Property Now Issue #23

PROPERTY A

PUBLICATION

NOW

ISSUE 23

WHAT’S INSIDE 2-5

Market: Record financial year on the east coast

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Consumer: What to consider when looking to refinance

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Social: NAIDOC week reflection and the Indigenous housing crisis

10-11

Security: ABA pushing for PayID as scam numbers rise

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Australia’s east-coast property market posts record settlements in FY22 Australia’s east-coast property market has powered through back-to-back record-breaking financial years, with more than 628,000 residential property sale settlements – worth an aggregate $554 billion – being completed in FY22, according to the latest report from PEXA Insights.

Despite these stellar results, there are clear signs the market has peaked, with a soft second half of the financial year having been observed.

The nation’s most populous states, Queensland, New South Wales and Victoria all experienced year-onyear volume growth for property sale settlements, with Queensland leading the way with 220,692 residential settlements, up almost 12% from FY21.

However, all three states experienced a noticeable decline in sale settlements from the first half to the second half of the financial year, coinciding with the Reserve Bank of Australia’s decision to lift the official cash rate.

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The key trends across Australia’s east-coast for residential and commercial property in FY22

Queensland • Led the east-coast for growth in residential property, recording 220,692 property sale settlements (up 12% year-on-year) worth more than $148 billion (up 36% year-on-year).

• The state’s commercial property sector also posted strong results, with more than 11,000 settlements worth $24 billion being facilitated.

• Surfers Paradise, Newtown and Urangan all made the top 10 for postcodes that saw the highest number of residential settlements across the eastcoast. The Surfers Paradise and Broadbeach postcodes combined for an aggregate sale settlement value of approximately $6 billion.

QLD recorded the highest volume of residential sale QLD recordedinthe highest settlements FY22 at volume of residential sale settlements over 220K in FY22 at over 220K

NSW posted the highest aggregate value for the second year running NSW

NSW posted the highest aggregate value for the second year running

QLD +11.8%

SALE QLDRESIDENTIAL recorded the highest SETTLEMENTS TOTAL volume of residential sale VOLUME

+1.5%

settlements in FY22 at All states experienced year-on-year over 220K RESIDENTIAL SALE SETTLEMENTS TOTAL VOLUME volume growth in FY22 with QLD up

All states experienced year-on-year volume NSW by posted the highest aggregate value for 11.8%. growth in FY22 with QLD up by 11.8%. the second year running

RESIDENTIAL SALE SETTLEMENTS AGGREGATE VALUE ($B)

NSW

VIC

QLD 203,083

+11.8%

206,052

197,317

220,692

+1.5% +8.6%

+28.8%

RESIDENTIAL SALE SETTLEMENTS TOTAL VOLUME

RESIDENTIAL gains SALE SETTLEMENTS Significant in aggregateAGGREGATE value were observed across the eastern Significant in aggregate value were observed across states ingains FY22, driven by both the eastern states in FY22, driven by both increases in increases in volume and value of volume and value of residential property over that period. residential property over that period.

+36.1%

All states experienced year-on-year volume VALUE ($B) growth in FY22 with QLD up by 11.8%.

203,083

206,052

197,317

220,692

185,445

201,361

+28.8%

$185.2

RESIDENTIAL SALE SETTLEMENTS AGGREGATE VALUE ($B)

$238.5

$109.0

$148.3

+35.2%

+36.1%

FY21 Significant gains in aggregate valueFY22 were observed across the eastern states in FY22, driven by both increases in PEXA, QLD Government, NSWthat Land Registry Services volume Source: and value of residential property over period. $185.2

FY21

$238.5

$109.0

$148.3

$123.6

$167.1

FY22

Source: PEXA, QLD Government, NSW Land Registry Services

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New South Wales • Posted the highest aggregate value of residential settlements of all three states for the second year in a row, recording 206,052 settlements (up 1.5% year-on-year) worth $238.5 billion (up (29% year-on-year).

• The state’s commercial property sector saw 13% growth in sale settlements and led all states in aggregate value with $39.6 billion (up 61% year-on-year).

