australia housing market top five trends for spring 2023
The cities reprise their place at the top of the Australian property market. Image: Canva.
  • A solid market rebound is underway.
  • Australian homes returned to the $10T mark.
  • Sydney and Melbourne are back on top.

Australia’s real estate market has endured a roller coaster ride over the past few months, seeing everything from house price recoveries to unseasonable listing trends, a stalling of the official cash rate and more.

While spring has sprung, winter sprang a listings leak – new listings were unusually elevated. New listings began to rise in July but remained below 2022 levels, and August delivered an unexpected surge. Sydney led the rises prior to spring, recording a year-on-year new listings leap of 9%.

Similar out-of-season trends were also observed across the auction market, and housing prices more broadly began to move upwards; indeed Australia’s housing market made back its 2022 losses to return to the $10 trillion mark.

The Reserve Bank of Australia (RBA) also held interest rates at 4.10% several times,

Australia’s property market supply-demand imbalance is not expected to be resolved any time soon, and while it is now known that the supply side must be addressed, there are doubts over whether recent government announcements for more homes will be fruitful given the construction challenges.

  1. Market revival has serious momentum,
  2. Australia’s big cities are back at the top,
  3. Apartments gain ground in more markets,
  4. Affordable areas bounce back, and
  5. Regional markets still going strong.

The Hotspotting Price Predictor Index (PPI) for spring 2023 was recently released, with the quarterly update highlighting some of the key trends in Australia’s housing market.

Hotspotting director, Terry Ryder, said the rate of price growth in cities and regional markets across Australia is likely to accelerate in the wake of major uplifts in sales activity in many locations.

“The previous edition recorded the first signs of recovery, but this spring survey shows a dramatic upturn in the revival momentum in most market jurisdictions in Australia,” said Ryder.

“Without question, recovery and resurgence are the dominant themes with seven out of 10 locations in the nation now having positive sales activity trends – a massive improvement on the situation three months ago, when we saw the first signs of revival,” he added.

1. Revival has serious momentum

Highlighting the dwindling number of declining markets, the index only has 6% of markets seeing downward movement; the winter index recorded a higher rate of 17%.

“Now we are seeing growth momentum in most corners of the nation,” said Ryder.

“Among the capital cities and regional jurisdictions of the nation, only two – Canberra and Darwin – remain in the doldrums.

“Everywhere else, resurgence and growth are the dominant themes.

“It’s clear that multiple rate rises have had little impact,” Ryder added.

2. Big cities are back in businesses

Hotspotting general manager, Tim Graham, observed that, “The big cities are back.”

“We’ve noted in recent editions of the index that smaller cities and their regional areas have been the national leaders on market activity,” he said.

“While Perth and Adelaide remain as busy as before, the nation’s three biggest cities have mounted significant comebacks. Sydney, Melbourne, and Brisbane are all markets on the rise, with Sydney ranked as the number one market nationwide based on having 82% of suburbs with positive sales trends.”

Indeed the City of Sydney was considered by the latest edition of the index as the ‘National Growth Star’.

“There are 22 City of Sydney suburbs in our analysis and all but one of them has a positive classification, including 13 ranked as rising markets,” said Ryder.

“Five of these suburbs are included in our National Top 100 list of Supercharged Suburbs – Elizabeth Bay, Forest Lodge, Potts Point, Waterloo, and Zetland.

“City of Sydney suburbs ranked as recovering markets include Alexandria, with a median unit price $925,000, and Darlinghurst, with a median unit price of $900,000 – along with strongly rising quarterly sales volumes.”

3. Apartments rule in more markets

High density is gaining ground, with Ryder observing the strongest market precincts are typically located in the inner city.

“The number one municipality in Greater Melbourne is the City of Melbourne, and the City of Sydney has a similar status in the Greater Sydney market in this Spring survey.

“The City of Hobart leads the market in the Tasmanian capital, while the Brisbane inner precinct is a stand-out in the Queensland capital, and inner Perth is among the strong markets in the WA capital.”

Both lifestyle and affordability were key drivers of the attraction to apartments, a trend that has now been more widely observed.

4. Affordable locations rebound

Outer-ring locations suffered throughout late 2022 and early 2023, according to Graham, seeing a marked decline in sales activity.

“However, the revival in buyer demand in Sydney, Melbourne, and Brisbane has included recovery in the affordable areas,” he said.

“The City of Blacktown has led the resurgence in western Sydney, the City of Casey is prominent in the Greater Melbourne comeback, and outer-ring precincts of Greater Brisbane have seen buyer demand recover.

“Meanwhile, the bottom end continues to thrive in the Adelaide and Perth markets.”

The revival of buyer demand in the more affordable areas has occurred despite 12 interest rate rises since May 2022, added Graham.

5. Regional market strength continues

While some may believe the exodus to the regions was caused by Covid, Ryder noted the movement had been well underway prior to the pandemic.

“We’ve seen multiple headlines suggesting that demand in regional markets has collapsed and that prices are no longer rising,” he said.

“Our analysis refutes that. Regional markets remain strong and indeed we have recorded significant upturn in buyer demand in the regional areas of the eastern states.”

Terry Ryder, Hotspotting

“New South Wales, Victoria, and Queensland have all recorded big turnarounds in buyer demand in this spring survey, while demand has continued at steady levels in South Australia, WA, and Tasmania.”

The Gold Coast has also seen a resurgence in buyer demand, as have other regional centres, Ryder added.

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