REA Group
Property Demand
Index
No relief in sight for
buyers and renters as
demand skyrockets
Introduction
Nerida Conisbee ·
REA Group Chief Economist
Demand for property hit yet another record high in February 2017,
suggesting strong price growth will continue and the affordability crisis
in Sydney and Melbourne will only become more apparent. People will
continue to be priced out of the market and pushed to urban fringes,
smaller dwellings or continue to rent.
MARCH 2017
Borrowers have shrugged off rising interest rates from banks, continuing
their search for property.
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In all states, buyer demand increased over the month, even in the
relatively subdued market of WA. It is still too early to say whether the
West Australian market has reached the bottom of its cycle with year-onyear declines still apparent.
Tasmania continues to be the strongest market, attracting interest from
local buyers, as well as buyers from interstate and overseas, while New
South Wales and Victoria are still attracting very high levels of interest.
© REA GROUP 2017
REA GROUP PROPERTY DEMAND INDEX · MARCH 2017
Rental demand hits a record high
Do we need more property investors, not less? Based on high levels of demand on the rent section of realestate.com.au,
the current number of property investors in Australia are unable to adequately provide enough rental properties.
So why is rental demand so high? There are a number of factors including lifestyle, but it is largely driven by continued
unaffordability in our big cities in the buy market, forcing people to turn to renting. Just like in the buy market, it’s abundantly
clear that supply of rental housing has not kept pace with demand.
The negative gearing debate continues to heat up, but the incredibly high levels of rental demand suggest that any changes to
the way rental housing is provided in Australia needs to be carefully considered. If you take negative gearing away, there may be
less investors in the market meaning a sudden drop in available rental housing, but it could also slowly moderate the rate
of house price growth in our most unaffordable cities.
While lifestyle factors such as access to great shops, cafes and restaurants are important for renters, it appears many are
prepared to give these up if they decide to buy. There are a number of drivers of this. In some cases, it’s because they just can’t
afford to buy in desirable lifestyle locations, for others it may be life cycle such as starting a family and needing more space.
Demand for rental properties is strong across the country, but there is significant variance between states. Queensland,
Tasmania, Australian Capital Territory, Victoria and New South Wales have the strongest demand for rental housing, which is
consistent with what we are seeing from buyers. It reflects conditions in those markets that impact both buyers and renters –
a combination of economic growth and far too little supply.
© REA GROUP 2017
REA GROUP PROPERTY DEMAND INDEX · MARCH 2017
Data & Insights
Buy - Monthly Index Values
28TH FEBRUARY 2017
City
All Dwellings
Houses
Units
Month End
Value
% Change
YOY
% Change
MOM
Month End
Value
% Change
YOY
% Change
MOM
Month End
Value
% Change
YOY
% Change
MOM
AUS
250.3
19.9%
8.8%
265.5
21.5%
9.1%
203.7
16.4%
8.6%
WA
104.4
-7.0%
6.9%
110.3
-8.5%
7.0%
66.3
-1.2%
5.0%
ACT
255.8
50.9%
5.3%
323.6
65.6%
1.4%
216.4
56.1%
6.4%
NSW
340.6
32.9%
9.2%
353.4
37.7%
9.2%
267.5
15.8%
9.8%
86.9
9.1%
12.1%
93.8
9.6%
14.8%
63.1
17.8%
12.1%
QLD
242.2
15.1%
6.5%
241.7
15.6%
7.0%
228.9
15.8%
5.6%
SA
187.2
10.0%
7.1%
199.2
12.8%
8.1%
158.1
4.9%
3.6%
TAS
423.0
68.9%
10.1%
454.5
76.8%
11.8%
492.3
71.6%
5.4%
VIC
300.6
24.7%
10.5%
370.8
29.3%
10.7%
193.9
17.8%
9.3%
NT
All Dwellings: National
2013 — 2017
© REA GROUP 2017
REA GROUP PROPERTY DEMAND INDEX · MARCH 2017
Rent - Monthly Index Values
28TH FEBRUARY 2017
City
All Dwellings
Houses
Units
Month End
Value
% Change
YOY
% Change
MOM
Month End
Value
% Change
YOY
% Change
MOM
Month End
Value
% Change
YOY
% Change
MOM
AUS
177.7
10.7%
4.7%
169.6
8.3%
4.0%
197.4
16.5%
5.7%
WA
49.8
-7.4%
8.5%
49.0
-7.9%
10.5%
58.4
-1.6%
4.0%
ACT
432.4
52.5%
15.3%
366.2
58.6%
4.5%
522.0
47.5%
23.0%
NSW
239.5
12.5%
8.0%
240.1
13.2%
5.3%
250.0
14.7%
10.7%
96.1
-0.7%
-4.5%
104.5
-8.0%
-9.3%
93.8
7.9%
0.3%
QLD
129.2
-1.3%
3.4%
135.4
-1.2%
2.6%
129.3
1.6%
3.7%
SA
162.5
14.6%
0.6%
174.7
16.6%
-0.6%
153.6
13.8%
1.1%
TAS
475.0
41.1%
-1.8%
463.4
38.3%
-2.9%
490.7
46.3%
-0.9%
VIC
293.1
32.4%
6.8%
281.4
24.0%
5.0%
314.3
42.5%
9.3%
NT
Rent - All Dwellings: National
2013 — 2017
© REA GROUP 2017
REA GROUP PROPERTY DEMAND INDEX · MARCH 2017
Lifestyle, great shops, cafes & restaurants
make suburbs popular among renters
National
Renters seek out shops, cafes, restaurants and lifestyle factors when considering
where to live, so it’s no surprise the most in demand suburbs nationally have these
features in spades.
