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According to the Real Estate Buyers Agents Association of Australia (REBAA), the trajectory of Australia’s property market in 2023 was a testament to its resilience and adaptability.
“Regional variations, supply-demand dynamics, and changing rental landscapes have all played pivotal roles in shaping this narrative,” REBAA president Melinda Jennison said.
“As the year draws to a close, the real estate sector continues to navigate the waves of change, offering both challenges and opportunities.
“The intricate interplay of factors continues to shape the nation’s property landscape, creating an environment where vigilance and adaptability remain key for both buyers and sellers.”
Ms Jennison highlighted signs emerging at the start of the year indicating the slowdown in the national housing market was losing momentum, despite rising interest rates.
“The subsequent months witnessed an unforeseen rebound, catapulting property prices into double-digit growth between February and October in the cities of Perth, Sydney, and Brisbane,” she said.
Indeed, following 10 consecutive months of house price declines, properties began to rebound from March 2023 and ended the year at new records.
“The surge in prices, however, was not uniform on a monthly basis across the nation. As listing volumes swelled in areas such as Melbourne, Sydney, Hobart, and Canberra, the pace of monthly price growth moderated,” Ms Jennison said.
“Conversely, Perth, Adelaide, and Brisbane, where advertised stock levels either declined or remained stable, experienced a more accelerated rate of property price growth over the last quarter.”
Ms Jennison noted that this divergence underscored the influence of supply and demand dynamics at a local level on market performance.
Strong rental growth, driven by the tightest rental market on record, resulted in substantial increases in both house and unit rents around the nation this year.
“Adelaide and Brisbane led the charge in January, with the most substantial increase in annual house rents, according to CoreLogic. However, by October, the scene had shifted, with Perth and Melbourne taking centre stage in the annual house rent increase rankings,” Ms Jennison said.
NSW
REBAA NSW state representative Linda Johnson highlighted significant transformations in NSW’s property market over the past year, characterised by distinct trends in both capital cities and regional areas.
“Property prices have experienced notable fluctuations, with varying impacts in urban and regional settings,” Ms Johnson said.
While most areas saw a pricing correction, prices generally remain well ahead of pre-COVID-19 market conditions, she noted.
Sellers are increasingly opting for delayed settlements, adding ‘on or sooner’ clauses to sale contracts to mitigate potential housing issues.
Buyer activity has intensified across the state, reflecting growing confidence in the real estate market, despite the looming threat of interest rate rises, Ms Johnson observed.
Victoria
REBAA Victoria state representative Luke Assigal noted stagnant house prices in Victoria in 2023 due to monthly interest rate increases and additional taxes imposed on property investors by the Victorian government.
Although Melbourne’s median house price declined for seven consecutive quarters, it still remained higher compared to pre-pandemic levels, he said.
“On the supply side, the number of dwellings under construction [has] decreased and it is projected that the level of new completed dwellings in 2023 will be the lowest in seven years,” Mr Assigal said.
Supply-side constraints, a decrease in dwellings under construction, and projections indicating the lowest level of new completed dwellings in seven years, coupled with rapid population growth, may lead to potential price increases in 2024, he predicted.
Qld
REBAA Queensland state representative Joanna Boyd highlighted limited housing stock amid surging demand, propelling Sunshine State property prices to unprecedented highs in 2023.
“The landscape has been defined by a scenario where buyers – driven by fear of missing out (FOMO) – are compelled to swiftly make purchase decisions, often necessitating increased budgets to secure homes,” Ms Boyd said.
Renovated properties, in particular, experienced soaring prices due to scarcity. Population growth remains robust, primarily driven by net interstate migration, she explained.
SA
REBAA South Australia state representative Jess Elam said South Australia’s housing market in
2023 has remained resilient, standing out with its strong performance.
Buyers’ competitiveness has driven property prices upward, especially in regions along the southern coast, which have experienced substantial appreciation, Ms Elam said.
Supported by steady population growth and ongoing infrastructure upgrades, South Australia’s housing market appears robust, she observed.
Tasmania
REBAA Tasmania state representative Sam Spilsbury noted Tasmania’s residential real estate market continued to slow in 2023, citing low levels of investor activity and subdued mainland buyer participation.
“Buyer inquiries also further slowed as we progressed through 2023,” Ms Spilsbury said.
“Some have been compelled to exit the market, while others opt to adopt a wait-and-
see approach.”
The diminishing buying activity has allowed the number of properties for sale to rebound, exceeding availability from 12 months ago by 28.2 per cent, she explained.
Regional Australia
REBAA Regional Australia representative Tiron Manning observed that housing values across Australia’s regional areas generally lagged behind the capital city markets in 2023.
Property below $500,000 in larger cities still showed good demand, while overpriced or less desirable properties tend to linger longer on the market, Mr Manning noted.
“To date prices have held but into 2024, you would expect to see individual vendors who are experiencing pressure to sell, may potentially take reduced offers in order to speed up a transaction,” Mr Manning said.
[Related: November property prices hit record highs]
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