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Despite some markets reporting increasing values and improved rental conditions at the end of last year, the Real Estate Institute of Australia’s (REIA) Real Estate Market Facts report said the outlook remains grim for various real estate stakeholders.
The data, which covers the December 2022 quarter, revealed that Australian home values declined 8 per cent throughout the last calendar year, the largest yearly decrease in 20 years.
Half the nation’s capital recorded quarterly value increases, with Hobart’s nation-leading 4.1 per cent followed by Perth (2.7 per cent), Adelaide (0.8 per cent), and Canberra (0.5 per cent).
Sydney’s 2.1 per cent value decline in the final three months of the year was the largest among the remaining capitals, followed by drops of 1.8 per cent in Darwin, 1.6 per cent in Melbourne, and Brisbane (0.7 per cent).
As a result of the December quarter’s results, Hayden Groves, REIA president, explained, “The Australian weighted average median house price fell $945,474, a decrease of 1 per cent over the previous quarter.”
Despite vacancy rates increasing in Sydney, Brisbane, Adelaide, Canberra, and Darwin, and remaining stable in Perth, widespread relief remains far off for the nation’s renters, particularly in Melbourne and Hobart, where the number of available rentals decreased.
In the Northern Territory capital, vacancy rates jumped 0.8 per cent in the quarter, while Melbourne reported a 0.8 per cent decline. Adelaide remained the nation’s tightest rental market with a 0.5 per cent vacancy rate.
Mr Groves said, “The weighted average vacancy rate for the eight capital cities remained stable at 1.7 per cent over the quarter but decrease[d] 1.1 per cent over the past year.”
Further compounding woes for Australian tenants is the continued increase in rents resulting from a chronic housing shortage.
“In the December quarter, the median rent for three-bedroom houses increased in Melbourne, Brisbane, Adelaide, Perth, and Darwin, remained stable in Sydney, and decreased in Canberra and Hobart,” he said.
“The largest quarterly increase was 5.3 per cent in Perth,” the president added.
In the 12 months to December 2022, every Australian capital city recorded increased rents, with Brisbane reporting the largest annual increase (21.4 per cent) this century.
Mr Groves forecast that the REIA’s Real Estate Market Facts report will reveal the continued strains placed on Australia’s housing and rental markets by incredibly low supply across the country.
He revealed the institute “will be looking to state and federal governments for meaningful action on housing and reforms of systems limiting a rapid injection of rental supply.”
“We have had inadequate investment and planning reform in Australia for many years, and now it is time for true action,” he concluded.
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