07/06/2023
PROPERTY PRICES DEFY PREDICTIONS, SET TO RISE 4% BY END OF 2023
Australia's property market is surprising experts with a stronger-than-expected surge in demand according to CoreLogic. Specifically, demand is on the rise, causing property prices to elevate and auction clearance rates to exceed expectations. The data group states that if this upward trend continues, home values could see a 4% increase by the end of 2023, defying earlier forecasts of a 10% or more decline this year.
The prediction is supported by the recent rise in auction clearance rates, reaching an impressive 75.3%—the highest level in 15 months. This remarkable performance comes despite the surprise interest rate rise by the Reserve Bank in May. Population growth and expectations of only one more rate hike contribute to the market's strong foundation for recovery.
Another factor driving prices upward is the scarcity of property listings, which are currently near decade lows—down over a third from the monthly average. This limited supply intensifies competition among buyers, pushing prices higher. However, as property prices rise, more sellers may enter the market, potentially increasing the number of listings.
While economists are revising their forecasts, uncertainties remain. The trajectory of the cash rate and the number of properties entering the market due to financial strain are among the factors to watch. Additionally, the potential impact of rising unemployment and stagnant wages could affect mortgage affordability.
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