CoreLogic has recently shared some insightful property data that sheds light on the dynamic real estate landscape. Their most recent report, the Hedonic Home Value Index (November 1, 2023), reveals key takeaways that can be especially useful for young Australians looking to venture into property investment. Let’s delve into these findings and decipher their implications for aspiring property investors.
1. Property values surge in 2023
According to CoreLogic’s findings, national home values saw a significant uptick of 0.9% in October. This surpasses the 0.7% rise recorded in September and adds up to a robust 7.6% increase since January, nearly reaching the historical peaks of last April.
So, why is this noteworthy?
For prospective investors, it’s a clear indication of a thriving property market with potential for capital growth. It’s an attractive signal for those considering entering the market.
2. Slower growth in capital cities
While housing values continue their upward climb in most capital cities, there has been a noticeable deceleration. From August to October, the growth rate dropped to 2.6%, down from 3.7% in the preceding three months until June 2023.
What’s the significance here?
This trend offers multiple interpretations. On one hand, it underscores the importance of thoroughly evaluating investment strategies, as slower growth can affect the return on investment properties. On the other hand, it may suggest a shift toward a more sustainable and stable market, potentially reducing the risk of a housing bubble and offering safer, long-term investment prospects. In any case, the dip in growth provides potential investors with an opportunity to assess the market meticulously, perform due diligence, and make informed choices.
3. Regional markets vs. capital cities
Capital cities have outperformed their regional counterparts, with a 0.9% and 0.7% rise, respectively. Notably, some regional areas in Queensland, Western Australia, and South Australia have reached record highs.
Why does this matter?
The decision between investing in urban or regional properties depends on factors like growth potential, rental demand, and investment goals. Given this data, potential investors might lean towards exploring capital city opportunities over rural properties. Alternatively, they may consider the growth potential in regional areas of Queensland, Western Australia, and South Australia.
4. The rental market
The rental market faces challenges with record-low vacancies and significantly reduced rental listings. While rents have been on a consistent upward trajectory for 39 months, the rate of growth has slowed down, particularly in the unit sector.
What does this signify?
For those eyeing property investment, this data suggests a strong demand for rental properties, indicating a high likelihood of quickly finding tenants in this market. Despite the growth slowdown, consistent rent increases underscore rental income stability, offering reliable returns on your investment.
For investors considering apartments or units, the slowdown in this sector requires careful consideration. It might be necessary to conduct more in-depth research and due diligence to ensure the property can still yield a favourable return. If not, a shift toward dual-living or investment houses might be a tactical move.
CoreLogic’s latest insights offer invaluable information for young Australians interested in property investment. These findings enable a thorough examination of market conditions, the assessment of potential risks, and the formulation of investment strategies that align with the current market dynamics. While deciphering this data can be a minefield we’re here to help. Contact us today to learn how the current property market affects your investment goals.
The information provided in this blog is intended for educational purposes and does not take individual circumstances into consideration; for personalized advice and information, please contact us directly.
