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Real Estate

Competition for rural property remains strong despite interest rate rises

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Competition for rural property remains strong despite interest rate rises

Elders Rural Property Update has been released today, analysing the movement of rural property values for quarter one of 2022. The report shows the sector remains strong nationally with very tight supply and high confidence, despite rising interest rates.

Key points of the first quarter (Q1) update include:

  • Transaction volume tightened significantly, decreasing nationally by 29.6 per cent (pc) in Q1-2022 to 1,513, totalling $2.6 billion.
  • National median price per hectare (ha) decreased slightly by 2.5 pc to $2,442/ha.
  • Despite a decline in median price per ha, the rolling one-year trend remains positive, increasing by 5 pc to $7,413/ha.

The report shows a decline in median price per hectare in five of the seven states and territories analysed in Q1-2022. However, the quarter-on-quarter decline was primarily due to a greater proportion of transactions in lower priced cropping dominant regions, which is historically common for Q1. Tasmania recorded the largest decline in median price per hectare, down 30.4 pc followed by Western Australia down 12 pc.

Importantly, the one year rolling median price per hectare increased for every state and territory in Q1-2022, highlighting strong underlying demand. Victoria led the way with a 9.5 pc increase followed by a 6.5 pc increase in Queensland.

Optimistic outlook, high commodity prices and good growing conditions are driving continued interest from investors and established growers seeking to expand their mixed farming operations. This has played out in the data across several states, particularly NSW with a strong increase in median price per hectare of 13.1 pc.

State Real Estate Manager NSW Richard Gemmell, attests to the quarter’s growth, saying “properties of scale, diversity and the ability to integrate into existing portfolios have been highly sought after in 2022.

“Existing landowners with a carbon neutral mandate have been active in the market and this trend will likely continue.”

The fundamentals of the rural property market remain strong, and as expected interest rates have started to increase in response to rising inflation. However, the increase in interest rates is coming from a low base and has been largely offset by gains in commodity prices particularly for grain and beef. Both remain well above year ago levels and will remain the driving force in the rural property market across Australia.

Also, rural land is generally considered a hedge against inflation as prices rise demand generally falls for most products except food. This may see greater interest for rural land from institutional and corporate investors.

Executive General Manager Real Estate Tom Russo says the outlook for Australian production remains positive, with a potential for production of grain and beef to increase alongside comparatively high prices.

“This scenario is obviously tempered by an increase in input cost prices however we expect profitability to remain high in 2022 and into 2023 which will aid buying power when it comes to rural property,” says Mr Russo.

“Overall, we expect property prices to continue to increase in the second half of 2022 driven by tight supply and high confidence across most agricultural sectors.

“The continuation of strong market fundamentals for most Australian farmland outputs and demand for product is cementing confidence from experts, farmers and investors alike. Second and third quarter updates will tell us if this prediction plays out as we expect.”

Elders source transactional level data for every rural property sale above 40 hectares in Australia from Corelogic before undertaking in-depth analysis to remove non-agricultural land uses and statistical outliers. Analysis and commentary is provided by Elders’ national network of rural real estate experts.

 

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Uneven Price Growth Reshuffles Rankings of Australia’s Most Expensive Cities

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Uneven Price Growth Reshuffles Rankings of Australia’s Most Expensive Cities

 

In the ever-evolving landscape of Australia’s real estate market, Brisbane has emerged as the country’s second-most expensive city, following a surge in home prices that propelled the Queensland capital to new record highs. According to the PropTrack Home Price Index, property prices continued their upward trajectory in May, with the median home value across Australia reaching unprecedented levels, showcasing the enduring strength of the housing sector despite broader economic fluctuations.

The latest data reveals a varied picture across the nation’s capital cities, with six cities witnessing increases in home values, while four—Sydney, Brisbane, Perth, and Adelaide—set new price records. Brisbane’s remarkable ascent in the rankings signals a reshuffling of the hierarchy among Australia’s capitals, with the city now sharing the title of the nation’s second-most expensive capital with Canberra. Both cities boast a median home value of $834,000, encompassing both houses and units.

Brisbane’s rapid rise to prominence reflects robust price growth, with values soaring by 0.67% in May alone. This surge has catapulted the city’s housing market into the upper echelons of Australia’s real estate landscape, outpacing even Melbourne’s values for the first time in over a decade. The factors driving this unprecedented growth include heightened demand fuelled by interstate migration, coupled with a limited supply of available properties—a combination that has propelled Brisbane to the forefront of the nation’s housing market.

Concurrently, Canberra experienced a marginal decline of 0.21% in home values during the same period, contributing to the parity between the two cities. However, upon closer examination of property types, Canberra’s houses retain their premium status, commanding a median value of $961,000, compared to Brisbane’s $930,000. Conversely, Brisbane’s units have surpassed those in Canberra, with a median value of $632,000, outpacing Canberra’s $605,000—a testament to the evolving dynamics of urban housing preferences and affordability constraints.

Despite Brisbane’s meteoric rise, Sydney maintains its status as Australia’s most expensive city, with prices rising by 0.42% in May, marking an impressive 7% increase over the past year. However, the pace of growth has moderated since February, as an influx of listings has provided buyers with increased options, albeit against the backdrop of persistently strong demand.

