Australia’s Property Market: Booming Sales and Quick Resales Dominating 2023 Trends

Australia’s real estate arena is witnessing intriguing trends in 2023, as properties continue to appreciate in value and fast property turnovers dominate certain regional areas.

According to a report by REA Group, Australia’s real estate prices are forecasted to see a rise of 2% to 5% by the end of this year, attributed to the low housing volume and an amplified demand for luxury residential properties, particularly from international visitors. Lucy Ingham reports, “Perth, Sydney, and Adelaide will be the cities experiencing the main growth”. Despite some cities, like Hobart, predicted to experience price drops, overall, the low housing supply coupled with increasing interest rates are expected to sustain steady growth.

Cameron Kusher, the Director of Economic Research at PropTrack, hints at potential turbulence in 2024, particularly for the luxury housing market, owing to possible resets in many fixed-rate mortgages. Yet, for the remainder of 2023, he remains optimistic, suggesting that “Australia’s luxury property prices could increase by as much as 5% before the end of 2023 and even more in major cities”.

On a different note, while the tradition has been to view real estate as a long-term investment, 2023 has seen a significant rise in short-term property resales, especially in regional Australia. Daniel Butkovich shares, “The proportion of properties listed for sale less than three years after purchase has spiked in many regions outside the capital cities”. Notably, Queensland’s coastal areas have recorded an unprecedented number of these short turnaround listings.

Angus Moore, PropTrack senior economist, explains the phenomenon: “People in these areas have seen prices grow faster than they’ve expected. That’s giving them substantial equity gains and enabling them to upgrade sooner than they might otherwise have planned”. A specific example being the Wide Bay region, where about 28% of listed properties were bought less than three years ago, a significant surge from the usual 18%.

Interestingly, some motivations behind these quick resales include initial panic buying during the pandemic and a certain degree of “tree change regret”. Karl Latham, a real estate agent based in Cairns, shares insights about some buyers, “A lot of people who came up from Melbourne… when Melbourne opened back up… a lot of them decided to go back to the city”.

The dynamic combination of soaring prices in regional areas and the incentive to make significant gains on property sales seems to be driving this trend. While rising interest rates may have spurred some to sell, Moore argues that the primary motivation remains price growth rather than mortgage stress.

In conclusion, 2023 presents an intriguing phase for the Australian real estate market, with city property prices booming and regional areas witnessing a surge in quick property turnovers.

References:

Ingham, Lucy. “Australia’s property market predicted to continue booming in 2023.” https://www.fxcompared.com/magazine/news/australias-property-market-predicted-continue-booming-2023 

Butkovich, Daniel. “In and out in three years: Why quick property resales are on the rise in regional Australia.” ↩ https://www.realestate.com.au/news/in-and-out-in-three-years-why-quick-property-resales-are-on-the-rise-in-regional-australia/