Australian Property Market Sees Notable Shifts in Sales and Rentals

Recent data reveals significant changes in the Australian property market, with a surge in property sales in certain suburbs and a decline in rental availability. However, the situation is more complex than meets the eye.

In recent times, a significant number of Australian suburbs have seen a surge in property sales. According to a report by Daniel Butkovich, approximately one-third of the suburbs have witnessed an increase in the turnover rate of homes selling each year. This rate measures the number of properties sold over a 12-month span as a proportion of total dwellings.

The suburb with the highest turnover rate is Airlie Beach in the Whitsunday region of Queensland, where almost 22% of properties changed hands in the year leading to April 2023. As PropTrack economist Anne Flaherty notes, “These are some of the areas that saw the strongest increases to buyer demand during the pandemic years,” suggesting a shift in buyer preferences and behaviors.

However, despite these promising statistics, rising property prices and the accompanying costs have not made it easier for most buyers. As Butkovich explains, “More choice is a good thing for buyers, but while rising property prices — and costs of ownership — have encouraged some owners to sell, those same drivers haven’t made it any easier to buy or own a home”.

On the other end of the spectrum, Australia’s rental market is experiencing a significant decline, as pointed out by Lukas Coch. A recent survey by the Property Investment Professionals of Australia (PIPA) showed that an alarming 12.1% of investors sold one or more of their rental properties over the past year. PIPA chair Nicola McDougall explains, “Just 24 per cent sold to another investor – down from 33 per cent last year – which means the majority of those investment properties were likely removed from the rental market”. This exodus, primarily led by investors from Queensland and Victoria, has resulted in an undersupply of rental properties, exacerbating the ongoing rental crisis.

One of the main reasons cited for this trend is the increased government reform and regulations. McDougall warns, “It’s not a mystery why so many investors are planning to exit the market, should governments further increase or introduce new taxes and compliance costs, 47.2 per cent of respondents said they would be forced to increase rents”.

In conclusion, while certain suburbs in Australia are experiencing a boom in property sales, the rental market is under significant strain. Potential buyers and renters need to be aware of these trends and strategize accordingly, keeping in mind the changing dynamics of the property market.

References:

“Property sales have surged in these suburbs, but there’s a catch for buyers” by Daniel Butkovich. https://www.realestate.com.au/news/property-sales-have-surged-in-these-suburbs-but-theres-a-catch-for-buyers/ 

“Why thousands of rentals are disappearing from the property market across Australia” by Lukas Coch. https://www.dailymail.co.uk/news/article-12507313/Why-thousands-rentals-disappearing-property-market-Australia.html