The Australian property market has recently undergone some of the biggest changes in its history.
Savvy investors obviously have their ears to the ground, but it can still be hard to keep track of where things stand across the country with so many micro-trends asserting their impact. Here, we bring you a snapshot of the Australian property market in Q2, 2023.
The country is fairly evenly split into three cohorts: home owners who own outright, those who are paying off a mortgage, and renters. The breakdown is as follows:
- 31 per cent of residents own outright
- 35 per cent hold a mortgage
- 30.6 per cent rent
While the first group has been fairly immune to changes that can be largely traced back to the onset of the COVID-19 pandemic — a stall and then a rush of international migrants, increased savings among the average Aussie stuck at home for months, and the living opportunities offered by the remote work revolution — renters and mortgage holders have been on something of a rollercoaster in recent memory.
The current cash rate is 3.85 per cent, rising from 0.1 per cent in May 2022. This means that mortgages have risen at the fastest rate in Australian history.
And vacancy rates for rental properties are extremely slim, with a national average of 1.4 per cent — that’s fallen from 2.9 per cent in April 2020. Some renters face even tighter markets, such as in Brisbane, where the rate sits at 1 per cent, and Perth and Adelaide, where it’s even lower — 0.6 per cent.
The median house price for the country at large sits at $709,130. However, if you’re looking in the capital cities, expect to pay more, with that figure jumping to $771,579. Buyers get a bit of a break in the regions, where the average house nets $579,818.
Meanwhile, average rent in the nation comes in at $570 per week, with capital city dwellers paying $594 on average, while regional residents are renting at the $507 mark.
Australian landlords are seeing roughly a 3.9 per cent rental yield across the board, with that figure resting closer to 3.7 per cent in the capitals and 4.6 per cent outside of the large metro centres.
The vast majority of landlords are what are described as “mum and dad investors”, meaning residents who have (or had, pre-retirement) normal day jobs and who parked some of their savings in one or maybe two investment properties. Here is the breakdown of property holdings across investor types:
- 71.5 per cent of investors hold one investment property
- 18 per cent of investors hold two investment properties
- 9.7 per cent of investors hold three, four, or five investment properties
- 0.8 per cent of investors hold six or more investment properties
But these figures can shift quite quickly depending on investor sentiments. And in fact, a number of investors have been parting with their rentals in recent years, with Queensland found to have the highest share of investors who sold their properties over the past two years, followed by NSW (24.1 per cent ) and Victoria (19.1 per cent).
Almost one in five landlords across Australia are planning to divest at least one of their properties in 2023, according to the Property Investment Professionals of Australia.
Originally Published: Juliet Helmke | Smart Property Investment | 1 June 2023
The post Australian property today: A factsheet on the housing market appeared first on Property Investment Professionals of Australia – PIPA.