CoreLogic Research Analyst, Cameron Kusher, has released analysis examining total investment returns (i.e. value growth and gross rental returns) across Australia’s housing market in 2019-19:
Over the 2018-19 financial year, total returns from residential property recorded a fall of -3.3%. Returns were down from the previous year and it was the only financial year since at least 2005/06 that total residential property returns were negative. To put that in context, housing returns last year were worse than those recorded during the financial crisis and during the 2010-12 housing downturn. The combination of falling values and historically low rental yields have driven total returns into negative territory.
Looking at the national figures in the context of the combined capital cities and combined regional markets shows that returns have reduced over the year across both regions. However, combined capital city returns have fallen -4.5% while combined regional market returns remained mildly positive at 1.6%. For the combined capital cities it was the weakest returns on record and the first negative annual return, while across the combined regional markets it was the weakest annual return since 2008-09.
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Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
