This article is from the Australian Property Journal archive
UPGRADERS have overtaken first home owners as the most active residential buyer cohort in Australia, a new valuer survey shows, while downsizers and investors are waiting in the wings for more certainty in demand and pricing.
CBRE polled 155 residential valuers across the country for its latest Residential Valuer Insights, which also showed demand overall has moderated further, with 47% of CBRE valuers reporting demand as “strong” or “very strong” in the past three months – the lowest so far of 2024, down from 42% in Q3, 54% in Q2 and 49% in Q1.
Perth, which has been leading the country in price growth in recent times, again showed the highest demand alongside Adelaide. Metropolitan Melbourne and the ACT have seen the lowest demand.
More valuers, at 18%, report demand as “soft” or “very limited”.
The most active buyer group was upgraders, with 64% of valuers reporting them as the most active buyer type. Upgraders were most prevalent in Sydney outer metro – which in this survey includes Newcastle, Hunter, Central Coast, Illawarra and South Coast – and metropolitan Sydney,
High mortgage rates and soaring prices has driven housing affordability to its worst level on record, as Australians work overtime, take on second jobs, and even skip on healthcare costs in a bid to break into the heated market.
“In the short-term, until we get meaningful interest rate cuts, I expect upgraders and first home buyers will continue to dominate demand,” CBRE’s Pacific head of research, Sameer Chopra said.
“Down the track, the downsizer and investor market could become more active once there is more confidence in demand and pricing.”
Recent overseas migrants and developers were the least active. Both local and interstate investors were less active this quarter. They were most active in Perth and Adelaide.
CBRE’s residential valuations national director Kat Hale attributed the broader divergence to buyer demographics and locational trends.
“Melbourne has seen less demand from investors due to tax changes and proposed landlord rental standards. This has fuelled increased investor activity in both Adelaide and Perth,” she said.
A declining number of valuers expect buyer demand to increase over the next 12 months. The strongest demand is expected in Sydney metro, Sydney outer metro, and Melbourne metro.
Meanwhile, unrenovated properties and homes in secondary locations are ranking lowest on buyer wish-lists, while new homes and renovated assets are most in favour.
Houses were more frequently selected in the first half of the year for increase in demand, topping 65% before coming down to 37% currently.
Recently renovated properties came out on top as a result, effectively steady at 45%, while 40% reported increased demand for new houses.
A decrease in demand was strongest in properties in unrenovated secondary locations (43%), with properties in secondary locations next (around 35%). A decline in demand for vacant land was reported by 24% of valuers.
Most expect house price growth – just
Fifty-five per cent of valuers surveyed are expecting house value growth in the next year, down from a peak of 78% in the March quarter. The highest growth is expected in Perth and Adelaide (nearly 40% of valuers expect at least 5% growth in each), and Brisbane metro (nearly 30%).
One quarter of Sydney metro valuers are expecting over 5% growth. Only half of that is expecting that growth in Melbourne metro.
In the apartment market, 38% of valuers expect an increase in apartment values, with the highest conviction clearly being for Brisbane metro (more than 50%), compared to second-placed Perth (less than 20%), following by the Gold and Sunshine Coasts. Nationally, twice as many valuers expect value growth against value decline.
SQM Research’s latest Boom & Bust report for 2025’s base case scenario – ongoing strong population growth, no inflationary outbreak, and up to two interest rate cuts of 0.25% each – has Perth values rising 14% and 19%, while Sydney and Melbourne would both see falls of up to 5%. Auction clearance rates in the major cities have continued to be sluggish.
The CBRE survey showed that just under half of valuers expect land values to rise over the next 12 months, and 35% expect them to remain stable. Adelaide leads here with 60%, followd by Perth and Brisbane metro at nearly 30%. Sydney metro, Sydney outer metro and Melbourne metro are all below 10%.
Two-thirds of the valuers surveyed expect an increase in available stock over the next 12 months – the highest result this calendar year, with the most supply anticipated in Canberra and the Sydney metro area.
