PHOTO: Australia is made up of many different housing markets, even within cities.
On the eve of Victoria’s last lockdown, Peter Mares was feeling cautiously optimistic.
He was about to bid on behalf of a friend for a two-bedroom apartment in Princes Hill, in inner Melbourne.
Listed as an “impeccably maintained retro”, Mares describes it as the best-situated flat in an ugly block of dark brown brick walk-ups dating from late 1960s.
When it came to price, he tells ABC RN’s Saturday Extra, he had a buffer of $100,000 above the advised price range.
“I was authorised by my friend to bid up to $780,000, but I didn’t get to put my hand up because it sailed past that and went to $845,000,” he says.
A few streets away, another friend of his had just moved into a similar apartment to take advantage of falling rents. It was a lighter, better place than her previous house, and much cheaper.
“Theoretically rent is an indication of the value of housing,” Mares, a journalist who has researched the Australian housing market, says.
“The rental return should rise with the value of housing. But if you see prices going up in one place and rents going down in another, it seems quite odd.”
It may seem odd, but it’s consistent with data showing rents for Melbourne and Sydney apartments fell steeply last year and remain low due to a lack of international students and the effects of the pandemic.
“It’s a reminder that we don’t have one housing market, we have numerous housing markets, not just between cities but within cities,” Mares says.
Regional rentals disappearing
Then there are what Mares describes as the “boom conditions” in regional areas, particularly those close to the capital cities.
Chief economist at the Regional Australia Institute, Kim Houghton, researches the drivers of sale price growth, housing availability and rental shortages in regional Australia.
READ MORE VIA ABC
