Australia’s residential property market saw values jump 6.7% in the three months to June, according to the Australian Bureau of Statistics (ABS).
That’s the strongest quarterly growth since ABS records began in September 2003 and means prices rose by a stunning 16.8% between June 2020 and June 2021.
Every capital city saw a rise in values, with Canberra, Sydney and Hobart leading the way.
What’s more, most capital cities broke decade-long records – with Perth (up 4.8%) and Darwin (up 4.6%) the only exceptions to the rule:
- Canberra (+8.2%) saw the largest quarterly rise in nearly 18 years
- Sydney (+8.1%) saw the largest quarterly rise in six years
- Hobart (+6.3%) saw the largest quarterly rise in nearly 18 years
- Melbourne (+6.1%) saw the largest quarterly rise in 11 years
- Brisbane (+5.7%) saw the largest quarterly rise in 14 years
- Adelaide (+5.3%) saw the largest quarterly rise in nearly 14 years
So what’s causing prices to surge?
A supercharged combination of ultra-low interest rates, strong demand and persistently low levels of stock, according to Michelle Marquardt from the ABS.
“The continued growth in property prices was occurring at a time of record-low interest rates. Persistently low levels of stock on the market were being met with strong demand and properties transacting at an increasingly rapid rate,” she said.
The downside to soaring property prices
Property prices might have seen record growth – but that wasn’t the only record to fall over the June quarter.
National rents also saw their highest annual growth in over a decade, according to CoreLogic. But although rents are up, yields are plunging to historic lows as the rental market struggles to keep up with soaring purchase prices.
In August, gross rent yields dropped to historic lows in five capital cities: Sydney, Melbourne, Brisbane, Hobart and Canberra.
In practice, falling rental yields means it’s harder than ever to find a positive-cashflow property. That’s not to say it’s impossible. You just need to know where to look, whether in the capital cities or regional locations.
That’s where Investors Dream can help. We help you identify and secure positive-cashflow properties that generate you a passive income.
Book a call with us to discuss how we can help you achieve your property investment goals.