The Gold Coast is undeniably the top region for renters, with eight of the top 10 most popular suburbs
on realestate.com.au. Beyond the beachside lifestyle, the Gold Coast economy is still strong which is
creating jobs, making the region particularly attractive to young people. The upcoming Commonwealth
Games and the new light rail are also attracting more people to the area.
For the first time, two Tasmanian locations feature in the national top 10. We have seen huge increases in
demand for people looking to buy in Tasmania and this strong demand from renters will support more
housing development.
North Hobart, with its restaurants and night life, is now attracting far more people looking to rent than
properties are available, while Moonah, located five kilometres from the centre of Hobart, is also
a popular location.
1
Kirra QLD 4225
2
Tugun QLD 4224
3
Miami QLD 4220
4
Reedy Creek QLD 4227
5
Bilinga QLD 4225
6
Moonah TAS 7009
7
Merrimac QLD 4226
8
North Hobart TAS 7000
9
Mermaid Waters QLD 4218
10
Burleigh Waters QLD 4220
© REA GROUP 2017
REA GROUP PROPERTY DEMAND INDEX · MARCH 2017
New South Wales
Northern Beaches and Sutherland Shire suburbs feature strongly as top suburbs for
renters in New South Wales, with beaches, lifestyle and greater affordability the
key drivers.
Interestingly suburbs just over the New South Wales/Queensland border also featured strongly, which links
to the Gold Coast being the most popular area for renters nationally.
All alone on the list in terms of geography is Wetherill Park, 34 kilometres west of the Sydney CBD. All other
top suburbs in New South Wales are close to water and contain a high proportion of Australian born residents,
while this suburb has neither. What it does have is a large shopping centre and good affordability.
1
North Narrabeen NSW 2101
2
Cromer NSW 2099
3
Collaroy Plateau NSW 2097
4
Sylvania Waters NSW 2224
5
Oyster Bay NSW 2225
6
Gymea Bay NSW 2227
7
Bilambil Heights NSW 2486
8
Tweed Heads West NSW 2485
9
Wetherill Park NSW 2164
10
Kirrawee NSW 2232
Victoria
A mix of inner city suburbs and outer suburban locations are the top locations for renters
in Victoria.
The inner-city suburbs all feature low levels of new development. With many inner-city suburbs in Victoria
seeing very high levels of new development, which is largely satisfying demand, places like Clifton Hill, Caulfield
East, Balaclava, Ripponlea, Albert Park, Middle Park and Carlton North are seeing far less. These suburbs offer
good retailing and restaurants which are attractive to people renting.
Surprisingly, a number of outer suburban locations also featured including Upwey, Dingley Village and Briar Hill.
This reflects continued affordability and lifestyle factors
with people seeking more space playing a role.
1
Clifton Hill VIC 3068
2
Caulfield East VIC 3145
3
Upwey VIC 3158
4
Ripponlea VIC 3185
5
Albert Park VIC 3206
6
Dingley Village VIC 3172
7
Balaclava VIC 3183
8
Mount Evelyn VIC 3796
9
South Geelong VIC 3220
10
Briar Hill VIC 3088
© REA GROUP 2017
REA GROUP PROPERTY DEMAND INDEX · MARCH 2017
Queensland
The top suburbs for renters in Queensland are all on the Gold Coast with eight of these
also making the national list.
The Gold Coast is the top region for renters, with eight of the top 10 most popular suburbs. Beyond the
beachside lifestyle, the Gold Coast economy is strong which is creating jobs, making the region particularly
attractive to young people. The upcoming Commonwealth Games and the new light rail are also attracting
more people to the area.
It is likely that a large amount of apartment development in Brisbane is satisfying demand in that city which is
why it does not feature in the top suburbs list.
The huge demand from renters on the Gold Coast supports further property investment as well more
development, but increased development needs to be well thought out to avoid over-supply in the future.
1
Kirra QLD 4225
2
Tugun QLD 4224
3
Miami QLD 4220
4
Reedy Creek QLD 4227
5
Bilinga QLD 4225
6
Merrimac QLD 4226
7
Mermaid Waters QLD 4218
8
Burleigh Waters QLD 4220
9
Clear Island Waters QLD 4226
10 Coolangatta QLD 4225
South Australia
A wide range of suburbs featured in the top list of suburbs for renters in South Australia,
including some very affordable options, as well as more expensive locations.
