November 2021

This is the 40th in a series of articles summarising monthly news and happenings in Sydney real estate, and more broadly.

Everyone loves a pool

… and it seems Domain has the data to prove it, with the word ‘pool’ becoming the most searched for term on Domain’s listings. According to the article other top terms included ‘home office’ and ‘courtyard’. Accordingly, the Swimming Pool & Spa Association (SPASA) confirmed this year had been the busiest ever for the industry.

“There’s never been a higher demand in the history of swimming pools and spas in Australia,” said the SPASA chief executive. “Even with travel opening up, we haven’t seen a drop in demand.”

Big tech is also working towards confirming the home office as the must have home feature, post COVID, with The Business Conversation featuring new solutions from Icomm, Microsoft and others. Working from home definitely appears to becoming a permanent part of the new normal.

The cost of housing

Core Logic reports that national housing construction costs have exploded “rising at the fastest rate since the introduction of the GST”. This comes at a time when the ABC reports the RBA, APRA and politicians are starting to butt heads trying to find some understanding as to how Australian property values have risen so high.

On one side of the debate appears to be APRA arguing that prices have risen due to supply and demand, and on the other is the RBA with a more long term and apparently nuanced view of the Australian economic landscape over the last 40+ years.

Having said that, The Real Estate Conversation report that HIA expect that demand for new detached and multi-unit housing will remain strong through 2022, only “constrained by the availability of land, labour and materials.” In other words everything, but that new builds will likely become dispersed from major centres (i.e. Sydney and Melbourne).

Another solution to reduce construction costs? Employ more women in construction to increase efficiency, according to another article on ABC .

In terms of the cost of housing when compared to wage growth, Core Logic has posted ABS data that shows there has been a 81.7% growth in the Australian wage price index (WPI) over the last 20 years. However, when observed alongside the increase in national housing values of 193.1% over the same period, the increasing degree of un-affordability for new homebuyers, becomes very clear, especially in the last year or so:

Environmental updates

Unsurprisingly on the heels of the COP26 meetings in Glasgow, a few more environmentally focussed developments seem to be coming through. One of these is in the category of ‘why didn’t we do this earlier?’, as reported by Commercial Real Estate, is the plan to raise energy efficiency of houses with light coloured roofing materials.

Rob Stokes, Minister of Planning, said that under the Net Zero Cities Action Plan being developed by the Department of Planning, Industry and Environment, all new housing would be required to have light-coloured roofing in order to reduce the urban “heat island” effect. The story reports this is a problem with higher temperatures, and often seen especially located around Sydney’s western suburbs.

Not exactly property news as such, but on a related topic, Domain reports we should expect to see a rapid uptick in home and office EV charging stations, with the NSW government pledging to make 50 per cent of all new vehicles sold in the state electric by 2030. European research shows that 80% of all charging is either at home or the office, and with working from home the new normal for many people, even more so.

Lastly, Core logic has an interesting article on how banks can help boost energy efficiency in homes through policy development, sustainable lending and other new types of products. The article discusses how other countries such as the UK and NZ are doing in this regard, how we could benefit from their efforts so far, and what cost savings could be made by homeowners.