New analysis of the Australian property market has revealed national home prices could return to positive annual growth as early as next month, if the current growth trajectory continues.
PropTrack’s latest Market Insight shows that if national home prices continue to grow at the same pace as they have during the past quarter, they could not only return to positive annual growth by July but could surpass their prior peak by January 2024.
“That could see home prices lift by 4% over 2023,” PropTrack senior economist Eleanor Creagh said.
“The housing market has so far avoided the steep falls many expected.
“After five months of price growth, stronger market conditions are becoming more widespread in 2023.”
Housing demand was stronger, likely bolstered by the surge in net overseas migration, as well as very tight rental markets, Ms Creagh said.
“Given limited new stock is coming to market, buyer interest is being concentrated, which is underpinning home prices and offsetting the downward pressure from interest rate rises,” she said.
However, several other factors could weigh on the pace of price rises ahead, she added.
“Price growth may wane if stronger market conditions improve seller confidence and spark a boost in stock coming to market. Interest rates also rose again in June and may rise further, which could slow the recovery,” she said.
“Though, interest rates are closer to their peak than not, and the shock of rate rises has lessened.”
Population growth, tight rental market conditions and a housing shortfall are also expected to remain, she said.
“If stronger demand holds up against the expected slowing of the economy, most capital city markets would return to positive annual price growth in the coming months,” she said.
Source: When property prices could peak again if pace of growth continues, Lisa Calautti for Realestate.com.au