Australian Property Market Overview
Australian property prices have risen in recent years across almost every part of the country. However, the property market outlook is different for everyone - and in the medium term, each region's price performance is dependent on its economic recovery, affordability and credit availability.
The Australian economy's recovery has been stronger in the outer suburbs and in some inner suburban markets, whereas growth is weaker in the middle ring suburbs and the CBD. This is because the development boom has concentrated in the outer suburbs and a higher density of construction means the property market there is more fragmented. To understand the above topic clearly, see page here now.
This makes the property market a highly segmented one, and prices in some segments are likely to outperform, while others won't. In some cases, this will be due to an influx of new buyers looking to relocate or investors seeking the capital gains that come with property growth. In other cases, it will be because the demand for property is driven by demographic factors like a move to work from home, an increase in the share of the workforce that works from home and a growing preference for working flexibly.
There's still a lot to consider when forecasting the australian property market, though, particularly when it comes to mortgage debt levels and the impact that higher interest rates will have on borrowing capacity. In particular, the big banks have divergent views on where the next rate hike will take place, and when they think it'll happen.
A number of analysts have predicted the housing market is set for a softer ride in 2022, while others are more optimistic about what the future holds. For example, SQM Research's 2022 Housing Boom and Bust report is more optimistic than the major banks, predicting a base case scenario where interest rates stay at a low 4 per cent and inflation is driven down throughout the year.
SQM also predicts that apartment rents will rise as a result of lower supply and surging construction costs. This is expected to be particularly true in Melbourne, Sydney and Brisbane where apartment supply is at a record low.
Despite this, some regions have managed to hold onto their property values and many are showing positive trends in asking prices. In Sydney, "asking prices" for established houses have been flat or slightly falling since May and auction clearance rates have continued to rise, suggesting the city's property market is starting to stabilise.
As for the unit market, CBRE's "Pacific Real Estate Market Outlook" suggests apartment rents will continue to rise across Australia's major capital cities over the next five years. In Sydney, unit rents could be up 15% in 2022-23, while house rents are set to rise 13%. At: you can get more enlightened on this topic. https://en.wikipedia.org/wiki/Real_estate_economics.
In other markets, there's a more mixed picture as some have seen significant declines in house and unit prices while others have held up relatively well. In Canberra, for instance, house prices are now above seven digits and have remained resilient while unit values are edging closer to a record high.