The property data from multiple research sources is becoming increasingly positive – not that it’s ever been as negative as mainstream media has portrayed.
A more optimistic outlook for real estate markets is being seen in data on sales activity, auction clearance rates and prices.
These more positive outcomes have occurred despite 10 consecutive interest rate rises by the Reserve Bank – and pre-date the RBA’s decision to pause the rate rises at its April board meeting.
And it’s worth re-iterating that, right throughout this period of continual rate increases, many major markets in Australia have continued to deliver rising sales activity and rising prices.
Perth, Adelaide and Darwin in particular, as well as many of the regional markets, have continued to defy the downturn pressures that have been most evident in Sydney and Melbourne.
Price data from Domain shows that, in calendar 2022, house prices rose in Perth, Hobart, Darwin, Adelaide and the combined regional markets.
PropTrack figures published in March recorded annual house price growth in Adelaide, Perth, Darwin and the regional markets Western Australia, South Australia and the Northern Territory.
And price data published on 4 April by SQM Research records annual house price growth in Brisbane, Perth, Adelaide, Darwin and Hobart, with Perth and Adelaide recording annual price increases above 10%.
Apartment prices increased in the past year in every capital city.
Nationally, according to SQM, house prices have risen 4% in the past 12 months and apartment prices have increased 6%.
During March, according to CoreLogic, house prices rose in Sydney, Melbourne, Brisbane, Perth, Regional NSW, Regional Queensland, Regional South Australia and Regional Western Australia.
In the apartment markets, prices rose in March in every capital city except Hobart and Darwin.
Hotspotting analysis of sales activity figures shows that there are buoyant markets right across Australia, including specific locations in our capital cities and the regional markets.
Every capital city, including the weakest markets such as Canberra and Melbourne, has individual locations where buyer activity has remained strong.
All of this has happened amid a climate of rising interest rates, high inflation, negative media commentary and apparently weak consumer sentiment.
What it shows is that most of analysis of property markets published in mainstream media is simplistic, misguided and just plain wrong.
Most of it comes from economists, notably from those working for the major banks.
Their limited understanding of residential real estate is such that they apparently believe that the major factor influencing markets, indeed the only factor, is interest rates.
What we get from bank economists is kindergarten analysis. Their view, proven wrong again and again, is that markets cannot be strong and prices cannot rise when interest rates are rising.
They are utterly confounded by the reality that, amid a period of repeated interest rate rises, property prices have risen in many of our major markets.
They’ve all forecast property price crashes during this period, just as they predicted big price decline in 2020 after Covid struck – only to have their incompetence exposed when prices recorded solid increases in that year.
None of the major banks, nor any of the other usual suspects who publish property price forecasts, predicted the property price boom that occurred in 2021.
Right now, according to these over-rated and over-paid economists, we should be seeing house prices falling 12, 15 or 20 percent right across the nation.
We’re not seeing that occurring anywhere.
For the most part, we are seeing growth emerging.
And this bodes well for the rest of 2023, as we await the full impact of rising migration into Australia, the return of overseas students and the impact (largely psychological) of the pause in the cycle of rising interest rates.
At the start of this year, we said that we saw 2023 as a time of great opportunity for property investors and a year in which prices would grow in many of our major markets.
Based on the emerging evidence from multiple sources, we see no reason to alter that forecast.
