Today we look at Core Logic’s latest Pain & Gain Report, an ABC report about Victoria’s building regulator, and the latest property digest report.
Summary of Core Logic’s Pain & Gain Report | CoreLogic Australia
Quick takeaways:
• Crazy recovery by Perth Units retuning
to profit sales! Brisbane, Adelaide and
Perth trending as strong unit markets.
• ~20% of Melbourne units are currently
selling at a loss (the highest nationally), compared to only ~3% of houses.
• Resource/mining market homes have benefited from strong price growth since the pandemic, with some flatlining. How long will this last?
• Prime sea and tree change destinations in QLD & WA have also benefitted majorly. Current favourable tax settings, remote working opportunities, (infrastructure expansion?) have turned these from dicey to lucrative.
• Popular destinations in the Victorian regional market have flipped since the pandemic, although the overall rate of loss-making sales still remains historically low.
Damning report into Victoria's building regulator - ABC News
Read the full article on the ABC.
An independent review found that the Victorian Building Authority (VBA) had serious failures in how hey handled complaints from home-owners over defective or unfinished homes.
The report stated that some of the failings of the VBA included:
• Complaints being duplicated, delayed, lost, or ignored for months
• No or few technical inspections
• VBA staff telling some complainants they should provide their own expert reports
for the VBA to review
The findings have prompted the Victorian Government to announce it will replace the VBA with the Building & Plumbing Commission. All aspects of building quality control will be incorporated into what they do, including regulation, insurance and dispute resolution. This will include a 50% increase in auditors and frontline inspectors, as part of a $63.3 million investment in this year’s Budget.
What will the benefits to consumers be?
• Now, the Building & Plumbing Commission will be able to direct to fix work beyond
move-in day (time period yet to be determined).
• Better access to insurance if things go wrong
• Apartment buyers will have stronger financial protection – with developers
required to provide a bond to cover the cost of fixing poor work for buildings over
3 storeys
• Further changes made to dispute resolution processes
Furthermore, legislative changes around domestic building contracts can be expected in 2025.
summary of latest property trends
Residential
Home prices
CoreLogic reported that home prices across the combined 8 capital cities in Australia rose by 0.5% in September.
Social and affordable housing
Housing Australia has selected an initial pipeline of 185 projects to potentially deliver more than 13,700 social and affordable homes across the country.
The average project size is 74 dwellings, with 53% of product in projects less than 50 dwellings. The market is dominate by apartments, medium- to high-density projects, and 1- to 2-bedroom dwellings.
Greenfield land
Research by RPM shows that rebates and promotions on Greenfield land projects in Melbourne currently average around 10% of the gross price, close to $40,000 on average. Cardinia and Casey afford some of the largest rebates on offer.
Multi-unit
– Build to sell
According to Urbis, over the last decade, inner and middle Melbourne have seen an average of approx. 10,000 apartment completions per annum. However, the pipeline supply is well below the long run average, with around 50% of the approved projects remaining inactive: approved but not able to proceed.
Concerns include the delays in project delivery. It now takes 2.5 years longer to deliver apartment projects compared to in 2019.
– Build to rent
According to Charter Keck Cramer and JLL, Melbourne will be the build to rent capital of Australia. In metropolitan Melbourne, unit rents have increased on average by 4.8% per annum since the early 2000s. See table below.
Industrial
Average prime rents have remained unchanged for 2 consecutive quarters across Melbourne’s West.
However, industrial vacancy rates have risen. Melbourne’s vacancy rate rose to 3.1% from 2.7% in July 2024 from March 2024.
