Looking ahead, interest rates are near their peak, and population growth is rebounding strongly.
Together with low levels of supply, PRD chief economist Diaswati Mardiasmo believes property prices will increase further.
“Dwelling supply, especially for houses, has dwindled significantly,” Dr Mardiasmo said.
“The number of loans issued for the construction or purchase of new homes are at their lowest since the GFC in 2008. This means that the supply of new houses is very little, and unless people are happy to switch from buying a house to an apartment, the competition for houses will continue to increase, and thus their prices.
“We also have plenty of international investors coming back to the market. They have seen how resilient our property prices were throughout COVID and the 12 cash rate hikes.”
Dr Mardiasmo also said the RBA’s decision to extend its rate pause will add to buyer confidence.
“People are feeling more confident with their financial situation as stable rates means there is less turbulence in monthly mortgage repayments, which allows them to plan their household budgets with more certainty,” she said.
“This often leads to more people entering the market. And as we know, when demand is high and supply is low, home prices often rise.”
While house prices will most likely accelerate, she believes the immediate rocket-like increase we saw during the pandemic will not eventuate.
Source: Are property prices expected to keep rising?, Hanan Dervisevic for ABC News