The first six months of 2023 saw a 2.3 per cent increase in property prices, which is set to be matched or even exceeded by the last half of the year, according to new data.
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PropTrack’s Property Market Outlook reports that national property prices are expected to increase between 2 per cent and 5 per cent by the end of 2023.
The capitals may see prices top that, with all of the capital cities except Hobart and Darwin expected to see positive price growth over the remainder of the year – the firm’s analysts putting the cumulative capital city figures somewhere in the 3 per cent to 6 per cent range.
The strongest growth is expected in Perth (4 per cent to 7 per cent), Sydney and Adelaide (both 3 per cent to 6 per cent) and Brisbane (1 per cent to 4 per cent).
Melbourne’s outlook is iffy, with figures falling in the range of -1 per cent to 2 per cent, while any growth in Canberra is projected to be modest (0 per cent to 3 per cent).
PropTrack director of economic research and the report’s author, Cameron Kusher, said that a lack of available properties had been the main reason for the rebound in property prices at the start of the year, but that other factors would come into play in the final six months of 2023.
“The property market has seen a turnaround this year with six consecutive months of property price growth. Limited supply of available properties for sale was a key factor contributing to buyer competition and price growth,” he said.
The data from the start of the year indicated “a shift in the housing market,” according to Mr Kusher, who said the trajectory was clear that the declines experienced at the end of 2022 were being reversed.
Despite rising interest rates and reduced borrowing capacities, he said that moderate price increases are predicted to continue through to December.
After that, however, the forecast becomes murky.
“The outlook for 2024 is much less clear with a large cohort of fixed-rate borrowers’ mortgages set to expire from current interest rates of around 2 per cent and reset to around 6 per cent,” Mr Kusher noted.
“Interest rate changes act with a lag, and as such, the possible impact of higher repayments on these borrowers won’t be seen until 2024. At this stage, we are forecasting modest price growth in 2024,” he said.
The availability of properties will play an important part in determining how great those gains are. From here, the direction of the housing market is likely to be influenced by the volume of stock available for sale.
Across the capital cities, the volume of total stock for sale remains historically low, with the total number of properties listed for sale on realestate.com.au down 9.6 per cent year-on-year in June 2023.
The ongoing low supply of properties available for sale has contributed to the price rebound in 2023 so far. But while many potential sellers have held off due to the downturn, an uptick in prices may urge more sellers to come to the market, therefore slowing price growth as options increase for interested buyers.
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.
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