Continued home value growth predicted
The Australian property market defied expectations in 2023, making a robust recovery after a challenging 2022 marked by eight consecutive rate rises.
Despite facing an additional five rate hikes in 2023, the market showed early signs of improvement, with listing volumes, sales, and home values surpassing the previous year’s performance.
National home values, reaching a new peak, concluded the year 5.52% higher than in December 2022, with both combined capital cities and regional areas experiencing year-on-year increases, PropTrack reported.
Standout cities in this recovery were Perth, Adelaide, and Brisbane, which not only avoided the downturn but also consistently reached new price peaks each month. However, Hobart and Darwin were exceptions among the eight capital cities, experiencing a year-on-year decrease.
Regions with the strongest home price growth
The regions that witnessed the most substantial home price growth in 2023 were in Perth, Adelaide, and Brisbane. Perth dominated with five regions, while Brisbane contributed three to the top 10.
Perth’s South West led the way with an impressive 18.23% rise, despite challenges posed by high lending costs.
Perth’s robust real estate markets extend to the South East, North West, Mandurah, and the North East; however, Perth Inner is the sole city region not making it to the national top 10.
Adelaide’s more affordable region, Adelaide-North, recorded robust growth of 14.81%, with many suburbs selling for under $400,000. During a period of elevated interest rates limiting borrowing capacity for many buyers, the more budget-friendly neighbourhoods in Adelaide are undergoing a resurgence.
Property market insights and outlook
Despite economic challenges such as high-interest rates and inflation, the housing market remained surprisingly resilient throughout 2023. ABS reported a decrease in the average ratio of household savings to income to just 1.1% in September, the lowest level since December 2007 during the Global Financial Crisis.
Looking ahead to 2024, PropTrack’s housing forecast predicts continued home value growth, albeit at a slower pace. Projections suggest a 1% to 4% increase, with Perth, Adelaide, and Brisbane leading with potential increases of 8%, 7%, and 6%, respectively. However, challenges may persist for Hobart and Darwin, which could experience falls in home values similar to those observed in 2023.
To read the PropTrack article, click here. Also read the PropTrack Property Market Outlook report.
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