April 2024 Newsletter
HEY NEIGHBOUR!
The Neighbourhood team is back after the Easter Holiday – too much food and chocolate!! I spent Good Friday watching our mighty Blues get another win over North Melbourne and the Good Friday Appeal – what a great tradition that is! Such an outpouring of generosity from our Victorian public.
As we dive into the second quarter of 2024, it's remarkable how swiftly time progresses. There's a palpable sense of optimism as we navigate through the year, with hopes for an improvement over 2023. In discussions with our valued clients, key topics at the forefront include rental growth, the ongoing challenge of housing supply, and the pleasing efficiency with which we're leasing properties within our portfolio. I'm pleased to share that our current average time on the market stands at 7 – 10 days, a testament to our team's dedication and market insight, and notably below our 2023 average. A noticeable change is apartment leasing in the city – this has slowed down considerably now that the overseas student market has settled in for the year ahead.
Despite ongoing challenges, such as fluctuating buyer sentiment and supply constraints, Melbourne’s property market continues to demonstrate resilience, albeit has stagnated in growth in comparison to other states. We have noticed a lot of discussion in the news around the increase in Land Tax and we want to ensure all our landlords are aware of the current legislation. Additionally, the Covid tax has been implemented and all investors will now pay $975 pa for the next 10 years, which is a cost on top of the increased land tax charges – please click the link to find out more information on both the current land tax rates and Covid Levy.
As always, please reach out if you have any concerns or want to discuss anything regarding your property. We are always here to help!
Have a great weekend from The Neighbourhood team.
Carmela
MARKET INSIGHTS
We strive to stay up to date on the latest market trends. Here are a few articles we think are worth reading.
- The ‘right’ apartment still a good stepping stone to property wealth (afr.com)
Key takeaways from the article- Role of Apartments: Despite a record price difference between houses and apartments, the latter still play a crucial role in the property ownership journey, especially for first-time buyers who often can't afford houses in quality metropolitan suburbs.
- Asset Selection Importance: Not all apartments are the same, and careful asset selection is vital. Location is key, with suburbs between 2 to 10 kilometres from a CBD often offering blue ribbon areas with older, quality-built apartments and finite supply.
- Considerations for Investment: Scarcity of units per block, apartment characteristics, such as size, layout, and amenities, and the potential for upgrades are all crucial factors to consider when investing in apartments. Strategic renovations can significantly improve older buildings and contribute to higher rental returns and property value appreciation over time.
- Is Your Property In One Of The Booming Suburbs? Booming suburbs where house prices surged more than 20pc in 12 months (afr.com)
Key takeaways from the article- House prices surged by more than 20% in hundreds of affordable suburbs across Perth, Brisbane, Sydney, and Adelaide over the past year, fuelled by reduced borrowing capacity, tight lending, and a shortage of housing stock.
- Perth saw the most significant gains, with house values rising by at least 20% in 147 suburbs, driven by strong net migration, low supply, and comparatively lower housing prices. Suburbs in Perth's southeast and southwest recorded the highest growth rates.
- While Perth, Brisbane, and Adelaide are expected to continue outperforming, Melbourne's suburbs are also experiencing significant price increases, particularly in areas like the inner southwest and west. Flight to affordability and undersupply are key factors contributing to the sustained upward pressure on prices in Melbourne's housing market.
- Housing crisis: New homes supply to hit decade low (afr.com)
Key takeaways from the article- Dwindling Housing Supply: The forecasted drop in new home construction to its lowest level in over a decade by 2026, driven by planning hurdles, workforce shortages, and skyrocketing material costs, will worsen housing and rental affordability issues. This shortfall will leave the government well short of its target to erect 1.2 million homes by mid-2029.
- Challenges and Government Response: Industry experts point to various hurdles, including labour shortages and bottlenecks in the building process, hindering the attainment of housing goals. The government is rolling out initiatives like the new homes bonus and planning reforms to tackle these obstacles and boost housing stock.
- Ramifications and Recommendations: The decline in housing supply comes amidst record migration levels, intensifying pressure on the housing market. Experts stress the need for planning overhaul, a larger skilled workforce, and incentives to stimulate construction. Achieving the lofty housing targets will demand significant efforts from both the government and the wider community.
- RBA holds interest rate but Michele Bullock warns war on inflation ‘isn’t yet won’ | Reserve Bank of Australia | The Guardian (theguardian.com)
Key takeaways from the article- RBA Holds Interest Rate: The Reserve Bank of Australia (RBA) maintained the cash rate at 4.35%, citing ongoing concerns about inflation despite some progress. Governor Michele Bullock emphasized that while there's headway, the path to achieving the inflation target of 2%-3% remains uncertain.
- Economic Outlook: Australia's economy has stagnated, with GDP growth slowing down significantly. Despite calls for rate cuts, economists anticipate the RBA will keep rates unchanged until there's greater certainty regarding inflation reaching target levels.
- Housing Market Resilience: Housing values have remained robust despite higher interest rates. The decision to keep rates steady could bolster confidence in the property market, potentially leading to increased home buying activity.
- Renting out a property that doesn't meet standards? You could cop an $11,000 fine (taskforce.com.au)
Key takeaways from the article- A new task force will crack down on advertising and rental properties that do not meet minimum standards.
- Violators face fines of up to $57,000 for companies and $11,000 for individuals if they break laws in Victoria.
- Potential illegal conduct can be reported to the designated task force.
COMMUNITY BULLETIN BOARD
What's new in your neighbourhood? These are a few recent updates that are happening in some of our local communities.
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- Festival of flowers | Tesselaar Kabloom (23 March – 21 April)
- Melbourne International Comedy Festival (late March–April)
- 2024 Rip Curl Pro Bells Beach: Event Preview - Surfer (26 March, at 8am. Event waiting period ends on 5 April)
- Wild Harvest Seafood Festival I Mallacoota Australia (26 – 28 April)
CAUGHT OUR ATTENTION
Here are a few things that members of our team have stumbled across over the month. Whether thought-provoking, interesting or entertaining, we want to share them with you.
