Monthly Property News 10th Edition 2024.
“The deterioration continues.”
Hi everyone, I’m Jason Mudford from OBrien Corporate with the tenth edition of the monthly property news for 2024.
Unfortunately, Melbourne’s fledging property market continues to slide with a 0.1% drop in the median values for combined dwellings recorded for the month of September by Corelogic. Nationally, we saw an increase of 0.4% in values, most of the declines in the Melbourne market over the last 12 months has occurred in the last quarter, where values have dropped 1.1%.
Over the last fortnight, the PropTrack Housing Affordability Index was released and nationally households can now afford the smallest share of homes on record, a typical household, earning just over $112,000 a year, can afford just 14% of all homes sold across the country.
Looking at the graph below, you’ll see this is the lowest share since records began in 1994-95. This is a significant decline from just three years ago, when nationally a median-income household could afford 43% of homes sold in 2020-21.
Looking at our next chart, Melburnians suffer from being the 3rd most unaffordable capital city in the country with households only be able to afford 12% of the homes. It’s uncanny but Western Australia which has had over 24% growth in property prices over the last 12 months is still easily the most affordable state to buy within. Incomes will need to rise substantially, before affordability metrics return close to average and sustainable levels.
Inflation for the month of August was released last week, coming in at 2.7%, down from 3.5% in July, and is the lowest reading since August 2021. While this sounds like lower interest rates in the future which will help with serviceability, it could come with a tightening of credit supply as highlighted in RBA’s September Financial Stability Review, which sees residential property as a key sector where “domestic vulnerabilities could increase if households take on excessive levels of debt”
Looking at the statistics below, of the 5 most expensive capital cities within Australia for property, Melbourne sits last for growth and dwelling values. The annual change in median values for combined dwelling has been fallen in total 1.4%, but it was houses compared to units that struggled the most, dropping on average $7,519 over the 12 months whereas unit prices have remained relatively the same.
In closing the Australian Bureau of Statistics just released their building approvals for August and dwellings approvals nationally fell 6.1% for the month and fell 3.0% for Victoria.
That’s all for this month, remember the information provided is of a general nature, you should always seek independent legal, financial, taxation or other advice in relation to your unique circumstances.
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