December 2024 Newsletter
HEY NEIGHBOUR!
As we prepare to welcome a new year, we take a moment to reflect on the year that has been. The many achievements and memories created, we acknowledge the significant challenges faced by property owners and families across Victoria. As we come to a close, we want to take a moment to express our heartfelt gratitude for your continued support and trust throughout 2024. Your partnership has been integral to our journey, and we are truly thankful to have shared this year with you.
The Victorian Government’s increased taxation measures have placed an unprecedented financial strain on property owners, with our state now bearing some of the highest land and property taxes in the country. Since 2014, 29 of the 56 new taxes imposed have all been property-related. These policies, coupled with rising living costs, have amplified the hardships many households are already navigating, making day-to-day expenses a burden for countless families. I am privy to information from both sides of the property rental market, our renters facing cost of living challenges and our owners facing even more costs and challenges imposed on them by this government.
We remain committed to supporting our clients and navigating the evolving landscape together. There has to be a change here in Victoria, mismanagement and this increasing grab of our tax dollars has to stop.
This festive season offers a much-needed pause—a time to connect with loved ones, create cherished memories, and focus on what truly matters. It is also a moment to recognise the difficulties many in our community have faced this year. The cost-of-living crisis, rampant crime, and the Victorian Government’s increasing property taxes—the highest in the nation—have placed significant financial burdens on property owners and families alike.
Despite the difficulties, this time of year brings an opportunity for hope. Hope that the changes we see around us—whether in the economy, policies, or our personal lives—will lead to brighter days ahead. As we look to 2025, we remain optimistic that we can turn challenges into opportunities and build a future of fairness, progress, and prosperity.
From myself and my team here at The Neighbourhood Property Collective, we wish you a Merry Christmas and a joyous New Year filled with love, laughter, and good health. May the festive season bring you peace, and may the year ahead bring you success and happiness.
Warm regards,
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.
- Australia house prices: CoreLogic’s Tim Lawless says rate cuts won’t stimulate a big upswing (afr.com)
Key takeaways from the article- Housing Market Slowdown: Sydney and Melbourne have seen declining house values, with Sydney recording a 0.2% drop and Melbourne a 0.4% correction in November. Other cities like Perth, Adelaide, and Brisbane are still experiencing growth, but momentum is slowing as stock levels rise and buyer activity decreases.
- Interest Rate Impacts: Economists now anticipate a later start to the rate-cut cycle (May 2025) and fewer cuts than previously expected, which is dampening buyer sentiment. The slower and more cautious rate cycle is unlikely to trigger a significant recovery in house prices as it has in past cycles.
- Market Pressures: Rising stock levels, reduced buyer activity, and eased rental growth are pressuring housing markets. For example, Sydney and Melbourne listings are at their highest levels since 2018, making it harder for vendors to sell.
- Future Outlook: A lack of new housing supply could prevent steep declines, keeping prices relatively stable. While a 15% drop in Sydney's housing market has been speculated by some, CoreLogic suggests that price falls are more likely to be modest, with Melbourne showing potential for recovery due to better affordability compared to Sydney.
- RBA interest rates: Have we hit an inflection point in the housing market? (afr.com)
Key takeaways from the article- National Housing Market Slowdown: House prices across Australia are poised to fall for the first time in two years due to high borrowing costs and declining demand, particularly in wealthier suburbs. CoreLogic data showed that home values dropped in 42% of Sydney suburbs and 80% of Melbourne suburbs over the past three months, with high-end areas such as Bellevue Hill in Sydney experiencing significant declines.
- Broader Economic Impacts: Rising mortgage payments, rents, and household expenses are straining family finances, leading to reduced demand in higher price brackets. Economists, including AMP’s Shane Oliver and CoreLogic’s Tim Lawless, suggest that the market may have reached an inflection point, with a cooling period expected to continue for at least six months.
- Interest Rates and Affordability: The Reserve Bank of Australia has maintained interest rates at 4.35%, and expectations of rate cuts have been pushed to mid-2025. High interest rates and poor affordability, especially in cities like Sydney, are deterring buyers. However, falling home values may help improve affordability as income growth catches up to price levels.
- Divergence in City Performance: Markets in Perth, Adelaide, and Brisbane, which previously outperformed others, are now slowing, aligning with trends in Sydney and Melbourne. Westpac forecasts a narrowing gap in price performance across major cities, with subdued conditions persisting in areas already soft and further cooling in areas that had been strong.
- Sydney, Melbourne property prices: Home sellers chop asking prices amid glut in listings (afr.com)
Key takeaways from the article- Price Reductions by Vendors: Home sellers in Sydney and Melbourne are reducing their asking prices to attract buyers amid an oversupply of listings and reduced demand. On average, Sydney sellers cut prices by $13,000, while Melbourne sellers reduced prices by $7,200. More aggressive discounts were seen in affluent Sydney areas, with the lower north shore showing an 11% reduction, equivalent to $246,083.
- Rising Stock Levels: Listings in Sydney and Melbourne have surged to their highest levels in years, with Sydney seeing a 4.7% rise in November to 36,931 and Melbourne stock increasing by 6.2% to 45,372. Nationally, total stock on the market has risen significantly, including a 20% increase in Perth and a 16.7% rise in Adelaide.
- Unsold Homes and Distressed Listings: Unsold homes are piling up, with Sydney now having 5,652 homes on the market for more than six months, a 20% increase from last year. Distressed listings have also risen nationally by 1.7% to 5,444, with Victoria, NSW, and WA seeing record-high levels of distressed sales.
- Market Outlook: Vendors are losing confidence due to the growing supply-demand imbalance. While some unsold properties may be temporarily withdrawn and relaunched early next year, continued stock overhang is expected to impact the market into 2024. Despite challenges, realistic pricing could help sellers take advantage of current conditions, particularly if they’re also buying within the same market.
