Invest
What’s next for Australia’s property market?
A stabilisation following the biggest fall in the property market in the last 40 years has led experts to ponder: What could be next?
What’s next for Australia’s property market?
A stabilisation following the biggest fall in the property market in the last 40 years has led experts to ponder: What could be next?
Commenting on the property market, AMP’s chief economist, Dr Shane Oliver, has said that the current position of the property market lies in between what property optimists and doomsters are saying.
He outlined how property optimists believe that property will double every seven years, meaning if wages grow by 3.5 per cent, Australian housing will rise to around nine times that in seven years from now.
On the other end of the spectrum, property doomsters expect the market will crash.
Their predictions for a 40 per cent crash are based on a hugely overvalued and over-indebted market with massive mortgage stress.
But Dr Oliver is dismissive of their concerns, and said that they have been saying this for around 15 years now.
Where to now?
Australia’s two major capitals, Sydney and Melbourne, have recorded strong numbers since May, with 75 per cent auction clearance rates leading to 2 per cent gains in property prices.
Compared to past cycles, debt-to-income ratios are much higher, banking lending standards are tighter, the supply of units has surged with more to come and this has already pushed Sydney’s rental vacancy rates above normal levels, Dr Oliver has outlined.
With unemployment likely to drift up as the economy remains soft, Dr Oliver did note that AMP does not predict boom-time conditions to come to fruition, instead seeing constrained gains of around 5 per cent through 2020.
3 key things to watch, according to Dr Oliver
1. The spring selling season – if auction clearances remain elevated as listing pick up, then it will be a positive sign that the pick-up in the property market has legs.
2. Housing finance commitments – these have bounced back but will have to pick up a lot further to get 10–15 per cent price rises.
3. Unemployment – if it picks up significantly in response to slow economic growth, then it will be a big constraining factor for house prices.
Impact for investors
Over the long term, residential properties are still looking to provide similar returns to shares, at around 11 per cent per annum.
The pullback in prices in several cities in the last few years is providing opportunities for investors, but Dr Oliver has warned that people should bear in mind that rental yields remain low in Sydney and Melbourne, and should be wary of areas where numerous new units are up for grabs.
In the economist’s perspective, Perth, Brisbane and numerous regional areas are looking more attractive from a yield point of view as well as low vacancy rates and improving population growth.
Read more on Tips On How to Maximise Tax Benefits On A Property.
RELATED ARTICLES
About the author
About the author
Property
Twice the demand: the case study behind Melbourne’s first‑home buyer surge
Melbourne has quietly engineered one of Australia’s most consequential housing turnarounds, with first‑home buyer demand running at roughly double the national pace and four of the top five buyer ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Home guarantee scheme shake-up challenges Australia’s housing market players
From 1 October 2025, the expanded Home Guarantee Scheme (HGS) materially widens what first-home buyers can purchase and where. By sharply lifting price caps and relaxing eligibility settings, the ...Read more
Property
GSB’s first‑home buyer play: turning policy tailwinds into market share
Great Southern Bank’s latest results show that nearly one in three of its new mortgages now go to first‑home buyers—evidence of a fast‑moving market reshaped by government guarantees, easing rates and ...Read more
Property
Why investors are fleeing and renters are scrambling in Australia's housing maze
Australia’s rental market is tightening even as individual landlords sell down. New data points to a multi‑year investor retreat tied to higher holding costs and regulatory uncertainty, while prices ...Read more
Property
Australia's 5% deposit guarantee: Unlocking gains while balancing risks in the market share race
Can a bigger government guarantee fix housing access without fuelling prices? Australia is about to find out. The Albanese government’s expanded 5% deposit pathway aims to help 70,000 buyers, remove ...Read more
Property
Australia's bold move the 5% deposit scheme shaking up the housing market
Can a government guarantee replace lenders mortgage insurance without inflating prices or risk? Canberra’s accelerated 5% deposit scheme is a bold demand-side nudge in a supply‑constrained marketRead more
Property
When rates drop but stress sticks: exploring Australia's mortgage arrears dilemma
Headline numbers suggest arrears ease as rates come down. The reality in Australia is messier: broad measures dipped into mid‑2025, yet severe delinquencies and non‑bank portfolios remain under ...Read more
Property
Twice the demand: the case study behind Melbourne’s first‑home buyer surge
Melbourne has quietly engineered one of Australia’s most consequential housing turnarounds, with first‑home buyer demand running at roughly double the national pace and four of the top five buyer ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Home guarantee scheme shake-up challenges Australia’s housing market players
From 1 October 2025, the expanded Home Guarantee Scheme (HGS) materially widens what first-home buyers can purchase and where. By sharply lifting price caps and relaxing eligibility settings, the ...Read more
Property
GSB’s first‑home buyer play: turning policy tailwinds into market share
Great Southern Bank’s latest results show that nearly one in three of its new mortgages now go to first‑home buyers—evidence of a fast‑moving market reshaped by government guarantees, easing rates and ...Read more
Property
Why investors are fleeing and renters are scrambling in Australia's housing maze
Australia’s rental market is tightening even as individual landlords sell down. New data points to a multi‑year investor retreat tied to higher holding costs and regulatory uncertainty, while prices ...Read more
Property
Australia's 5% deposit guarantee: Unlocking gains while balancing risks in the market share race
Can a bigger government guarantee fix housing access without fuelling prices? Australia is about to find out. The Albanese government’s expanded 5% deposit pathway aims to help 70,000 buyers, remove ...Read more
Property
Australia's bold move the 5% deposit scheme shaking up the housing market
Can a government guarantee replace lenders mortgage insurance without inflating prices or risk? Canberra’s accelerated 5% deposit scheme is a bold demand-side nudge in a supply‑constrained marketRead more
Property
When rates drop but stress sticks: exploring Australia's mortgage arrears dilemma
Headline numbers suggest arrears ease as rates come down. The reality in Australia is messier: broad measures dipped into mid‑2025, yet severe delinquencies and non‑bank portfolios remain under ...Read more