Looking ahead, the outlook for Australia’s housing market remains positive, albeit with a tempered pace of growth. According to PropTrack senior economist Eleanor Creagh, the market continues to grapple with supply-demand imbalances, population growth dynamics, and tightening rental markets. Nevertheless, further price appreciation is anticipated in the coming months, albeit at a moderated pace relative to earlier in the year.

Beyond the metropolitan hubs, regional disparities in price growth emerge as a defining feature of Australia’s housing landscape. Perth emerges as the standout performer, with prices soaring by 20.58% over the past year, driven by robust buyer demand amidst constrained supply conditions. Similarly, Adelaide witnesses substantial price growth, buoyed by its comparative affordability and robust demand dynamics in the city’s northern precincts.

Conversely, Hobart’s housing market faces headwinds, with prices declining marginally, indicative of a protracted recovery from previous downturns. Yet, regional Tasmania presents a stark contrast, with home values reaching new peaks, underscoring the resilience and divergent trajectories within the broader Tasmanian property market.

In sum, Australia’s housing market undergoes a paradigm shift, with Brisbane’s ascent to the echelons of the nation’s priciest cities emblematic of the dynamic forces reshaping urban housing dynamics. As the sector navigates evolving demand-supply dynamics and regional nuances, the trajectory of Australia’s housing market remains a pivotal determinant of broader economic resilience and prosperity.

 

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Criticism Mounts Over Federal Budget 2024 Housing Package

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Criticism Mounts Over Federal Budget 2024 Housing Package

 

The housing package unveiled in the 2024 federal budget, totalling $6.2 billion, has faced sharp criticism for its perceived inadequacy in tackling the affordability crisis, despite some groups welcoming the new initiatives.

The aim of the housing package is to unlock more affordable housing options, alleviate infrastructure bottlenecks, and bolster student housing without exacerbating inflation. However, critics argue that the measures fall short of addressing the pressing housing challenges faced by Australians.

Out of the $6.2 billion in new funding announced, $1.9 billion is allocated towards loans for the development of new social and affordable homes, while $1 billion is earmarked for ‘enabling infrastructure’ essential for connecting services to new housing developments, including roads, water, and power.

Although this funding adds to the over $11 billion in housing measures announced earlier, some of these initiatives were repurposed funding and joint agreements with states and territories.

Maiy Azize, spokesperson for Everybody’s Home, expressed disappointment, stating that the government’s budget fails to alleviate the housing cost burden for Australians already struggling in a challenging housing market. Azize criticized the perceived lack of genuine funding for social housing, highlighting that much of it constitutes repackaged initiatives and loan offers rather than real financial support.

Meanwhile, Shadow Treasurer Angus Taylor criticised the government’s failure to address inflation and the cost-of-living pressures experienced by households and businesses nationwide.

The reception to the housing package underscores the ongoing debate over the adequacy of government measures in addressing the housing affordability crisis, highlighting the need for more comprehensive and effective solutions.

 

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Bendigo Bank Leads the Way in Home Loan Satisfaction

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Bendigo Bank Leads the Way in Home Loan Satisfaction

 

Bendigo Bank has emerged as the top choice for home loan customers in Australia, as revealed by a recent survey encompassing over 30,000 respondents from the nation’s ten largest banks.

The survey, released yesterday, highlighted Bendigo Bank’s exceptional customer satisfaction rate, standing at an impressive 87.7% over the six-month period ending March 2024, according to Roy Morgan. This figure solidifies Bendigo Bank’s position well above the industry average, firmly establishing its leadership in customer satisfaction.

Richard Fennell, Chief Customer Officer for Consumer Banking at Bendigo Bank, expressed pride in the bank’s customer-centric approach, emphasizing the importance of fostering strong relationships with customers.

“At Bendigo Bank, we prioritize building meaningful connections with our customers,” stated Mr. Fennell. “Our relentless commitment to delivering exceptional outcomes for each individual customer sets us apart. Over the past two years, we have made concerted efforts to engage with our home loan customers, ensuring that their loans align with their unique circumstances.”

“As we approach the colder months, we urge all Australians to reevaluate their home loan needs through Bendigo Bank’s Home Loan Health Check,” added Mr. Fennell. “Whether it’s refinancing, investing in property, or purchasing a first home, Bendigo Bank stands ready to assist.”

Beyond boasting Australia’s most satisfied home loan customers, Bendigo Bank has earned recognition as the country’s most trusted bank, consistently ranking among the top 20 most trusted brands nationwide.

Patrick Pretlove, a 24-year-old Airline Cabin Manager who recently purchased his first home in Geelong, commended Bendigo Bank for the support he received during the significant financial decision-making process.

“Bendigo Bank provided invaluable support throughout my application process,” shared Mr. Pretlove. “Meri Dimovska, in particular, was incredibly responsive to my numerous inquiries and kept me informed every step of the way. Their dedication to customer care truly made a difference, and I wholeheartedly recommend Bendigo Bank to any prospective homebuyer.”

To explore Bendigo Bank’s diverse range of home loan products and conduct a personalised home loan health check, visit the Bendigo Bank website today.

 

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