This is an edited version of a live discussion as I go through the latest from our household surveys to end February 2025. In this show we look in detail at the post code level data, and to examine, across income, financial stress, mortgages and rents and property price movements ahead.
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DFA Live Q&A HD Replay: Post Code Deep Dive: Household Finances Under The Microscope…
The political games are in full swing now, ahead of the RBA’s rate call on Tuesday and if they do cut, many are calling the starting gun for the election which must be run by May 17, will go off very soon.
So, no surprise at all then to see that housing was in the spotlight again over the weekend, as Housing Minister Clare O’Neil announced that Labor would ban foreign investors from buying established homes for at least two years, replicating the promise made by Opposition Leader Peter Dutton in his budget reply speech last May. The housing minister, said the government had to orient all its efforts into securing home ownership for more young Australians. Nice dog-whistle, right there!
Australia’s housing is some of the most unaffordable in the world and soaring property prices will be a key election issue amid a broader cost-of-living crisis, especially among young voters who fear they will never be able to buy a home.
The government recently passed housing reforms, including a shared equity scheme and tax incentives for developers, to ease cost pressures and achieve a target of building 1.2 million new homes by 2030.
The truth is, throttling back migration to better match the number of new homes being built, and reducing the tax breaks for property investors, and build to rent schemes would have a far greater impact. But then to remind you again, O’Neil all but said she does not want to see prices fall, which they would need to do if more normal affordability ratios were reestablished.
All up this is more about annoucables, than real strategic policy change.
Today’s post is brought to you by Ribbon Property Consultants.
In tonight’s show we catch up on Edwin’s predictions – does NOSTRADAMUS walk among us? We look at the massive rise in Council Tax, and also the rise in listings, but only in some places.
And given the upcoming election we examine some of the early promises being made in the quasi campaign, despite the gap between the promised 1.2 million well sited homes over 5 years and what is happening on the ground.
Edwin also highlights an important issue for a prospective property purchaser – get your paper work in order!
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Today’s post is brought to you by Ribbon Property Consultants.
Something a bit weird is happening in property markets across Australia.
Normally as we head into the peak autumn selling season momentum and prices tend to step up. But so far sellers are racing to beat the competition into a falling market already padded by properties that failed to sell in spring last year and this has pushed up the volume of residential listings in parts of Sydney and Melbourne more than 50 per cent on last year according to CoreLogic data. And now its spreading to Brisbane and Perth too.
“Brisbane looks to me like a really soggy market and I wouldn’t be surprised if house prices go negative in the next couple of months,” said AMP chief economist Shane Oliver. Brisbane could be the next capital to enter a downturn after Sydney. “It’s often the case that once the momentum turns negative, you go further negative for a while, so when prices are falling, history tells us that can go on for a little bit. I think momentum is starting to work against Brisbane, and it is now weakening at a similar pace as Sydney was six months ago.”
So for now, perhaps Brisbane is the one to watch…
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
Digital Finance Analytics (DFA) Blog
Is Brisbane The Next City To See The Home Price Fall Shoe Drop?
We are crossing the ditch to New Zealand today to look at the latest home price data from the REINZ, and the latest inflation data from the RBNZ.
The New Zealand property market experienced a relatively quiet month in December 2024. Actually, sales increased by 1.8% nationwide compared to December 2023, rising from 5,420 to 5,518 but the median price for New Zealand decreased slightly by 0.6% to $775,000 year-on-year. Month-on-month, the national median price fell 1.8% from $789,000. Auckland prices were down 4.3% over the past year, and Wellington was down 5.4%.
National inventory levels have risen, increasing by 18.5% year-on-year to 29,478. However, inventory levels have decreased by 13.3% compared to the previous month, down from 33,984. Nationally, the days to sell rose 6 days year on year to 42 days.
The latest data from the RBNZ showed inflation slowed, though locally grown inflation was still sticky. Ahead, we can expect further rate cuts this year, as inflation tracks in line the RBNZ expectation, though external factors like exchange rates are in play, increasing uncertainty.
Whether the RBNZ will need to push the OCR below circa 3.25% neutral levels or have the OCR move higher remains to be seen, with monetary policy settings for 2025 and beyond highly conditional on the (still-uncertain) economic outlook.
This uncertainty flows back directly into the property market, and despite the lower rates ahead, the broader uncertainties and financial pressures many households are feeling will continue to hold the property market in a zone of uncertainty, especially given weaker demand as migration rates continue to ease. There is no easy upside breakout in property prices here.
In this show we look at the latest from our household surveys to end December 2024, and highlight where mortgages stress, rental stress, investor stress and overall financial stress predominates, as housing affordability continues to crash.
As a result, the dream of home ownership is becoming a nightmare for many.
We also examine the latest price scenarios across the states, and spot those likely to fall and those more likely to rise.
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
The gap between average prices and affordability has widened substantially, and it is unlikely things will turn around anytime soon. And rate cuts are far from certain in the short term.
