Australia’s Property Market Nears Record Highs Amid Positive Momentum

Australia’s property market is on the brink of a historic rebound, as data indicates that the national median house price is edging closer to its pandemic boom highs. The market’s resilient surge is not just localized but has been observed across major cities, with some regions already hitting new records. This recovery is also mirrored in the NAB Residential Property Index, which maintains its upward trajectory amidst constrained supply conditions and increasing demand.

In her recent article, Maria Gil highlighted that the national median house price is only $2000 away from matching pandemic records. The latest House Price Report by Domain indicates a swift recovery from the steepest fall recorded last year. This turnaround is evident in cities like Sydney and Brisbane, where property prices are expected to surpass their previous highs by the end of the year.

Notably, Sydney’s housing market has shown a formidable recovery by recouping a majority of its downturn losses, with Brisbane not far behind. On the other hand, Adelaide and Perth avoided the downturn altogether, already marking new price records.

Dr. Nicola Powell, Domain’s chief of research and economics, remarked on the slowed pace of growth this quarter. She noted, “The pace of price growth is losing momentum. We saw quite a strong start to the year in terms of price rise, but now we’ve started to see the pace of growth still be positive, but it moderated”.

Mina Martin’s analysis of the NAB Residential Property Index also paints an optimistic picture. In the third quarter, the index soared to +40 points, surpassing the previous quarter’s +33 points and the +9 points recorded in the same period last year.

Alan Oster, NAB’s group chief economist, reflected this positive sentiment, pointing out that the confidence among property professionals is at its highest in approximately two years. This suggests stronger expectations for housing market recovery in the coming years.

However, it’s not all smooth sailing. Both reports indicate challenges, particularly with supply. Dr. Powell emphasized that the surge in new listings has given buyers more options, thereby reducing urgency. Similarly, Oster emphasized the challenges posed by “rising interest rates” and “lack of stock”, particularly in Western Australia.

In conclusion, as Australia’s property market steers towards its pre-pandemic highs, the dynamics of supply and demand, coupled with economic indicators like interest rates, will play a crucial role in determining its future trajectory.

References:

“Australia’s property market has almost fully recovered from the downturn and nearing pandemic record highs” by Maria Gil https://www.domain.com.au/news/house-price-growth-loses-momentum-as-all-australian-capital-cities-are-in-recovery-1244345/