The real estate market in Australia is driven by supply and demand, with high dwelling sales and a decreasing property stock for sale. The market has tight 'saleable' supply lines, with only about three months' property supply remaining. This has led to rising prices, which easing off slightly in 2023 due to interest rate increases. Long-term values have increased significantly across Australia, with houses and apartments experiencing 3.6 and 2.5 times increases since the 2000 Sydney Olympics.
A recent poll by API magazine revealed that 70% of investors in capital cities anticipate price increases over the next 12 months, while 53% in regional markets anticipate the same. Not many believe prices will decrease. Additionally, only a third of respondents believe current households are experiencing mortgage stress.
Australia's housing market is not as saturated as previously reported, with only 13% of those with low fixed rates selling their assets to make ends meet. However, 70% have negotiated new mortgage rates and saved enough money to cover the difference.
The second and subsequent owner-occupier market dominates with 45%, while first-time buyers account for 26%. About 30% of the population rents, making it challenging to increase rental supply.
Detached housing still dominates 30% of the market, despite a decline in rental returns over the past year. However, interest in apartments is increasing at 24%, while townhouses remain steady at 18%. This suggests a challenge in increasing rental supply.
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