If you deep dive into where home prices have risen and fallen over the past year, it reinforces the need to go granular to understand what is really going on.
A long period of higher interest rates has put significant pressure on prices in wealthier areas, with some investors forced to sell adding to stock on the market, even as prospective buyers become more reluctant about taking out a large mortgage, coupled with a fear of buying in at current heady levels.
Many properties in areas traditionally been held by investors, have begun to sell as interest rates made breaking even more difficult.
Younger Australians are facing to get into the market unless they previously owned a home (and have accumulated housing equity) or receive money from family members (the bank of mum and dad).
Thus, as never before its important to go granular to understand what is really happening and also avoid simplistic fixes which are politically popular. Fixing housing affordability will take a generation and will require some degree of price correction. Generally, stand alone houses will do better than units in this environment, but again it is important so study the local area and avoid generalisations.
Finally, perhaps its time to move away from the fixation on rising property prices, and regard a home as a place of shelter, not a financial investment. That may not be a popular view, but to me it has great merit. Though the question is – can the genie be put back in the financialisation bottle? Not unless politicians change tack.
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
Well, there should be no surprise that home price growth is easing, and indeed prices are falling in some places up to the end of the year, as a combination of higher for longer interest rates, broader financial pressures, reduced borrowing capacity and even easing migration are all taking their toll. This despite assurances from Clare O’Neil that prices would not drop.
The reality is that gravity is finally catching up with the market. Many observers expected home prices to fall in response to the Reserve Bank of Australia’s (RBA) aggressive interest rate hikes, which made property significantly more expensive. However, prices defied gravity and increased due to record net overseas migration and acute stock shortages. But as a result, Australian property values have decoupled from borrowing capacity, resulting in historically low affordability. Realistically, home prices will continue to fall until the RBA cuts interest rates, increasing affordability and borrowing capacity. But even then, growth will be anemic at best, This is consistent with our three scenarios and our base case as reported in recent months.
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
Core Logic released their annual Best of the Best report, and they say that while at first glance, the Australian housing market was surprisingly resilient through 2024, it can be characterised as having stronger conditions ‘out of the gate’, which slowed over the course of the year under waning demand, rising levels of advertised supply and a changed outlook for inflation and interest rates.
There were significant variations across property types and locations, with significant rises and falls, and units doing better than houses.
Melbourne dominated the list of the worst-performing house and unit markets, underscoring the city’s weak showing this year. House prices in Chelsea, Doncaster, Dromana and Bonbeach slumped between 9 per cent and 10.2 per cent, while unit values in Sunshine, Frankston South, Carnegie, Murrumbeena and Caulfield South dropped by as much as 13.8 per cent.
Sydney suburbs Zetland and Cronulla were among the weakest house markets in the country, with values dropping by 9.7 per cent and 8.5 per cent respectively. And that’s the point really, because the truth is, values are all over the shop at the moment, with the likelihood of further falls in some areas, unless or until we see significant rate cuts. Given what we saw yesterday reflected in the lower unemployment rate, the RBA won’t be cutting soon, so 2025 will be “interesting”….
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
You can smell an election coming soon as Australia’s housing minister has declared that the Anthony Albanese government doesn’t want house prices to fall – despite them being very unaffordable for the young.
Clare O’Neil made the admission on Triple J’s youth-orientated Hack program recently, when she was hit with a barrage of questions about the housing market being ‘stacked against young people’.
‘We want to bring house price growth into something sustainable – so we’re not trying to bring down house prices,’ Ms O’Neil said.
That prompted a surprised host David Marchese to ask: ‘Why don’t you want to be seeing house prices drop? ‘If you’re looking to get into the market, if you’re a young person looking at what’s ahead of you, you definitely want to see house prices come down.’
O’Neil rejected the argument – saying ‘That may be the view of young people – it’s not the view of our government,’ she said.
Data keeps rolling out showing how unsustainable the current housing market policy path is, with the Real Estate Institute of Australia (REIA)’s latest Housing Affordability report for the September quarter showed average loan repayments amounted to 48.6 per cent of the median family income of $2501 a week.
This is the greatest proportion since the REIA began monitoring housing affordability in 1996.
Mind you we saw similar political confusion from the UK Deputy Prime Minister and Housing Minister who in a weekend interview managed to say both there was a housing shortage, and no housing shortage, despite high migration in the same interview. Again it shows the political back-flips polys are prepared to do.
For truth though Kudos to Adrian Orr the New Zealand Reserve Bank Governor, who said last week in an interview that the property market was a real mess. Can you imagine the RBA or Senior Politicians in Australia speaking such truth. No, because politics trumps housing policy rationality. High migration wins over bringing prices back under control. And Boomers win over younger Australians again.
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
Digital Finance Analytics (DFA) Blog
Revealed: The Politics Of Housing And The Intergenerational War!
