Australian Property Market: Staying Strong Despite Challenges

The Australian property market has continued its upward trajectory, defying expectations and economic headwinds, with property prices remaining remarkably robust despite a series of interest rate hikes, elevated inflation, and tightening borrowing conditions.

As we are now in the Spring selling season, the resilience of the property market has left many experts surprised, with values in our capital cities showing an impressive 4.9% increase year-to-date.

This stark contrast to pessimistic forecasts made by banking economists at the end of the previous year has ignited discussions about the factors underpinning this market's remarkable strength.

While it's true that property prices have shown remarkable resilience, it's also important to note that the pace of growth may now begin to moderate for the remainder of the year.

The key indicators and dynamics within the property market provide valuable insights into the current landscape:

1. Increasing Supply: The pipeline of new property listings is slowly on the rise. Many experts believe that this surge in supply could be the catalyst for slowing down property price growth. However, it's essential to keep in mind that the available stock for sale remains low compared to historical standards.

2. Regional Variations: Property price movements vary significantly across Australia's major cities. For instance, Sydney has experienced a 0.2% weekly increase, a 0.9% monthly increase, and an impressive 7.2% year-to-date increase, outperforming the market's expectations. Melbourne and Brisbane have also shown resilience, though Melbourne still faces a year-on-year decline.

3. National Perspective: When viewed on a national scale, Australian capital dwelling prices have increased by 0.9% over the last month and are now only slightly down by -0.3% over the last 12 months.

The current scenario presents a window of opportunity for potential buyers and investors. While it is true that properties are generally still priced below their recent peaks, this gap is rapidly narrowing. As we transition into this new phase of the property cycle, it becomes increasingly apparent that the property market is poised for further growth, with the potential to reach new heights.

However, this resilience should be seen as part of a complex interplay of various factors. Low-interest rates, government incentives, and a post-pandemic desire for housing upgrades have all contributed to the market's buoyancy. Still, it's crucial to monitor the evolving economic landscape, as factors such as inflation and lending conditions could impact the property market in the future.

Paulette Contessi 

Director/ Licensee

CONTESSI PROPERTIES