According to the PropTrack’s Property Market Outlook August 2023 Report, the national property market in Australia is expected to witness an increase of up to 5% by the end of 2023.

The report analyzes consumer behavior by extracting property market data from the 12.1 million Australians who visit realestate.com.au each month. It indicates that the property prices have already experienced a 2.3% increase in the first six months of 2023.

Despite rising interest rates and relatively low wage growth, the property market has shown resilience this year.

The report attributes the price growth to a lack of supply of available properties for sale, leading to buyer competition. The forecast suggests that larger capital cities are expected to witness greater growth.

Houses in Brisbane and Adelaide have experienced the strongest gains so far, and the report projects prices to increase between 3% and 6% across the combined capital cities on an annual basis.

With the exception of Hobart and Darwin, all capital cities are expected to see positive price growth in the remainder of 2023.

Looking ahead, the report acknowledges challenges in forecasting the direction of the property market beyond 2023.

2024 uncertainty

A significant number of fixed-rate borrowers’ mortgages are set to expire from current interest rates of around 2%, potentially resetting to around 6%, which could impact borrower repayments in 2024. The outlook for 2024 remains uncertain, and the report forecasts modest price growth in that year.

Unemployment remains a key risk to the property market’s stability, as people’s ability to pay off housing largely depends on having a job and income. Official forecasts predict a rise in the unemployment rate, although the jobs market has been resilient so far.

The report highlights the need for a supply-side response to improve affordability, emphasizing the importance of structural fiscal and monetary policy reform in shaping the property market’s future.