Australia’s Property Market Defies Convention: Top Factors Driving House Prices in 2023-24 - Property Inc

Australia’s Property Market Defies Convention: Top Factors Driving House Prices in 2023-24

In an unanticipated move, Australia’s property market has remained resilient despite the sharpest interest rate rise in three decades. House prices rebounded even as rates surged, a phenomenon most recently seen in 1994. Yet, experts argue that historical parallels fall short in explaining the current property market trends due to the unique influences of the pandemic (Malo, 2023).

This development has prompted economists and industry experts to identify a host of determinants shaping the property market landscape in 2023-24. From supply constraints to high migration and changes in household sizes, multiple factors are reportedly driving house price growth.

According to CoreLogic’s head of Australian research, Eliza Owen, the current economic situation has significantly disrupted conventional wisdom about property market responsiveness to interest rate increases. “I don’t think there’s been any data set or indicator that hasn’t been rocked by what we’ve been through in the past three years” (Malo, 2023).

Contrary to historical patterns, house prices began to increase during the rate rise cycle, even before the cash rate had peaked (Malo, 2023). This trend has been attributed to heightened consumer attention to the Reserve Bank of Australia’s (RBA) hiking cycle.

According to Hayden Groves, the President of the Real Estate Institute of Australia (REIA), supply, or the lack thereof, is one of the top ten factors that will shape the property market over the next year. “That’s the key feature of Australia’s property market over the next 12 months and emphasises the subsequent urgent need for all tiers of government to address housing supply in a meaningful way” (API Journalists, 2023).

Another factor Groves highlights is the rising construction costs and a slowdown in construction approvals. This situation further aggravates the supply shortage and pushes prices upward (API Journalists, 2023).

AMP Chief Economist Shane Oliver agrees with this sentiment, indicating that interest rate increases have had a less than anticipated impact on the property market. This, he posits, is due to economic indicators such as unemployment and international migration remaining unexpectedly resilient. Oliver stated, “This time it’s all back to front. Earlier this year [prices] bottomed out and then started rising when rates hadn’t stopped rising” (Malo, 2023).

Other factors flagged by Groves, like the burgeoning build-to-rent sector, constrained rental supply, high construction costs, and mortgage stress, also contribute to the intricate matrix affecting Australia’s property market.

Overall, the interplay of these variables paints a complex picture of the property market in 2023-24. House prices, once thought to be inextricably tied to interest rates, now dance to a new tune, echoing the resilience of the Australian property market in the face of a historically tumultuous time. The market’s responsiveness to a multitude of factors, and its disregard for old norms, has both economists and investors eager to see what the future holds.


Malo, J. (2023). This year’s house price rise was a shock. But history left some clues behind. Retrieved from 

API Journalists. (2023). Top 10 factors shaping property market in 2023-24. Retrieved from 

Recommend0 recommendationsPublished in Property News

Related Articles