Latest Australian Property Market Insights:
Week Ending 8th Dec ’23
Property Weekly Pulse with Rasti:
As we wrap up the week of 08 Dec ’23, I’m thrilled to bring you the latest pulse of the Australian property market. This update is packed with pivotal trends and data points, capturing the essence of our dynamic real estate landscape. Whether you’re a savvy investor or a curious first-time buyer, this article is your gateway to understanding the subtleties and shifts that are shaping the future of property in Australia. So, let’s jump right in and unravel the insights that will keep you a step ahead in the property game!
Record-Breaking Growth in Property Prices
In an extraordinary leap, the Australian property market hit a national record high in November, with CoreLogic’s Home Value Index climbing by 0.6%. This might be the smallest monthly increase since February, yet it was enough to break the record. Since the market’s low point in January 2023, we’ve witnessed housing values rise by 8.3%.
However, not all cities shared this upward trend. Darwin, Melbourne, and Hobart saw slight decreases in property values. CoreLogic’s research director, Tim Lawless, attributes this to an imbalance between supply and demand, affecting housing values in most markets. Rising stock levels, deteriorating affordability, and low consumer sentiment played their parts in these cities’ declining values.
Forecasting the Future: Will the Rise in Prices Continue?
● Predicted Growth: Despite 13 cash rate hikes and ongoing cost-of-living challenges, property prices persisted in their upward trend throughout 2023. Experts predict another 6% to 8% increase in capital city house prices in 2024, with Sydney potentially seeing growth between 7% and 9%.
● Driving Factors: This growth is underpinned by post-COVID migration and population increases, continuing to put upward pressure on housing prices.
Interest Rates: Walking a Tightrope
Former Reserve Bank of Australia governor Philip Lowe voiced concerns over whether the current interest rates are sufficient to rein in inflation. This balance of rates is critical, as government measures like cost-of-living assistance can inadvertently fuel inflation.
First Home Buyers: Seeking Affordability
First-home buyers are making interesting moves in the market. Data shows a shift towards more affordable, outer suburban areas:
● Hotspots: In New South Wales, areas like Liverpool’s 2170 postcode are attracting these buyers. Similarly, Melbourne’s outer north and regional Queensland’s Mackay are buzzing with activity.
● Why the Shift? According to PropTrack senior economist Angus Moore, financial constraints are driving first-home buyers to these areas.
Building Approvals: A Concerning Trend
Despite a slight uptick in October, building approvals remain worryingly low. Tom Devitt from the Housing Industry Association notes a significant drop compared to last year, indicating a shrinking building pipeline. This trend might lead to the lowest number of new house constructions in over a decade by 2024.
Signing off, I’m Rasti Vaibhav, your Architect of Property Wealth. Understanding these market nuances is key to making informed decisions about your property investments. If you’re pondering your next move or want a chat about your personal circumstances and how property investing can work for you, book a time (https://getrare.com.au/ready) with me. Alternatively, expand your knowledge at our educational workshops (https://getrare.com.au/workshop).
Let’s navigate these exciting yet complex waters together!