Property Point

When people talk about the Australian property market it often seems as though they are talking about one market, something that contains uniform traits and a consistency throughout the country.

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The single-market phenomenon probably applies to other areas; the corn market is probably pretty uniform in the corn-growing areas of the country and I would expect wheat and wool and other markets to have very little variation.

Of course, the wool market is one of the many things I know nothing about, although I do hear good things about the merino breed of sheep and its soft, fine wool.  

I’m slightly better informed about the property market and one thing that is very clear is that there is not one market.

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Demand and supply play out in different ways in different cities. Business activity varies, population movements change, demographics have an impact and none of this is the same from one city or region to the next.

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There are also the different types of property markets. The so-called “prestige market” is different to the suburban mum and dad market because different factors apply.

It is true that a federal budget that removes negative gearing on established dwellings and increases capital gains tax does have an impact in all markets but the extent varies.

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And when tax changes combine with other economic factors such as an increase in the cost of living for things such as fuel and electricity, the results can be seen in various markets.

There has, without a doubt, been changes to property markets around the country over the past few months and none of them, in my opinion, appear to be going up at the moment.

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But the impacts have been felt far more seriously in bigger cities than in other locations.

The prestige and higher-end markets in Sydney and Melbourne have been smashed. Many of those properties increased dramatically in recent years. A property in Sydney that increased from $4m to $5m over a short period will probably find that price winding back now.  

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The Herron Todd White property clock, a monthly assessment of property markets around the country by the valuation company, described Sydney and Melbourne as markets in decline in July.

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There is no doubt that the removal of negative gearing will be having a huge impact on properties at the higher end as investors shy away from the negative yield those properties would provide.

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It was interesting to note which cities the HTW housing property clock described as “approaching the peak” of the market.  

Gladstone, the Sunshine Coast and Townsville were all described as approaching the peak.

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Not so Mackay, which is still described as a “rising market”, along with Rockhampton, Cairns and Emerald. Brisbane is described as being at the peak of the market.

Melbourne is a good example of how markets around the country differ. Someone last month bought a two-bedroom unit in an inner-city suburb for $610,000. The same unit last sold in 2018 for $635,000. A loss after eight years is a very differentexperience to the Mackay situation where the prices have more than doubled in that period.

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As always, economic factors in individual regions have an impact and Mackay’s economy is going well, with full employment and plenty of activity. Markets plunge when economic factors force people to sell. That is not the case in Mackay and it’s generally not the case in other parts of the country.

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Meanwhile I had an average of eight people turn up to my four open homes last weekend and we ended up with strong offers on all four of them.

Buyers are more cautious than they were but people still need somewhere to live so well-priced properties that are marketed properly are attracting good attention from buyers.

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It’s certainly not the case that there is one property market in Australia and that what is happening in Sydney is replicated throughout the country.

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