Posted on August 15th, 2023

Data shows the housing market recovery is in full swing

For property investors, the latest Domain Forecast Report makes for some good reading. According to the report, the property market in Australia is now in a strong recovery phase, with house prices in several cities expected to hit record highs over the next financial year. Of these, Sydney comes out on top with projected price growth of up to 9%. What’s more, the report also suggests that unit prices in Brisbane, Adelaide, and Hobart could potentially surpass existing records too.

In this blog, we’ll explore what this could mean for property investors looking to get into the market for the first time in 2023, or those who want to add to their existing portfolio.

The benefits of investing in a recovering property market

The benefits of investing in a recovering property market include lower interest rates, increased affordability for first-time buyers, and the potential for significant capital growth.

Besides being proof positive that the Australian property market is in a recovery phase, the Domain Forecast Report also offers other interesting insights for investors.

According to Domain’s chief of research and economics, Dr. Nicola Powell, we can expect to see prices continuing to rise this year. However, the recovery is expected to be gradual and steady. While Sydney is set to see the strongest rate of growth, there are many different dynamics at play that can impact the market in various ways. These factors include both push and pull factors, such as the lack of supply of homes on the market and the rise in population, particularly due to an increase in migrant numbers.

According to Corelogic research director Tim Lawless, the national Home Value Index (HVI) in Australia increased by 0.9% in July, marking the fifth consecutive month of recovery. This should be welcome news to any investors worried about the future of the market.

By understanding these trends and factors, you can make more informed decisions when it comes to investing in property during this period of recovery.

Housing price forecasts

In the Domain Forecast Report, it shows Australia’s housing market is steadily recovering over the 2023-24 financial year. House prices in Sydney, Adelaide, and Perth, and unit prices in Brisbane, Adelaide and Hobart, could have fully recovered from the 2022 downturn by the end of the next financial year. Adelaide and Perth house prices are predicted to rise slowly and may avoid a downturn.

Sydney

The Domain Forecast Report predicts that Sydney will be the leader of the pack with a median house price increase of between 6-9% and unit prices of 2-5%. This means that by the end of the next financial year, house prices could reach a new record median high of $1.62 million to $1.66 million.
Melbourne

According to the research, Melbourne is facing the slowest recovery out of all the capital cities. While house prices are either staying the same or rising slightly, they’re not recovering to their record-high median price of $1.094 million just yet. And while units are expected to stay steady for the year, investors should keep their eyes open for desirable locations where growth is imminent.
Brisbane

As the rising median prices in Brisbane suggest, the city’s property market is set to continue its upward trajectory, albeit at a steadier pace. The Domain Forecast Report expects house prices to climb by 1 – 4%, bringing them closer to the all-time high of $858,511. Meanwhile, unit prices are predicted to be more stable, with growth rates of 0 – 1%. However, despite this tempered growth, median prices for both houses and units are set to reach new records in the coming years, reflecting the strength of the Brisbane market.
Perth

Perth’s booming property market is showing no signs of slowing down, with median prices expected to hit over $700,000 for the first time by July 2024. Despite this record high, the good news for unit buyers is that prices are still predicted to be $36,000-$43,000 less than their previous peak. With its appeal as a destination for new migrants, Perth remains an attractive option for investors.
Canberra

Investors looking to make a profitable venture in the real estate market might want to keep an eye on Canberra. The Domain forecast predicts a moderate growth in housing values, ranging from 2 – 4%. Although the median price may still not be at the peak of $1.17 million, the steady growth is a good sign for potential investors. Unit prices are also estimated to grow between 1 and 2%. While the recovery might not be as explosive as some of the other capital cities, the growth in Canberra is assured, making it a great option for those looking for a stable investment.
Hobart

For investors keeping a close eye on the Australian property market, Hobart is a city not to be overlooked. Despite experiencing a slight dip in housing prices in 2022, Hobart is expected to bounce back with growth rates ranging from 3 – 5%, making it the second strongest capital city after Sydney. But it’s not just houses that are seeing an upswing in median values, as unit prices are predicted to reach a record high of over $570,000.

Final thoughts

The Reserve Bank remained determined to keep a lid on inflation throughout 2023, which saw a raft of rate hikes. It was been welcomed news for investors that the RBA decided to keep interest rates on hold in August as inflation eases.

Economic recovery has been slow from 2020, is likely to result in a slower-than-expected increase in property prices across Australia. That said, the latest Domain Forecast Report provides a great insight into the future of the property market in Australia. While some cities are showing signs of a slower recovery, others are predicted to break new records.

Regardless of where you are looking to invest, the report proves that the market is in the midst of a strong recovery and for those looking to capitalise on this, now is the perfect time to invest. By keeping an eye on emerging trends and taking advantage of the growth opportunity, investors can become successful in their pursuit of a fruitful real estate investment.

At Ironfish, we help investors capitalise on these trends and ensure the best return for their investments. With in-depth knowledge of the market, robust property investment strategies, and a strong team of property investment specialists, we help our clients build a portfolio that will increase in value and generate sustainable wealth for years to come.

May 14th, 2024 / How to invest, Financial wellbeing

How to fast-track your wealth-building strategy

Without a plan, building wealth can be a slow and uncertain process. But with the right strategy, you can fast-track your financial goals and achieve wealth in less time. Real estate investment stands as a reliable, time-tested method to grow long-term wealth in a relatively short period. Real estat

May 7th, 2024 / How to invest, Property trends, Data & research

Investing in new vs established properties – Which is the best?

With the advent of reality TV shows like The Block, many property investors are fixed on the idea of finding a ‘fixer-upper’, a diamond in the rough that can be transformed into a lucrative investment. The belief is that by investing in an established property, fixing it up and then sell

May 1st, 2024 / Message from our CEO, How to invest

The two-hand theory to building your fortune through property

We all know that to live a healthy, fulfilled life, one has to find balance. Balance between work and play, exercise and rest, spending time with people and spending time alone. So, what if we applied this theory of balance as the key to living a wealthy life? This is what I call the Two-Hand Appro

April 29th, 2024 / How to invest, Financial wellbeing, SMSF

Using your SMSF to invest in property

It appears as though the self-managed superannuation fund (SMSF) revolution in Australia is now in full swing. Currently, approximately 1.1 million Australians manage their own superannuation through SMSFs. According to Deloitte’s 2022 data, Australian males aged 45 to 49 typically have $224,2

April 16th, 2024 / Data & research, Equity

Manufacturing Instant Equity Through Property Investing

Have you ever wondered how some investors seem to magically make money in real estate right after purchasing a property? The secret isn’t anything supernatural or even complicated. It’s simply about understanding the concept of manufacturing instant equity through property investing. By