Sydney is continuing to lead a home price rebound, as property values close in on a return to pandemic boom peaks.
Key points:
Home prices rose 1.1 per cent on average across the nation last month
Sydney led the increase with a 1.7 per cent rise, regional markets lagged and Hobart prices fell
Analysts believe property price growth will slow, and possibly reverse, as rates keep rising and Australia flirts with recession
Two interest rate rises in a row appear to have done little to dent the market, particularly in the premium sector — the top quarter of homes by value.
CoreLogic data show a 1.1 per cent rise in national property values over June, backing up May’s 1.2 per cent increase.
Sydney’s 1.7 per cent rise was again the strongest last month, with Brisbane (1.3 per cent), Perth and Adelaide (both 0.9 per cent) the next largest.
Only Hobart (-0.3 per cent) saw prices fall in June.
Regional markets were weaker than most of the capitals, with prices up an average of 0.5 per cent.
Data calculated using a different methodology by rival provider PropTrack shows more modest gains but the same trend, with a 0.6 per cent rise in Sydney prices leading a 0.3 per cent national average gain.
Hobart and Darwin were the only two capital cities to record falling prices, although regional areas were generally also either dropping or posting very modest increases.
Adelaide and Perth are the only two capital cities currently at record prices, but many other locations are getting close.
Overall, regional Tasmania and regional Queensland have seen the biggest capital gains since the outset of the pandemic, both above 50 per cent, while Melbourne has seen the smallest increase of just above 15 per cent.
Home owners reluctant to sell
Carla Peacock knows the strength in Sydney’s premium property market first hand, after recently coming up short in her bid to secure a waterfront apartment in the city’s lower North Shore.
“It’s been hard, it’s been getting harder,” she told ABC News.
“The supply is short, the interest rates haven’t really dampened the interest because there’s less supply on the market.
“I think vendors are pulling out of the market, because they’re scared of their properties not going for the prices they want and, as a result, I think properties are often going for more than they’re actually worth.”
CoreLogic’s research director Tim Lawless said the data backs up Ms Peacock’s gut feeling.
“Through June, the flow of new capital city listings was nearly 10 per cent below the previous five year average and total inventory levels are more than a quarter below average,” he observed.
Real estate agent Matthew Smythe oversaw the sale of this apartment in Mosman on Sydney’s lower North Shore.(ABC News: Tony Ibrahim)
Matthew Smythe, the principal at Belle Property in Mosman and Neutral Bay, was the agent selling the two-bedroom unit.
He said the market in his area was quite hot.
“We’re finding about two-thirds of our stock is selling before auction date, and then the balance is pretty much around auction date. So it’s still quite good clearance rates for us around here,” he observed.
“I think there’s a little bit more caution out there, but I think people are still willing to stretch, if it’s the right home, and it’s going to last the next 10 years.”
How are property prices defying rising rates?
Mr Smythe said, at the high end of the property market where he operates, many buyers are paying cash and so unaffected by interest rate rises.
“Typically a lot of them are sort of debt free, mortgage free,” he observed.
“So they’ve got the capacity to buy no matter what interest rates do.”
The auctioneer who sold the unit, Clarence White, said interest rates are having an effect on the property market, but current levels are clearly not high enough to deter many buyers.
“Each time the cash rate goes up, it restricts buyer capacity and it also gives them pause for thought as to what’s going to happen next,” he told ABC News.
“So the further they go with interest rate rises, the more they will dent confidence in the real estate market. If they stopped where we currently are, we know that we’ve still got good interest.”
Louis Christopher, a long-time property analyst and managing director of SQM Research, said demand remains strong due to the combination of Australia’s population growing by 500,000 people last year and surging rents continuing to make home ownership look relatively attractive, despite rising rates.
“We’ve definitely had a significant increase in underlying demand, with the population growth right now running at about 2.3 per cent per annum,” he said.
“Then on the supply side, it’s been constrained in terms of new building, as well as existing property owners not willing to sell in this current environment.”
Will property prices keep rising?
Mr Christopher said, in the short-term, the property market is showing resilience in the face of interest rate rises.
Despite some evidence that a growing number of recent buyers are reselling as they struggle with surging mortgage repayments, Mr Christopher said most owners will try everything to hang onto their homes.
“When we actually look at leading indicators, such as distressed sales activity, those numbers are still benign at this point in time,” he said.
“The fixed mortgage resets have already started, it’s already happening as we speak.
“So far, so good, [but] we’re still not quite at the peak of this reset that’s occurring to many of your home borrowers right now.”
However, Mr Lawless said that there could be some early signs of price growth slowing as the most recent interest rate rises increase expectations of how high the RBA will go and how long rates may be elevated.
“Higher interest rates and lower sentiment will likely weigh on the number of active home buyers, helping to rebalance the disconnect between demand and supply,” he noted.
On the supply side, both agent Matthew Smythe and auctioneer Clarence White believe more people will decide to sell during the traditional market peak in spring.
“Don’t panic — if it’s not right, don’t necessarily feel like you have to buy it,” Mr Smythe advised.
“There’ll be more stock coming into spring, that’s the feeling that we’re getting here.”
“If you are looking to sell your property, now is a fantastic time because there’s so little good property on the market,” added Mr White.
“I would be getting on the market before we get a glut.”
While Mr Christopher believes most borrowers can still find ways to hang onto their homes in the face of much higher mortgage repayments, his major concern is what effect the spending cuts they will need to make to do so will have on the economy, which will feed back into home prices.
“The real danger for the housing market is that if we see a significant spike in unemployment over the next six months, similar to what we had, say, in 1990,” he warned.
“That could actually create the conditions for a significant double dip downturn in the housing market, but we’re not there yet.
“If we go into recession, I’ve no doubt we’ll see another fall in housing prices.
“Recession means a rise in unemployment. A rise in unemployment means more defaults in the housing market. And more defaults means housing price falls.”
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
