New industry analysis highlights the importance of paying attention to micro-trends across the country, as shifting economic factors exert pressure on prices, but not always in the ways one might expect.
PRD’s latest economic and property report for 2022 is aptly titled, Different markets, different speeds, and the story it tells is certainly that.
“Markets within markets” is how the network has described the state of affairs just past the half-way point in the year, with the report noting that since the onset of the COVID-19 pandemic, the prevailing lesson has been to expect the unexpected.
When it comes to the capitals, that means that Australians should remember that no two cities are alike at this moment in time.
“Capital city markets have seen a slower pace of median house price growth in the 12 months to the first half of 2022. That said, different capital cities behaved differently. A similar pattern of median house price growth can be seen in metropolitan markets, however there is more uniformity in regional markets,” it noted.
According to the brand’s chief economist, Dr Diaswati Mardiasmo, suburbs around the country are now being ruled by a delicate dance of supply and demand, which are not only swayed by national factors, but by local ones as well.
One such element at play is the returning influx of home-seekers from overseas, with open borders now welcoming migrants back to Australian shores and impacting demographic trends.
“A key component in 2022 is our demographics. International students and long-term overseas visitors are back in droves, translating to a higher level of demand for housing stock,” she noted.
And even the changes taking place more broadly across the country are having different impacts in different markets, Dr Mardiasmo said.
“2022 brings new challenges to the property market, on top of issues faced in 2021. The Reserve Bank of Australia has changed its policy stance, whilst the federal government has not.
“As a result, each property market is reacting differently to the current forces at hand. Depending on demand and supply, the market can still be growing, holding steady, or turning to a decline”.
She pointed to Sydney and Melbourne’s recent performance in comparison to Brisbane, Perth, Hobart and Darwin. While the former have seen a substantial turn in their markets, the latter did not. Meanwhile, in the regions, growth may have slowed somewhat, but across the board, they are still recording double-digit price increases.
Rental yields, too, are moving at different speeds, depending on the balance between property price and rental price growth, the report noted.
And shifts in consumer confidence — with buyers’ trust in the market returning to low levels not seen since June/July 2020 — as well as a dip in owner-occupier activity and the returning strength of investors are also likely to continue to have impacts on a hyperlocal scale as the year plays out.
According to Dr Mardiasmo, the message is to home in on your market.
“Many more events and disruptions will colour the rest of 2022 and early 2023, creating a seemingly never-ending seesaw of demand and supply balance in the Australian property market. Where to from here? The key is localised, granular market analysis,” she said.
ABOUT THE AUTHOR
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.