Your market update for Australian real estate
Housing is a huge part of Australian life, from first home buyers to investors to retirees. However, a lot can change even over the course of a year – let’s take a look at the major game-changers that are currently affecting our property nationwide.
Mining towns feeling the pain
Major mining regions in Western and South Australia have had a slew of loss-making sales.
Back when mining in Australia was booming, the regions of our nation saw a huge uplift in property values as workers flocked to real estate that was located near their valuable places of work. However, as the boom turned to a bust, values have dropped and continued to fall without much sign of stopping.
While these drops in value have certainly spelled an excellent opportunity for people wanting a chance at a rural life, investors are likely ringing their hands. The latest CoreLogic RP Data Pain and Gain report for the March quarter reveals that major mining regions in Western and South Australia have had a slew of loss-making sales.
However, there is some hope for people who own real estate in these zones. PwC reminds us that while the top miners across Australia are certainly taking a hit, there could be a rebound as previously under-utilised resources such as lithium become more in demand due to increased use in advanced battery technologies.
Affordability in the regions
The priority of affordability is still right at the top of the list of many Australians.
While most of rhetoric of the property market in Australia has been centred around the rise or decline of certain capital cities, the regions have slowly been showing their strength in the newly highly priced landscape.
As people are finding themselves unable to achieve enough financing to purchase the home they want in the more metropolitan areas, Australians are instead turning their eyes to the regional towns instead. While mining towns have taken a hit, places like Narranderra and Kyogle in New South Wales have seen a huge uptick in total sales values over the last year, according to data from CoreLogic.
This isn’t just limited to New South Wales either. South Australia, Tasmania and Victoria have all seen multiple regional council areas rapidly increase in the volume of sales and value of those sales. It appears that the priority of affordability is still right at the top of the list of many Australians, and the regional centres of the states are strongly benefiting from this ripple effect.
New homes take a hit
It appears that there has been a brief downturn in an otherwise robust construction landscape.
Housing supply is one of the main points of debate for the upcoming election, so it’s no surprise that a lot of dialogue is being created centred around the issue. Nobody is denying that there isn’t a shortage in many of our major cities – that is, after all, one of the reason why the prices have been growing so much lately.
It is supply, therefore, that so many people have been keeping their eye on, and it appears that there has been a brief downturn in an otherwise robust construction landscape. The Housing Industry of Australia (HIA) reports that new constructions have dropped for the second month in a row over May.
However, HIA chief economist Harley Dale was quick to point out that this was no cause for alarm, and was merely a part of the natural cycle of peaks and troughs in residential construction activity. Considering the large amount of supply in the pipeline for many cities (especially Melbourne), this slight drop is likely to be more than manageable.
The housing industry of Australia is in a constant state of flux – that’s what makes it so exciting! The Federal Election looms just over the horizon, and it will certainly be interesting to see the real estate ramifications of whichever party manages to seal the deal with the voters of Australia.