• Marsden Park placed third in the top 10 postcodes for volume of residential sale settlements and came in at number one for the aggregate value of settlements (more than $3.5 billion).

VIC recorded over VIC recorded over 13.6K 13.6K commercial sale commercial sale settlements in FY22, higher than any other higher state settlements in FY22, QLD saw the other highest growth than any state in both volume (+57.5%) and aggregate value (+108.5%)

NSW

QLD saw the highest growth in both volume (+57.5%) and aggregate value (+108.5%)

SALE VICCOMMERCIAL recorded over SETTLEMENTS 13.6K commercial TOTAL sale VOLUME settlements in FY22, higher VIC topped the nation for than any other COMMERCIAL SALE state SETTLEMENTS TOTAL VOLUME commercial property transactions

VIC the topped the nation forin commercial property QLD saw both volume for thehighest past 2growth financial years. transactions for the past 2 financial years. (+57.5%) and aggregate value (+108.5%)

+13.1%

FY21 NOT AVAILABLE

NSW

11,564

11,164

+60.6% FY21 NOT AVAILABLE

COMMERCIAL SALE SETTLEMENTS AGGREGATE Although recording less transactions than VIC, NSW edged ahead with a Although recording less transactions than VIC, total aggregate value of $39.6B in NSW edged ahead in with a total aggregate value of $39.6B FY22.

VIC topped the nation for commercial property VALUE ($B) transactions for the past 2 financial years.

in FY22.

10,224

11,564

11,164

FY21 NOT 11,045

AVAILABLE

13,696

+60.6% +50.3%

$24.7

COMMERCIAL SALE SETTLEMENTS AGGREGATE VALUE ($B)

$39.6

$24.2

FY21 NOT

Although recording than VIC, NSW FY21less transactions FY22 edged ahead in with a total aggregate value of $39.6B in FY22.Source: PEXA, QLD Government, NSW Land Registry Services

AVAILABLE

1 FY21 not available due to gradual uptake of the PEXA exchange during the year. Estimate $24.7

$39.6

$24.2

$22.6

$34.0

FY22

Source: PEXA, QLD Government, NSW Land Registry Services

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+24.0%

+13.1%

COMMERCIAL SALE SETTLEMENTS TOTAL VOLUME

FY21

VIC

QLD1 10,224

COMMERCIAL SALE SETTLEMENTS AGGREGATE VALUE ($B)

QLD1

1 FY21 not available due to gradual uptake of the PEXA exchange during the year. Estimate provided for QLD in FY22.

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Victoria • Recorded 201,361 residential property sale settlements (up 8.6% yearon-year) worth more than $167 billion (up 35% year-on-year).

• The state led the east-coast for number of commercial property sale settlements with 13,696 (up 24% year-on-year), worth an aggregate of $34 billion (up 50% year-on-year). o Dandenong, Pakenham, Truganina and Epping took out the top four postcodes across the east-coast for total volume of commercial sale settlements.

• Truganina, Craigieburn, Point Cook, Cranbourne East and Clyde North all made the top 10 postcodes for volume of residential sale settlements.

According to PEXA’s Head of Research, Mike Gill: “Due to an extremely strong first half of the financial year, we have seen a record 12 months for residential and commercial sale settlements, both in volume and in value, across the eastcoast of Australia.

“Queensland’s residential property market continued the strong momentum it has demonstrated over recent years recording the most sale settlements of any state in FY22, and both the New South Wales and Victorian markets have shown great buoyancy to also post record numbers in FY22. The commercial property sector across all three states also posted significant growth in both total volume and value.

“However, we have seen a noticeable decline in residential and commercial sale settlement volumes in the second half of FY22 compared to the first half across all three eastern states, with

New South Wales and Victoria seeing the largest falls.

“Over recent months in particular, coinciding with rising interest rates, we have seen the residential property market move to a more historically ‘normal’ setting, following a period of significant growth and annual records.”

The latest PEXA Property Insights report can be accessed via: www.pexa.com.au/insights.

