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House prices are expected to continue rising in the wake of increased spring sales activity, new data has revealed.
The Hotspotting Price Predictor Index (PPI) for Spring 2023 shows a “dramatic upturn in the revival momentum in most market jurisdictions in Australia,” with seven out of 10 locations across the nation experiencing positive sales activity.
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The data showed around 80 per cent of suburbs have shown positive sales trends, which was widespread across all sectors.
According to Hotspotting Director Terry Ryder, the rate of price growth in cities and regional markets across Australia is likely to accelerate in the wake of major uplifts in sales activity in many locations.
“Without question, recovery and resurgence are the dominant themes with seven out of 10 locations in the nation now having positive sales activity trends – a massive improvement on the situation three months ago, when we saw the first signs of revival.”
Perth has been the nation’s strongest market for the past year, while the turnaround in the Melbourne market has been “quite dramatic”, Mr Ryder noted.
“Three months ago, we reported a glimmer of recovery but overall Greater Melbourne was still a struggling market. Now the city’s markets are pumping, with 73 per cent of suburbs recording positive activity.”
It has been a similar story in Brisbane, which has bounced back over the past quarter, alongside the Adelaide market which continues to distinguish itself for its consistency of solid market performance.
Mr Ryder argues that there is a correlation between sales volumes and price movements, with sales changes typically preceding price adjustments whether markets are rising or falling.
For example, during the 2020–2021 up-cycle across Australia, price increases followed increases in the number of dwellings sold.
Conversely, the recent decline in prices in cities like Sydney was foreshadowed by a decrease in sales.
As such, he anticipates that the rate of price growth in cities and regional markets across Australia will accelerate following significant increases in sales activity.
This aligns with the latest data from the PropTrack Listings Report for August 2023, which reveals a 20.5 per cent increase in listings nationwide month on month in August.
Sydney and Melbourne saw their busiest end to winter in over a decade, with new listings rising by 18.4 per cent in Sydney and 20.8 per cent in Melbourne compared to the same period last year.
This surge in new listings led to a 5.7 per cent month-on-month increase in the total number of properties listed for sale across Australia in August.
Proptrack senior economist Angus Moore further noted that home prices continued their recovery, marking the eighth consecutive month of growth in August.
“Home prices nationally are now just 0.8 per cent below the March 2022 peak.”
The PPI also highlighted only 6 per cent of markets had a negative ranking, compared to 17 per cent in the Winter edition.
“It’s clear that multiple rate rises have had little impact,” Mr Ryder said.
Appeal for apartments
Additionally, the analysis revealed an emerging trend of more buyers opting for apartments in desirable areas.
Suburbs in inner-city areas of Melbourne and Sydney continue to exhibit strong sales activity for units and apartments.
“The City of Hobart leads the market in the Tasmanian capital, while the Brisbane-inner precinct is a stand-out in the Queensland capital, and inner Perth is among the strong markets in the WA capital.”
Lifestyle and affordability are the core drivers of this compelling national trend, Mr Ryder said.
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