I work on several annual retainers for housing related businesses across Australia.
Whilst there are some caveats and restrictions on trade, my bank account tells me it is worth the handcuffs.
A couple of these gigs are confidential – that is I supply my analysis and opinion undercover – whilst two in particular are more of an open affair.
These two include Harcourts across Australia and Kollosche on the Gold Coast.
This missive holds the 16 charts I used at my Australia housing market overview presentation at the recent annual Harcourts conference on the Gold Coast, where I did catch up with the folks at Kollosche too.
With permission, Harcourts has allowed me to share these 16 charts with you.
My end notes
Despite what the RBA did today – being another 0.25% lift in the official cash rate – the next major direction in the Australian cash rate is down. The first fall is likely by the end of calendar 2023 and I expect the cash rate to be around 2.5% by the middle on 2024. That’s over 1.5% less than it is now.
Notwithstanding the recent interest rate hikes, the Australia housing market remains strong.
It speaks volumes to me – but obviously not to the RBA – that after 12 hikes in 13 months and as a consequence mortgage holders with a $750,000 variable home loan are paying around $2,000 more per month that the generic housing market across the country is not slowing down. I outlined some reasons why here.
Anyhoo, back to the main story…sales volumes may be down on last year, but they are on average at the same level for detached houses are they were during the past decade and apartment sales are rising.
One big factor that is keeping the housing market strong is the lack of supply – that includes property for sale, for rent and under construction too. This might change for resale listings, but it will be hard to resolve over the short to medium term for renters and new home builds.
Australia’s population growth rate is also expected to increase, and I think the projected ‘official’ annual increase over the next decade is light. I wouldn’t be surprised if we saw an annual increase of over 450,000 new people across the Australia over the next five years or so.
All things being equal – that is to say that things don’t go stupid on the wider world scene (but you can never tell these days) – then calendar 2024 and 2025 are likely to be better years for real estate downunder.
I think that housing prices could rise between 3% and 5% each year over the next two years, then plateauing for some time and weekly rents could escalate by 5% to 10% per annum over the same time frame.
Without giving the RBA head honcho any credence – and big noting a bit here I have been saying this for yonks – many renters will be forced to share digs or move back in with family. Rarely fun for the parties concerned.
Ditto homes for sale that can accommodate more people per title are growing in demand and price.
All 16 charts posted in this Missive are the property of Harcourts. You can look but not touch. I might forgive any breach but well Harcourts won’t.
Plus, I am still available to work on a project advice commissions, housing outlook and need studies and select project support roles. My handcuffs aren’t that tight, so don’t be shy. If you think I can help, give me a bell via the link here.
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