2022-07-07-莱坊-Australian_Residential_Market_Update_July_2022_2页_1mb

Australian Residential Market Update Summary (July 2022)

Core Content

The Australian residential property market in July 2022 is shaped by five key trends, including monetary policy adjustments, demographic shifts, and changes in housing structure and ownership patterns. The report outlines the current state of the market, highlighting both challenges and opportunities.

Main Trends and Key Information

1. Australian Official Cash Rate Reverts to Mid-2019 Levels

• The Reserve Bank of Australia (RBA) raised the cash rate target to 1.35% on 5 July 2022, marking the third consecutive month of increases.
• The rate increase followed previous hikes of 25 bps in May and 50 bps in June, bringing it back to levels last seen in June 2019.
• The RBA cited global inflation, supply chain disruptions (including in China), the Ukraine war, and strong domestic demand as key reasons for the rate hikes.
• Australia's inflation is higher than many other countries due to global pressures and local factors such as a resilient economy, tight labour market, and capacity constraints.
• Housing prices have seen declines in some markets after years of significant growth.
• The household saving rate remains higher than pre-pandemic levels, suggesting financial stability among households.
• The RBA expects to continue normalising monetary conditions, with further rate increases anticipated.
• Mortgage lending rates have risen sharply, with 3-year fixed rates for owner occupiers increasing by 183 bps to 5.66%, and standard variable rates rising by 75 bps to 5.27%. Investors also face similar rate increases.

2. Significant Generational Shift in Australia

• The 2021 Census revealed that 66.9% of Australians live in Greater Capital Cities, with 80% residing in eastern Australia.
• The median age of Australians remains at 38 years.
• Baby Boomers and Millennials each account for over 5.4 million people, with only a small difference in numbers.

3. Growing Number of Overseas-Born Residents

• The proportion of Australian residents born overseas or with overseas-born parents has exceeded 50%.
• The top five ancestries reported in the 2021 Census are:
  • English (33.0%)
  • Australian (29.9%)
  • Irish (9.5%)
  • Scottish (8.6%)
  • Chinese (5.5%)
• Communities from Nepal, India, Pakistan, Iraq, and the Philippines have seen significant growth.
• Mandarin is the most common language other than English spoken at home, followed by Arabic, Vietnamese, and Cantonese.
• Punjabi saw the largest increase in language use.

4. Australian Households Are Shrinking

• The average household size decreased from 2.6 to 2.5 persons over the past five years.
• Family households make up 70.5% of all households, while lone households account for 25.6% and group households for 3.9%.
• Of the 5.5 million couple families, 53% have children living with them, and 47% do not.
• The distribution of dwellings has shifted:
  • Separate houses account for 70% of occupied private dwellings.
  • Townhouses make up 13%.
  • Apartments account for 16%.
  • This contrasts with the 2016 Census, where the split was 73%, 13%, and 13%, respectively.
• Ownership remains dominant, with 66.0% of households owning their homes outright or with a mortgage, and 30.6% renting.

5. Market Performance Indicators

• Capital Values:
  • Month-on-Month (MoM): -0.6%
  • Quarter-on-Quarter (QoQ): -0.2%
  • Year-on-Year (YoY): +11.2%
• New Listings (Rolling 28-day count): -2.0% YoY
• Total Listings (Rolling 28-day count): -7.4% YoY
• Auction Clearance Rate: 56.8% with 2,364 total auctions

Contact Information

• Residential Research Contact:
  Michelle Ciesielski
  +61 2 9036 6659
  michelle.ciesielski@au.knightfrank.com

• Media Enquiries:
  Caroline Stanley
  +61 4 0217 0901
  cstanley@gracosway.com.au

Disclaimer

Knight Frank Research provides strategic advice and forecasting to a variety of clients globally. This report is for general information only and not to be relied upon for decision-making. No responsibility or liability is accepted for any loss or damage arising from its use.
Reproduction of this report is not allowed without prior written approval.
© Knight Frank Australia Pty Ltd 2022