Issue 23 | November 9th, 2017 | Mixed Messages For The Australian Real Estate Market
It is a really fascinating time in the market and with so much research being done by so many bodies it can prove quite confusing with what would appear to be many mixed messages.
Take right now for example. There are an increasing number of stories about the end of the property boom in Sydney. However, the way this particular market receives such prominent profiling it would be easy to assume that what is happening in Sydney is reflective of the whole country. This could not be further from the truth. There has never been a time in the history of the Australian property markets than there is such diversity of activities now. Perth for example is almost a basket case as a result of the demise of the mining boom, Melbourne remains a very consistent market, Sydney has had one of the longest booms on record and Darwin has also been experiencing very difficult times and so we have to remember to look at each market separately.
WHY IS THE GOLD COAST IS GOING STRONG?
Here on the Gold Coast, our recovery phase started several years after Sydney’s. We looked with envy at those markets when the Gold Coast was still dead in the water. We also have not experienced the surge in prices such as Sydney and Melbourne and so we are a completely different market. We are quite possibly the healthiest market in the country coming off a very low base, our price growth has been very modest and manageable and we have more drivers of our market than any other city at present. As such, we can expect our market to continue with its modest growth for quite some time to come and with no fear of a correction because of overheating.
Whilst all the figures in Sydney are pointing downward, our figures are pointing up and that is reflected by a new company record in sales in October with $128 million in sales. The activity was across all sectors and with the volume of buyers that we are working at present, there is no question we will continue to record strong results in November and December, and it is a great platform for our upcoming Event in January 2018.
HOW IS AUSTRALIA’S HOUSING AFFORDABILITY AT PRESENT?
The other mixed messages are around affordability. A report just released shows housing loan affordability improved 4.4 percent across the country in the twelve months to March. This is a result of rising incomes and very steady unemployment figures. It accounts for a number of measures including home/loan/to/salary ratios, salaries, unemployment and net migration.
Now this will surprise people, but it is also backed up by a second report from the Adelaide Bank/REIA Housing Affordability report which also showed improvement. So, whilst housing affordability is improving off the back of higher salaries and longer hours worked, we also see a report showing housing mortgage stress. Mortgage stress of course is basically that your outgoings are more than your income. When you delve into it deeper, it is surprising to see that the mortgage stress in this cycle is amongst the prestige end of the real estate market and not predominately in the lower half of the real estate property pricing. For example – the country’s top mortgage stress postcode is 6065 which is of course in Perth, followed by Sydney’s 2170 and so on. The Gold Coast is fairing reasonably well in this regard.
So there we have two reports. One about affordability and getting better and the other about housing stress rising. A little hard to analyse how those two reports can really give you a trend in the real estate market and such is the challenge with so many reports now available.
DO YOU WANT TO BE PART OF SOMETHING BIG?
For those thinking of selling, don’t forget to contact us regarding being part of The Event 2018 program. It is interesting to note in our last auctions we generated just over $500k more in sale prices over reserves for the properties. This indicates the strength of auctions in the marketplace.
If you want to get a information on The Event please visit the website here or call 1800 198 009.
Andrew Bell, OAM
Chief Executive Officer
The Ray White Surfers Paradise Group