Australian Property Market: A Mixed Bag of Growth and Declines in 2023
The Australian property market in 2023 has presented a complex picture, with some regions witnessing significant growth while others experienced notable declines. Kate Ainsworth and Elizabeth Redman, through their insightful articles, have shed light on this multifaceted market landscape.
According to Kate Ainsworth’s article, which relies on data from PropTrack, a division of REA Group, property prices in Australia have generally seen an upward trend, with the national median house price increasing by 5.4% in 2023. This growth is especially pronounced in capital cities where house prices rose by 6.5% over 12 months. However, certain suburbs and regional areas have not followed this pattern, seeing substantial declines in their median house prices. Anne Flaherty, a PropTrack economist, noted, “We’ve had 13 interest rate rises, which have reduced borrowing capacities by around 30 per cent. Despite that, property prices nationally have increased… and are sitting 5 per cent higher compared to where they were a year ago.”
In Tasmania, suburbs like Carlton experienced a 13.3% fall in house prices over the last year, with nearby suburbs also seeing declines over 11%. Flaherty attributes this to a cooldown in demand post-pandemic, coupled with high interest rates, leading to a market correction. “Hobart really dominates the list of suburbs that have been big price drops over the past year,” Flaherty stated, adding that “these were areas that really outperformed during the pandemic.”
Elizabeth Redman’s report complements this analysis, highlighting how Sydney and Melbourne also witnessed contrasting trends. Sydney’s home values grew by 10.2%, while Melbourne saw a modest 3% increase. Perth emerged as the strongest performer with a 13.5% growth in home values. This growth, according to CoreLogic’s Eliza Owen, is “pretty extraordinary” given the continuing rate hikes. Owen observes a late slowdown in Sydney and Melbourne, indicating a potential shift in trends for 2024. “I expect slower growth – mostly in the Sydney and Melbourne markets,” she said.
Both articles emphasize the impact of the pandemic and subsequent interest rate rises on the property market. While some areas saw skyrocketing demand and prices during the pandemic, the situation has now reversed in many of these regions. The disparity in growth rates across different areas indicates a market in transition, responding to a complex mix of economic factors.
As we head into 2024, the Australian property market remains a puzzle, with some areas poised for continued growth while others may face further price corrections. This uneven landscape suggests that potential buyers and investors need to be increasingly discerning and aware of local market conditions.
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