9.5% Up, 8.9% Down: Australia's Split Property Market

Australia’s cheapest homes rose 9.5% in a year while the most expensive fell 8.9% — a split market, not a crash. Jacob Field tests the headline against rents, inflation, migration, jobs and suburb-level data. • Asking rents: $650 a week, up from $620. • Headline inflation: 4%; the trimmed mean held at 3.6%. • Typical rental vacancy: 2.2%, with about one suburb in six below 1%. • Leneva and Seymour both rank in the top 1%, but vacancy is 14.5% in Leneva versus 1.8% in Seymour. The lesson for investors: buy the rent, check vacancy, and analyse the street — not just the suburb. Get the free Top Five Markets Report: https://ripe.house/brief General information only, not personal financial advice.

The cheapest homes in Australia are up 9.5% in one year. The most expensive are down 8.9%. This is snapshot as of today, the same week, the same interest rates increases opposite directions over the last four rate rises in the last 12 months. Now this is not a crash and it's not a boom, it's a split. Buy on the wrong side of it and you could be paying for it for years. This is our own sales data, the bottom 10% of sales, the week to the 31st of August went from $347,000 a year ago to $380,000 today. The top 10% went from about just over $2 million to $1.9 million. Now today, I'm gonna give you fresh numbers from outside of our business, inflation, migration, jobs, and a change at the checkout that starts today and what's happening overseas. Then I'll check each against what's actually happening on the ground. So state of the end, two suburbs, both in the top 1% of our national rankings and one has a rental vacancy rate eight times the other. We'll go street by street. This is general information, not personal advice. I'm Jacob Field from Ripe House Advisory. The number one number we're going to dig into is inflation. Yesterday, the ABS said prices rose 4% in a year to August. That's up 3.5% in July. The biggest driver was housing. The cost of housing up 5.7%. That's the cost of building new homes and electricity. The Reserve Bank's preferred measure, the trimmed mean, held at 3.6%. So underlying inflation isn't getting worse, but it isn't falling either. Now here's the on-the-ground check. The typical asking rent on a new lease is $650 a week. A year ago, same week, it was $620. That's up 4.8%. So what does that mean for an investor? Your income is keeping pace with inflation. And when new homes cost more to build every year, existing homes get harder to replace. Over time, that supports well-chosen established property. It doesn't make every property a winner. It means the rent side is doing its job. Number two, people. Australia added 392,700 people in the year to March. That's about 1,075 new residents every single day. Net overseas migration was almost 300,000. That's down 5.6% on the year before. So the flow is easing, it isn't stopping. Western Australia grew the fastest at 2.1%. Victoria and Queensland, 1.6%, close in a second place. Now, the on-the-ground check. What does this really mean for us? Every one of those people needs a roof. Across the 4,370 suburbs that we track with accurate liquid rental markets, the typical vacancy rate is 2.2%. A year ago, it was 2.1%. And about one suburb in every six is below 1% in vacancy rates, which is, it's almost impossible to mechanically get vacancy rates lower than that in a suburb. For an investor, low vacancy means fewer empty weeks. That is cash flow you can plan around. Migration easing a little doesn't change the picture yet. Number three, jobs. Unemployment rose to 4.6% in August. Employment grew by 39,500 people. But we need to look a little bit closer. Part-time jobs rose by 45,000. Full-time jobs fell by 6,000. So the jobs market is cooling. It's not collapsing. You can see on the ground in how long homes take to sell. Listings that came off the large websites, the classified websites, they came off the site in the last week of August, had been online for 63 days on average. The same week last year, it was 50 days. That's an extra nearly two weeks to sell a property. Here's the upside. Slower selling gives a prepared buyer more time to do their homework and more room to negotia