Market Update, Predictions, & Local Insights
Weekly Real Estate Market Update with Leigh Martinuzzi MPG
In the September Quarter of 2023, the Australian real estate landscape faced a formidable challenge with a significant drop in new house construction. Just 23,058 houses commenced construction, marking the weakest quarter in over a decade. Economist Tom Devitt raised concerns about meeting the National Cabinet’s goal of constructing 1.2 million homes in the next five years. Devitt emphasized the need for government accountability in streamlining planning processes, reducing red tape, and fostering infrastructure development to tackle housing market challenges.
An economic review surfaced this week, shedding light on the growth of GDP staying below the trend for this year. Inflation is expected to hover around 4.2% by the fourth quarter of 2024, and by the end of the year nearer 3%, aligning it close to RBA’s target range of 2 to 3%. Projections suggest a static cash rate until the end of the year, followed by potential rate cuts of 75 basis points towards the year-end and a further 75 into the new year. As economic uncertainties loom, property prices remain steady. With forecasts predicting a potential upswing in market prices at the end of 2024 and the start of 2025, now may be the opportune time for both buyers and sellers to maximise their gains.
On the rental front, Australia witnessed a dramatic rise in median rents, reaching a new high of $601 per week, a substantial increase from the market average in August 2023 ($437 p/wk). Despite signs of rental growth slowing, factors like decreased household size, record-high population growth, reduced building approvals, and lower rental market availability are contributing to sustained high prices. For the long term, new housing initiatives are crucial to boosting housing supply.
Locally, here on the Sunshine Coast, the market may appear subdued, but strong results persist. The average time on the market has increased, particularly for premium and rural properties, while A-grade homes and those offering great value are still in high demand. Homes sitting in the “affordable” category also face strong buyer competition and quick turnaround. Palmwoods is emerging as the new property hotspot, with more residential homes now fetching close to or above $1 million. Its strategic location, proximity to the beaches, transport hubs, and top-notch facilities on the Sunshine Coast make it an attractive destination for newcomers. I must say as a local myself I tend to be a tad biased. For all your real estate needs please feel free to reach out anytime.