Australia’s Property Market Nearing Full Recovery with Rising Housing Confidence
Australia’s property market is inching closer to a complete recovery, with house prices almost reaching a new milestone and housing confidence at a two-year high, according to recent reports by Domain and the National Australia Bank (NAB).
According to a report by Mina Martin in Domain, the country’s property market is projected to fully recover by the end of 2023. Domain’s House Price Report for the September quarter highlighted that houses and units saw growth for the third and second consecutive quarters, respectively. Specifically, there was a 1.9% increase for houses and a 1.8% increase for units over the quarter. Although the growth rate has decreased from the previous quarter, it’s notable that “house prices have risen on an annual basis for the first time in a year, and unit prices have been on the rise since mid-2022,” says the report.
Nicola Powell, Domain’s chief of research and economics, stated, “September’s quarter confirms all Australian capital cities are in recovery or at a price peak.” Sydney has taken the lead in this recovery, closely followed by Brisbane. Both cities are anticipated to see their house prices return to previous peaks by the end of the year. Powell attributed the impressive numbers to factors such as interstate migration, overseas migration, a tight rental market, and chronic housing undersupply. However, she did point out that “if mortgage rates weren’t as high as they currently are, price growth would be faster with the current housing undersupply.”
In addition to this optimistic outlook, Sophie Foster, writing for another source, discusses the results of the Q3 2023 Quarterly Australian Residential Property Survey by NAB. This survey indicates that housing confidence has reached its highest point in two years, with a significant increase in foreign buyers and climbing national rents.
The NAB states, “Expectations for a housing market recovery over the next few years strengthened, with confidence levels among surveyed property professionals rising to their highest levels in around two years.” The National Australia Bank has adjusted its forecast for house prices to a 1.5% rise in the upcoming year and 2.4% over the next two years. This boost in confidence and anticipated price growth comes amid expectations of the RBA reaching its peak for interest rates and potentially cutting rates in the second half of 2024.
However, challenges persist, especially for potential buyers. Foster highlights in her article that a notable obstacle now is the shortage of stock, followed by difficulties in accessing credit and the current price levels.
In conclusion, the Australian property market shows signs of resilience and potential growth, with both reports indicating a positive trajectory. As Powell from Domain rightly points out, “During the last quarter, choice has also risen for buyers, as sellers regain market confidence and pent-up supply makes its mark.”
References:
“Australian property market nears full recovery – Domain” by Mina Martin https://www.mpamag.com/au/news/general/australian-property-market-nears-full-recovery-domain/464228
“Housing confidence at two-year high as first rate falls pencilled in” by Sophie Foster https://www.realestate.com.au/news/housing-confidence-at-twoyear-high-as-first-rate-falls-pencilled-in/?campaignType=external&campaignChannel=syndication&campaignName=ncacont&campaignContent=&campaignSource=herald_sun&campaignPlacement=spa
Responses