It’s safe to say this year’s spring selling season well and truly lived up to expectations.
New figures from CoreLogic indicate that the combined value of residential real estate has risen to over $11 trillion.
Further supporting that incredible figure, Proptrack reports that national home prices hit a new record in October, rising 0.2% over the last month to now be 5.9% higher than they were a year ago.
On the auction front, 2,882 homes went under the hammer across the combined capitals last week, the third-busiest auction weekend of the year-to-date behind the 7 days prior to Easter (3,519) and the week ending 27th October (3,135).
The preliminary clearance rate came in at 64.1%, with experts claiming the current property cycle has been driven by an undersupply of good properties relative to current demand.
Commentators believe the undersupply of properties is going to persist for some time with almost all agreeing that there is no chance the country will hit the current housing construction targets required to meet demand.
Owner Occupiers Driving Property Markets Forward
It’s the little secret a lot of property commentators choose to keep to themselves. The secret of what continues to drive price growth and it is that owner-occupiers are the ones that drive Australian property markets forward.
According to figures, owner-occupiers own close to 70 per cent of all the properties in the country and although often overlooked in terms of market influence, they certainly dominate Australia’s property market.
Residential real estate makes up 56.2% of Australian household wealth, and investors own around 27% of Australian dwellings by number and approximately 24% by value.
Overall sentiment indicates that owner-occupiers underpin the steady long-term growth of property values, while investors ultimately create property booms and downturns.
Big Bank Amends Housing Predictions for 2025
The NAB has amended its forecasts for both house prices and interest rates for 2025.
Looking ahead to 2025, NAB anticipates overall property price growth to reach 4.2 per cent over the course of the year, although not all markets will appreciate at the same rate.
Yes, growth has slowed down a degree in the second half of 2024, largely due to weakness in the private sector, but NAB thinks this will mark the lowest point before an upswing next year.
By 2025, we should see growth picking back up to more typical levels according to current NAB forecasts.
The job market has been surprisingly steady, and while the NAB does foresee unemployment inching up to around 4.5%, it’s expected it will still remain above pre-COVID rates.
For the Reserve Bank of Australia, keeping inflation in check while maintaining a strong job market will be the key focus areas moving forward.
NAB Changes Rate Cut Call to May 2025
The NAB has also changed its rate cut forecast from February 2025 to May 2025.
This comes after the latest unemployment rate came in steady at 4.1% for the month of October.
Even though this was widely expected, it does challenge the RBA’s forecast track of the unemployment rate increasing to 4.3% in Q4 2024.
Seeking Professional Guidance
The Australian property market is a dynamic landscape influenced by a range of factors, from interest rates to government initiatives and shifting buyer preferences.
Understanding these trends and statistics is crucial for current and potential homeowners looking to make informed decisions.
Navigating the property market can be complex, and seeking professional guidance is often a wise decision. Real estate agents, mortgage brokers, and property advisors can provide valuable expertise and support throughout the process.
When choosing professionals to work with, prioritise those with a strong track record and local market knowledge. Engaging with experts who understand your goals and preferences can make the buying, selling, or investing process smoother and more successful.