In this episode of Market Watch Scott and I delved into the market performance data for properties sold by 30 September 2024.
As usual, we reviewed and compared the data tables from CoreLogic, SQM Research and PropTrack. This month, the bad news continued for Melbourne, Canberra, Hobart and Darwin. Anyone who thinks the price dips in these locations represent an opportunity are either delusional, misguided or trying to sell you properties in these locations.
With reference to Melbourne, as it’s largely investors selling out of this location, we expect rental returns will continue to improve – just make sure you do your numbers while taking into account the increased taxes you will be required to pay annually.
Sydney, is chugging along with a very mixed market – developer stock units are stalling / tanking in price while the mid range market continues to move upwards. Brisbane, Adelaide and Perth are still on the rise although we are starting to see some signs of slow downs as we head towards the end of the year.
Watch the podcast for a deeper analysis on trends and nuances of each key area.
Distressed properties
The media has been hyping the point about an increase in ‘distressed’ properties in the past few weeks so Scott and I dug into the background of this issue, to bring you some detailed insight.
The first issue we looked at was the ABS data outlining lending intentions. This data tracks the amount of new loans being approved for both owner occupiers and investors in each State. While there is a slight slowing in one or two location, the charts show there is very healthy demand for home buyers and investors. So, if there is an increase in distressed properties there’s certainly going to be plenty of buyers.
We also looked at the supply of new listings for properties for sale. Interestingly, this data tracked quite closely with the October sales performance we discussed earlier. Melbourne, Hobart, Canberra and Sydney have an increase in the number of listings – Canberra is up 15%. Locations where supply of listings dropped over the past 12 months included Brisbane, Adelaide, Perth (down by a whopping 31%) and – strangely Darwin which had a decrease in supply of 15%.
The drop in supply in Darwin would have to be due to the fact that prices are dropping, so owners are trying to hold out until prices improve before selling.
Next we looked at the data on the change in distressed listings, commencing with a list of the features that can categorise a distressed listing. We used the SQM Research approach which list the top ten features – one of which is deceased estates.
I don’t know about you, but I have been to many deceased estate sales and these have been anything but ‘distressed’. If a property is being sold by family members after a relative has passed away, the family usually want to achieve the best possible price and therefore I wouldn’t call these ‘distressed’.
Apart from this, when we looked at the changes in the actual amount of distressed listings it really only comes to an incredibly small percentage of the properties available for sale – nationally just over 5,000 properties against over 201,000 listings in total.
Keeping in mind we’re looking at very small numbers, the annual change was interesting with Melbourne and Hobart distressed listings up by 26 percent and Canberra up by 40 percent.
Is it a trend though? Not really, but watch the episode for our full thoughts.
About the author
Debra Beck-Mewing is the Editor of the Property Portfolio Magazine and CEO of The Property Frontline. She has more than 20 years’ experience in buying property Australia-wide and has extensive experience in helping buyers use a range of strategies including renovating, granny flats, sub-division and development. Debra is a skilled property strategist, and a master in identifying tailored opportunities, homes and sourcing properties that have multiple uses. She is a Qualified Property Investment Advisor, licensed real estate agent and also holds a Bachelor of Commerce and Master of Business. As a passionate advocate for increasing transparency in the property and wealth industries, Debra is a popular speaker on these topics. She is also an author, podcast host, and participates on numerous committees including the Property Owners’ Association.
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Disclaimer – This information is of a general nature only and does not constitute professional advice. We strongly recommend you seek your own professional advice in relation to your particular circumstances.
