The Australian Housing Landscape

As we approach the end of 2023, Australia's housing market is brimming with dynamic shifts and promising prospects. From soaring confidence levels to intriguing price trajectories, the property landscape offers a mosaic of opportunities and challenges. Dive into this week's comprehensive update to get a grasp of where the market stands and where it's headed. Whether you're an investor, a homeowner, or just keen on real estate trends, this piece promises insights that will not only inform but inspire. Read on to discover the latest scoop on Australian properties for the week ending 27 October '23.

Renewed Confidence in the Property Market

Confidence is making a significant comeback in the Australian housing sector. The most recent NAB Residential Property survey reveals:

• Expectations of a housing market rebound in the forthcoming years are more robust than ever.
• Confidence levels among property professionals have soared to a two-year high.
• Yet, the construction industry voices concerns. Many claim that the steep building costs deter them from initiating new residential projects.

Adjusting for the unexpectedly positive outcomes over the previous quarter, NAB economists have updated their property price growth projections. They anticipate that capital city dwelling values will surge by approximately 8% by this year's end. Moreover, they predict a further increase of 5% in 2024. They attribute this to the continued mismatch between housing demand and supply, surpassing rising rates effects. Additionally, a potential rate hike by the RBA to 4.35% in the upcoming November meeting is expected.
 

Easing Building Costs: A Glimmer of Hope

It's not all grim news for those wishing to build a new home. The skyrocketing costs, which had Australians grappling with a 20% spike last year due to Covid-induced disruptions, seem to be plateauing.
Key highlights from the Cordell Construction Cost Index (CCCI) include:

• The slowest growth rate in construction costs in four years.
• A mere 0.5% hike in the costs to build a typical home in the September quarter – a rate not seen since June 2019.

John Bennett, Construction Cost Estimation Manager, weighs in on the matter. He suggests the industry's cost pressures are pivoting from material costs to labour. With material costs seemingly stabilising, labour costs are facing fresh challenges.

Property Listings Dip, But Prices Surge

Despite burgeoning buyer demand, new property listings are dwindling. Domain's analysis suggests:

• For September, new listings across combined capital cities slumped by 12.3%.
• Year-on-year, the number is down by 0.7%.

Nerida Conisbee, Ray White's chief economist, observes that while there was a surge in listings from June to August, the momentum has since slackened. This poses a challenge, especially with a sea of eager buyers. Conisbee's forecast is clear: this trend will likely persist through year-end. Prospective sellers eyeing a sale before Christmas should act swiftly.

An Imminent Property Price Boom

A wave of property price hikes is on the horizon. With a 4.3% price surge this year, some suburbs have reported staggering growth, as PropTrack data reveals.
PropTrack's senior economist, Eleanor Creagh opines that the dampened listing scenario, coupled with a spike in demand fueled by high migration, is driving prices north. Affordable regions, given the escalating prices, are becoming gold mines.
Consider these facts:

• Double-digit price growth in nearly 500 suburbs this year.
• The majority of Australia's top-performing suburbs, both for units and houses, boast a median value of under $500,000.
• Locations like Riverview in Queensland witnessed a median value surge of 24% this year, albeit maintaining an average house price of around $446,000.

Quicker Property Sales Observed

Selling a property is becoming a faster affair. Recent figures from CoreLogic show:

• In September, properties took an average of 30 days to sell nationally, a drop from 36 days in January 2023.
• Cities like Perth, Brisbane, Melbourne, and Sydney recorded even brisker sales.

Eliza Owen, CoreLogic's Head of Research, envisions a steady market through year's end, driven by a renewed sense of urgency among buyers.

As we draw this update to a close, it's evident that the property landscape in Australia is undergoing dynamic shifts. Whether you're a buyer, seller, or investor, staying abreast of these changes is crucial.

If you're intrigued about how these trends impact you personally or are keen on exploring property investment opportunities, I'd be delighted to guide you. Let's delve deep into your personal circumstances and carve out a tailored strategy for you. Book a time with me at https://getrare.com.au/ready. Alternatively, for a comprehensive understanding, attend our educational workshops at https://getrare.com.au/workshop.