When asked the question ‘Would you live in a housing development?’ over 60% of respondents said yes.

Two main types of buyer

When we dig deeper into the data, we can begin to carve out a typical housing development buyer persona, mainly based on people’s life stages.

Although more than half of all respondents stated they would consider buying into a housing development, there were clearly two demographic groups evident:

1. Younger aspirational buyers

Those most likely to buy in to a residential development are typically younger – under 35 years old – and are interested in investment properties.

This aspirational group favour housing developments over established stock, and here are some reasons why this might be so:

Established stock in premium areas tend to have a higher initial buy-in cost, compared to new developments that are usually further out in new communities

Younger property buyers hoping to use a housing development as a stepping stone will consider new developments that are more affordable than established stock

From an investment perspective, newly built properties also offer depreciation benefits on fixtures and fittings in the first five or so years and this may be attractive to buyers on rising salaries

2. Established mature buyers

These buyers tend to be older and are more likely to have established families with children, and show much less interest in housing developments than their younger counterparts. This means that from a home-buyer perspective these buyers may have already settled in to existing housing stock.

This became clearer when other data points were uncovered, including;

The group’s propensity to be bringing in household incomes greater than $90K per year

A greater propensity to be working only part-time. It is likely this group is more focused on family duties than developing a full time career, or perhaps other investments are providing additional household incomes.

The data suggests that housing developments are favoured more so by young investors than mature home-owners. But those who sit in the middle of these two demographics shouldn’t necessarily shy away from developments. For instance, investors who are growing their career salary may find appeal in a modern development from a tax depreciation perspective.

RP Data has revealed an increase in Australia’s capital city dwelling values of 1.3% in October, with the Sydne­y housing market the largest driver (a 5.5% increase in property values).

The weakest performing city was Hobart, which showed a 0.6% decrease in value.

Highest rental yields were seen in Darwin with a gross rental yield of 6.2% for houses and 6.3% for units. Lowest rental yields were seen in Melbourne with a gross rental yield of 3.4% for houses and 4.3% for units.

According to the Real Estate Institute of Victoria nearly one billion dollars worth of property changed hands over the weekend of the 26-27 October – a record setting figure of $914 million worth of property sold by auction.

1460 properties were sold over the bumper weekend. 1064 went under the hammer, with a clearance rate of 73%.

“Auction clearance rates have been above 70% for the past three months, and in such conditions the market should run strong until mid-December, with prices expected to rise”, said Enzo Raimondo, Chief Executive Officer, REIV

“Currently the Melbourne median house price is $595,500, an increase of nearly 9%. If the market strength continues, this could well tip over $600,000 in the next quarter.”

The move, or lack of one, was in line with economist predictions, and market conditions that have been turning a corner in recent months. Values are climbing, clearance rates are up with consumer confidence, and construction numbers are improving. But there’s enough uncertainty for the Board to hold fast rather than risking further change.

Here’s some of what RBA Governor Glenn Stevens had to say:

Volatility in financial markets has abated recently. Long-term interest rates remain very low and there is ample funding available for creditworthy borrowers.

In Australia, the economy has been growing a bit below trend over the past year and the unemployment rate has edged higher. This is likely to persist in the near term, as the economy adjusts to lower levels of mining investment. Further ahead, private demand outside the mining sector is expected to increase at a faster pace, though considerable uncertainty surrounds this outlook. There has been an improvement in indicators of household and business sentiment recently, but it is still too soon to judge how persistent this will be. Public spending is forecast to be quite weak.

Recent data on prices show inflation consistent with the medium-term target. The Bank’s assessment is that this is likely to remain the case over the next one to two years.

The easing in monetary policy that has already occurred since late 2011 has supported interest-sensitive spending and asset values. The full effects of these decisions are still coming through, and will be for a while yet. The pace of borrowing has remained relatively subdued overall to date, though recently there have been signs of increased demand for finance by households. There is also continuing evidence of a shift in savers’ behaviour in response to declining returns on low-risk assets. Housing and equity markets have strengthened further, trends which should in time be supportive of investment.

