2024, following a notable 7% increase in the median weekly rent for rental properties throughout 2023. To gauge the potential for further increases in 2024, it’s essential to examine factors influencing supply and demand in the rental market. Three key factors stand out:
- Rental Supply: Petrie’s rental market comprises 825 properties, accounting for 25% of total residential properties in the area. This percentage is lower compared to many other postcodes in Brisbane and the City of Moreton Bay, where rental properties often make up 35% or more of the residential properties. Notably, Petrie’s rental stock remains historically low, with a vacancy rate below 1%, and new housing supply at its lowest point in over a decade.
- Rental Demand: Demand for rental properties in Petrie is high, driven by population growth in Brisbane and the City of Moreton Bay, as well as the anticipated increase in demand due to the projected growth of the USC Petrie Campus. However, there are concerning trends for tenants, including a decrease in the availability of townhouses for rent, with many being purchased by first-home buyers. While unit supply has seen a slight increase over the past five years, the number of rented houses in Petrie has grown significantly, indicating a heightened demand. Addressing this demand requires concerted efforts from the State Government and the City of Moreton Bay to deliver affordable housing options, particularly focusing on increasing the supply of units, townhouses, secondary dwellings, and other suitable properties.
- Economic Factors: Economic conditions such as rising construction costs and higher interest rates contribute to the upward pressure on rents. Projections from the Housing Industry Association (HIA) suggest that 2024 may witness a significant downturn in housing starts, with construction activity expected to hit its lowest point in over a decade. Additionally, there’s evidence of a decline in loans for first-home buyers, indicating potential challenges in entering the property market. However, forthcoming tax cuts may provide some relief for renters by putting more money in their pockets.
Considering these factors, it’s likely that rents in Petrie will continue their upward trajectory in 2024, underscoring the importance of addressing both supply and demand issues in the rental market to ensure housing affordability for residents.
Can we help you with your property needs?
If you’d like advice about the property market, whether you want to sell, buy or lease, we know the Petrie area and understand the local real estate market. Please get in touch. We’re here to help.
