Nerida Conisbee Economist
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It's the Real Estate Podcast, brought to you by Ray White, the largest real estate and property group in Australasia.
And welcome to another episode of the Real Estate Podcast. And we're talking with Nerida Conisbee, Chief Economist at Ray White. G'day there, Nerida. Welcome to the Real Estate Podcast. Thanks for having me. Yeah, nice to have you on. And how's 2022 been for you? I guess like everybody else, it's sort of started with a bit of a thump.
Yeah.
It certainly has. It's been a pretty fast start. I think it's looking quite a different year compared to last year. I was talking to a few people about it last week that start of 2021, it was pretty much full steam ahead. We could see that prices were really on the increase and it was going to be a very big year. I think this year there's a lot more uncertainty. On one hand, COVID is starting to become a little bit more less of an impact in terms of the way we live. But there's a lot of other influences on the property market, such as the threat of interest rate rises, opening borders, all of those things are going to have a different impact on what happens in 2022.
Yes, you're absolutely right, particularly about the international borders reopening. Of course, we weren't talking about that last year, but let's talk about that because international borders reopening and rental levels, especially because when people start to really come into Australia in their numbers, they don't begin with buying a property. Traditionally, they'll go into the rental market. And as a result, would we be expecting some really big growth in that rental area?
What market trends does Nerida Conisbee observe for 2022?
Yeah, absolutely. I mean, as you said, people, when they come to Australia, they rent before they buy. And last year, we did see very solid rental growth in many locations. It was partly to do with the fact that people were getting wealthier through the pandemic. We've seen it through ABS data that Australians are the wealthiest they've ever been, but also because we had a lot of movement in Australia. So a lot of movement, particularly up to Southeast Queensland, which really pushed up rental levels. Rental levels for houses in Brisbane actually increased by about 20%. So we did see some really big pickups. The areas though that struggled were those areas that did house a lot of overseas students. So if you have a look at somewhere like Melbourne CBD, we did see a fall in rents of in excess of 20%.
Places like North Ryde in Sydney, Parramatta saw pretty big drops. So what we are expecting this year that rents will continue to increase for houses, but we will also see a recovery in those unit rents, which have been particularly problematic for a lot of people that invest in apartments.
And Nerida, these first home buyers, they're going through a pretty emotional draining and taxing time, particularly with their energy levels. As house prices rise, the aspirational goal of owning your own backyard, a slice of section somewhere, gets further and further away. And I think a lot of first home buyers want that house with a bit of room to move outside. But there is no doubt in this market, it requires very quick pivoting to secure a roof over your head. Have you got some numbers on different areas and the gap between the house pricing and the apartment market?
Yeah, look, we did have a look at that in our most recent property market update. So that's available on raywhite.com. But what we did, we had a look at what's been happening to house prices and unit prices. And in some areas now, very desirable areas, getting into the apartment market is actually quite affordable. So some really good examples include places like Hawthorne, In Melbourne, you know, trying to buy a house in Hawthorne is pretty much well and truly out of reach for most first home buyers. But head into an apartment and you can get an apartment for around $600,000. So, you know, that's certainly in first home buyer territory. Even places like New Farm in Brisbane, you know, again, buying a house is pretty much out of reach.
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