The Herron Todd White Property Clock for residential housing. Areas in orange changes since last month. Source: Image supplied.
  • Herron Todd White's report show the vast majority of cities experiencing a rising market
  • The findings affirm the current property boom
  • Prices have risen across all cities, according to agent testimony and official statistics

According to Herron Todd White, the vast majority of our cities are experiencing a rising residential property market with a few reaching their peak.

These findings affirm the current property boom, which has been driven by historically low interest rates and a raft of government stimulus measures that increased the demand for housing (such as the First Home Loan Deposit Scheme).

As shown in the main image, the national property clock remains largely unchanged from last month, apart from three exceptions. Albury has peaked, Darwin has left the recovery stage and begun rising, and Broome’s market has declined slightly back to the ‘start of recovery’ phase.

Meanwhile, the national property clock for units is also weighted heavily in the rising market section – with the exception of Canberra which is currently experiencing a declining market (see below).

The Herron Todd White Property Clock for residential units. Areas in blue changed since last month. Source: Image supplied.

Sydney

Sydney has been considered unaffordable for a while, but the Covid-induced stimulus has accelerated demand to bring the market into full swing in 2021.

According to CoreLogic, the median value for all dwellings in Sydney increased 9.3% by the end of April. Median values now sit above the previous highs of July 2017. SQM Research also recorded a rise in weekly asking prices.

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Herron Todd White’s report found that a dated single level, three-bedroom brick dwelling on 460 square metres of land sold in March for $3.63 million. It is common during periods of rapid price growth for buyers priced out of beachside suburbs to look at more affordable options. This looks to be happening in Malabar at the moment, located 12km south-east of the Sydney CBD.
A combination of FOMO (fear of missing out) and extremely low borrowing costs have driven prospective buyers to be more comfortable in offering prices that massively exceed guide prices and recent comparable sales.
Expatriate demand on the North Shore has also been strong across all price points, which the report suggests is due to Australia providing a safe haven during the pandemic.

Melbourne

Melbourne joined the $1 million median price club alongside Sydney, recording an 8.8% rise in residential property prices in the previous quarter. According to SQM’s data, weekly asking prices have consistently remained above $1 million for the past year.

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The report noted that as more people spent time working from home in 2020, many individuals and families took up the opportunity to upgrade their homes – supported by government support such as First Home Buyer incentives.

Flexible working arrangements have also led people to look at other areas in the city’s fringe in the other east in areas surrounding the Yarra Ranges.

The report said that the market is very much consisting of owner-occupiers. However, with reports of investors returning to the market, it is expected that prices and demand will continue to increase throughout 2021.

Brisbane

In Brisbane’s northern fringe (around 20km from the CBD), there are homes for the mid-$400,000 to early $500,000s. For example, a three bed, one bath home sold in May for $502,000.

SQM has recorded a relatively consistent rise in weekly asking prices, with no apparent sharp uptick in prices (which is what Sydney experienced).

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Traditionally considered the most affordable areas in Brisbane, Caboolture and Belmere have experienced an uptick in values. Three bedroom dwellings that were selling for $350,000 six months ago are now regularly achieving $400,000.

Adelaide

March quarter data released by the state government indicated that the median sale price of a house reached a historical high of $518,000 – an 8.2% increase year on year. It is expected by the end of the June quarter that this record will be broken. SQM’s data show a relatively stable trend in weekly asking prices, which a slight uptick in recent months.

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The report noted the shift towards sale by auction, becoming a more common practice across the metropolitan area. There have been record numbers of registered bidders. For example, a listing for $1.6 million sold for $2.5 million with 29 registered bidders.

The most affordable areas include five of nine suburbs which make up the larger satellite city of Elizabeth, north of the CBD. Price points within the Elizabeth area begin at $125,000 and rise to a ceiling of $400,000. Meanwhile, on the top end of the market, the suburbs of Walkerville, Medindie and Gilberton have achieved price growth year on year of above 20%.

Perth

Perth’s median house price has risen to $500,000, the first time since December 2018. Weekly asking prices from SQM show a relatively stable trend, although it has dipped slightly in the past month.

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The report said that much of Perth has been undersupplied. This is contrary to REIWA‘s figures which indicate the supply stock of housing has remained relatively steady.

The prestigious suburb of Cottesloe has climbed further, with a property previously purchased in 2014 for $2.6 million recently selling for $3.6 million. Overall, the report found that Perth’s prestige market has been one of the best performing so far this year, and they believe this growth will continue throughout 2021.

First home buyer suburbs such as Alkimos and Ellenbrook have seen increases of 4.4% and 5.6% respectively in median house prices. The report notes that even suburbs like the aforementioned are seeing price increases, despite being chronically oversupplied not long ago.

Darwin

Darwin has performed beyond expectations. CoreLogic’s Hedonic Home Value Index showed house values rose 20.3%, the strongest performance of any capital city in Australia. SQM’s data showed a slight uptick in weekly asking prices.

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The northern suburb of Alawa recorded its first dwelling sale beyond $1 million. Houses in this area traditionally sell in the range of $450,000 to $750,000.

The report notes the Darwin has yet to see investors flood back into the market, and that the strong price growth has been driven almost entirely by owner-occupiers.

Canberra

The median house price in Canberra is now over $900,000, and annual growth rates have been close to 20%. SQM’s weekly asking prices show a sharp decline between April and June of this year, but have now begun to recover.

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Retirees are active in selling their homes are record prices, then downsizing to medium density options. The report said a key trend happening is agents are using off-market sales techniques to complete a quick transaction with no marketing campaign required.

Hobart

It’s all hot at the moment. Hobart is experiencing record sale prices and short days listed on market. Like Sydney’s North Shore, a high proportion of buyers in Hobart are expats, who have paid well above asking prices. SQM’s data showed weekly asking prices have steadily climbed over the past two years.

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Because borrowing money is cheap, the prestige market is attracting attention, accompanied by a lack of supply (an issue that pervades the entire nation’s housing market). Traditionally lower price point suburbs are also performing well.

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Report: Month in Review, June 2021, Herron Todd White.

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