Kalgoorlie 
With interest rates rising repeatedly and many households cutting back on spending, it was forecast at the start of 2023 that property prices would fall in Australia.
However, the opposite is happening, with recent reports saying that home values are now expected to go 4 per cent higher by the end of the year.
Here is what is influencing the continued change in prices:
Foreign Exchange Rates
The foreign exchange rate has a massive influence on international buyers. The stronger the Aussie dollar is against their country’s currency, the less tempted international buyers will be by the Aussie property market. Conversely, when the Australian dollar is comparatively weak, property becomes more affordable.
With the Australian dollar relatively low at the moment, international investors are flocking to the market. This is helping keep prices buoyant, particularly in capital cities.
The Home Loan Hold-Out
Interest rates have risen almost every month for a year but most households are adapting so they can continue to pay their mortgage. People are cutting back on luxuries but making their home loan a priority.
While there has been talk of more properties coming onto the market as people’s low fixed rate mortgages expire, this is yet to be the case. Up to date reports say borrowers are “making a safe descent off the fixed rate cliff”, and that fixed rate expiries have not led to any significant increase in arrears as of yet. This is contributing to the lack of stock on the market.
Intercity and Interstate Migration
While international buyers are keeping prices strong in Sydney and Melbourne, there is also migration happening between states, with Queensland being the most popular sea change destination.
Brisbane, the Gold Coast and the Sunshine Coast are experiencing steady growth, as are regional areas such as Rockhampton, Yeppoon and the Capricorn Coast. Meanwhile, regional towns are still enjoying an influx of new residents, with some destinations reporting 40 percent price increases over the last twelve months.
Construction Industry Challenges
With multiple construction companies becoming insolvent this year and the price of materials and labour still high, the cost of building and renovating is also increasing. As a result, there is a shortage of new homes, which is pushing those prices up even further.
What this means for you…
A strong and steady property market is a good thing. If you’re able to buy, you have fewer concerns about overpaying and experiencing a drop in value. If you’re looking to sell, you should have the opportunity to achieve an excellent price, particularly when you have the help of an experienced agent who can expose your property to a wider section of the market.
Want to know how your local market is performing? Get in touch with Professionals Platinum today.
