This article is from the Australian Property Journal archive
IF the current growth trajectory continues, national property prices could be back to positive annual growth by July this year.
According to the latest Market Insight report from PropTrack, national home prices could be back on the positive track by July and even overtaking their previous peak by January in 2024.
“Housing demand is stronger, likely bolstered by the surge in net overseas migration, as well as very tight rental markets,” said Eleanor Creagh, senior economist at PropTrack.
“Given limited new stock is coming to market, buyer interest is being concentrated, which is underpinning home prices and offsetting the downward pressure from interest rate rises. If the pace of price growth recorded over the past quarter continues, national property prices will surpass their prior peak by January 2024.”
Under these conditions, with five months of price growth and more widespread positive conditions, Australian home prices could lift by 4.0% over 2023.
“However, there are factors that may weigh on the pace of price rises ahead,” added Creagh.
“Price growth may wane if stronger market conditions improve seller confidence and spark a boost in stock coming to market. Interest rates also rose again in June and may rise further, which could slow the recovery.”
In Sydney, prices are down 4.4% from their peak in February 2022, but are up 3.0% since the low recorded in November. Prices in Sydney could return to positive annual growth by the end of June and surpass their prior peak by December 2023.
Melbourne is still lagging behind, sitting 5.6% down on the previous peak in March 2022 and up just 0.4% from the trough, at this rate prices could return to positive by October this year.
While both Canberra and Brisbane have seen a quick turnaround in prices.
With home prices in Brisbane up 2.0% in 2023 so far, down just 1.50% from its previous peak in April 2022 and plausibly returning to positive growth by July 2023.
While Canberra is up 1.0% from trough and is sitting 5.6% below pits March 2022 peak, with prices possibly returning to positive annual growth in October 2023 and surpassing their peak in late 2024.
Though it was previously forecast that Adelaide and Perth would eventually catch up to the downturn felt across the other capitals, both have so far bucked the trend and hit new peaks in May.
Both are currently at peak with Adelaide up 2.6% this year so far and Perth up 3.1%.
“Though, interest rates are closer to their peak than not, and the shock of rate rises has lessened,” added Creagh.
“Population growth, tight rental market conditions and a housing shortfall are also expected to remain. If stronger demand holds up against the expected slowing of the economy, most capital city markets would return to positive annual price growth in the coming months.”