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Finding value for your dollar For the first time in a long time, the cost of living in Australia is a hot topic.

Reserve Bank of Australia Governor Phillip Lowe made note of this in a recent release, remarking that “after many years in which inflation was something that most people didn’t think too much about, it is now a topic of everyday conversation.”

Prime time for refinancing One area that consumers are seeking to secure more bang for their buck is on their home loan.

This is a trend that has been confirmed

by PEXA Insights’ Refinance Index, an online metric which quantifies market performance.

And unfortunately, the outlook ahead does not appear to be bright, with Treasurer Jim Chalmers forecasting The index reached a record high at the testing times in coming months, ahead start of July, as volumes remain strong of expected further rises in inflation. after a bumper FY22.

The impact on consumers The effects are being felt nationwide – with the current economic climate now forcing consumers to evaluate their day-to-day expenditure, explains iSelect spokesperson Sophie Ryan.

“Aussies are experiencing price hikes across the board, from groceries and petrol to electricity prices and interest rates.

“Every dollar counts in these tough times, which is why it’s so important to make sure you’re not paying more than you need to when it comes to household bills and expenses.”

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And as Ryan notes, “with interest rates increasing, the home loan you previously signed up for may not be the best fit for you today. There could be more competitive interest rates out there, which is why now could be a good time to shop around and consider refinancing.

“You may be able to find a lower premium with a different insurer or a home loan with lower repayments.

“Lendi data shows that homeowners are penalized with a ‘loyalty tax’ by remaining with their lender. By considering an alternative lender, Lendi data shows existing Owner

Occupiers on Principal and Interest loans who refinance now could save a median of $1,643 annually.”

What to look for When determining your next steps, Ryan notes that each case is different and it’s best to evaluate your circumstances in order to make the right move.

“If you’re thinking about refinancing, it’s important to be clear on your needs. Whether you’re looking for

additional features, such as an offset account or redraw facility, or perhaps you want a home loan that’s better suited to your current finances and lifestyle.

“Every home loan is different, so make sure you sit down and work out what you need first.”

For more refinance analysis, visit www.pexa.com.au/insights.

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The Indigenous housing crisis

By Jarrod McAleese Many of us recently acknowledged NAIDOC Week – a nationwide celebration held during the first week of July each year (Sunday to Sunday).

The week provides us an opportunity to recognise the history, culture and achievements of Aboriginal and Torres Strait Islander peoples.

Most importantly, in line with this year’s theme of “Get Up, Stand Up, Show Up”, it is a platform for us to advocate for true progress – whether it’s environmental, cultural and heritage protections, Constitutional reform, a comprehensive process of truth-telling, working towards treaties, or calling out racism.

The housing dilemma It’s widely known that Australia is going through a housing crisis.

More than 116,000 Australians are homeless on any given night across the country, while another 1.5 million live in serious housing stress.

And unfortunately, Indigenous Australians are historically overrepresented among people who are homeless and those seeking assistance with housing.

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The ABS 2016 Census showed that Indigenous Australians accounted for more than one-fifth (23%) of the homeless population nationally, despite representing less than 5% of the population.

And according to the 2014–15 National Aboriginal and Torres Strait Islander Social Survey (NATSISS), 29% of Indigenous Australians aged 15 and over had been homeless at some time in their life.

Further, 2019–20 Specialist Homelessness Services data showed that: • Around 71,600 Indigenous Australians received SHS support.

• Indigenous Australians made up 27% of all SHS clients (AIHW 2020).

• More than half (53%, or almost 38,000) of Indigenous SHS clients were aged under 25 compared with 41% (79,800) of nonIndigenous clients (AIHW 2020).

The importance of secure housing cannot be understated. Without this stability, the social exclusion and disadvantage experienced by Indigenous Australians is further compounded.

Proposed reform Anthony Albanese’s Labor Government has pledged to build 30,000 social and affordable houses over five years through its $10 billion Housing Australia Future Fund.

Notably, within the first five years of this initiative, $200 million has been committed to the repair, maintenance and improvements of housing in remote Indigenous communities.

