Aussies Flock Back to Cities as Interest Rates Stabilize and Rental Market Tightens - Property Inc

Aussies Flock Back to Cities as Interest Rates Stabilize and Rental Market Tightens

The Australian urban landscape is witnessing a significant shift. With interest rates experiencing a pause, Australians are making a pronounced move back to major cities. Recent data indicates Sydney and Brisbane as the prime beneficiaries of this trend, while Melbourne seems to be lagging behind.

According to Fiona Killman, August data from the Australian online removalist booking platform, Muval, suggests that Sydney and Brisbane have seen a surge in moving inquiries since the Reserve Bank paused rates in July. “Sydney and Brisbane are the winners of the rate pauses, while Melbourne and Perth are trending down since the July pause,” stated Muval’s Chief Commercial Officer, Adam Coward.

Coward notes that Brisbane has now matched Melbourne in inbound metro moving inquiries, both recording 24% in August. This marks a noteworthy shift, as Melbourne dropped from 27% in July. “This is the first time in over a year that Melbourne hasn’t been the stand-alone number one metro moving destination in Australia,” Coward revealed.

The data further highlights Sydney’s positive trajectory, accounting for 19% of metro inbound moving inquiries across Australia in August, the highest since early 2020. “After two months of rate pauses, Sydney is experiencing its first positive steps post-pandemic,” Coward elaborated.

These migrations could be attributed to various factors. The stability in interest rates over three consecutive months has likely boosted confidence in the Sydney jobs market. “From what we can see in our moving stats, the Sydney uptick is being driven by Melbourne. This could be a combination of Sydney’s buoyant jobs market and increased confidence in interest rates,” Coward observed. He also mentioned the potential influence of major events, like the cancellation of the Commonwealth Games in Melbourne and the forthcoming Olympic Games in Brisbane, on these migration trends.

On a related note, Liz Jordan reports a substantial decline in the national rental vacancy rate. According to PropTrack, the national rental vacancy rate plummeted by 0.14% in August to a mere 1.10%, marking its most significant dip in over a year. This tightening rental market, combined with the pausing of interest rates, paints a complex picture of Australia’s housing and urban trends.

With the traditional moving season in Australia set to commence in October, extending through to March, the coming months will be crucial in determining the urban migration trends and their implications for the Australian property market.

References:

Fiona Killman, “Interest rate pauses prompt move back to Australian cities, according to moving data” ↩ https://www.realestate.com.au/news/interest-rate-pauses-prompt-move-back-to-australian-cities-according-to-moving-data/

Liz Jordan, “Harder to find property as rental market tightens” ↩ https://www.australianpropertyjournal.com.au/2023/09/10/harder-to-find-property-as-rental-market-tightens/

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