Invest
Property market rebound predicted to be short-lived
While the two largest property markets in Australia have been reaccelerating in the later part of the year, their rebound has been deemed unsustainable.
Property market rebound predicted to be short-lived
While the two largest property markets in Australia have been reaccelerating in the later part of the year, their rebound has been deemed unsustainable.
CoreLogic research director Tim Lawless told nestegg.com.au that the late market resurgence in Sydney and Melbourne is irregular.
“Since around 2009, we’ve seen Melbourne dwelling values go up by 85 per cent and Sydney by 95 per cent so we’ve seen those markets reaccelerating on the back of low mortgage rates, and a bounce back in investment activity does come as a bit of a surprise,” Mr Lawless said.
“Normally, when you start to see momentum leaving the market from late 2015 through to the first part of 2016, it’s pretty uncommon for there to be a rebound like we’re seeing at the moment.”
Mr Lawless said it is unlikely that reacceleration can be sustained given market constraints.
“It probably can’t last that long. We probably will see a return to more moderate growth for both those markets simply due to affordability constraints, higher supply levels, particularly in the apartment market, and lenders becoming a little more cautious on lending to property markets that have already seen a substantial level of capital gain over the last two growth cycles,” he said.
Key to that downward pressure is apartment oversupply, which continues to raise questions about the sustainability of apartment values.
“The supply we’re seeing coming on to the market at the moment in Melbourne at least is very inner city apartment-centric. We have seen a peak in approvals so we’re probably due for a construction peak next year or the year after,” Mr Lawless said.
“I think the impact on the Melbourne marketplace is going to be quite specifically on those inner city investment markets, whereas detached housing supply is very balanced if not undersupplied. Inner city areas are where we could potentially see some negative movements in unit values given that stock that is facing high supply levels and doesn’t have any sort of differentiation and is exposed to the investment and buyer market.”
In Sydney, however, the supply and construction of apartments conversely has been far more geographically diverse.
“While the inner city is where the largest proportion is being built we’re also seeing a lot of densification alongside the transport lines in Sydney, in areas like Parramatta, Mascot, Chatswood,” Mr Lawless said.
“Arguably then, Melbourne is much like Brisbane, where it’s early in its densification trend and most of the high-rise apartments are happening in precise locations.”
RELATED ARTICLES
Property
Rents are rewriting the inflation playbook: what record‑low vacancies mean for Australian business
Australia’s rental market is so tight that housing costs are now a primary transmission channel for inflation and interest rates. This isn’t just a property story; it’s a business risk story—affecting ...Read more
Property
Off-market real estate is going mainstream — and changing the rules of dealmaking
With public listings tight and sales still climbing, Australia’s investors are shifting to off-market channels that reward speed, networks and data advantage. The playbook is closer to private equity ...Read more
Property
Australia’s rental squeeze is now a business problem: inflation, capacity and the new growth calculus
Record-low rental vacancies are no longer just a social headline – they’re reshaping cost structures, wage dynamics and capital allocation across corporate Australia. With economists warning of a ...Read more
Property
Rents Are Repricing Australia Inc: What record‑low vacancies mean for inflation, talent and strategy
Australia’s rental market has slipped into a vacancy desert, and it’s not just tenants feeling the heat. Persistently tight supply is pushing up rents, embedding services inflation and complicating ...Read more
Property
Young buyers poised for a comeback as 5% First Home Guarantee takes effect
In a move set to reshape the Australian property landscape, the government’s revamped First Home Guarantee is poised to open the doors of homeownership to a new generation of young AustraliansRead more
Property
AFG Securities waives settlement fees for first-home buyers, signalling strategic shift
In a strategic move aimed at easing the financial burden on first-home buyers, AFG Securities has announced the elimination of settlement fees on select loans, potentially saving customers up to $699Read more
Property
From trust woes to wealth: Australian agencies' secret to boosting prices
In Australia’s residential market, trust is no longer a nice-to-have—it’s a pricing variable. Persistent distrust of real estate agents is depressing vendor outcomes and inviting regulatory heat, but ...Read more
Property
Reality check for first home buyers: Affordable suburbs with 5% deposit
In a significant development for Australian first home buyers, a new property search tool from Aussie Home Loans is set to transform the way prospective homeowners approach the market. As the Federal ...Read more
Property
Rents are rewriting the inflation playbook: what record‑low vacancies mean for Australian business
Australia’s rental market is so tight that housing costs are now a primary transmission channel for inflation and interest rates. This isn’t just a property story; it’s a business risk story—affecting ...Read more
Property
Off-market real estate is going mainstream — and changing the rules of dealmaking
With public listings tight and sales still climbing, Australia’s investors are shifting to off-market channels that reward speed, networks and data advantage. The playbook is closer to private equity ...Read more
Property
Australia’s rental squeeze is now a business problem: inflation, capacity and the new growth calculus
Record-low rental vacancies are no longer just a social headline – they’re reshaping cost structures, wage dynamics and capital allocation across corporate Australia. With economists warning of a ...Read more
Property
Rents Are Repricing Australia Inc: What record‑low vacancies mean for inflation, talent and strategy
Australia’s rental market has slipped into a vacancy desert, and it’s not just tenants feeling the heat. Persistently tight supply is pushing up rents, embedding services inflation and complicating ...Read more
Property
Young buyers poised for a comeback as 5% First Home Guarantee takes effect
In a move set to reshape the Australian property landscape, the government’s revamped First Home Guarantee is poised to open the doors of homeownership to a new generation of young AustraliansRead more
Property
AFG Securities waives settlement fees for first-home buyers, signalling strategic shift
In a strategic move aimed at easing the financial burden on first-home buyers, AFG Securities has announced the elimination of settlement fees on select loans, potentially saving customers up to $699Read more
Property
From trust woes to wealth: Australian agencies' secret to boosting prices
In Australia’s residential market, trust is no longer a nice-to-have—it’s a pricing variable. Persistent distrust of real estate agents is depressing vendor outcomes and inviting regulatory heat, but ...Read more
Property
Reality check for first home buyers: Affordable suburbs with 5% deposit
In a significant development for Australian first home buyers, a new property search tool from Aussie Home Loans is set to transform the way prospective homeowners approach the market. As the Federal ...Read more
