Sonam Capital

𝗔𝗻𝗻𝘂𝗮𝗹 𝗥𝗲𝗻𝘁𝗮𝗹 𝗚𝗿𝗼𝘄𝘁𝗵 𝗮𝘁 𝗟𝗼𝘄𝗲𝘀𝘁 𝗟𝗲𝘃𝗲𝗹 𝘀𝗶𝗻𝗰𝗲 𝟮𝟬𝟮𝟭 Rental growth is slowing, but property investing activity is growing sharply. Australia's median rent rose 0.2% in October, which was higher than the increase recorded the month before (0.1%) but lower than the increase in the previous three Octobers (which was 0.7% each time), according to CoreLogic. Meanwhile, over the year to October, the median rent rose 5.8%, which was the lowest figure since April 2021. “Softening rental conditions are likely symptoms of slowing net overseas migration, which peaked through the first quarter of 2023, as well as changes in household formation, as the average household size gradually increases following the pandemic ‘shrink’,” CoreLogic said. Despite this reduction in rental growth, “investing in housing remains popular”, with investor borrowing growing sharply over the past year – and more than twice as fast as owned-occupier borrowing. #property #realestate #homeloans

𝗥𝗲𝘀𝗶𝗱𝗲𝗻𝘁𝗶𝗮𝗹 𝗖𝗼𝗻𝘀𝘁𝗿𝘂𝗰𝘁𝗶𝗼𝗻 𝗠𝗮𝗿𝗸𝗲𝘁 𝗦𝘁𝗮𝗿𝘁𝗶𝗻𝗴 𝘁𝗼 𝗡𝗼𝗿𝗺𝗮𝗹𝗶𝘀𝗲 Good news for anyone who wants to see an increase in the nation’s housing supply, with the number of homebuilding approvals now clearly trending upwards. A total of 14,842 approvals were issued in September, which was 6.8% higher than the year before, according to the Australian Bureau of Statistics. During that time, approvals for houses increased 16.7% (see blue line in graph), although approvals for other dwellings fell 12.2% (orange line). Housing Industry Association economist Maurice Tapang said the residential construction market was starting to normalise, with building costs “growing at a more normal pace” and build times for houses back to pre-pandemic levels. “It has been a year since the RBA last raised interest rates. Unchanged cash rate settings, supported by strong population growth, low unemployment levels and acute housing shortages, have helped lift consumer sentiment,” he said. “The result seen in house approvals data continues to confirm that the market is past its trough, and more buyers are building a new home, especially in those markets outside of Sydney.” #property #realestate #homeloans

𝗥𝗕𝗔 𝗥𝗲𝗺𝗮𝗶𝗻𝘀 𝗖𝗮𝘂𝘁𝗶𝗼𝘂𝘀 𝗮𝗯𝗼𝘂𝘁 𝗜𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻 The Reserve Bank of Australia (RBA) board has left the cash rate at 4.35% – and delivered three key messages in the statement explaining its decision. 1. Underlying inflation “remains too high”. While the headline inflation rate recently fell to 2.8% (putting it within the RBA's target range of 2-3%), the ‘core’ inflation rate was still 3.5%. 2. The RBA’s “highest priority” is to sustainably return inflation to target. Interest rates will need to be “sufficiently restrictive” until the RBA believes inflation is under control. 3. The economic outlook remains “highly uncertain”, so it's unclear what will happen with inflation and the broader economy in the months ahead. Based on this statement, the RBA doesn’t appear to have any plans to reduce the cash rate anytime soon. #property #realestate #homeloans

𝗕𝗼𝗿𝗿𝗼𝘄𝗶𝗻𝗴 𝗗𝗲𝗰𝗹𝗶𝗻𝗲𝘀 𝟬.𝟯% After increasing for seven consecutive months, home loan borrowing activity has now declined. Between January and August, monthly borrowing steadily rose from $26.208 billion to $30.308 billion. However, in September, it declined to $30.210 billion, a reduction of 0.3%, according to the Australian Bureau of Statistics. Time will tell whether this is an aberration or the start of a downward trend. Either way, borrowing activity has increased strongly over the past year: * Total borrowing = 18.9% higher (compared to September 2023) * Owner-occupier borrowing = 13.1% higher * Investor borrowing = 29.5% higher #property #realestate #homeloans

𝗣𝗿𝗼𝗽𝗲𝗿𝘁𝘆 𝗣𝗿𝗶𝗰𝗲 𝗨𝗽𝗱𝗮𝘁𝗲 Australia has a two-speed property market, the latest CoreLogic data has confirmed. * Over the three months to October, Brisbane, Perth and Adelaide recorded strong price growth. * By contrast, prices went backwards in Melbourne, Hobart, Canberra and Darwin, while inching forward in Sydney. However, there is a consistent theme across the capital cities – which is that the more affordable end of the market is attracting the strongest buyer demand. “A combination of less borrowing capacity and broader affordability challenges, as well as a higher-than-average share of investors and first home buyers in the market, is the most likely explanation for stronger conditions across the lower value cohorts of the market,” according to CoreLogic’s research director, Tim Lawless. “The past three months has seen the lowest quartile either record a higher growth rate or smaller decline relative to the upper quartile or broad middle of the market across every capital city except Canberra.” #property #realestate #homeloans