Looking forward By virtue of our role in the property ecosystem, at PEXA, we work to house people.

Our commitment to tackle homelessness through the creation of more sustainable and affordable housing, together with Homes for Homes, is a natural extension of this purpose.

It’s for this reason that we’re also extremely passionate about the housing gap being closed for Indigenous Australians.

It’s our hope that these measures being introduced, in tandem with further collaboration will help contribute to advances being made for the Indigenous community.

Housing Minister Julie Collins has also recently led a forum with her state and territory colleagues to discuss national And in the wake of this NAIDOC housing and homelessness strategies Week and as we move into FY23, we’ll – the first of its kind in five years. continue to raise awareness of these issues and advocate for progress.

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Scam numbers on the rise as the push for PayID continues

By Jarrod McAleese Australians are unfortunately falling victim to cyber-crime in record numbers.

A recent ACCC Targeting Scams report revealed that Australian businesses had lost $227 million to payment redirection scams in 2021, a 77% increase compared to 2020.

It was also confirmed that payment redirection scams were the single most financially damaging scams for Australian businesses in the previous year.

A typical payment redirection scam involves scammers impersonating a business or its employees via email or other channels and requesting an upcoming payment be redirected to a fraudulent account. This is also commonly referred to as Business Email Compromise (BEC).

Breakdown of 2021 scam reports and losses by business size (Scamwatch data only)

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The threat to our sector Buying and selling a home is one of the most emotionally charged and financially significant transactions a person will ever make – a truly critical milestone in anyone’s life.

Given the sums involved and the nature of the information being exchanged, industry professionals servicing Australia’s homebuyers and sellers; conveyancers, lawyers, bank representatives and real estate agents, are a prime target for cyber criminals and specifically, payment redirection scams.

ACCC data found that it was our smaller businesses that were hit the hardest.

Scam type

Number of reports

Reported losses

Micro (0-4 staff)

1,093

$3.5m

Small (5-19 staff)

890

$3.5m

Medium (20-199 staff)

551

$4.2m

Large (over 200 staff)

319

$421k

Size of business not provided

771

$1.7m

Industry reform It’s clear that there is much to be done to buck this trend.

In response to these figures and having been called on by ACCC Deputy Chair Delia Rickard to take action, the Australian Banking Association (ABA) has just confirmed the launch of the “Australian Banks: Working to Protect You” PayID campaign.

PayID connects bank account details with a mobile number or email address to enable real time payments.

ABA CEO Anna Bligh, in a statement, explained that the widely adopted, secure method should be adopted by more Australians.

“PayID is free to register, easy to use and to date there are more than 11 million PayIDs registered in Australia, but we would like to see even more. Customers can have multiple PayIDs, including their phone number, registered emails, or even their ABN in the case of a business.

“17% of all real time payments are now made using PayID and this campaign aims to accelerate the growth of these payments.

“PayID is as simple as using the mobile number or email address of the person or business you wish to pay to make a payment, unlike a traditional payment where you need both a BSB and an account number.”

And most notably, Bligh said that the method can help to mitigate the risk of potential scams.

“Critically, it helps to stop scams because unlike a traditional payment, the payer can see a confirmation screen, which includes the intended PayID name, before they confirm the payment.

“The more payments we see using PayID, the more protected customers will be.”

PEXA’s Chief Information Security Officer, David Willett, encouraged the move.

“In our sector, there is absolutely zero tolerance for risk. There should be no stone left unturned in ensuring the level of security protecting Australia’s property settlements – and that’s why PEXA will always support initiatives like this and any endeavours which aim to reduce the risks associated with payment redirection scams.”

Businesses that are the victims of a cybercrime, such as payment redirection scams or ransomware, should report the incident to ReportCyber as soon as possible.

ReportCyber is run by the Australian Cyber Security Centre and passes reports to law enforcement agencies for assessment and intelligence purposes.

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Do you have feedback, a question or a story pitch?

Get in touch with us at industry@pexa.com.au

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