Sonam Capital

𝗔𝘂𝘀𝘁𝗿𝗮𝗹𝗶𝗮𝗻 𝗛𝗼𝗺𝗲 𝗦𝗲𝗹𝗹𝗲𝗿𝘀 𝗘𝗻𝗷𝗼𝘆𝗶𝗻𝗴 𝗥𝗲𝗰𝗼𝗿𝗱 𝗣𝗿𝗼𝗳𝗶𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆 Despite slower market conditions and declining capital growth, Australian home sellers continue to see rising profitability, according to CoreLogic’s Pain and Gain report for the September quarter. The report revealed the median nominal gain hit a record $295,000, the highest since the series began in the mid-1990s. Loss-making sales remained steady, with a median resale loss of $40,000, just above the five-year average. Only 5% of resales recorded a loss, the lowest level since March 2008. CoreLogic’s head of research Eliza Owen attributed these strong results to rising national home values (up 0.8%) and continued demand for housing. Brisbane led the charge for profitability among the capital cities, with 99.4% of resales generating a gain, up from 99.2% last quarter. Perth followed with profit-making sales rising to 96.9%, while Melbourne saw the highest rate of loss-making sales (outside Darwin) at 9.9%. #property #realestate #homeloans

𝗣𝗿𝗼𝗽𝗲𝗿𝘁𝘆 𝗦𝗲𝗹𝗹𝗲𝗿𝘀 𝗴𝗮𝘃𝗲 𝟯.𝟲% 𝗗𝗶𝘀𝗰𝗼𝘂𝗻𝘁 𝗶𝗻 𝗡𝗼𝘃𝗲𝗺𝗯𝗲𝗿 𝗤𝘂𝗮𝗿𝘁𝗲𝗿 One of the best ways to gauge the strength of a housing market is to look at the level of vendor discounting, which captures the reduction from the price at which homes are initially listed to the price at which they're finally sold. During the November quarter, the median vendor discount was 3.6%, according to CoreLogic. The strongest sales markets were Perth and Brisbane, where discounting was just 2.9%. The weakest market was Darwin, where discounting was 4.5%. (The orange numbers in the graph are November 2024 data; the grey numbers November 2023.) Significant movements in vendor discounting can reveal shifts in market dynamics – the balance of power is shifting towards vendors when discounting is falling and towards buyers when it’s rising. During the past year, Hobart was the only capital city that experienced a major change, with discounting falling by 0.6 percentage points. #property #realestate #homeloans

𝗧𝗵𝗲𝗿𝗲 𝗺𝗮𝘆 𝗯𝗲 “𝗟𝗶𝗴𝗵𝘁 𝗮𝘁 𝘁𝗵𝗲 𝗲𝗻𝗱 𝗼𝗳 𝘁𝗵𝗲 𝗧𝘂𝗻𝗻𝗲𝗹” 𝗳𝗼𝗿 𝗧𝗲𝗻𝗮𝗻𝘁𝘀 There are now more vacant rental properties than at any time since 2021. The national vacancy rate – which captures the share of untenanted rental properties – rose from 1.2% in October to 1.4% in November, which was the highest rate in three years, according to SQM Research. Nevertheless, the balance of power still favours property investors over renters: * No capital cities are tenants’ markets (which is when the vacancy rate is above 3%) * Melbourne is a balanced market (between 2-3%) * The other capitals are landlords’ markets (below 2%) SQM Research managing director Louis Christopher forecast that conditions might improve further for tenants next year. “Are we out of the rental crisis? No, not yet, but there is a little bit of light at the end of the tunnel, notwithstanding another year of rapidly expanding population compared to our low building rate will keep the pressure on tenants in 2025,” he said. #property #realestate #homeloans

𝗔𝗻𝗻𝘂𝗮𝗹 𝗣𝗼𝗽𝘂𝗹𝗮𝘁𝗶𝗼𝗻 𝗚𝗿𝗼𝘄𝘁𝗵 𝗦𝗹𝗼𝘄𝘀 𝘁𝗼 𝟮.𝟭% Australia’s population is booming, leading to more demand for housing, which is putting upward pressure on both prices and rents – although the boom is clearly winding down. Over the past 40 years, the population has grown by an average of 1.4% per year, according to the Australian Bureau of Statistics. But the current rate of growth is much higher: * Sep 23 = 2.5% * Dec 23 = 2.4% * Mar 24 = 2.3% * Jun 24 = 2.1% The Reserve Bank of Australia has forecast that population growth will soon return to more normal levels, declining to 1.6% in June 2025 and 1.1% in June 2026. If so, that will lead to an easing of pressure on the housing market. #property #realestate #homeloans

𝗥𝗲𝗻𝘁𝗮𝗹 𝗕𝗼𝗼𝗺 𝗔𝗽𝗽𝗲𝗮𝗿𝘀 𝘁𝗼 𝗯𝗲 𝗢𝘃𝗲𝗿 Australia's national median rent climbed 5.3% in the year to November, the smallest increase since April 2021, according to CoreLogic. By way of comparison, rents rose more than 8% in 2023 and more than 9% in each of 2022 and 2021. While rental growth is still significantly higher than the pre-pandemic decade average of 2.0%, it's expected to keep falling, due to a slowdown in population growth and an increase in the average household size – both of which are putting downward pressure on demand. “It will be interesting to see if the rate of rental growth rebounds through the seasonally strong first quarter of the year in 2025, but beyond any seasonality, it looks increasingly like the rental boom is over,” said CoreLogic’s research director, Tim Lawless. #property #realestate #homeloans

