Increased buying and selling activities in the December quarter drive market recovery
The total number of property transactions in Australia exceeded 670,000 and was worth a combined value of over $613 billion, property settlement giant PEXA has reported.
According to its 2023 Property Insights Report, the Australian property market saw a notable surge in national property sale settlements in the closing months of the year, despite an overall 9.1% decrease in the total value of property transactions across residential and commercial sectors compared to the previous year.
In the December quarter alone, PEXA noted, recorded 188,000 sale settlements nationwide, marking the highest volumes for any quarter throughout 2023. Residential settlement volumes witnessed growth across all price bands in the latter half of 2023, with December accounting for nearly $50 billion worth of residential property settlements.
The premium segment of the residential market led the recovery, with significant growth in settlement volumes for properties priced over $1 million, particularly in the eastern states. Property settlement volumes for homes in the $1.5 million to $2 million and $2 million and above price bands exhibited increases in the second half of 2023, with notable rises in New South Wales and Victoria.
At the lower end of the market, sale settlements in the sub-$500,000 price band also saw an upturn across the eastern states. Notably, NSW residential sale settlements valued under $500,000 increased by 11.2% in the second half of 2023, while similarly priced settlements in VIC rose by 17%.
“Compared to the pandemic-related property boom of 2021 and 2022, the property sector experienced a decline in total settlement volumes last year,” said Mike Gill (pictured), head of research at PEXA. “However, the recovery in settlement volumes in the latter months of 2023 suggest the market may have reached a turning point and buyer confidence is returning.
“Sales volumes are likely to recover further during 2024. Particularly if inflation decelerates, we could expect the RBA to keep interest rates on hold, and eventually cut them.”
Examining each of the five mainland states, Gill said New South Wales stood out with the highest spend on residential property, surpassing $192 billion for the year. Queensland led the country for the third consecutive year in terms of volume, recording nearly 176,000 residential sale settlements in 2023. Victoria experienced the largest fall in aggregate value, with a decline of 13.9% in 2023, while Western Australia’s market remained relatively stable.
Turning to commercial property transactions, Victoria and New South Wales faced significant declines. New South Wales witnessed a 17.5% decrease, while Victoria experienced a 16.4% decline in settlement volumes in 2023. Gill attributed these declines to the softening of the commercial property market in the high-interest rate environment.
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