I get very tired of the high-level reporting of home prices, because as you know I believe we have many discrete markets, which are behaving very differently across locations, states and types of property. Averages mask.
But in some areas, prices are indeed continuing to drop. And drop fast. For example, in my old stomping ground, Thirroul, median house values rose significantly from 2019, peaked in 2021 at over 2 million dollars, that’s double their 2019 levels, then fell away to a new trough of $1.68 million in March 2023, before rising a little, but then moved down to around $1.78 million. And Units in the same area are still descending and on average are just now over $1m.
Similar patterns are showing up elsewhere.
Last year I did a number of “antispruik” shows where we did deep dives at a post code level and looked at how vendors were cutting their asking prices to get a sale.
And actually, as the AFR reported home values in 27 coastal towns have plummeted by more than $200,000 from their pandemic highs two years ago, while 56 towns lost more than $100,000, analysis by CoreLogic shows.
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The NSW government has already announced plans last month to build more than 200,000 homes and focus on higher density living by building up, not out. But now NSW Premier Chris Minns says the state will not meet its housing target, but is doing its best to boost supply.
The plan includes 138,000 new homes at rezoned sites in 31 suburbs, and 47,800 homes near eight major transport hubs, with the latter to be completed over the next 15 years.
Those suburbs include Bankstown, Bays West, Bella Vista, Crows Nest, Homebush, Hornsby, Kellyville and Macquarie Park.
The government will offer developers in those zones a fast-tracked approvals process, called a state significant development, to ensure apartments are built quickly.
It will be offered to developments over $60 million, and construction must start within two years of approval.
The government also intends to relocate Rosehill Racecourse and replace it with 25,000 homes as part of the plan.
But Housing industry insiders say they are not surprised by the NSW premier’s admission that the state will not meet its housing targets agreed to just last year.
The target, which was set out by the federal government in August, would see an average of 75,000 new dwellings a year over the next five years. It is part of a broader plan to build 1.2 million homes across Australia during that period.
Premier Chris Minns said the government would fall short of the goal but was working on building as many houses and units as possible to alleviate housing shortages and skyrocketing costs.
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Today’s post is brought to you by Ribbon Property Consultants.
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Another thought provoking chat with our Property Insider Edwin Almeida, as we look at the latest trends and news. Looks like 2024 will be quite a year!
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My first Friday chat with Tarric Brooker, Journalist and Chart-Meister.
Will recent developments force a replay of the recent inflation crisis and keep rates higher for longer. If so, what are the potential implications politically and economically?
His charts are here: https://avidcom.substack.com/p/dfa-chart-pack-12th-january-2024
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Following my post about Household Financial Stress https://youtu.be/G1T72rUFlgA and the upcoming live show tomorrow, I received many requests for postcode level analysis. So I made an extra show here to cover some of the requests.
Post Codes Covered (In Order) In This Show: 3912 4868 2560 4670 2487 6149 3842 3799 6072 4178 2042 4215 3690 2640 6030 2137 4670 3174 3012
Join us tomorrow on the live show for more. https://youtube.com/live/nXhfjacOnA0
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Another deep dive into the dynamics of property with our insider Edwin Almeida. How are the new listings tracking, and how does this compare with the MSM stories we are seeing? Will new construction volumes remain in the doldrums?
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Ahead of my live show on Tuesday evening, today I walk through the latest from our household surveys, with a focus on mortgage, rental, investor and overall household financial stress.
We look at the top stressed postcodes as represented by the data to end December 2023. We also map that data for selected urban centres, as well as default estimates.
If you want data on a specific postcode to be featured on Tuesday drop it in the comments on YouTube.
Details of our One to One Service is also found on our blog: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
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CoreLogic reported that their national Home Value Index (HVI) rose 8.1% in 2023, a significant turnaround from the 4.9% drop seen in 2022, but well below the 24.5% surge recorded in 2021. December’s 0.4% increase saw 2023 finish with a relatively soft monthly rise in home values.
Despite the annual 8.1% increase, the year was punctuated by diversity , with the annual change in housing values ranging from a 15.2% surge in Perth to a 1.6% fall across regional Victoria.
So now of course, the question is what will happen in 2024. Last week I made two shows for the channel, one on the top 5 elements supporting home price growth in 2024 and the other on the top five elements which could drive prices lower.
If you take, low supply, high demand, easing lending, Government support and RBA/APRA stability concerns, the potential for home prices, especially houses to rise in 2024 seems pretty strong. On the other hand, the risks from higher unemployment or a recession, the exit of property investors, higher delinquency and defaults, higher mortgage rates for longer, and dire housing affordability are all reasons why prices could fall in 2024.
To make an assessment of what will play out, you then have to do is to weigh the relative influence of each of these forces, against an unstable local and global economic environment.
This is something we model dynamically, in our Core Market Model, which incorporates all these elements and delivers scenarios at a post code level for houses and units.
In comparison, the AFR published estimates from a panel of 10 property market experts and economists. Overall, they take a more sober view on growth prospects for the housing market, with most tipping gains of somewhere between 1 and 5 per cent. The most optimistic prediction is for house price gains of up to 8 per cent, while the most bearish forecast is for prices to fall nationally by as much 5 per cent.
Last year’s “very unusual supply and demand dynamics” are expected to normalise in 2024, according to Barrenjoey chief economist Jo Masters, who is tipping 4.8 per cent growth nationally. Sydney house prices could rise by 3.8 per cent, with Melbourne up 3.2 per cent and Brisbane 5.9 per cent.
“Importantly, we think borrowing capacity will re-emerge as a key constraint on demand,” she told AFR Weekend in a quarterly property survey.
Trying to pin the tail on the property price donkey, is fraught with difficulty, because of the uncertainty in the system – one reason why I run scenarios, and why the specific tale you prefer will influence your expectation of price movements.
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Well, the numbers are now in so today I am going to review the performance of our channel over the last year, and specifically highlight the top 10 most watched shows.
I want to thank you for being part of the DFA community, watching our shows, and supporting us by subscribing, liking the shows, and sharing them widely. Its greatly appreciated and I want to celebrate the momentum we created together. Especially around some of our campaigns, most notably addressing the issue of bank branch closures and the need to be able to access cash.
None of these top ten were my live shows, which generally run each Tuesday evening. Generally live events tend to do less well on YT compared with recorded shows. But the great positive of live is the audience participation, which is key to building and nourishing the community. So a quick word of thanks, to all those who turn out regularly to support our live events.
And if you stand back, its clear that housing related shows rate well, as do the regular chats with Tarric and his slides, and some of the more philosophical shows such as Down the Rabbit Hole and the BRICS discussion, also did well.
If you have specific subjects you would like me to cover, or guest suggestions, drop them in the chat!
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