After dramatic rises in property prices followed by steep lows, we give you the latest data on the Australian property market. As ever, the market is different across the country, with Sydney seeing continued falls and Melbourne’s prices edging upwards.
What has happened in the Australia property market?
Here’s a little summary of what has been going on in Australian real estate. Over the course of the pandemic, for the most part, property prices across the country boomed. This was because the Australian government cut interest rates and savings grew. Additionally, the growth of working from home meant that people were no longer tied to wherever their job and could instead look further afield. Many opted to shake up their lifestyle with a move to a rural or coastal location – if you’re also interested in this lifestyle, check out this article on four gorgeous spots in regional Victoria.
In 2022, prices dramatically dropped, with areas that had the greatest pandemic price rises experiencing the greatest falls. For example, real estate in some suburbs in Sydney (where prices really rose) returned to their pre-pandemic levels. Experts disputed how exactly to decipher these great price drops. But many saw it as a “correction” rather than a fall. In other words, property prices had become unsustainably steep during the pandemic, and this was real estate’s way of amending that.
What is the latest information on Australia’s property market?
As we near the end of the first month of 2023, we can take a look at whether property prices have fallen further, risen, or indeed, stabilised.
Domain, leading property market experts in Australia, have published data showing that the Australian property market has slowed down. In the build-up to December, nationally, house and unit prices fell by less than 1%.
It shows that house prices fell in Sydney, Brisbane, and Canberra over the December quarter. In both Sydney and Canberra, house prices have fallen for three consecutive quarters. This is the steepest annual decline in both city’s histories. For Brisbane, it has been the steepest fall in a decade.
However, for the most part, prices still have a long way to go before they return to their pre-pandemic levels. For example, in Sydney, even with an 11.3% loss, house prices are still 24.2% more expensive than before the pandemic.
Meanwhile, in Melbourne, Adelaide, Hobart, and Perth, prices edged upwards. Although, units in Melbourne saw the biggest fall in their history. In Darwin, house prices increased by 3.3%. If anything, this is a reminder that the Australian property market really is not a monolith. And in the run up to purchasing a home there, you should really zone in on what is happening in the specific market you are looking at, say the Melbourne suburbs.
What does this mean for buyers?
During the pandemic, the housing market was extremely competitive. Many, especially first-time buyers, struggled to get a look in. Now, with the property market settling more, buyers feel increasingly confident with their decision-making around buying a home. Meanwhile, renting in Australia has become intensely competitive with prices constantly hiking – many have even framed it as a crisis. Across the country, vacancies are at record lows and if anything does come on the market, it is usually picked up by the very first viewer. To be in with a chance, it is recommended that you organise an early private inspection with a leasing agent – difficult to do from the other side of the world. In Victoria, 1 in 5 prospective renters are offering more rent than is asked for to secure a place. So, if you have the finances to do either and are torn between renting and purchasing a property in Australia, buying is possibly a more accessible and a less daunting option.