The National house price recovery has begun, find out where to from here? 

Key stats show a National housing rebound

According to CoreLogic’s National Home Value Index, National home values rose by 1.2% in May, marking the third consecutive monthly increase. Recent CoreLogic data shows the median dwelling value in Sydney increased by 1.8% in May – the largest increase seen since September 2020 – and up 4.8% from the low in January. This represents an increase of around $50,000 in the median dwelling value over that 32-month period. Alongside these favourable market conditions, a scarcity of available properties for sale and returning overseas migration has also further driven demand. While the RBA has raised the official cash rate recently, the current lending environment remains favourable. So, property investors are well-positioned to capitalise on these market conditions which look set to continue. With Sydney seeing its biggest gain since September 2021, and Brisbane and Perth experiencing solid gains, up by 1.4 per cent and 1.3% respectively, the market rebound is clearly underway.

The rise in home values is likely due to housing supply being tight, evidenced by the 13.1% decrease in fresh listings compared to the five-year average. Knowing this, property investors may wish to take advantage of current market conditions and secure their investments now while there is still ample room for growth in this cycle of housing market activity.

Most expensive housing leading the way

When it comes to the highest-performing segment of Australia’s housing market, there is no doubt that top-tier properties are leading the way.

According to CoreLogic data, houses in the top quarter of the market are seeing the fastest recovery, with values increasing by 5.6% in the past three months. This is a significant difference when compared to the more affordable segments of the market, which only saw an increase of 2.6%. Recent reports have also shown that buyers targeting the premium sector of the market are still buying at well below peak prices.

Population set to factor into future growth

Population trends are likely to influence the national housing market in 2023, particularly with Australia’s population projected to reach more than 35 million by the year 2030. This will no doubt influence demand for housing, and as such, investors may be able to take advantage of opportunities in certain locations.

For example, states like Queensland will be well placed to benefit from population growth, with Brisbane and other regional cities in the state likely to see increased demand for housing as a result of the 2032 Olympics and infrastructure investment. While Sydney currently leads the way, other cities around Australia will see significant growth in the coming years, meaning significant opportunities for investors.

What to expect in the coming years

While housing market predictions are fraught with many variables, investors should remain optimistic about what the future of the National housing market holds. The Reserve Bank’s decision to lift the cash rate in May did not seem to slow down the current home price rebound. In fact, house prices continued to rise and gain momentum, with increased auction activity and firm clearance rates. While rising interest rates and a slowing economy is expected to still factor in, the tight labour market and strong housing demand should support the housing market’s ongoing recovery.

Final thoughts

The rebound in home prices is good news indeed for investors. With buyers returning to the market, increasing values, tight rental markets, and a wealth of investment-grade properties on the market, there is plenty of scope for price growth in the coming years.

At Ironfish, we are excited to be in a position to provide up-to-date insights into the latest trends in the Australian property market for our investors. We make it our mission to ensure that our clients are in the best possible position to secure a sound investment for their future. So, whether you are buying your first property or adding to your portfolio, contact one of our expert consultants today. We are here to help you make the most informed investment decisions so you can build a secure financial future.

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