𝗨𝗻𝗲𝗺𝗽𝗹𝗼𝘆𝗺𝗲𝗻𝘁 𝗙𝗮𝗹𝗹𝘀 𝘁𝗼 𝟯.𝟵% The economy is weak, so you would normally expect unemployment to be quite high and rising. Remarkably, though, unemployment is low and is actually falling. The national unemployment rate fell from 4.1% in October to 3.9% in November, according to the Australian Bureau of Statistics, which is extremely low by historical standards. Also, the underemployment rate (which captures the share of workers who would like more hours) fell from 6.2% to 6.1%. While it’s great that most workers have a job and sufficient hours, there is a downside – which is that it makes it harder for the Reserve Bank of Australia (RBA) to start cutting interest rates. That’s because more employment means more spending which means more inflation – and the RBA has made clear that it is “resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome”. #economy #jobs #money

𝗣𝗿𝗼𝗽𝗲𝗿𝘁𝘆 𝗟𝗶𝘀𝘁𝗶𝗻𝗴𝘀 𝗥𝗶𝘀𝗲 𝟰.𝟳% Conditions are continuing to turn in favour of property buyers, providing further evidence that the market is cooling as we near the end of the year. A total of 91,178 properties were listed for sale in the combined capital cities during the four weeks to December 1, which was 4.7% more than the corresponding period the year before, according to CoreLogic. The city-by-city breakdown was: * Sydney = up 9.5% * Brisbane = up 6.3% * Melbourne = up 5.3% * Perth = up 1.2% * Canberra = up 1.2% * Adelaide = down 1.7% * Hobart = down 15.3% * Darwin = down 29.0% When buyers have more properties to choose from, they face less urgency to move fast and bid high, which puts downward pressure on prices. Vendors may respond by reducing their asking prices or pulling their homes from the market. #property #realestate #homeloans

𝗥𝗕𝗔 𝗻𝗼𝘁 𝗶𝗻 𝗮 𝗛𝘂𝗿𝗿𝘆 𝘁𝗼 𝗰𝘂𝘁 𝗥𝗮𝘁𝗲𝘀 The cash rate will remain at 4.35% for all of 2024, after the Reserve Bank of Australia (RBA) board left it unchanged at its final monetary policy meeting of the year. While a rate cut would have stimulated the weak economy, it would also have risked reigniting inflation – and inflation is the RBA’s key concern. “Measures of underlying inflation are around 3.5%, which is still some way from the 2.5% midpoint of the inflation target,” the board said in a statement announcing its decision. “The most recent forecasts published in the November Statement on Monetary Policy do not see inflation returning sustainably to the midpoint of the target until 2026. The board is gaining some confidence that inflationary pressures are declining in line with these recent forecasts, but risks remain.” The board also emphasised that it was “resolute in its determination to return inflation to target” and would “do what is necessary to achieve that outcome” – even if that meant leaving rates higher for longer. #property #realestate #homeloans

𝗦𝘁𝗮𝘁𝗲𝘀 𝘄𝗶𝘁𝗵 𝗛𝗶𝗴𝗵𝗲𝘀𝘁 𝗮𝗻𝗱 𝗟𝗼𝘄𝗲𝘀𝘁 𝗦𝗮𝗹𝗮𝗿𝗶𝗲𝘀 𝗥𝗲𝘃𝗲𝗮𝗹𝗲𝗱 The ACT is the state or territory with the highest-paid workers. ACT residents earn a median $1688 per week in their main job, according to the latest data from the Australian Bureau of Statistics (see graph). Next come Western Australia and the Northern Territory (both $1500), Victoria ($1400), New South Wales ($1387), Queensland ($1350), South Australia ($1250) and Tasmania ($1208). The highest-paying industries are mining ($2593), electricity, gas, water & waste services ($1895) and professional, scientific & technical services ($1841). The industries that pay the least are arts & recreation services ($1000), retail trade ($893) and accommodation & food services ($650). #economy #jobs #money

𝗦𝘁𝗮𝘁𝗲𝘀 𝘄𝗶𝘁𝗵 𝗛𝗶𝗴𝗵𝗲𝘀𝘁 𝗮𝗻𝗱 𝗟𝗼𝘄𝗲𝘀𝘁 𝗦𝗮𝗹𝗮𝗿𝗶𝗲𝘀 𝗥𝗲𝘃𝗲𝗮𝗹𝗲𝗱 The ACT is the state or territory with the highest-paid workers. ACT residents earn a median $1688 per week in their main job, according to the latest data from the Australian Bureau of Statistics (see graph). Next come Western Australia and the Northern Territory (both $1500), Victoria ($1400), New South Wales ($1387), Queensland ($1350), South Australia ($1250) and Tasmania ($1208). The highest-paying industries are mining ($2593), electricity, gas, water & waste services ($1895) and professional, scientific & technical services ($1841). The industries that pay the least are arts & recreation services ($1000), retail trade ($893) and accommodation & food services ($650). #economy #jobs #money