Australian Property Market 2023: Comprehensive Update and Trends Analysis

Hey there, mates!

Welcome to the latest scoop on the Aussie property market for the week ending 01 December '23.

We're diving into a whirlwind of changes, from the slowdown in apartment construction to the unexpected rise in home values, and the evolving dynamics of buying versus renting. This update, packed with the latest stats and insights, is your essential guide to understanding the current pulse of the Australian property market.

Whether you're an investor, a first home buyer, or just keen on the property scene, there's something here for everyone.

So, let's get stuck into it!

Apartment Construction Takes a Slowdown Turn

The Australian property market has witnessed a notable shift, particularly in apartment construction. Recent data from JLL's Q3 Apartment Market Overview indicates a significant 8% decrease in the construction pace over the last year. This slowdown, attributed to challenges in staffing and a pivot of builders towards larger infrastructure projects, is shaping the future of urban living.

Leigh Warner, JLL's senior research director, highlights a consequent tightening in the rental market with less stock available. The marketing of apartments has notably fallen by 30%.

Surging Home Values Amid Economic Shifts

Despite the economic fluctuations, particularly the November interest rate rises, the Australian housing market has shown resilience. CoreLogic's latest figures reveal that home values have reached a new peak, marking an 8.1% increase from recent lows. This growth, while beneficial for current property owners, raises concerns about affordability, especially for potential buyers.

CoreLogic research director, Tim Lawless, points out the dual nature of this scenario, where rising values create affordability pressures amidst high-interest rates and escalating living costs.

The Evolving Landscape of Buying vs Renting

In an intriguing twist, a report from PropTrack unveils that buying a home is now more affordable than renting in over a third of Australian homes. The analysis shows:

• 36% of homes are cheaper to buy than rent.
• High affordability in Queensland, Tasmania, and Western Australia.
• In Western Australia, more than three-quarters of homes fit this profile.

Despite the substantial rise in home prices since the pandemic began, skyrocketing rents make buying a more viable option in many regions.

 

Mounting Affordability Concerns

Looking forward, the ANZ CoreLogic Housing Affordability Report forecasts a challenging period ahead. Increased rents and deposit requirements, coupled with rising mortgage rates, are making it increasingly difficult for individuals, especially first home buyers, to enter the property market.

Adelaide Timbrell, ANZ's senior economist, stresses the impact of these factors on the ability to save for a home deposit.

 

Regional Markets - The Unseen Heroes

CoreLogic's latest Regional Market Update shines a spotlight on the robust performance of regional markets. Despite a slower growth pace compared to capital cities, several regions in Queensland and Western Australia have achieved new price highs. Notable areas include:

• Bunbury, WA: Leading with a 4.6% increase.
• Lismore, NSW: Up by 4.3%.
• St Georges Basin – Sanctuary Point, NSW: A growth of 3.9%.

These figures underscore the vibrancy of regional markets, often overshadowed by their metropolitan counterparts.

In conclusion, the Australian property market continues to evolve, presenting both challenges and opportunities. Understanding these trends is crucial for making informed decisions, whether you're a current homeowner, a potential buyer, or an investor.

I'm Rasti Vaibhav, The Architect of Property Wealth. If you're navigating these dynamic market conditions and seeking personalised advice on property investing, I'm here to help. Book a one-on-one session with me at https://getrare.com.au/ready or join our educational workshops at https://getrare.com.au/workshop to learn more about leveraging these market trends for your benefit.