11 Mar 2021
Australian Residential Property: Prices
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
The price volatility in houses and units is just breathtaking at present.
Demand for houses is high and is resulting in reporting on a weekly basis that auction bidding is significantly exceeding reserve prices.
Units however are a mess with both big gains and falls across the country. For example, high in demand suburbs such as Chatswood and St Leonard’s in NSW have posted 11% falls in median prices over the past 12 months.
Click for chart.
What is driving this price volatility? The COVID-19 pandemic impact on rental income.
Property investors are not excited about paying high prices for units when data from SQM Research is reporting that average rents in Melbourne CBD and Docklands are down 34.4% and 33.0% respectively over the past 12 months.
This is an important reminder for all investors that residential property just like listed companies is defined as a growth asset class which means that prices can and do move both up and down.
At Newealth we are always looking to support and promote our clients wherever possible and if you have any ideas or comments, please feel free to email me or to call me on +61 2 9267 2322.