House prices surge on low sales stock
Property prices surged last year after the number of homes on the market hit a three-year low but a rebound in consumer confidence is likely to see more people willing to sell in 2024, experts say.
Property prices surged last year after the number of homes on the market hit a three-year low but a rebound in consumer confidence is likely to see more people willing to sell in 2024, experts say.
The latest listing figures from housing researcher PropTrack have shown the number of homes for sale hit a three-year low at the start of 2023.
The drop coincided with fast-moving property prices, which was surprising to many against the backdrop of rising interest rates and, as the number of homes on offer returned to levels in line with the 10-year-average, gains began to slow.
Despite the number of homes for sale being slashed in half month-on-month through December, which is traditional for that time of year, buyers still had more choice compared to previous years.
PropTrack economist Angus Moore said this would keep the a lid on prices over the coming months.
“We’re expecting more normal conditions this year than we’ve seen over much of the past four years,” he said.
“It’s obviously been an unusual string of years between Covid, the 2021 boom and rapid increases in interest rates in 2022. So, we’re expecting positive but slow growth in home prices.”
Buyer demand remained strong last year against the challenges of higher loan repayments, lower borrowing capacity and worsening affordability. Auction numbers from real estate Ray White show bidders figures were strong in 2023 compared to the year prior, with 2.5 to three bidders raising their paddles to bid on average.
PropTrack data shows that, in Brisbane, Adelaide and Perth, the number of homes on the market was still below the 10-year average, coinciding with continued strength in property prices. Meanwhile, Sydney, Melbourne and Canberra have returned to more normalised home availability.
Ray White chief economist Nerida Conisbee said there was more positivity among buyers and sellers, with early signs suggesting more homes would sell at the start of the year.
“There was a whole lot of things happening, but directly, a lack of properties for sale was a major factor,” Ms Conisbee said.
“There was lot of active bidders at auction, and particularly with renovated properties, we did see very high levels of active bidding.
“Also, a lot more people got pushed into the established market, given what happened to construction costs … and there was also very strong population growth.”
Ms Conisbee said the fundamentals were in place for prices to keep rising, particularly if two rate cuts were made in 2024, with gains of more than 10 per cent possible.
“As to whether we see an increase in properties for sale, we hope so, because that will calm the market,” she said. “If we don’t see a pick-up in properties for sale then, that will continue to lead to strong price increases.
“Most sellers are subsequent buyers, so when the market is super red hot we do tend to see people holding back.
“Ideally, we will see a pick-up in the number of people coming to market.”
This price growth prediction is divergent from broader market analysts who are expecting gains of between 1 per cent and 5 per cent nationally.
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