10 insights into the investment property market

In recent news, rent increases continue to slow; research finds Aussie renters are the world’s most dissatisfied; vacancies tighten further; house prices move higher; listings continue spring surge; investment hotspots revealed; NSW passes new rental reforms while Victoria proposes some; and the RBA says investors are not to blame for high rents.

Each month we pull together 10 insights impacting the investment property market. Read on for this month’s instalment…

1. Rental market slows. According to PropTrack, the national median rent rose to $610 per week in the September 2024 quarter – the slowest annual growth rate since September 2021. Domain’s Rent Report noted quarterly rental growth for both houses and units had stalled across the combined capitals – marking the weakest September quarter since 2019 for houses and since 2020 for units.

2. 7 out of 10 rent because they can’t afford to buy. According to research from Capterra, 71% of Australians who rent do so because they simply cannot afford to buy a home – a figure significantly higher than the global average of 55%. Some 48% of Australian renters identified affordability as a major issue – well above the global average of 34%. As a result, 45% of Australian respondents reported dissatisfaction with current rental prices, making the country’s renters the most discontent worldwide, and registering far above the global average of 36%.

3. Vacancies dip. Residential dwelling vacancy rates fell across Australia to 1.2% in September, according to SQM Research. There was a total of 37,932 residential properties vacant over the month, down from 39,665 in August. Property Buzz reported on Australia’s top 10 cities with the highest and lowest number of vacant residential properties.

4. House prices continue to rise. The national capital city median house price increased by 0.3% to $1,154,359 over October, according to data from My Housing Market. National unit prices also rose 0.6% to $661,651. Prices in major capitals continued to grow over the year, with Sydney, Brisbane, Adelaide, and Perth reaching record highs, according to Domain’s House Price Report.

5. Spring sees listings surge. Data from CoreLogic showed that listings were on the rise – with the flow of new listings tracking 3.2% higher than a year ago nationally to be 8.8% higher than the previous five-year average for the traditionally busy time of year. New property listings rose 5.4% to 77,622 dwellings in September, according to SQM Research. National new listing volumes in September were 10.1% higher YOY – the strongest September for new listings since 2015, according to PropTrack.

6. Restrictive measures impact rental market. Property Investment Professionals of Australia discussed the toll ‘anti-investment’ policies were having on the property market, with the 2024 Investor Sentiment Survey revealing 14.1% of respondents had sold at least one investment property in the past year – an increase from 12.1% last year. REIA also commented on the ‘investor exodus’. A report commissioned by the Property Council of Australia indicated Queensland had lost 33,000 new homes and international investment in the State had dropped 83.9% since new property rules and taxes came into effect in 2016. REINSW called the new tenancy rules in NSW a ‘dark day for renters’, and REIV raised concerns about the impact of proposed tenancy reforms on the State’s rental market. Ray White Group noted Victoria’s complex and heavy property tax structure had led to a significant downturn in the state’s real estate sector.

7. Investment hotspots revealed. Queensland is set to overtake Victoria as Australia’s second-biggest property investor market, according to data from Money.com.au. Hotspotting revealed the ‘second wind’ markets where property is set to boom. CoreLogic earmarked the buyers’ markets where no-one wants to buy. PIPA identified the surprise regions where prices have grown the most in the last 20 years.

8. Rental reforms passed in NSW and proposed for Victoria. On 24 October 2024, the NSW Parliament passed a bill to introduce new renting rules including banning no-grounds evictions, making it easier to rent with pets, and limiting rent increases to once a year. Victoria’s 7.5% levy on short-stay accommodation platforms was passed by Parliament, with the new charge coming into effect from 1 January 2025. Victorian Government also proposed a number of new rental reforms, including banning ‘no-fault’ evictions and limiting the fees that can be charged to a tenant for breaking the lease.

9. Making headlines. According to an RBA report, investors are not to blame for high rents, as few pass on interest rate rises to renters. Treasurer Jim Chalmers confirmed the government's focus remains firmly on increasing the supply of homes rather than altering existing tax incentives such as negative gearing and capital gains tax discounts. Rising interest rates and ‘mortgage fatigue’ is seeing affordable houses experience stronger price growth than luxury homes, according to Ray White Group. According to The Australian, ten suburbs across the country have seen their median house prices surpass the $3 million mark since January.

10. Regions wrap. While rental growth in the higher priced capital cities slowed, regional markets reported significantly higher demand and tighter supply, according to PropTrack’s rental report for the September 2024 quarter. John McGrath noted home values in regional areas were now 52.5% higher than where they were at the onset of the pandemic, while regional rents were up 39.1%.  

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