- Home prices could lift by 4.0% over this year
- Change in current market price trends unlikely
- Rising population, high demand, and shortfall in housing stock fuelling this trend
The housing market has defied prior expectations of a price drop, with prices steadily climbing in an already overheated market, according to the latest from PropTrack.
PropTrack’s latest insights noted that should the home prices grow at the same rate as last quarter, it would revert to positive annual growth by July 2023 and supersede the prior price peak by January 2024. If this prediction comes to pass, home prices may rise by around 4.0% over 2023.
Home prices in Sydney have experienced a swift turnaround in 2023, up 3.0% from the lull in November 2022. Should the prices continue to trend in this direction, they may return to positive annual growth by June’s end and outpace their previous peak this coming December.
Brisbane and Canberra have followed suit, posting a quick reversal in prices.
Presently up by 2%, Brisbane home prices are on course to ascend to positive annual growth by July 2023 and go over their prior peak by September. On the other hand, Canberra home prices are projected to reach positive yearly growth by October 2023 and overtake their peak near the end of 2024.
Home prices in Adelaide and Perth resisted the price dips for most of 2022. However, 2023 has seen the home prices of both capital cities sail to fresh peaks in May, up 2.6% and 3.1% at present, respectively. Adelaide home prices continue to record fresh price peaks in 2023. Both cities are expected to register new price peaks across 2023, assuming the price continues to move in this direction.
Analysis of market conditions
PropTrack asserts that the previous five months’ worth of price growth signals that robust market conditions are more prevalent in 2023.
The tight rental markets and net overseas migration spike suggest higher housing demand. As there is a shortfall in housing stock, and buyer interest is unwavering, home prices remain high, unabated by the expected downward pressure from the interest rate hikes. Thus, provided that the price continues to follow the same trends of the past quarter, national property prices are expected to record a new peak by January 2024.
There is some possibility that the price growth may slow down. If stronger market conditions prevail, seller confidence might improve, and more stock may flow into the market, putting a damper on price growth. In addition to the recently announced revised cash rate, further interest rate rises may slow the price increase.
Nonetheless, interest rates are reaching their peak with every revision, making each iteration of the rise less startling. Economic growth is predicted to slow, housing stock remains scant, the population is set to grow, and rental vacancies are at an all-time low. Most capital cities will likely post positive annual price growth in the near future.