Proximity to good amenities appears to be a driver with suburbs close to Westfield Marion all featuring, while
locations close to Reynella also came up in the top 10 due to affordability and proximity to the beach.
1
Redwood Park SA 5097
2
Melrose Park SA 5039
3
Marino SA 5049
4
Modbury Heights SA 5092
5
Morphettville SA 5043
6
Reynella SA 5161
7
Dulwich SA 5065
8
Sheidow Park SA 5158
9
Everard Park SA 5035
10 Marion SA 5043
© REA GROUP 2017
REA GROUP PROPERTY DEMAND INDEX · MARCH 2017
Western Australia
Coastal suburbs north of Perth feature strongly in the list of most popular suburbs for
renters in Western Australia accounting for half of the top 10.
The popularity of beaches with people renting was a feature nationally, with many chasing the best possible
lifestyle, a characteristic they appear more prepared to lose when they look to buy.
Waterside suburbs are also particularly popular.
1
Trigg WA 6029
2
Salter Point WA 6152
3
City Beach WA 6015
4
Mount Claremont WA 6010
5
Marmion WA 6020
6
Floreat WA 6014
7
Dalkeith WA 6009
8
Swanbourne WA 6010
9
Gwelup WA 6018
10 Peppermint Grove WA 6011
Tasmania
Moonah made the national list, as well as topping the list for Tasmania. Great restaurants,
night life and close proximity to the CBD are likely the key factors.
Tasmania is currently seeing the strongest rental demand relative to supply and this is supporting greater
investment in the state. All the suburbs are around Hobart, which is likely driven by affordability but also lifestyle.
It is possible to live close to the CBD in Hobart at a low cost, but Hobart’s cultural scene has changed
considerably over the past decade, offering greater range in restaurants, cafes and retailing than it
did previously.
1
Moonah TAS 7009
2
North Hobart TAS 7000
3
Mount Stuart TAS 7000
4
Bellerive TAS 7018
5
West Moonah TAS 7009
6
Lindisfarne TAS 7015
7
Lenah Valley TAS 7008
8
Howrah TAS 7018
9
New Town TAS 7008
10 South Hobart TAS 7004
© REA GROUP 2017
REA GROUP PROPERTY DEMAND INDEX · MARCH 2017
Australian Capital Territory
The Australian Capital territory is a city where there is very high demand from renters,
partly reflecting strong demand from a more transient population combined with
relatively low supply of rental housing.
Holt is the top suburb for renters in this state however there was a wide range of geographic locations
reflecting the diverse nature of people coming to live and rent in Canberra, from young people to established
families. This diversity makes it quite different to other capital cities where renters are typically young people.
The inner suburbs of Canberra did not feature prominently which is due to increased supply from a lot of new
development in the area.
1 Holt ACT 2615
2 Calwell ACT 2905
3 Crace ACT 2911
4 Palmerston ACT 2913
5 Amaroo ACT 2914
6 Macgregor ACT 2615
7 Lyneham ACT 2602
8 Downer ACT 2602
9 Florey ACT 2615
10 Hackett ACT 2602
Northern Territory
The Northern Territory is currently seeing relatively low demand from both buyers
and renters.
The top suburbs were fairly evenly spread between Darwin and Alice Springs. Marrar, right next to the Darwin
airport came in at number one.
1
Marrara NT 0812
2
Howard Springs NT 0835
3
Farrar NT 0830
4
Wanguri NT 0810
5
Anula NT 0812
6
Desert Springs NT 0870
7
Araluen NT 0870
8
Ludmilla NT 0820
9
Sadadeen NT 0870
10
Larapinta NT 0875
© REA GROUP 2017
REA GROUP PROPERTY DEMAND INDEX · MARCH 2017
The REA Group Property Demand Index is produced by the REA Group, owner and operator of realestate.com.au –
the leading source in Australia for residential property with a total average unique audience of more than 5.8 million
(Nielsen Digital Ratings (Monthly), August 2016-January 2017).
The REA Group Property Demand Index provides data and insights relating to demand for residential dwellings across
Australia, at a national level and per state and territory according to site visit data on realestate.com.au. It calculates
the number of online visits in the past month (including at least one interaction with a property) against the average
number of property listings. This metric is seasonally adjusted to negate the effect of spikes in any given month, and
it is indexed to a point in time (February 2013).
This report details the key findings of the REA Group Property Demand Index for February 2017.
This report uses REA Group internal data that is current as at the time of publication. This report provides
general information only and is not intended to constitute any advice or appraisal and should not be
relied upon as doing so. If you wish to cite or refer to this report (or any findings or data contained in it)
in any publication, please refer to the report as the ‘REA Group Property Demand Index (Mar. 2017)’.
© REA GROUP 2017