The Australian dollar, while below its level earlier in the year, is still uncomfortably high. A lower level of the exchange rate is likely to be needed to achieve balanced growth in the economy.

RP Data national research director Tim Lawless agreed the decision is intended to ease more buyers into the market, and not ripple slowly calming waters.

“Transaction numbers are close to 20% higher compared with a year ago and dwelling values across our combined capitals index have risen by 7.9% over the past 12 months,” he said.

“The improvement in housing market sentiment has flown through to improved developer sentiment as well, with the number of dwelling approvals showing a marked improvement over recent months.  In our view, the RBA will remain vigilant on the housing market, particular the Sydney and Melbourne housing market where values are rising at a faster rate than other cities.”

Westpac’s chief economist Bill Evans pointed to a tradition of November rate moves, noting that since 2006, “25% all moves have occurred in November – remarkable given that only 9% of meetings have been held in November.”

When it comes to researching where to live, both cities have their pros and cons. Think cost of living, public transport, health system, community engagement and even the weather. However we wanted to dig a little deeper and find out what really matters to buyers in Melbourne and Sydney when they’re searching for their dream home, and the suburb they want to live in.

With this in mind, we conducted a buyer survey to compare buying preferences of house hunters in both cities, and how their responses matched up against buyer demand data such as auction clearance rates and the most searched suburbs on the realestateview.com.au website – producing some interesting results…

Sydney-siders prefer the great outdoors; Melburnians can’t get enough of their city

In the survey, buyers were asked to rank the top property and suburb features they considered important when buying a home. Interestingly, Melbourne buyers ranked a good floor plan above their Sydney cousins, while a property that had a garage/car space as well as an outdoor area were both higher up the list of priorities for buyers in Sydney compared to Melbourne. Does this indicate that Sydney residents value big houses and outdoor space more than their Melbourne counterparts? It certainly appears to be the case, especially when comparing this data with the most searched suburbs in both states which revealed the highest demand was for inner city suburbs in Melbourne while Sydney-siders are more actively seeking property at least 20kms from the CBD.

More cars on Sydney roads while Melbourne hosts a city of commuters…

Perhaps Sydney’s love for the great outdoors has meant a greater reliance on cars, with the city’s buyers ranking traffic as their second highest consideration ­when choosing a suburb to live in. Conversely Melburnians seem to have a preference for properties located close to public transport, ranking public transport access higher up the list – a sentiment backed by auction clearance data which shows the suburbs with the highest clearance rates in Melbourne all have good access to public transport.

Value for money drives Melbourne buyers, Sydney residents want to live the dream

Taking a closer look at the suburbs with the highest auction clearance rates, value for money seems to be the key driver in the Melbourne auction market – with the list comprising ‘next-door’ suburbs such as Ivanhoe East, Surrey Hills, Carlton North, all of which offer more ‘bang for buck’ than their traditionally more affluent neighbours Ivanhoe, Balwyn and Fitzroy / Carlton. In comparison, the Sydney auction market appears to be strong in suburbs located within a 20km radius of the CBD – and with a majority of these suburbs known for their large homes and backyards, it’s clear Sydney residents refuse to compromise on their love for space.

What they have in common…

Despite the nuances, there is some common ground for house hunters in both cities. Price, location and the potential for a property to rise in value are all top of their list of key property considerations, while neighbourhood safety is the shared number one concern when it comes to researching a suburb.

Differences and rivalry aside, whether you are a buyer in Melbourne or Sydney, both states have undeniable appeal to make you lucky to call them home. It’s no surprise as buyers and residents we put a lot of weight on the “best city” or “best suburb” or even “best location”, however what’s important to remember is it’s our differences that make us who we are.

Check out the infographic below summarising key data and stats contained within this article!