Australia's Property Market Insights for May 2024

Published: 10th May 2024

Investing in Change: Australia’s Property Market Expands in New Directions

Welcome to the pulse of Australia's property market!

As we round out the week ending 10 May 2024, fresh data unveils key trends and shifts that could significantly influence your property decisions.

From surging approvals to the resilience of regional markets, this update is packed with insights to guide both seasoned investors and first-time buyers.

Stay tuned as we break down the figures and forecasts that matter to you.

Housing Approvals on the Rise

The Australian Bureau of Statistics (ABS) just released its latest figures, and they paint an optimistic picture for the housing market. March saw a significant lift in building approvals for both houses and units:

House approvals increased by 3.8%.
The value of residential buildings surged by 8.7% to $6.35 billion.
Approvals for attached properties and units rose by 3.6%.

Overall, 12,947 new dwellings were approved in March, marking an increase of 1.9% from the previous month.

The states showed varied performance with Victoria leading the way with a 6% increase in house approvals, followed by New South Wales (4%), Queensland (3.2%), and South Australia (1.1%). However, Western Australia experienced a slight downturn, decreasing by 1.8%.

Construction site showing new housing developments in Australia

Regional Markets Outperforming Cities

The allure of regional areas continues to grow stronger:

Regional property values escalated to nearly $623,000, a 0.8% increase from the previous month.
Compared to the 0.6% rise in combined capital cities, regions like Bunbury, Barossa, York Peninsula, and Southport have seen remarkable growth, with increases ranging from 16.6% to 19.9%.

Daniel Rossi, the ABS head of construction statistics, emphasised the robust nature of the market, despite higher construction costs impacting the pace of growth in average approval values. Rossi’s insights underscore the dynamic nature of property investments, suggesting a sustained demand for housing across various regions.

Aerial view of regional area in Australia, showcasing growth in regional Australian property markets

The Build-to-Rent Sector: Expanding Rapidly

The Build-to-Rent (BTR) sector is proving to be a resilient asset class:

Investment in BTR has more than tripled in 2023 compared to the average over the last five years.
There are 13,265 BTR apartments currently under construction, and over 32,000 are in the pipeline, pending approvals.

Conal Newland, from Savills Australia, noted that significant policy changes at the federal level could further catalyse the growth of the BTR sector, potentially leading to the construction of 1.2 million new homes over the next five years.

Graphical representation of rising trends in the Australian housing market

Renting vs. Buying: What's More Viable?

The latest inflation data indicates a shift in the renting versus buying dynamics:

Rental prices have increased by 7.7% over the past year—the highest increase since 2009.
Mortgage cost inflation was comparatively lower at 5.1%.

This disparity is leading many to reconsider the viability of buying over renting, especially as rental inflation has consistently outpaced mortgage inflation since June 2023.

Modern Build-to-Rent apartments under construction in Australia

Navigating the property market can be challenging, but staying informed is your best strategy for making sound investment decisions.

Whether you're planning to buy your first home, invest in a booming regional market, or explore the possibilities in the Build-to-Rent sector, understanding these trends is crucial.

Rupali

your Independent Buyers Agent

Let's Talk About Your Property Goals!

Interested in how these market trends could specifically affect your property goals?

I’m here to help you translate these insights into actionable investment strategies.

Schedule a one-on-one discussion with me at Get RARE Ready or join our educational workshops on Properties in SMSF at Get RARE SMSF.

Let’s make your property investment journey a success together!