08/03/2023
Over the past year, Australia's property market has seen a significant shift amidst challenging economic conditions, including skyrocketing interest rates and falling prices. However, recent data from the PropTrack Home Price Index has indicated a slight upturn in the market due to limited stock availability.
According to the report released on Wednesday, home prices rose by 0.18% nationally in February, with all capital cities except Hobart experiencing a rebound. Adelaide, Sydney, and Melbourne recorded increases of less than half a percent, while Brisbane, Perth, and Darwin saw smaller rises of around 0.1%. Canberra, on the other hand, remained unchanged.
Despite the slowdown in recent months, the housing downturn has stalled, and rising interest rates are no longer the primary driver of the market. Limited stock availability has become a significant factor as many sellers hold back from listing their properties for sale, constraining supply. As a result, supply will continue to impact borrowing capacity, which has now decreased by approximately 30%.
Although it may be too early to confidently declare an end to the downturn, there are positive signs of improvement in some markets. For instance, Sydney recorded a 0.26% increase in January, and prices rose by a further 0.36% in February. However, prices are still down by 6.64% over the past year, with Sydney experiencing the most significant falls of any market.
Similarly, Melbourne's prices fell by 5.99% over the past 12 months and remain 6.09% below their March 2022 peak. In Brisbane, prices are 3.49% below their peak recorded in April 2022, while in Perth, prices are only 0.24% below their peak.
Despite these fluctuations, Adelaide has become the strongest-performing capital city market over the past year, with home prices reaching a new peak, increasing by 0.44% in February.
Overall, the Australian property market is showing promising signs of recovery, and limited stock on the market is contributing to price increases in some capitals. With supply levels expected to remain constrained, the market presents a great opportunity for investors looking for long-term growth potential.