The End of Australia's Housing Downturn Could Be Near

The property downturn many thought wouldn’t end, has already begun to rise once again. So, what does this mean and how will it affect an already tight buyer and renter market?

After a seemingly never-ending downturn of property prices over recent months, could the tides be changing?   

Several months of unsteady property values and decreased buyer interest appear to be coming to a close. The Australian property market’s increasing value is encouraging prospective buyers to take the leap before prices rise further. Australian property prices have seen positive trends for the second month. CoreLogic reported a 0.6 per cent increase in March, followed by a 0.6% increase in April. This comes after a 9.1 per cent decrease between May 2022 and February 2023. 

Unfortunately, the extended decrease was detrimental to consumer sentiment. It caused many prospective buyers to stay on the sidelines for the downturn. The housing market was too unpredictable for many to take the risk.  This could all an end with housing values increasing across Sydney, Melbourne, Brisbane, Perth and Adelaide. Sydney is leading the charge with a 1.3 per cent increase in April. 

Despite the upward trend for buyers, vacancy rates are still at an all-time low for renters in Australia. This has greatly exacerbated the financial burden renters have endured as those lucky enough to find a property are forced to pay a steep price to secure it.  The lack of housing for Australia’s growing population is a significant issue and a force that is putting increased strain on an already tight property market. 

With the return of international students for study, a ferocious rental market, and a lack of suitable housing, already putting pressure on the market, the rise of property prices could mean those hoping to jump into homeownership are seeing their dreams slip away. To counteract this perfect storm, an investment in housing and construction needs to be made. This means creating affordable housing that meets the demand in the areas they’re built for. Ideally, more supply on the market will increase confidence, bringing back buyers and ensuring vendors are confident to sell again. 

This thinking is backed by CoreLogic’s prediction that increased consumer sentiment and a stronger housing market for both property buyers and sellers are in the near future for Australia. Despite the nature of the everchanging property market, the next few months will be crucial in cementing the end of Australia's property downturn while trying to counteract and avoid the exacerbation of the current housing crisis.