Residential Figures Q2 2024

Key Points:

• Pricing trends are showing diversity. Sydney's growth pace has decelerated. Melbourne’s house values are on a downward trajectory, with unit values flat. Performance in Canberra is patchy. Brisbane, Perth, and Adelaide, by contrast, continue to experience robust and rapid growth.
• National vacancy stood at 1.3% in June, highlighting the critical scarcity of rental properties. Vacancy is expected to remain tight over the medium-term with high borrowing and construction costs, rising property taxes, and protracted planning processes impeding investment and development. An easing in overseas migration will likely lower demand pressures a little.
• New supply, particularly higher density, is retreating, with national commencements to March 2024 trending at its lowest level since 2012 and completions at its lowest level since 2014. This suggests the aspirational 1.2 million new homes target over the five years to FY29 won’t be met without a significant uplift in activity. The equivalent average annual target of 240,000 has never been reached, with a deficit of at least 250,000 homes possible by the end of the period.
• CBRE’s Q2 2024 Residential Valuer Insights survey showed valuers were becoming more cautious about future demand and availability. 41% of valuers anticipated an increase in local market demand, whilst half predict stability. Similarly, 45% foresaw a listings increase, with an equal percentage expecting no change. Adelaide, Perth, and Brisbane are the markets most expected to face undersupply.