This week’s Australian real estate news: Top 5 headlines

Explore the newest developments in Australian real estate news: 

1. Population boom creates hotspots: Surging population growth is creating housing construction hotspots in suburban outskirts of major cities, with a population growth above 2.4% and building work over $200 million.
2. Regional house prices gather steam: CoreLogic data shows faster house price growth in many regional areas over the past three months, following net migration to some regions picking up noticeably.
3. Overseas buyer interest dropping: Migration and student number changes may reduce overseas property searches. PropTrack data shows a 0.8% rise in buying searches but a 2.3% drop in rental searches in April.
4. Vacant home numbers rise: The PropTrack Rental Vacancy Rates report for April shows the national vacancy rate increased by just 0.09%, to reach 1.21%. However, this rise is insufficient to ease rental struggles.
5. First-home buyers back: ABS data shows a 9.9% YoY increase in new loan commitments for first-home buyers, totalling $5.19 billion, with loan approvals at their highest since the COVID pandemic. 

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Population boom creates hotspots   

Surging population growth is creating housing construction hotspots in suburban outskirts of major cities. 

The annual Housing Industry Association (HIA) Population and Residential Building Hotspots Report says the northwest Sydney suburbs of Box Hill and Nelson are Australia’s biggest hotspots for construction, followed by Fraser Rise and Plumpton in Melbourne’s west. 

Hotspots have population growth above 2.4% and building work over $200 million. 

11 Victorian locations made the Top 20 list, mostly in outer suburbs. 

New South Wales has four hotspots, including Marsden Park and Austral. 

Queensland has three: Chambers Flat-Logan Reserve, Ripley and Caloundra West. Western Australia and South Australia have one hotspot each. 

HIA Economist, Maurice Tapang, says the results show that new master-planned housing communities are in high demand. 

“The drivers of housing demand are population and economic growth,” he says. 

“Supporting population growth will require supplying adequate homes, which will entail providing the necessary infrastructure and land supply to grow our cities.” 

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Regional house prices gather steam 

House price growth surged in the country’s popular regions over the past three months. 

CoreLogic data shows faster growth in many regional areas compared to the previous quarter, following net migration to some regions picking up noticeably. 

CoreLogic Research Director, Tim Lawless, says the “re-acceleration” in some regional markets shows that demand persists for properties in areas that have “lifestyle advantages”. 

“I think we will see buyers taking advantage of the fact that prices in some of those regions are currently below their record highs and showing some affordability benefits for those that couldn’t buy in the earlier growth phase,” he says. 

The fastest growth was in South Australia’s Barossa-Yorke-Mid North region. 

Growth also picked up pace between the two quarters in Western Australia’s Wheat Belt and Outback, Tasmania’s Launceston and Northeast, and New South Wales’ Newcastle and Lake Macquarie. 

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Overseas buyer interest dropping 

Changes to migration and international student numbers is likely to result in a reduction of the number of overseas-based buyers and renters searching online for Australian property. 

PropTrack data shows a slight 0.8% increase in overseas searches to buy on realestate.com.au, but a 2.3% drop in rental searches in April. 

UK-based buyers and renters increased by 6.9% and 8.1%, respectively. 

Interest from China, the US, New Zealand, Hong Kong, Singapore and India has dropped. 

PropTrack Senior Data Analyst Karen Dellow says recent government mandates concerning students and educational institutions have led to a decline in visas granted to overseas students intending to study in Australia. 

“Given the correlation between issued student and work visas and the volume of rental searches on realestate.com.au, both are anticipated to decline proportionally due to these policy changes,” she says. 

Queensland is the top state for overseas buyers, followed by Victoria, New South Wales and Western Australia. 

Overseas renters prefer New South Wales, followed by Victoria, Queensland and Western Australia. 

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Vacant home numbers rise 

Vacant rental properties increased slightly in April, but not enough to ease rental struggles. 

The PropTrack Rental Vacancy Rates report for April 2024, shows the national vacancy rate increased by just 0.09%, to reach 1.21%. 

PropTrack Economist, Anne Flaherty, says despite the change, vacancy rates remain at less than half the level that is considered a healthy rate. 

“With vacant properties scarce, homes that do come up for rent are continuing to see high levels of competition, which is driving rent prices higher,” she says. 

Vacancy rates increased in Perth and Canberra (0.18%), Hobart (0.16%) and Sydney (0.14%). Melbourne was up by 0.09%, Brisbane was up by just 0.03% and Adelaide by 0.13%. 

“The situation for renters is similar across both capital city and regional areas, with each seeing vacancy at 1.2% in April,” Flaherty says. 

“Compared to 12 months ago, regional areas have seen the greatest deterioration in rental conditions, with vacancies down 0.25 percentage points compared to a 0.15-percentage-point drop in the cities.” 

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First-home buyers back 

First-home buyer (FHBs) loan approvals are increasing. 

Australian Bureau of Statistics (ABS) data shows a 9.9% year-on-year increase in new loan commitments for first-home buyers. 

The value of new home loan commitments for first-home buyers is up 17.9% year-on-year and up 4.4% for March to a total value of $5.19 billion. 

This follows first-home buyers’ home loan approvals reaching their highest level since the COVID pandemic in the January 2024 quarter. 

Tasmania saw the highest increase in loans to first-home buyers (12.9%), followed by Victoria (5.8%), Queensland (4.2%) and Western Australia (2.8%). 

Loans to FHBs in ACT saw a 1.6% increase, while loans fell in South Australia (-5.9%), NSW (-0.5%) and NT (-14.5%). 

FHBs are entering the market as rental affordability worsens. 

Ray White analysis shows rental properties under $500 a week have nearly halved (47%) in the past year. 

Outbound link: https://www.abs.gov.au/statistics/economy/finance/lending-indicators/mar-2024#first-home-buyers  

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Catching up on Australian real estate news?

Read last week’s Australian real estate news article covering:

1. 1. Land prices rise: Land sales are increasing, indicating a modest recovery in the housing market, driven by rising prices, with land availability becoming a key concern for future home building. 
   2. Record-high median house prices: Despite rising interest rates, almost half of Australian suburbs saw record-high median house prices by April 2024, driven by high demand and limited supply.
   3. Suburbs cracking $2 million: Property prices are rising rapidly, pushing more markets past the $2 million and $3 million marks.
   4. Super borrowers better off: Using superannuation for a home deposit could lead to greater financial gains in retirement, but it raises concerns about impact on housing affordability.
   5. Markets favouring first-home buyers: Increased affordability for first-home buyers in various regions across Australia outside capital cities, due to softer market conditions and higher listings.

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