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Prices ‘strengthening around the nation

Property

Prices ‘strengthening around the nation

But challenges remain due to supply, as our migrant population continues to grow and less people move away from the Sunshine State.

Contrary to the plethora of poor property forecasters who predicted significant property price falls, market conditions continue to be solid in the face of the low supply of sales listings around the nation.

That’s according to the latest Property Investment Professionals of Australia (PIPA) National Market Update.

This report pulls together insights and analysis from seven market experts and PIPA members.

PIPA chair Nicola McDougall says the significant price falls simply did not materialise in many property markets – even with the most rapid increase in interest rates in a generation.

“Of course, part of the reason why prices have been strengthening is the significant number of overseas migrants – some half a million, seemingly – who have landed on our shores within the past year or two, which is also causing rental markets to continue to struggle with a critical undersupply of stock,” she says.

Ms McDougall says that as well as healthy market conditions, it appears that the rising interest rate cycle may have come to an end.

“The Reserve Bank of Australia took its foot off the throttle in early July and held the cash rate steady at 4.1 per cent, which provided some confidence to property buyers around the nation,” Ms McDougall says.

“The June quarter inflation reading also came in well-under market expectations at six per cent with it highly possible we are at, or near, the peak of the cash rate.”

Megan Wells, founder of Property Pursuit Advisors, says that pre-COVID, population fluctuations were common.

“People would come and people would go,” she says.

“One of the common reasons for departure was to seek higher-paying job opportunities interstate or overseas.

“But with the ability to secure well-paying corporate jobs that have work from home or hybrid arrangements, the requirement to relocate away from the Sunshine State has disappeared. The challenge for quality, established housing supply is that no one is selling until they can buy something else.

“But no one is leaving. We now have a bottleneck of owners who won’t sell until they can buy but can’t find anything to buy until someone leaves.

“And no one is leaving. And around and around it goes.”

However, Ray White Maroochydore principal Dan Sowden says the problem with market predictions is that they are generalised and do not take into account the nuances of specific regions.

“As an example, with the rise of interest rates and inflation, we have seen this to be a significant benefit to the baby-boomer population because they generally have no mortgages and while their property expenses are low, their property incomes are boosted by inflation and payments made by the banks on cash holdings (term deposits),” he says.

“It’s these baby boomers that control the balance of the upper-end market and why there is little movement in transactions.”

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