Quarterly Property Market Recap
Liquidation, inflation, and high rents – let's delve deeper into the events and trends that shaped the Australian property market during the first three months of the year.
Farnoud Erfanian Nozar
Unfortunately, an increasing number of Australian builders have faced liquidation, leaving homeowners with substantial financial losses and incomplete homes. Consequently, the solvency of builders has come under intense scrutiny, as the industry looks to prevent further issues in the coming months.
With inflation at 7 per cent, the cost of living has soared, impacting everyone's finances in various ways. This has exacerbated the disparity between workers in different income brackets, making housing even more unattainable for those earning less.
Alongside these challenges, high-interest rates and a predicted economic slowdown in the coming months are influencing house prices in Australia, but perhaps not in the ways we expected.
CoreLogic is anticipating upward pressure on home prices over the next quarter due to low advertised stock levels, added demand from overseas migration, and exceptionally tight rental conditions.
The national rental vacancy rate fell to a record low of 0.8 per cent in February. At the same time, the cost of rent reached unprecedented levels, making it difficult for many people to secure affordable housing.
In the coming months, the Federal Government is actively addressing these issues by assisting residents in finding appropriate housing through various initiatives. For people wishing to purchase a home, there is the First Home Guarantee scheme, Family Home Guarantee scheme, and the Help To Buy scheme, which is available from July 2023.
Additionally, the construction of more social housing is underway. The National Housing Accord brings together all levels of government, investors, and the residential development, building and construction sector to deliver a total of one million affordable, high-quality dwellings over a five-year period.
With the Reserve Bank set for the biggest overhaul in decades , a falling inflation rate and continued pressure on the construction sector, the next few months will be interesting to watch.
