Australian property market update - December 2019

By Craig Gibson

With 2020 well underway it’s time to take a look at our monthly Australian property market update and absorb what happened over December. 

This includes an overview of national property values, highlighting the strongest and weakest housing conditions in each state’s capital city as well as updates on regional areas. 

Let’s start our analysis with an overview of national property values.

National property values: December 2019

property market update

Houses
$552,196
Monthly change: +1.2%
Units
$511,111
Monthly change: +0.8%
 
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December was characterised by advances on all fronts for national dwelling values, with the combined capitals up +1.2% and regional markets up +0.5% - for an overall growth of +1.1% nationally.

Drill down to the state capitals and five of the eight are in the black, with five of the seven regional markets also in positive territory. House prices continue to grow faster than units advancing +1.2% vs +0.8%, for median prices of $552,196 and $511,111 respectively. 

This left the market up +4.0% for the quarter, to end the year on a positive note and continue the turnaround that started in July. CoreLogic reports that the December quarter was the fastest rate of growth since November 2009.

Overall national dwelling values have grown +2.3% over the year, though capital city values fell -3.8% in the first half of the 2019, surging +7.0% in the latter half. The slump of the last few years means that despite the rebound property values are still down on their previous record highs. 

Property market update: Sydney and regional NSW

Houses
$973,664
Monthly change: +2.0%
Units
$746,017
Monthly change: +1.0%

Sydney advanced +1.7% over December, which takes it up +6.2% for the quarter to finish +5.3% for the year. The median dwelling value is $840,072, with houses nudging back up close to the $1 million mark and units at $746,017.

The market's overall quarterly performance makes Sydney the leading state capital, though it is still down -6.4% from its 2017 peak. This is also a softer result for house prices after a November when they grew +3.1%. 

In terms of specific areas that are performing strongly, Sydney’s Inner West is the standout, up +8.8% on an annual basis. Regional NSW is more muted, down -1.1% for the year, though it is still up +30.5% over the decade.

Read more:

Property market update: Melbourne and regional VIC

Houses
$778,649
Monthly change: +1.7%
Units
$576,475
Monthly change: +1.9%

Melbourne continued its growth streak, advancing +1.4% for the month, up an impressive +6.1% for the quarter and +5.3% for the year, for a median dwelling value of $666,883.

According to CoreLogic the Inner East is the leading sub-region in the Victorian capital, up +12.1% for the YTD. The Mornington Peninsula is however still down -2.2% for the same timeframe, with the Warrnambool and South West the leading regional Victorian region up +3.6%. 

Read more:

Property market update: Brisbane and regional QLD

Houses
$546,781
Monthly change: +0.7%
Units
$386,023
Monthly change: +0.7%

Brisbane continued its muted progress in December, up +0.7% to take it to +2.4% for the quarter and positive +0.3% for the year. Its median dwelling value of $497,491 is likely to prove attractive to interstate migrants from Sydney and Melbourne, with mid-range properties recording the biggest gains, to finish +0.7% for the quarter.

Regional areas in the black for 2019 include Mackay - Isaac - Whitsunday (+2.9%) and Cairns (+2.9%).

Read more:

Property market update: Hobart and regional TAS

Houses
$506,395
Monthly change: -0.2%
Units
$393,399
Monthly change: +1.9%

Overall dwelling values are marginally up in Hobart +0.2%, but house prices are softer down -0.2% in December, with unit prices propping them up by advancing +1.9%.

For the quarter property prices were positive up +3.4% and up 3.9% annually for median dwelling price of $474,186. House prices now look to be on a downward trend after peaking in 2019, though regional markets continue to advance, with Launceston and the North East up +3.5% for the YTD.

Read more: Best suburbs to invest in Hobart 2020

Property market update: Canberra and the ACT

Houses
$691,551
Monthly change: 0%
Units
$439,496
Monthly change: +0.5%

The Canberra market was marginally up overall at +0.1% for December, and positive +2.3% for the quarter for a median price of $611,841, though houses recorded no growth for the month. This is softer than last month (+1.6%), which could reflect low supply of housing stock.

Read more: Best suburbs to invest in Canberra 2020

Property market update: Adelaide and regional SA

Houses
$471,419
Monthly change: +0.6%
Units
$323,662
Monthly change: -0.1%

Adelaide is another market that recorded marginal gains for the month - up +0.5%, and +1.4% for the quarter, for a median property house price of $433,845. This market is only just down -0.2% from its peak, and is down for the same value over the YTD. Specific markets struggling include Adelaide’s West down -2.2%, as well as regional Outback areas (-3.2%).

Read more: Best suburbs to invest in Adelaide 2020

Property market update: Perth and regional WA

Houses
$456,289
Monthly change: 0%
Units
$352,099
Monthly change: 0%

After showing some gains last month, Perth houses and units were flat in December (0.0%), leaving it down -0.1% for the final quarter and the year (-6.8%).

The median property price ($437,080) remains attractive for first time buyers, though many of Perth’s metro markets and regional areas still recorded significant falls over 2019. Some analysts believe 2020 could see a turnaround - but only time will tell.

Read more: Best suburbs to invest in Perth 2020

Property market update: Darwin and regional NT

Houses
$464,625
Monthly change: -0.2%
Units
$279,357
Monthly change: -1.1%

Darwin has the dubious honour of being the only capital city to record a fall in property values over December, down -0.5% and also softer for the quarter (-1.4%) for a median price of $388,018. This continues the trend set earlier in the year when the market was down -1.1% over the three months to November.

Read more: Best suburbs to invest in Darwin 2020

Rents and rental yields

Rental markets were steady over December, with the national index up +0.1%, while rents were +1.2% higher nationally for the year. This is a slight improvement over 2018 when rents only grew +0.5%.

Overall Hobart rents were up +6.0% over the year, while Darwin’s were down -2.1% for the year - though rental yields are the highest here at 5.9%. Sydney continues to offer the lowest rental yields in the country (+3.0%) for the three months to December - which is a record according to CoreLogic.

What does all this mean and what can we expect?

The big question is if the housing rebound will continue into 2020. 

CoreLogic analyst Tim Lawless believes housing values will rise in 2020 across most markets, though he cautions that capital cities may not continue to grow at the same pace.

He thinks Brisbane and Perth could see an uptick as the affordability of property here draws buyers in. Lower advertised stock levels could put pressure on growth as buyers return to the market.

Rising property prices also hurt the overall affordability of property, particularly in our two major metro markets, which could drive buyers and investors alike to look for more attractive opportunities elsewhere.

Read more: National property market forecast 2020

 

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