AVERAGE HOME VALUE RISING $1,990 PER WEEK
CoreLogic’s September Home Value Index reveals an alarming statistic; average home values are rising by $1,990 per week (or $103,400 per annum), taking Australian housing values 18.4% higher than a year ago.
By comparison, wages are rising at just 1.7% per annum on average. This is the fastest annual pace of growth in housing values since 1989.
Through the late 1980’s, the annual pace of national home value appreciation was as high as 31%, so the market isn’t quite in unprecedented territory. The annual growth rate at the moment is trending higher, in fact, it is 3.6 times higher than the thirty-year average rate of annual growth.
Houses still beating apartments for growth
However, the performance gap is finally beginning to narrow. Throughout the first quarter, capital city house values were rising approximately 1.1% faster than units each month. By August the average performance gap reduced to 0.7%. The convergence of growth in house values and unit values is thought to be another demonstration of affordability becoming more challenging.
Monthly change in capital city home values
MONTHLY ANNUAL
Sydney p 1.8% p 20.9%
Melbourne p 1.2% p 13.1%
Brisbane p 2% p 18.3%
Adelaide p 1.9% p 17.9%
Hobart p 2.3% p 24.5%
Darwin q 0.1% p 22%
Canberra p 2.2% p 22.5%
National p 1.5% p 18.4%
What is the impact of lockdowns?
Australian housing values have continued to record a broad-based rise despite the disruption from lockdowns. Dwelling values rose 1.5% in August; a rate of growth that is still well above average, but the lowest monthly rise since January.
Both advertised supply and housing demand have been negatively affected over recent months.
In early May, newly advertised properties were tracking 19.7% above the five-year average, however due to both lockdowns and seasonal factors, the number of new listings through August dropped to -5.8% below the five-year average and total active listings were -29.4% below average.
The estimated number of home sales has also been affected, dropping by -9.0% nationally over the three months ending August when compared to the previous three-month period. Despite the fall in sales, however, housing market activity remains well above average levels.
Rate of price growth peaked in March
The latest data provides further confirmation that the rate of price growth is moderating after moving through a peak in March of this year.
At that time, national home values had risen 2.8% in a month, led by Sydney where dwelling values were up 3.7%. The slowing rate of growth probably has more to do with worsening affordability constraints than ongoing lockdowns.
Although there has recently been a trend towards fewer buyers, the past three months has seen the number of home sales remain 30% above the five-year average at a time when active listings are -29% below average. There is a disconnect between advertised supply & housing demand, even in the cities where lockdown restrictions are active which is keeping upwards pressure on housing prices.
CYBER SECURITY, MORE IMPORTANT THAN EVER
While cyber security is often considered the domain of the IT department (if there is one), in a constantly evolving digital environment, responsibility is now falling more and more on each of us as individuals.
With many people working from home internationally, firewalls, encryption, and strong authentications are not always in place. In traditional workspaces, Cyber security largely buffered us from external attacks, but with so many working from home, we all need to be more aware. The solution lies in a shift in everyday behaviours - replacing curiosity with suspicion, and intrigue with scepticism.
Corporate and personal exposure to risk is greater than it has ever been, with those traditional structures no longer in place. Many of us now work from places other than the fixed address of the office, on non-regulation equipment such as home laptops and devices – many of which are connected through shared family networks, on unsecured WiFi networks. Collectively this new positioning advances everyone’s exposure to what has become the increasingly sophisticated nature of cyber-attacks. If you’re unsure of how to best manage your personal cyber security responsibilities, get advice from your IT department or advisor. Alternatively, the Australian Cyber Security Centre (ACSC) has some great how to step by step guides on specific topics for individuals and families, small and medium businesses, and larger organisations. Stay safe out there!
LIVING WELL THROUGH TIMES OF UNCERTAINTY
All of us are having our own experience of the global pandemic in one way or another and it’s without question one of the most challenging times many of us have ever been through.
However, throughout our lives there are periods of uncertainty and how we choose to navigate through those times can make all the difference to the outcomes.
It’s important to make choices that align with your circumstances, but in every case taking care of your mental and emotional wellbeing should be your first priority. A key strategy around this is to protect yourself from information that may exacerbate your situation.
A great first step is to work out how you can stay on top of the information you need to have, in ways that are safe and productive. This might mean not watching press conferences during the pandemic, turning off notifications, or checking news and emails only at certain times. In other cases, you can put a mediator in place to manage communications as you divorce, or leave a bad employment situation, or you can ask someone you trust to help you work through information you have difficulty understanding.
Behavioural adjustments can help too – you hear about hydrating, exercising, and practicing mindfulness and meditation all the time because they work. If these aren’t for you, try simply being still, closing your eyes, and taking some long and deep breaths. Counting each breath in and each breath out is also a simple but useful way of clearing your mind and getting a bit of focus back.
The next step is to direct your attention to what you can change, or do something about, rather than what you can’t. Start with listing everything from what needs the most urgent attention down to what is of less importance. Group the tasks into actionable chunks and delegate them to others to do, or to help you with wherever possible. You can split that list into jobs for today, for the next few days, for next week or for next month. Giving yourself clarity in this way will make all the things swimming around in your head feel much more achievable. If you’re not sure who to deal with someone, simply searching online with the term “I need help with …” might be the first step towards a solution you never knew existed.
Regarding the pandemic, both the Australian and New Zealand governments have a vast array of support mechanisms in place for individuals and businesses; for people who’ve lost their jobs, had to take time off work to get tested or vaccinated, had to quarantine, had to home school - the list goes on.
Not everything can be resolved in an instant but taking action to get things moving makes a huge difference to your sense of purpose and achievement around issues that can often feel beyond your control.