Australian Property

In this week’s podcast, we are taking a look at the crushing weight of Australia’s housing market—why affordability is being flattened under rising prices, what’s driving the squeeze, and what comes next for buyers, renters, and investors.

A new report from Oxfam claims that the capital gains tax (CGT) discount and negative gearing are “disproportionately” benefiting Australia’s wealthiest, fuelling the housing affordability crisis and inequality, and harming the federal budget.

This week’s consumer sentiment survey from Westpac revealed that Australian house price expectations are at their highest level in 15 years, following a 2.1% rise in October. Westpac also noted that “expectations are stronger still in Queensland (184)”.

The Australian Prudential Regulatory Authority (APRA) has consistently flagged high loan-to-valuation ratio (LVR) mortgage lending as a risk area. For example, in December 2014, the Australian Prudential Regulatory Authority (APRA) released guidance stating that “ADIs should not undertake large volumes of, or increase their share of, higher-risk lending.

Cotality’s daily dwelling values index shows that capital city value growth is tracking at around the fastest pace in two years.

Last week, shadow home affairs minister Andrew Hastie resigned from the Coalition’s frontbench following frustration that he would have no input into the party’s immigration policy.

It’s rare that any more than a month or two goes by without Prime Minister Anthony Albanese mentioning that he grew up in public housing.

Last week, the government body Build Skills Australia released a report claiming that there simply aren’t enough tradespeople to meet Labor’s target to build 240,000 homes a year.

If you want bona fide proof that the Australian Treasury has become a propaganda arm of the federal government, look no further than its modelling of the impact of Labor’s 5% deposit scheme for first home buyers.

With the release of the latest ABS Building Approvals data for August, it was revealed that dwelling approvals had fallen by 6.0% on a month-on-month basis but were still up 3.0% year-on-year.

Most of the media’s attention has been on Labor’s First Home Guarantee scheme, which came into effect on Wednesday.

The Albanese government’s fantastical target of building 1.2 million dwellings over five years is centred on delivering a boom in high-rise towers.

In the debate surrounding the viability of individual households servicing ever larger mortgages, the fact that Australia has yet to see large-scale defaults is often cited as evidence that the current level of debt is sustainable.

The Albanese government’s First Home Guarantee scheme came into effect on Wednesday, allowing almost all first home buyers to purchase a home with only a 5% deposit, without requiring lenders’ mortgage insurance, as taxpayers will guarantee 15% of the mortgage.

On Tuesday, the Australian Bureau of Statistics (ABS) released dwelling approvals data for July, which showed 15,624 trend approvals for the month, down 1.0% from July. Approvals remained 4,376 (22%) behind the National Housing Accord’s five-year objective of 20,000 dwellings per month.

Cotality has released its September housing market report, which contains more bad news for renters.

Cotality’s daily dwelling values index, which measures dwelling value growth across the five major capital city markets, lifted in September amid RBA rate cuts. The following chart shows that dwelling values at the 5-city aggregate level rose by 0.9% in September, led by Perth (1.6%), Brisbane (1.1%) and Adelaide (0.9%).

With each rate cut, commentators discuss how it will impact the housing market, make borrowing more accessible, and enable more people to enter the market.

Eliza Owen, head of research at Cotality, has published the following chart on the amount of principal and interest repayments for the median Australian dwelling value ($848,858) under the Albanese government’s 5% deposit scheme for first-home buyers, which comes into effect on Wednesday.

Australia’s housing market is experiencing a strong upswing. According to Cotality, last week’s national final auction clearance rate increased to 71.6%, the highest result for capital cities since early June 2023 (73.1%).

“Stubborn empty nesters” refusing to downsize from their family-friendly homes have become Australia’s latest housing scapegoat.

Australian house prices are already at their highest level in history and are beginning to surge higher. According to Cotality, last week’s combined final auction clearance rate rose to 71.6%, which was the capital cities’ highest result since early June 2023 (73.1%).