𝗦𝘁𝗮𝘁𝗲 𝗴𝗲𝘁𝘀 𝘁𝗼𝗽 𝗥𝗮𝗻𝗸𝗶𝗻𝗴 𝗳𝗼𝗿 𝗙𝗶𝗿𝘀𝘁 𝘁𝗶𝗺𝗲 𝘀𝗶𝗻𝗰𝗲 𝟮𝟬𝟭𝟰 Which state has the nation’s best-performing economy? The answer is Western Australia, according to CommSec’s quarterly State of the States ranking. * Western Australia scored highest on three of the eight economic indicators – unemployment, retail spending and population growth. * South Australia scored highest on two of the eight economic indicators – economic growth and home building starts. * Queensland (home lending), Victoria (construction work) and Tasmania (equipment investment) topped the other three indicators. CommSec ranks the states/territories by comparing their current performances on the eight key indicators with their long-term averages. This is the first time in 10 years that WA has taken top spot. “WA is well positioned for sustained future performance; however, the competition remains intense, particularly among the top three states, with Queensland moving quickly up the rankings,” according to CommSec chief economist Ryan Felsman. #economy #jobs #homeloans

𝗜𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻 𝗙𝗮𝗹𝗹𝘀 𝘁𝗼 𝟮.𝟴% There were two good pieces of news in the latest inflation data from the Australian Bureau of Statistics. First, the consumer price index (CPI), which measures inflation, fell from an annualised rate of 3.8% in the June quarter to 2.8% in the September quarter, bringing it back to within the Reserve Bank's target range of 2-3%. Second, inflation rose just 0.2% in quarterly terms between June and September (after rising 1.0% in each of the previous two quarters), suggesting the rate of price growth in the economy has dramatically slowed. The sooner the Reserve Bank believes that inflation has fallen – sustainably – to low levels, the sooner it will reduce the cash rate. Once that happens, mortgage rates will also fall. #economy #homeloans #money

𝗙𝗶𝗿𝘀𝘁 𝗛𝗼𝗺𝗲 𝗕𝘂𝘆𝗲𝗿 𝗦𝗻𝗮𝗽𝘀𝗵𝗼𝘁 What are the main reasons first home buyers want to enter the property market? The number one reason, according to the Realestate.com.au Property Seekers Survey, is to stop renting, which was mentioned by 36% of respondents. First home buyers also want to build wealth (24%) and to attain a better quality of life (23%). But there are obstacles, including cost of living (56%), property prices (53%) and the economy (49%). If you’d like to buy your first home, there are ways you might be able to enter the market sooner than you realise. They include accessing the federal government’s First Home Guarantee, using a guarantor home loan, using a low-deposit loan, or buying with a partner, relative or friend. #property #realestate #homeloans

𝗩𝗲𝗻𝗱𝗼𝗿 𝗗𝗶𝘀𝗰𝗼𝘂𝗻𝘁𝗶𝗻𝗴 𝗟𝗮𝗿𝗴𝗲𝗹𝘆 𝗨𝗻𝗰𝗵𝗮𝗻𝗴𝗲𝗱 𝗼𝘃𝗲𝗿 𝗣𝗮𝘀𝘁 𝗬𝗲𝗮𝗿 Properties typically sell for a discount compared to their original listing prices. Across Australia, the median vendor discount in the September quarter was 3.7%, according to CoreLogic. That included median discounts of 3.4% in the combined capital cities and 4.0% in the combined regions (see graph). Interestingly, these figures have recorded little movement in the past 12 months. During that time: * National discounting has ranged from 3.5% to 3.8% * Capital city discounting has ranged from 3.1% to 3.5% * Regional discounting has ranged from 3.8% to 4.1% Discounting trends tell you how a market is moving – an increase in discounting means the balance of power is shifting from sellers to buyers, while a decrease means it’s shifting from buyers to sellers. The fact discounting has remained largely unchanged over the past 12 months suggests the market has been quite steady during that time. #property #realestate #homeloans

𝗪𝗵𝘆 𝗛𝗼𝗺𝗲𝗯𝘂𝗶𝗹𝗱𝗶𝗻𝗴 𝗔𝗰𝘁𝗶𝘃𝗶𝘁𝘆 𝗶𝘀 𝗪𝗲𝗮𝗸 Australia’s residential construction industry is facing pricing and productivity challenges, which is limiting the amount of new housing that is being built. The Cordell Construction Cost Index, which tracks the change in the cost of labour and materials to construct a lowset detached house, rose 1.0% in the September quarter. This was up from 0.5% in the June quarter, but well below the peak of 4.7% in the September 2022 quarter (see graph). Nevertheless, challenges remain for new housing supply, according to CoreLogic's head of residential research, Eliza Owen. “The stickiness in construction costs without an offset in increased productivity is likely to lead to less project feasibility and low approvals. The particularly low levels of apartment development will also mean a higher ratio of demolitions to dwellings completed, and lower net completions than in the 2010s,” she said. “There are some signs of capacity easing at the early stages of construction, such as in commencement times for detached houses, but more must be done to increase the capacity and productivity of the sector.” #property #realestate #homeloans