The Australian property market has seen significant changes over the past year, with most areas experiencing declining prices after a period of huge growth. As we move through 2023, what are the key property valuation trends emerging across the country?
New South Wales
After hitting record highs in early 2022, Sydney property prices have been on a downward trajectory. However, there are signs of a potential recovery.
- The median Sydney house price peaked at $1.32 million in April 2022, but has since fallen to $1.1 million as of July 2023, a decline of 10.5%.
- Apartment prices in Sydney have fared worse, with the median unit price down 13.5% compared to the peak.
- July 2023 saw the fifth consecutive month of rising prices, suggesting Sydney property may be bottoming out.
Factors like affordability constraints, rising interest rates, and increased supply are weighing on the market. However, positive signs like stronger auction clearance rates indicate property valuation trends in Sydney may be stabilising.
Melbourne property prices have followed a similar trend to Sydney, but the declines have been less sharp.
- Melbourne’s median house price peaked at $975,000 in March 2022 and now sits at $900,000 as of July 2023, a 7.5% decrease.
- Apartment prices in Melbourne are down 9.5% from their peak.
- There was a slight 0.2% increase in Melbourne prices in July, but it’s unclear if this marks the start of a recovery.
Rising interest rates have dampened demand, but Melbourne’s underlying population growth provides some support for property valuations. Investors are also returning to the market lured by lower prices.
Brisbane has been the most resilient capital city market in 2023, with relatively moderate valuation changes.
- Brisbane’s median house price has hovered around $750,000, dipping slightly from its $760,000 peak in February 2022.
- Apartment prices are also only down about 3% from their peak.
- July 2023 saw a slight rise in prices, up 0.5% over the month.
Underlying demand remains strong in Brisbane, boosted by interstate migration from southerners searching for affordability. However, rising supply and interest rates are likely to weigh on price growth going forward.
Perth property prices have reversed after surging in 2021 during the mining boom.
- Perth’s median house price peaked at $725,000 in August 2021 but now sits at $650,000 as of July 2023, a decline of 10%.
- Apartment prices are down even further, with the median unit price falling 13.5% from the peak.
- There was a 1% rise in prices in July, but Perth remains the weakest performing capital city market.
Slowing economic growth and declines in mining investment are weighing on property demand and valuations in Perth. Oversupply is also an issue, especially in the apartment sector.
Other States and Territories
Adelaide, Hobart, and Canberra have all seen moderate peak-to-trough declines of around 8-10% for houses and slightly larger falls for units. Darwin remains subdued, with property prices down around 15% from their 2018 peak.
Broadly, property valuation trends in the smaller cities and regional markets have mirrored the larger state capitals. Oversupply is evident in many parts of the country, constraining price growth.
In summary, property valuation trends in 2023 reflect declines from peak prices in most markets, however signs of stabilisation are emerging. The outlook remains uncertain, with factors like interest rates and supply-demand dynamics shaping valuations.