Australian suburbs where unit price growth outpaces the rate of houses, plus other stories

For PropertyGuru’s real estate news roundup, in certain Australian suburbs, unit prices have grown at more than double the rate of houses over the past year. In other stories, Hong Kong’s government will relax the mortgage loan-to-value ratio amid a property slowdown, a move welcomed by the real estate sector. Lastly, real estate market transparency improves globally, with the Asia Pacific region showing the greatest progress.

Where unit price growth is outpacing houses in Australia

Historically, house values have risen faster than units, but with affordability pressures, units are being preferred by many homebuyers. In certain suburbs, unit prices have grown at more than double the rate of houses over the past year.

According to PropTrack in their latest Home Price Index, the national home prices peaked in October, now 45 percent above their levels in March 2020.

Since the pandemic, both house and unit prices have seen strong growth. However, house prices have surged ahead, currently up 48 percent, while unit prices have increased 23 percent.

Although house prices have grown faster over the long term, the growth rates of houses and units over the past two years have been comparable, 9.8 percent and 9.1 percent respectively. In recent months, annual unit growth has been converging with house growth.

In New South Wales, Engadine, Wagga Wagga, and Merimbula, annual growth in unit values outpaced houses by 6.8 percentage points, 6 percentage points and 5.8 percentage points, respectively. This was the widest margin among all suburbs within the state.

In the past year, units in the Victorian suburbs of Safety Beach, Templestowe Lower, and Warragul also experienced stronger growth in their values compared to houses.

HK Policy Address 2024: Loan-to-value ratio for home mortgages to be relaxed amid home price slump

Hong Kong’s government will relax the mortgage loan-to-value ratio amid a property slowdown, a move welcomed by the real estate sector.

The city’s leader John Lee announced on Wednesday, during the 2024 Policy Address, that the ratio for residential properties would be set at a maximum of 70 percent regardless of value, whether the property is for self-use or rent, and whether or not purchasers are first-time buyers.

The maximum debt servicing ratio would be adjusted to 50 percent, Lee said, adding that non-residential properties would enjoy the same mortgage rules.

HKFP reports that the new policy will come into immediate effect, with the Hong Kong Monetary Authority issuing guidelines to all banks.

JLL: Real estate market transparency improves globally, Asia Pacific shows greatest progress

Real estate transparency is more critical than ever during periods of uncertainty. According to global real estate consulting firm JLL and its subsidiary LaSalle in the 2024 edition of the Global Real Estate Transparency Index report, the pace of structural changes impacting real estate markets — from demographic shifts to sustainability targets and technological advances — is accelerating.

“These long-term changes are intersecting with cyclical challenges as companies and markets process rapid adjustments to pricing and growth prospects,” the report said, adding that 2024, being the record year for general elections and the ongoing geopolitical tensions, are introducing additional elements of policy uncertainty worldwide.

These factors mean that transparency is more important than ever as real estate investors, occupiers and governments navigate the transition to a new real estate cycle and the next stage of urban growth.

As cited in The Edge, Malaysia is ranked 33rd and is placed in the “Transparent” group, just a rung below neighbouring Thailand (32nd). These two countries are the only Southeast Asian nations in this group. Indonesia (40th), the Philippines (45th) and Vietnam (49th) are in the “Semi-Transparent” group.

The Property Report editors wrote this article. For more information, email: [email protected].