Q3 2023 Australian Residential Figures Report
October 12, 2023 5 Minute Read
Australia’s residential markets continue to provide fascinating contrasts.
After almost a year of price correction, Australia’s residential values have now (to September) risen for seven consecutive months. Capital city house values have jumped by around 7% since March with unit values up by over 5%. Both are closing in on their pre-pandemic highs. Most capitals have seen sustained recovery. Canberra appears the exception. In fact, REIA data to June was showing Perth and Adelaide median house prices at record highs while Brisbane and Sydney were quickly approaching their previous peaks. Low stock levels and demand generated by resurgent overseas migration have more than compensated for the headwinds from higher interest rates.
Undersupply in the rental market remains the key issue to be addressed. Reflecting the return of overseas migration and constrained supply pipelines, national vacancy has settled at around 1.0%, trending at a 17-year low. Growth in dwelling supply is now lagging well behind the population growth rate. With investors needing to cover higher costs, substantial rental growth has continued across most markets, approaching 30% y-o-y in some cases. With CBRE estimating the net overseas migration target of 975,000 over 2022-23 to 2024-25 to generate demand for more than 408,000 dwellings, there is unlikely to be any significant release of these pressure for some years, although affordability constraints and the possibility of further government intervention will see a gradual return to more sustainable increases.